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Oral Answers to Questions
(10 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr David Amess (Southend West) (Con)
1. What assessment he has made of the progress of the second wave of city deals.
The Minister of State, Cabinet Office (Greg Clark)
Twenty-eight city deals have now been concluded and each one is bespoke to the area that negotiated it. Together the city deals have brought about new investment in roads, support for small businesses, the regeneration of derelict sites, employer-led skills training and an expansion in the number of apprenticeships.
Mr Amess
Southend is not just the alternative city of culture 2017; under this Conservative-led Government, it is also increasingly seen as the place to do business and to invest. Will my right hon. Friend share with the House what progress is being made on the delivery of the Southend city deal programme?
Greg Clark
I will indeed. I had the great pleasure of visiting Southend in March with my hon. Friend and my hon. Friend the Member for Rochford and Southend East (James Duddridge). This is a very good deal for Southend and it is being implemented. Its focus is on supporting small businesses in Southend. Everyone knows that Essex has a formidable reputation for the entrepreneurialism of its people, and that is now supported in Southend. The deal will have the further side-effect of helping to regenerate the area of Victoria avenue, and I know my hon. Friend the Member for Southend West (Mr Amess) has long championed the need to improve that area.
Andrew Gwynne (Denton and Reddish) (Lab)
The Minister said that city deals are bespoke entities and I certainly welcome the Greater Manchester devolution package. One of the benefits of the regional development agencies that this Government scrapped was that they brought in strategic thinking outside city region boundaries, but that has now gone. What is the Minister doing to make sure that we get proper strategic thinking and strategic planning in place so that we do not just end up with a patchwork of city deals, but get proper decisions that suit areas wider than city regions?
Greg Clark
There is more strategic thinking going on in Manchester, in conversation with the Government, than ever took place when it was suppressed under the regional development agencies. It is a tragedy and a disgrace that a city of the eminence of Manchester should be suborned to a region that was designed in Whitehall and enjoyed no local affection. It is emerging from that and emerging strongly, which is much to the credit of the leaders across Greater Manchester.
Mike Crockart (Edinburgh West) (LD)
Will my right hon. Friend share with the House the progress being made with the first Scottish city deal in Glasgow, and are any discussions taking place with other great Scottish cities, such as Edinburgh?
Greg Clark
The city deal with Glasgow was signed during the summer and it is proceeding apace. The medical research centre will be one of the most exciting, cutting-edge opportunities in the country. It involves a long-awaited connection to Glasgow airport and the city. I have received indications from other Scottish cities that they would welcome very much a city deal of their own. No decisions have been taken as to whether that is possible, but I listened very carefully to the representations.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister will know that Huddersfield is part of the Leeds economic partnership area. We are not against city deals—we are very interested in them—but, strategically, what is their democratic content? What is the plan for long-term democratic participation? How are we going to attract good people to come in and be the democratically accountable people who run the city deals?
Greg Clark
The hon. Gentleman makes a reasonable point. One of the sadnesses of the tendency to suck power away from our great cities to Westminster and Whitehall is that it reduces the authority and the influence of the leaders of the cities, towns and counties. Empowering the cities and getting them to enjoy their renaissance is a powerful incentive for people to come forward with the ambition and aspiration to lead them, and that is what we are doing.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
12. My right hon. Friend very kindly gave a city deal to Plymouth earlier this year. Does he agree that, in order to maximise it, we have to make sure that we have good transport links down into the south-west?
Greg Clark
I agree. It was a delight to be at the Devonport dockyard to sign the Plymouth city deal in the company of my hon. Friend. Of course, the south-west relies on good transport connections. He will know that the south-west growth deal included a lot of investment in roads. He was kind enough to come to Exeter for the signing of that deal. I encourage him to work with his local enterprise partnership to put forward the best new projects for what I hope will be the next round of growth deals.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
The Minister will not be surprised to know that I endorse the comments of the hon. Member for Edinburgh West (Mike Crockart) about Edinburgh being an ideal location for the next round of city deals, particularly for one focused on the regeneration of Leith docks, which happens to be in my constituency.
Greg Clark
I am delighted that representations are coming from all parts of the House for building on the success of our city deals programme.
Andrew Stephenson (Pendle) (Con)
2. What discussions he has had with Lancashire local enterprise partnership on the timing and size of the second phase of local growth deals.
The Minister of State, Cabinet Office (Greg Clark)
The first round of growth deals gave a major boost to local economies by investing in transport, skills and housing, and by helping businesses to create thousands of new jobs. I am determined to build on the momentum of the growth deals, so I have invited local businesses and civic leaders from across England to propose the next set of projects to be funded from the local growth fund.
Andrew Stephenson
On 15 October, I met representatives of the Lancashire LEP, and I have since made my views known to them about the importance of Brierfield mill and other projects in my constituency. I have also made my views known to the Minister. How does Lancashire fit into the Deputy Prime Minister’s Northern Futures project and the Chancellor’s northern powerhouse project?
Greg Clark
Lancashire is absolutely fundamental to the northern powerhouse. For our country to prosper at its optimal level, every part of it needs to be firing on all cylinders, and that certainly includes Lancashire. My hon. Friend has made a powerful case for the Brierfield mill development. I look forward to having the chance to see it in person before long. I encourage him and all Members of the House to engage with their local enterprise partnerships. In my view, Members of Parliament have a pretty good idea of what the most important economic priorities are, so they should feed those priorities into the LEPs.
Mr William Bain (Glasgow North East) (Lab)
3. What his priorities are for political and constitutional reform in the remainder of this Parliament.
The Parliamentary Secretary, Cabinet Office (Mr Sam Gyimah)
The Government have a full agenda for political and constitutional reform for the remainder of this Parliament. We are currently awaiting the recommendations of Lord Smith of Kelvin on the process of devolving further powers to Scotland, and we will publish draft clauses on that in January 2015. The Wales Bill, which will devolve further power to the Welsh Assembly, is continuing its passage through Parliament. Work continues to be done to investigate the impact of devolution on all nations, particularly in relation to the so-called West Lothian question. We have introduced a Bill on the recall of MPs. We are implementing legislation to deliver a statutory register of consultant lobbyists, which will increase transparency and help to drive up standards in the industry.
Mr Bain
I am grateful for the fact that the Minister’s answer did not include plans to repeal the Human Rights Act 1998 or to threaten to withdraw from the European convention on human rights. Does he agree that such plans would diminish our standing in the world, take rights away from millions of people in the United Kingdom, and cause great harm to the devolution settlement in Scotland, Wales and Northern Ireland?
Mr Gyimah
The Prime Minister made very clear at the Conservative party conference the Conservative party’s position on the European convention on human rights. As I have said, we have a full agenda for the remainder of this Parliament, which will satisfy all the nations of the United Kingdom.
John Stevenson (Carlisle) (Con)
Given the recent announcement of a metro mayor for the Manchester area, it appears that elected mayors are fashionable once more. One barrier to having more elected mayors is the requirement that 5% of the local electorate must sign a petition to trigger a local referendum. Will the Minister therefore consider reducing the 5% threshold to 2% or 1%?
Mr Gyimah
I thank my hon. Friend for that question. I am advised by my right hon. Friend the Member for Tunbridge Wells (Greg Clark), the Minister responsible for cities, that councils can resolve to have a mayor and go ahead on that basis, so the 5% threshold should not be a barrier.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
9. I will give the Minister a second opportunity to answer the question asked by my hon. Friend the Member for Glasgow North East (Mr Bain). How are the Tories’ attacks on human rights and the removal of critical protections for citizens against the state meant to help the public?
Mr Gyimah
The Prime Minister’s position and that of the Conservative party is very clear: the Human Rights Act should work in the interests of the British state and of British people, but it does not always do so. That is why, if there is a future Conservative Government, we will look to exit the Human Rights Act.
Alistair Burt (North East Bedfordshire) (Con)
The House of Lords should have 400 Members, all appointed for 10-year terms—possibly with repeat terms for someone exceptional—and an upper age limit. Why do we not just get on and do it?
Mr Gyimah
My right hon. Friend is well aware that a programme to reform the House of Lords was brought before this House and was unsuccessful. However, we have since reformed the House of Lords. The Steel Bill has brought some reform to the House of Lords, in that peers can be made to retire and, if guilty of serious wrongdoing, can be removed from the House of Lords. The Government remain committed to reform of the House of Lords in future.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Surely an obvious reform would be full fiscal autonomy for Scotland, not only to end the disproportionately greater Scottish contributions to the Exchequer that there have been for the past 33 years, but so that we in Scotland can arrange tax and spend to grow the economy, jobs and communities. Full fiscal autonomy for Scotland—there you go.
Mr Gyimah
There was a clear referendum in Scotland and a clear result for Scotland to stay part of the United Kingdom. I advise the hon. Gentleman to wait for the proposals of the Smith commission, from which there will be heads of agreement at the end of this month and draft clauses in January, for the full answer to his question.
Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)
The Minister will know that last Friday the UK Youth Parliament met in this Chamber. Its priorities were shaped by more than 800,000 young people across the country. Does he agree that that shows again that many young people are engaged in politics? In learning from that and from the experience of the Scottish referendum, is it not time that we finally lowered the voting age to 16?
Mr Gyimah
The hon. Gentleman has asked that question—[Hon. Members: “How old are you?”] [Interruption.] How old are you?
The hon. Member for Liverpool, West Derby (Stephen Twigg) has asked that question a number of times. As he is aware, there is no consensus within the Government on the issue, and therefore there are no plans to lower the voting age in this Parliament. It is great to see young people taking an interest in politics—I was at the rock and roll event held in Parliament yesterday as part of Parliament week—but there is no consensus on lowering the voting age at this point.
Nia Griffith (Llanelli) (Lab)
4. What the Government’s policy is on a constitutional convention.
Mrs Emma Lewell-Buck (South Shields) (Lab)
7. What the Government’s policy is on a constitutional convention.
The Deputy Prime Minister (Mr Nick Clegg)
I have made clear my support for a constitutional convention to ensure that a new constitutional settlement is robust, fair and engages the public. It is clear, especially in the wake of the Scottish referendum and the ongoing work of the Smith commission, that our current constitutional settlement needs root and branch reform, but it must come from the bottom up and be based on the views of the voters, not politicians. I very much hope that we will be able to secure cross-party agreement for a full constitutional convention in the near future.
Nia Griffith
The First Minister of Wales, the right hon. Carwyn Jones, has asked for a long time for a full constitutional convention, which would allow people from all parts of the UK to discuss a complex issue with the sobriety and time that it needs. Will the Deputy Prime Minister stick by that, or does he intend to jump on the bandwagon of the Prime Minister’s knee-jerk proposals?
The Deputy Prime Minister
I do not think there is anything knee-jerk about the constitutional questions that are now being examined, regardless of whether a constitutional convention is established. The Smith commission needs to, and will, proceed according to the timetable that has been set out in mapping out the next chapter of radical devolution north of the border. Within Government, we are of course looking at the arrangements in this House for debating and voting on matters that affect only English and Welsh MPs. However, all those things can proceed without disrupting the wider need to embrace the public and generate ideas across the country, so that we can introduce root and branch constitutional reform across the United Kingdom, which I think will be needed in the next Parliament.
Mrs Lewell-Buck
The hon. Member for North Devon (Sir Nick Harvey) has reportedly asked the Deputy Prime Minister to do a deal with the Tories on English votes for English laws. I heard the Deputy Prime Minister’s earlier answer, but can he unequivocally rule out such a deal and promise that the question of devolution will be decided not in Westminster but by the British people as part of a constitutional convention?
The Deputy Prime Minister
I urge the hon. Lady’s party to engage in this issue of what is called English votes for English matters. It is difficult, and it is a dilemma. My party has been clear that what we want is for the people’s votes to be reflected in any arrangement in this House, not simply the allocation of votes to one particular party. That is where there is a difference of opinion between the coalition parties. We should grapple with that, and, as ever with constitutional issues, the more we can do that on a cross-party basis the better.
Sir Edward Leigh (Gainsborough) (Con)
Will there be a vote in this Parliament on English votes for English business?
The Deputy Prime Minister
Everything will be subject to the publication of the deliberations of the Cabinet Committee currently being chaired by the Leader of the House, and we hope to publish something in the not-too-distant future.
Mr Peter Bone (Wellingborough) (Con)
We have a great democrat at the Dispatch Box at the moment, and as usual he of course is right that we should get on with constitutional reform where we can. The House voted by 283 votes to nil for the European Union (Referendum) Bill. Not a single Liberal Democrat voted against it, yet some vicious rumours are going around in the media that the Deputy Prime Minister blocked the money resolution so that debate on the Bill would be halted. Will he take the opportunity to put that lie to rest and say that he was in favour of the money resolution?
The Deputy Prime Minister
I would be delighted. I was fully in support of the money resolution for that private Member’s Bill, and for the Affordable Homes Bill on the spare bedroom subsidy, which the Conservative party blocked. If the hon. Gentleman did not like what happened, he should address his own party’s leadership, not me—[Interruption.]
Sadiq Khan (Tooting) (Lab)
I was quite enjoying that, Mr Speaker.
The Deputy Prime Minister will be aware of the anti-Westminster mood around the country, and he has spoken of anomalies in the way our country is governed. I welcome his support for a peoples-led convention, which the Lib Dems, the Labour party and other parties all support. Why does he think the Conservatives are so against that proposal?
The Deputy Prime Minister
My understanding is that all parties are reflecting on this matter, but as the right hon. Gentleman says, many individuals believe that at this important juncture in the constitutional development of our country, we cannot just hoard the debate here in Westminster; we must open it up to the public and ensure that we look in the round at all the different bits of the constitutional jigsaw. I think—as does the right hon. Gentleman—that that can be done only through a constitutional convention, and I hope that all parties will agree with that in the not-too- distant future.
Stuart Andrew (Pudsey) (Con)
5. What discussions he has had with the Leeds local enterprise partnership on devolving powers and responsibilities from central Government.
The Deputy Prime Minister
(Mr Mick Clegg) I am pleased to confirm that negotiations on future devolution to the Leeds city region are under way, and I am hopeful of an announcement in the coming weeks. These negotiations build on the growth deal that I recently signed on behalf of the Government, which devolved £573 million to the local enterprise partnership from April next year.
Stuart Andrew
Although I welcome the move away from centralisation that was prevalent under the previous Government, a number of my constituents have raised concerns that devolution of power may still feel centralised from their communities by city centres. What assurance can my right hon. Friend give that the allocation of resources will be based on proven need?
The Deputy Prime Minister
I reassure the hon. Gentleman that the growth deal process that was agreed was based on the needs of the entire functional economic area—namely the £55 billion economy that covers both urban and rural areas in that part of the world. The significant transport fund worth £1 billion will lead to a step change in people moving not just between city centres, which he alluded to, but to moving around all of West Yorkshire. While it might be called a city deal, it radiates out to other non-urban areas in that region.
Philip Davies (Shipley) (Con)
What can the Deputy Prime Minister do to ensure that local MPs have a formal role in the decision making process, particularly for transport funds in the Leeds city region, and that decisions are not just carved up by five Labour councils scratching each other’s backs to fulfil their priorities, while excluding other parts of the region that have equally important needs?
The Deputy Prime Minister
I certainly agree it is essential that any local enterprise partnership worth the name should consult locally and regardless of party affiliation with representatives in the areas affected, including MPs from all parties.
Mr Stephen Hepburn (Jarrow) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Deputy Prime Minister (Mr Nick Clegg)
As Deputy Prime Minister I support the Prime Minister on a full range of Government policies and initiatives—[Laughter.] Oh yes I do—most of the time. Within Government I take special responsibility for the Government’s programme of political and constitutional reforms.
Mr Hepburn
More than 1 million people in this country are now surviving thanks to food banks. Does the Deputy Prime Minister regret backing the Tories’ war on the poor, and bringing in things like the bedroom tax and changes to council tax that have put so many people in that plight?
The Deputy Prime Minister
Members across the House will be concerned to help those who need support, but before the hon. Gentleman gets on his high horse, he must remember that under his party’s stewardship and the previous Government, youth unemployment rose by 45% and the gap between the rich and the poor was larger than in the 1980s, and because they crashed the economy in 2008 £3,000 was wiped off the household budget of every home in this country. That is not a record to be proud of.
Duncan Hames (Chippenham) (LD)
T2. I thank the Deputy Prime Minister for his interest in Wiltshire and Swindon’s local growth deal. He will have seen our second round bid for the digital Corsham project. Can he assure me that in future these deals will go beyond our much-needed investment in local transport infrastructure and lay the foundations for the skills and businesses of the digital economy?
The Deputy Prime Minister
As my hon. Friend knows, growth deals are not just focused on transport; they very much respond to the proposals put forward by local areas and local enterprise partnerships. I was very pleased that we were able to agree, with the local enterprise partnership in round 1, almost £200 million for the Swindon and Wiltshire growth deal. As he will know, there was over-subscription in the first round. We hope to hold further rounds and I hope the proposal for a digital hub in Corsham will be included from his local area.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
The Deputy Prime Minister and his Tory best friends claim that they have turned the economy around, but the facts are that under this Government more and more people are on zero-hours contracts, the income of people who are self-employed has fallen by 14%, and low-paid and insecure work is leaving more people reliant on benefits to top up their pay and to help to pay their bills. While millionaires enjoy a Tory-Lib Dem tax cut, everyday working families are on average £1,600 a year worse off and struggling to make ends meet. Will the Deputy Prime Minister tell us whose recovery this is?
The Deputy Prime Minister
Almost every time we meet across the Dispatch Box, the right hon. and learned Lady repeats the extraordinary suggestion that we have somehow been responsible for tax cuts for people in the higher tax bracket, when for 95% of the time that her party was in power the top rate was 40p. It is now 45p, which is 5p higher than it was under Labour. As I said earlier, the gap between rich and poor was higher under her party’s stewardship of the economy than it was in the 1980s, manufacturing declined four times more than it did under Margaret Thatcher, and we have taken more than 3 million people on low pay out of paying any income tax at all. That is the contrast between our records, of which I am very proud.
Ms Harman
The fact is that the Government have cut taxes for millionaires while they have cut tax credits for everyday working people. The fact is that the right hon. Gentleman’s Government are borrowing £190 billion more than they planned. They said they would balance the books by 2015, but the deficit is likely to be £75 billion by then. Stagnant wages and too many low-paid jobs have led to a shortfall in tax receipts, meaning more Government borrowing. With thousands more people reliant on in-work benefits, it emerged last week that the Government have spent £25 billion more than they planned on social security. [Interruption.] At least the facts I am putting to the Deputy Prime Minister are accurate, unlike the facts he misrepresented. His Government have left hard-working families not knowing how they will make ends meet. Why will he not admit it? He says they have rescued the British economy, but this recovery is only for a privileged few.
The Deputy Prime Minister
Say that to the fact that there are now more women in work than ever before. Say that to the fact that youth unemployment is lower than it was when we inherited the economy from the right hon. and learned Lady. Say that to the fact that we are now days away from being able to confirm that 2 million new apprenticeships are being formed under this Government—twice as many as under the Labour Government. We have cut tax for people on the minimum wage by two thirds. During Labour’s time in office there was the ludicrous and unacceptable situation where stockbrokers paid less tax on their dividends than their cleaners did on their wages. We have changed that. We have fixed the economy. They messed it up in the first place.
Mr Andrew Robathan (South Leicestershire) (Con)
T3. I was languishing on the Front Bench for some time, so I did not have the opportunity to ask the Deputy Prime Minister a question about consistency that has been bothering me. In 2010, he introduced a measure to equalise the electorates in each constituency. That seemed to me to be very fair and he was very eloquent in saying how important it was to be fair and for each vote to have the same value. Two and a half years later he voted against it. Please could he tell me, the House and the good British people why he did that?
The Deputy Prime Minister
I am delighted that the right hon. Gentleman is now languishing—as he puts it —elsewhere and is able to ask his question. He appears to have forgotten that the proposal to equalise constituencies was part of a wider package of constitutional reform. A deal is a deal, and his party, having committed solemnly to the British people to push for House of Lords reform, flunked it. Quite understandably, therefore, the deal could not be proceeded with.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
T5. Has the Deputy Prime Minister seen today’s report from the cross-party Higher Education Commission that shows how awful the situation is that students in debt face for the rest of their lives? Some 68% of them will never pay back their loan, and many will never get a mortgage, because he deserted them, broke his pledge and voted for £9,000 fees?
The Deputy Prime Minister
I am perplexed. When those controversial changes were introduced, the hon. Gentleman said they would be too harsh on students, but now he is criticising them because students will not have to pay off their outstanding loans. It cannot be both. He predicted at the time that fewer people would be going to university, but there are more youngsters on full-time courses now then ever before; he predicted that fewer kids from disadvantaged backgrounds would be going to university, but there are now more kids from poorer backgrounds at university than ever before; he predicted that kids from black and minority ethnic backgrounds would not go to university, but there are now higher rates of participation in university among kids from BME backgrounds than ever before. Why does he not stick with the facts?
Nigel Mills (Amber Valley) (Con)
T7. In a recent informal ballot I organised in my constituency, more than 80% of those who replied wanted to leave the EU. Is it not now time for a Government Bill so that we can have the referendum that people want?
The Deputy Prime Minister
I suspect that the hon. Gentleman and I will have been in the same Lobby back in 2011 when we introduced legislation on behalf of the coalition guaranteeing in law something that could not be tampered with by future Governments and Parliaments: the circumstances in which a referendum on our membership of the EU would take place—when the rules next change and we are asked to endorse a new treaty. That was our view then, and it remains my view now. It is perfectly free to do so, but his party has decided to change its mind radically since then.
Mrs Emma Lewell-Buck (South Shields) (Lab)
T6. The Liberal Democrats have said they want to reform the bedroom tax, so why did the Deputy Prime Minister and his colleagues not support the Bill brought in by my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) to exempt the 60,000 unpaid carers being hit by this unfair policy?
The Deputy Prime Minister
The hon. Lady is right that, on the basis of research we commissioned in government, we think that amendments need to be made so that new social tenants receive only the housing benefit they need for the number of bedrooms they have, but the Liberal Democrats feel that disabled adults should be treated the same as disabled children and that those offered an opportunity to downsize should have the provisions applied to them. That was the subject of the private Member’s Bill of my hon. Friend the Member for St Ives (Andrew George). If we had been granted a money resolution, we could have voted on it in this House.
Mark Hunter (Cheadle) (LD)
T9. May I thank the Deputy Prime Minister for recently visiting my constituency to promote the northern futures initiative? Does he agree that the idea of giving real power back to the great northern cities is long overdue, and will he give the House an update on recent progress?
The Deputy Prime Minister
As ever, it was a great pleasure to visit my hon. Friend in his constituency. He is right that through city deals and local growth deals we are finally loosening the clammy grip of Whitehall that for too long has stifled innovation and autonomy in our local communities, particularly our great cities, in the north and the elsewhere, which should be powerhouses able to make up their own minds, rather than being hamstrung by Whitehall red tape.
Natascha Engel (North East Derbyshire) (Lab)
T8. On Friday, the UK Youth Parliament held its sixth annual sitting in this Chamber. Last year, its members chose votes at 16, and this year they chose mental health services and the living wage, as their main campaigns. Could the House mark the importance of the Youth Parliament perhaps by having an annual debate on the subject chosen by it?
The Deputy Prime Minister
Of course, I defer to you, Mr Speaker, and the usual channels, but I hope we can take up that idea. In selecting mental health for debate, the Youth Parliament was right to shine a spotlight on the sometimes awfully under-resourced and badly organised children and adolescent mental health services around the country. They need reform and improvement, and it was right to push the House to do that. I hope we can take up the hon. Lady’s suggestion of an annual debate on the topics the Youth Parliament selects in the future.
Andrew George (St Ives) (LD)
T10. My right hon. Friend made it very clear that he would grant a money resolution necessary for the EU referendum to proceed once the same facility was in place for the first private Member’s Bill that dealt with the bedroom tax or spare room subsidy. What can he do to make sure that the Prime Minister respects the decision of Parliament and does not abuse the privilege of Executive power?
The Deputy Prime Minister
On the private Member’s Bill and the Prime Minister’s decision to withhold the money resolution, the Prime Minister will need to reply directly to my hon. Friend. But the convention of granting money resolutions to private Members’ Bills is a long-standing one that, broadly, should be respected.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
T12. Does the Deputy Prime Minister agree that with so many different constitutional processes under way and so many different views being expressed on our country’s constitutional future, we are in danger of creating an even bigger dog’s breakfast than we already have?
The Deputy Prime Minister
As I explained, excessive neatness—the idea that we have everything rolled into one single process and decided simultaneously—is probably unrealistic and undesirable. But especially in the wake of the Smith commission and the debates we are having about how we administer votes in this House on English and Welsh matters, we need a wider constitutional convention stretching into the next Parliament to bring all the different threads together in the way that the hon. Gentleman implies.
Sir Andrew Stunell (Hazel Grove) (LD)
T11. I thank the Deputy Prime Minister for the energy that he has put into making the northern futures project work. Does he agree that growth in investment in infrastructure is a fundamental part of that? Does he also agree that getting the second phase of the Hazel Grove by-pass in my constituency has to be a part of that process?
The Deputy Prime Minister
I am sure that the Hazel Grove by-pass weighs heavily on the mind of the Chancellor, much as it does on my right hon. Friend’s and mine. He is right to say that revamping our national infrastructure, particularly those parts of our transport infrastructure that are still Victorian and in some cases somewhat dilapidated, is a major national mission that we must persist with over many years.
Diana Johnson (Kingston upon Hull North) (Lab)
T13. Talking of great northern cities, I know that Hull is outside the Deputy Prime Minister’s golden triangle. Will he explain to my constituents why, in his statement of 6 November, he did not back Hull’s privately financed bid to get rail electrification to Hull in time for 2017 and the city of culture and why he said that we would have to wait until the 2020s?
The Deputy Prime Minister
I do not recall responding in the way that the hon. Lady suggests.
The Deputy Prime Minister
The hon. Lady says I did not respond at all. As she will have noticed this morning, there are many Members of this House who have local infrastructure projects and who, quite rightly, want to see them advanced. I defer to nobody in my zeal to see road and rail improvements across the country. I know that this is an alien concept to those on her side of the House but affordability is something that one must attend to. If she is saying that there is a fully formed and fully affordable means by which electrification can be provided, of course that is something that all of us would back.
Bob Blackman (Harrow East) (Con)
T4. Across London, and in my constituency in particular, some 10% of the adult population now come from eastern Europe but only about 3,500 appear on the electoral register as EU citizens not eligible to vote. There are now 4,000 EU citizens registered to vote who may think that they have a vote in the general election. Could my right hon. Friend do something to clean up the electoral register so that those who are entitled to vote can vote?
The Deputy Prime Minister
I am grateful to my hon. Friend for raising this but we are not aware of individuals from EU countries being on the electoral roll for UK parliamentary elections. EU nationals are entitled to vote in the UK in European Parliament elections and local elections, and EU nationals on the electoral register have a separate mark against their name to indicate that they cannot vote in UK parliamentary elections. That system has served us well, but I and other Ministers will look at the issue that he describes.
Douglas Carswell (Clacton) (UKIP)
T14. The Deputy Prime Minister talks about a cross-party constitutional convention. To ensure that it is not an establishment fix, will cross-party participation include those parties committed to a post-EU future?
The Deputy Prime Minister
As I said, all constitutional issues are always best dealt with on a cross-party basis. More than that, I think it is best dealt with when we embrace the public rather than make it just for politicians sitting in this Chamber—including, dare I say it, for such an anti-establishment figure as the hon. Gentleman. That seems to me to be the real thing that we should be doing—opening up this constitutional discussion to involve as many members of public as we can in the years ahead.
Mr Speaker
Order. I ask the hon. Member for Burton (Andrew Griffiths) to take his seat. We want to see not the back of his jacket, but the front of his face. We are grateful to him.
Mr Philip Hollobone (Kettering) (Con)
Why is far more not being done to ensure that UK nationals who live abroad are put on to the UK electoral register?
The Deputy Prime Minister
I think a fair amount is being done. The hon. Gentleman will be familiar with the time limits that operate with respect to people exercising their right to vote here if they live abroad, but British citizens who live abroad will be very mindful of their rights and can take them up very easily. Many British citizens living abroad do take them up on a regular basis.
Mr Iain McKenzie (Inverclyde) (Lab)
Would the Deputy Prime Minister consider replicating the Scottish Government’s unique approach to attracting and retaining people on the electoral register by admonishing them for all their historic council tax debts?
The Deputy Prime Minister
I am not aware that we are planning to do that. As the hon. Gentleman knows, we have progressed with individual voter registration—first advocated by Labour when in government—and we have transferred data from other databases on to the individual voter registration database to ensure that the vast majority of voters are transferred on to individual voter registration without having to do anything themselves.
Dr Julian Huppert (Cambridge) (LD)
I welcome the work of my right hon. Friend and others to support the Greater Cambridge city deal, which will make a huge difference for transport and housing needs in the Cambridge area, but does he accept that if we had more devolution of powers to Cambridge we could do better—not just for ourselves, but in our contribution to the rest of economy? Will he look very carefully at what other powers could be given?
The Deputy Prime Minister
My hon. Friend is quite rightly proud of the astonishing economic dynamism of Cambridge and the surrounding area, which was of course reflected in the first city deal. I think it is a good thing that there is now such ambition to build on that city deal and go further. I know that my right hon. Friend the Secretary of State has listened very carefully to my hon. Friend’s representation and is keen to push this further.
Mr David Winnick (Walsall North) (Lab)
Before this Session comes to an end, why cannot the Deputy Prime Minister bring himself to apologise for having voted for and supported from the beginning the hated bedroom tax?
The Deputy Prime Minister
Perhaps I will do so when the hon. Gentleman apologises for seeing his party going on a prawn cocktail charm offensive with the City of London, sucking up to the bankers and crashing the economy. Perhaps then we could all start apologising.
Martin Vickers (Cleethorpes) (Con)
1. What discussions he has had with his ministerial colleagues on the effectiveness of the unduly lenient sentence scheme.
The Attorney-General (Jeremy Wright)
I have regular discussions with ministerial colleagues on a range of matters, including the effectiveness of the unduly lenient sentence scheme. In the year to 30 October, the Law Officers considered 362 cases under the scheme and referred 100 offenders to the Court of Appeal. Some 69% of those offenders then had their sentences increased by the court for some of the most serious violent and sexual offences, including murder, rape and sexual assault.
Martin Vickers
I thank my right hon. and learned Friend for that reply, and welcome the fact that many sentences have been increased. My constituents, however, find many sentences passed by the courts to be far too lenient. It is clearly important to maintain public confidence in the sentencing process, so what other steps does my right hon. and learned Friend intend taking to ensure that that is the case?
The Attorney-General
Of course, this is a remedy for those exceptional cases where the judiciary pass what are considered by the Court of Appeal to be unduly lenient sentences, and I think it is right that we have that mechanism available to us. I believe that the judiciary generally get it right, but that when they do get it wrong it is important to have a mechanism to correct things.
Keith Vaz (Leicester East) (Lab)
I raised with the Attorney-General’s predecessor the case of Elena Fanaru, a young woman who was killed by a driver who did not have insurance and got a shockingly lenient sentence. The key is keeping in touch with either the victims or, where they are deceased, the families of the victims. Can the right hon. and learned Gentleman reassure us that that is happening throughout this process?
The Attorney-General
Yes, I can give the right hon. Gentleman that assurance. As he says, it is important that people affected by offences of this kind have an opportunity to invite the Law Officers to consider the matter. As he will know, not every offence is currently included in the scheme and not every case that is referred to the Law Officers will subsequently be referred to the Court of Appeal, but I think it important that those people have an opportunity to raise their concerns, and that others who have no connection with the case have that opportunity as well. I emphasise again that only in exceptional cases will the matter be taken further.
Andrew Griffiths
My constituent Mr Christopher Adams pleaded guilty to three offences of sexual activity with a young woman in my constituency who had the mental age of a child. Although he had pleaded guilty and had been told by the judge that he should expect a lengthy custodial sentence, he actually received only a community order—not even a restraining order to keep him away from the young girl concerned. That case cannot be referred under the unduly lenient sentence scheme because it does not qualify: the system does not consider it a serious enough offence. My constituents feel that it is a serious enough offence. Is it not time that we examined that case and others of its kind with the aim of enabling them to be reviewed if the sentence imposed was not strict enough?
The Attorney-General
I commend my hon. Friend not just for raising that case today, but for communicating with me about it more than once. He feels very strongly about it, and I understand why: it is clearly a very terrible case. At present, as he will know, the balance is struck between a manageable system that enables us to pass truly exceptional cases to the Court of Appeal and ensuring that people have an opportunity to raise their concerns. I can tell him, however, that I am looking at the unduly lenient sentence scheme again to ensure that its scope is appropriate and that it is coherent and sustainable, and I will take careful note of what he and others have said as I do so.
Philip Davies (Shipley) (Con)
As the Attorney-General knows, I refer a number of cases to him for appeal against unduly lenient sentences, and I am very grateful to him and to the Solicitor-General for the way in which they consider them. The Solicitor-General has now begun to view the behaviour of offenders after their conviction to establish whether they have gone on to the straight and narrow as a factor in the decision on whether to appeal. On that basis, is it not time that we increased the period during which people can appeal against unduly lenient sentences from 28 days to perhaps double that, so that everyone has more of a clue about the path on which the offender has embarked after he has been sentenced?
The Attorney-General
That is certainly one of the criteria that are considered, but it is not the only one. Most consideration concerns whether the judge applied the information that was available to the sentencing judge appropriately in determining whether a sentence was unduly lenient.
The issue of the time limit for making a reference under the scheme is a vexed one, and I know that my hon. Friend has raised it before. I think it is important for there to be certainty and a fixed end point, and for defendants to understand clearly that after a fixed period they will know what sentences they will be serving. For that reason, I am not currently minded to extend the time limit, although, as I have said to my hon. Friend, I am considering other aspects of the scheme very carefully.
John Stevenson (Carlisle) (Con)
2. What steps he has taken to promote pro bono work among members of the legal profession.
Miss Anne McIntosh (Thirsk and Malton) (Con)
8. What steps he has taken to promote pro bono work among members of the legal profession.
The Solicitor-General (Mr Robert Buckland)
The Attorney-General and I are the pro bono champions for the Government, and part of our responsibility is to uphold the rule of law. I am helped by two pro bono co-ordinating committees, which bring together the leading organisations dedicated to the delivery of pro bono legal help and representation both here and abroad. The Attorney-General and I attended a number of events as part of the recent national pro bono week to highlight the importance of pro bono, and to encourage the profession to continue its engagement with pro bono initiatives.
John Stevenson
Let me begin by declaring an interest, which is in the Register of Members’ Financial Interests. I am a solicitor.
I commend the Solicitor-General for encouraging members of the legal profession to do pro bono work. Does he agree that we should encourage other professionals, such as accountants and surveyors, to do likewise?
The Solicitor-General
I strongly believe that showing a willingness to work with the community for the community’s benefit enhances the reputation of professions such as the law and accountancy.
Miss McIntosh
As a non-practising Scottish advocate, I congratulate and pay tribute to the legal profession for its generosity in the pro bono work it does. Will my hon. and learned Friend assure the House that we are reimbursing all the costs in particularly costly family law and custody cases? I have had a number of difficult ones in North Yorkshire, which has been a pilot scheme for early adoption. We must make sure the full costs are awarded for legal representation in these very difficult emotional cases.
The Solicitor-General
I am grateful to my hon. Friend for her question. The amount of money or financial equivalent now being generated by pro bono work is about £601 million-worth of work. A number of family case judgments have recently caused a lot of interest. In two of them in particular I am glad to say civil legal aid was awarded after full information was obtained. In another case, there were particular difficulties with the application of the threshold test in an application to discharge an adoption order. I know those matters are concerning the Ministry of Justice, and I am sure my colleagues in that Department will be able to deal with the issues as they arise.
Huw Irranca-Davies (Ogmore) (Lab)
The firms and individuals who engage in pro bono work are to be commended, but we in the UK are not alone among continental neighbours in being behind the curve in terms of our pro bono offer at the same time as legal aid has of course been cut. Does the Minister, as pro bono champion, anticipate that pro bono will now fill the gaps left by the withdrawal of legal aid?
The Solicitor-General
Pro bono work is never a substitute for legal aid. It is an adjunct to legal work, but not a substitute. That has applied throughout the development of pro bono work, and at various times we have seen previous Labour Governments make changes to legal aid. I think it would be wrong to correlate the two.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I work with a man called Glyn Maddocks, who puts an enormous amount of pro bono time into miscarriages of justice, and many solicitors and legal people do that. Does the Minister share my concern, and will he talk to the Law Society about this, at increasing evidence of lawyers—solicitors—working in a grey area where I believe they are becoming very suspect in the way in which they handle their affairs?
The Solicitor-General
I listened very carefully to the hon. Gentleman. The Solicitors Regulation Authority deals with professional misconduct and I know that it takes all complaints very seriously indeed. The solicitor profession has a long and honourable tradition of quality work and I know solicitors would want that to be maintained, so if there are any particular cases, I urge they be taken up with the SRA.
Paul Uppal (Wolverhampton South West) (Con)
3. What steps the Crown Prosecution Service has taken to increase the conviction rate for hate crimes against disabled people.
The Solicitor-General (Mr Robert Buckland)
The proportion of successful outcomes of disability hate crime cases increased from 77.2% in 2012-13 to 81.9% in 2013-14. To build on this improvement, as recently as last month the CPS published a new disability hate crime action plan further to improve the prosecution of disability hate crime and the experience of disabled victims and witnesses.
Paul Uppal
I thank my hon. and learned Friend for that response. In my constituency, I have worked with various organisations and individuals who have highlighted to me the fact that from a BME community background this can often be a culturally taboo subject to talk about. May I impress upon my hon. and learned Friend the importance of being mindful of that? We should send a strong, robust message on hate crime, through not just his own good offices but those of other organisations as well?
The Solicitor-General
I thank my hon. Friend for that question and I hear very much what he says, and I am sure the CPS hears it too. All discrimination cases should be treated equally. It is troubling that disability hate crime remains the lowest strand of offences prosecuted, which is why the CPS action plan is a vital step forward.
Bill Esterson (Sefton Central) (Lab)
My thoughts are with the family and friends of Erick Maina, who was tragically found dead over the weekend after apparently taking his own life. Shockingly, racist graffiti referring to Erick appeared in my constituency in the days after his death. Will the Minister commit to reversing the recent decline in prosecutions so that appalling acts of hate crime such as that linked to Erick’s death are dealt with in the strongest possible way?
The Solicitor-General
The hon. Gentleman has raised a grave and serious case, and it is one of a number that are concerning us as constituency MPs. The 10-point disability hate crime action plan will help to reinforce the message to prosecutors and to the police that hate crimes can take many forms. An example is people who befriend individuals with learning difficulties, then use coercive control to commit crimes against them. That is a hate crime.
Mr Marcus Jones (Nuneaton) (Con)
As a member of my local Mencap organisation, I am well aware of the concern about disability hate crime. I hear what my hon. and learned Friend says about the progress being made on conviction rates, but is he confident that he will continue to make progress in that regard, and will he say a bit more about how an improved conviction rate can be achieved?
The Solicitor-General
My hon. Friend has mentioned Mencap, whose “Hear my voice” campaign is playing an important part in raising awareness of disability hate crime. In the prosecution of these cases, it is important that we widen the ambit to consider the entire experience of people with learning difficulties and lifelong conditions in the criminal justice system. Frankly, it has not been a good one, and I will do all I can to offer leadership to ensure that real change in the criminal justice system can be obtained for people with learning difficulties and disabilities.
Julie Hilling (Bolton West) (Lab)
Prosecutions for hate crimes are down, compared with the figures for 2010-11, even though the Home Office evidence and our own postbags show that incidents of hate crime— particularly disability hate crime—are increasing. What is the Solicitor-General doing to determine the cause of the drop in prosecutions, and to improve the response of the law enforcement agencies?
Mr Speaker
Order. I am sorry to embarrass the hon. Member for Wolverhampton South West (Paul Uppal), but I must make this point because this is the second time today that this has happened. An hon. Member must not leave the Chamber while the exchanges on his or her question are in train. Members really ought to know that, and I think that most do. The hon. Gentleman is normally the most courteous of individuals, but he must stay, whatever other commitments he might have, until those exchanges have been completed. That is the courtesy that we expect of Members.
The Solicitor-General
Coming back to the question from the hon. Member for Bolton West (Julie Hilling), she is right to make that point. It is encouraging to note that prosecutions have increased from 150 or so five years ago to between 400 and 500 now, but the action plan contains provisions to offer further training to prosecutors and the police so that they can be fully aware and put themselves into the shoes of people with learning difficulties. There was also a high-level management conference last week at which a service user with disabilities came to speak to prosecutors and to lay it on the line about their experience.
Mr Philip Hollobone (Kettering) (Con)
The proportion of cases being successfully prosecuted is impressive and increasing, but the overall number of convictions is still very small. I reckon that it is nine a week, out of a population of 63 million. Which parts of the country are doing this best, and how can the other parts of the country learn from them?
The Solicitor-General
I do not have the specific figures, but I know from a recent report from Her Majesty’s Crown Prosecution Service inspectorate that there have been examples of best practice in the north-west and the north-east. Those examples could be followed by other CPS areas to help to increase the number of prosecutions.
Kerry McCarthy (Bristol East) (Lab)
4. What recent assessment he has made of how effectively police and prosecutors co-operate in securing convictions of perpetrators of child abuse.
Helen Jones (Warrington North) (Lab)
6. What recent assessment he has made of how effectively police and prosecutors co-operate in securing convictions of perpetrators of child abuse.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
7. What recent assessment he has made of how effectively police and prosecutors co-operate in securing convictions of perpetrators of child abuse.
The Attorney-General (Jeremy Wright)
The Crown Prosecution Service prosecutes child abuse cases robustly. In 2013-14, the number of child abuse prosecutions rose by 440 to 7,998 and the conviction rate rose to 76.2%—the highest ever, and a reflection of the close co-operation between the police and the CPS.
Kerry McCarthy
I thank the Attorney-General for his response. The excellent recent report produced by my hon. Friend the Member for Stockport (Ann Coffey) raised concerns in relation to child sex exploitation and grooming in the Manchester area that negative comments by the CPS about the victims’ behaviour had influenced the decision not to bring charges. Will he ask Her Majesty’s Crown Prosecution Service inspectorate to review those charging decisions made by the CPS to ensure that the new guidelines—which do not allow prejudices and stereotypes about the victims to be taken into account—are now being adhered to?
The Attorney-General
Yes, I have seen the report by the hon. Member for Stockport and I agree that it is an impressive and particularly striking piece of work. I hope the hon. Member for Bristol East (Kerry McCarthy) will be relieved to know that updated guidance for Crown prosecutors on this type of offence is already available and makes precisely the point to which she refers. A number of myths need to be addressed, and not only in the minds of prosecutors; there needs to be communication with courts and juries to make sure that some expectations that some jurors and some prosecutors have of how victims of this type of offending ought to behave are challenged and dealt with. That guidance is in a much better place now, and the CPS is serious about it.
Helen Jones (Warrington North) (Lab)
The excellent report by my hon. Friend the Member for Stockport showed that there had been 13,000 complaints of serious sexual assault against children in six years but only 1,000 convictions. Is it not time to review not only the guidance for prosecutors but how the police handle these cases, how they deal with victims and the kind of evidence they collect, to ensure that these crimes are taken seriously and that they realise that these are children who cannot give consent, whatever their circumstances?
The Attorney-General
Yes, the hon. Lady is certainly right about the last point she makes, and it is important that everybody keeps that in mind in these cases. As she will understand, I do not take responsibility directly for what the police do, but it is important that Crown prosecutors have the earliest possible interaction with investigators to make sure these cases develop in the right way. Again, that forms part of the updated guidance and we are keen to see that it happens. In addition, it is important that we have specialist prosecutors who understand these cases well. The CPS is now taking that approach and it is a positive move forward, which will mean that these cases are prosecuted in the most effective way.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
These statistics are shocking and I am grateful for the Attorney-General’s reassurance that they will be reviewed. Will he be discussing with the Home Secretary today’s report by Her Majesty’s inspectorate of constabulary about the non-recording of 200,000 reported sexual offences?
The Attorney-General
Yes, and clearly this matter is of great concern. The hon. Lady will understand that that report was commissioned by my right hon. Friend the Home Secretary, who I know will wish to take up some of its recommendations very clearly, and I will certainly discuss with her what more the CPS can do to assist. The hon. Lady will also understand that, notwithstanding the point I made to the hon. Member for Warrington North (Helen Jones) about the need for Crown prosecutors to be engaged at an early stage, these prosecutors cannot be engaged right from the outset. It is important that once they are, they engage properly and prosecute these cases effectively.
Mr Speaker
I am trying to help Members but they must help themselves. Extreme brevity is now required, not preambles. We need short questions and short answers.
Tessa Munt (Wells) (LD)
Edward Graham, a retired serviceman, was recently sentenced to 13 years’ imprisonment for 23 counts of sexual abuse, after a trial by a court martial. I understand that a court martial should be used for service personnel only for matters of military discipline, so will the Attorney-General have discussions with the Secretary of State for Justice and the Secretary of State for Defence to ensure that all future cases not involving matters of military discipline are investigated by the police and tried by the civilian courts?
The Attorney-General
Let me be as brief as I can, Mr Speaker. I understand that the only way of prosecuting this man was via a court martial, because the offences took place before the law had changed to allow for the prosecution of this type of offence in a civilian court in this country. So if a British court was to take it, it had to be a military court. It was a good example of the effective prosecution of historical abuse claims.
David Mowat (Warrington South) (Con)
There have been several recent instances of victims of child abuse being subjected to intimidatory and vicious cross-examination by defence barristers, which will be a deterrent for those people coming forward in the future. Is there more we can do to raise standards in this regard?
The Attorney-General
Yes, I hope there is. First, I should say it is right that the defence case is put to prosecution witnesses and to complainants, and that will often be a difficult experience. However, aggressive cross-examination is not necessarily the same as effective cross-examination, and it is important that defence advocates as well as prosecution advocates understand that clearly. I know that the Lord Chancellor is interested in talking to the legal professions about the best way to ensure the necessary training is delivered, and, as I have said, as far as prosecutors are concerned that is already being done.
Mr Peter Bone (Wellingborough) (Con)
It has been reported in the media today that a 12-year-old boy was murdered in the 1980s by a Member of Parliament at a depraved sex party. What resources will the Attorney-General put to that investigation?
The Attorney-General
My view is that the Crown Prosecution Service should pursue cases where the evidence exists to wherever the evidence leads regardless of the position held by the person being investigated. If evidence is brought to light to justify such an investigation, I would expect it to be carried out.
Justin Tomlinson (North Swindon) (Con)
5. What steps the Crown Prosecution Service has taken to improve the conviction rate for rape and domestic violence in the last two years.
The Solicitor-General (Mr Robert Buckland)
The Crown Prosecution Service has taken a number of steps to prioritise effective prosecutions of rape and domestic violence. In June 2014, the CPS published, with the police, a national rape action plan to improve the investigation and prosecution of these crimes. In addition, in May 2014, the CPS launched a public consultation on legal guidance to prosecutors on cases involving domestic violence.
Justin Tomlinson
Will the Solicitor-General join me in thanking Swindon’s women’s refuge and victim support teams for providing a vital service that gives victims of crime the confidence to speak out?
The Solicitor-General
I am happy to join my hon. Friend in doing so. I have visited the refuge; it is an example of best practice and one of a large and growing network of crisis centres that help and support women who have nowhere else to turn.
Emily Thornberry (Islington South and Finsbury) (Lab)
Although it is important to improve conviction rates, we must also look at why so few rape cases make it to trial. Today, Her Majesty’s Chief Inspector of Constabulary published a critical report, which contained some really troubling findings, especially in relation to the handling of sexual offences. The inspector found that serious sexual offences were not being recorded. They included 14 rapes where offenders had simply been issued with an out-of-court disposal, and in many of those cases they should have been prosecuted. I have been expressing concern for some time that there needs to be far greater CPS oversight of police decision making in cases of rape and other serious sexual offences. Does the Solicitor-General agree that this report illustrates that that plan is the right one to take, and will he support Labour’s proposals to ensure that before a rape case is dropped a CPS lawyer must look at it?
The Solicitor-General
The hon. Lady makes proper points about a report that raises serious concerns. It is right to note that, in the year ending June 2014, the Office for National Statistics recorded a 29% increase in reported and recorded rapes, so progress is being made, but much more needs to be done. The national rape action plan is a vital part of ensuring that more is done by police and prosecutors to monitor why cases are not followed through. We know that sometimes the reasons for that are quite complex and varied.
Apprenticeships (Child Benefit and Tax Credit Entitlement) (Research)
Jesse Norman (Hereford and South Herefordshire) (Con)
I beg to move,
That leave be given to bring in a Bill to provide for a programme of research into the costs and benefits of extending eligibility for Child Benefit and Tax Credit entitlement to young people completing apprenticeships; and for connected purposes.
The Government have made excellent progress over the past four years in increasing the take-up of apprenticeships. Across England, more than 1.9 million apprenticeships have started since 2010, with the number of apprenticeships overall having more than doubled in this Parliament. In my own constituency of Hereford and South Herefordshire, between 2010 and 2014, 2,210 apprenticeships were started compared with 2,340 in the previous four years, which is an increase of 80%. But that terrific growth has largely been due to increasing numbers of over-25 year-olds starting apprenticeships. The number of 16 to 19-year-olds starting apprenticeships has remained relatively flat. In 2011-12, there were some 130,000 apprenticeship starts among 16 to 19-year-olds. That fell to 114,000 in 2012-13. The provisional figures for 2013-14 indicate that apprenticeship starts for 16 to 19-year-olds rose slightly to 118,000. So the huge increase overall in apprenticeships does not seem to be getting much traction among school leavers, and it is worth asking: why not?
At my local jobs fair in Hereford last March, a friend who works in the local jobs club pointed out to me a serious inconsistency in how the benefit system treats young people. If a 16 to 19-year-old stays in education, their family can continue to claim child benefit and tax credits for them. But if that same young person takes up an apprenticeship instead, they are counted as being in work and their family can no longer claim benefits on their behalf.
Clearly, apprenticeships are work, but as the apprentice minimum wage is just £2.73 an hour, the youngest and most poorly paid apprentices will often be earning less than their family could receive in benefits for them. The minimum wage for under-18s not in apprenticeships is £3.79 an hour, rising to £5.13 an hour for 18 to 20-year-olds, so the young apprentice ends up neither receiving benefits nor earning the normal minimum wage.
Of course, there are many reasons why an apprenticeship is highly worth while even with the relatively low apprentice minimum wage. Many employers invest heavily in high-quality apprenticeships, and an apprenticeship serves as a stepping-stone between training and full employment, but we must also consider what benefits are lost to the family of someone who becomes an apprentice at this early age. The area is extremely complex, as the House will know, but I have checked the following numbers with the Library.
First, the family will lose child benefit. If the apprentice is the only child in the family, that will be £20.50 a week. If the family is in receipt of child tax credit, they will also lose up to a further £3,295 a year, or £63.37 a week. Indeed, colleagues have reported that they might also lose housing benefit. If a person aged 16 to 19 works 30 hours a week at the apprentice minimum wage, they will earn £81.90, on which they will not pay tax or national insurance, so the net effect of a 16-year-old’s going into an apprenticeship on minimum wage could be a drop in family income of just under £2 a week, or a little over £100 a year.
How, then, do these young apprentices fare relative to someone who is in full-time education? The family of a 16 to 19-year-old in full-time education will continue to be eligible for child benefit and other benefits for that child, even when that child is in paid work. They might also be entitled to a 16-to-19 bursary, or the education maintenance allowance if they live in Wales, Scotland or Northern Ireland. We must not forget that full-time education is defined as more than 12 hours a week of supervised study, and that many apprentices will do seven hours a week in their work.
I am highly sympathetic to the Government’s position on this issue, which is that
“When a young person takes up an apprenticeship, they are classed as in employment with training. From that point, benefits for the young person paid to their parents cease.”—[Official Report, 28 January 2014; Vol. 574, c. 757.]
But as the National Institute of Adult Continuing Education has pointed out in supporting the Bill today, the notion that a young apprentice should be considered a non-dependent in relation to benefits would be challenged by many parents, to put it mildly.
Apprentices are caught in the middle between training and employment. As the idea of an apprentice minimum wage implicitly recognises, what matters is not the classification but the human consequences for those affected by the loss of benefits, and the deterrence from taking up an apprenticeship that results. This is an injustice that affects the least well-off in our society and we need to fix it, and that is why I urge the House to support the Bill.
Question put and agreed to.
Ordered,
That Jesse Norman, Angie Bray, Jim Shannon and Mr Graham Stuart present the Bill.
Jesse Norman accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 9 January, and to be printed (Bill 121).
Small Business, Enterprise and Employment Bill (Programme) (No. 2)
First day | |
|---|---|
New Clauses, new Schedules and amendments relating to Part 4 | 4.00 pm on the first day |
New Clauses, new Schedules and amendments relating to Part 1; New Clauses, new Schedules and amendments relating to Part 2; New Clauses, new Schedules and amendments relating to Part 3; New Clauses, new Schedules and amendments relating to Part 5; New Clauses, new Schedules and amendments relating to Part 6 | 7.00 pm on the first day |
Second day | |
New Clauses, new Schedules and amendments relating to Part 11; New Clauses, new Schedules and amendments relating to Part 7; New Clauses, new Schedules and amendments relating to Part 8; New Clauses, new Schedules and amendments relating to Part 9; New Clauses, new Schedules and amendments relating to Part 10; New Clauses, new Schedules and amendments relating to Part 12; remaining proceedings on Consideration | Two hours after the commencement of proceedings on Consideration on the second day |
Toby Perkins (Chesterfield) (Lab)
We felt at the time of the original programme motion that the Government were in a bit of an unseemly rush to get through all this, and debate on the Bill has showed that although the Government might be in a rush, there was a lack of attention to detail on some of the key points that the Government might have thought important in putting together a Public Bill Committee. Not unlike proceedings today, Committee proceedings started with the Minister for Business and Enterprise racing in just after we had started.
Some things that one might usually expect a competent Government to have got together in advance of a Bill Committee did not appear to be there. For example, they did not have Members on the Committee who supported significant parts of the measure, and they clean forgot to vote against some amendments.
Everything was rather slapstick at first, but since Committee the Government’s approach has taken a slightly less savoury turn. Report was brought forward, apparently to reduce the time available for campaigning on important issues such as the measures on pub companies; there was a significant amount of public opinion that further changes were needed to those.
At 6 pm yesterday we still did not have the order in which matters would be debated today. That impacts on the capacity of hon. Members and those who want to follow the proceedings of the House to be involved. It is a disappointing turn for democracy that the Government should behave in such a shabby manner, given that we will discuss important issues.
A number of Members want to debate the issues before us, especially pub companies, so I do not propose detaining the House with a vote on this programme motion, but I do want to put on the record that the way in which this important issue has been approached, and specifically the way in which everything has been left so late, and the last-minute changes to what was to be debated and when, reflect poorly on the Government.
The Minister for Business and Enterprise (Matthew Hancock)
I will be brief. I want just to clear up a couple of inaccuracies. There was time to spare in Committee; the Committee reported to the House earlier than planned by a few hours, and several of the sittings ended at 4 o’clock, rather than 5 o’clock, as agreed. It is important that the House notes and the record shows that in Committee we considered the Bill in full and had more than enough time; we did not use it all up.
Secondly, as always and as is normal, we have agreed the timings of Report through the usual channels. It is absolutely right that we should spend plenty of time on the issues on which there is the most interest. By changing the timings of Report, we have managed to expand the time available to debate pubs, not least because that seems to be the issue in the Bill that is of the greatest interest to Members. We have more time, and we would have had more still had the hon. Member for Chesterfield (Toby Perkins) not chosen to use some of it debating how much time we should have to debate these important issues, so I think we should get on with it.
Question put and agreed to.
Small Business, Enterprise and Employment Bill
(10 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:59 - The House divided: - Ayes: 284 / Noes: 269 - Question accordingly agreed to.
16:18 - The House divided: - Ayes: 238 / Noes: 302 - Question accordingly negatived.
18:32 - The House divided: - Ayes: 229 / Noes: 295 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
New clause 2—Pubs code: market rent only option for large pub-owning businesses—
‘(1) The Pubs Code shall include a Market Rent Only Option to be provided by large pub-owning businesses in respect of their tenants and leaseholders.
(2) A Market Rent Only Option means the right of the tenant, or leaseholder, of a pub owned by a large pub-owning business, to be offered such tenancy or lease in exchange for an independently assessed market rent paid to the pub-owning business and, for the avoidance of doubt, not thereafter being bound by “a tie”, meaning an agreement meeting, in whole or in part, Condition D as defined in section 63(5) of this Act (obligation to buy from the landlord, or from a person nominated by the landlord, some or all of the alcohol to be sold at the premises).
(3) For the purposes of this section, the definition of Condition D in subsection (2) is to be interpreted to include an obligation to buy or contract for goods and services other than alcohol.
(4) For the purposes of this section, the definition of a “large pub-owning business” is a business which, for a period of at least six months in the previous financial year, was the landlord of—
(a) 500 or more pubs (of any description); and
(b) one or more tenanted or leased pub.
(5) The Pubs Code may include provisions to permit a brewery which qualifies as a large pub-owning business to continue to require that specified brands produced by that brewery (required products) are sold within its tenanted or leased pubs—provided that such tenants and leaseholders are free to purchase such required products from any supplier.
(6) The Pubs Code shall contain provisions requiring that the offer of a Market Rent Only Option to a tenant—
(a) at the point of lease, tenancy contract or other agreement renewal, or at rent review or five years from the date of the previous rent review;
(b) when the large pub-owning business gives notice of, or imposes, (whichever is the earlier) a significant increase in the price at which it supplies products, goods or services (falling under subsections (2) or (3)) to the tenant;
(c) when a large pub-owning business implements, or gives notice of, a transfer of title;
(d) when a large pub-owning business goes into administration; or
(e) upon an event outside of the tenant’s control, and unpredicted at the time of the previous rent review, that impacts significantly on the tenant’s ability to trade.
(7) The terms of an offer under subsection (5) shall include provision for a 21 day period of negotiation, commencing from the tenant giving notice of an intention to pursue a Market Rent Only Option, in which the large pub-owning business and the tenant may seek to negotiate a mutually agreeable Market Rent Only settlement.
(8) Following the negotiation period under subsection (7) there shall follow a 90 day period of assessment. In this period—
(a) an independent assessor shall be appointed with the agreement of both parties by joint private instruction and on the basis of an equal apportionment of costs; and
(b) under arrangements and criteria that the Adjudicator shall establish, such an assessor shall be—
(i) independent of both parties; and
(ii) competent by virtue of qualification and/or experience.
(c) if the business and tenant cannot agree on an appointee then a person shall be appointed, on the application of either party, under arrangements established by the Adjudicator;
(d) the appointed assessor shall then assess the market rent for the property operating as a pub with no “tie” as defined in subsection (2) and submit to both parties the resulting sum for such a rent; and
(e) at the time of the three month assessment period, the tenant shall have the right to pay no more than the sum determined under paragraph (d) to the pub-owning business and, if previously one party to a “tie” as defined in subsection (2), shall no longer be bound by it.
(9) The Pubs Code shall contain such measures as ensure that—
(a) the Market Rent Only Option is conducted in accordance with timing provisions and procedures, in accordance with RICS guidance, as specified in the Pubs Code; and
(b) large pub-owning businesses are prohibited from acting or discriminating against any of their tenants who choose the Market Rent Only Option.
(10) The Secretary of State shall confer on the Adjudicator functions and powers in relation to the Market Rent Only Option, that include—
(a) determining what constitutes a significant increase in price, as mentioned in subsection (6)(b) in the event of a dispute between tenant and business;
(b) adjudicating in disputes concerning the process or outcome of the market rent assessment; including the power to set the market rent if the Adjudicator deems the process or decision to have been flawed; and
(c) receiving, investigating and adjudicating in relation to complaints made under subsection (9)(b).
(11) The Secretary of State shall make provisions for the implementation of the following measures in this section by regulations amending the Pubs Code. Such regulations shall be made under negative resolution procedure. The Secretary of State may make provisions changing the types of agreement that fall under subsection (2) by regulations. Such regulations shall be made under negative resolution procedure.”
Government amendments 29 to 41.
Amendment 5, in clause 6, page 47, line 19, leave out “tied” and insert “tenanted, leased or franchised”.
Government amendments 42 to 58.
Jo Swinson
I am glad to be able to get on to the debate on part 4 of the Bill, which is about pubs. There was considerable debate in Committee on the measures to introduce a pubs code adjudicator and a pubs code, and I am sure that we will have another lively debate today. As my right hon. Friend the Minister for Business and Enterprise has already mentioned, there is considerable interest in this matter in all parts of the House, and it is important that we have good scrutiny of the Bill.
New clause 6 ensures that the definition of a tied pub does not inadvertently capture restaurant or hotel premises, which was a concern raised in Committee. We are aware of one fish and chip restaurant chain that could meet the conditions set out in clause 63, and it is possible that there are others. We all know a pub when we see one, and we all know the difference between a pub and a fish and chip restaurant, but defining that in legislation can prove difficult, particularly given increased food consumption in pubs, which is in large part the result of the hugely successful smoking ban making the experience much more enjoyable. That is a new way in which pubs have diversified, and indeed increased their income, but it makes separating them by legal definition more complex.
New clause 6 therefore provides the Secretary of State with a power to exempt a particular type of tenant or premise from the pubs code in secondary legislation, so that we can ensure that it is only pub premises that are in scope. For the avoidance of doubt, amendment 58 sets out that regulations created through the exercise of that power will not be subject to the hybrid instrument procedure.
There are two other big issues addressed by the amendments in this group. Our discussions today obviously follow many years of consideration by the Select Committee on Business, Innovation and Skills, which has, along with its predecessor Committees, looked in particular at problems in the tied pub sector—I think that there have now been four reports. I would like to pay tribute to the hon. Member for West Bromwich West (Mr Bailey), who I see is here, as well as to his Committee and its predecessors for all their work to ensure that the problems were heard, investigated, documented and addressed.
We heard concerns from Members on both sides in Committee about smaller companies and family brewers being covered by the statutory code and adjudicator. We also heard assurances, through the evidence submitted by smaller companies and family brewers, that they would continue to fund the voluntary regulation system, which I know many hon. Members feel strongly about.
Richard Fuller (Bedford) (Con)
The Minister says that there were concerns, but will she also acknowledge that the Government were defeated in Committee because of the strength of those concerns?
Jo Swinson
Absolutely. We have been considering how best to respond to those genuine concerns. This Government have no wish to overburden small business. Indeed, we have done a huge amount to reduce regulation on business, particularly small business. Of course, this is a small business Bill. We are trying carefully to strike the right balance between helping smaller pub-owning companies and helping individual tenants and small business people who are struggling with some of the difficulties documented in the Select Committee reports.
We have listened to all the concerns put to us and, on further reflection, have decided not to press amendments 29 to 33, 41, 43 and 44, which were designed to reinstate smaller pub companies within the scope of the statutory pubs code, albeit with lesser requirements. Instead, we will bring forward amendments in the other place to change the exemption to those companies that own fewer than 350 tied pubs. We think that strikes the right balance between preventing overburdening of genuinely small family brewers and ensuring adequate protection of tied tenants in a way that is proportionate.
The hon. Member for Chesterfield (Toby Perkins) made the point in Committee that a threshold of 500, which would have been set out in the Bill, would not have ended up capturing some groups that perhaps would have been expected to be captured. This change will ensure that the adjudicator’s attention, and indeed the costs of compliance with the measures, is focused on the largest companies in the sector and on the end of the market where most complaints originate.
Richard Fuller
I just want to clarify what the Minister said. I think that I might be seeing the deft hand of my right hon. Friend the Minister for Business and Enterprise, who seems to be the only one in the Department who understands small businesses. Can the Minister explain to the House what the big difference is between 500 and 350, or is she just grabbing at a number that does not look like 500, which she said in Committee was the right one?
Jo Swinson
The hon. Gentleman could recognise and welcome the fact that the Government have responded to the concerns he raised and have moved on the issue, but he has chosen not to, given his comments about colleagues in the Department, with which I wholeheartedly disagree. We must ensure that we consider those concerns, but they were raised not only by his colleagues, but by my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert), who was a member of the Committee, and by Opposition Members concerned about the issue.
Toby Perkins (Chesterfield) (Lab)
That is a fundamental part of this. The Government lost the vote in Committee, and now they say that the Bill will go right through to Third Reading as it is, but that they have some vague idea of doing something about the matter in another place. As we have been through Committee and are now on Report, that does not give this House much opportunity to debate whether we are happy with these eventual changes.
Jo Swinson
We have between now and 4 o’clock to have that discussion. What I have clearly set out is in line with what the hon. Gentleman wanted in Committee, which was for smaller companies to be excluded. As I have said, he made the very reasonable and rational point that there were some companies—this deals with the intervention from my hon. Friend the Member for Bedford (Richard Fuller)—that had in excess of 400 tied pubs, for example, and it might seem strange to people that such companies would not be covered. We listened in Committee and now propose that the threshold should be 350 tied pubs, rather than 500. I think that it is a positive thing that the Government have listened to the views of hon. Members and responded accordingly.
Toby Perkins
For the benefit of the House, can the Minister clarify how many businesses she believes will now be brought into scope that would not have been previously?
Jo Swinson
Three further businesses would fall into that category. It is obviously a fluid issue, because companies buy and sell pubs all the time, so that might change in future.
Sheryll Murray (South East Cornwall) (Con)
I am grateful to the Minister for listening to the will of the Committee. It is reassuring that the Government listen when amendments, such as the one that I tabled, receive cross-party support. Will she please clarify whether, when she talks about tied pubs, she is referring to tied pubs excluding managed pubs—in other words, short-term tenancies and leases excluding managed houses?
Jo Swinson
The definition is as set out in the Bill. Where a pub is directly managed, it does not meet the definition of a tied pub. I hope that gives the hon. Lady the reassurance she seeks.
As I have said, the Government have listened and recognised that the largest number of concerns originate at the end of the market with the largest pub companies, which is why we will focus the pubs code adjudicator on those companies. We recognise that there are concerns about other parts of the market, but clearly the House can return to those issues in future if it so wishes. We think that focusing the adjudicator’s attention in that way will resolve the vast majority of the issues that we have identified in the market.
We have listened to the concerns about smaller pub companies and family brewers. Of course, later this afternoon we will discuss another issue about which hon. Members from various parties have expressed strong views. It is clear from the number of hon. Members who have put their name to new clause 2 that there is a strong desire in the House for the statutory code to go further and to introduce the market rent only, or MRO, option.
We ran a consultation on that whole issue. As I pointed out in Committee, and as was said on Second Reading, it was one of the most popular consultations the Department has run in a very long time.
It received a huge number of responses because tenants, individuals and campaign groups take a great interest in the issue. Many representations were made on whether there should be a market rent only option and there was support from many quarters for that approach, but we recognise that there could be uncertain outcomes from such an approach. We would not want unintended consequences to harm the sector and the people we are trying to protect—
Jo Swinson
I will finish my sentence, then I will give way to my hon. Friend, who has such a strong record of campaigning in this area.
We recognise that many hon. Members worry that the pub companies need the very real threat of tenants going free of tie before they will offer their tenants a good tied deal. I can commit today that the Government will bring forward amendments in the other place to respond to this. Following the many Select Committee reports and the campaigning by my hon. Friend the Member for Leeds North West (Greg Mulholland) and others in all parties in the House, we have listened to those strong representations and we plan to add to the Bill a power to introduce a market rent only option after two years if a review concludes that the measures have not delivered sufficiently for tied tenants.
Greg Mulholland
I thank my hon. Friend for all the work she has done. I will respond to that last point when I make my speech. She commented on the popularity of the consultation; two thirds of all who responded backed the market rent only option. None supported what the Government are proposing—a parallel rent assessment—so what was the point of the consultation?
Jo Swinson
The point of a consultation is to explore the issues and, if necessary, to make changes to the Government’s proposals in response. That is exactly what we have done. The parallel rent assessment responds to some of the concerns expressed in the consultation about the initial ideas that we had outlined. It is right that the Government should be flexible enough to respond to a consultation. If the Government go into a consultation with a set of plans and come out of the consultation with exactly the same set of plans, that means either that the plans were perfect—sometimes that may be the case—or that the Government refuse to listen. That was the point of the consultation on this issue.
My hon. Friend makes the point that there was great support in the consultation for a market rent only option. He is right. The Government recognise that. Although I appreciate that he will be disappointed that that will not culminate in the Government accepting his new clause 2, it gives a great fillip to campaigners who have worked on this issue and shows that the Government are serious. We think that the parallel rent assessment approach that we have outlined will deliver the “no worse off” principle, which we should all be able to agree is what we want for tenants. We will make sure that with the further power, the market rent only option is still on the table if, for any reason, the parallel rent assessment proposal does not deliver the intended outcome.
Toby Perkins
I will not dwell on the fact that the Minister is suggesting that a consultation is a success if the Government change their view and conclude that something that no one was asking for is the right answer. The industry is desperate for certainty. If we come out of the process proposing another review in two years which might change the whole landscape yet again, does the Minister agree that we will have failed to give the industry the certainty it requires?
Jo Swinson
We recognise that a significant number of companies appreciate the beer tie. For many tenants and companies it is a model that works well, as Members on all sides would agree. Therefore, we do not want to undermine it. There is a danger that that could happen under the market rent only option. Equally, I understand that many people advocate that as a market-based solution to deal with the issue. We are trying to forge a way forward that will have the confidence of the industry and will allow the market rent only option to be introduced two years after commencement of the Bill if a review finds that the parallel rent assessment is not working. It is clear that the “no worse off” principle is paramount and needs to be delivered. We believe that the parallel rent assessment will deliver that, but if it does not, we do not want to have to introduce another piece of primary legislation. We want the Government to be able to act swiftly.
Anne Marie Morris (Newton Abbot) (Con)
I have listened with interest to the discussion of issues relating to new clause 2 and I agree that it is good to hear that the Government have moved on these matters. However, two years is a long time into the future. Another Government will be in office and a review would be toothless unless we are very clear about the criteria for judging whether the Government’s current proposals have succeeded. I would be grateful if the Minister clarified she is proposing. It needs to be concrete and specific to have any value.
Jo Swinson
We are proposing a power for the Secretary of State to introduce the market rent only option following a review that finds that tenants are not sufficiently protected by the system that we put in place. An important point that should reassure my hon. Friend is that we are creating a pubs code and putting a pubs code adjudicator on a statutory footing, so there will also be a significant individual who is independent, who is an expert and who has great experience of dealing with disputes. If cases go to arbitration, the adjudicator may be involved in investigations as well. The pubs code adjudicator will have a substantial amount of information at his or her disposal. We will not be in the situation that we have been in up to now, where it would be more difficult to assess the position. The adjudicator will enable us to make that assessment and to have an independent voice to set out what may need to happen further.
Andrew Griffiths (Burton) (Con)
Does the hon. Lady accept that, in an industry that employs thousands upon thousands of people and creates millions of pounds-worth of wealth for this country, there will be incredulity that amendments are to be made within hours of the Bill leaving this House? We have had four BIS Committee inquiries into this and years to discuss the issues, yet the Minister comes scrabbling to the Dispatch Box just a few hours before we are due to vote on the measure. How can that give the industry any confidence?
Jo Swinson
I regret the fact that my hon. Friend is disappointed, but he was often disappointed in the Public Bill Committee when we were not able to accept his amendments on a range of issues that, if taken together, would have undermined the purpose of the Bill. I know that he speaks up for his constituents and he represents one of the larger pub companies that has its base in his constituency, so I understand where he is coming from. His view of what needs to happen to address the problems and injustices in the industry is very different from that of many, and perhaps most, Members of Parliament. We want to make sure that we get the details right. We want to listen to the House. That is what a responsible Government do.
Richard Fuller
Perhaps I was unchivalrous earlier when I said that the Minister does not understand business. It is clear that the Government are on the run. This is the second issue on which they are proposing changes. What role has the Secretary of State for Business, Innovation and Skills played in these last-minute shenanigans?
Jo Swinson
Yes, the hon. Gentleman was unchivalrous and I am not sure he rescued the situation with that intervention. My right hon. Friend the Secretary of State, my right hon. Friend the Minister for Business and Enterprise, who is my fellow Bill Minister, and I discuss these issues as the hon. Gentleman would expect, as we try to make sure that we give the right response to the concerns raised in Committee.
Jo Swinson
I would like to make a little progress, then I will give way to my hon. Friend.
We have set out in the Bill the parallel rent assessment process, which gives tenants the opportunity to request a parallel rent assessment so as to be able to ascertain—
Jo Swinson
I have said that I will make some progress and then I will be happy to give way.
The parallel rent assessment process will enable tenants to get the information they need to assess the deal that they are being offered by their pub company—to look at the figures and decide whether they are being offered a good deal or would be better off under a free-of-tie option. Of course, the pub companies would hope that if, as they say, they are offering a genuinely good deal under the tied model, then very many tenants will be very happy to continue in that vein. However, if the parallel rent assessments show that they are worse off, or if there is a suggestion that the parallel rent assessments are not being properly and accurately completed, then the adjudicator has the power to ensure that the assessment is done again or, if necessary, to provide for a different rent to be set. The parallel rent assessment has the potential to revolutionise the experience of tenants, and it should reassure them that we are serious about this. If the pub companies do not reform and their behaviour continues as it has, we will be able to legislate further to introduce the market rent only option to ensure that tenants get a good deal.
I hope that my hon. Friend the Member for Leeds North West and those supporting his new clause will be reassured by this commitment. It is right that we give the new system a chance to deliver a fair deal, with an added power for Government to introduce a market rent only option should pub companies fail to do as they should. I think that that will focus minds. I am keen to listen to the debate that will take place on this issue.
Jo Swinson
I will; I said that I would once I had made some progress. Perhaps that was not clear to my hon. Friend.
Sheryll Murray
I wanted to intervene on a specific point, but I am grateful to the hon. Lady for eventually giving way. Will she please confirm what dialogue she has had with the industry, since the Committee stage just a couple of weeks ago, about the new measures of which she is informing the House today?
Jo Swinson
This is not the first intervention that my hon. Friend has made, and I am obviously happy to respond to it. The industry has made significant representations in writing and had the opportunity to contribute at the public evidence session, which is an excellent, fairly new innovation in this House from which we all benefited in Committee.
Jo Swinson
I would like to finish my answer to my hon. Friend the Member for South East Cornwall (Sheryll Murray) before I take another intervention.
In Committee, we had the opportunity to hear from and to have these discussions with the industry, as well as with campaign groups—we must recognise that both sides are important in this. Since then, written correspondence has taken place, to which I have responded to deal with some of the issues raised. Of course, as Minister, I will continue to do so.
Jo Swinson
I give way to the hon. Member for Pudsey (Stuart Andrew), who has not yet intervened.
Stuart Andrew
Our concern is that a lot of pubs could close over two years. We want assurances that there has been lots of dialogue with the industry and with pub owners who are going through these difficult times to make sure that they are happy with the proposal that the Minister is now bringing forward.
Jo Swinson
During the process of developing this legislation, there has been significant dialogue and consultation on the whole area through the formal consultation that Government held, to which we had the response earlier in the summer. I have met, through various round tables, members of companies that own pubs, family brewers, and tenants’ groups.
Jo Swinson
I am being asked to give way before I have finished responding to the previous intervention.
Mr Speaker
Order. I appreciate Members’ interest in these matters, but it is a little unseemly for them to try to intervene on a Member—in this case, the Minister—who is already responding to an intervention. Timing is of the essence in these matters. Be patient—the Minister is a most gracious and accommodating Minister.
Jo Swinson
Thank you very much, Mr Speaker.
My right hon. Friend the Business Secretary, my hon. Friend the Member for Cardiff Central (Jenny Willott)—who did her job so brilliantly during the six-month period when I was on maternity leave—and I have had various face-to-face meetings and held round table and discussion events. I have met some of the individuals who have been through the PICAS and PIRRS— pubs independent conciliation and arbitration system and pubs independent rent review scheme—processes. We have had those meetings face to face. There has been significant correspondence—reams and reams of correspondence—between me, as Minister, but even more so, in terms of the level of detail and volume, between my officials and these companies and campaign groups. I therefore do not think that the hon. Member for Pudsey can suggest that there has not been consultation. Equally, it would be impossible for me to stand here and say that everybody is entirely happy with these proposals; that was never going to be possible. I am sure that even the BIS Committee would recognise that there are very strong views on this issue, often in contradictory directions. We are trying to find the right way forward that best protects tenants while not imposing unnecessary burdens on businesses.
I now give way to the hon. Member for Burton (Andrew Griffiths).
Andrew Griffiths
I thank the Minister for giving way, because this is a very important issue. Investors will be looking at her statements today. This could affect the viability and the profitability of businesses, together with thousands of jobs. She has announced a brand-new element—the introduction of the free-of-tie option but with a two-year wait. Can she confirm whether she has spoken to a single member of the industry about the implications for their business of that two-year delay—to one person, yes or no?
Jo Swinson
I would like to correct the hon. Gentlemen’s characterisation of what is happening. He is saying that this is the market rent only option but with a two-year wait. To be absolutely accurate, it is a power for the Secretary of State to introduce the market rent only option after a period of two years if a review finds that that is necessary. That is not exactly the same thing. It is important to put that on the record.
Throughout this process, the Government have been engaging with companies and with individuals. The market rent only option was extensively covered and discussed within the consultation process. I have had very many such discussions with companies over the course of the past 18 months. As was put to us forcefully on various occasions, some large pub companies will not welcome this and are very opposed to it. At the same time, we recognise the issues that have been raised in successive BIS Committee reports about the tenants who are suffering and the need to do something about it. We think that our parallel rent assessment is a proportionate and sensible way forward that will deliver for tenants, but we are keen to make sure that if that does not happen we do not end up at this stage again; we need the ability to act swiftly to introduce a market rent only option.
Toby Perkins
Let me try to clarify this. In the last few moments we have discovered that there is to be a two-year review before fundamental change to the industry, leading to two years of uncertainty. Is the Minister saying that she has discussed a whole series of things over 18 months but has not spoken to anyone within the industry about the new development that she is presenting to us today?
Jo Swinson
I am saying that we have had plenty of negotiations and discussions about all the different options, but specific round tables have not been reconvened with the industry since the Committee stage. We know where the industry stands on this. My officials are in regular contact with the industry and with campaign groups, who have been making their cases fervently. Many Members represent tenants and also have pub companies and family brewers in their constituencies. Ministers have had many discussions with those hon. Members on behalf of their constituents who have raised these issues over the past couple of weeks since the Committee stage. Indeed, we also had such extensive debates in Committee. There has been plenty of consultation.
Grahame M. Morris (Easington) (Lab)
In relation to the Minister’s discussions with the Federation of Small Businesses, it estimates, according to the information that I have, that implementing the market rent only option would boost the economy by £78 million, and that over 90% of pubco tenants would have much more confidence to invest in their businesses, helping local economies to grow.
Jo Swinson
The hon. Gentleman makes a powerful point. As I have said, a range of different of views and issues have been raised and it is impossible to please everybody. Although some of the larger companies oppose the introduction of a market rent only option, organisations such as the FSB, as the hon. Gentleman points out, are campaigning to implement it.
Jo Swinson
I will give way once more before I move on, because the hon. Gentleman has not intervened yet.
Julian Sturdy
The Minister says that she has been in consultation with the pub industry. I will phrase the question slightly differently: has any assessment been made of the impact the two-year review will have on pub closures?
Jo Swinson
The review was always built into the process, because we wanted to look at how the measure was working. What is new is the introduction of the power to introduce a market rent only option, and when that proposal goes before the other place, supporting documentation, such as impact assessments, will also be submitted. Clearly, different quarters have opposing views on what it will mean: some say it will be excellent for business, while others say it will result in concerns for business. People will not necessarily concur and agree about what the exact impact will be, but the Government will produce the documentation to go alongside that amendment when it is tabled in the other place.
The Government’s technical amendments—amendments 34, 35 and 55—deal with the particular issue of franchises. Clause 40 already makes it clear that tied pub agreements are in the scope of the pubs code where tenants pay some sort of fee, such as a turnover fee, rather than rent. Such agreements are often called franchise agreements and it is right that they are covered. The same potential for the abuse of a tie exists, and if franchises were not in scope there would be a sizeable loophole by which companies could evade the code.
Amendments 34 and 35 therefore ensure that franchises are covered by clause 42, which refers to rent assessment and rent review arrangements, which the Secretary of State may rule as void or unenforceable. Amendment 55 provides the Secretary of State with a power to define parallel rent assessments in regulations so that we can ensure there is appropriate flexibility in the approach to cater for franchise pubs. That will allow the final design of parallel rent assessments to take account of further engagement with the industry and public consultation, and through that we will ensure that those assessments are available to all tied tenants of large pub-owning companies.
Amendments 40 and 56 ensure that agreements where the tenant is tied for some or all alcoholic drinks are still covered, even when the tenant does not purchase those drinks from the pub-owning company. We are aware of some franchise agreements where the tenant does not technically purchase drinks from the pub-owning company. The tenant is still contractually obliged to sell those drinks on behalf of the pub-owning company and cannot source them elsewhere, so the amendments are important to avoid a loophole in the legislation.
The Opposition’s amendment 5 seeks to clarify that franchise agreements are in scope of the legislation. I absolutely agree with that view and hope the hon. Member for Chesterfield will be reassured by the Government amendments, which make that crystal clear and address the point by ensuring that no loopholes are being created.
Amendments 38, 39 and 47 to 53 seek to ensure that tied agreements are covered by the protections of the pubs code, whether the tenant occupies the pub under a tenancy or under a licence to occupy. This is another measure to ensure that all tied tenants are protected. Amendments 36, 37, 42, 46 and 54 are technical clarifications to ensure that the provisions of the Bill apply to pub-owning companies and any subsidiary companies they may own.
Finally, amendment 57 provides that all regulations under part 4, other than regulations under clause 61(1)(c), are subject to the affirmative resolution procedure, which, given the sensitivity surrounding the issues and the interest in them, is absolutely appropriate. I hope the Government amendments will be supported and that hon. Members on both sides of the House will be reassured by our commitment to make further changes in the other place in order to address any concerns.
Toby Perkins
It is always a singular pleasure for this House to gather to discuss what we can do to support our great British pubs, which are crucial institutions, bedrocks of our community and vital economic and social hubs, as well as really important employers, particularly of women and young people—two groups who are underrepresented in the workplace. Pubs and brewers also make an incredibly important contribution to the economy as taxpayers and employers, and our communities take tremendous pride in these institutions. The industry is watching this debate with tremendous interest and concern, in the hope that we in this place will do justice by everyone involved in it.
The Government are creating a spectacle by changing the Bill as we speak. These are incredibly important issues, but the Government’s attempts at debating this part of the Bill are rather like attempting to mount a moving bus: the moment we think we know what we are going to discuss, the debate suddenly focuses on something completely different. It is a complete and utter shambles.
Duncan Hames (Chippenham) (LD)
I am conjuring the image of the hon. Gentleman mounting a moving bus. On the new clauses and amendments under discussion, however, is it not the case that he himself intends to move the bus? Is that not the very purpose of our having a debate in this place?
Toby Perkins
If the hon. Gentleman is talking about the amendment we tabled and that the Government voted against and that they then adopted only to drop again, his description is rather uncharitable. He is right to say that the Government should listen to consultations and follow the right process for a Bill, but on Friday the Government tabled new amendments to undo amendments that were voted on in Committee and now, without any discussion or notice, they have come to the debate and said, “Actually, we’re going to drop the amendments we tabled on Friday to the things that were voted out of the Bill a couple of weeks ago. The Lords can talk about them, but Members of Parliament will not have the opportunity to vote on them.” I do not think that is any way to run a whelk stall, much less a really important industry about which we feel so passionately.
It is to Parliament’s credit that it has debated and researched the issue of pub companies with incredible diligence. The issue and the industry are incredibly complicated and this Parliament has attempted to strike a fine balance that best meets the needs of the industry with minimum disruption. However, at a time when Parliament should be reflecting with some pride on its contribution to this debate, I think that the way in which the Government are operating leaves everyone unsatisfied. There are Government Members on both sides of the argument—some think the plans go too far while others think they do not go far enough—but I do not think that the way in which the Government are operating the process of the Bill gives anyone any confidence that they know what they are doing.
The Minister for Business and Enterprise made a fleeting visit to our debate on the programme motion a few moments ago: he popped in to tell us that everything was going swimmingly and that there was plenty of time for debate, and then he dashed out again. We are told that he raced around last night attempting to convince Conservative Members not to vote with the hon. Member for Leeds North West (Greg Mulholland) and the other 90 Members who are supporting new clause 2.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Surely at the very kernel of any amendment is the fact that we are losing pubs every week right now. As a consequence, the Government clearly need to focus much more on that aspect of the problem, so that it does not continue to recur, as it very regularly does in all our constituencies.
Toby Perkins
I am grateful to my hon. Friend for making that point and precisely expressing the passion which so many of us feel for the pubs in our communities. It is precisely because so many of us are concerned about the changing face of the pub trade in our communities that the issue of the contribution of pub companies to pub closures has been so fiercely debated. It is because so many of us believe that the model under which pub companies operate is the cause of many of the pub closures that the Opposition have brought this matter to the House on many occasions, and many other Members have made that case. My hon. Friend is absolutely right that this debate is all about the strength of the industry, but it is also about having a sense of what exactly is being done to support it, and the question of pub companies is a key part of that debate.
I suspect that much of this debate will be about what divides Members, but there is real value in reflecting on what we are all agreed about, including the fact that this Government Bill contains provisions for a pubs code. The very fact that we are debating an issue that for so long seemed destined to elude this Parliament is a tribute to the dogged work not just of the Business, Innovation and Skills Committee, but of Parliament itself. Today still has potential to be a great day for this Parliament.
In reflecting on the contribution that Parliament has made on this question, notwithstanding my reservations about how the Government are handling this incredibly important debate, I want to pay tribute to the many hon. Members whose work has brought us to this point. In no particular order, those who deserve great credit include the hon. Member for Mid Worcestershire (Sir Peter Luff) and my hon. Friend the Member for West Bromwich West (Mr Bailey). They have both chaired the Business, Innovation and Skills Committee, which produced diligent research on this issue in 2004, 2009, 2010 and 2011.
In 2011, the Select Committee finally came to the conclusion that the industry had had enough time to get its house in order and that the time had arrived for a statutory code with an independent adjudicator, open market rent assessments and a free-of-tie option. It is disappointing that it has taken more than three years to get from the Select Committee’s conclusion to the Bill before the House. It will be an even greater disappointment if we have to move away from the Bill and are told that there will be a further review in two years’ time to debate the whole thing again and decide whether we then need the free-of-tie option. What is more important than anything else is that Members do not let the opportunity to take real action through the Bill pass us by.
I want to acknowledge other Members. My right hon. Friend the Member for Wentworth and Dearne (John Healey) was the pubs Minister who empowered the Select Committee to be the arbiter of when the time for action had arrived. The hon. Members for Leeds North West and for Northampton South (Mr Binley) and my hon. Friend the Member for Easington (Grahame M. Morris) led a cross-party campaign to ensure not only that we had a pubs code, but that it would make a real difference for tenants and create competitive pressure on pub-owning companies to ensure that they offered their tenants a fair deal.
I also want to recognise the Minister’s contribution. Notwithstanding what I said about how the Government have handled this Bill and how she has been badly let down on a Bill that appears to be changing in front of our eyes for what appear to be political considerations, the fact is that she did at least end the prevarication—at least, that is what I wrote down in my speech—that we endured under her predecessors. If this was Prime Minister’s questions, I would be told off for writing my script in advance, but that helps when we are going to be on our feet for a while.
To be charitable for a moment, at least we are here to debate the pubs code. The fact that the Minister’s predecessors constantly pushed for review after review and did not take action, while she came forward to say that there would be something in statute, is a source of tremendous credit. It is a shame that she has unfortunately been forced to come to the Dispatch Box to propose a review in two years’ time, with all the uncertainty that that will create. However, she has at least made an effort to get something on the statute book.
There are many other such hon. Members, but the strength of this campaign has been due to the fact that the push inside the House very much reflects the broad coalition in favour of the measures outside it. The case that we and other hon. Members are making today has been supported by a tremendous range of organisations, almost all of whom come under the Fair Deal for Your Local banner.
Just listen, Mr Deputy Speaker—not that you would ever not listen while in the Chair, but perhaps you will do so with particular attention—to the breadth of organisations that support this case. Such breadth makes the case more powerfully than anything else. The organisations include the Federation of Small Businesses, which does not usually demand regulations or that the business relationship between two parties should be put on a statutory footing; the all-party save the pub group, which is so ably chaired by the hon. Member for Leeds North West; the Campaign for Real Ale and the Fair Pint campaign; the trade unions Unite and the GMB; and the Guild of Master Victuallers and the Forum of Private Business.
There are also two support groups, Justice for Licensees and Licensees Supporting Licensees, which were set up to support licensees affected by what had happened in their relationship with the pub company. Such licensees have often been bankrupted or are facing bankruptcy as a result of having chosen to pursue their dream of running a pub. Who would have thought that a support group needed to be set up for people who have chosen to pursue a particular profession or work in a particular industry?
In some ways most significantly of all, the Punch Tenant Network, made up of tenants who run pubs owned by Punch Taverns, has come out in support of new clause 2. Those tenants’ business success hinges to a large degree on the strength—or weakness, depending on how they see it—of their relationship with their pub company, and they are saying that the hon. Member for Leeds North West and 90 other Members are right that the code should be put on a free-of-tie basis. If the network believed the scare stories that the industry is putting about—that the proposed changes will lead to an increase in pub closures, less choice for punters or increased unfairness in the industry—it would hardly be calling on hon. Members to support the new clause.
The House has heard in recent years from literally dozens of Members who are desperately trying to support pubs in their communities that are under threat—all victims of the great pubco scandal.
Richard Fuller
The shadow Minister has listed many people who have been involved in the debate on one side or the other. Now, at the moment when the Government are reversing the policy that they had in Committee, does he think it odd from the point of view of protocol that the Secretary of State for Business, Innovation and Skills is not here to explain that change in Government policy?
Toby Perkins
The hon. Gentleman has a valid point. We have all received a huge number of representations from members of CAMRA; from pub licensees; from many different organisations, some of which I have just listed; from the pub-owning companies themselves; and from the British Beer and Pubs Association. They have all been lobbying us in support of, or in opposition to, what they thought would be in the Bill. The Minister, whether by her own choice or because of the hand she has been dealt today, has had to say to the House, “Forget all the speeches that you have prepared and all the letters and considerations you have received on this complicated issue, because we are ripping up a lot of the amendments you thought you would be voting on. We’ll discuss some of them later; and on another one, we thought we might lose, so as a bit of a sop we’ll come back to it in two years if there’s still a problem.” It is a shambolic way to present a Bill.
I wish to be conciliatory and work constructively on the issue, but it reflects no credit on the Government or the House when people come to watch our debate, or watch it on television, and suddenly discover that the issues they have been lobbying their Member of Parliament on have been totally changed. It is an absolute shambles. I have some sympathy with the view that the Secretary of State should have been here to explain why the changes have been made. The Minister was unable to tell us whether he has been involved in the discussions—maybe she will want to clarify that now.
However, this is the point that we have arrived at, and I think we all recognise that when the Government are under pressure they will sometimes take the opportunity to discuss with Members in the run-up to a debate what form amendments will take. Let us make no mistake, though—this debate was scheduled for next week, so the Government could have had another week to consider what should be debated. For reasons best known to them, they decided to bring the debate forward and table last-minute amendments. Now, on the day of the debate, they stand up and say, “Forget all those amendments, we’re not doing any of that”. The hon. Member for Bedford (Richard Fuller) may well be right to apportion some responsibility to the Secretary of State, but either way, something that should be a source of pride to the House is now a source of embarrassment. I deeply regret that, because this is an important issue on which there is considerable agreement.
Bill Esterson (Sefton Central) (Lab)
Does my hon. Friend agree that all the ins and outs, ups and downs and unknowns of what the Government will end up bringing forward, either here or in the House of Lords, show why it is important that we support new clause 2, which 91 of us, including me, have signed?
Toby Perkins
I do. You will be glad to know, Mr Deputy Speaker, that I will come on to new clause 2 in more detail in a moment, but I basically agree with my hon. Friend’s point. His constituents in Sefton, who feel strongly about their local pub industry, will be glad to know that he took part in debates in the Public Bill Committee and has signed new clause 2.
That brings me nicely on to the contributions that a variety of Members from throughout the House have made on the subject in recent years. The hon. Member for Salisbury (John Glen) told the House about the landlords of the White Horse in Quidhampton, alleging that Enterprise Inns had
“signed them up to a lease on a false prospectus and…made their business completely uneconomic and unsustainable”.—[Official Report, 13 June 2013; Vol. 564, c. 476.]
The hon. Member for Meon Valley (George Hollingbery) has confirmed that the closure of the White Hart in South Harting was caused by
“unsustainable rent demands...from Enterprise Inns”.—[Official Report, 13 June 2013; Vol. 564, c. 476.]
The hon. Member for Romsey and Southampton North (Caroline Nokes) wrote to Enterprise Inns to inform it that the Abbotts Mitre public house in Chilbolton was
“under threat largely due to unrealistic rents and changes in terms and conditions”.
The hon. Member for Bristol North West (Charlotte Leslie) wrote to Enterprise Inns asking it not to close the Lamplighters in Shirehampton, and the hon. Member for Cheltenham (Martin Horwood) has bemoaned Enterprise’s decision not to save the Little Owl. As a Sheffield United fan I am not generally in favour of saving the Owls, but in this case it would have been important. He said that
“a big company has failed to recognise a pub’s value to the community.”
The hon. Member for Pudsey (Stuart Andrew) was also concerned with saving the Owl, this time the one in Rodley, whose threatened closure he blamed on
“the mounting costs imposed by the building owners, Enterprise Inns”.
The hon. Member for Bromley and Chislehurst (Robert Neill) said of the sale of the Porcupine in Mottingham that the public were
“incensed that their right to bid for the pub has been bypassed deliberately by Enterprise Inns and LiDL”.
Richard Graham (Gloucester) (Con)
The hon. Gentleman is giving a terrific roll-call of his party’s MPs who are apparently now standing up for pubs, but he completely forgets what happened to pubs over the 13 years of the Labour Government. Thousands of them closed all over the country under their regime. This is an extraordinary moment of amnesia, is it not?
Toby Perkins
I think the moment of amnesia is the hon. Gentleman’s, because all the Members I have listed so far are Conservative Members—in fact, many of them are sat behind him. I was not seeking to make a party political point. Sadly I do not have in my speech—as it is currently drafted, although we know these things are subject to change almost on the spur of the moment—a reference to a contribution that he has made to saving a pub, but he might well want to tell us either now or sometime in the future about what he has done to support pubs in his local area.
Richard Graham
The hon. Gentleman will be interested to know that I launched a strong campaign some months ago to save the Ridge and Furrow in Abbey. It is an ongoing process, and I am confident that we will win in due course. I am grateful to him for giving me the opportunity to make that point, so that the residents of Abbey ward in Gloucester can hear it loud and clear.
Toby Perkins
I am glad I was able to facilitate that magic moment.
I have not finished listing members yet. The right hon. Member for East Devon (Mr Swire) told a packed crowd that he would be joining the campaign to save the Red Lion in Sidbury, which Punch Taverns was planning to sell.
The list of pub-saving parliamentarians is long. My right hon. Friend the Member for Tooting (Sadiq Khan) joined the campaign that successfully saved the Wheatsheaf, and my hon. Friend the Member for Westminster North (Ms Buck) was busy trying to save The Clifton and The Star. My right hon. Friend the Member for Southampton, Itchen (Mr Denham) campaigned to save the Bittern, and my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) joined the Legh Arms campaign for community pubs—the list goes on. Eventually, however, comes the time to put up or shut up, and many people outside this House will be looking to see what we do.
Mark Pritchard (The Wrekin) (Con)
Does the hon. Gentleman agree that one way we can all support local pubs, whether in urban or rural areas, is by supporting the Government’s planning reforms, and allowing pubs—whether tied or not—to expand restaurants or develop bed and breakfasts? We should back those pubs to grow their businesses on brownfield sites wherever they can.
Toby Perkins
The hon. Gentleman mentions planning and whether pubs can expand, and it is important that pubs have that opportunity. However, the biggest planning issue currently facing pubs is the fact that big supermarkets can come in and change a pub into a supermarket without any reference to planning law. In my constituency we have a significant campaign to try to save The Crispin—I was not going to mention it, but the opportunity now arises. A pub that currently operates perfectly successfully under Enterprise Inns will be closed because the lease has been signed to Tesco. Indeed, Labour’s planning proposals would increase restrictions on pubs that are turning into supermarkets, and deal with many of the concerns that I have already raised. Hon. Members gave many examples of pubs that are being closed to become supermarkets.
Andrew Griffiths
The hon. Gentleman has treated us to a tour of the country and listed some 30 or 40 MPs who have done something to save pubs. It has all been very interesting, but we have not heard what he will do to save pubs. Rather than packing his speech with such examples and filling time, will he get on with telling us what he is going to do?
Toby Perkins
Many contributions that hon. Members have made are important to their constituents and they will consider it pretty disrespectful for the hon. Gentleman to say that I am filling time. I do not think I am—this is a significant issue. We can all get the press release out or attend packed public meetings, and we can all rail against unfairness and talk about how a pub company sold a false prospectus and failed to consider the needs of the community, but today is the day for talking to finish and for us finally to act. People will reflect on whether, when given the opportunity to act, Members of Parliament stood up in the Chamber to complain about the situation or actually took action.
Mark Pritchard
The hon. Gentleman is being generous with his time, but earlier he did not address my question. I was not asking about pubs that have not succeeded and therefore a change in use to retail has been suggested to the local authority; I was asking about successful pubs that want to expand further, to build bed and breakfasts, hotels or an extra restaurant. The question is about successful pubs and whether the hon. Gentleman and Labour Members support the Government’s planning reforms on permitted development rights and change of use, for example, to make those successful pubs flourish even more.
Toby Perkins
I take issue with the idea that the only pubs that are being closed and turned into supermarkets are unsuccessful ones. The Crispin in Chesterfield is a successful pub that makes good profits, but it does not offer Enterprise Inns the 25-year lease that Tesco is willing to offer, and that is why it is being shut down. Pubs that are turning into supermarkets should not necessarily be described as unsuccessful.
I thought that I had responded to the hon. Gentleman’s point, but I will do so again. Of course we are supportive of steps to support larger pubs, and we think that is important. The specifics of the Government’s proposal and whether it has implications on the right of a community to have its voice heard on such issues is a matter that my hon. Friends in the communities and local government team will consider at greater length. Of course we support pubs that are successful and want to expand, but we also want to defend pubs that have a future in the community but often fall victim to the vagaries of pub companies’ operations, particularly when pub companies close pubs that are successful.
In response to the hon. Member for Burton (Andrew Griffiths) let me turn to the specifics of new clause 2. When debating pub tenants we are talking about a group of people who often work as many hours as anyone, but who earn less than they could legally be paid by an employer on the minimum wage.
Bill Esterson
The hon. Member for Burton (Andrew Griffiths) asked my hon. Friend what he is doing to help, and he was just starting to explain. My hon. Friend supports the market rent only option in new clause 2, so that is exactly how he, and the 91 hon. Members who have put their name to the new clause, are supporting pubs in our communities. When mentioning those Members who have referred to pubs in their constituencies, I hope my hon. Friend also expects them to support new clause 2, as do I.
Toby Perkins
I certainly do. The hon. Member for Burton had the unrivalled pleasure of listening to a day and a half of debates to which I made a fairly significant contribution—I appreciate that he cannot get enough of my contributions on pubs, but he has had a significant opportunity to hear my thoughts on the matter.
Pub tenants are those who clean their pub and get it ready for the next day’s trade. They are working at the bar, handling supplier relationships, generally keeping a cheerful presence, wearing the mask, and closing up long after most people have finished work, and all the while they know that the unfairness of their relationship means that the whole day’s work has been for nothing financially. Latest figures show that more than half of tied licensees work for less than £10,000 a year. Indeed, during the recent mini-recess I spoke to three pub tenants in my constituency who run pubs owned by the big pub companies, and none of them was taking a wage out of the business. By voting for new clause 2 and amendment 5 we can take a significant step towards preserving pubs for the next generation, and hardwire fairness into that longstanding business relationship.
Amendment 5 is simple but important and should reassure people who have concerns about these complicated issues. The Minister attempted to say that she believes the Government have found a different way to achieve broadly the same thing, but the specific wording of our amendment leaves a lot less potential for businesses to get out of saying that they are covered. To my mind, there are two ways in which the pubs code could fail to deliver what we want—first if the code is too weak and allows pub companies to comply with it while continuing unfairly to disadvantage their tenants; and secondly if we end up with a code that strikes the right balance for our expectations about the behaviour of pub companies, but is drafted in a way that allows pub companies to exempt themselves, or creates confusion as to who is covered.
Already the big pub companies have attempted to create confusion over definitions. The Government were right to acknowledge that they dropped a clanger with the phrase “tied pubs”, which in their definition is supposed to mean those on a tenanted or leased model in England, Scotland and Wales, although the code would need to be enacted separately in Scotland. The phrase “tenanted, leased” is the type of tenure clearly defined and easily established. We remain of the view that amendment 5 will provide the greatest clarification on exactly who should be covered by the Bill.
Toby Perkins
I did not want to take many more interventions because many other Members wish to speak. However, if the hon. Gentleman feels that it would add a huge amount to the debate I will give way.
Richard Fuller
The shadow Minister is making an absolutely crucial point. I think he will have heard, as I did, the Minister say that three companies will be captured by the reduction from 500 to 350. Is the shadow Minister aware of what those three companies have done to incur the wrath of the Secretary of State to be included in the regulation?
Toby Perkins
I am not sure that I would necessarily accept that we are suggesting those companies are wrath-deserving. We are attempting to create a regulatory framework that is reliable, so that businesses know where they stand. The limit of 500 is arbitrary, as is the 350 limit. I suspect this is more about attempting to save political face than save the actual companies. Suddenly bringing smaller pub companies into the heart of the Bill is seen as an act of bad faith by the industry. Having lost the vote in Committee, and having then voted against almost exactly the amendment that they then attempted to bring back, which, for the avoidance of doubt was the one that is now not being brought forward, is a pretty shabby way to treat an important industry.
Members and the many thousands of CAMRA members who have written to us all in such impressive numbers in the very short period of time during which there has been an awareness of new clause 2 will be aware that the Opposition supported a free-of-tie option for pubco tenants. [Interruption.] Goodness me, this is a magical moment for the House! I can now say I was there when the Minister for Business and Enterprise, the right hon. Member for West Suffolk (Matthew Hancock) actually attended proceedings on his own Bill. I can tell my grandchildren, “I was there!” He is here, Mr Deputy Speaker. Goodness me.
Mr Deputy Speaker (Mr Lindsay Hoyle)
And I can tell the hon. Gentleman that he is running out of time.
Toby Perkins
I have just been waiting for the right hon. Gentleman to arrive, Mr Deputy Speaker. The debate barely seemed worth getting on with until he was here.
The people who have written to us in such numbers will be aware that we have supported the introduction of a free-of-tie option for pubco pub tenants at the date of renewal ever since the Business, Innovation and Skills Committee concluded that the industry had had its last chance and that the time was right. That was back in September 2011, and in debates in January 2012, 2013 and 2014 the Opposition sought the support of the House for that viewpoint. It will therefore come as no surprise to Members that it remains the view of Opposition Members that the time for the mandatory rent-only option is now.
I am delighted that a cross-party group of Members has tabled new clause 2. In a time of great cynicism with politics, the fact that Members of four different political parties have added their names to it shows that there are things more important than naked party political advantage. It shows that this House can work in the finest traditions of democracy in a collective voice in support of our pubs, not because there is necessarily party political gain but because it is the right thing to do. I pay tribute to all those who added their names and to everyone from any party who votes for it today.
I look forward to the contribution of the hon. Member for Leeds North West (Greg Mulholland). I hope he considers that yet another review is not the right step for the industry. It appears to be a political solution to a political problem at a time when a serious industry needs a serious response from this place, and needs to be able to conduct its matters with real certainty knowing what it will face in the future. I think that anyone bought off by the review and the suggestion that the issue will be looked at in two years’ time if today’s measures are not considered to have worked was never really serious about supporting it in the first place. The House should vote in support of new clause 2 and repeat the unanimous support it gave to the motion in the January 2012 Backbench Business debate.
In conclusion, I said on Second Reading that the Government had introduced a Bill that expected too much of family brewers and not enough of pub companies. I also said that I hoped the Bill would leave the Committee and Report stages in a stronger shape than it arrived in. Already, thanks to the hard-won amendment brought by the hon. Members for South East Cornwall (Sheryll Murray) and for Burton (Andrew Griffiths) and others, it could do that. Supporting the two other substantive amendments before us today would mean that we were finally on the way to repaying the debt the House owes to Britain’s publicans.
By supporting our amendment 5 and ensuring that large pub-owning businesses with tenanted, leased and franchised models are exempted, by continuing to reject any amendments that bring family brewers under the scope of the Bill and by backing new clause 2 to ensure a free market solution in this most important of industries, with an industry regulator, the House can unite in support of Britain’s pubs and ensure that the pub sector enters a new, better and more optimistic period free from the restrictive practices that have been allowed to dominate, with faith in the market to choose who is offering a fair deal. That will allow our pubs to offer one of the greatest of all Britain’s great inventions, the simple pint of ale, for many hundreds of years to come. I commend our amendment to the House.
Greg Mulholland
I am delighted to speak at this important stage of this important Bill. I commend my hon. Friend the Minister and her colleagues for their work in bringing measures forward not only on pubs, which is an area of particular interest, but other positive measures.
I will concentrate my comments on new clause 2, which I am delighted to introduce on behalf of myself, as the chair of the all-party save the pub group and co-ordinator of the Fair Deal for Your Local campaign, the hon. Member for West Bromwich West (Mr Bailey) who is the Chair of the Business, Innovations and Skills Committee, and my hon. Friend the Member for Northampton South (Mr Binley), the president of the save the pub group and a member of the BIS Committee. Unfortunately, he cannot be here today because he is becoming a freeman of Northampton. I am sure we all congratulate him on that. I am also speaking on new clause 2 on behalf of the 91 colleagues who put their names to it and the many others who have said they will support it.
Over the past few days, in the limited time between Committee and Report, more than 8,000 e-mails were sent by CAMRA members up and down the country and several thousand by members of the Federation of Small Businesses, licensees, organisations and trade unions, urging the Government to take the sensible, obvious, market-based action to resolve the issues that have been a problem in the leased and tenanted pub sector for too long.
So that Members are clear, new clause 2 is the cross-party solution from the Business, Innovation and Skills Committee introduced first by the hon. Member for Mid Worcestershire (Sir Peter Luff), then ably continued by the hon. Member for West Bromwich West (Mr Bailey), and supported by all colleagues on the Select Committee at all stages in this and the last Parliament. It is also backed by the FSB, the Forum of Private Business, the Pubs Advisory Service, Justice for Licensees, Licensees Supporting Licensees, CAMRA, Licensees Unite the union, the Fair Pint campaign, the Guild of Master Victuallers, the GMB and now the Punch Tenant Network, which represents Punch tenants and is giving an honest and a very different picture of the Punch model from that which Punch Taverns has been trying to communicate to MPs.
To remind the House, the problem is a simple one, despite the complexity of the sector: the large companies went on a reckless acquisition spree, buying up pubs using borrowed money, and got themselves into grotesque amounts of debt—more than £4 billion in the case of Punch Taverns and more than £3 billion in the case of Enterprise Inns—and with nothing to stop them charging unlimited prices for beer and unlimited rents, both of which have gone up and up and up. The beer tie, which was always operated responsibly, has been abused. It used to offer lower rent in exchange for higher beer prices and genuine support for small breweries, but the pub company model does not do that.
What, then, is wrong with the proposals as they stand? I commend my right hon. Friend the Secretary of State and his colleagues in both coalition parties for having the courage to bring forward the statutory code of practice that the Select Committee first recommended so powerfully and clearly in 2009. As drafted, however, the proposed statutory code will not deliver the Government’s two key principles: fairness and the principle that a tied licensee should be no worse off than a free-of-tie licensee. The problem is that there is no direct mechanism to stop the double overcharging that I have mentioned.
As I have already said, not a single respondent to BIS’s extensive consultation thought that the Government’s proposed parallel rent assessment was the right solution, whereas two thirds said that the Select Committee was right. The assessment would need considerable participation from the adjudicator—in fact, the proposal confuses the adjudicator with the rent assessor, as the adjudicator is there to adjudicate disputes, not to survey and set rents. Without the direct mechanism, the basis on which the adjudicator is set up is currently weak.
Furthermore, the Government made the fundamental mistake that the shadow Minister has pointed to already. The Fair Deal for Your Local campaign and the Select Committee are clear that this measure must not apply to smaller companies—those with fewer than 500 pubs—because that is not where the majority of the problems are. A “large pub company” must be defined as any company with 500 or more pubs of any type, with the measure applying to its leased and tenanted pubs only, not to tied pubs.
The issue of tied pubs is a legal minefield, as the Government have realised, with the absurdity that Harry Ramsden’s, a fish and chip shop restaurant, could have been categorised as a “tied pub”. There are different forms of the tie in the UK—some free houses opt to be tied to a brewer in return for soft loans and business support—and how would we categorise “part tied” and “fully tied”? It is a nonsensical way to categorise. We need to define a “large company” simply as a company with 500 or more pubs, some of which are tenanted and leased pubs, and then apply the measure to the tenanted and leased pubs only. In that way, there would be no question of the large managed companies, such as Wetherspoon’s and Mitchells and Butlers, being caught any more than there would be of a restaurant chain being caught.
At the moment, the Bill and code do not deliver what the Government have set out, courageously, to deliver. Do not take my word for it; take the word of one of the two companies lobbying particularly vociferously against the code. In its own prospectus for potential investors, dated 6 October 2014, Punch Taverns said it did not believe that the reforms proposed would materially adversely affect the Punch group. In other words, it would be business as usual, and it would continue to charge excessive beer prices—often 70% more than hon. Members could get from the brewery—and set entirely unregulated rents.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The hon. Gentleman hit the nail on the head when he called this a matter of fairness. Whether it is zero-hours contracts, the minimum wage or, as we saw on “Dispatches” last night, the fact that the 3,000 top earners in the UK earn as much as the bottom 9 million, we are talking about the abuse of economic muscle. My concern is that the contract models used in England are rolling into Scotland, meaning that publicans and licensees are being hit hard in Scotland. Will he expand on that a little?
Greg Mulholland
The hon. Gentleman is absolutely right. It was Punch Taverns’ acquisition spree that took the leased pubco model to Scotland—it bought up pubs simply as a way of artificially increasing the value of the company—although there are other tied leased pubs in Scotland as well. The only way to get justice for Scottish licensees is for Westminster to pass new clause 2 today: I had a meeting last year with Minister Fergus Ewing, and he said that if that happened, the Scottish Government would consider enabling legislation to take it forward in Scotland. So it is vital for Scottish licensees, as well as for English and Welsh ones, that we vote for new clause 2.
The new clause has been carefully drafted with the help of expert surveyors, lawyers and publicans. It is a new clause that works, and I pay tribute to all who helped to draft it and to the Clerks in the Bill Office who assisted with the process. It would make for clear primary legislation specifying how the market rent only option would work in practice and exactly what it would be, and crucially—this is why Members can give it their support—it would come in gradually over five years and be triggered only at certain key points in the cycle of a lease or tenancy. It would be triggered at five-year rent reviews, on lease renewal, on the sale of the property title, if there was a substantial change in prices—mirroring BIS’s own clauses—which would be for the adjudicator to decide, or if there were a change of circumstances, such as the opening next door of a Wetherspoon’s offering cheaper beer prices, which should lead to lower rents, but often does not under the pubco model. The new clause would give the large pubco tenant the opportunity to go to the adjudicator to plead that it was a significant change in circumstances.
The process is clearly laid out in the new clause, and there can be no confusion or suggestion it would come in straightaway: a tenant serves notice requesting an independent assessment of the market rent; there is a 21-day period of negotiation to allow the two parties to come up with a new deal; if they do, there is no need for it go further; but if they cannot agree within the 21 days, they must agree to appoint an independent surveyor to set the rent; if they cannot agree, the surveyor is appointed by the chair of the Royal Institution of Chartered Surveyors, as is standard practice, following RICS guidance, and in conformity with statutory guidance for tied pubs. At the end of the 21 days, the rent assessment is done and presented, and then there is another period of negotiation for both sides, at which point the company should come forward with attractive, fair tied agreements to keep them buying beer through them, but offering genuinely lower rents and genuine business support.
That is a reasonable, gradual process that will simply bring back market forces into a sector that has become grotesquely anti-competitive. It is closed to many smaller breweries, it is not working for publicans or those communities losing their pubs, and frankly it is not working for the large companies either.
Sheryll Murray
I am a little confused. The hon. Gentleman has not mentioned the economic impact that his free-of-tied proposal might have on small family brewers. Has he done any work on the financial impact on family brewers, such as the one owned by my constituent James Staughton, who rely on selling their beer far and wide across the UK?
Greg Mulholland
I am delighted that my hon. Friend has raised that issue. So let us all be clear; the clause, in primary legislation, cannot and will not apply to a single family brewer. All the family brewers—members of the Independent Family Brewers of Britain—have fewer than 500 pubs. The clause—in primary legislation to ensure that it cannot be changed—will not apply to them. The simple answer is that it will not and cannot affect them in any way. Surely Conservative MPs above all would like to see more competition and more ability for all brewers—regional and small microbrewers—to compete and to get their beer into pubs if it is good enough and if people want to drink it.
Richard Fuller
The Minister has just said that she wants to reduce the limit of the pub adjudicator from 500 to 350, which will start capturing some of the larger family brewers. Is he saying that he stands apart from what the Minister has said?
Greg Mulholland
That is helpful but I shall make it clear; the point of new clause 2 is that it is a stand-alone clause and has no bearing on that matter. I understand the position of those hon. Members with family brewers. They can support their family brewers if they wish by opposing new clause 6, but they can still support new clause 2, which, as I say, will apply not to a single family brewer but only to the large pub-owning companies. We have defined that very deliberately, which the Government failed to do despite our telling them that they should. A Member can vote for their family brewer by voting for new clause 2. To be clear; it is primary legislation and cannot then be changed without other primary legislation. It is not being put into the statutory code—secondary legislation—as some measures are. That is precisely why we have done it.
There has been a shameful campaign of misinformation against new clause 2 and the market rent only option from the usual suspects; the large pub companies and their mouthpiece, the so-called British Beer and Pub Association. In reality it is the big brewers and pubco association. They have been lobbying vociferously, making a whole stream of utterly baseless comments. It is simply scaremongering to suggest that somehow these companies offering a fair commercial rent to their tenants would cause collapse, chaos and closures.
Liz McInnes (Heywood and Middleton) (Lab)
Will the hon. Gentleman give way?
Greg Mulholland
I remind the House of what was said by the BIS Select Committee in its follow-up report in 2011—
Greg Mulholland
Let me finish my point and I will give way. The Select Committee said:
“The BBPA (British Beer and Pub Association) has shown itself to be impotent in enforcing its own timetable for reform and the supposed threat of removing the membership of pub companies who did not deliver was hollow.”
Just last year the chief executive of the British Beer and Pub Association misled the Select Committee and said two things that were factually untrue, as well as presenting a series of baseless evidence.
Finally, before I give way, I will read what the Select Committee said in its 2008-09 report:
“As is noted elsewhere in this Report…in evidence to us both Mr Thorley of Punch and Mr Tuppen and Mr Townsend of Enterprise Inns made assertions which, on investigation, proved to give a partial picture, or on one occasion were positively false.”
Members on all sides of the House can know exactly how to take the absurd and baseless claims from those organisations.
Liz McInnes
Like the hon. Member for South East Cornwall (Sheryll Murray), I am seeking clarification on small family brewers. I, too, am confused by the effect of the proposal on J.W. Lees brewery in my constituency, which has fewer than 500 pubs but has a strong retail arm. I am concerned—as is the brewery, which asked me to raise the issue during the debate— about the effect it will have on a family brewer with fewer than 500 pubs but which has a strong retail arm.
Greg Mulholland
I thought I had given clarity. I ask the hon. Lady and all hon. Members to read this detailed new clause, as this is precisely why all of us who have been involved in writing it have done so. Let me read new clause 2(4):
“For the purposes of this section,”
meaning the market rent only option,
“the definition of a ‘large pub-owning business’ is a business which, for a period of at least six months in the previous financial year, was the landlord of—
(a) 500 or more pubs (of any description)”.
That cannot apply to any family brewer, and because it is in primary legislation, it cannot be changed in the future.
Greg Mulholland
I will briefly, but I have covered the point. I do not think I could make it any more clearly, but I will give way to my hon. Friend, whose work I respect.
Richard Graham
The point is not so much about whether the specific paragraph excludes microbrewers and small family brewers; the question is whether they support this proposal. It is interesting that the microbrewers’ trade association does not. It is concerned that it leaves the doors open for greater domination by foreign-owned brewers such as Carlsberg and AB InBev. The issue is not the hon. Gentleman’s integrity or the value of his drafting work on the paragraph, but the unintended consequences of new legislation. I should declare that my family has a pubco. It is a very small pubco, with two pubs, but we would not be in favour of the amendment.
Greg Mulholland
I will put on record strongly that there are many small pub companies and breweries that run their pubs exceptionally well and, interestingly, are doing very well and are expanding rather than contracting, but here is the rub: I speak directly to my Conservative coalition colleagues. The question I put to them is this: “Do you believe in competition? You all say you do. If you do, you should not be afraid of allowing brewers of all sizes to compete.” The reality is that small microbrewers do not have adequate, fair and direct access. They cannot turn up at thousands of pubs and say, “We would like to sell our beer to you because we believe it is good.” They are prevented from doing that.
Let me tackle the issue directly; this will be controversial. SIBA, the Society of Independent Brewers, has a direct delivery scheme that used to be part of the solution to the pubco closed shop. It is now part of the problem; many small independent brewers have contacted the save the pub group to say that. Incidentally, there was a U-turn in SIBA’s position. SIBA was a member of the Independent Pub Confederation, which supported the market rent only option. Seemingly without consulting its members directly, SIBA suddenly decided that it was against it; that is what SIBA members have told me. It no longer represents the majority of microbrewers on this key issue.
Toby Perkins
I wish to reinforce the hon. Gentleman’s point that new clause 2 is precisely about a free market option, and that to defend the status quo is to defend a restrictive practice, which should be absolutely anathema to any Conservative MP; if they vote against the new clause, they will be voting for a closed shop and against an open market.
Greg Mulholland
I share the shadow Minister’s bafflement about that, and I am delighted that we have a strong group of Conservative colleagues who, having heard the reality of the situation from their local branch of the Campaign for Real Ale, their local pubco publicans and their local Federation of Small Businesses branches, are fully supportive.
Ian Lucas (Wrexham) (Lab)
Does the hon. Gentleman agree that it is quite extraordinary that there seems to be such a strong voice for preventing new market entrants from moving into the brewing industry? Those are important small businesses that want to make progress. The message I hear from microbreweries is that they are prevented by this archaic and extraordinary system that we have endured for far too long.
Greg Mulholland
The hon. Gentleman is absolutely right. I repeat that if we believe in competition, an open market and entrepreneurship, we cannot defend the closed shop of the leased pub sector, which is dominated by these large companies.
Richard Graham
The hon. Gentleman is generous in giving way and I appreciate that, especially as he knows that I will not necessarily speak in support of his new clause. The crucial point is that hundreds of new microbreweries have been springing up over the last few years; the microbrewery in my family’s pub sprang up last year. This will make no difference to them whatever.
Greg Mulholland
I am afraid that the hon. Gentleman is simply wrong. I can send him the e-mails I have received from microbreweries—cider as well as beer producers. They are desperate to get more direct access, so that they can knock on the door of the pub 2 miles down the road and say, “We believe our beer is great and that your customers would like to drink it. We would like to sell it to you at our brewery price, rather than you having to go through the SIBA-directed delivery scheme, which has a considerable mark-up, or get on a pubco list,” as the pubco outrageously demands an incredibly low price that many microbrewers simply cannot afford to brew at, and then marks up prices by 60% to 70% to sell the product to their own so-called business partners. Is that seriously a model that Conservative MPs can support? I remain baffled by that.
Let me remind you, Mr Deputy Speaker, of the reality of the pub company model. As I look round, I see hon. Members who have family and smaller brewers in their constituency and want to support them; I respect their position, and I am at one with them on that, which is why the Fair Deal for Your Local campaign has always said that the provision should apply only to companies with over 500 pubs.
Let us look at the reality of what the big pubcos have done to skew the traditional tied tenancy model. Punch Taverns, a pub company that does not brew a single pint of beer, made a profit over 10 years—these are its figures from its own annual report—of £2.271 billion, all from on-selling beer to its own so-called business partners. Frankly, in any other country, that would be called a protection racket. It is extraordinary and unjustified, which is why it is right for us to try to deal with it.
If Members do not believe that this is an anti-competitive model—I know that some colleagues behind me do not, for their own reasons—they should listen to former Punch licensee Alison Smith, a Conservative activist who has e-mailed all colleagues today to tell of the reality of the pubco business model, and how it stifled her and her partner, preventing them from being able to create a successful pub. Even though they were doing well and improving their business, the draconian terms of the pubco lease meant that that was simply not possible.
What do hon. Members think these large pub companies are? They are not pub companies at all; unlike the traditional brewers, these are people who do not really care about our pubs or our brewers. There was a huge rush in the City when people saw this “get rich quick” scam, a way to inflate the value of companies artificially by basing it on what they could overcharge their own tenants by—their tenants for 25 years on these outrageous, new, long-term, fully repairing and insuring leases.
Let me give the example of what happened to the excellent Sir John Barleycorn in Hitchin. The community, I am delighted to say, applied to use powers introduced by this coalition Government to apply for community value status; they applied for the pub to be an asset of community value. There were objections. The most vociferous one said:
“the current use of the premises as a public house…does not itself further the social wellbeing or social interests of the local community and therefore is not land of community value.”
Who said that? Was it someone living down the street who was anti-pub? No, that objection was from the so-called pub company Punch Taverns, which was seeking to get rid of this pub and sell it off after forcing out the licensees. That is what is going on.
If there is any doubt that this model is closing pubs, let me read out the stark evidence of the figures. These figures, collated by CGA Strategy for the British Beer & Pub Association and CAMRA, showed that there was a much greater drop in the number of leased and tenanted pubs than in the number of free houses between December 2005 and March 2013. The number of non-managed—that is, tenanted and leased, mostly tied—pubs fell by 5,117, whereas there was a fall of only 2,131 free-trade pubs. All pubs have issues—there has been a difficult recession—but the difference is clear and stark.
We could also look at the pubco trade association’s own figures—figures that it has frankly been keeping very quiet about. Its own figures show that over 10 years, the number of non-managed—in other words, tied, tenanted and leased—pubs decreased by 8,000, while the free-trade sector expanded by 1,600 pubs. I repeat: that is its own figures. Between 2008 and 2012—just four years—the two giant pubcos, Enterprise Inns and Punch Taverns, collectively disposed of over 5,000 pubs—a third of all their pubs in just four years. Can any Member seriously stand up and say that this is a business model that is working for pubs?
Toby Perkins
The hon. Gentleman is hitting on a really important point. These big pub companies are often heralded for employing so many people, but they, of course, inherited these pubs and employees, and what they are doing over a long period is laying people off and shutting pubs, not the opposite.
Greg Mulholland
Absolutely. The debt level is still in the billions, and the hon. Gentleman will be aware of the extraordinary restructuring that has left Punch shareholders owning only 15% of the company. Meanwhile, the Punch tenant network expressed its serious concern about the effects on them of the company’s instability.
Mr David Ward (Bradford East) (LD)
My hon. Friend mentions the high number of pubs that have closed, but there is also the personal tragedy: a whole succession of tenants went into business with really high ambitions, and found that they simply could not make a living out of the existing model. That is a personal tragedy for them and their families.
Greg Mulholland
My hon. Friend is absolutely right. Every pub is a story about a community, and a story about the people who are running it. There have indeed been many tragedies. I had one in my constituency; a pubco tenant died of a heart attack a week after closing his pub. There are awful stories of human misery here. It comes down to the simple problem I outlined at the beginning: the over-charging. These companies continue to take more than is fair. It can often be 70%, 80%, 90% or even 100% of the pub’s profit, meaning that licensees cannot make a living.
Most revealing of all, I have asked Punch Taverns—in writing, and to its representatives’ faces—four times why it is so afraid of the market rent only option, the simple option to give tenants the right, at certain trigger points, to be offered a fair commercial market rent, and it has failed to answer four times. That, Mr Deputy Speaker, tells you all you need to know. It tells you that this business model is precisely based on taking more than is fair and sustainable. The only solution is the market rent only option.
Let me deal finally with the Government’s suggestion of a compromise: “Perhaps we can include a reference to the market rent only option or the Business, Innovation and Skills Committee option being built into the Bill, but only after a review two years after the statutory code comes into force.” I understand why this is being said, because the will of this House is clearly in support of the market rent only option, with 90 coalition MPs signed up to the Fair Deal for Your Local campaign, which calls for that option. I understand why the Government Whips are getting so worried: they realise that they might lose this vote today.
Let me say clearly on behalf of the campaign and all the organisations that have expressed this view that the last thing we need is yet another review. We have had four exhaustive Select Committee reports. In 2011, when the Government were supposed to act, we had a Department for Business, Innovation and Skills review, and BIS decided not to act. What was supposed to be the last chance became a second-last chance for the pub companies. When people realised that nothing had changed, there was a further review. We have had four reports and two reviews. The simple reality is that we need action and need it now. I ask you, Mr Deputy Speaker, to grant a vote on new clause 2; I think that you will agree that it is the will of the House to vote on it, given the support for it.
The simple message from all the Fair Deal for Your Local campaigns, thousands of tied publicans, and all who believe in pubs, publicans, communities and fairness is “No more delays, no more reviews, no more excuses.” Please let us solve this problem at last, properly, once and for all. Please let us all vote for new clause 2 today.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
I have a sense of déjà vu as I rise to speak about this subject yet again. I shall confine my remarks to new clause 2, because that very well-researched clause is consistent with nearly 10 years of successive recommendations from the Business, Innovation and Skills Committee, and because I feel that it will address an issue that all the other proposals have failed to address: the unfair relationship between the pubco and the tenant. That unfairness, and the need to redress it, were spelt out to me in a letter that I received from a tenant, who wrote:
“The pub company wins all the time, they get a share of the Games Machines, the pool table, the Rent and they also put £30-£50 on top of each barrel so we pay a lot more for our beer than buying it off a wholesaler or warehouse.”
I realise that the Minister and the Government have moved a long way in the last two years, from insisting that a voluntary code would be sufficient to deal with the problem to recognising, following a long consultation, that it was necessary to introduce a statutory approach. However, I feel that, in its current form, that approach is lacking.
Let me begin by responding to the Minister’s reference to a possible Lords amendment postponing the implementation of the Government’s proposals until after a review and a ministerial decision. I oppose that course of action for a number of reasons, some of which were mentioned by the hon. Member for Leeds North West (Greg Mulholland). The industry has already been consulted to death. As the Minister said, the Government’s last consultation received an enormous number of responses, and it took them a long time to reach their conclusions. I therefore see no grounds for any further consultation.
The issue here is the deeply entrenched position of the British Beer and Pub Association, which represents the pub companies and which, over the years, has consistently paid lip service to the BIS Committee recommendations for the introduction of a voluntary code while dragging its feet and procrastinating at every stage of the procedure. Indeed, our last report referred to “glacial” progress. There is no reason to believe that any further consultation over the next two years will make any difference whatsoever.
Richard Graham
Does not the history of pubs and beer in this country show that the unintended consequences of legislation over the years have frequently proved almost disastrous?
Mr Bailey
I understand that argument, and I have some sympathy for it. However, the hon. Gentleman referred to unintended disastrous consequences. I think that many people would describe the closing of 27 pubs a week, which is happening at this moment, as a pretty disastrous scenario. I do not pretend that all the closures are a direct result of the beer tie or that all the pubs are owned by pub companies, but those are undoubtedly major factors in a high proportion of the closures. Given the current rate of closures, if we delay for two years the industry will have been greatly slimmed down even within that time.
Andrew Griffiths
I can reassure the House that I will not be speaking for 40 minutes, nor will I be reading off a list of pubs that have been saved or want to be saved around the country. I just want to get to the nub of the point.
I begin by telling the Minister that I want to help her today. In fact I want to help her so much that I have sent my researcher off to WHSmith to buy two packets of Benson & Hedges, not because I have taken up smoking or I think her nerves are bad, but just in case she wants to write two new policies while we are having this debate and she needs something to write them on.
We have debated this issue for many years and today the Minister comes up with an amendment that was cobbled together within the last couple of hours. This is an important industry. It employs thousands of people across the country. Livelihoods depend on the decisions we make today, and I am deeply concerned that there has been no consultation whatsoever with the industry about her proposal today to have this two-year stay so that we can assess the situation. There has been no impact assessment, and there have been no discussions.
I have the same aims as the hon. Members for West Bromwich West (Mr Bailey) and for Leeds North West (Greg Mulholland). We want to see pubs prosper. We want to see pubs thrive. We want to keep the community pub. We want publicans to do well and to be profitable. It is how we achieve that that is key. The hon. Member for West Bromwich West mentioned unintended consequences. I have heard that said a number of times over the last 24 hours or so. I would bring the House back to the fact that we find ourselves in this situation because of the beer orders. A Conservative Minister decided, with the best of intentions, that the Government should interfere in the market; the Government decided that they should split up the big brewers because they were acting in an uncompetitive way and the consumer was not getting a good deal. They broke up the big brewers. The reality is that that decision set us on this path we are on today with the pub companies. We should therefore be careful and cautious—and afraid—of unintended consequences. The hon. Gentleman said that there is no certainty. Of course there is no certainty, but as politicians—as legislators—we have to act with caution when we are interfering in business and in the marketplace and in people’s livelihoods.
Greg Mulholland
A little bit of the beer orders story is conveniently forgotten, which is that it was not the Government’s decision; it was the industry lobbying to stop there being a limit on non-brewing companies that led to the creation of the large pub companies. The lesson is to not listen to that sort of self-interested industry lobbying and instead get the legislation right.
Andrew Griffiths
Once again the hon. Gentleman talks about big business as if it is a bad thing. I like big business. I like small business. I like successful business. Just because a business is big does not mean it is acting inappropriately.
Grahame M. Morris
The hon. Gentleman is speaking for big brewers and I understand his perspective, but what about consumers? If a tenant is paying 60% or 70% more for the product, surely the consumer is getting a bad deal as well?
Andrew Griffiths
The hon. Gentleman has read up on this subject. I refer him to the Office of Fair Trading report of 2009 and its recent interventions in this debate—it has said this has had no impact on consumer costs and the price the consumer is paying for a pint. In fact it could be argued that, because of the big distribution models, beer is actually cheaper. The statistics show that beer across the country is cheaper in a tied house than in a free house. I hope I have answered the hon. Gentleman’s concern.
Andrew Griffiths
I support big and small businesses. The hon. Gentleman should note that the Society of Independent Brewers, which represents the smallest breweries across the country, is opposed to the scrapping of the measure—
Andrew Griffiths
The hon. Gentleman shakes his head, but it is true. The hon. Member for Leeds North West tries to undermine decisions made by any organisation that disagrees with him, but the Society of Independent Brewers is clear that this provision would disadvantage the country’s smallest brewers, and I will tell hon. Members why. The society believes that guest pumps would be taken over by lagers from foreign-owned breweries, which would come in and offer massive discounts, so that rather than having micro-brewers selling beer in our pubs, we would have foreign brewers selling lager.
Andrew Griffiths
Of course; this is a market and there is always going to be an inequality of bargaining power. If I am buying 10,000 items, I will have greater bargaining power than if I am buying only one. The question that we have to ask ourselves is whether the publican, the tenant, is being treated fairly.
Richard Graham
I have huge respect for the hon. Member for Wrexham (Ian Lucas) and for his colleague, the hon. Member for West Bromwich West (Mr Bailey), both of whom have made some good points. I must point out to them that when my family pub buys beer, we are just one pub doing that and we are hugely disadvantaged compared with the buying power of the big companies—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Order—[Interruption.] Mr Graham, do not pull a face. It does not help. Mr Griffiths is the person who is speaking, not Mr Lucas, so please address Mr Griffiths.
Richard Graham
I hope that I was very clear, but if you want me to repeat my point to my hon. Friend the Member for Burton (Andrew Griffiths), I would be happy to do so, Mr Deputy Speaker.
Andrew Griffiths
I thank my hon. Friend for making a good point. When we are talking about scale, it is true that there is a difference between those who are buying in bulk and those who are buying in small quantities. I want to return to the point I was making earlier, which was that we want our publicans to get a fair deal. We want to ensure that they pay a decent amount of rent and a decent price for their beer, so that their businesses can be successful.
Bob Stewart (Beckenham) (Con)
But can my hon. Friend tell me why so many tied publicans are going out of business? Why is that happening?
Andrew Griffiths
I understand my hon. Friend’s concern, and I do not defend the fact that there have been bad practices, that some people have been dealt with unfairly and that some of the pubcos have acted incorrectly. The point is that this Bill, as set out by the coalition Government, will address that by bringing in a statutory code that will provide protection for tenants. For the first time ever, tenants who feel that they are paying too much rent or paying too much for their beer or spirits will have some redress in law.
Sheryll Murray
Will my hon. Friend explain the difference between contracts that are negotiated at the outset and assignments, which can sometimes be guilty of putting the pubs we are trying to protect out of business?
Andrew Griffiths
My hon. Friend has shown great interest in this issue. She has done a great job in standing up for family brewers, and she has demonstrated that she understands the complexities of these matters. She asks about assignments. These occur when someone who has previously taken over a tenancy assigns it to someone else. Some of the most egregious cases of mistreatment that we have seen have involved such assignments. The problem is that the pubcos have no control over them; they cannot, by law, interfere in how an assignment takes place.
To return to my point, if we want to protect our tenants and ensure that they pay fair prices and fair rents, we have the power to do so in this Bill. For the first time, there will be an adjudicator to whom tenants can take their concerns. If they feel that they are paying too much rent or paying too much for their beer, they will be able to go to the adjudicator, who will be able to intervene and ask the pubco to change its pricing. The adjudicator will also be able to fine a pubco if it is acting inappropriately or unfairly. That will provide great support for those tenants, and it will go a long way towards addressing the concerns that hon. Members have expressed.
Mr Laurence Robertson (Tewkesbury) (Con)
I have a connection with a tied house that is run by a family member, and I have looked into this matter carefully. Does my hon. Friend agree that the most important thing to get right is the contract at the beginning of the arrangement? Far too many people are desperate to get a pub, and they do not look properly at what they are getting themselves into. That is the area in which a lot of guidance is needed.
Andrew Griffiths
I absolutely agree with my hon. Friend. As he says, some people are desperate to get a pub. They have a dream of being a publican, and there have been instances of pubcos waiting for the next sucker to come along and take on a tenancy. There has also been an element of rinsing—of passing people through the system. I do not support that; it is wrong and we should stamp it out.
Mr Bailey
The hon. Gentleman is being incredibly indulgent to the queue of Members trying to intervene on him. May I take him back to his point about the brewing orders? They undoubtedly had unforeseen consequences, but the proposals in new clause 2 are nothing like the proposals in those orders. The new clause proposes a graduated, incremental approach that would give the industry a chance to adapt and to see how the new arrangements were working.
Andrew Griffiths
I understand the intentions behind the hon. Gentleman’s new clause, but its fundamental aim is to break the tie. There have been many investigations of the tie, and it has been proved lawful. It has also been proved not to be anti-competitive. What we want to stamp out are the abuses, where the tied model is being abused by companies that treat their tenants badly. That is what the Bill will do, without the addition of new clause 2.
Richard Graham
My hon. Friend is absolutely right. For the record, does he agree that if someone disagrees with new clause 2, that does not make them an unabashed supporter of large pubcos? We have the right to criticise abuses in individual pubs, such as the one in my constituency.
Andrew Griffiths
Thank you, Mr Deputy Speaker. I saw that look in your eye, so I shall try to make some progress.
Andrew Griffiths
I think I have been fairly generous, but I will of course give way to the hon. Gentleman.
Greg Mulholland
The most fundamental dishonesty is the suggestion that the new clause would abolish the beer tie. It absolutely would not; it would simply give an option, at certain trigger points, for people to choose between a tied agreement and a rental-only agreement. That would make the tie work properly and ensure that we got back to what the beer tie used to be.
Andrew Griffiths
I think I found a question in the hon. Gentleman’s intervention. Given that he spoke for only 40 minutes earlier, I quite understand why he wanted to have another go.
I should like to get back to the point made by my hon. Friend the Member for Tewkesbury (Mr Robertson) that people often find they have signed up for things that they did not expect. They find that they have been hoodwinked because they were not given all the details, and that they have not got a fair deal. That is what we want to outlaw. I want briefly to consider what, under this legislation, someone wanting to take on a tenancy today would have to do. First, they would have to have a business plan, which would have to be assessed. They would have to have an accountant and a lawyer, and they would be told what they are paying for their rent, their beer, their whisky and for everything else. They would also be told how many barrels of beer and bottles of whisky the pub sold in the past year, in the previous year and in the past five years. All that information would have to go before their accountant before they could sign. I do not know what other Members think, but I think these people are grown ups and business people. If they are provided with all that information calmly and clearly so that they can make a decision, it is not for government to intervene to tell them they cannot engage in a business agreement that is perfectly legal.
Andrew Griffiths
I have given way enough, so I will move on, because I want to make the following point to allow colleagues clearly to understand what new clause 2 would do. Let us suppose I am a tenant with Marston’s in my constituency, a company that brews magnificent beer and would be affected by this legislation. Let us suppose I go to Marston’s asking to become one of its tenants and I go through all the procedure—it could take up to six months to do the due diligence on me—to take on that pub. Let us suppose I do all that and sign on the dotted line. Under new clause 2, I could then say to Marston’s, “Excuse me, Marston’s, I have changed my mind and decided I don’t want to sell Marston’s beer. I want to sell Greene King beer so I would like to go free of tie. Not only am I not going to sell your beer, but I would like the Government to tell you what rent you can charge me.” That is what is being proposed. To all those who have signed new clause 2 and are thinking of backing it, I say that that does not sound like a Conservative proposal to me. I do not know what some of my colleagues think, but it does not sound like a very Conservative approach to business. I want protection and clarity, but I do not want mummy state interfering and telling people how they can run their businesses. That is very important.
We have heard a little about people being able to buy their beer elsewhere under new clause 2, so let me just enlighten the House as to what it would do. New clause 2 states that brewers could still stipulate the sale of their brands but the tenant must be free to buy them from someone else. I could stipulate that people had to buy Marston’s, but they would be able to buy it from anywhere. In essence, Marston’s would no longer be able to sell its beer at a lower rate to large wholesalers who are buying 10,000 barrels than to the Dog and Duck which is buying 10 barrels—and this would come with full brewery technical support and reduced dry rent. This new clause is a serious market intervention; we would be interfering in a market in a way unlike anything that happens in any other industry in this country. These are the unintended consequences that colleagues need to consider when they vote for this new clause.
Let me discuss the facts. They are that the industry is desperately concerned about the implications of new clause 2 and this free-of-tie provision. We are talking not only about the pubcos, which people might hiss at and not like, but about the family brewers, who will be exempt. We are talking about the microbrewers and the Society of Independent Brewers; the people who are not even affected by this legislation are concerned about the knock-on effects and the consequences for the industry and the market. We should be desperately concerned about that. The Minister will know that the Department for Business, Innovation and Skills commissioned a report from London Economics, which estimated that if we scrapped the tie and introduced something like this new clause, 1,800 pubs would close and 8,000 jobs would go. Nobody here wants to see that happen to our pubs. We saw what happened under the previous Government, when 52 pubs a week were closing and the hated beer duty escalator increased duty by 48%. We have seen the consequences of legislation for our industry. We should hold our nerve. We should vote for the statutory code and for the adjudicator, and we should give power to our publicans, but we should not throw the baby out with the bathwater—we should not vote for new clause 2.
Paul Murphy (Torfaen) (Lab)
I rise to support new clause 2. It was interesting to listen to the hon. Member for Burton (Andrew Griffiths) and, for about two and a half seconds, I felt sorry for the pub companies. Are they really the great bastions of competition? No, of course they are not. They have lost the confidence of not only the landlords who are their tenants, but this House of Commons and the general public. That is why I congratulate the Government, particularly the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), and her boss, the Business Secretary, on coming up with the pubs code of conduct and the adjudicator. I also congratulate my hon. Friend the Member for West Bromwich West (Mr Bailey) and his predecessors, the various Chairs of the Select Committee, all of whom agreed that change was absolutely necessary. On each of the three occasions we have debated this issue in this House of Commons there has been no vote against the basis of the debate: to ensure that there was change with regard to pub companies and how they treat their tenants.
On the new clause, the market rent only option was central to all those debates and to the reports of the Select Committees, because it highlighted the fact that the pub companies take far too much profit for themselves and leave very little for the tenants who run their pubs. The pub companies charge excessive rents and their beer prices are inflated and, as a result, their landlords are often impoverished. Is that competition? It is a cartel and a monopoly; it is nothing to do with competition—it is all about greed. The key principle outlined by the Select Committee reports and others is that the tied licensee should be no worse off than the licensee who is free of tie. That is central to today’s debate and to the decision this House of Commons must take within the next hour.
There are those who argue that new clause 2 would bring doom and disaster upon the industry, with thousands of people losing their jobs and hundreds upon hundreds of pubs closing. That is all scaremongering; it is all tactics to try to ensure that Government Members and some other Members who feel strongly about these issues should vote in a certain way within the hour. The hon. Member for Leeds North West (Greg Mulholland) spoke eloquently, as always, referring to the fact that new clause 2 would mean that the market rent only option would be introduced gradually; it would not suddenly fall upon the pub companies, but would happen in a piecemeal way, bit by bit and with sense.
Secondly, the new clause would not affect small family brewers. As we have all heard, it applies only to companies owning more than 500 public houses. Yet time and again in this debate people have been bringing up the idea that somehow or other companies such as Brains from south Wales, which is active in my constituency, will suddenly disappear from the face of the earth because of new clause 2, which does not affect them.
Andrew Griffiths
I am delighted that the right hon. Gentleman has mentioned Brains, because I understand that it does not support the free-of-tie proposal. Will he understand that although family brewers may not be encompassed by it, they will be affected by it, because they supply their beer to the pubcos and through their pub chains and distribution network? So it is not true to say that family brewers will not be affected; they are deeply concerned by these proposals.
Paul Murphy
The concern is not warranted. If new clause 2 came in and tenants were able to choose what beers and ciders they had in their pubs, perhaps in addition to the pubs in south Wales that currently serve Brains beers, other pubs that do not but that are linked into the pubcos could do so. Far from hindering the progress or in some way destroying the profits of Brains, this liberating measure would mean that public houses could serve Guinness, Brains and other local beers and ciders as well.
Sheryll Murray
My constituent, the owner of the fantastic St Austell Brewery, has recently told me that if new clause 2 goes through, he will be affected financially—that comes straight from the horse’s mouth. I do not know where the right hon. Gentleman has got his information from, but I have taken the trouble to go and speak to my family brewers and find out how the measure will affect them.
Paul Murphy
No, I will not. The hon. Member for Leeds North West made it clear that the detail in new clause 2 was specifically designed to exclude small companies such as Brains and others. It is possible that those companies were frightened by the tactics of some hon. Members and others, or, worse, that they were frightened because the pubcos had told them that they wanted friends to defend their own position. I do not believe for one second that small companies in my constituency, or anywhere else, would be adversely affected if pub companies allowed their tenants and landlords to earn a living wage—what is wrong with that?—to have a variety of cheaper beers, including those of the small companies, and to ensure that the profits are shared. Nothing in that could be said to be anti-competition. On the contrary, it probably means that they would do better in their pubs if they were allowed to earn more, to share their profits properly and to sell beer and cider from the microbreweries that exist in many of our constituencies. No, this is all about scare tactics.
Richard Graham
May I ask the right hon. Gentleman a simple question? He has quoted Brains, a small brewer in his constituency. For the record, does it, or does it not, support new clause 2?
Paul Murphy
It has already been said that Brains has misgivings about it. I am saying—[Interruption.] Of course it has written to me. It has written to other Members in South Wales. I am saying that those companies are misguided—[Interruption.] Will the hon. Gentleman contain himself while I answer him? Brains and others believe— because they have been frightened into believing it—that new clause 2 will affect them adversely. That is not the case. At the end of the day, those companies will benefit from the new clause.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I know that it is unusual for an Opposition Whip to speak in a debate, but Brains is actually based in my constituency, and I have had many conversations with it. Is my right hon. Friend aware that the major concern of Brains and many other family brewers is over the Government amendments, which reverse the gains that we made in Committee? That is the primary cause for concern.
Paul Murphy
That is a useful piece of information from my hon. Friend whose seat includes the headquarters and the brewery of Brains.
Finally, I understand the tactic that the Government are using. They think they will lose the vote today, because there are so many Members who believe in the things that we are talking about and who will join us in the Lobby. I am not sure that a review is the answer. A review will simply push the argument and debate further down the road. Oddly enough, those who oppose new clause 2 do not like the idea of a review, and those who support it do not much like it either. It reminds me of Aneurin Bevan who said, “When you are in the middle of the road, someone will knock you down.” I sincerely hope that the Government amendment will be knocked down and that Members from all parts of the House will support new clause 2, as it will have the greatest effect in every single one of our constituencies.
Richard Fuller
We have had a fractious debate today. The responsibility for that can be placed firmly at the door of the Secretary of State for Business, Innovation and Skills, who has treated the House in a very shabby way. He has brought forward last-minute amendments and asked this House to take on trust that he can singly make massive and sweeping changes to this industry and that we should just trust him that his word is sound. He is proposing to affect an industry that has long been a mainstay of economies up and down this country.
I have very little confidence that the Secretary of State understands the industry on which he singly wishes to intervene. It is rather a poor show that he has not come to this House, but has instead left a very capable, but nevertheless junior, Minister to outline why the Government are retreating on one set of amendments, and looking to make changes in another set of amendments. That is no way for the proposed changes to be put to this House.
I speak on behalf of family brewers when I say that it is incredibly important that the Government keep the promise that they gave at the start of the consultation that those brewers would not be included in respect of the pubs code adjudicator. I was very pleased that my Conservative colleagues, along with the Opposition and the Liberal Democrats, voted to oppose the Government’s attempts to impose those regulations on small family-owned breweries. Today, the Minister has offered half a loaf back. She has said, “Well, we won’t do it for those who own 500 or fewer. We will do it for those with 350 or fewer. Just trust me, we will make it happen in another House.” I am happy that she is not pressing amendments 41, 43 and 44 today, but I am still at a loss to understand why there is an in-principle difference between 500 and 350. If it is a fact that just three family brewers are impacted by that change, there is a very serious issue about whether this is ultra vires legislation that is being felt by certain family businesses but not by others. I think the Minister will find that she will also have severe problems in the other House.
Andrew Griffiths
I completely agree with my hon. Friend’s analysis about plucking the figure of 350 out of the air. Does he share my concerns that this is a recipe for disaster, as we are bound to have legal challenge after legal challenge about what is a competition matter?
Richard Fuller
My hon. Friend is absolutely right. This is one of the problems of trying to make policy on the hoof. Small businesses in this industry up and down the country will be looking aghast at the actions of the Secretary of State. Serious business people run these breweries. They have to make long-term investment decisions that affect themselves, their employees and their customers. To have a Secretary of State who makes his position clear on a Friday, but changes it by Tuesday and again when it goes to the upper House sends an incredibly poor set of signals to an industry that has to make those long-terms decision. To be quite honest, a Secretary of State for business should understand that and should have the decency to be here—[Interruption.] I am sorry, I should not say that. It would have been preferable if he had been here today so that he could explain his rather unforced flip-flop at the last minute, because these are unprecedented changes that he is putting forward.
Mark Field (Cities of London and Westminster) (Con)
My hon. Friend is making a powerful and impassioned speech. Does he not recognise that Ministers have tried at least to find some element of compromise? For those of us who had some concerns about this—I share the concerns, as they have been put to me by Fullers brewery in Chiswick—the change to 350 provides a reasonable compromise, and it will now go to the other place to be determined.
Richard Fuller
My hon. Friend, with his emollient and soothing words, makes a fair point. The Minister has done a fantastic job in presenting these compromises. However, they raise severe questions both in terms of the specificity of the number of companies that will be affected by this additional change and the fact that they were presented to this House at the last minute on a “trust us, we will change it” basis. Yes, it is a step in the right direction, but would it not have been so much better to have this sorted out before and to have included the proposals in the Bill or in the amendments so that we could debate them here today in this House?
This issue shows some of the problems with Government intervention on industry. Essentially, anyone who runs a business knows that they cannot trust the politicians. They cannot trust the politicians to keep the guidelines for the industry safe and secure if we have an interventionist as Business Secretary, and we certainly have that. They cannot trust the Government if they know that they will change the rules one week so that the next week they will affect the industry.
Grahame M. Morris
I do not know whether I can take on one of the characters from “The Lord of the Rings” and better that finish from the hon. Member for Bedford (Richard Fuller).
I want to speak in support of new clause 2, and I declare an interest as vice-chair of the all-party save the pub group. I pay tribute to my fellow officers, the hon. Member for Northampton South (Mr Binley), the hon. Member for Leeds North West (Greg Mulholland), who has done such a sterling job of researching new clause 2, and the hon. Member for Romsey and Southampton North (Caroline Nokes). Like other Members, I acknowledge the important role played by Fair Deal for Your Local, the Campaign for Real Ale, the Fair Pint campaign, my union Unite, the GMB, various support groups for tenants and the Punch Tenants Network.
New clause 2 is about stopping exploitation by large pubcos of pub landlords up and down the country. The situation has not come out of the blue. We have been discussing the issue for some years now, and it has been known about for a long time. The hon. Member for Burton (Andrew Griffiths) gave an example from his constituency, and the point I sought to make, although there was not time for me to do so during his speech, was that I can think of many cases in my constituency where a tenant of one of the large pubcos has effectively invested their life savings, and often their redundancy money, in taking over a business and turning it around. They have built it up and taken on additional responsibilities, such as opening a restaurant or providing bed-and-breakfast rooms, but when the review of the tenancy has come around, the pubco has doubled the rent, so that it is not viable for those people to continue.
Grahame M. Morris
I will give way to the hon. Gentleman, even though he would not give way to me.
Andrew Griffiths
I think that I was pretty generous in giving way. The hon. Gentleman has done a lot for beer and pubs, and I acknowledge his support in scrapping Labour’s hated duty escalator. I agree that it would be absolutely unfair of a pubco to do what he has described, but does he not accept that under the statutory code, the tenant could take the case to the adjudicator, who could rule on whether it was fair, and get the decision overturned? The tenant would have protection under the code.
Grahame M. Morris
I think that the best protection is offered by new clause 2, with the market rent only option. Time is short, but I shall try to explain why. We have heard from the respected Chair and former Chairs of the Select Committee on Business, Innovation and Skills. We have had debates, and the all-party save the pub group is certainly aware of the four reports produced by the Committee that concluded that there had been abuse of the tied system, and that recommended time and again the market rent only option.
During her opening remarks, the Minister was harangued by Government Members with prophecies of doom about the consequences for local economies and regional brewers, but in truth the Federation of Small Businesses suggests that there will be a considerable benefit to the economy of offering this option. CAMRA estimates that large pub companies force their tenants to buy beer at prices that are inflated by as much as 50% or 70%; that is on top of rent that is already excessive. Anyone who believes in fairness would support new clause 2, which would correct that.
John Healey (Wentworth and Dearne) (Lab)
My hon. Friend makes a powerful case. Does he agree that tied tenants, such as those of the Monkwood tavern in Rawmarsh, The Crusty Pipe in Goldthorpe and The Bull’s Head in Cortonwood, simply want a fair basis on which to run their pubs as a business for them and their families?
Grahame M. Morris
Absolutely. All we are arguing for is fairness—[Interruption.] The hon. Member for Burton asks from a sedentary position why this has not been done before. We have an opportunity to do something now, and I cannot be answerable for things that happened before I was a Member of this House.
As a result of excessive behaviour by the pub companies, an estimated 57% of tied landlords earn less than £10,000 a year. That is a disgrace. Anybody who, like me, frequents pubs regularly will realise what an incredible effort goes into running a public house—the hours put in bottling up after customers have gone home, the huge commitment it takes, and the toll it takes on the owners’ personal life. For them not to have the opportunity to earn a decent living is a disgrace.
Mr Jim Cunningham (Coventry South) (Lab)
Does my hon. Friend agree that the tied pub concept is old-fashioned and antiquated in the 21st century? We had the same issues with tied housing in the past. Surely big brewers inflicting on landlords a certain label of ale, for want of a better term, is one of the factors that led to the demise of the working men’s club. Those clubs ended up in a lot of debt.
Grahame M. Morris
The demise of the Club and Institute Union, and the working men’s clubs, is a huge issue, certainly for me. New clause 2 does not propose the end of the tie; rather, it seeks to make it work more effectively and fairly. If a pub landlord agrees to a tied arrangement in relation to the purchase of alcoholic drink from the pubco, they should get a lower rent, especially if they are paying as much as 70% over the top for those beverages. That is the way the tie should work. If the landlord does not want to be tied to a company in respect of beverages, they should pay the market rent, or have that option. I am not suggesting that the tied system should be done away with—just that it should work in a manner that is fair to both the pub company and the tenant. At the moment, it certainly does not.
Members have suggested that the impact is not huge, but there are lots of villages in my constituency of Easington, such as Hawthorn and High Heselden, where only a single pub is left. These communities are really feeling the effects. If landlords are compelled to pay as much as 70% more for their alcoholic beverages, despite what the hon. Member for Burton says, the tenant will be absorbing some of that cost, but when there is only a single pub in the village, it is basically passed on, and the customers pay a lot more than they need to.
It is no coincidence that thousands of pubs have closed in recent years. In some cases, profitable, popular pubs, beloved by local communities, have been sold off by big pubcos to developers and supermarkets. Pubcos have sought to cash in on the real estate or land value, with little or no thought for local people, or the effect of the loss of a community hub. As the hon. Member for Leeds North West pointed out, that is often because these pubcos have saddled themselves with huge debts. There is a suspicion that the rents they charge are deliberately high to get rid of landlords, so that it is easier for them to sell.
Those landlords who opt for the market only rent can purchase drink supplies from elsewhere, leading to better and fairer access to the pub market for smaller local brewers and cider producers. It would also increase the choice for all our constituents. I would like Members to support new clause 2 because it would help to deliver increased licensee profitability, increased investment in pubs, greater consumer choice and fewer pub closures. If avaricious pubcos are stopped from exploiting their tied landlords, hiking up rents and charging up to 70% more for a pint, the price of a pint can only fall. I am sure that I speak for all hon. Members on both sides of the House and their constituents—I certainly speak for myself and my constituents in Easington—when I say that such a move would be warmly welcomed. For that reason, for fairness and for the benefit of the economy as a whole, I commend new clause 2 to the House.
Sheryll Murray
I thank my hon. Friend the Minister for not pressing amendments 41, 43 and 44. However, I want to put on record my surprise that the amendments were tabled by the Secretary of State as recently as 14 November, and the explanation was:
“This amendment, and amendments 43 and 44, reverse amendments made at committee and bring pub-owning businesses with fewer than 500 tied pubs back into the scope of the Pubs Code.”
The Secretary of State has continually led the House to believe that it was his intention not to include small family brewers with fewer that 500 tied pubs in the statutory code. When the Bill appeared, it included those small family brewers, with top-heavy bureaucracy.
I thank my hon. Friend the Member for Newton Abbot (Anne Marie Morris), who is no longer in her place, my right hon. Friend the Member for Faversham and Mid Kent (Sir Hugh Robertson), my hon. Friends the Members for Bedford (Richard Fuller), for Burton (Andrew Griffiths) and for St Austell and Newquay (Stephen Gilbert), and the hon. Member for Chesterfield (Toby Perkins) and his colleagues on the Opposition Benches for seeing sense and supporting my amendment, which would simply have put back into the Bill what the Secretary of State has always led the House to believe he intended to have in the Bill.
Jo Swinson
We have had a lively debate on the various amendments before us. The hon. Member for Chesterfield (Toby Perkins) made the point that today has the potential to be a great day for Parliament. Given all the detailed discussions we have had—that is what we do on Report—getting into the specifics on thresholds, family brewers and new clause 2, I think it is easy to lose sight of quite how far we have come and what a real change this Bill will mean for tenants who have been arguing for such a long time for action to be taken to improve their situation.
We have heard hon. Members make contributions of various lengths—significant, in some cases—and we have heard more make interventions, on both sides of the argument, about new clause 2, and we have heard speeches from those who powerfully oppose it. I want to respond to some of the specific points made by the hon. Member for Bedford (Richard Fuller) about family brewers and the Government’s proposed threshold of 350. He was right that earlier I confirmed that three companies would be included. An important fact to put on the record is that none of those three is a family brewer. Those who have been arguing for the exclusion of family brewers can rest assured that, with the reduction in the threshold from 500 to 350, that exemption will remain, as I think was the will of the Committee, which the Government have listened to and recognised should be reflected in the Bill.
I take issue with the suggestion that those companies are all small businesses. Of the three that will be included by changing the threshold from 500 to 350, one has a turnover of £758 million a year and some 16,000 members of staff. I do not think that it is accurate to say that we are necessarily talking about small companies in that sense. The hon. Member for Heywood and Middleton (Liz McInnes), who is new to the House, asked about the brewery JW Lees in her constituency. I am happy to confirm that with fewer than 350 tied pubs, it will not be affected by the measures.
In his comments about family brewers and the changes we have introduced, my hon. Friend the Member for Bedford indicated a certain lack of confidence that the commitments made here by the Government will be implemented. We have set those out in clear words, which will appear in black and white in Hansard if he chooses to read it tomorrow. The amendments will be made in the other place but this House will have the opportunity to vote on them as well. The situation is not necessarily good versus evil, as he outlined it. I began to worry that he was being a bit uncharitable towards me at one point, until he compared my right hon. Friend the Business Secretary to Saruman, who was a pretty evil and nasty piece of work. I do not think that comparison is warranted, but perhaps I should just be pleased that my hon. Friend did not reach for Sauron instead.
New clause 2, which was introduced by my hon. Friend the Member for Leeds North West (Greg Mulholland), seeks to introduce a market rent only option requiring pub-owning companies with more than 500 pubs of any description and one or more of those being a tied pub to offer their tied tenants the right to go free of tie. It is widely accepted in the industry that tied tenants should be no worse off than free-of-tie tenants. It is one of the key principles underpinning the Government’s proposals and goes to the very heart of the measures we have set out in this Bill. There was an attempt in Committee to take that principle out—a probing attempt, apparently, but none the less an attempt—by some of the Back Bench who have spoken today. It is a vital principle that underpins the impact that we are trying to have.
Toby Perkins
The hon. Lady to some extent predicted what I am going to say. People who listened to the hon. Member for Burton (Andrew Griffiths) might want to reflect on the fact that he attempted to introduce an amendment in Committee that would have removed the principle that tied tenants should be no worse off than tenants free of tie. It may be valuable for hon. Members to consider in that light everything else they have heard from him.
Jo Swinson
Indeed. I am glad that that amendment did not ultimately form part of the Bill, as that principle, which we have set out from the beginning, is crucial. We looked at various means of achieving it. One of the things we consulted on was whether the market rent only option should be included in the pubs code. We looked carefully at whether to introduce that. It might seem a straightforward way of strengthening the negotiating position of tenants, because if they are faced with a compulsory free-of-tie option alongside market rent only, pub-owning companies will arguably work much harder to offer a tied deal which represents a fair share of risk and reward.
The freedom to choose the supplier and the likely lower costs of supply could mean that free-of-tie agreements offer greater potential profits for tenants wanting to maximise the benefit of those terms. Those would be the most experienced and entrepreneurial tenants. It would not necessarily help others, whereas the parallel rent assessment will do that. It was interesting from the consultation, and almost unique in such a polarised policy area, that concerns were expressed by people on all sides of the debate about the impact of introducing that provision and the consequences it could have on the tied model as a whole. There would be some uncertainty and unpredictability, especially in relation to pub-owning companies and how they would respond.
The parallel rent assessments that we are introducing provide a way of making sure that the prime principle that a tied tenant should not be worse off than a free-of-tie tenant can be enacted and made real. That is why we are proceeding with the arrangement.
Neil Carmichael (Stroud) (Con)
If there is a market rent review in two years, will it be sufficiently rigorous to satisfy tenants?
Jo Swinson
I can give an assurance that the review will be rigorous and that, in response to it, there will not only be this power for the Secretary of State, but, if he finds that there is insufficient protection for tenants as a result of the parallel rent assessments and the system is not working as it should, a requirement for him to bring forward the market rent only option.
Toby Perkins
The Minister is attempting to straddle a very difficult line. She claims that we should believe that the measures proposed by the Government today are likely to work, but if not there is an alternative process that is her party’s policy for which she will argue going into a general election. Why do we not just do away with all that nonsense, give the industry some certainty, and support new clause 2?
Jo Swinson
The hon. Gentleman is right to say that it would be Liberal Democrat policy. Clearly, we are in a coalition Government rather than a Liberal Democrat Government, and people will make their decisions when it comes to the general election in which we will all be campaigning and voting in a few months’ time.
We have before us a Bill that will improve the lives of tenants and makes real the principle that a tied tenant should be no worse off than a free-of-tie tenant. The hon. Member for Bedford suggested an analogy with “The Lord of the Rings”. Perhaps I can posit an alternative scenario. I think that what we have had on this issue over the past few years is a rather intrepid fellowship—a group including MPs from all parties in all parts of the House, tenants, Select Committees, business groups, and campaigners. I will leave hon. Members to make up their own minds about who among them would be deemed to be hobbits, elves, dwarves or men—[Interruption]—and, indeed, who has been Gandalf at their head. The members of this intrepid fellowship have campaigned hard. In some ways, they probably feel that they have been on an epic journey, battling against the unfairness that has been repeatedly highlighted in Select Committee reports.
We need to recognise that the result of that campaign by all those individuals has been to achieve a great success. What we have is proposed legislation with a statutory code and a pubs adjudicator who can make that code a reality and ensure that if it is not abided by there can be arbitration, investigations, and ultimately, if necessary, penalties with real teeth. We also have the parallel rent assessments to make sure that the system bites. Now, going even further, we have the power to introduce the market rent only option if all that is ultimately unable to work. That is a huge success for campaigners who have worked on this issue for many years. I think that people should welcome what has happened.
I hope that my hon. Friend the Member for Leeds North West will recognise that success, see how far he has come, and think twice about putting his new clause to the vote. In the Bill before us, we have a solution to the issue identified in the Select Committee reports and a way to make sure that if that does not work we have the ability swiftly to implement a market rent only option. I commend this part of the Bill to the House.
Question put and agreed to.
New clause 6 accordingly read a Second time, and added to the Bill.
New Clause 2
Pubs code: market rent only option for large pub-owning businesses
(1) The Pubs Code shall include a Market Rent Only Option to be provided by large pub-owning businesses in respect of their tenants and leaseholders.
(2) A Market Rent Only Option means the right of the tenant, or leaseholder, of a pub owned by a large pub-owning business, to be offered such tenancy or lease in exchange for an independently assessed market rent paid to the pub-owning business and, for the avoidance of doubt, not thereafter being bound by “a tie”, meaning an agreement meeting, in whole or in part, Condition D as defined in section 63(5) of this Act (obligation to buy from the landlord, or from a person nominated by the landlord, some or all of the alcohol to be sold at the premises).
(3) For the purposes of this section, the definition of Condition D in subsection (2) is to be interpreted to include an obligation to buy or contract for goods and services other than alcohol.
(4) For the purposes of this section, the definition of a “large pub-owning business” is a business which, for a period of at least six months in the previous financial year, was the landlord of—
(a) 500 or more pubs (of any description); and
(b) one or more tenanted or leased pub.
(5) The Pubs Code may include provisions to permit a brewery which qualifies as a large pub-owning business to continue to require that specified brands produced by that brewery (required products) are sold within its tenanted or leased pubs—provided that such tenants and leaseholders are free to purchase such required products from any supplier.
(6) The Pubs Code shall contain provisions requiring that the offer of a Market Rent Only Option to a tenant—
(a) at the point of lease, tenancy contract or other agreement renewal, or at rent review or five years from the date of the previous rent review;
(b) when the large pub-owning business gives notice of, or imposes, (whichever is the earlier) a significant increase in the price at which it supplies products, goods or services (falling under subsections (2) or (3)) to the tenant;
(c) when a large pub-owning business implements, or gives notice of, a transfer of title;
(d) when a large pub-owning business goes into administration; or
(e) upon an event outside of the tenant’s control, and unpredicted at the time of the previous rent review, that impacts significantly on the tenant’s ability to trade.
(7) The terms of an offer under subsection (5) shall include provision for a 21 day period of negotiation, commencing from the tenant giving notice of an intention to pursue a Market Rent Only Option, in which the large pub-owning business and the tenant may seek to negotiate a mutually agreeable Market Rent Only settlement.
(8) Following the negotiation period under subsection (7) there shall follow a 90 day period of assessment. In this period—
(a) an independent assessor shall be appointed with the agreement of both parties by joint private instruction and on the basis of an equal apportionment of costs; and
(b) under arrangements and criteria that the Adjudicator shall establish, such an assessor shall be—
(i) independent of both parties; and
(ii) competent by virtue of qualification and/or experience.
(c) if the business and tenant cannot agree on an appointee then a person shall be appointed, on the application of either party, under arrangements established by the Adjudicator;
(d) the appointed assessor shall then assess the market rent for the property operating as a pub with no “tie” as defined in subsection (2) and submit to both parties the resulting sum for such a rent; and
(e) at the time of the three month assessment period, the tenant shall have the right to pay no more than the sum determined under paragraph (d) to the pub-owning business and, if previously one party to a “tie” as defined in subsection (2), shall no longer be bound by it.
(9) The Pubs Code shall contain such measures as ensure that—
(a) the Market Rent Only Option is conducted in accordance with timing provisions and procedures, in accordance with RICS guidance, as specified in the Pubs Code; and
(b) large pub-owning businesses are prohibited from acting or discriminating against any of their tenants who choose the Market Rent Only Option.
(10) The Secretary of State shall confer on the Adjudicator functions and powers in relation to the Market Rent Only Option, that include—
(a) determining what constitutes a significant increase in price, as mentioned in subsection (6)(b) in the event of a dispute between tenant and business;
(b) adjudicating in disputes concerning the process or outcome of the market rent assessment; including the power to set the market rent if the Adjudicator deems the process or decision to have been flawed; and
(c) receiving, investigating and adjudicating in relation to complaints made under subsection (9)(b).
(11) The Secretary of State shall make provisions for the implementation of the following measures in this section by regulations amending the Pubs Code. Such regulations shall be made under negative resolution procedure. The Secretary of State may make provisions changing the types of agreement that fall under subsection (2) by regulations. Such regulations shall be made under negative resolution procedure.”—(Greg Mulholland.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Mrs Eleanor Laing)
With this it will be convenient to discuss the following:
New clause 3—Prompt Payment Code, duties of the Secretary of State—
‘(1) The Secretary of State shall—
(a) ensure that any business with payment terms of more than 60 days cannot sign up to the Prompt Payment Code, and that any existing signatory with payment terms of more than 60 days is removed from the list;
(b) at the end of each financial year, the Secretary of State shall write to all businesses in the FTSE 350 who are not signatories of the Prompt Payment Code asking them to become so;
(c) the Secretary of State shall publish a list of those businesses written to prominently on the Government’s website.”
New clause 4—Late payment review—
‘(1) The Secretary of State shall—
(a) conduct a review into how the Government can use the payment publishing regime to ensure that small businesses who are paid late by a larger supplier are automatically paid compensation, and into how the onus of reporting late payment can be shifted away from the smallest businesses who cannot afford to lose significant customers; and
(b) report back to both Houses of Parliament on the conclusions of the review.”
Amendment 6, in clause 3, page 4, line 33, at end insert—
“(g) about the circumstances and process for amending payment terms of the company.”
This is for companies to include details of the circumstances and processes (including who will be involved) by which payment terms would be amended, preventing unilateral and ad hoc changes.
Amendment 91, in clause 11, page 12, line 19, at end insert—
“(5) The Secretary of State may by order establish a Prohibited List of certain classes of exports that cannot receive UKEF/ECGD support.
(6) An order establishing , or thereafter amending a list for the purposes mentioned in subsection (5) shall be subject to the affirmative resolution procedure.”
This amendment would grant the Secretary of State the power to prohibit specified types of exports from receiving government support, thereby enabling UK export finance provision to reflect government policies and priorities, such as preventing arms sales to certain regimes. The content of, or changes to, any such list would need to be approved by Parliament.
Government new clause 5—Independent Complaints Commissioner: reporting duty.
Amendment 92, page 20, line 5, leave out clauses 20 to 26.
This amendment removes the obligation on future governments to set a deregulation “business impact” target for each Parliament.
Government amendments 27 and 28.
Amendment 7, in clause 37, page 35, line 9, at end insert—
“() duties to establish the past payment performance of potential parties to a contract, before contracts are entered into;
() duties to ensure contracts entered into include the contractor’s requirements for prompt payment of their suppliers.”
These are to ensure that the payment performance of potential contractors are known before contracts are entered into and that contracts entered into require contractors to pay their suppliers promptly.
Amendment 1, page 35, line 16 , at end insert—
“() duties relating to the provision of apprenticeships and training opportunities as a result of procurement;
() duties to publish reports about the amount of expenditure undertaken by the relevant procurement function in relation to—
(i) amount and proportion of expenditure undertaken by small and medium-sized enterprises,
(ii) amount and proportion of expenditure undertaken in the local area.”
Amendment 2, page 35, line 22, at end add—
‘(5A) A person making regulations under this section may also specify the reasons why firms may be excluded from entering into contracts.”
Amendment 3, page 35, line 28, at end add—
‘(8A) Regulations under this section are subject to the provisions of the Freedom of Information Act 2000”
Amendment 4, page 35, line 30, leave out subsection (10).
Debbie Abrahams
This group of amendments is seeking to address the very significant issue of businesses paying their suppliers late. Recent data show that the late payment debt burden for UK businesses is more than £46 billion, with SMEs shouldering most of this. They are owed nearly £40 billion in late payments and 60% of small businesses are affected, with the average small business owed over £38,000 in late payments.
It is getting worse: £36 billion was owed in 2012, so the increase over recent weeks and months can be seen. In other debates we have heard about the implications of late payments for these small businesses, from productivity to access to finance and credit terms—all these are affected. For these businesses, there is not just the inconvenience of spending an extra 158 million hours chasing payment: vital cash flow that is stemmed often affects their very survival, their jobs and their livelihoods. In 2012 it was estimated that 124,000 small businesses were put out of business directly as a result of late payments.
For me, it has been about the personal stories. My interest in late payments started when a constituent came to me and said that their business was going under directly as a result of this issue. This opened a can of worms, not just in my constituency but across the country. The issue of late payments is endemic. When someone describes how their life’s work has been destroyed by what can only be described as corporate bullying—large companies paying their bills late just because they can, because they have the power—it is clear that it is one of the most raw forms of injustice.
From the late payment inquiry held last year, it was clear to us that it is not just a micro-economic issue. With approximately half the work force and half the UK’s income in the private sector coming from small businesses—a massive £1,558 billion—it is inconceivable that late payment is not affecting the wider economy and, of course, a sustainable recovery. I am glad that the Government are tackling the issue; it has been a long time coming. I started my Be Fair—Pay On Time campaign in 2011 and now the Government are finally getting to grips with the issue, but I am afraid that the measures in the Bill do not go far enough. It is regrettable that in Committee the Government failed to support measures that would have seen small businesses automatically compensated for late payment by their suppliers. I hope that the Minister will reconsider and have a look at new clause 1 and the amendments.
New clause 1 seeks to address the issue of retention of moneys in the construction industry. You may be aware, Madam Deputy Speaker, that at any one time over £3 billion is outstanding in the construction industry by way of cash retentions. This is an aggregate sum of moneys provided for by small businesses in the event that they fail to remedy defects. I have several examples, including that of a company that wrote to me to say that £60,000 of retention moneys was withheld—5% of the overall contract—for eight months. There was nothing in the contract about that. They had to go through adjudication and it ended up with them losing £22,000. These are small businesses, and this is their livelihood.
Gordon Banks (Ochil and South Perthshire) (Lab)
Having worked all my life in the construction industry, I am very much aware of retention issues. My hon. Friend’s final point was valid. When it comes to negotiating retentions, it always comes to a compromise: people will always lose, as they will never come out with the £60,000 that they were owed. That is effectively their money going to somebody else’s pocket.
Debbie Abrahams
My hon. Friend speaks from experience. That is certainly the experience of many contractors, and we need to address it.
There is evidence that cash retentions have been used to shore up the working capital of local authorities and tier 1 suppliers. There is a key concern that if tier 1 suppliers become insolvent, the small businesses in the supply chain are at risk of losing their retentions.
I recognise that the Department for Business, Innovation and Skills has said in its construction supply chain payment charter that it wishes to abolish retentions by 2025. My new clause, however, is a stepping-stone towards that by requiring the publication of companies’ policies, practices and performance on retention moneys, reviewing this and subsequently making recommendations about further action to help secure and protect retention of moneys for small businesses—in trusts, for example.
The new clause is timely, with New Zealand considering the requirement for cash retentions to be taken in trusts, and New South Wales in Australia is currently reviewing regulations to that effect. The new clause would enable the Secretary of State to review published information and then issue regulations to ensure that these owed moneys are protected for small businesses.
Moving on to amendment 6, a key issue for small businesses has been the changes made to contract payment terms without negotiation or notice. My amendment recognises that and would require companies to include details of the “circumstances and process” by which payment terms may be amended in the company’s published payment practices and policies. This will prevent ad hoc and unilateral changes from being made to the payment terms, which have again affected the financial viability of so many small businesses.
Amendment 7 looks at the issues around public procurement practices. One major issue identified in my late payments inquiry was that late payment is a cultural issue. Large companies pay small companies late because they can, as I mentioned—they have the power and the small companies do not. We need to change these attitudes, and we need to view late payment as being as unethical as tax evasion. Changing public procurement practices, as identified in amendment 7, provides an opportunity to do so, first, by requiring public bodies to determine the “past payment performance” of potential contractors before any contract is entered into; and secondly, by making the contracts of tier 1 suppliers commit them to pay their suppliers promptly. All the way down the supply chain, there should be a commitment that payments will be made on time.
Although my next topic does not relate to my amendments, it relates to public procurement practices. A report came out today from the Walk Free Foundation on the subject of modern slavery. Although the UK is supported for what it is doing to combat modern slavery, it finds that we are not doing as much as Brazil and the US, for example, in addressing Government procurement practices to stop this happening. I know this is highly irregular, Madam Deputy Speaker, but I hope the Minister is listening so that he can respond and make clear how we will deal with this problem in future Government practices.
Debbie Abrahams
I have come to the end on that really important point, but I happily give way to my hon. Friend.
Toby Perkins
My hon. Friend may be approaching the end, but if I am any judge, I know she is nowhere near the end of campaigning on this issue. She has been a robust and resilient campaigner on late payments, and I know that she was granted an award for her work yesterday by the Federation of Small Businesses. I want to take this opportunity to congratulate her, not only on that thoroughly deserved award, but on the fantastic campaigning work she has done on late payments.
Debbie Abrahams
That was very kind of my hon. Friend, and I am grateful to him. I will continue to campaign, because, as I have said, I do not think that the Government’s measures are strong enough. They have been dragged here kicking and screaming; I hope that they will now listen, and will address what are still weaknesses in the Bill.
Caroline Lucas (Brighton, Pavilion) (Green)
I hope I am right in thinking that I can speak about any of the amendments in the new clause 1 basket. That seems to be the case, and I am delighted, because it means that I can speak about my amendments 91 and 92.
The Bill contains important provisions to help United Kingdom firms to export, which is, of course, welcome news for many of them. However, UK export finance is, in the Government’s own words,
“not presently legally able to discriminate between classes or types of exports”.
Amendment 91 would alter the Export and Investment Guarantees Act 1991 to give the Secretary of State power to create a prohibitions list, thereby allowing the Government to ensure that UK export finance was not available to projects overseas that undermined other Government policies—specifically, policies on human rights and arms exports, and the 2010 coalition pledge to
“ensure that UK Trade and Investment and ECGD become champions for British companies that develop and export innovative green technologies around the world, instead of supporting investment in dirty fossil-fuel energy production.”
The amendment would not bind a Secretary of State, now or in the future, to introduce such a prohibitions list, nor would it prescribe what should be included in the list. It would merely allow the Secretary of State to create such a list if he or she chose.
Given that the amendment is so moderate, I find the Government’s arguments against a prohibitions list very unconvincing. First, they argue that it is better to consider projects on a case-by-case basis, but the case-by-case approach is not working, even when measured against the coalition’s own pledge to support “innovative green technologies”. In 2012-13, UK Export Finance gave a £147 million guarantee to support oil and gas exploration by Petrobras in Brazil, and £15 million in guarantees for a loan for a gas power project in the Philippines. In March 2014, support worth US$215 million was announced for a major petrochemical project in Vietnam. Nor is the current approach working when it comes to military exports to repressive regimes. Many of the deals that have been underwritten by UK export credit support are controversial, including sales of military aircraft to Saudi Arabia and Oman, armoured vehicles to Turkey, and intelligence equipment to Indonesia.
Secondly, the Government argue that the UK would be less likely to be effective in achieving change through multilateral routes if we acted unilaterally in this way. If that is the case, why do other countries have prohibitions lists? The Export-Import Bank of the United States, for instance, prohibits
“loans, guarantees, and insurance as to sales of defense articles or services”.
In June 2014, the German Finance Ministry announced that Germany’s official export credit agency would be prohibited from supporting nuclear contracts.
I simply do not think it credible to argue that if the UK showed some leadership and led by example, that would somehow hinder multilateral action to the same end. Indeed, the reverse is the case, as John Ashton, the UK’s top climate diplomat in former years, has pointed out. In his view,
“our influence has always depended on the credibility of our domestic policies. How can we expect to persuade others if we are not doing ourselves what we ask of them?”
Thirdly, the Government say that there is not a problem with coal, because UKEF has not funded a coal-fired power station overseas since 2002. However, there is clearly a loophole in the UK’s policy on export finance for coal projects abroad. The hon. Member for Streatham (Mr Umunna) highlighted that loophole in a speech in April this year. He said that he would take action to close the loophole; I hope that he will follow through, and vote for my amendment today.
A change in export credits could also offer a boost to UK low-carbon industries seeking to expand overseas, as the chief executive of a British solar company operating in a number of African countries has explained. It is not just about stopping export finance in one area; it is about expanding it in others, so this is a pro-business proposition. Finally, I reiterate that this amendment does not specify what goes on the prohibitions list; it simply gives the Secretary of State the power to create one, in recognition of the fact that the current approach is failing on both human rights and environmental grounds, even measured on the Government’s own terms.
Gordon Banks (Ochil and South Perthshire) (Lab)
It is a pleasure to follow the hon. Member for Brighton, Pavilion (Caroline Lucas), and I should like to speak to new clauses 3 and 4. Before I so do, I should like to draw the House’s attention to my entry in the Register of Members’ Financial Interests.
New clause 3 is designed to flush out late payers. It seeks to press, or perhaps encourage, FTSE 350 businesses that have not signed up to the prompt payment code to do so. It would also empower the Secretary of State to publish a list of such companies on the Government website, thereby highlighting those that had not committed to the code. I support those ambitions. The new clause sets out to do what the Government said they would do—name and shame large companies that did not commit to prompt payment practices. However, they have now reneged on that promise. New clause 4 proposes that the Government conduct a review into how the payment publishing regime could be adapted to ensure that late payments would be automatically accompanied by a compensation payment, and how the onus of reporting late payment could be moved away from the customer waiting to be paid.
Why are the new clauses so important? Any small business owner will know that a late payment can often mean the difference between continuing to trade and business failure. Insolvency specialists have estimated that one in five business failures are down to bills not being paid on time; they are nothing to do with a failed business model and and purely down to cash being withheld from the business by its customers. The Scottish Building Federation has highlighted the fact that four out of five building firms have reported instances of late payment in the past year. I can assure the House that the overwhelming majority of those businesses will not have considered seeking redress through interest payments.
The problem that the Bill will not solve is that it will still be up to the supplier—usually a smaller business—to pursue its customer for prompt payment. The supplier will either lose the argument, and lose the prompt payment, or win the argument and put at risk its relationship with that larger customer.
Bill Esterson
My hon. Friend is absolutely right to make the case for a level playing field when it comes to the payment of smaller suppliers by larger organisations. He has also made the point about the human and social cost of late payments to the people who run and work in small businesses. Does he agree that it is incredibly short-sighted of larger businesses to disrupt their own supply chains by delaying payments in that way? Is not that another reason to deal with this issue once and for all by adopting these important amendments?
Gordon Banks
I thank my hon. Friend for making that valid point. The bigger companies have to understand that there is a need for smaller companies in the supply chain. They should view the situation in the round and acknowledge that not every company is big enough to withstand late payments in the same way that they perhaps could. There is a moral argument running through this as well. If I supply goods and services to someone on a Tuesday and they agree to pay me a particular sum by 1 August, for example, why should they not pay me by that date? It is simple: if I keep my part of the bargain, I expect them to keep theirs.
Mr Brooks Newmark (Braintree) (Con)
I totally hear what the hon. Gentleman is saying, and I agree that small businesses are the backbone of this country. Does he agree that the banks also have a role to play in loosening up their working capital facilities to help small businesses? That, too, is a challenge that small businesses face.
Gordon Banks
I am grateful to the hon. Gentleman for making that valid point. I shall come to that matter later in my speech when I talk about the changes that have happened over recent years, and perhaps decades, and try to illustrate why prompt payment has become so important.
Let me return to what I was saying about people trying to get their payment on time, and whether they win the argument and risk losing the customer in the process. There does not seem to be much incentive for small businesses to utilise their right against late payers, because just 10% of businesses have even considered doing so. I have been in private business all my working life, having set up my own business in 1986. I can tell this House that late payments are the biggest curse small businesses face: people striving, working hard and going out to sell their wares but then struggling to get paid. As I said, that part of the bargain is not being upheld.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend hits the nail on the head, because this is not a small problem for small businesses—it is a big problem. Is he aware of research by BACS showing that 60% of British small businesses have said that late payment is a problem for them?
Gordon Banks
Yes, I am aware of that research, and late payment is a major problem. It is not just a transient major problem, but a constant one, week to week. I have lain in bed at night worrying whether the cheque was going to come in so that I could pay the wages of my staff. That is not a position that any business should be put in, and certainly not because of late payments.
A small business, perhaps a new one trying to establish itself, often finds a degree of comfort in dealing with a larger, perhaps household, name in its business sphere. The saying in my sector is, “You know your money is safe with so and so.” It may be safe but it may also be in their bank all the time and not yours.
We also need to consider the credibility that comes from working with such a customer and the possible opportunities, arising from volume increases, for small business suppliers to be able to renegotiate rates from their suppliers. In my experience, those will more often than not be larger companies. So the small business can find itself sandwiched between a large business customer and a large business supplier, perhaps a multinational company, and being strung out at one end and wrung out at the other. These multinational companies, understandably, have strict credit limits and they will be very quick to stop supply if they are not being paid within 30 days. Within a limited period of time they will remove the small business’s credit facilities, so damaging its credit rating, and reducing its access to key products and, in effect, its ability to pay the bill for which the multinational is awaiting payment.
As we know, the reason for late payment in these cases is often that a large customer fails to keep its side of the deal. I wish to draw the House’s attention to an experience I have encountered a number of times, where large multinationals have been pressing for payment within 30 days for a commodity sold by them to my business and yet that commodity has been sold to another division of the same company and it has no intention of paying within 30 days. Even within the same organisation we may have the supplier pressing for payment within 30 days, the product having been sold to another division in the same company as the supplier and yet it not upholding its part of the bargain and being prepared to pay in 30 days—it just strings you out. So the company wants its money in but does not want to pay the money out. That is just not good enough. The current system of being able to charge interest, at the supplier’s instigation, or being able to apply a debt recovery cost is not adequate and we have to improve these experiences.
Toby Perkins
My hon. Friend is making an excellent speech on this important subject. He will probably be aware that in Committee we tabled a worked-through amendment that would have moved the onus from small businesses having to pressure their large business customers for repayment on to the large businesses. Does he agree that the fundamental change we need is for small businesses not always to have the onus on them to pursue their large business customers?
Gordon Banks
I absolutely agree with my hon. Friend. It is not morally or structurally fair for a small business to be trying to squeeze a few hundred or a few thousand pounds—perhaps even tens of thousands of pounds—out of a large multinational company. That onus must be shifted away from the small company. After all, the company is only endeavouring to get what it is owed. If the larger customer is made to pay its bills on time, it will take the onus away from the small supplier.
Bill Esterson
One reason why a fair system for recovering payment is needed is that small businesses do not have the people, time or money to chase late payment. Large businesses do, and they can defend themselves against smaller businesses. This is really about making it fair and equitable, and ensuring that small businesses can compete on equal terms with large ones.
Gordon Banks
My hon. Friend makes a valid point. I have seen larger businesses behave in a way that smaller businesses would never ever dream of doing. They might say, “We only take purchase ledger calls on Tuesdays and Friday mornings.” If a firm cannot get through on a Tuesday to ask about a cheque or an invoice, no one will take its call until Friday. The other issue about resources is valid too. I have worked in business since 1986, and have found that cash monitoring and cash control can almost become the things that the company was set up to do. As a by-product, it happens to sell stuff, but the real purpose of its existence is to get in the money for the goods that it has sold. That should not be the case. The real benefit should be the freedom to sell materials, and the expectation that one can get payment for the goods and services in a negotiated and agreed contractual period. Small businesses are not asking for anything more than that, but they should not be prepared to accept anything less than that.
The issue of resources, which enables small businesses to manage purchase and sales ledgers, is a really important point to make, as the bigger companies are always able to work things more to their favour. That goes back to the point that I made earlier, which is just how hard will I, as a company, push for that cash within 30 or 35 days if it means that that is the last cheque that I will get from that business, and I might lose 10%, 20% or even 40% of my turnover? A company will understand when a certain thing is in a vice, and how far they can go. That is another example of what is not fair.
Anyone in business will understand the experience of agreeing credit accounts, which are often paid in excess of the terms—but not by enough to kick up a fuss. So, we could have a 30-day account being paid in 35, 36 or 37 days, or a 60-day account being paid in 66 or 70 days. For that four or five days, that week, or that 10 days, when the small business is out of pocket, they are not just a supplier to that customer, but a banker.
What about delayed payments? I am talking about when invoices issued perhaps a month or six weeks earlier are queried, or when the cheque comes in and the payment for those invoices is missing. Some of these queries might be accurate, and in those cases the supplier has the responsibility and the right to rectify the error and, of course, get things right for the future. However, these are often simple ploys that are timed to delay payments and that result in even more work and cost for the supplier. If someone has issued their invoice and a statement to the company concerned, it is unacceptable for them to be told 30, 40 or 50 days later that there is a query about that invoice, or a problem with it, and that it cannot be paid.
Those actions are deplorable, but they go on every single day. Every small business in Britain will have encountered them. I want the Government—I would like the Minister to listen to this point, if he would—to consider setting a legal limit on the length of time that it can take to query an invoice. Although I appreciate that there might be some challenges to that, will the Minister consider the question before he makes his closing remarks and comment on it? It cannot be right for a small business to chase money for 30 or 60 days only to be told, “We need proof of delivery—proof that we received the materials,” when the proof of delivery has already been supplied but has become separated from the paperwork. I want the Minister to consider setting a legal limit on the period in which the content of an invoice can be queried.
Sir Greg Knight (East Yorkshire) (Con)
Is there not a problem with the hon. Gentleman’s idea? As I understand it, it is unlawful for any agreement to seek to exclude the jurisdiction of the British courts, and if, as he suggests, a provision was introduced to ensure that one could not query an invoice after a certain date, could that not be construed as not allowing the matter to be adjudicated on by the courts at a later stage?
Gordon Banks
I take the right hon. Gentleman’s point. I have asked the Minister to give the issue some thought before he sums up, and I have also said that I do not necessarily think that there will be a simple solution, but I am convinced that there is a way in which this can be developed so that small businesses—in fact, all businesses—can rest assured that 30, 35 or 40 days after they have submitted their invoice, that invoice will not be challenged. Is not 40 days long enough?
Toby Perkins
In Committee, we proposed an amendment similar to my hon. Friend’s new clauses. We suggested that there be a period of up to 30 days for someone to register a complaint; after that point, they would be deemed to have accepted the invoice, so that there could not be this constant adding to the payment period.
Gordon Banks
I am grateful to my hon. Friend for clarifying that point. I am prompted by a sedentary comment to say that my argument is not so much about an invoice being queried as about a customer saying that they have not received the invoice, or that it is lost, 30 days after they have had a statement listing all the invoices they should have received. Basic accounting practices are either not being carried out within the business, or they are being carried out but no regard is being paid to them, and the process is being used as a payment delaying mechanism.
I understand that some might see new clause 4 as another piece of red tape, but it is a piece of red tape that can be easily discarded and thrown in the bin if companies do not make late payments, so it does not have to be onerous at all. That brings me back to the point that my hon. Friend made: the new clause takes the onus off the small business. It is up to the larger paying business—the debtor—to ensure that the bill is paid on time, and if it is not, an automatic compensation payment is made on behalf of the company making a payment to the company receiving it. New clause 4 need not be particularly onerous in action at all. It will cause no problem to a good, organised, thoughtful company.
Banks are much less willing to provide business support than they were in 1986, and that is often a nightmare for small and medium-sized businesses, especially in the construction industry. The banks will say that they do not particularly want to be involved in the construction sector, which I find depressing and extremely strange. Every business that needs to expand requires the construction sector. Every Government project for infra- structure, housing, schools, roads, telecommunications or railways—anything of that nature—needs the construction sector. That sector is the most likely to lift us out of our current economic position and deliver an improvement to our infrastructure that is long overdue and long needed. It is a particular challenge to have a good business in the construction industry that is adequately financed and resourced in this day and age, and that is short-sighted and a crying shame. It is not helped by the failure of Project Merlin and the funding for lending scheme. General financing is relevant to new clauses 3 and 4, as it is because working capital is tighter these days that prompt payment has become a real issue.
Debbie Abrahams
Is it not also the case that late payment and issues around cash flow affect a business’s ability to access finance and the terms on which finance is made available?
Gordon Banks
Of course they do. Every £1,000 not received has an impact on whether a business can prove to a possible financial investor, whether that is a bank or anything else, that it is a responsible company with the processes and the people in place to take the business forward. It may well have the people and processes in place, but it may be being stymied by the Tuesday and Friday phone calls to try to get the money that is long overdue.
New clauses 3 and 4 are a step along the way to moving the responsibility to where it should lie, ensuring greater financial impact on those who make late payments, and naming and shaming those who are not signed up to prompt payment practices. I was looking at the prompt payment code website last night. I represent a Scottish constituency, so I did a search on Scotland and I found that 43 businesses there have signed up to the prompt payment code. That level of commitment is extremely questionable. There are hundreds of thousands of businesses in Scotland.
Toby Perkins
I agree with my hon. Friend entirely on that. Does he agree that if a prompt payment code allows a business to pay on 90-day terms and if, so long as it meets those terms and conditions, it is deemed compliant with the code, that calls into question the use of the word “prompt”?
Gordon Banks
It most definitely does. Prompt payment in my business experience is 30 days. That is fair and prompt payment. In my book, 90 days is not and should not be considered prompt payment. It is a massively overdue payment allowing one business to make its way in the world at another’s expense.
I fear that we have a long way to go, unless the Government listen tonight. I do not think that the Bill really gets us to where we need to be. It does not, in its current form, lift the onerous responsibility from the shoulders of small businesses; it actually empowers the larger businesses in their relationships with small businesses. However, it could be improved if the Government listen and support new clauses 3 and 4.
Ben Gummer (Ipswich) (Con)
I am delighted to be called to speak in this debate and apologise to the shadow Minister and to those on the Treasury Bench for not being here at the beginning. It is a very important Bill that the Minister has brought before the House, and it is one that I feel strongly about, because my first job was running a very small business, and then I ran one that was only slightly larger. When one has lived and breathed cash flow, and dreamt about lack of payment for invoices that have been outstanding for 60, 70, 80 or 90 days, one knows why the provisions in the Bill are so important.
I know that the Minister understands small business; he was brought up in it. I also know that the shadow Minister is one of the very few people on the Opposition Benches who has business experience. It is good that we are having a discussion about some of the things that are incredibly important and pertinent to small businesses —pre-packs, zero-hours contracts, payment terms and director disqualification, all of which I plan to talk about —but it is also good that we are having this discussion, full stop, because they were not discussions that were had in any detail under the previous Government.
I would like to start on that note, because one of the things that I, as a small business owner and manager, turned to time and again was the Late Payment of Commercial Debts (Interest) Act 1998, a piece of legislation that was well meant by the previous Administration, brought in early as a result of a manifesto pledge, but that was almost completely useless. No one was really able to go to their customers and enforce the 8% above base stipulation set out in the Act, because they were afraid of upsetting them. I had recourse to it on only two occasions when dealing with customers. The frustrating thing was that although Parliament had willed the means, following a long campaign at the end of the Major Administration and the beginning of the Blair Administration, it was unable to will the ends. That is why I am so pleased with what the Minister has created in the Bill, because we are getting much closer to a system that will work.
The first thing we must recognise is that it has taken this amount of time, and the innovation of the coalition Government, to be able to do something of this magnitude. That is why I think that criticising the Bill and trying to claim that it is deficient in some way or other is a pretty mealy-mouthed approach to what is a big step forward in helping small businesses control the terms of trade that they have with their customers.
Having run a business that, at the start, was turning over only a few hundred thousands pounds, I know the pain that was caused to my business when every week the results showed, almost invariably, that we were trading at a profit, yet that was not reflected in the bank account because of poor payment terms by large companies and, frankly, large parts of the public sector, and that is a pain I will never forget. I remember getting towards the end of the month and being genuinely terrified that I might not be able to pay the people working for me because I had not been paid by big customers. It is a very unnerving, frightening and frustrating experience. The amount of energy it takes out of small business people, who should be deploying that passion and energy in building a business, employing people and increasing wealth and prosperity, means that it is very destructive to business growth.
Debbie Abrahams
The hon. Gentleman is very gracious in giving way and is making a moving speech about his experience. Constituents and many small businesses from across the country who have come to talk to me have shared that experience. Does this mean that he will support new clause 4, which is about undertaking a review so that small businesses which have problems with late payers are automatically compensated so that they do not have to risk using measures that have previously been unsuccessful?
Ben Gummer
I understand why the hon. Lady wishes to push new clause 4. I have read the Minister’s response in Committee to the points raised by the shadow Minister, and I think it was compelling. We are making a very big change which will have a revolutionary impact on the payment terms of small businesses, but if the regime and the legislation are too rigid, we could end up with perverse consequences, which is precisely the problem with the previous legislation and why it was reformed and then repealed in the course of one Administration.
To those who claim, for whatever reason—probably connected with the proximity of the coming election—that the Government could do something else, I would say that the measure is a magnificent change and one that we have waited for since 1998. The previous Government could have done all these things but did not. We now have a Government who are willing to do so, and we should give them our full support without moderation.
Gordon Birtwistle (Burnley) (LD)
Does the hon. Gentleman agree that many of the late payment problems, particularly in manufacturing, when a lot of product has to be bought before it can be turned into something, arise because small companies have been sent down invoice financing routes to finance their cash flow? The charges for invoice financing, and sometimes the prohibitive interest charged by invoice financing companies, heaps extra cost on those companies, which does not help the bottom line of a small company struggling to work and provide jobs and prosperity for the industry in which it is working.
Ben Gummer
I could not agree more. When I tot up in my head the amount of interest that I have paid on a business account for overdrafts incurred because of non-payment by large customers over the years, and when I think of the amount of money that could have been spent on product development, employing new people and growing my business, it is immensely frustrating even now to think of all that wasted money. My hon. Friend is entirely right that in any business in which the process involves the purchase of large capital goods, whether that is in manufacturing or in construction, and the business is dependent on paying its suppliers in order to create an end product, the middle guy is stuffed if he is not paid on time.
The hon. Member for Ochil and South Perthshire (Gordon Banks) referred to the construction industry. That is where my first business was. I was running a small business, largely working for very large multinationals or for the Government, and my suppliers were often small businesses. Sometimes they were larger ones. When a business relies on the good terms of its suppliers in order to satisfy the punitive terms of its customers, that is a wrong place to be. It is, in effect, pushing credit all the way down the line. That is what I find most objectionable about large companies and Government agencies that behave in that way. They are using their supply chain as a bank. The businesses serving as that bank are not large banks; they are, in many cases, small businesses which cannot bear the cost.
A second important aspect of the Bill relates to the disqualification of directors and pre-packs. Too often, in running a small business, I ended up with bad debts because of suppliers who went bust, cleared out their overdue creditors, reinvented themselves the next day with precisely the same shareholders, directors and a whole load of other people who were connected with the previous company, and then suddenly emerged, phoenix-like—in fact, pre-packs are called phoenixes in the business—and ready to trade again. That is an absolute outrage. It goes against all the principles of a decent, liberal market economy. It is fraud.
The two key provisions that will go some way towards helping that situation are those on director disqualification, for which there is a five-year horizon—I hope that the Government will be able to use the provisions within that period—and on pre-packs, also within that period.
Bob Stewart
I am reminded of the time when I was running a small business. I thought that what my hon. Friend has just described was utterly illegal and people could not do it. I never believed that it was possible to close down one day and then start up as a new entity the next. I thought it was highly illegal even then, and that was 15 years ago.
Ben Gummer
I remember thinking it was illegal the first time it happened to me. It involved a business based on a trading estate in the east midlands, not far from where I was based. I went there one day to try to get some money out of someone who had bought something from me, and was refused the cash. When I went back two days later, everything was exactly the same apart from the name plate over the trader’s shop window and the fact that the filing cabinets had been thrown away because they contained all the creditors’ records. There was a brand-new sign but it was an old business.
The provision on the late payment of commercial debts is part of a package of measures that will transform the ability of small businesses to carry out their business.
Gordon Banks
The hon. Gentleman says that this Bill will transform the experience of small businesses. Surely he has to admit, coming from a small business background, as I have, that the only way the late payments situation can be transformed is by forcing people to make payments on time, and that can happen only with financial detriment to the payer.
Ben Gummer
I disagree with the hon. Gentleman, although I understand his point. In the end, having thought about this at considerable length, because it is something that has taxed me, I came down on the side of the Minister, because transparency is the best way of ensuring exactly what he intends to achieve. If we start mandating people on payment terms, we end up with perverse consequences as regards the payment terms themselves, and a race to the bottom as regards their length. One supermarket famously gave terms of a minimum of 90 days. We cannot change that by legislation, because, in the nature of things, payment terms must sometimes be short and sometimes be long. Mandating would force, or encourage, companies to extend their payment terms. That is the first problem.
The second problem, as the hon. Gentleman knows perfectly well, having been in business, is that there are many times when someone’s invoice is disputed. The problems in the construction industry caused by the winding-up orders and appeals to the commercial courts—the county courts—that are often used as an excuse to try to avoid payment would be compounded all the more by the mandating of payments. We would end up in an unholy mess that would not be good for small businesses, for honest large businesses, or for customers who did not want to pay a bill but felt forced to do so because of terms such as he proposes.
Gordon Banks
I think the hon. Gentleman misunderstands the objective, which is not to get the extra forced payment, but to make sure that the original payment is made on time so that the debtor does not have to pay that forced payment.
Ben Gummer
I understand what the hon. Gentleman is driving at, but much as I would love there to be a mandatory payment term in a theoretical world, I just do not think that it would work in practice. As I have tried to indicate, I think it would result in perverse consequences that would be worse for small business than if we go down the Minister’s route of transparency and openness with regard to the terms offered by businesses.
Toby Perkins
The hon. Gentleman may well think that the proposal would make things worse, but his opinion is not shared by the Federation of Small Businesses or the Forum of Private Business, both of which support our approach. Why does he presume to think that he knows better than those well-respected bodies, whose members tell them that they support our approach?
Ben Gummer
I can only speak from personal experience, which is what I have tried to do, to explain why I think it makes sense to go down the Minister’s route and why we would end up with perverse consequences were we to go down the route of mandation. Many small businesses are not members of the Federation of Small Businesses, and the Federation of Small Businesses is not absolutely right in everything it suggests. All I would say is that, in this instance, my own experience is that mandation would have a perverse consequence that would be inimical to the well-being of all small businesses. As a good first step, transparency, as the Government suggest, will create a new environment for businesses, which will change things for the better for people trying to build wealth and prosperity in our nation today.
The shadow Minister intervened on me to suggest that something better could be done. All I will say to him is that, when in government, his party did absolutely zero. They were, if I may coin a phrase, a zero-zero Administration when it came to small businesses. In 13 years, they did nothing apart from put up taxes on small businesses. They did nothing to cut red tape. Labour Members oppose the Minister’s efforts to tackle bureaucracy and claim that they can do better, but that sits a little ill in their mouths. I know that most business people—this is true of almost everyone I speak to in my constituency—think that it sounds a little false, and there is a reason for that: it comes neither from the heart nor from a real desire to do anything right. The difference is that the Minister understands what needs to be done and he is doing it.
Bill Esterson
Like the hon. Member for Ipswich (Ben Gummer), I have run a small business—for 15 years, in my case. The reason new clause 4 is so important is that the status quo just is not working: small businesses are not in a position to chase late payments. In Committee —the Minister will probably repeat what he said then —members on both sides came up with examples of why action is needed, but I am afraid that what is being suggested just is not adequate. That is why we need measures such as new clause 4, which goes so much further.
As my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) has said, small businesses account for half of our economy. They are a crucial part of the economy and of prosperity and future prosperity. Very many small businesses are struggling at the moment and late payment is one of the main reasons for that. They are used by suppliers for working capital—in fact, they are used as a bank. We have heard about how accounts departments are available only on Tuesday at 5 o’clock or Friday at 3 o’clock, and if people cannot get hold of them at those times, they have had it. When I was in business, there was only one payment run a month, and if people missed that, they had had it for a month. The following month’s invoice would then be queried and sent back to them, so they would miss two payment runs and two months’ worth of pay. I am afraid that that sort of practice goes on all the time, which is why action is needed to go further than the Government’s proposal.
A total of £39.4 billion is overdue in payments to small businesses. On average, small businesses are owed £38,000 in overdue payments. One in four companies spends 10 hours or more a week chasing late payments.
Gordon Banks
Given the time in the calendar that we are now approaching—November, December, January, February—does my hon. Friend share my experiences of and concerns about what happens to cash flow and cash collection over these months, when for a number of reasons, or rather excuses, cash collection during the winter months, when in some ways it is needed more, is greatly reduced?
Bill Esterson
That is absolutely true. It is certainly my experience that the delays at this time of year are an additional burden on small businesses. They of course have a knock-on effect not just on the businesses themselves, but on the staff, who potentially lose out in the run-up to Christmas, when families need support more than at almost any other time of the year.
The proposal is about unlocking the potential of small business to do so much more for our economy and our future prosperity. As I said at the start, the status quo is not working, and we need something to change.
As we have heard from other Members, 10% of small businesses have considered using late payment legislation, but they have not actually done so. At the same time, 22% of them have ended a relationship because of late payment. That is a demonstration not that the system is working, but that it is not working.
Small businesses cannot and will not challenge their larger customers for fear of losing them. As I said in an intervention, there are moral reasons, community reasons and other good reasons for ensuring that payments are made on time, including to support the supply chain and the bigger business, as well as to benefit the wider economy and individuals in our country.
The issue is crucial, and we must make sure that the right solutions are brought forward to support small businesses and everybody who owns them or works in them. The system is not working at the moment, which is why the concept of automatically having to pay an 8% penalty on late payments is so important. Such behaviour will not change on its own. My hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) made that point very well by saying just how few businesses in Scotland have signed up to the prompt payment code. It is a derisory number: is it 43?
Bill Esterson
I do not know how many businesses there are in Scotland, but there are 5 million in the UK as a whole, and it is not too hard, by scaling that up, to calculate that the number signing up to the prompt payment code overall is not very big.
There is support for new clause 4 from across the business community. Phil Orford from the Forum of Private Business has said that it would be
“a welcome addition to the proposals outlined in the Small Business, Enterprise and Employment Bill and would go a long way to reducing the time and cost small firms spend on chasing late payments and allow them to concentrate on growing their businesses and creating jobs.”
Government Members must accept that it is supported across the business community. As my hon. Friends have said, the only way to support small businesses is to make the proposal mandatory to ensure that big businesses pay on time. New clause 4 does just that, and I hope that the House will support it.
Toby Perkins
I am in the rather unusual position of speaking to my new clauses and in effect winding up the debate at the same time, but it is a challenge I relish.
There have been some very valuable contributions to the debate. I reiterate my admiration of the campaign on late payments led my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams). She has been a really doughty fighter on the issue, and there is no doubt that late payment is a key factor in holding back small business growth. Suppliers frequently report that it is one of the key hurdles that they face, alongside access to finance, because small businesses do not have the cash flow buffers of their large competitors.
The hon. Member for Ipswich (Ben Gummer) has been forced to leave his place—he arrived in rather a rush and left in rather a rush. Let us hope he is properly dressed when he returns. He said, rather ungenerously, that I was in a lonely position as a Labour Member in having run a small business. However, we all know that my hon. Friend the Member for Edinburgh South (Ian Murray) was a small business owner, as were my hon. Friends the Members for Ochil and South Perthshire (Gordon Banks) and for Sefton Central (Bill Esterson) and many of my other colleagues. And so are several of Labour’s parliamentary candidates, who we hope will be joining us here in just a few months. Conservative Members often try to create the impression that they are the only ones who have ever been in business and that all Labour Members were previously engaged in social work, school teaching or whatever they think is not worthy.
The Minister of State, Ministry of Defence (Anna Soubry)
Nothing wrong with that.
Toby Perkins
Absolutely right, there is nothing wrong with that. However, the suggestion that none of my colleagues has been involved in the business world does not stand up to scrutiny
The hon. Member for Ipswich described the Bill as a thing of “magnitude”, which was an incredibly generous description. It contains a number of measures, none of which has anything particularly wrong with it, but it is not in any sense a thing of magnitude. It contains small steps in the right direction on transparency, with some positive commitments from the Government— [Interruption.] Oh, he’s back. I’ve just been talking about you. For the benefit of anyone watching on television, the hon. Member for Ipswich has returned. There are positive steps in the Bill on the role that central Government will play by paying people on time, but it is certainly not a thing of magnitude. The steps are relatively minor, and the steps that the Opposition proposed in Committee and have alluded to today on Report would have been far more significant, which was why they enjoyed such broad support.
The hon. Gentleman attempted to say, “The Federation of Small Businesses—what do they know? They might be wrong.” I believe that having more transparency would be a significant step, so he was wrong to say that. Many owners of the 2,500 businesses a year that go bust as a result of not being paid on time will think so, too. It is important to get on record the full scale of the problem that we are highlighting, and to reiterate some of the statistics that my hon. Friend the Member for Oldham East and Saddleworth gave. Figures published by Bacs reveal that Britain’s small businesses now carry a burden of £39.4 billion in overdue payment.
Ben Gummer
I apologise for missing the first part of the hon. Gentleman’s speech. He has just characterised what I said in terms that were completely different from what I actually said. He quoted me as saying with reference to the FSB, “What do they know?” That was not actually what I said. Maybe if he reflects on precisely what I said, which was that I thought the proposal could have perverse consequences, he might give a different response.
Toby Perkins
Members will be able to check Hansard for the exact phraseology, but I was attempting to paraphrase the hon. Gentleman rather than to quote him. He said, if I remember rightly and can quote him more directly, that the FSB was not always right, or that it was wrong on this issue. He said that he believed he was right and the FSB was wrong on the issue—is that close enough? Anyway, anyone who wants the word-by-word definition can check it in Hansard.
Gordon Banks
Does my hon. Friend share my ambition that new clause 4 does not have to be onerous or deliver any financial problem to the debtor? All the debtor has to do is pay on time, and there is no penalty. It is simple; it puts money back into the economy and oils its wheels. It ensures that small businesses do not totter on a knife edge of survival at the behest of a larger company. There need be no financial detriment to the large company in the new clause.
Toby Perkins
My hon. Friend is right. The proposals brought forward in Committee were detailed, and new clause 4 is investigating those ideas. Small businesses have the right to expect to be paid on time, and we should be taking serious steps to support that.
Current provisions in the law are not adequate to deal with the extent of the problem, and the Late Payment of Commercial Debts (Interest) Act 1998 was an important step. The EU late payment directive that the Government introduced in 2012 was broadly built on the same principles. They are valuable as far as they go—the prompt payment code is valuable as far as it goes—but they are clearly not adequate. The idea that more transparency, welcome though it may be, will be a silver bullet or even a significant step towards a resolution, is entirely wrong.
The Bill includes some provisions on interest charging. For reasons that other Members have highlighted, many small businesses feel that they are not able to charge interest because of the impact it would have on their relationship. This was a real opportunity for the Government to take hold of the issue and tackle the problem once and for all. Our amendments in Committee should have won the support of the Committee and the Government, because they had potential and I look forward to promoting them as part of a Labour party business manifesto in 2015. Small businesses will recognise that the measures we proposed were a step forward and that the measures in the Bill are a much smaller step.
The Government have dragged their feet on this issue over the past four years: the EU late payment directive was introduced at the last possible moment and the steps proposed at this juncture are small. We were disappointed after the very successful Back-Bench debate on late payments secured by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) and the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe). In the run-up to that debate the previous Minister, the right hon. Member for Sevenoaks (Michael Fallon)—he was great; he used to attend debates and everything—said that he would write to the FTSE 350 and warn businesses that they would be named and shamed if they did not sign up to the prompt payment code. Unfortunately, because that had not happened by May 2014—almost two years on—I tabled a series of written parliamentary questions to find out if companies were due to be named and shamed. We were told that it was no longer Government policy. It ceased to be the policy of the Government before it had ever actually become the policy of the Government. The Government’s record on this is not strong and to describe it in the terms that the Minister did was generous in the extreme.
New clause 3 would take this issue out of any Minister’s hands by ensuring that the very biggest businesses would know that they would all be named and shamed publicly if they did not comply. It would also provide an opportunity for Ministers to name and praise businesses that paid on time and complied. That carrot-and-stick approach is valuable as it would ensure that businesses that played by the rules and ensured that their customers were paid on time would not be tarnished with the same brush as those that gamed the system. It would ensure that the Government had a focus on signing up businesses to the prompt payment code. There was some talk previously about the number of people signed up to the prompt payment code. In the last two years of the Labour Government 978 businesses signed up to the code, whereas in the first two years of this Government just 204 did—a real difference in the number signing up. Our proposed changes will ensure that companies comply with the spirit of prompt payment, not just the letter of the code. I hope Members will give the new clause the support it deserves.
New clause 4 was tabled because the Government’s draft legislation fails to grasp the central problem behind the late payment crisis. Ultimately, despite the extent of the crisis, small businesses are often reluctant to report late payment as they rely on the custom of businesses for their very existence. Just 10% of businesses have considered using late payment legislation, despite 22% of businesses ending a relationship with a customer because they could not be paid on time.
Previous policy initiatives have focused on increasing prompt payment from public sector bodies to contractors. In the March 2010 Budget, the last Government took significant steps to tighten the rules on late payment by the public sector, and this Government are looking to take further steps in that direction, which we welcome. However, the FSB is clear that late payment by private sector businesses is the major problem, and although it is right that government should put their own house in order first, the challenge for policy makers is to shift the burden away from small businesses going out on a limb to ask for interest payments to their being paid as a matter of routine. Ministers are wrong to say that transparency, welcome as it is, will solve the problem. Yes, businesses might know they are dealing with a company that often pays late, but none the less, because of how their businesses are constituted, they might be utterly dependent on that relationship and be unable to do anything about it.
We are clear about the changes we think should be made to alter the balance of power in the late-payment relationship, and our proposed review would be an opportunity to investigate the matter in more detail, away from the cut and thrust of a Committee stage, where Governments, for whatever reason, are often reluctant to take forward ideas simply because they come from the Opposition. Our review would be an opportunity to explore an idea that we think has real merit. Our proposed quarterly statement would list all payments made late to suppliers without a formal query having to be made. It would also confirm whether interest has been paid to compensate the supplier and set out a payment plan to ensure it is paid promptly where it has not. As a package, those measures would be a significant step forward, with greater potential than any other to change the relationship between small businesses and their suppliers in the context of late payments.
My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) spoke to her new clause and amendment. Amendment 6 would require companies to include details of the circumstances and process by which payment times can be amended and details of whose permission is required, which would prevent individual directors from making rash, unilateral or ad hoc changes to companies’ payment policies. Her new clause 1 addresses the issue of retention money in the construction industry, where it is common for firms to withhold payments to protect against problems with work and/or materials. We think that these proposals are worthy of consideration, and we look forward to hearing what the Government have to say. Many jurisdictions abroad have legislation in place for protecting retention money. It has worked well elsewhere and certainly deserves significant scrutiny.
The hon. Member for Brighton, Pavilion (Caroline Lucas) proposed a couple of amendments, including one on exports. Like the rest of us, she will know that the Government have failed spectacularly to secure the export-led growth they promised us back in 2010. We have the largest 2014 trade gap of any major industrial country, which is a significant issue, particularly in relation to goods, and we believe that the Government should pull their weight in supporting our exporters and that a case can be made for examining the overall role of UK Export Finance.
Damian Collins (Folkestone and Hythe) (Con)
I have been following the hon. Gentleman’s remarks very carefully. To touch on what my hon. Friend the Member for Ipswich (Ben Gummer) said, the charging of an 8% levy for late payment might not be a catch-all, because there might be people not paying because they have a legitimate complaint about the quality of the work done who might fear being charged the 8% levy for late payment if they raise a legitimate concern but are not successful. That would be unfair and might discourage people from making reasonable complaints.
Toby Perkins
The hon. Gentleman makes a valid point. The Bill, as originally drafted, would have meant that a business that had raised a legitimate concern within 30 days would have been exempt from punishment for late payment. That is a valid concern.
Damian Collins
But that would depend very much on the type of work. If it was a construction contract that was running over a long period of time, and if the 30 days were taken from the moment of the invoice, the actual consideration of the quality of the work might come some time afterwards. Again there would need to be much more flexibility built into the system because different jobs may take different periods of time. Assessing the quality of the work might take longer because of the length of the contract.
Toby Perkins
I almost wish the hon. Gentleman had been on the Committee. We debated many of these issues and he raises thoughtful questions on it. His would have been a valuable contribution to the Committee. We are referring to something that we are not debating today but, in terms of his question, the invoice would usually become due for payment at the moment the work is completed. If we were talking about a six-week construction project, the moment at which the invoice would start would be once the work was completed. There would then be a period from that point. A late payment penalty would be due 30 days after the invoice was due. In practical terms, on a traditional contract of 30 days’ net monthly, the business would provide the work and present the invoice. There would be 30 days when the payment was due. There would then be another 30 days before any late payment interest was due. There are a number of safeguards in place to try to deal with that.
Toby Perkins
I will give way because the hon. Gentleman made a speech. But if we are going to get into a great deal of detail about something that is not actually in the new clause, I would caution whether that is the best use of our time.
Ben Gummer
I understand that, but the hon. Gentleman has just made a point that reveals his misunderstanding of how an industry works. Herein lies the problem; his answer suggests that he fails to understand the way in which payment terms work in the construction industry. Often, invoices are not issued when work is complete. They are done on a staged basis when applications are made and certified by an architect or a quantity surveyor. Often the work is not complete; it is part of a process. It might well be that the work may not have been completed to the satisfaction of the customer, but they will be afraid of raising a complaint because it is not worth the 8% premium, or whatever it might be under the proposal. Herein lies the issue; he proposes legislation the impact of which he does not quite understand. It would have perverse consequences, and he has come back with another clause just to satisfy a particular interest group rather than actually trying to support what the Government are doing.
Toby Perkins
That was a bizarre contribution in a number of ways. First, we have said we are going to support what the Government are doing so he was factually wrong in that regard. But saying that by giving a single example of how it might work I was suggesting that that example would always work in every single case is a complete straw man. That contribution did not take us anywhere, so let us move on.
In Committee we tabled amendments that would have required the Secretary of State to initiate an independent assessment of the functions on export finance and how to improve awareness of the body. Unfortunately the Government did not accept our amendments. But the next Labour Government will make it a central mission to boost exports. Within that, there is a role for examining the overall way in which UK Export Finance works, but I would be hesitant at this stage about saying that, on that basis, the amendment of the hon. Member for Brighton, Pavilion should be supported. She may be minded to explore the issue today and consider whether to push it to a future stage.
On amendment 92, we strongly agree with the principle that Ministers should be accountable to Parliament for their performance in supporting businesses, and I accept what the hon. Member for Brighton, Pavilion said about not wanting a series of meaningless measures with things being deregulated just for the sake of deregulation. I also think, however, that having a deregulatory target has some value in ensuring that Governments and their civil servants are constantly conscious of the impact of any proposed new regulations. We thus think the deregulatory target has some value, as I say, although I share some of the hon. Lady’s reservations about how it will work.
Public procurement is a hugely important function of government. Central Government spend about £45 billion a year on the purchase of goods and services, and ensuring that more of that money delivers for the UK economy is one of the most valuable things that any Government can do. We are absolutely behind ensuring that the power of UK Government procurement delivers for the real economy. That is the principle behind our amendment 1, which outlines three areas in which such value can be found for our constituents, constituencies and communities, ensuring that proper reports are made and kept in each of those areas.
There is much good practice around the country coming from various public authorities. The TUC has championed the “one in a million” campaign, which aims to ensure that as far as possible, every £1 million of public spend results in at least one apprenticeship opportunity provided to a young person. A Labour Government would deliver on such principles. We would, for example, require the HS2 project to create 33,000 apprenticeships for young people at no extra cost to the taxpayer. Likewise, Labour’s new immigration Bill would compel multinationals to create an apprenticeship place each time a skilled worker was hired from outside the EU. We should leave no stone unturned in fighting for apprenticeships.
We should ensure, too, that we fight for quality apprenticeships. They should be at or above NVQ level 3, so that every business that takes on someone who has had an apprenticeship will know that they have taken on someone who has had a really significant quality of training. We think there is a lot more to be done to support apprenticeships, and our amendment 1 would take significant steps forward in supporting those apprenticeships and the type of economy that we are looking to create.
On both apprenticeships and late payments, we think that the Government are taking small steps in the right direction, but they could have been far more ambitious and delivered far more for small businesses, apprenticeships and a skilled economy. We hope that the Government will support our amendments, which would enable us to do precisely that. If they do not, they can be sure that a future Labour Government will pursue these themes and make sure that we have the kind of economy in which we can have confidence and faith in the future.
The Minister for Business and Enterprise (Matthew Hancock)
We have had a good-natured and largely well-informed debate on these new clauses and amendments.
I shall deal first with late payments. We have heard passionate speeches from Members on both sides of the House on the importance of tackling late payment. I will start by addressing a comment made by the hon. Member for Sefton Central (Bill Esterson), who performed admirably on the Public Bill Committee and made many important interventions. He argued that the current situation in the country on late payment is not acceptable and is not working, and I think he is right. The question is what to do about it.
We consulted broadly on all the potential options surrounding late payments, including many of the options covered by the amendments, and we listened carefully to the responses to the consultations. There was a range of responses, including from those who would firmly regulate all private contracts and from those who did not want any change at all. It is important for us to take steps that will have a positive impact, and to think about the unintended consequences. If we introduce into English law a requirement for a contract to take a specific form, we will remove a freedom of contract that has served the country extremely well for a long time.
We have today heard passionate arguments about the importance of dealing with late payment, as we did on Second Reading and in Committee. We have heard them from my hon. Friend the Member for Ipswich (Ben Gummer) and from Opposition Members. I bow to none in my passion for sorting out the problem of late payment, because the family business in which I grew up nearly went under thanks to it, but let me point to the big picture. The hon. Member for Ochil and South Perthshire (Gordon Banks) argued that there was a moral case, and I agree with that. He also observed that the problem arose when there was a cascade of companies paying late—when, because some paid late, others had to do so, and then others had to as well. I have been at the receiving end of that, as I am sure he has. He is nodding now. The best way to tackle the problem of companies going bust and others paying late is first to establish a stable economy, and then to establish a culture of payment that is stronger and better.
Matthew Hancock
I will in a moment. Many Members have ignored the fact that the Bill already contains measures to improve transparency and increase prompt payment in the public sector. My Department pays within five days of receipt of 95% of undisputed invoices, and within 30 days of receipt of 99%. That excellent performance—which is what I would call it—must be rolled out much more widely in the public sector if the culture is to be changed, but we also need transparency.
Bill Esterson
I am glad that the Minister did not give way to me earlier, because he has made my point quite well. By improving its payment terms, the public sector is helping the economy. Rather than concentrating on putting the economy right in order to boost prompt payment, we should bear in mind that boosting prompt payment will help us to grow the economy, and if that is right in the public sector, it will be right in the private sector. We merely want to start the ball rolling. We in the Chamber do not have the perfect answers; it is for others to go away and design a system that works. If we assumed that all amendments must be perfect, we would never agree on anything here.
Matthew Hancock
All Government amendments are, of course, perfect, at least when I am at the Dispatch Box. However, I strongly agree with the thrust of what the hon. Gentleman has said. We must take the situation as we find it and then improve it, which is what I think the Bill does. However, I do not think we should go as far as the hon. Gentleman suggests. Let me begin by tackling the transparency provision, and explaining why I think it will make such a difference.
We propose that not only the average payment terms but the percentage of invoices met beyond agreed payment terms should be published. That is a different sort of late payment, but it is still a problem. However, we also propose that the proportion of payments made within 30, 60 and 120 days of receipt be published. The hon. Member for Chesterfield (Toby Perkins) has made a great deal of the fact that he received a parliamentary answer from my predecessor about naming and shaming. My predecessor was true to his word—he did publish a list of non-signatories to the prompt payment code in the FTSE 350, as he had committed himself to doing—but we have gone further. The fact that the Bill requires transparency means that all payment practices of all large companies will be published. It is not a question of having to ask a Minister to name and shame, or even the good idea of naming and shaming on the one side and celebrating on the other. The argument about naming and shaming will be driven by the measures taken in the Bill.
Ian Swales (Redcar) (LD)
The Minister is right to talk about unintended consequences. Getting companies to sign up to the prompt payment code made many of them extend their standard payment terms. What does he see happening to a company such as Procter & Gamble, which has now extended its payment term to 180 days? I regard naming it in this place as naming and shaming it. It is such a powerful organisation that it can be as transparent as it likes and simply ignore any consequences.
Matthew Hancock
First, the fact that everybody will now know, because they will read the Hansard, that that company pays in 180 days will have an impact, but the transparency measures in this Bill will take that information in Hansard and make it much more widely public. We have also made a change to the prompt payment code. Big companies could stay within that even if they made their payment practices worse, and we have seen a couple of examples of that recently, so we have convened a new prompt payment advisory board to strengthen the code. That code will only work if it has teeth, so people in the code who have poor prompt payment practices, or who make their prompt payment practices worse, need to be removed from the code, and that must be made to happen in a very public way to demonstrate that the code has teeth; otherwise, it does not have any teeth at all.
Gordon Banks
The Minister will recall that I mentioned that in Scotland there are 43 businesses on the prompt payment code register. What will he do to increase that number? If there are 43 businesses on the register, the system is not working.
Matthew Hancock
There are 1,700 businesses on the register from across the country as a whole. Of course, this is targeted at the biggest companies because they are typically the ones at the top of the supply chains, but I would be very happy to work with the hon. Gentleman to increase the number in Scotland.
Matthew Hancock
I want to turn to the campaign that the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) has run over many years, but first I will take an intervention from the shadow Minister.
Toby Perkins
Although many people will of course race off to Hansard to catch up on this debate, some, unbelievably, may not. Is it not entirely wrong that a business could have a term of 180 days, pay “on time”—that is, within those 180 days—and be seen as a signatory to the prompt payment code? All we are proposing in new clause 3 is that if they do not pay within 60 days, they should not be considered part of the prompt payment code.
Matthew Hancock
There is a lot in what the hon. Gentleman says, and that is why we are strengthening the code and will in future kick out companies that say that they have signed up to the code but then have unreasonably long payment terms, so I think we are basically in the same place on that point.
I wanted to address a couple of points made by the hon. Member for Oldham East and Saddleworth about modern slavery. She has run an admirable campaign on prompt payment over many years, and we have had exchanges across the Chamber before. She has brought a huge amount of pressure to bear on this issue, and has pushed this agenda. I strongly agree with the direction of the agenda, and I agree with her on modern slavery, too. We are determined to work with businesses to ensure that supply chains are not infiltrated by the abhorrent crime of modern slavery. There is a new disclosure requirement in the Modern Slavery Bill, requiring all large businesses to disclose what they have done to ensure that their supply chains are slavery-free. That is an important step forward and takes into account the point she made.
New clause 1 would introduce a power allowing a new reporting requirement on the retention of money, require a review, and provide a further power to act on that review, but we already have a new obligation to report on these practices in this Bill. The transparency measures are at the core of the prompt payment changes proposed in the Bill.
We will seek the views of business bodies during the consultation. We are also aware that retentions are particularly prevalent in the construction industry, as the hon. Member from Scotland said—[Laughter.] The hon. Member for Ochil and South Perthshire (Gordon Banks), as I should have said. We are working with industry to move to a position where retentions are no longer necessary, and I would be happy to work with Opposition Members to push that further.
New clause 3 deals with prompt payment. It would introduce a maximum payment term of 60 days, and also place an obligation on the Secretary of State to write annually to all non-signatory FTSE 350 companies asking them to sign up to the code. I am delighted to say that I commit wholeheartedly to writing to all non-signatory FTSE 350 companies asking them to join the strengthened prompt payment code, and we should continue the cross-party push aimed at getting more large companies to sign up. The new reporting requirement will provide sufficient transparency, which will lead to competitive pressure on companies to improve their payment practices.
Ian Swales
The Minister will be well aware that many large businesses in this country are not in the FTSE 350. For example, the company that I named earlier is American-owned. Is he going to do anything in addition to writing to FTSE 350 companies to try to address this issue?
Matthew Hancock
Absolutely, and I would be happy to work with my hon. Friend on that. There are large private companies that are not in the FTSE. Larger companies, however they are formulated, need to be considered.
New clause 4 also deals with prompt payment. It proposes a review of how the new reporting requirement can be used to ensure the automatic payment of compensation by large companies. This is the nub of the proposal, which we discussed in Committee, that interest be automatically allowed to accrue after 60 days. We consulted on something similar during the consultation, and some bodies were in favour and others were against. Some of the bodies representing small businesses, such as the Institute of Directors, were against the proposal because of the way in which it would change contract law. I therefore do not think that the new clause is necessary, but, like Opposition Members, I want to work to strengthen payment practices. We will resist this proposal today, because we do not think the case for it has been made and we do not believe that the unintended consequences have been thought through. However, we will report back publicly on the findings of further work before the end of this Parliament.
Toby Perkins
I am pleased to hear what the Minister has said about new clause 3 and the prompt payment code. Given those assurances, we will not press new clauses 3 and 4 to a vote. I hope that we can continue to work together constructively on late payments, because that is a key issue for small businesses.
Matthew Hancock
That is terrific. After our voting performance today, I am delighted to hear that.
Amendment 6 proposes that companies disclose details of the circumstances in which, and processes by which, payment terms are amended. I have already said that the Government believe that it is poor practice to subject suppliers to unilateral and ad hoc changes to payment terms. We talked about that in Committee. I agree that greater transparency could increase accountability for this practice, and we are launching a consultation on how that transparency could be achieved. I hope that that deals with the substance of amendment 6.
Amendment 7 seeks to ensure that contracting authorities know about the historical payment performance of potential suppliers before they enter into public contracts with them. It also seeks to ensure that the companies entering into those contracts pay their own suppliers promptly. The new procurement regulations that will be made early next year will place a duty on contracting authorities to pass 30-day payment terms all the way down the public sector supply chain, from the contracting authority to the tier 1 supplier. This has been discussed here today and in Committee. I hope that Members will therefore agree that this amendment is not required in addition to the regulations.
On amendment 1, having prompt payment in procurement is dealt with in the new procurement regulations. The requirement for training in procurement is something I agree with where it is cost-effective. We have delivered that in Crossrail and I very much hope that HS2, which has been mentioned, will also deliver it. That is exactly the sort of training, alongside contracting, that is common in the private sector, but of course we have to drive value for money in the public sector, too. The Government agree that transparency and reporting in public sector procurement is vital, and Departments are already required to report on procurement expenditure with smaller businesses. As hon. Members know, that expenditure has been rising rapidly as a proportion and we are on target to hit the goals we set.
Amendment 2, also on procurement, is designed to ensure that the Minister making regulations under clause 37 is able to specify the reasons why firms may be excluded from entering into contracts. Under the existing procurement regulations a contracting authority can already take account of certain types of past behaviour by an economic operator, such as grave professional misconduct, when deciding whether it is eligible to take part in a procurement process. So that is already allowed for.
Amendment 3 states that any regulations made under clause 37 are subject to the provisions of the Freedom of Information Act, and I reassure hon. Members that contracting authorities, as public authorities, are already required to respond to FOI requests. Amendment 4 is designed to increase the level of parliamentary scrutiny by removing the reference to the negative resolution procedure. I agreed to consider, following the debate in Committee, whether it would be appropriate to change the level of parliamentary scrutiny for these regulations. The Government think that the negative resolution procedure provides the right level, but I did go away and consider the matter. We think that an affirmative process would slow down potential changes when the Government want to remain nimble in responding to the needs of small businesses.
I thank the hon. Member for Brighton, Pavilion (Caroline Lucas) for tabling amendment 91 on UK Export Finance. In our response to the consultation on these issues, the Government rejected such a proposal and set out the rationale: a prohibited list, by its very nature, would not allow the Secretary of State to take an open-minded approach in coming to a decision on whether to support an export falling within an included class. The measures already enhance the support that UK Export Finance can offer, and creating an ability to prohibit support for certain exports which are otherwise perfectly legal goes directly against that goal.
Amendment 92, again tabled by the hon. Lady, relates to the business impact target. I am delighted to debate that with her, because I believe the need for the target proposals set out in the Bill is clear. Too many businesses, particularly smaller ones, find that complying with Government regulation is the single biggest challenge to running their business. We had strong support in Committee for the target. It is only by having a competitive business environment that we can have prosperity, growth and indeed the environmental protections that she is so passionate about. I strongly support, and urge her to support, the deregulation target.
Caroline Lucas
Why does the Minister present regulation as always being anti-business, given that so many businesses are saying that smart regulation is good for a competitive environment?
Matthew Hancock
Of course, if we can achieve the regulatory objectives with a lower burden on business, we can get the best of both worlds. Almost all the examples the hon. Lady gave were about the crash and the banks, but systemically important financial institutions are excluded from the one-in, two-out approach, precisely because we need to ensure that we have regulations so that we do not repeat the messes of the previous Administration.
Very briefly, let me speak to Government new clause 5, on the independent complaints commissioner duty, which I commend to the House, and Government amendments 27 and 28, on the business impact target. I made a commitment to look at what more parliamentary scrutiny of that target there should be. We are proposing that the report should be to the House. I look forward to building on the cross-party support for these measures and to explore whether a Select Committee can take a formal role in scrutinising the target. I therefore support those provisions.
Debbie Abrahams
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Mr Speaker
Before we come to the next matters relating to the Bill, I have received a report from the tellers in the No Lobby for the Division earlier today at 3.59 pm. They have informed me that the number of those voting no was erroneously reported as 269 instead of 259. The Ayes were 284 and the Noes were 259.
New Clause 5
Independent Complaints Commissioner: reporting duty
‘(1) Section 87 of the Financial Services Act 2012 (investigation of complaints against regulators) is amended as follows.
(2) After subsection (9) insert—
“(9A) The complaints scheme must provide—
(a) for the investigator to prepare an annual report on its investigations under the scheme, to publish it and send a copy of it to each regulator and to the Treasury;
(b) for each regulator to respond to any recommendations or criticisms relating to it in the report, to publish the response and send a copy of it to the investigator and the Treasury;
(c) for the Treasury to lay the annual report and any response before Parliament.
(9B) The complaints scheme may make provision about the period to which each annual report must relate (“the reporting period”) and the contents of the report and must in particular provide for it to include—
(a) information concerning any general trends emerging from the investigations undertaken during the reporting period;
(b) any recommendations which the investigator considers appropriate as to the steps a regulator should take in response to such trends;
(c) a review of the effectiveness during the reporting period of the procedures (both formal and informal) of each regulator for handling and resolving complaints which have been investigated by the investigator during the reporting period;
(d) an assessment of the extent to which those procedures were accessible and fair, including where appropriate an assessment in relation to different categories of complainant;
(e) any recommendations about how those procedures, or the way in which they are operated, could be improved.”—(Matthew Hancock.)
This amendment requires the scheme established by the financial services regulators for the investigation of complaints to provide for the investigator to produce an annual report on its investigations. The report must describe any general trends emerging from such investigations, and assess the accessibility and fairness of the regulators’ handling of the complaints investigated.
Brought up, read the First and Second time, and added to the Bill.
Clause 20
Duty on Secretary of State to publish business impact target etc
Amendment made: 27, page 20, line 19, at end insert—
‘( ) The Secretary of State must lay each thing published under subsection (1) or (3) before Parliament.”—(Matthew Hancock.)
This amendment requires the business impact target, the interim target, the determination of qualifying regulatory provisions and the methodology for assessing the target to be laid before Parliament (in addition to the requirement for these things to be published which is currently required by the clauses.
Clause 25
Amending the business impact target etc
Amendment made: 28, page 25, line 10, after “lay” insert
“the thing as amended and”.—(Matthew Hancock.)
This amendment requires any changes made by the Secretary of State to the business impact target, the interim target, the determination of qualifying regulatory provisions and the methodology for assessing the target, to be laid before Parliament.
Clause 37
Regulations about procurement
Amendment proposed: 1, page 35, line 16, at end insert—
“() duties relating to the provision of apprenticeships and training opportunities as a result of procurement;
() duties to publish reports about the amount of expenditure undertaken by the relevant procurement function in relation to—
(i) amount and proportion of expenditure undertaken by small and medium-sized enterprises,
(ii) amount and proportion of expenditure undertaken in the local area.”—(Toby Perkins.)
Question put, That the amendment be made.
Business without Debate
Madam Deputy Speaker (Dame Dawn Primarolo)
With the leave of the House, we shall take motions 4 to 7 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Insurance Premium Tax
That the Insurance Premium Tax (Non-taxable Insurance Contracts) Order 2014 (S.I., 2014, No. 2856), dated 27 October 2014, a copy of which was laid before this House on 27 October, be approved.
Representation of the People
That the draft Representation of the People (Scotland) (Amendment No. 2) Regulations 2014, which were laid before this House on 21 July, be approved.
That the draft Electoral Registration Pilot Scheme Order 2014, which was laid before this House on 22 July, be approved.
That the draft Representation of the People (England and Wales) (Amendment No. 2) Regulations 2014, which were laid before this House on 13 October, be approved.—(John Penrose.)
Question agreed to.
Fenton Town Hall
(10 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Robert Flello (Stoke-on-Trent South) (Lab)
Let me place on record my thanks to Mr Speaker for allowing this debate. While I am in the mood to give thanks, I also thank the Minister for today’s meeting with a group of residents—community activists—from Fenton, as well as people from Urban Vision and somebody from the Victorian Society.
Perhaps even more important, I put on record my thanks to the 498 men of Fenton and the surrounding area who gave their lives in the first world war, and to all those others who gave their lives and are commemorated in Fenton town hall. They gave their lives in conflicts so that we can have these sorts of debates about incredibly important issues—particularly important, in this case, to the people not just of Fenton but the wider Stoke-on-Trent area.
I am talking about a building that was given to the people of Stoke-on-Trent—specifically the people of Fenton —as a town hall by the Baker family, back in 1888. It is a beautiful building. I repeat my invitation to the Minister to come and see for himself just what a fantastic building it is. It has a beautiful façade on Albert square. As you stand there facing it, with the second world war memorial opposite in the middle of the square, to the right you see Christ church—a beautiful church—in its grounds and, to the left, some Victorian shops and buildings along the side of Christchurch street. It is the beautiful heart of Fenton. The town hall building fits in beautifully, and it is right at the heart of the community. Perhaps when the Minister visits, he may wish to bring his colleague the Secretary of State with him so that they can both see it for themselves.
As much as the building and its setting is beautiful, and as important as it is as the heart of the Fenton area, inside are four memorials, including the large first world war memorial that is built into the very fabric of the building using good old Minton tiles. Every Member of Parliament should know Minton tiles—good Stoke-on-Trent tiles—because they are underfoot whenever they come in and out of the Palace of Westminster. In this case, the tiles are part of a beautiful, unique memorial dedicated to the lives of the 498 men who gave their lives to the people not only of Fenton but of Britain, and beyond, in the first world war. I will mention one particular name—that of Sergeant Ernest Heapy, the great-grandfather of Mrs Jones, one of the community activists from the residents’ area who is understandably incredibly passionate, as we all are, about the memorial remaining there.
This debate is about the town hall building, which was given to the people of Fenton and Stoke-on-Trent in 1888. It remained a building for the community and the city until 1968, when it became the magistrates court. Then, in 2012, the Ministry of Justice decided, based partly on costs and partly on the rationalisation of the estate, to close the building.
To my knowledge and to that of everyone I have ever spoken to about the issue, the MOJ has never paid for the building. It has never bought the building from Stoke-on-Trent and the people of Fenton, and it has never paid any rent to occupy the building. I am sure the Minister will reiterate what he said this afternoon, namely that the building has been maintained by the MOJ, but what else would we expect? The premises we occupy—the Houses of Parliament—are part of what is still a royal palace, yet we rightly pay to maintain it. I do not think there is any doubt about who owns the Palace of Westminster. If we ever decided to sell it, I think there would be an interesting constitutional argument and the Crown would no doubt say that it was not ours to sell. I think that the same principle applies to Fenton town hall, because it is not the MOJ’s building to sell.
The Government say that it is the MOJ’s building to sell, but it is fair to say that the Minister and I had a meeting of minds this afternoon on the difficulty of proving who owns it. Understandably, the Minister asked how it was possible to look back to 1888 to see who owned the building and had the right to sell it at the time. However, we are talking not about 1888 but about 1968, so if the Minister thinks that the building is the MOJ’s to sell—he clearly does—may I ask him, with the greatest respect, whether we may see the deeds? May we see the proof of the MOJ’s ownership of the building? We could then see how it was purchased—we know it was not—or perhaps we could see when it was gifted from the people of Fenton and Stoke-on-Trent to the MOJ.
Whatever the legal argument that might rage—we have already had the opening shots of a discussion, rather than an argument—and whether or not the MOJ can prove its ownership of the building, which I suspect it cannot, I think that the moral claim over it has to go back to 1888, because it was given not to the MOJ or the wider nation, but specifically to the good people of Stoke-on-Trent and Fenton.
I find it very hard to accept the argument that the Government own the building, but if the MOJ is completely intransigent on the issue and thinks it is its building, we have to ask how we can move forward from that. First, we need to give the community, which is working with Urban Vision, a proper chance to propose plans to acquire the building. Whether it wants to acquire it as a financial consideration or through a community transfer on the basis that it is and needs to be a community building, the community needs an opportunity to make its case.
The Minister is aware that communication over the past few months has been a little difficult, to say the least—perhaps “almost non-existent” would be a better way of putting it. That is a tragedy, because an opportunity has been wasted. I do not want to go into the ins and outs of who was and who was not to blame and the repercussions of that, but an opportunity for communication has been lost over the past three or four months. What we really need now is a protected period during which the community can present its proposals and show that it can take on this fantastic building in Albert square, run it sustainably and get funding from organisations that are proud to see the continuation of its heritage. The community will be able to present a sustainable business plan and we will not have to revisit the issue in two or three years’ time. Instead, in 20, 30 and 40 years’ time, the building will be a vibrant part of the community and owned by the community.
The Minister is a man of the law—I am not a lawyer, but that has never stopped me—and if he is concerned that such an arrangement may not be sustainable, I am sure he knows far better than I do that there are ways to ensure that it is sustainable. The building could be on a peppercorn lease to the community for a couple of years, which would provide an opportunity for the community to show that it can be developed and continued sustainably. The Ministry of Justice might hold on to a string, so that if the community does not do what I have every confidence it will do, it can pull the building back in and continue with whatever plans it has for it. I will come on to what those plans may be in a moment.
Things could be structured in such a way that there is a protected period first, during which the building will not be sold from under the feet of the local community, but if the Minister still has concerns, arrangements can be made so that he keeps an interest in it. I repeat again that I do not think the Ministry of Justice has an interest in the building. That is a moot point, on which we will possibly never agree, unless the Minister wants to acquiesce and come over to my side of the argument. The community should get a fair crack first. If it does, it will be shown to be acting correctly, and the Minister’s confidence in it will be justified.
If this does not go the way we hope, we have several concerns about the building that I hope the Minister can respond to this evening. The first relates to the memorials themselves. The Minister, like the Secretary of State, has kindly provided written answers to parliamentary questions and discussed this with me outside the Chamber. He has time and again repeated his view that the covenants over the building ensure that the memorials will be protected and kept safe, and that whatever happens to the building, there will never be any question but that the memory of those 498 brave souls and others can for ever be remembered through the memorials.
Perhaps understandably, some members of the community have expressed concerns about the covenants not being worth the paper they are written on. An unscrupulous developer might only pay lip service to them, and the next thing we know—several months or years later—there might suddenly be a pile of rubble, which would be an abomination. The community is understandably concerned that that might well happen despite the covenants.
I hope that the Minister will put on the record an explanation of how, if the building is sold, the covenants will work. Indeed, even if it passes to the community, as I hope it will, the covenants still need to be in place to protect the memorials in 20, 30, 40, 50 or 100 years’ time. Will he explain how the covenants provide protection against an unscrupulous developer? If he cannot give such explanations or reassurance, that will strengthen our view that the building rightly belongs in the hands of the community that cares about it.
This is a good point to mention the concerns that those who are currently in residence, as it were, in the building have expressed to me on numerous occasions. They are not protesters, occupants or occupiers, but custodians. They are in the building, and they very much see themselves as its protectors. They want not just the buildings but the memorials to be protected for future generations in memory of those whose deaths are recorded there.
It would be very helpful to have an explanation from the Minister. I am sure that he will not fall into the shorthand—if he does, it would be inadvertent—of referring to those people as protesters or occupiers. I hope that he will recognise that, and that he will use more appropriate language. He is a very honourable man, and I am sure he will do so.
The second concern is what will happen to access to the memorials. I know that in the past most of those who have had access to them have been on the wrong side of the magistrate’s bench and have been going into the building for less than honourable reasons, but we need to ensure that we return to the position that existed before 1968, and has existed on occasions since then, whereby the community can go in.
Robert Flello
In some cases, the community sees the memorials almost as a substitute for a grave, because some of the individuals recorded on them have no grave. Particularly as the memorials relate to the first world war, perhaps their remains were never able to be formally buried in a way that would allow loved ones through the generations to pay their respects at a graveside. For some people, the memorial is the place where they want to pay their respects. The community wants access, and the most appropriate time would seem to be every Remembrance Sunday, so that people could pay their respects and lay wreaths. That would be difficult if a developer were to take on the building and cover the memorial, or encase it in something that would protect it but mean that it could not be viewed and that respects could not be paid at it. Perhaps the Minister will explain whether any covenant on access could be considered.
If the building were to be sold on the open market, perhaps to a private purchaser—I know I do not need to repeat, but I will, that we hope it will never get to that point—could some of the space within the building be maintained for the community? After all, that was what the town hall was built for. The whole purpose of its being given to the people of Fenton was for it to be used as a community building. It was designed not as a court but as a public building, and there is a beautiful ballroom beneath all the layers of the court. Could any space be carved out of the building by way of a covenant or the terms of sale so that it could be used by the community, for the community?
I will conclude shortly, to give the Minister plenty of time to respond and, I hope, to answer some of my questions. I hope—perhaps unreasonably, I do not know—that he will be able not only to give some explanations and reassurances but to say that there will be a protected period such as I have described.
The community has a fantastic vision of what the building could be. The vision is that when visitors to Fenton go to Albert square, they will see the façade of the magnificent building that was once the town hall and could be again. They will be able to go into a building that has space available for the community, such as the community library, which is being stocked with books as we speak. There will be space available for local businesses and—who knows?—even multinational businesses to have their offices, so that they can meet people in fantastic and grand surroundings. The upstairs area will be restored to the ballroom it once was, so that it can host weddings and other events on a grand scale. Those are the key words—“grand scale”. The community’s vision is a building at the heart of the community and on a grand scale.
This year, with the centenary of the commencement of the first world war, we have seen memorials up and down the country to our glorious dead, our heroes who made this nation what it is. Money has been lavished on some of those memorials—rightly, in my view—yet this memorial has perhaps received less positive attention.
As important as it is that the people of Fenton rally to this cause, a much wider group of people have also done so to say that not only is this building significant and important to Fenton and the people of Stoke-on-Trent, but that it is an important and significant building on a national scale—indeed, the Victorian Society has listed it as among the top 10 most vulnerable and at-risk important buildings in our nation.
I have very high expectations of the Minister. He is an honourable man and I hope he will take the comments made this afternoon and this evening in the manner in which they were intended. The group wants to work with the Government, as do I. We want a building that in generations to come, long after I am six foot under and pushing up the daisies, is there for future generations to enjoy, make the most of, and visit to pay their respects, perhaps when commemorating the 200th anniversary of the first world war. I want future generations to know that the names on the memorial are accessible for people to see, and that the community can go in and use that building.
Mrs Jones had a letter from Buckingham palace, and to conclude I will read the last paragraph from the deputy correspondence co-ordinator:
“Nevertheless, Her Majesty thought it kind of you to let her know of this matter and understands your wish for the fallen Great War soldiers of Fenton not to be forgotten.”
If nothing else, for the people remembered in that building, perhaps those whose physical remains are long gone but who nevertheless gave their lives for today, may we please have our building back?
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
I congratulate the hon. Member for Stoke-on-Trent South (Robert Flello) on securing this debate, and I put on record his diligence and conscientiousness in championing this worthwhile cause on behalf of his constituents. We have corresponded with oral and written questions, by letter, and we had a meeting earlier today with some of his constituents. I also pay tribute to the 498 brave people who paid the ultimate price so that the hon. Gentleman and I, and the rest of us, could have the privilege and pleasure of being able to discuss matters in the democracy that we enjoy.
As the hon. Gentleman is aware, the closure of Stoke-on Trent magistrates court was announced in December 2010 as part of the court estate reform programme. Any decision to close a court is not taken lightly and is never easy, but the hon. Gentleman will recall the consultation that preceded the closure, which found that the court offered poor facilities and was non-compliant with the Disability Discrimination Act 2005. It had inadequate facilities for victims and witnesses, and there were also security issues. As he knows, the court subsequently closed in December 2012.
The court site incorporates the former town hall which, as the hon. Gentleman said, was built and funded in the late 1880s by William Meath Baker, a benefactor. According to English Heritage, Mr William Meath Baker sold the town hall to the local health board, which was superseded by Fenton urban district council in 1897. It has been in the hands of the public sector ever since. More recently, the freehold of the building was transferred under the Courts Act 2003 to the local magistrates court committee, and then to the Government in 2005. Those are legal provisions, and I like to think that all such transfers have been done according to the law—I say that with reference to the comments made by the hon. Gentleman about legality of ownership.
I note the hon. Gentleman’s view that the Government have never paid any sums of money to Stoke-on-Trent to buy or rent the building but, as he rightly said, we should remember that for more than 100 years maintenance, upkeep and so on has been paid for by the taxpayer. That is not an inconsiderable sum over the years.
The building is operationally surplus to requirements. We have to work within the rules concerning the disposal of surplus property assets. Guidance to Departments is clear: surplus property assets need to be disposed of as expeditiously as possible, within six months of being declared surplus for housing and within three years for all other properties, while achieving overall value for money for the taxpayer. It is certainly the case that overall value for money for the taxpayer does not necessarily equate to the highest offer. However, I trust that the hon. Gentleman will appreciate that I cannot simply gift a building that has considerable value.
It is not just the capital receipt that we need to consider. There are temporary costs associated with ensuring unused courts are kept secure and protecting the fabric of each building. By disposing of surplus property assets speedily, we remove the ongoing liability of holding costs. In the case of this particular building, bearing in mind that the level of security, utilities and maintenance has been reduced to a level that is appropriate for a site that has been closed, the holding costs do not come cheaply—more than £108,000 in the past financial year alone. Put simply: we cannot hold on to it indefinitely.
The hon. Gentleman is of course correct to raise the future of the four memorials inside the building. Memorials to those who made the ultimate sacrifice are hugely important and must be protected. We have received advice that a Minton great war memorial cannot be moved without risk of damage. Therefore, the Minton world war one memorial will remain in situ and be preserved in perpetuity with an appropriate legally binding restrictive covenant in the sale contract that states that the memorial is to be preserved.
The hon. Gentleman wanted a bit more clarification about a covenant. A covenant is a contractual promise incorporated in a property contract. It provides for an obligation—in this instance that the memorial will be preserved and looked after not only by whoever ends up owning the property, but by the successors in title as well. A covenant also has consequences for what happens when there is a breach. There can be damages paid or there can be specific performance that can be ordered by a court. It is also important how the property is held: whether it is held freehold or leasehold. In the case of leasehold, it may be possible that forfeiture will follow. That effectively means that the property reverts back to the freeholder. This is a legally binding set of words in a contract.
Robert Flello
That will not reassure the community. If a developer damages the building or gets sued and it reverts back to the Ministry of Justice, the memorial will still be gone.
Mr Vara
The hon. Gentleman makes a very valid point, but he will accept that this is property law. It is the way that thousands of property transactions are conducted on a daily basis for a whole variety of properties, whether they be commercial, residential, industrial or whatever. This is the process of the law of the land under which we operate. We would very much hope that, in parting company with the premises, we would have carried out our due diligence to make sure that any obligations in the contract will be honoured and that we will not get a rogue developer or rogue occupier who would do the damage that the hon. Gentleman fears may happen. I hope he will take on board the point that we will do our utmost to make sure the owner is credible, whether it is a person, corporation or charity.
The three other memorials, depending on who we sell the building to, be they in the public or private sector, will either be removed to the local church or remain in situ. That is something we can look into. If they are removed to a neighbouring church, the work will be carried out at the expense of the Ministry of Justice.
The sale of former court buildings is affected by several factors, including the state of the market, potential future use of the property, including its development potential, and the location. As of 29 October 2014, some 66 former court buildings had been closed under the court estate reform programme and sold, attracting disposable receipts of just under £43 million. Those funds have been used for further investment in the justice system. Stoke-on-Trent magistrates court has been on the market since 2013, and local campaigners have persuaded the council to list it as an asset community value, giving campaigners six months from August last year to raise funds and bid for the building at market value. Further time was set aside to allow the local community association to formulate its bid, culminating in the proposal being put forward for consideration, alongside several commercial bids.
The Department has received several commercial bids for the building, and the hon. Gentleman will appreciate that I cannot say their size for reasons of commercial confidentiality. The bidders view the building as having development potential, but we have also received a bid from Urban Vision on behalf of Fenton community association for a community asset transfer. We are also mindful of the resolution passed by Stoke-on-Trent city council requesting the return of the building. We held discussions with the council, and in early October the council was invited to come up with a viable proposal for returning the building to community use, but none was received.
We cannot afford to continue to leave the building as it is, eating away more than £9,000 every month, including almost £4,500 in rates. As is usual when disposing of surplus property assets with historic significance, there is also a qualitative element in the consideration of bids. We consider not only the purchase offer, but its potential reuse, the financial status of bidders, their ability to maintain the building in the face of significant holding cost and the extent of the estimated continued liability to the taxpayer of the Department holding the property.
In recognition of the hon. Gentleman’s advocacy for the future of the former court building and the views made so eloquently clear to me in our earlier meeting and with an eye to ensuring that we do not close down options too early, I have asked my officials to continue engagement with his constituents. I hope that that engagement, having started at today’s meeting, will continue from tomorrow onwards, but he will be aware that any possible disposal that is novel and contentious will require Treasury approval. Whatever happens, however, let me assure him that the world war one memorial will be preserved, although the future use of the building will be a matter for the preferred purchaser and the council, as the local planning authority.
Robert Flello
On the dialogue with the MOJ, which the Minister says will continue tomorrow, I must stress the point about providing a little protected time—ideally, three or four months—to give the community the opportunity to work up a bid to the satisfaction of the Department.
Mr Vara
I understand where the hon. Gentleman is coming from, but I hope he will appreciate that, in the spirit of openness and transparency, we have to ensure that other bidders are not penalised by our being seen to give preferential treatment to one of them. Much time has been spent on this. There has been a dialogue. We have asked for bids. A business case was requested. It is also possible for community groups to seek assistance from local authorities and other voluntary bodies that help these groups when they approach the Government for such measures. There is a limit to how much assistance we can provide and we are constrained by the law in terms of time limits. We are also mindful of the time that has passed, which we must also take into account. There are also other bidders whom we must take into account so we are not accused of preferential treatment.
Robert Flello
Part of the problem is that letters between the community and the Ministry of Justice were not answered and there was a breakdown in communications. I take on board what the Minister says about getting on with things and about not giving an advantage to anyone, but the community group has been disadvantaged because of the lack of communication.
Mr Vara
The hon. Gentleman and his constituents raised that with me at the meeting. I have not been able to make intensive research into the issue but I have found out that there were telephone conversations in the period where it was said there was no communication. I hope he will appreciate that at the time of the bidding there was limited information that we could impart to the other parties because that would be seen as being unfair to everyone else. This has been going on for two years and we are not talking about a bidding process covering only the last few months. There is a limit to what the Government can do.
I congratulate the hon. Gentleman on securing the debate and my officials will be in conversation with his constituents from tomorrow. I pay tribute to the 498 people who paid the ultimate price so that we could engage in this free debate.
Question put and agreed to.
Ministerial Correction
(10 years ago)
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Communities and Local Government
(10 years ago)
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Duncan Hames (Chippenham) (LD)
19. What recent guidance he has given local authorities on ensuring adequate storm water drainage in residential areas.
The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)
There are strict tests in national planning policy to protect people and property from flooding, including from storm water. We made clear in planning guidance that we published in March that where those tests are not met, new development should not be allowed.
Duncan Hames
Quite right. In the past year we have seen businesses and homes damaged by floods in Bradford on Avon, Corsham, Melksham, and villages, including Holt. What role does the Minister expect local authorities such as Wiltshire council to play in preventing flood damage with sufficient storm water drainage?
Stephen Williams
We obviously expect local authorities to deal with such issues through their local plan. Some 94 local authorities act as the lead local flood authority and are expected to have in place a flood risk management strategy. Of those 94, 36 local authorities have not yet published or consulted on their strategy and, according to my information, Wiltshire is one of them. Perhaps as a diligent constituency MP, my hon. Friend will join me in encouraging Wiltshire council to come forward with that plan.
[Official Report, 10 November 2014, Vol. 587, c. 1175.]
Letter of correction from Stephen Williams:
An error has been identified in the response I gave to the hon. Member for Chippenham (Duncan Hames) during Questions to the Secretary of State for Communities and Local Government.
The correct response should have been:
Stephen Williams
We obviously expect local authorities to deal with such issues through their local plan. Some 152 local authorities act as the lead local flood authority and are expected to have in place a flood risk management strategy. Of those, as of March 2014, 94 local authorities had not yet published or consulted on their strategy and, according to my information, Wiltshire has only very recently consulted on its plan. Perhaps as a diligent constituency MP, my hon. Friend will join me in encouraging Wiltshire council to finalise that plan as soon as possible.
NHS health services in Guisborough, Skelton, Brotton, Park End and Hemlington
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Physical Inactivity (Public Health)
(10 years ago)
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Nick Smith (Blaenau Gwent) (Lab)
It is a pleasure both to serve under your chairmanship, Mr Weir, and to introduce today’s debate. I would like to put my thanks on the record to the Backbench Business Committee for allocating us this time, and I particularly thank the hon. Members for Chatham and Aylesford (Tracey Crouch) and for Canterbury (Mr Brazier), my right hon. Friend the Member for Rother Valley (Kevin Barron), my hon. Friend the Member for Bradford South (Mr Sutcliffe) and the right hon. and learned Member for North East Fife (Sir Menzies Campbell) for their support in applying for this debate. It is great to have cross-party interest, and I am looking forward to hearing colleagues’ contributions today on how we can best get Britain active.
I note that the hon. Member for Chatham and Aylesford has sent her apologies to us today; I understand that she is being kept busy in a bunker in Rochester and Stroud. Fair do’s—she is a tireless campaigner on public health and I pay tribute to the work that she has done in this area.
There is a physical inactivity epidemic and a growing obesity problem. If we want to make south Wales and the UK healthy again, we must help people to enjoy the simple activities that can save their lives. We need to walk, dance and play our way to well-being.
Tredegar in my constituency is the home of Nye Bevan and the NHS, and promoting physical activity is an issue that beats at the heart of our nation’s health. Although health is a devolved matter in Wales, I take an interest in the wider issues of public health, and during my time in the House I have spoken in favour of minimum pricing for alcohol and plain packaging for cigarettes, and taken an interest in the drivers of long-term conditions, such as diabetes, heart disease and obesity.
Britain, including Wales, is a great sporting nation. Governments of both colours have made huge efforts to showcase Britain as a home to sports. In recent years, we have celebrated the 2012 Olympics and this year’s Glasgow Commonwealth games, and next year there will be the rugby union world cup. However, for all that we are a successful sporting nation, we are not an active nation.
This debate is conveniently timed, as ukactive has just published its latest report into what it calls an “epidemic” of inactivity. Ukactive aims to get
“more people more active, more often”
and the stats that it has to show are really quite shocking.
Inactivity is the fourth largest cause of disease and disability in the UK, and physical inactivity directly contributes to one in every six deaths in the UK. That makes it as dangerous as smoking. Those who are completely inactive are at a much greater risk of a wide range of chronic diseases, such as diabetes, heart disease, cancers, obesity and mental health conditions, including dementia. Last week, the Welsh Minister for Health and Social Services reported that Wales is suffering from an “obesity epidemic”.
In the most recent Wales health survey, 58% of adults were classed as overweight, with 22% classed as obese. In my constituency of Blaenau Gwent that was higher, with 27% of adults being classified as obese. Meanwhile, Public Health England reports that obesity in adults has increased from 15% in 1993 to 25% in 2012. Obesity for children under 10 has increased to 13% and for 11 to 15-year-olds, it has increased to a shocking 18.7%. The answer to that is not just diet, of course, and it is certainly not to do nothing. We need to get Britain moving. How do we do that? I am careful at least to try and practise what I preach. Although I am often guilty of flopping down by the telly and watching sport instead of doing it, over the summer one of my tech-savvy daughters downloaded a pedometer app on to my phone for me. I now take care to get in my 10,000 steps a day, although sometimes it is a struggle. I am also a keen hiker; my part of the world, which includes the Brecon Beacons, is very good for that.
One of the key messages that we need to get across in this debate is that physical activity can be as simple as just going for a walk. This is not a debate on how to increase participation in sport, although sport is a cracking pastime for those who want to do it. Physical activity can be anything from taking the dog for a walk, to a Zumba class, to kids flying around on a skateboard. Not every kid in a class will be sporty, just as not every adult has fond memories of playing rugby in freezing cold PE lessons. We risk putting people off and making them think it is not for them if we make this solely a “sports” agenda, not a “get active” agenda. It is important that we make it easy, natural and normal for people to fit activity into their day.
In Blaenau Gwent in south Wales we have some fantastic, varied activity going on. There is a great tradition of bowling, with many teams from different valley villages and towns. That also helps address problems of loneliness and supports good mental health for older people. There are lots of dance groups, too. Places such as the Llanhilleth institute, built from the contributions of miners and steelworkers, positively bubbles with the sounds and energy of Zumba and body combat sessions. It is fantastic to see these places.
Having said that, in times of cutbacks to councils we need to promote more and more of such provision in deprived boroughs such as mine. I would like to see promotion of what I see as more accessible sports too, which require less space and less kit and caboodle, and which can be played indoors, such as table tennis and basketball.
Across Britain, the most deprived areas on average suffer more from inactivity and have higher rates of obesity than less deprived boroughs. There are practical concerns that we need to take into consideration. We can encourage somebody to take more exercise, but if we do, we need to make it easy, affordable and safe for them to do so. In order to make a meaningful difference, we need to be serious about reaching those hardest-to- reach groups.
The biggest health benefit is earned by getting someone to move from no activity to some activity. What are the Government doing specifically to encourage participation in physical activity in the most deprived areas? The next important factor is profile, and there is still lots to do to raise the profile of physical activity to improve public health. There have been some real success stories over the past year, of local government pushing this issue up the list of priorities. Ukactive found that over 70% of local authorities have increased spending on physical activity in the last year. In Wales, the Welsh Assembly Government have set the pace for leadership on this issue. Last year, Wales launched the Active Travel (Wales) Act 2013—Europe’s first piece of active travel legislation—which puts safe cycling and walking at the heart of Wales’s plans for the future.
We must not underestimate the achievements that there have been, but we must also not underestimate how far we still have left to travel. Despite the increases and the good work and good will that we have seen, spending on physical activity represents just 4% of the ring-fenced public health grant. We need all Governments, of all colours, to take leadership on the issues—just look at the national campaign on smoking, which has made such a huge difference. Before 1998, smoking levels were rising year on year, as inactivity and obesity levels are rising now, yet since 1998, 1.5 million people have quit smoking. The tide has turned. Important factors include the 10-year strategy, which has been long-term and, crucially, supported by all major parties across the aisle, so it is important that this issue is not politicised, and that is why it is great today that there is good cross- party debate. Pleasingly, the momentum has continued —and fair do’s, in 2011, the Government set specific targets to reduce smoking further by 2015. That needs to be applauded.
However, that leads me to a final but really key point. Action on smoking is about shifting the narrative to prevention rather than cure, and that is what we need to do now for physical inactivity. Individually, we all need to be concerned with physical activity for the sake of our personal health, and nationally, we all need to be concerned about physical inactivity for the sake of our national health service.
The new chief executive of NHS England put that in no uncertain terms last week, when he told the annual conference of Public Health England to get serious about obesity or bankrupt the NHS. We cannot afford to keep flooding our NHS with avoidable illness and disability. Diabetes UK estimates that type 2 diabetes already costs the NHS about £9 billion a year. If we are to protect our NHS and the excellent service that it gives us and our constituents, we need to prevent these problems from arising in the first place. The NHS is the national health service, not the national sickness service or the national pharmaceutical service. Prevention is better than cure. We need to start seriously looking at shifting to a service that promotes health and prevents illness wherever possible.
I am pleased that a future Labour Government would be committed to allowing GPs to give out exercise on prescription. That is a step that the medical profession is ready to take. A recent poll of GPs reported that 95% of GPs without access to exercise referral programmes said they would use one if it were available. The success of initiatives such as Let’s Get Moving, which encouraged more than 500 previously inactive patients to amass a total of 164 million steps—is that not brilliant?—shows how valuable GP surgery-led interventions can be.
This is an important debate and there are important questions to put to the Minister. First, how can the Government and others improve on what is being done? Secondly, where is the Olympic legacy for deprived areas such as Newham, which hosted the Olympics and is the least active borough in the country? Thirdly, what can be done to ensure that best practice is being shared, and that our efforts are being properly monitored so that we have data on what works, what is needed and, importantly, where?
Credit needs to be given where it is due. Some ships are moving in the right direction. For example, in England, the NHS’s “Five Year Forward View” makes a strong reference to this topic. We must applaud that, but the tide has not yet turned and inactivity is still set to rise.
Like smoking cessation, what can the Minister offer that will really make a difference in this regard? Labour has given a commitment to put physical activity at the heart of its future health plans, but the current Government and all future Governments, of any colour, need to do the same. I look forward to hearing from colleagues and to the Minister’s reply.
Mr Mike Weir (in the Chair)
Order, About eight hon. Members want to speak, and I want the winding-up speeches to start at 10.30 or 10.35, so although I will not impose a time limit on speeches at the moment, I suggest that if Members stick to about six minutes each, we can get everybody in.
Justin Tomlinson (North Swindon) (Con)
It is an absolute pleasure to follow the hon. Member for Blaenau Gwent (Nick Smith), who made a very good, thoughtful speech on a very important topic. I have highlighted it a number of times previously in Westminster Hall and the main Chamber.
I am speaking partly as a vice-chair of the all-party group on heart disease, but also because of my own background. My school was bottom of the league tables in Kidderminster. My group of friends replicated whatever was on television, so predominantly we played football, but if Wimbledon was on, out came the tennis rackets; if the Tour de France was on, out came the bikes; and if the Ashes was on, out came the cricket bats. The importance of that was both that I was active and that I kept out of trouble. Two of my friends ended up spending time at Her Majesty’s pleasure, but the rest of us did not follow that path, because frankly we were just too tired at the end of the day, although I remember that when I phoned my old headmaster to say that I had got into Parliament, he said, “You know, the last time someone from our school got into the press, it was because they had gone to prison, but I’m not sure which is worse.” We will all make a judgment on that.
The hon. Member for Blaenau Gwent made a very important point. This debate is not just about sport; it is about the opportunity to be active. That is the part that I want to concentrate on—that opportunity. Before I became the MP for North Swindon, I represented for 10 years as a councillor a new build housing estate. It went from 1,800 to 10,000 houses. I was horrified once to be told that I was very lucky that my ward had the greatest proportion of open space of any ward in Swindon. I knew, as I lived there, that that was complete nonsense, so I did a bit of digging and it turned out that hedges, heritage sites and grass verges counted as open spaces. The last time I put down jumpers for goalposts to play football, none of those counted as usable open space, so it is a welcome move that the Government have removed the higher density rule, but I still think that more needs to be done in planning terms for new development to provide usable open space. That is incredibly important because garden space for one’s own home is now one third smaller than it was in the 1960s and front gardens for new builds are often just an aspiration rather than a reality.
We do not need premier league-standard open spaces for people to be active. When I used to play football during the whole of the summer holidays, we played on an almost vertical pitch, which was very handy, because Matthew and Paul Gilbert, the twins, were considerably better than me and my teammates. We got to kick downhill all day and they got to kick uphill—that was only fair.
We also need to look carefully at how we organise opportunities. I was a big fan of the school sports partnership. The Government looked at that when they first came to power, because there was the worry that in the previous years, even with £150 million being spent, only two out of five children ever took part in competitive sport.
Mr Lee Scott (Ilford North) (Con)
Does my hon. Friend agree that competitive sport, whatever sport it might be, in school leagues and various competitions is beneficial in getting young people involved and stopping some of the obesity problems that this country has?
Justin Tomlinson
I thank my hon. Friend for that very good point. I am about to come on to that issue, so I shall just pause my response, but I will cover it.
To return to the school sports partnership, there was the worry that after the £150 million had been spent year on year for a number of years, still only two out of five young people were involved in competitive sport. The reality is that if someone is good at sport, that is probably because their parents have encouraged them, and they have probably already signed them up to competitive teams. What the figures did not show was what was happening with the other three out of five children; it was probably the only opportunity that they had to be active. Therefore, the figures were not telling the full story and it was absolutely right for the Government to continue that provision.
Leading on from that was the desire to reinstate the school games, which was competitive sport. I speak from the experience of invariably being on the losing team—that set me up well for being involved in politics later in life. But I think that it is important for children not always to win. My hon. and learned Friend the Member for South Swindon (Mr Buckland) and I visit the Swindon school games every year, and they are a fantastic success. Huge numbers of sports clubs are engaged, as are volunteers; and schoolchildren of all abilities are getting involved.
I also welcome the moves to encourage more troops to become teachers. There is a chronic lack of PE-confident teachers in primary schools. That is a real challenge. I have visited a number of primary schools, and they have said that it is one of the biggest challenges that they face.
I am very proud that when I was a councillor, I set up the Swindon sports forum, which brings together about 60 different sports clubs. They are not necessarily competitive sports clubs. They could be walking clubs or clubs aimed at those aged 60 and above. However, the forum brings clubs together to share best practice and to talk about how they can secure funding from external bodies and how they can sometimes share facilities. There have been a number of major successes in that respect.
We face another big challenge. We talk about the Olympic legacy, and straight after the Olympics or any major sporting event on the television, young people are inspired and want to go and replicate the success that they have seen on the television. Sports clubs are then overwhelmed, in the short term, by huge numbers of new participants. The problem is that the number of children who can benefit is capped by the number of volunteers who are available. Sports clubs are no different from charities, political parties or other organisations when it comes to the real challenge of finding sufficient volunteers. I am a big fan of the Government’s National Citizen Service programme, because it is training young people to be good, constructive citizens. I think that we should look to channel more of those volunteers, in the summer, to go on to become sporting volunteers to help sporting clubs.
There also needs to be a lot more work among youth services, leisure centres and traditional sports clubs. I remember that when I was a councillor, the three would never talk to one another, but I also remember pointing out that on a Friday night there was the ice skating disco. That was not technically sport, but it involved 650 teenagers going round very quickly in a circle chasing after people they found attractive, so I argued that it was probably the most beneficial way of getting young people active.
Finally, there is the big plea that I have made as an MP. We have amazing facilities in this country. Whether it is schools, sports centres or community facilities, they are fantastic facilities. However, we charge an absolute fortune for voluntary groups to come and provide constructive activities, whether for older people or for younger people. It is very hard to get volunteers, and I think it is unacceptable to charge them for the privilege of helping people to be active. In my utopian world, between the hours of 4 o’clock and 6 o’clock, all school buildings would be available free of charge to groups that provide constructive activities for young people. That would help busy parents. It would help to tackle the obesity crisis. It would provide constructive engagement, which stopped me going down a very different path. I make that plea for all parties. There is good cross-party support on the wider principle, and I think that that is the most tangible way in which we could make a big difference.
Barbara Keeley (Worsley and Eccles South) (Lab)
It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate my hon. Friend the Member for Blaenau Gwent (Nick Smith) on securing such an important debate. We need to promote physical activity to people across the UK. The issue is important to me as a constituency MP in an area that has very low levels of physical activity. I am co-chair of the all-party group on women’s sport and fitness, and I encourage hon. Members to support that group. Last year, I was co-chair of the all-party commission on physical activity.
As an MP in the north-west of England, I am concerned that ours is one of two regions in the north with the highest levels of inactivity in the UK. In our region, 32% of the population is classified as inactive, which represents an inactivity level 5% higher than in the south-east. Reports demonstrate that deprived areas have higher levels of inactivity than the least deprived areas; the hon. Member for North Swindon (Justin Tomlinson) has referred to some of the reasons for that. The sheer cost of undertaking physical activity and classes sometimes gets in the way. My constituency is in the top 40 local authorities with the highest inactivity rates, and 33% of people are inactive. We need action locally to tackle the problems.
There are stark differences in inactivity rates not only between regions, but between men and women. There is a worrying gap between the rates of men and women who undertake exercise. The most recent figures from Women in Sport, which was formerly the Women’s Sport and Fitness Foundation, show that only slightly more than 30% of women in England aged 16-plus take part in sport or fitness once a week, compared with more than 40% of men.
In Salford, the gap is even greater, with only 25% of women taking part in weekly exercise. Figures from Sport England demonstrate that more men take part in activity than women in every age group up to age 65. That is serious, because being physically inactive shortens a person’s life span by up to five years and is responsible for 17% of premature deaths in the UK. Indeed, if everyone in England were sufficiently active, an estimated 37,000 lives would be saved every year. We must take that seriously.
I find it interesting that inactivity is as dangerous to health as smoking. Because women are less active than men, women are subject to an increased risk of ill health and premature death. The reasons for the gender gap in inactivity rates are well established. Women and young girls either face, or feel that they face, many barriers when it comes to sports participation. Barriers exist at both grass-roots sport level and elite levels. In the all-party group on women’s sport, we work to identify those barriers and the actions needed to remove them.
The all-party group pressed the Culture, Media and Sport Committee to hold an inquiry into women in sport, which it did. The Committee’s report, which was released in July this year, contained some interesting recommendations and confirmed many of the reasons for the gender gap in activity. It is not that inactive women do not want to play sport or to be active; research from Women in Sport showed that 12 million women, more than half of whom are inactive, want to play more sport. Many of the sports that are most popular with women, such as running and swimming, are done informally—that is an interesting clue—so they are outside the formal funding structures for sport.
Women make up 62% of participants in swimming, 42% of participants in tennis and 41% of participants in athletics, particularly running. I will come on to talk about running informally, because it is an attractive sport to women who have family responsibilities or other commitments that prevent them from taking part in team sports. There is also a clue in the figures for team sports. Only 7% of participants in football, 8% of participants in rugby union and 9% of participants in cricket are women. We can see a real trend there; women are tending to do informal sports such as running and swimming.
Many girls are put off exercise and sport at a young age, and too many girls end up thinking that sport is simply not for them. Sports such as football can seem entirely male, judging from the media coverage that they receive. Women’s sport accounts for only 0.5% of all commercial investment and only 7% of the media coverage of sport, which makes it even more difficult to encourage girls and women to participate.
In terms of financial reward, it is surprising that male footballers are paid millions of pounds every year, but women’s teams are nearly always amateur or semi-professional. Members of our England women’s football team are on contracts under which they are paid £20,000 a year—not £20,000 a day or a week, but £20,000 a year—and the England women’s rugby squad were not put on paid contracts at all until after they had won the rugby world cup. Every time I mention that, I get comments on Twitter stating that that is because of a lack of interest in women playing sport. I understand that 55,000 tickets have been sold for the England-Germany women’s football match at Wembley this Sunday, so perhaps that tide is turning.
Women’s and girls’ negative perceptions of sport often stem from negative experiences of physical education and sport at school. That point is supported by the Culture, Media and Sport Committee report. A survey carried out by Women in Sport found that 51% of girls felt deterred from physical activity by their experiences of school sport and PE. Many girls describe their experience negatively, citing a lack of choice, an overly competitive environment, a lack of confidence in their own ability and concerns about body image. It is essential that we change young girls’ perceptions of sport if we want them to be active for life. We must, as my hon. Friend the Member for Blaenau Gwent said, create exercise classes and sporting activities that actually interest girls.
I look forward to the campaign being launched by Sport England, which aims to change our perception of girls and women doing sport. The campaign is called “This Girl Can”, and it will aim to see more women and girls exercising regularly or playing sport with less fear of judgment, more confidence and more enjoyment.
I will mention two very worthwhile initiatives of the sort that we see springing up now. “Fatty Must Run” is a social media advice and support initiative and Twitter account run by Julie Creffield, and it helps people who are overweight and starting to take exercise. Another great initiative is the “Couch to 5K” running group in Blackburn, where volunteers support free group running sessions to encourage inactive people to run regularly. As part of our thinking about how to increase activity levels, we must look at similar wonderful, often voluntary, initiatives and find ways to support them.
It is time to focus on the scale of the problems we face with inactivity and health. I have mentioned that we could save 37,000 lives a year if everyone in the UK were sufficiently active. Women in the UK have the 10th highest rate in the world of cancers linked to physical inactivity. In 2012, there were nearly 79,000 deaths across the country from bowel, breast and womb cancers, of which an estimated 12,000 could have been prevented if women were more physically active. In Salford, the CAN-Move project aims to ensure that physical activity is part of the pathway for patients with breast, bowel or prostate cancers, and it offers those patients a 12-week physical activity programme. Such projects should be available more widely, but the most important thing is to focus on encouraging people to be physically active earlier, not simply when they already have a cancer.
Caroline Nokes (Romsey and Southampton North) (Con)
It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate the hon. Member for Blaenau Gwent (Nick Smith) on securing this important debate. I feel somewhat daunted to be following the hon. Member for Worsley and Eccles South (Barbara Keeley), who is something of an expert on women’s sport and fitness. That was to be the focus of much of my speech, but there are a couple of other areas that I would like to discuss.
We have heard at length this morning about the problems associated with a lack of physical activity, and I wanted to focus briefly on some of the positives. Perhaps I come from a fortunate position and constituency, because Test Valley, in the south-east of England, is the eighth most active borough in the country. I spent 10 years of my life as the leisure portfolio holder on the local council, so I should know a little bit about what we did to encourage such activity, to ensure that there were pathways from school sports into clubs and to try to retain the crucial group of 14 to 18-year-old girls, where there is the most stark drop-off in levels of physical activity.
Test Valley borough council has long had a determined commitment to ensuring that sports clubs are supported, encouraged and celebrated. The weekend before last, I was lucky enough to go to the inaugural Romsey and District sports awards—a fantastic, uplifting event at which there was absolutely no shame about celebrating elite sport and the successes of those who have achieved a phenomenal amount, either as individuals or as part of teams and clubs. But there were also categories for veterans, a critical group that is being encouraged to stay in sport longer and be active later in life. There were also categories for coaches and volunteers. The volunteers were perhaps the most inspiring group, as they are giving up thousands of hours every year to ensure that clubs can keep going.
In my area, we are lucky to have a wide range of clubs. Every year there is a sports fair at Romsey sports centre, where the pathways from school sport into clubs are promoted and made accessible and inviting. One of the biggest barriers to physical participation is cultural. I always use the example of a golf club where, after walking in through the door, people are almost inevitably told that they are wearing the wrong things. The same is true of many gyms, where it is imperative to be wearing the right kit. Wherever people go, there are mirrors on every wall. People who feel somewhat nervous or anxious about making that first step—I firmly believe that the first step is the most important—can sometimes be put off instantly on arrival.
I have long said that the hardest thing when it comes to keeping girls and women in sport is that wonderful substance Lycra. Everyone in the gym will be wearing it, yet those who feel slightly self-conscious about their appearance, or those who might be overweight, may look in the mirror at themselves clad in Lycra and decide that the gym is not for them and that they are never coming back.
It is critical that we have welcoming environments that are accessible in terms of both cost and the physical structure of the buildings. It is also imperative that we have a welcoming, enthusiastic and encouraging culture among instructors. I declare an interest as a parliamentary ambassador for the YMCA, which has led the way on physical activity and sport over the past 150-plus years. It is very seldom that people will go into a gym in this country and find instructors who have not been taught by the YMCA how to make the environment welcoming and successful and how to enthuse people to achieve what they can.
As chairman of the all-party group on body image, I have focused on some of the cultural barriers to participation, but I will say a few words about why it is important to encourage and not to “fat shame,” a hideous term. I was interested to hear the hon. Member for Worsley and Eccles South refer to “Fatty Must Run”, about which I have some reservations because the first step is the hardest. In a nation of people who are not taking part in enough sport and exercise, we have to encourage that first step. We have to make it culturally acceptable and the norm for people to take part, and we have to give them a pat on the back when they start taking part in sport.
The fat-shaming that we see from celebrities such as Katie Hopkins does the wrong thing, and we have to try to encourage everyone, whatever their size or shape, to take part in sport. It is true that people can be healthy at any size and inactivity is a danger for its own sake, so, whatever their body shape, I encourage people to participate.
I conclude by picking up the point about the participation of girls and women. Fifty per cent. of girls are put off sport in secondary school, and that feeling can continue for the rest of their lives. My hon. Friend the Member for North Swindon (Justin Tomlinson) referred to jumpers being used as goalposts, which is an important point. It is easy for boys to take part in football because all they need is four jumpers and a ball. Traditional women’s sports require a great deal more equipment, and it is therefore harder for girls to carry on in sport once they leave school.
Many other hon. Members wish to contribute to this debate, so I will finish with one parting shot to the Minister: the Olympic legacy is critical. A feel-good factor is not enough; we want genuine well-being as our Olympic legacy.
Mr Mike Weir (in the Chair)
Order. I am afraid that we are now running up against the clock, so from this point I will set a formal five-minute time limit on speeches.
Grahame M. Morris (Easington) (Lab)
I also congratulate my hon. Friend the Member for Blaenau Gwent (Nick Smith) on securing this debate, and I congratulate the Backbench Business Committee on allocating time for a subject whose importance is increasingly being recognised. The Select Committee on Health, of which my good and hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) and I are members, will be holding an inquiry on the impact of physical activity and diet on health, so this is a timely debate. I am sure that the evidence compiled by the Select Committee will be brought to the Minister’s attention, and that appropriate action will be taken.
Many hon. Members who have contributed to the debate have covered the general subject areas, so in the interests of brevity I do not intend to repeat the statistics, but I will mention some specific issues that affect my constituency of Easington, County Durham in the north-east of England. The figures on physical inactivity quoted by hon. Members earlier in the debate are even higher in my region. Some 32% of people in County Durham are classed as physically inactive, and all the projections indicate that the problem will get worse. Higher degrees of inactivity are predicted by 2030.
International comparisons show that our levels of inactivity are twice those in Germany and France. I thought we would be rather more active than the United States, but our levels of inactivity are 20% higher. It is generally recognised that physical inactivity is a considerable public health problem. The numbers of people who are likely to suffer as a consequence of physical inactivity were identified earlier in the debate. It has been suggested that physical activity can help to combat, or at least delay the onset of, conditions such as heart disease, type 2 diabetes, obesity and even dementia.
The costs are not just for the individual; there are also costs for communities and our economy. There are various estimates of the cost to the UK economy, and I have seen a figure of £20 billion a year, so there are direct costs associated with the health issues. My hon. Friend said that £9 billion a year is spent on costs associated with treating type 2 diabetes, but many other health issues are also caused by inactivity. There are also indirect costs such as, for example, lost days of work and low productivity. Employers need to take note. Some 16 million working days are lost every year due to obesity-related illnesses, so improving workplace health could have an immense impact on individual businesses and the economy. It is in everyone’s interests to address physical inactivity.
There have been some welcome improvements, and hon. Members have mentioned local authorities that are trying to prioritise physical activity, but local authorities are facing considerable pressures as a consequence of cuts in central Government funding, which have inevitably had an impact on their ability to deliver activities and opportunities to engage in physical activity. My local authority, Durham county council, is one of the hardest hit, and such authorities face some of the greatest challenges in relation to physical inactivity. Such authorities have seen the deepest cuts to their overall budgets. Indeed, 13 of the 15 local authorities with the most inactive populations are located in areas that are considered most deprived or more deprived. Despite facing huge challenges, particularly public health challenges, Durham county council has had to implement £135 million of cuts in three years, with another £44 million of cuts in the pipeline.
David Rutley (Macclesfield) (Con)
It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate the hon. Member for Blaenau Gwent (Nick Smith) on securing this debate on an important subject on which I know he has been campaigning for many years. Many of us have taken the opportunity to come to support him.
I draw Members’ attention to my interests: I am co-chair of the all-party group on mountaineering, a vice-chair of the all-party group on mountain rescue and secretary of the all-party group on national parks; there is a definite outdoor theme there. I will spend a few minutes discussing why it is vital to ensure that we tackle the challenge of physical inactivity, and how we can do even more by tackling it in an outdoor setting. Over the past few years, I have been passionate as a Member of Parliament about ensuring that we get people off the sofa and outdoors to be active. The good news is that we are making progress. We have had numerous debates; I secured a debate on outdoor pursuits recently, and in September the hon. Member for Ogmore (Huw Irranca-Davies) secured a debate on outdoor sport and recreation.
It is positive that we have been working closely with Ministers, particularly the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), who takes a keen interest in the matter, and of course our very own Minister for public health, my hon. Friend the Member for Battersea (Jane Ellison), who is an example in that respect. She was kind enough to come to the Macclesfield area and High Peak, and we walked around Goyt valley and up on to Shining Tor, practising what she preaches by having a meeting outdoors, talking and walking. She is an excellent walker and a great ambassador for the issue. I commend her for the important work that she does.
Why are we doing this? As Members have highlighted, it is important to recognise that 30% of the UK population are inactive, compared with Scandinavia, where the figure is more like 8%. Clearly, there are other countries not very far away that have grasped the nettle better and more effectively than we have. A key report published recently, “Moving More, Living More”, suggests that the cost of physical inactivity is around £20 billion. We have a chance to reduce premature death. The importance of physical activity in tackling mental health issues as well has not been stressed as much in this debate as in other settings. The well-being aspects of walking and cycling, for example, are critical. Charities in my area, such as Age UK Cheshire East, make every effort to show people those well-being aspects.
It is good that we can take the agenda forward through Government and local authorities, but importantly, we can get more people involved in outdoor activities by bringing together various groups. Progress is being made; a year or two ago, we launched an important programme called “Britain on Foot”, and now a coalition of outdoor organisations including the Ramblers, the Youth Hostels Association, Living Streets, the British Mountaineering Council and the Outdoor Industry Association has published six key proposals for Government action on the outdoors.
The first and most important is that we need cross-government support for a long-term strategy on outdoor recreation. We need a strategy for promoting outdoor activities and tackling physical inactivity, just as we have one for sport. Interestingly, Sport Cheshire has now changed its name to Active Cheshire, an approach which I am sure has been mirrored in other parts of the country as well, to show that we need a more holistic approach. Yes, we have a sport strategy, but now we also need a physical or outdoor activity strategy to match it every step of the way. The aim is to get 1 million more people out of physical inactivity.
Another of the six key proposals is to increase opportunities for young people to be active outdoors; I know that the hon. Member for Blaenau Gwent is particularly keen on that. The work of the Scouts, the Guides and Duke of Edinburgh programmes provides clear opportunities. I hope that the Minister, in her winding-up remarks, will show her support for the six key proposals, as the Sports Minister has done. We need a cross-government approach to the issue. The Sport and Recreation Alliance’s report “Reconomics”, published earlier this year, says that we have a vast blue and green gym that we should be using more often. It is free. Let us get more people active outdoors.
Kevin Barron (Rother Valley) (Lab)
I congratulate my hon. Friend the Member for Blaenau Gwent (Nick Smith) on securing this debate. I do not want to repeat too much of what has been said. As people will know, I have had an active interest in public health for a number of my years in the House, and I have said on numerous occasions that the public health issues for the 21st century will not involve sanitation, fresh water supplies or bad housing, although unfortunately, in such a rich country bad housing still exists; they will have more to do with individual lifestyles and behaviour, including smoking, drinking alcohol in unhealthy amounts and other things. Inactivity is a major threat to public health in the 21st century.
My hon. Friend talked about the national health service being a sickness service. I have used it on many occasions, and for most of my life it has really been a national ill-health service. It reacts to people on the basis that there is something wrong, and we must move away from that. I say to the Minister that although I do not have many compliments to pay about the contents of the Health and Social Care Act 2012, moving public health into local government so that it becomes a part of local society was a proper thing to do. Also in that Act, although I have heard little about them since, were provisions on population health and how we measure it, and on health inequalities, from which constituencies such as mine suffer badly. I would like a lot more to be done on that issue.
There is a wealth of evidence clearly showing that an active life is essential for physical and mental health and well-being. A number of diseases, including cancer and diabetes, are affecting an increasing number of people at an earlier age, as are conditions such as obesity, hypertension and depression. Regular physical activity can guard against such conditions. We must enable people to take control of their current and future health.
Boosting parents’ understanding about active play and physical literacy is essential for children as well. My childhood was not spent on Xboxes, or even in front of television for much of the time. Most of the time, if the weather was right, we were outdoors, climbing trees or playing football on the street, and up to all sorts of things. We had a far more active life than my grandchildren do. Outwith activities such as football and so on, they lead a pretty sedentary life in front of televisions and in their play.
Being active increases quality of life at every age and increases everyone’s chance of remaining healthy and independent. The benefits do not stop there; there are many other social, individual and emotional reasons to promote more physical activity. Being active plays a key role in brain development in early childhood, and it is good for long-term educational attainment. Increased energy levels boost workplace productivity and reduce sickness absence.
As Members have hinted, the experience of other countries tells us that getting the whole nation active every day will happen only if we involve all sectors. Countries such as Finland, the Netherlands and Germany have turned their inactivity situation around—not in years, I admit, but in decades in places such as Norway. We all need to engage with such strategies in our communities. In order to make real and lasting change, we must take a long-term, evidence-based approach, building on what we know works, and embed physical activity into the fabric of daily life, making it an easy, cost-effective and normal choice in every community in England.
I will finish by giving an example. More than 20 years ago in my constituency, a then coal mining village called Thurcroft set up a programme with the local public health organisation called Thurcroft Healthy Hearts. It brought schoolchildren and pensioners together to discuss issues such as smoking. Inevitably, as it was a three-year programme, it ended after three years. Little evaluation of its benefits was done, although people were asked if they were happy with it and they said yes. However, from that programme came Thurcroft walking group. I walked with the group a couple of years ago. Its members are elderly people who have been meeting once a week to walk together, which has been to their general benefit. That is what we need more of in our society.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Blaenau Gwent (Nick Smith) on bringing this issue forward for consideration.
When we look at the figures for physical inactivity, some of them are horrendous. In a world where we are so image and health conscious, it makes me wonder why we have not moved forward in the way that we should have done.
We followed the Olympic games in 2012 by putting an emphasis on making more people do forms of exercise. Cycling was in, the gas-guzzlers were out and pedal power seemed to be winning the day.
We also have to look at ourselves, because we are all different—in fact, unique. We are all different shapes and sizes. Also, some of us have faster metabolisms than others. Some of us could eat buns and cakes until the cows come home and not get fat; others just look at buns and cakes and their waistline expands straight away. That is what we are—different—so sometimes we have our own in-built systems that have to be addressed as well, and physical activity is a way of doing that. We want to try to ensure that those who are inactive consider physical activity; if they do not do more physical activity, their lives could be shortened.
Thirty minutes of exercise—three 10-minute blocks of exercise—can increase our life span, and reduce our chances of developing a wide variety of diseases. I am a type 2 diabetic myself. My developing diabetes was not necessarily down to a lack of exercise; it was down to diet. What we eat is therefore also important. Physical activity is important, but so is diet.
There are international figures to show the number of people who are not getting the recommended levels of physical activity. In the Netherlands, the figure is just 18% of the population; in Germany, 28%; in France, 33%; Finland and Australia are tied at 38%; they are followed by the USA, the stereotypical view of which is that everything is supersized, including people’s thighs, and 41% of its population are not reaching the levels of activity recommended; but the figure for the United Kingdom of Great Britain and Northern Ireland is 63%, so we are at the wrong end of the scale, unfortunately.
Why is that important? It is important because Finland in 1970, for example, had the highest rate of heart disease in the whole of Europe, but now Finland has one of the lowest rates of premature cardiovascular deaths in Europe, the figure having dropped by 65% since 1970. In Finland, men are now living for an average of seven years longer, and women for an average of eight years longer, than they did in 1970. The right hon. Member for Rother Valley (Kevin Barron), who spoke before me, was absolutely right when he said that it has taken decades for that type of change to happen, but we have to start somewhere and hopefully we can start here.
At present, physical inactivity is responsible for 17% of premature deaths in the UK. According to ukactive, if everyone in England achieved their recommended amount of physical activity, 37,000 lives would be saved each year. Unfortunately, the other part of that equation is that if action is not taken, that figure of 17% will increase by another 15% by 2030. That is why the Government need to encourage the general public to be more active. In her response, perhaps the Minister could consider defining physical activity as a stand-alone public health issue, as has been requested by the World Health Organisation.
In its report, “Steps to solving inactivity”, ukactive found a clear correlation between physical inactivity and deprivation. That is also why this issue should be prioritised in public health, education, social care and transport policy. Active children are more likely to be active adults, so the education in this area must start at home at an early stage. It is for not only the Department of Health, but the Department for Education and other Departments to consider. When it comes to the education of children, we all know the benefits of eating well and exercising.
The right hon. Member for Rother Valley said that when we were younger we had physical exercise; we did not have Facebook or Xboxes. That is a fact. Some parents even tell me that their children contact them in the kitchen below by texting or Facebooking them from the bedroom above. That is ridiculous, but it is a fact; that is sometimes how things are done. That is where we are moving to, and we have to address those issues. We are also in a different age, one where the vulnerability of children is greater than before, and we are obviously concerned about that.
In his introduction to the debate, the hon. Member for Blaenau Gwent referred to the anti-smoking campaign. It has been so successful that since 1998 1.5 million people have stopped smoking. Physical inactivity is the fourth largest cause of disease and disability in the UK, contributing to one in six deaths here. When we consider what the anti-smoking campaign achieved, I believe that we can do the same when it comes to promoting physical activity. Exercise is necessary for everyone’s health, regardless of their shape and size.
Mr Iain McKenzie (Inverclyde) (Lab)
Thank you, Mr Weir, for calling me to speak. It is a pleasure to serve under your chairmanship again.
I congratulate my hon. Friend the Member for Blaenau Gwent (Nick Smith) on securing this important debate, because we are very aware that inactivity has a direct impact on health, as we are so obviously seeing across the country.
Quite simply, our lives have changed. Many people now work in non-physically demanding jobs, where they spend many hours in front of a screen, before heading home to spend many more hours in front of a screen. Our leisure pursuits have changed as well, and even more so for our young. As we have heard, online games etc. are providing great competition for the more traditional games and sports in children’s leisure time.
Inactivity and poor diet are taking their toll. We see that in our hospitals and in our health centres. As you will know, Mr Weir, many GPs in Scotland are now prescribing activity, in the form of “gym prescriptions”.
The UK is staring at an epidemic of poor health brought on by obesity, which is due to a lack of activity and a poor diet. This is happening across the UK, where the only thing that seems to be getting faster is our eating habits. Drive-through food outlets can be seen everywhere. These are fine if they are visited infrequently, but unfortunately some people visit them frequently.
As we know, prevention is always better than cure. In Scotland, we are ahead of other parts of the UK and the world in suffering from this obesity epidemic; I suspect that you will agree with me, Mr Weir, when I say that that is the only world league table that we do not want to top. The problem hit us some years ago, and we had to take serious action to try to reverse the trend and prevent another generation from becoming inactive.
Top of all the unhealthy league tables—that is where we in Scotland found ourselves. Heart problems and diabetes brought on by a poor diet and people being overweight, coupled with smoking-related illnesses and the impact of over-drinking, all damaged our health, and at younger ages. We were seeing health problems associated with people in their 80s taking hold while people were in their 40s. We needed to get more active, and to improve our quality of life in so many ways. We needed to promote activity and sport for all. I am glad to say that that message is getting through. I myself am a Zumba orphan; my mother spends more time doing Zumba than she does on the phone, or talking to me.
My constituency of Inverclyde built all-new schools with state-of-the-art sports facilities. Inverclyde schools’ sport facilities are first class and free for use by our communities. We also employed sports co-ordinators to introduce kids to a variety of sports and even more importantly to continue that sporting activity by linking up with clubs after school. The last time we did that I myself was in secondary school. That was when we built new facilities and I was introduced to a new indoor sport called basketball. In Inverclyde, we also offer free swimming to kids under 16, as well as free hire of 2G, 3G and—even in Scotland’s climate—grass pitches for under-19 teams. Funding all that is not easy, but if we did not, the cost in the future would be quite simply unbearable. We bought into the legacy of the London Olympics and the Commonwealth games in Glasgow, using those events to excite people and promote activity.
Inverclyde educates and promotes the importance of getting active, and of healthy eating. You are what you eat. We tell youngsters that if they put rubbish in, they will get rubbish out, especially in sport. We are educating our kids to cut out as much sugar as possible, and to eat “five a day”. The message is getting through. I paid a visit to a school, where I ate a school meal, and one of the pupils told a teacher that I had only three pieces of fruit and not five. I was guilty, and had to take another two pieces. So, as I say, the message is getting through.
We have been removing fizzy drinks from schools, and replacing them with water. However, we cannot do that on our own. We need our supermarkets to buy into this process too. We simply need to ask: why is fruit more expensive than sweets? We should remove sweets from the checkout area. We should also make things easier for hard-working families, because the fruit and vegetables that they are taking home are not lasting the full week and they have to make further trips to the supermarket to stock up.
In conclusion, what can the Government do? I should like to offer some low-cost solutions that I am sure they would be interested in. They could do more to promote sport and an active life style; they could approach supermarkets about their short sell-by date food-laden shelves and about ready meals; and they could emphasise the reduction in sugar consumption. Activity can be a small part of people’s day, but it is a big part of their life.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
It is a pleasure to serve under your chairmanship again, Mr Weir. I congratulate my hon. Friend the Member for Blaenau Gwent (Nick Smith) on securing this debate and all colleagues across the House who supported the application for it. We have heard some important contributions by hon. Members from all parties.
I should like to take this opportunity to thank the many organisations that are doing an important job to get Britain moving—hon. Members mentioned many of them—including ukactive, Sustrans and StreetGames. I had the pleasure of joining Living Streets on a walk to work back in May, to celebrate national walking month and the benefits of walking to work, so I have seen first hand the fantastic work that it does. I also thank my hon. Friend for mentioning pedometers. Many hon. Members measure their steps on a daily basis. I am just on 2,000 already today and on my way to securing my 10,000 a day.
I share hon. Members’ concerns about the place of physical activity in our society. Just a few generations ago, physical activity was an integral part of daily life, yet today it is becoming ever less a part of our daily routines. The opportunity to move and be active in modern life has declined dramatically: advances in technology mentioned by hon. Members, the rise in passive entertainment options, community safety concerns, roads that are not safe for pedestrians and cyclists, and limited playgrounds and green spaces are just a few of the reasons why.
We have heard the statistics, but they are worth reiterating. In some parts of the UK, more than 40% of the adult population is classed as inactive and a quarter of all adults in England are failing to do enough physical activity to benefit their health. Nearly half of all 11 to 25-year-olds in England—more than 4.5 million individuals —fail to achieve the chief medical officer’s recommended levels of physical activity. This is deeply concerning. Our nation’s children and young people are not getting the activity that they need to stay strong, fit, healthy and happy, which is something that will inevitably affect them in later life.
As we heard, insufficient levels of physical activity are estimated to cost more than £7.5 billion nationally. Other figures have also been mentioned. That sum is broken down to just over £1 billion in the NHS, £5.5 billion in lost productivity and £1 billion in premature mortality among the working-age population. My hon. Friend the Member for Easington (Grahame M. Morris) also mentioned the staggering 16 million days lost in the workplace, which we must be concerned about and take action on.
More than 1 million children are classed as obese and a third of children leaving primary school are classed as obese or overweight. We know that the status quo is not working. If we are to make the NHS financially sustainable in the 21st century, it follows that we need to have the most ambitious plans for physical activity, to contend with those lifestyle diseases that the NHS is increasingly responding to.
We know that physical activity is the simplest and cheapest route to good health and staying well. Moving from inactivity to activity is one of the easiest first lifestyle changes to make. This has been looked at academically and found to be easier than altering diet, stopping smoking or reducing drinking—and it can cost next to nothing, too. However, the issue is about more than health; it is also about people fulfilling their potential and making the maximum contribution. We know that children who are more active are more likely to achieve better exam results and earn more throughout their lives. I echo the concerns of my hon. Friend the Member for Blaenau Gwent about lower levels of physical activity in more deprived communities. I should be keen to hear the Minister respond to that issue.
Put simply, physical activity and sport builds strong people and strong communities. Yet for an activity that brings such universal health benefits, there seems to be very little centrally driven support for its promotion. We have neither a way of accurately measuring the physical activity people take, nor consistent messages about what level of physical activity people should be taking. Until recently, the guideline for adults was for them to take 30 minutes or more of physical activity of moderate intensity on at least five days a week. That is a minimum of two and a half hours of physical activity per week.
In 2008, the health survey for England measured physical activity among adults by means of a questionnaire. Some 39% of men and 29% of women reported that they met the recommended minimum level of physical activity. However, when accelerometers were used on a group to measure their physical activity objectively, the real percentages were actually 6% and 4%. That was complex enough, but to make things more challenging, in 2011 new guidelines were produced by the UK’s four chief medical officers that are particularly complex—I shall not read them out; I struggle to understand exactly what the recommendations are.
There are other issues to consider, too. The active people survey does not actually measure activity and does not include recreational walking or recreational cycling. We no longer even have a way of measuring children’s participation in school sport, because the school sports survey, which measured the proportion of pupils receiving two hours of curriculum PE and the proportion participating in at least three hours of “high quality” PE a week, was scrapped in 2010. So, too, were the regulations that previously tracked schools’ travel patterns. Will the Minister share with us any plans to clarify this confusing picture and introduce a more consistent way of measuring physical activity? Are there any plans to reintroduce the school sports survey and school travel survey?
Again I share concerns raised by hon. Members about the Olympic legacy in our country, despite the huge progress made under the previous Labour Government. In 2002, just 25% of children undertook two hours of PE and sport in school, but by the end of the previous Labour’s Government time in office this had been raised to 93%. The previous Labour Government also created 422 school sports partnerships and 2,300 school sport co-ordinators, covering every school. It was my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) who promised a “golden decade of sport”, kicked off by the Olympics and Paralympics in 2012. Yet a series of decisions has meant that these ambitions have not quite been realised under this Government.
The school sport partnerships—the local networks of schools and PE teachers—which had quietly been achieving notable success in getting students across England to be more physically active during school hours, have been abandoned; playing fields in some areas have been sold off; and school sport targets have been removed. We heard earlier this month that the borough that hosted the Olympic games is the least physically active in England.
Grahame M. Morris
Will my hon. Friend acknowledge the impact that cuts in local government have had, particularly on youth services? In national youth week last week, a number of youth clubs, including in Peterlee in my area, were reporting that they may have to close because of funding cuts.
Luciana Berger
I will move on to that point in a second. I was interested in the remarks made by the hon. Member for North Swindon (Justin Tomlinson). I have seen first hand some young people in my constituency who have taken part in the national citizen service, but that is just a few young people. At the same time, throughout the country, we have seen devastating cuts to our youth services. I want all young people to have access to good services. In a moment, I will mention my concerns about local authority cuts.
I should be interested in hearing from the Minister what work the Government are doing to mobilise all the different sectors, industries and organisations that have a role in getting Britain moving. My hon. Friend the Member for Easington mentioned people with dementia. We need particularly to pay more attention to and focus more on older people.
I am keen to hear what the Government are doing to encourage councils, which have the delivery system, to open up their parks, improve access to leisure centres and swimming pools, and make walking, running and cycling a key consideration of developments. However, I echo the concerns of my hon. Friend the Member for Easington about cuts sustained by local authorities throughout the country. My own area in Liverpool has had its budget cut by 56% and it is struggling to do all those things well.
We know that small adjustments to workplaces can make active travel or exercise before or after work a much more realistic option. What work are the Government doing with employers so that workplaces can become more physical activity-friendly? I have asked a number of questions about the health at work programme, and I was disappointed to learn from a parliamentary question that no records are being kept of the number of businesses that are becoming good health at work employers. That is a key issue, which needs more attention and resource directed towards it.
What work are the Government doing with sport governing bodies to ensure that the great success we have enjoyed at the elite level is matched with the same success at grass-roots level? I, for one, enjoyed taking part earlier this year in the “Back to Netball” programme, and I would like to hear about more projects like that that the Government are encouraging across the country—not only for young people, but for adults.
There is a particular concern and challenge around young people at college or university and the differing costs of accessing physical activity and organised sport in places of higher and tertiary education. In the absence of school sport partnerships and compulsory minimum numbers of hours of physical education in schools, how will the Government ensure that sport and activity are a feature of every school, with quality sports coaching and provision in all schools?
I echo the concerns raised by my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) and the hon. Member for Romsey and Southampton North (Caroline Nokes) about female participation in sport and physical activity. We know that there is a gap between the number of men and the number of women who take part, and I would be keen to hear from the Minister what the Government are doing in that area. Finally, what action are the Government taking to promote active travel and create environments where people are more likely to walk or cycle for short journeys?
With the right support and direction from Government, getting Britain moving is a single, simple, positive goal that the whole country can get behind—a goal that has the potential to shift our national culture. The issue is not about finger-wagging or telling people they cannot do something they enjoy; it is about promoting a positive activity that people can feel good about and an affordable route to good health and well-being for the whole population. It is the most cost-effective way of making our public services and our NHS sustainable now and in the future.
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
First, I thank the hon. Member for Blaenau Gwent (Nick Smith) for securing this debate on such an important topic. It is one of my personal passions, particularly while I have been in this job. It is evident from the contributions of so many colleagues, who made so many thoughtful points, that many share my passion for this area. I do not pretend to think that I can respond to every specific point that was raised, because it has been a varied and wide-ranging debate, which demonstrates Parliament’s appetite to get stuck into this topic. I will return to the powerful role that MPs have in increasing levels of physical activity if I have time towards the end of my remarks.
Society has changed a great deal, and that sits behind everything we have been debating this morning—why we have become more sedentary—and other Members have laid that out. I will not spend too much of my speech going over the evidence base, because it has been well covered by the hon. Gentleman and other Members, but the evidence base is well established for the problems that the level of physical inactivity in our nation is causing. I was pleased to hear Members talk about not only physical conditions, but mental health. I think dementia was also mentioned. There is an important evidence base for the fact that becoming more physically active can benefit people in a great many ways. One of my personal passions is how physical activity can impact on social isolation and exclusion; I will try and touch on that later. I will not reiterate what other Members have said on the statistics on how inactive we have become as a nation, because they are all on the record; I would prefer to use my time—I am conscious of leaving a little bit of time for the hon. Gentleman to wind up—by telling the House what the Government are doing.
I will say a few words about obesity. It is a slightly complex area, as I was saying to the hon. Gentleman just before we came into the Chamber. We are clear that all the expert evidence suggests that while physical activity brings the important health benefits that we have been discussing—such things as stronger muscles and bones and improved cardiovascular health and metabolic health, as well as some of the psychological well-being aspects—tackling obesity is fundamentally about eating and drinking less. That is what will lead to significant weight loss. That is not to belittle the role of physical activity, but to emphasise its importance. Physical activity cannot just be seen through the narrow prism of its role in weight loss, because it is bigger and more important than that and goes to the heart of so many well-being and other social issues. I am keen that it is not cast only in the light of weight loss. We need to understand its role in tackling obesity, not least in encouraging active lifestyles in children from the very start and not building up problems for future generations, but it is a little more complex than that.
Barbara Keeley
Will the Minister acknowledge that it is important for overweight people and large people to take exercise, because they will be healthier, whatever size they are, if they do that? There is a danger in focusing just on weight loss, instead of exercise. If people take exercise, it is likely to lead to a healthier lifestyle and a desire to lose weight.
Jane Ellison
Absolutely. I could not agree more with the hon. Lady. It is exactly why we should not just link obesity and physical activity together. It is better for everyone to move. I will come on to some of the conditions that are helped by that, but she is right that whatever someone’s age, weight or state of health, moving more is always a better option.
Members have touched on this, but it was an important moment when we saw prevention put right at the heart of the NHS with the publication of the “NHS Five Year Forward View”. Public Health England collaborated closely with the NHS on the prevention chapter of that forward view, which states:
“The future health of millions of children, the sustainability of the NHS, and the economic prosperity of Britain all now depend on a radical upgrade in prevention and public health.”
It cannot be said more profoundly than that that this issue is important. The attention given to that aspect of the forward view was heartening to me as the public health Minister, because I had not heard the prevention agenda put quite so much at the heart of the health debate in our country and related to the sustainability of our great public services to that extent.
Members have talked about shifting the narrative. With the best will in the world, Governments can only do so much. We have to shift the population’s thinking from where we are now to where we need to be. A couple of Members touched on the role of some of the major charities. I have been having conversations with some of the major health charities about how they can harness the reach and reputation they enjoy among our population. For example, Macmillan Cancer Support is famous for its wonderful cancer care, but it is a bit less famous for the excellent work it does with the Ramblers on the evidence base on walking as a key element of physical activity. I have been talking to Macmillan and others, including some of the big cancer charities, about what more they can do to get people to understand more widely the role of physical activity in preventing diseases, because those charities have enormous reach into the population.
I pay tribute to Breakthrough Breast Cancer on its message, “Raise your pulse, reduce your risk”, which is a campaign that tells women that 30 minutes of daily physical activity can reduce the risk of breast cancer by at least 20%. Arthritis Research UK launched a piece around understanding arthritis, which addresses exactly the point that the hon. Member for Worsley and Eccles South (Barbara Keeley) made in her intervention. It is tackling the misguided belief that someone should rest if they have joint pain and is trying to put some of its weight, resource and reputation behind simple messages on standing, walking and being more active, even for people with some of those physical challenges.
We have dwelled a lot on physical inactivity among the young, and I will come on to some of the things that the Government are doing to help that, but the most inactive generation is the oldest generation. Only one in 10 men and one in 20 women over 75 are active enough to stay healthy. I am lucky enough to have both my parents still with me—one is 80 and the other is just under 80—and very much active and healthy. My father is still cycling 50 miles a week at 78. I look at their lifestyles and I see how much can be gained from staying active as people grow old. It helps them to remain independent for longer and tackles some of the thorny issues of social isolation. Active older people are unlikely to be lonely. We must be passionate about the activity agenda for older people, as well as the sensible focus on getting the young into good habits.
On the role of Government, experience from across the globe shows that getting everybody active every day will work only if everyone is involved, including all levels of government, so I want to discuss what we have been doing recently, because the level of activity is good. At a national level and following up on the Olympic legacy—I chair a cross-ministerial group on the physical aspect of the legacy—we started “Moving More, Living More” as a cross-Government policy to get more people active. It stresses that physical activity is everyone’s business. If it just sits in a health silo, we will fail again. I have had conversations with Lord Coe, who recognises that we have been around this circuit before. Physical activity cannot just be a health measure; it must be embedded across all levels of Government and local government.
Following on from that, we have taken a much more granular approach and have provided a proper toolkit. Just last month, Public Health England published the “Everybody Active, Every Day” framework. It was going to be published early next year, but I urged it to bring that forward to this autumn, so that it was available to local authorities when planning their 2015-16 spend. We have provided £8.2 billion for public health over three years, and it is important that we also provide the best evidence base for how to spend that money for local populations.
I want to describe how the scheme was produced, because it has been a wide-ranging collaborative effort. I hope that MPs all received their toolkit. It might still be lurking in the inbox—we all receive a lot of e-mails—but please look for it, because it was designed to give MPs a role in promoting the agenda. The campaign was co-produced with more than 1,000 cross-sector organisations and individuals at national and local level. It was begun at a workshop in January this year. Since then, we have had nine expert round tables attended by more than 200 experts. Five regional forums have been attended by some 750 individuals, including people from local authorities. The “Moving More, Living More” policy and the recommendations of the all-party commission on physical activity—I see one of its members here—fed into the process. We held sector-specific presentations and workshops, bilateral meetings with Government and nine expert rapid topic overviews.
Good and promising practice has been collated, and we have also commissioned work on what constitutes such practice, with more than 960 submissions for assessment. I have also commissioned a review of return on investment data, which is critical for local government. A public consultation was held on the draft documents, with 183 submissions raising 550 specific issues. The output from the exercise, which was launched at the Oval last month, includes a toolkit, as mentioned, for elected representatives—I worked with Public Health England on the MP toolkit and we are looking at one for locally elected members as well—and free British Medical Journal-sponsored e-learning modules. Regarding the review of promising practice in communities, we have commissioned the Centre for Sport and Exercise Science and ukactive’s research institute to consider and rate submissions. We have also done some detailed topic overviews, in particular looking at some in-depth guidance for addressing complex issues around deprivation and health inequalities, which will respond to one of the points raised by the hon. Member for Blaenau Gwent.
I have attended a high-level round table with local government leaders, who I must say are a great deal more optimistic than the shadow Minister about their ability to deliver on this agenda. The meeting was cross-party and extremely positive, and I have seen many of the things that they have been doing. This is a collaborative effort right across local and national Government to take us to the next level in terms of an evidence-based approach to physical activity. Like the right hon. Member for Rother Valley (Kevin Barron), who spoke about public health sitting well with local government, I absolutely think that it has landed in the right place. I have seen some fantastic examples of real leadership, but we need to give local government the tools to do the job. We do not want people endlessly reiterating the evidence base and endlessly trying to work out what works and carrying out their own evaluations when that can be done at a national level through the resources of Public Health England.
The four areas within “Everybody Active, Every Day” are “Active society”, “Moving professionals”, which is about ensuring that our professionals are geared up to make every contact count, “Active environments”, and “Moving at scale”, which is about the big interventions—as opposed to small, excellent micro-interventions—that will really make a difference to the population. The framework contains a lot more detail, and I urge Members to have a look at it, because it is what we are now engaging with local government leaders on. I was asked about the data that local authorities have at their disposal and the Active People survey provides them with areas to target.
In addition to all that, my Department has given £11.4 million to the Change4Life sports club programme, through which 13,500 clubs have been established to help our children to be more active. Those clubs have deliberately been set up in areas of high childhood obesity and significant deprivation. We are also investing £180 million over three years into the primary PE and sport premium to improve health outcomes for primary-age children. We have provided £30.5 million to fund the School games organisers, who are responsible for delivering the games and co-ordinating Change4Life sports clubs. Much work is ongoing with the Department for Transport around cycling cities, and we have augmented its funding by putting money into five walking cities.
Sport England recently announced that it is also making more money available to help to get people more active. I echo everything that has been said today about women’s participation and removing barriers to entry. Some extremely good points were made. I welcome the fact that Sport England has recognised that and is looking to fund things that many of us would not traditionally recognise as sport and things beyond team sport. Like my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), I remember the Lycra shame of the 1980s and the “feel the burn” movement. We do not want people to go to something once and then give it up. We must remove the barriers to entry. I heard about wonderful local government initiatives, such as T-shirt swimming days for people who do not want to swim in just a swimsuit, and other clever things.
However, we need to get the message out there, which much of the debate concentrated on. I must be honest that I do not believe the chief medical officer’s guidelines are well understood. They are difficult for health professionals to understand and the same is certainly true for the public. I have commissioned a piece of work from Public Health England to develop a mantra for physical activity similar to “five-a-day”, which, if not universally observed, is widely known and understood.
I hope that I have provided a sense of how we are trying to follow up on the Olympic and Paralympic legacies. Lord Coe has been clear that that will be judged over decades not years, because although the shadow Minister suggested that it has developed over the past five years, the problem has developed over decades, but we are taking action. MPs have a valuable role to play. It is a huge job, but we are making great strides towards getting everybody active every day. I thank Members for their participation in the debate.
Nick Smith
I have little time to respond, so I unfortunately cannot comment on all the cracking contributions made in the debate, but I did particularly like the point raised by my hon. Friend the Member for Inverclyde (Mr McKenzie), who talked about our spending all day in front of a screen and then going home to spend our evening in front of a screen. We should all be mindful of that. I also laughed at his story about being a Zumba orphan, because that is where his mum spends all her time these days.
I want to highlight a few points that were made in today’s debate. It is important that we reduce obesity and improve health in areas of deprivation. The costs of being unhealthy are high, particularly for clinical conditions such as heart disease and diabetes. The financial costs of obesity are also high, and we need to promote physical activity. The NHS’s chief executive has spoken of the NHS being bankrupted by the high costs of physical inactivity.
I thank everybody for participating in today’s debate. We must place as much emphasis on promoting physical activity as we placed on reducing smoking in the past in order to see a successful campaign.
Corporal Stewart McLaughlin
(10 years ago)
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Ms Angela Eagle (Wallasey) (Lab)
I welcome the Minister of State for defence personnel, welfare and veterans and hope that she will be able to deal in detail with my arguments today. A member of the shadow Cabinet is not often successful in applying for a Westminster Hall debate, so I want to thank Mr Speaker for allowing it to happen.
My aim is to persuade the Government to right a great injustice and finally to allow Corporal Stewart McLaughlin’s heroic actions during the battle for Mount Longdon to be considered for the recognition that they so clearly deserve. I will end my remarks early to allow my hon. Friend the Member for Barnsley Central (Dan Jarvis), who also served in the Parachute Regiment, to add his voice to the plea for the long-overdue consideration of a gallantry award for Corporal McLaughlin.
The circumstances that have led us to this debate, 32 years after the event, are well known and not disputed. In July 1982 Corporal Stewart McLaughlin was a section commander in 5 platoon, B company, 3 Para, which during the Falklands war led the successful assault on Mount Longdon, overlooking Port Stanley. It was a crucial victory that led, just days later, to an Argentinian surrender. As is acknowledged, the successful outcome of that battle was substantially in doubt.
Corporal McLaughlin’s men were under sustained fire, but he reassured them by running into danger to pull the injured back to relative safety. He also protected them by leading the charge to the cover of nearby rocks. Apparently, when he realised that their position there was unsustainable, he shouted, “I will count one, two, three, and then we all go.” According to his commanding officer, he shouted, “Come on, lads, I’m bullet-proof. Follow me!” He then ran straight towards the gunfire, followed by the rest of the section, and they all reached cover. Members of the section apparently commented that it was the bravest thing they had ever seen. The regimental colonel said that Corporal McLaughlin’s heroic actions on that day are so widely known that they are now in the DNA of the regiment.
As I stood on Egremont prom on Remembrance Sunday to honour our war dead, it occurred to me that no story expresses the bravery and sacrifice of our armed forces better than that of Corporal Stewart McLaughlin, who was killed later that day in 1982, at the age of only 27. After the battle, Corporal McLaughlin’s commanding officer, Lieutenant Colonel Hew Pike, wrote up a citation for bravery, but in the chaos and confusion after the battle the citation appears to have been lost, so it was never processed or considered.
The McLaughlin family are a big military family and they do Wallasey proud. Stewart’s dad, the late Edmund Joseph, served, and so did six of his eight sons. Stewart’s mum, the late Elizabeth, had much to be proud of. After Stewart McLaughlin died in June 1982, the family went to a memorial service for the fallen Paras in October of that year. At the memorial, Major Mike Argue, Stewart’s officer commanding, told Edmund that he had put Stewart in for the highest award for gallantry. Three weeks later, when the awards were published in The Gazette, Stewart’s name was not even mentioned. That was when Edmund knew that something was wrong and he started his campaign to get Stewart the recognition that everyone knew his actions merited.
Corporal McLaughlin’s family have run a tireless campaign for the proper consideration of Stewart’s actions, because they rightly believe that recognition of bravery should not be refused simply because of some kind of administrative error, and it was administrative error that is at fault. I first visited Edmund and his wife Elizabeth in the 1990s to lend my support to the campaign. In July this year, hundreds of Paras, family and friends marched to Downing street asking for Stewart’s bravery finally to be properly considered for an award. Thousands of people have signed a petition and it was handed to the Prime Minister on that day.
Since then, however, it is fair to say that we have come up against a brick wall of intransigence. I have received two letters, one from Lord Astor and the other from the Prime Minister, turning down a request for what they call a “review” of the situation. They are understandably worried that a gallantry award granted to Corporal McLaughlin after the passage of so many years might somehow open the floodgates, but I argue strongly that Stewart’s case cannot be reconsidered, because it was never considered in the first place. The response I have had from the Prime Minister fails to address that crucial issue.
A citation was written, but never processed. The letter from Lord Astor, a Minister at the Ministry of Defence, seems to intimate that perhaps Sir Hew Pike never submitted the citation at all. That point is patently untrue, however, and I ask the Minister present today to confirm that on the record. Sir Hew Pike, who is in the Public Gallery listening to the debate, along with Stewart’s entire chain of command in the Paras, recalls submitting the citation and has recently taken the unprecedented step of rewriting it. In it, he states:
“Cpl McLaughlin’s leadership through a terrible battle, of which his young soldiers had no previous experience, inspired confidence in all and sustained those who might otherwise have faltered.”
There are many contemporary accounts of Corporal McLaughlin’s actions on that night that are not disputed. Yet the Prime Minister’s letter refers to “reopening honours boards” and “reconsidering” Stewart’s actions which have been “rigorously examined”, even though we have established that his bravery was never considered for an award in the first place.
The Prime Minister goes on to say that there cannot be an award at this distance, because it would be unfair to those who “fought alongside him”. Yet it is precisely the testimony of those of his comrades who did fight alongside him that provides the irrefutable evidence of his heroism on that day. Indeed, some of them were on the march to Downing street in July.
It is of course right that our honours system is rigorous and above reproach. It is also right that politics should play no role in making awards. All the campaign has ever been about, however, is ensuring that Corporal McLaughlin’s actions are finally properly considered in the way that they would have been without the administrative error. The circumstances are so exceptional that I do not believe a dangerous precedent would be set if the Minister were to make us all extremely happy and announce a belated consideration in her response today.
It would not be the first time that a retrospective award has been made. For example, in 2012 the Prime Minister announced that sailors who delivered supplies to Russia during the second world war should receive the Arctic Star. Only a month ago, the Prime Minister awarded the South Atlantic medal to soldiers who served in the Falklands in the weeks after the war had concluded, and that was done after a review. I have examples of half a dozen soldiers granted the Victoria Cross decades after their death in the late 19th century. What we are asking for would not be unprecedented.
Corporal McLaughlin gave his life in the service of his country, but he has been failed by a rigid administrative system that has forgotten his sacrifice. His citation should have been processed, but it was not. The Minister has a chance to put that right. Every Minister whom the family have met has agreed that Corporal McLaughlin displayed enormous bravery worthy of recognition. Anyone hearing his story, or reading it in much greater detail than I have presented today, would agree. Will the Minister not agree that it is now appropriate that the rewritten citation should be properly considered alongside the contemporary accounts of Stewart’s undoubtedly brave actions that day in order to give a man who gave his life for our country his due recognition?
Dan Jarvis (Barnsley Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate my hon. Friend the Member for Wallasey (Ms Eagle) on securing this important debate. It is quite unusual for a member of the shadow Cabinet to secure a debate of this sort, and I pay tribute to her for the tireless campaign she has pursued over many years.
I also pay tribute to the McLaughlin family. For them, it has been a long march—or, to put it into regimental parlance, a long tab—but they have made a determined case throughout in a dignified way. We know that they are supported by an extended regimental family and that they carry the good wishes of thousands of people, not just in Merseyside but across the country.
This debate is important because it is about basic fairness to Corporal McLaughlin and his family; but it is also, more broadly, about the way in which we treat our veterans. Corporal McLaughlin was a tough and robust paratrooper, serving with 5 platoon, B company, 3 Para during the battle for Mount Longdon on the night of 11 June 1982. There is no doubt that he showed supreme courage and outstanding leadership during the battle. That was acknowledged in a recent letter from the Prime Minister, in which he said:
“I have no doubt of the gallantry and incredible selflessness that was demonstrated...through his actions on the Falkland Islands.”
We know that Corporal McLaughlin ran towards sustained fire, provided support to other platoons pinned down by Argentine forces, neutralised an enemy bunker and ran forward under fire to pull a wounded man back to cover. Although one man under his command was wounded, his entire section survived the battle.
As my hon. Friend said, a citation was written at the time by the commanding officer, Lieutenant General Sir Hew Pike, then a lieutenant colonel. We also know that, although now retired, Lieutenant General Pike has taken the unusual but much welcomed step of rewriting the citation. That rewritten citation was submitted to the Chief of the General Staff. Given the facts that have been outlined today, will the Minister consider whether she thinks it fair that the MOD is not prepared to look at the circumstances of this exceptional case?
We should also consider the wider message that the case sends to those who have served—our veterans. By recognising Corporal McLaughlin’s sacrifice, we send a message that as a country we value the service of our men and women, that we reciprocate their service by ensuring they are treated fairly and are not disadvantaged, and that when they are injured mentally or physically they are supported. We must also be clear that their families will be properly supported if they do not return home from the places where our country has asked them to serve and that their loss is formally recognised by our nation. I am sure the Minister agrees that that is the fair thing to do.
I am sure the Minister will have received advice from her civil servants about how to respond to this debate and I have no doubt that their intentions are honourable. However, they may be advising that no special case should be considered, and that doing so may set a precedent. They should know, however—my hon. Friend has already outlined this point and I have shared the detail with the Ministry of Defence—that there is already precedent. My hon. Friend cited some examples, but we know there are more besides, including of where an award was granted decades after the action that warranted it took place.
In 1858, Private Edward Spence of the Black Watch died from wounds he sustained during the Indian Mutiny. In 1879, Lieutenant Nevill Coghill and Lieutenant Teignmouth Melvill fought at the battle of Isandlwana; they attempted to get their regimental colours to safety but were eventually caught and killed. Those are two of six examples from the period. Until a change in policy in 1907, awards for gallantry were not made posthumously. After that change, the families of those soldiers were duly invited to meet the King and receive the Victoria Crosses they had for years been denied. Military historians—we know there are quite a few of them out there—will also know about the VC awarded to Major Edward Mannock in April 1919, some time after his death in action, after a strong campaign by his former comrades, led by Ira Jones, and through the support of Winston Churchill. Precedent is not an issue in this case.
Let us be clear: given the concerns that have rightly been raised and the facts that have been laid out, it is within the Minister’s gift to state that she feels this case is exceptional and merits further investigation. She could do that, and I hope she does so today. It would be warmly welcomed.
Corporal Stewart McLaughlin was a man who laid down his life for our country. He demonstrated supreme valour and made the ultimate sacrifice. He inspired his men that night and played a key role in sustaining the momentum that enabled 3 Para to win the battle of Mount Longdon. He left behind a family and a son, who is here today. We owe it to Corporal McLaughlin and his family, who have borne his loss for so long, to ensure an injustice has not been served. I believe that an injustice has been served and that we must put that right. It is only fair after what he has done for us.
The Minister of State, Ministry of Defence (Anna Soubry)
It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate the hon. Member for Wallasey (Ms Eagle) on securing this debate and the hon. Member for Barnsley Central (Dan Jarvis) on his speech. I have 14 minutes in which to try to respond to a difficult situation. It would trouble anybody to have to respond to what is undoubtedly an extremely difficult case, and if I sound as though I am rushing, I apologise absolutely, but there are some important points that need to be made.
The first such point is that I speak without fear or favour. I do not speak on behalf of any civil servant; I say what I believe to be right and true. I will begin by reading a small section of the speech prepared by me, because I want these words recorded in Hansard. I will then respond as far as is possible to all the important points that have been made.
We have heard today how Corporal Stewart McLaughlin was killed by mortar fire in the Falkland Islands in June 1982, after he had led a series of charges against the Argentines, notably machine gunners, in the battle of Mount Longdon. Like many others, Corporal McLaughlin was in the prime of his life when he died. He was only 27, and I know that he left a young son only four months old.
We know that a quarter of 3 Para lost their lives fighting on Mount Longdon. It is a remarkable story of courage, valour and achievement that Mount Longdon was taken at that time. We have also heard of Corporal McLaughlin’s exceptional bravery and his leadership in the face of heavy enemy fire.
Having been briefed in detail on his actions in June 1982, I absolutely agree with the assessment of those actions. There can be no doubt whatever that Corporal McLaughlin demonstrated exceptional courage and bravery, in the finest traditions of his regiment—and, of course, the British Army—throughout the Falklands campaign. His family, his compatriots and the nation are right to remember him in that light. He was heroic.
We have also heard mention of a letter written to Corporal McLaughlin’s son by the Prime Minister. I will repeat the lines quoted by the hon. Member for Barnsley Central:
“I have no doubt of the gallantry and incredible selflessness that was demonstrated by your father through his actions on the Falklands Islands. Our country owes a debt of gratitude to him and many like him which can never be repaid.”
I will now describe, in short, the system as I understand it. I am happy to be corrected—notably, if I may say so, by the hon. Member for Barnsley Central, who knows this system because he has served himself, no doubt with courage and gallantry. As I understand it, after a battle, once the theatre of war has ceased, there is a gathering of officers who make representations to the commanding officer about those men—as they invariably are, although there have been women, as well, in more recent times—who have acted well above and beyond the call of duty. As a result, citations are prepared; that certainly happened after the battle for Mount Longdon.
The citations are submitted to a committee to decide whether honours should be awarded. That committee then goes into considerable detail, often taking evidence from others who served. It looks at the whole theatre of war and—I will be corrected if I am wrong—tries to make some assessment of what awards should be made and on what grounds. It takes all matters into consideration at that time.
All that is done in the strict confidence. Unfortunately, this case is an example of why that confidentiality exists. It would be quite wrong for a family to be given some sort of false hope: “Your son was remarkable”—I actually take the view that they are all remarkable—“and is being put up for an award.” If that young man then does not receive an award, that family quite rightly feels that some injustice may have been done and that, in some way, some criticism has been made of the otherwise heroic actions of their loved one. That is why this is done in confidence, and I do not have any difficulty with that whatever.
In the event that a citation that has been put forward does not result in an award, there is a period in which the commanding officer can, effectively, say, “What went wrong there? What happened? We put forward this person for an award. He didn’t receive one. Why didn’t that happen? Has some injustice been done? Is there some new evidence that can be brought forward to make sure justice is done?” I am told it is a five-year period, although, normally, these things happen quite swiftly after the awards have been announced.
Unfortunately, in this case, no such representation was made at that time. Sir Hew Pike has talked about that and his grave regret that that was not done at the time. It may be that if it had been done at the time, we would not be having this debate today, and this perceived—and I think it is an injustice—would not be being put forward in this way. But it was not done, and I know that Sir Hew, in meetings with the family, has expressed his regret that it was not done.
What do we know has happened in this case? If Sir Hew says he wrote and submitted a citation, it is not for me to say that he did not. What we do know, however, is that no citation was received and therefore the board, the committees and so forth never considered the case for Corporal McLaughlin to be given an award. We could go back and perhaps talk for ever about why that citation did not go forward. Sir Hew has talked about the constraints of time, and he has said, according to the minutes I have seen, that, perhaps, in the heat of the moment, after all that had happened, the issue simply did not catch somebody’s eye—I think that is the expression he uses—and the citation was, therefore, not submitted. In any event, however, it was not submitted and, therefore, could not be considered. Then, unfortunately, no one came forward—it has to be at the highest level—to say, “What’s happened with the case for McLaughlin? Why hasn’t he got an award?”
So here we are, 30 years later, in this awful position, where there is no doubt about Corporal McLaughlin’s gallantry, heroism and bravery, but the question is, how do we fix something 30 years on? I have thought long and hard about this—forgive me, but I listen to my officials and I respect all that is said—and I genuinely do not see any way round this, because of the passage of time. The hon. Member for Barnsley Central will no doubt disagree with me—I am more than happy to be intervened on—that everyone who serves knows what the rules are. These are the rules, and they can sometimes result in injustice, because it is also the case—
Anna Soubry
May I just finish this point? I am quite happy to take an intervention, although I am conscious of the time.
The hon. Gentleman and others listening to the debate will know that there are many who conduct themselves well above the call of duty and who do the most astonishingly brave and heroic things, but who, for whatever reason, never even get a citation—those wonderful acts never come into the light, so they never get the recognition that they should. Apparently, I am told, that is an accepted part of the system; it is not a perfect system, but is as good as it can be.
Ms Eagle
I understand the argument the Minister is making about precedent and the way the system works, but we have now established that the citation was written —Sir Hew Pike, who is here listening to the debate, says it was written—but never actually typed up and transferred over. Therefore, Stewart McLaughlin’s actions were never considered at the time.
Given the exceptional nature of this occurrence, where we have the word of the commanding officer at the time and we have extremely detailed contemporaneous information about what Stewart did on that night, I wonder whether the entire system would collapse and the floodgates would open if the Minister said, “This is exceptional. We need to go back and consider, with all the evidence we have, the citation that was originally written and accept that there was an unexpected administrative error. In this case, therefore, we should go back and reconsider.”
Anna Soubry
I hear the power of the argument, but I fear that this may not be the only such case. Yes, I do believe that it would not be a good precedent, because of the 30 years. If it were not for the 30-year period, there would be much more merit. It is perhaps unfortunate that we did not have this debate many years ago, because we could perhaps have resolved this. However, it is the 30-year period that agitates concerns.
Anna Soubry
Quickly, but the hon. Gentleman must remember that I have a matter of minutes left, and I want to read out a letter.
Derek Twigg
I am not sure whether I have to declare an interest, but I am an honorary member of the South Atlantic Medal Association.
If the Minister believes an injustice has been done, will she say she believes an injustice has been done? Clearly, she has the power to do something about that. Let us take an example. The advice was very clear that the Bomber Command medal and the Arctic medal could not be awarded so long after the event. Why can the Minister not take action now to ensure that this wrong is put right and that this injustice is dealt with?
Anna Soubry
For the very same reasons that no Government of any colour over the last decades has changed the system: we recognise the danger. Actually, awards for gallantry and bravery are different from service medals, if I may say so. However, the issue is the passage of time; it is the 30 years. It is also the fact that there is that five-year gap during which exactly such representations can be made by comrades—by senior officers. In this case, that did not happen. Those who serve and who know about the system say that it is not right and that it would not be fair, given the long passage of time—
Anna Soubry
No, I cannot take interventions. I have taken three interventions, and I have had less than 15 minutes to try—
Anna Soubry
Sorry, two interventions. If I can give way, I will. I do not know whether everybody has read the letter from Lieutenant General Jacko Page, who was the colonel commandant of the Parachute Regiment. If I do not have time to read out his letter to Corporal McLaughlin’s son, I will make sure everybody gets the opportunity to see it, because, in it, he expresses the position better than I am perhaps expressing it. He talks in very clear terms about the unusualness of this case. He says:
“This is an unusual case in that the system for the award of honours is, as much to protect those who do not receive an honour, kept confidential. It follows that there is no formal appeal process, and no ‘right’ to an award for a particular level of gallantry or bravery shown.”
Anna Soubry
I will, but wait—sorry. The letter continues:
“Everyone who has knowledge of Stewart’s story recognises his outstanding courage and leadership on Mount Longdon, and how widely admired he was as a soldier. But the very essence of the citation system is that all those relating to a particular campaign should be contemporaneous with the events described, so that fair comparisons of ‘like with like’ can be made by the Committee in the process of selection and allocation of awards. Even a relatively short time after the event, let alone 31 years later, this disciplined methodology becomes, by definition, impossible. Language changes, perceptions change, memories change and the immediacy of the time is entirely lost. Above all, the necessary comparisons between citations cannot effectively be made. Moreover, it is hard to imagine how in practice the allocation process could fairly be opened to retrospective citations without extending the principle to all, not just in the Falklands Campaign but in every theatre. This would be wholly unimaginable; it simply could not be done.”
Dan Jarvis
Does the Minister want to run the risk of talking the debate out? Will she give way?
Dan Jarvis
I am grateful to the Minister. Let me ask her a very simple question: has an injustice been served on Corporal McLaughlin? Yes or no?
Anna Soubry
I believe that his outstanding bravery has, indeed, been recognised, and it has been marked. The hon. Gentleman should explain that—
EU Reform
(10 years ago)
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Sir William Cash (Stone) (Con)
It is a great pleasure, Mr Robertson, to serve under your chairmanship. In 1997, shortly after the Maastricht rebellion, Thomas Kielinger of Die Welt wrote a pamphlet entitled “Crossroads and Roundabouts” about Germany and the United Kingdom in Europe—the contrast between the German vision of Europe and the UK’s commitment to its Parliament and its own national interest. We have done the roundabout; now we are truly at the crossroads of the EU and perhaps even of our relationship with Germany. Is it really the case that in this country we are disproportionately preoccupied with our own national concerns?
I am introducing this debate about the UK and Germany in the EU—the first devoted specifically to the subject, I think—about which, in the interests of our mutual relationship, we must be both realistic and straight with each other, as we were yesterday in discussions with the Bundestag European affairs committee.
I warned John Major before Maastricht that the treaty, which I urged him to veto, would lead to a European Government and a German Europe. I campaigned for a referendum on that and the petition to Parliament received many hundreds of thousands of signatures. In my book of that time, “Against a Federal Europe”, I wrote:
“The answer to the German question lies primarily in Germany itself and that to hand her the key to the legal structure of Europe with a majority voting system gravitating around alliances dependent on Germany simply hands her legitimate power on a plate.”
That is now becoming clearer by the day. I also wrote then:
“Britain wants to work together with Germany in a fair and balanced relationship, based on free trade, cooperation and democratic principles. She does not want to be forced into a legal structure dominated by her. Plans for a united Europe stray into the darkest political territory, and must be firmly rejected.”
I wrote that in 1991. In 1990, I had written that
“if Germany needs to be contained, the Germans must do it themselves…now is the time for the Germans to prove themselves”.
In the words of the German philosopher, Thomas Mann, in 1953:
“We do not want a German Europe, but a European Germany.”
I argued that we were embarking on
“a European Germany and a German Europe”
because the two ran together after Maastricht. As Bismarck himself said:
“I have always found the word ‘Europe’ on the lips of those politicians who wanted something from other Powers which they dared not demand in their own names.”
He meant their own national interests. It is also to be recalled that, as Friedrich Karl von Moser stated:
“Each nation has its main characteristic. In Germany it is obedience. In England it is liberty.”
Mark Field (Cities of London and Westminster) (Con)
My hon. Friend and I have talked many times about these matters, for obvious reasons. Does he accept that a British exit from the European Union would be the single most likely thing to provide the German dominance of Europe to which he refers? Is it not very much within the modern German mentality to see the European Union as a way of containing elements of some chapters of their history—of which, understandably, they are not proud? They see a strong European Union as being the way in which the dominance of Germany can be kept at bay.
Sir William Cash
I understand that point and my hon. Friend has made it to me before. All I can say is that it depends on the structure being created and the irreversibility established by the treaties themselves as put into legislation. As I shall explain in a moment, the consequence of the existing structure is to create an imbalance in favour of Germany and a disadvantage for the United Kingdom in several areas. That is what we must evaluate because we want a peaceful and stable Europe; unfortunately, however, what is happening now is creating instability, and I believe the European Union as it was conceived will ultimately be undermined. Our parliamentary system is the bulwark of the liberty and democracy that saved us and Europe. That is no anachronism today.
The problem we now face in an increasingly assertive German Europe is one increasingly at odds with British national interests. For me, that was one of the mainsprings of the Maastricht rebellion and it has been exacerbated by successive treaties, including Lisbon—against which, notably, the Conservative party was united.
The situation is getting worse. For example, we are told that the single market is the prime reason, or certainly one of the prime reasons, for our engagement in the European project. Although more than 40% of our trade is with Europe, our trade deficit with the other 27 member states is £56 billion, whereas the German surplus with the same member states is £51.8 billion. At the same time, we have a substantial surplus with the rest of the world with the same goods and services. I fundamentally disagree with the CBI’s analysis.
A host of individual problems give rise to concern—for example, the regulatory system in the City of London. I wrote about that in the Financial Times, warning the City against the consequences, and we have lost case after case in the European Court of Justice. There is the ports regulation, opposed by port employers and the trade unions. There is the change in the patent courts system. There is the lack of a reciprocal policy of liberalisation in relation to energy, professional services and other matters. There is over-regulation, particularly of small businesses, on which no substantial progress is ever made, and which is calculated to cost about 4% of EU GDP.
The effect on our economy is deep. Our growth is being dragged down by the sclerotic eurozone, whose problems in many countries, such as Italy and Greece, are blamed on German currency and export manipulation.
Mr Jim Cunningham (Coventry South) (Lab)
The hon. Gentleman mentioned the single market. Logic says that anyone signing up to a single market gets a central bank and a single currency. Surely the horse has bolted. I remind the hon. Gentleman that it was the Labour party that gave the British people a referendum and the five economic tests.
Sir William Cash
I entirely accept the hon. Gentleman’s second point about the referendum; I have never disputed that. Far from it—it was an extremely good thing, although back then it was about a kind of Europe different from the one we are now experiencing.
I voted for the Single European Act, but I tabled an amendment to preserve the sovereignty of the Westminster Parliament. If that amendment had been allowed for debate, which it was not, it would have changed the whole nature of the matter. I was strongly supported by Enoch Powell, who understood that if we were to have a single market that did not work, the only way to retrieve the situation would be through some form of “notwithstanding” formula of the sort I have returned to over and again in subsequent years.
German economic policy is obsessed with fiscal discipline and large current account surpluses. Without the euro, currency adjustments would control Germany’s ability to export cheaply. German economic efficiency, combined with the single currency, allows for artificially cheap German exports at the expense of Mediterranean countries, which can deflate their currencies to offset cheap German goods, drawing money and jobs north and leaving the southern Governments unable to finance their deficits through economic growth.
German insistence on fiscal discipline is, as Wolfgang Munchau made clear in yesterday’s Financial Times, ideological and a deeply held response to the crisis of the 1930s. The result will be the destruction of the Mediterranean export economies while simultaneously deepening the damage through austerity on a massive scale. An attempt to impose German-style labour laws and fiscal discipline on those countries will fail and will not bring the required efficiency to compete with Germany.
The eurozone, which is dominated by Germany, is a disaster, as is increasingly recognised publicly by some of my Labour colleagues, and it seriously damages our economy. Furthermore, although we are told that consensus is the norm, the political consequences of the present treaties mean that, as of 1 November this year, the majority voting system in the EU Council of Ministers has been profoundly changed, subject only to a compromise transitional arrangement called the Ioannina compromise.
Germany and France with two small states can now effectively determine European decision making. The consensus is insufficiently transparent and is achieved primarily because the member states know the outcome of a given vote, which in any case does not sufficiently correspond to our concerns. In my European Scrutiny Committee, we have been very critical of how Coreper functions and the manner in which we are unable to achieve our objectives. We also have some critical things to say about UKRep.
Indeed, VoteWatch Europe has demonstrated that when the UK has voted between 2009 and 2012, it has done so in favour with the majority of member states in 90% of all votes. That strongly suggests that most European Commission proposals go through in practice. Therefore, the change in the voting system will tend to affect British interests increasingly adversely.
Professor Roland Vaubel of Mannheim university has examined the voting system and argued that the outcome is one of regulatory collusion, favouring Germany in particular. One must recognise that Germany makes a very substantial net contribution—£13 billion in 2013 compared with our £8.6 billion, although our contribution is rising. In return, Germany now acquires disproportionate advantages under the voting system and through its economic influence in Mitteleuropa.
In his speech in Berlin on 13 November, John Major reinvoked the concept of subsidiarity and he did so again on “The Andrew Marr Show” on Sunday. He said that subsidiarity is the answer and that we must
“nail it down as a matter of European law”.
I do not know which planet John Major has been living on since Maastricht, but that is already a matter of EU law. When he promoted subsidiarity in the Maastricht treaty, I described it as a con trick. In my 30 years on the European Scrutiny Committee, I have never come across a single example of the direct application of subsidiarity. Even John Major now reports its failure, and his speech in Berlin was a catalogue of the failures of his European policy at Maastricht.
The European Union is not an abstract concept. It is about the daily lives of our voters, to whom we are directly accountable, across a vast range of matters. The list of chapters in the consolidated treaties sets out the immense impact that the European Union now has on us all.
The European Scrutiny Committee, of which I was elected Chairman in 2010, argued strongly and unanimously in November 2013 that the Government should reintroduce the veto. We were promised that the veto would never be abandoned when the White Paper was issued in 1971; that was the basis of our voluntary acceptance of the treaties by our Parliament in the passing of the European Communities Act 1972, yet so many other additional competences have been added since. That paper described the veto as being in our vital national interest, and stated that to abandon it would even endanger “the very fabric” of the European Community itself. Somebody out there understood where all this could lead, as it has.
The Prime Minister, to his credit, did veto the fiscal compact, although my right hon. Friend the Member for Wokingham (Mr Redwood) will remember a conversation that we had with him shortly beforehand. My Committee proposed the application of the formula
“notwithstanding the European Communities Act 1972”
to our Westminster legislation when it is in our national interest to do so. We could thereby override European laws and the European Court of Justice when necessary, as we can and should, under our own flexible constitutional arrangements unique to the United Kingdom among the 28 member states, thus regaining our right to govern ourselves in matters of vital national interest.
Those proposals were rejected by the Government, which shows how weak our negotiating stance really is in relation to the need to change fundamentally our relationship with the EU in the interests of our parliamentary democracy and the needs of our voters.
Dr Julian Lewis (New Forest East) (Con)
Am I right in thinking that my hon. Friend has referred to the fact that Germany—the country on which this debate is focused—has a sort of parliamentary supremacy as a safeguard in its legislation, and that that is what he has tried to introduce for the United Kingdom? Can he tell us how well it works for Germany?
Sir William Cash
The short answer is that in the German constitution, in the preamble to the Basic Law of 1949, an assumption is built in for a united states of Europe. Unfortunately, therefore, a change in the German constitution would be required to enable the Karlsruhe court to override the provisions of the Basic Law. Therefore, Germany faces a real constitutional question that we do not, because we do not have a written constitution and we have the inherent right, within our own Parliament, to make the kind of adjustments that we want in this area.
To refuse to accept our Committee’s proposals—I say this with great respect to the Minister—is not merely walking away; it is not even engaging with the real problem, which is the dysfunctional structure created by successive treaties and the disadvantages that that creates for the United Kingdom.
All that demands a direct return to democratic accountability at Westminster—not the Maastricht-based co-decision with the European Parliament, which I opposed at the time, and not the manner in which the majority voting system and the so-called consensus have led to us being put at significant disadvantage from time to time in matters of our national interest. Those are increasingly becoming a matter of concern following the change in the voting system as of 1 November.
Mark Field
Does my hon. Friend not accept that many in continental Europe would say that Britain has a permanent exclusion from the single currency, is not signed up to the Schengen agreement, and in fact, under Maastricht, was also exempt from the social chapter, although that exemption has now gone? He talked about the fiscal compact, which technically speaking was not a veto, but essentially was done at eurozone level.
If we are going to continue to opt out, does my hon. Friend not recognise the concern that, as we become ever more marginalised from the centre of Europe, the case for staying in the European Union will become ever weaker? Is that the path down which he now wishes to take us, and if so—
John Robertson (in the Chair)
Order. The hon. Gentleman will have the chance to make a speech later.
Sir William Cash
I have said many times on the Floor of the House that I think we have reached the point where we will have to leave the treaties, for all the reasons that I have given and will give. The opt-outs are merely indications of the profound uncertainty with which Britain entered the European Union in the first place. As I pointed out, the veto was a completely unconditional promise for the future, and that has now been whittled away. As I will explain, there are more and more reasons why we are at the exit door. Those are not purely economic, but political.
The European project, based on Maastricht and the successive treaties, has undermined the credibility and efficacy of European integration. That is now reinforced by the practical and visible impact of endemic protests and riots in the streets of European cities and by vast unemployment in several member states, in which youth unemployment has reached obscene levels of up to 60%. I predicted that when I wrote about it in the early 1990s, and I added that it would be followed by massive waves of immigration from central and eastern Europe when the Maastricht system failed, with the consequent emergence of the far right. No one can say that that has not happened now.
Mr John Redwood (Wokingham) (Con)
Does my hon. Friend agree that the Germans’ problem now is that to make a success of their single currency, they need a political union with massive transfers of money from the rich parts to the poor parts of the union, as we have in the sterling currency union or as exists in the dollar currency union, but that is exactly the kind of system that the United Kingdom would never accept, and that is why, at the crossroads, we need a different relationship?
Sir William Cash
That is completely right. We need a different relationship with the EU as a whole that also includes the eurozone, because the eurozone, which is causing so much of the dislocation in Europe, is dominated by Germany, and the German financial and fiscal policies, which I have described already, have that enormous impact in destabilising the eurozone.
This is where I really part company with statements made by some members—senior members—of our Government. I am referring to the consequences of the eurozone. We were told at the time when it was evolving, with the banking union and all the rest of it, that it was, in effect, a natural course of events that we could not prevent. Actually, it has created the very instability that is most likely to lead to the destruction of the European Union itself. That is the problem. It is not just a negative view that I am trying to put across; it is the fact that it is destabilising Europe. It is creating problems of a kind that can get completely out of control, with catastrophic consequences not only for this country but for Europe as a whole. That is why the argument that I am seeking to advance is that actually this is a real problem for Europe as a whole. It is not anti-European to be pro-democracy.
Mr Jim Cunningham
It was remiss of me not to congratulate the hon. Gentleman on acquiring the debate. I know the views that he has held over many years. My point is this. During the last economic downturn, the Germans, for example, did not dictate British economic policy; it may be argued that British economic policy was dictated to Europe. I do not see the hon. Gentleman’s logic. If he feels that the European market as it is constructed now is causing major problems in Europe, why should we pull out of that situation, rather than rebalancing Europe? That is what I do not understand about the argument that he is making.
Sir William Cash
The short answer to that is that we do not need to be in the European Union to trade with Europe, because it needs us—for example, in relation to Germany’s export of cars—on a monumental scale. I have already given the figures for the surplus that Germany runs with the other 27 member states. Furthermore, we have a global economy to which we can address our economic and trading concerns, and we are achieving a substantial surplus with the rest of the world, selling the same goods and services. What I am arguing is on the balance of judgment as to whether it is in our interest to subordinate our parliamentary system of government and the democracy that goes with it in order to achieve a trading relationship that at best is extremely debatable and, in certain instances, is positively disadvantageous.
Let me turn to the issue of defence, which is so fundamental to our national interest. Unlike John Cleese’s immortal words in “Fawlty Towers”, “Don’t mention the war”, we must never forget the reasons why we were confronted in two successive world wars by unprovoked aggression from Germany. We must look to the greater historic landscape in our mutual interests and we must look to resolve our real differences about the structure as well as individual issues within the EU.
Ten days ago, at a formal conference in Rome under the Lisbon treaty, comprising chairmen of national parliamentary committees for all 28 member states and the European Parliament, the German delegation formally proposed a defence Commissioner and a defence Council of Ministers and reinvoked the idea of an EU military headquarters. As Chairman of the European Scrutiny Committee, I argued passionately against that, as did the right hon. Member for Gordon (Sir Malcolm Bruce) and the hon. Member for Ilford South (Mike Gapes), the former Chairman of the Select Committee on Foreign Affairs. The British delegation defeated the proposal, but the German delegation insisted that
“it will have to be put back on the agenda at the next conference”
and added ominously that
“Great Britain will simply not be able to maintain their line”.
That harks back to previous German attempts to establish a European defence policy with majority voting and must be repudiated once and for all.
Sir Gerald Howarth (Aldershot) (Con)
My hon. Friend is making a very important point because, as he knows, defence is the only area of European activity—I will not call it policy—where the United Kingdom still has a veto, a veto that I twice used to prevent any increase in the budget of the European Defence Agency. But is he also aware that the former Foreign Secretary, our right hon. Friend the Member for Richmond (Yorks) (Mr Hague), and I, at the Foreign Affairs Council meeting, vetoed the idea of an operational headquarters for the EU, because it would have served further to undermine the cornerstone of European defence, which is the North Atlantic Treaty Organisation? We must resist any further attempt by the Germans, the Poles or the French to create a defence identity within the EU.
Sir William Cash
We are all indebted to my hon. Friend for his time in the Ministry of Defence. What he said is well known to me, but ought to be better known outside the House. This is crucial. The question, whether we have an EU military headquarters moves us into very dangerous territory. I will show my hon. Friend the full transcript of the exchanges between me and the German delegation on this matter. I do not have time to go into it now, but I can assure him that I set out some very powerful arguments, including by making reference to article III of the 1990 treaty, which dealt with the question of the restrictions on Germany in relation to the manufacture and distribution of nuclear weapons, which went back to the original NATO treaty of 1949. Also, of course, I mentioned in particular the role of NATO in relation, for example, to the Baltic states and the rest of it. NATO is there; it is the cornerstone, as my hon. Friend rightly says.
Mark Field
I very much agree with what my hon. Friend has said and with the intervention by our hon. Friend the Member for Aldershot (Sir Gerald Howarth), but does he not think that we would be greatly assisted in making the case for ensuring that there is no change in the European defence mechanism if we honoured our own commitments to ensure that at least 2% of our GDP is spent on defence and, given the insecurities of this world, rather more in the years to come?
Sir William Cash
I very much agree with that. Of course, there is this wave of counter-cyclical agreement and disagreement between my hon. Friend and me. Actually, that is encapsulated in a personal matter. We were, through our respective families, involved in the battles in Normandy, which I will not go into now, but which he knows about and I know about and which were extremely poignant and extremely relevant to what went on at that time.
Mark Field
My hon. Friend is far too modest to go into great detail or perhaps did not want to embarrass me, but I should point out that although his father served in the British Army, my great-uncle was serving in the Panzer regiment for the opposite side during that particular battle.
Sir William Cash
That was on 10 July 1944. My father got the military cross, and my hon. Friend’s great-uncle was on the other side, but there we are.
We must also—this is very delicate territory—remain clear that the United States, which has for more than 50 years impressed on the United Kingdom the importance of a more integrated Europe, must not be allowed to persuade us against our national interest in relation to the question of defence. However, this is not by any means only about defence. As I have explained, it is also about our economy and our trading relationships, which are punctuated by constant tensions embedded in our European relationship that, to a greater or lesser degree, are based on our alleged obligations under European law.
Most recently there was the budget surcharge issue, but there are also disputed areas of policy such as the European arrest warrant and, of course, the current wave of concern over immigration and freedom of movement, on which we are warned against infringing European law and on which we had very interesting exchanges with the Bundestag’s European affairs committee yesterday. It takes the view that one has to distinguish between workers and people, and that it is our fault that we have ended up where we are now, but as the shadow Minister, the right hon. Member for Wolverhampton South East (Mr McFadden), heard me say last night, of course we believe that that was the consequence of decisions taken by the former Labour Government. But there we are.
It must be said, however, that the European rule of law is itself a moveable feast at the whim of certain states. For example, in 2003, Germany and France themselves broke the stability and growth pact with impunity when it suited them. We are currently reminded by a proliferation of articles and books about the collapse of the Berlin wall that the German question, and its embodiment in European and our own and their political history, remains a constant national interest. In fact, very rarely do we talk about Germany in this country, but in Germany and in France they talk about it almost incessantly. Indeed, I recall taking part in a debate on the future of Europe in the then dilapidated Reichstag when the Berlin wall was still up, and putting my hand against the wall itself, and I recall a member of the German delegation vigorously waving his arms as I heard him through the Bakelite headphones vociferously remonstrating that, as he put it,
“my heart and soul rages with fervour and passion at the thought of a single government and a single parliament in this Reichstag.”
I warned the meeting that such language would merely rekindle old tensions—and that was before the wall came down.
As Peter Watson, who rightly reminds us in his book “The German Genius” about the great contribution of Germany to industry and art, said in a book review last week,
“no one has yet succeeded in explaining the collapse into barbarism that followed the First World War.”
I would add that nor has sufficient attention been given to the question of how to deal with a European Union—created to avoid everything that had happened in the aftermath of the first and second world wars—dominated, as it now is, by a peaceful but assertive Germany, based on a framework delivering supposedly irreversible policies that have delivered instability throughout Europe and vitally affected our own economy, our national interest and Westminster democratic accountability. Insufficient attention has been given to how we deal with that problem, and it is not just for us but for all the European member states, and Germany in particular.
Furthermore, far from containing German domination of the EU, the treaties have stimulated it. For all the protestations, the European Union has morphed into an increasingly undemocratic Europe, with Britain unacceptably relegated to the second tier and with Germany largely predominant over the whole, as well as the low-growth eurozone.
The Prime Minister was entirely right to state in his Bloomberg speech:
“Our national Parliament is the root of our democracy.”
We must address the question of a fundamental change in our relationship with the EU and the reassertion of sovereignty at Westminster and in our democracy. Those are the reasons why we were able to prevail in the dark days from 1940 to 1945, and we must not underestimate their importance today. Now we must do so again on those principles, but in very different circumstances. It is not enough merely to reform at the margins. We must resolve the European, and therefore the German, question in our own time. If negotiations for that purpose, above all else, cannot be resolved, we must leave the treaties and lead Europe on the right road to stability and peace, both for ourselves and for Europe—including Germany—as a whole. We must be, as Churchill said, “associated, but not absorbed.” For that purpose, we must pursue a policy of an association of nation states.
The Prime Minister’s purported renegotiations do not, at present, tackle the fundamental structural question of the treaties. The Foreign Secretary is right to indicate that we must never go into a negotiation unless we are prepared to get up from the table and walk away, but it is essential that we are told what our red lines are, and that they address the fundamental changes that we need within the EU. Immigration is, of course, a major issue, but the question of our borders is not simply a question of immigration. It is a question of parliamentary democracy and jurisdiction, and therefore it is about more than the symptoms of our problems with European integration and its impact on our entire political and economic national interest. Trade alone is not the arbiter of freedom and democracy; it flows from them, as do the laws that affect our economy and that have been so disadvantageous to us, as I have indicated already, in many areas.
The renegotiations cannot be successful in our national interest without a fundamental change in the architecture of the European Union. If we do not renegotiate and achieve such fundamental change, Germany’s predominance in the project will increase and the United Kingdom will be required to leave the EU. We must not be continually subjected and subordinated to being in the second tier of a two-tier Europe.
We are now at an historic moment at the crossroads of the European Union, which can be evaluated only on a broad historical landscape. I voted yes in 1975, and I attempted to reserve our Westminster sovereignty in the Single European Act in 1986. Maastricht and European Government changed all that. Britain and Germany have historically had, and still have, very different visions of Europe. We look to our borders, and Germany looks towards a broad, roaming European vision—a political union without borders.
Not so long ago, I referred in the book I mentioned, “Against a Federal Europe”, to Hans-Dietrich Genscher, who was Foreign Minister of Germany for 15 years and was one of the most powerful architects of reunification and the current European Union. Although he repudiated his former loyalties, Genscher stated:
“We Germans can be the architects of a united and indivisible Europe”
and that a strong Germany was good for Europe. In my analysis in 1999, from which I do not demur, I said that the assertion of a strong Germany being good for Europe
“begs many questions. Germany’s economic strength derives from the fact that she saturates the EC”—
as it was then—
“and Eastern Europe with her exports; if as seems likely, she consolidates this position via the single market, while gaining de facto control of the single currency, one could well envisage a scenario in which a strong Germany was bad for Europe. If industries in other countries were weakened or depleted by German domination and if the single currency removed the competitiveness of weaker economies, while the social charter…insulated German workers from competitively low wages abroad, then one could well imagine economic decline and rising unemployment on the periphery of the EC financing the German stranglehold.”
Who would argue today that that has not happened? I noted that at the 25th anniversary of the collapse of the Berlin wall, when Dr Michael Stürmer was asked on “Newsnight” how Germany had achieved such predominance, he indicated that it was “by default”. I reserve judgement on that.
Furthermore, we are not simply talking about Germany’s economic impact on other member states, whatever subsidies or defensive alliance through NATO they may receive in return. As I have said, the preamble to the German Basic Law of 1949 includes a policy leading to a United States of Europe as one of the constitutional foreign policy goals of Germany. As all those factors have aggregated, it has become ever more important for the United Kingdom to look to its own future. To that we must turn our determined attention, while seeking peaceful co-operation and trading relationships within Europe and with Germany. There will be no peace in an unstable Europe, which will implode with disastrous consequences. Such instability is inherent in the imbalanced structure of the whole, not only of the eurozone. We all want peace in Europe, but to ensure such peace we must restructure the treaties, not simply tinker with them.
We must clearly put this to Germany and the EU as a whole. The United Kingdom cannot and must not allow our democracy, in this Parliament, from which all political and economic action flows and which has saved Europe and herself for generations, to be in any way compromised. As William Pitt stated in his Guildhall speech in 1805:
“England has saved herself by her exertions and will, as I trust, save Europe by her example.”
John Robertson (in the Chair)
Order, I will be calling the Front Benchers at about 3.40 pm, so hon. Members have about 10 minutes each.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Stone (Sir William Cash) on bringing this matter to the House for consideration. Most, if not all of us probably share his opinion about the importance of discussing where we are going, and that resonates with all my constituents.
The hon. Gentleman said that he voted yes in 1975, but the Democratic Unionist party clearly took a “no” stance. However, it is good that all of us here today are of the same mind, even if we were not of the same mind back in 1975.
Sir Gerald Howarth
Just for the record, I should say that I campaigned for us not to join the European Economic Community in 1975.
Jim Shannon
The hon. Gentleman and my party were on same platform—that is good news, and I am glad to hear it.
As we move towards the Westminster election campaign next year, people’s minds are focusing on Europe, not just because of other parties’ stances on the issue, but because it affects their lives, and I want to talk about that.
The hon. Member for Stone is right that we cannot let Germany direct EU strategy or policy. We cannot allow debate on EU reform to be simply about tit-for-tat arguments on ideology. We need a real dose of realism, and today’s debate gives us that realism.
The worst of Europe damages the best of Britain. That is how I feel about the issue, and that is how I believe many others feel about it. The worst of Europe means red tape for businesses, mass immigration and less money for hard-working taxpayers. The May elections proved that the people of the EU are angry. The Government should not need reminding that the message sent loud and clear at our polls was that voters have had enough.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Member for Stone (Sir William Cash) on obtaining the debate. The research notes we received for the debate say Germany wants Britain to remain part of the EU
“because of its economic and political weight”.
If that is the case, Germany and others are surely going to have to change their attitude dramatically.
Jim Shannon
They will have to be very generous in trying to entice us, but it will probably take more than they are prepared to offer at this time.
There needs to be substantive change. There should be genuine change for the better. At the top of the shopping list should be tackling immigration and returning sovereignty to this Parliament so that we can legislate on behalf of those we represent. That is what we want to see: representation in Parliament, and Parliament having the necessary strength.
The background notes to the debate mention immigration, and it is important that we put on record that Mrs Merkel’s mantra is:
“Freedom of movement is very important. Nothing has changed”
in Germany’s position. According to the background notes, one of her fellow party members, Gunther Krichbaum, said:
“Cameron would get a bloody nose if he introduced quotas ‘unilaterally’”
on immigration. My hon. Friend is right that we need some conciliation, but there does not seem to be much evidence of it at the moment.
The Government need to send a signal of intent by calling for an end to the travelling European circus, which costs almost €200 million every year just bouncing between two cities in Europe. In a debate in the main Chamber last week, one of my colleagues also mentioned vanity projects. There are a great many things money is wasted on, and Germany supports and encourages that, but I do not believe we can.
According to Office for National Statistics provisional figures for the year ending June 2012, non-British net migration to the UK was 242,000, of which 72,000 people were EU nationals and 171,000 were from non-EU countries. Inward migration from the EU was mainly flat between 1991 and 2003, but, following EU enlargement in 2004, there was a significant jump in EU migration to the UK.
In 2003, research commissioned by the Home Office estimated that net immigration from the 2004 accession member states would be “relatively small”—between 5,000 and 13,000 immigrants per year. It actually worked out to be 42,000 a year between 2004 and 2010. That significant underestimate served to undermine public confidence in EU migration.
It is important to mention some of the comments made in Mrs Merkel’s speech to Parliament, which she made partly in English. She said,
“some expect my speech to pave the way for a fundamental reform of the European architecture which will satisfy all kinds of alleged or actual British wishes. I am afraid they are in for a disappointment.”
Conciliation in that? I don’t believe so. That is the issue in this debate.
Unsurprisingly, when figures are so far out, the public will become wary of Europe and of Government policy towards the EU. That became a particularly sensitive subject following the worldwide financial crisis of 2007-08, as belts were tightened and jobs were lost—many have still not been replaced. As the cost of living rises and wages stagnate, the public become increasingly alienated from freedom of movement.
On the red tape surrounding businesses in the United Kingdom of Great Britain and Northern Ireland, firms face a challenge, and I want to talk about that in the few minutes I have left. My hon. Friend the Member for Upper Bann (David Simpson) will have a personal knowledge of EU bureaucracy and what it means to businesses.
Our businesses produce superb products, offer world-class services and benefit from being able to sell to a European market of 500 million customers. However, businesses are often encumbered by problematic, poorly understood and burdensome European rules. The impact is clear: fewer inventions are patented, fewer sales are made, fewer goods are produced and fewer jobs are created.
The burden falls most on small and medium-sized firms, which make up the vast majority of businesses. I would like to give two examples. In farming, whether it is the dairy industry, the poultry or the pig business, or any of the goods produced on farms on the land in the United Kingdom of Great Britain and Northern Ireland, we have bureaucracy coming from Europe. Farmers nearly have to have a university degree to get through the red tape. They are not just farmers; they do not just till the land anymore—they do the books and deal with bureaucracy.
I represent the fishing village of Portavogie, and we have never seen so much bureaucracy coming from Europe in relation to fishing. There will be a debate on that in December, before a Minister goes to Brussels to fight our case. However, where once we had 110 or 120 boats from Portavogie fishing in the Irish sea, we now have 70. We have bureaucracy coming from Europe on white fish, and particularly cod. We have a cod recovery plan, which shows there is more cod in the Irish sea than there has been for umpteen years, but, yet again, the fishermen who agreed to the changes see no benefit from them. The bureaucracy in relation to fishing and farming is incredible.
The business taskforce was asked to develop a set of recommendations to reform British and European institutions. It was asked to address the barriers to overall competitiveness, starting a company, employing staff, expanding a business, trading across borders and innovation. According to the taskforce, implementing the recommendations could save billions of pounds, euros and kroner, and thousands of new firms and new jobs could be created. The creation of jobs and new products and technologies must be at the top of our priority list. We must encourage competitiveness so that businesses, including small and medium-sized enterprises, which make up a great deal of the firms in Strangford, and which are the backbone of my constituency, can compete in Europe and on the world stage.
Ultimately, we want an EU of openness and transparency, with equal economic opportunities for all member states. We must ensure that the EU is steered away from the ideological march towards a European federal superstate and towards a more flexible organisation that listens to and respects people in all its member countries. That is what the hon. Member for Stone said in introducing the debate, and that was the whole thrust of the debate.
The EU needs to be open for trade, closer to its people, living within its means and delivering value. That is the only way in which it can function properly, allowing each of its member states to flourish and ensuring that we in the United Kingdom of Great Britain and Northern Ireland benefit from our large number of trade partners, which will undoubtedly be boosted by the signing of the transatlantic trade and investment partnership at the G20 in Brisbane just a couple of days ago.
In conclusion, we must assert the sovereignty of the UK Parliament, enact the European Union (Referendum) Bill and allow British voters to have their say as soon as possible.
Mr John Redwood (Wokingham) (Con)
I rise to talk about two large European powers that are both, in their own ways, reluctant Europeans. It is well known that the United Kingdom made an historic and important decision, under the previous Labour Government, not to join the euro. Many of us campaigned actively for that decision. We strongly believed that if the United Kingdom joined the euro it could probably bring the currency down. It would be extremely damaging to our own economy and financial system. How glad I am that we prevailed on that Government. If the United Kingdom had been in the euro at the time of the great banking crash of 2007-08, we would have brought the euro down. The House may remember that it was the United Kingdom that brought down the euro’s progenitor, the exchange rate mechanism, which a previous Government mistakenly went into. Just as the forces of the Great British trading economy—an international economy with a strong dollar base—brought down the ERM, so I think we would have brought down the euro.
Now that we have made that historic decision, I see no intention on the part of any serious force in the United Kingdom to reverse it. I am pleased at that. I confidently predict that no party with any serious chance of winning a single seat in the Westminster Parliament in 2015 will campaign on the UK joining the euro between 2015 and 2020. I confidently predict that the same will be true if we have a general election in 2020. I do not see the mood changing. We have learned our lesson. We have understood that it will not work as an economic project.
We understood also that it does not work from the point of view of our democracy. As soon as a country begins to share a currency with other member states of the EU it must share many other things. Those countries are on a long journey towards a united states of Europe. They are discovering that they will need to share their policy on tax and public spending. It is no longer possible for people in Spain, Italy or Greece to think that they have a democratic right to choose their level of public spending, public borrowing or taxation. They are under increasingly tough controls from the centre. Germany is right about that: strong financial discipline is needed in a currency union if it is to work.
That is exactly the kind of control that the United Kingdom would never accept. I do not see parties of the left accepting that Europe should tell us to spend less; and I do not see parties of the right accepting that Europe should expect us to tax more. Indeed, some of us on the right would not want to be told to spend less in certain areas; and some on the left would not want to be told to tax more, in certain ways. We as a democracy say that the fount of our democracy is the elected Members of this Parliament; and that controlling taxation and our budget are central to our great national story. Our mother of Parliaments emerged to control the finances of the King and to say to the King or Queen, “You shall not tax more—or not without redress of grievance, or without our having a say over how the money is spent.” That is why the United Kingdom will rightly remain a reluctant European. We cannot accept the continuing pressure from the logic of the euro, that we should give away those fundamental birthrights—the democratic right to elect people to tax and spend, and change them if they tax and spend too little or too much, or in the wrong way.
I remember, as part of the anti-euro campaign, hitting on the phrase that joining a single currency would be like sharing a bank account with the neighbours. I used to say that I get on well with my neighbours. We have Christmas drinks and the odd summer party, and enjoy each others’ company. However, I do not know about other hon. Members, but I am not ready to share a bank account with my neighbours. I just have this feeling that if I were the prudent one, when I wanted to draw out some of my money to spend, the neighbours would have spent it. They might have wanted a fancier house, and taken out a big mortgage; then when I wanted a mortgage I would discover that our mortgage capacity had already been used up. That is exactly what being in a single currency is like. My opponents in those debates used to look for what was wrong with my analogy. I thought it was broadly right, but even I thought it might be a little bit of a try-on. Now that we have seen the euro scheme I realise that it was completely apt. That is exactly the position of countries such as Greece, Italy and Spain, in relation to Germany. Germany says “We do not want you using the collective mortgage, because we know you will borrow more, and we have got to do the saving.”
There is therefore an unhealthy tension, which is why I must talk about two reluctant Europeans. The other big power in Europe that is proving to be reluctant about the scheme of full European integration, providing the political backing to the single currency, is none other than Germany itself. At the very time when some Germans presume to lecture the United Kingdom on being a reluctant European—a very counterproductive thing to do, because it encourages Euroscepticism no end when Germans lecture us in that way—we find that Germany is busily trying to restrain the others from the impelling political logic of the euro, which must be to complete the political union to provide the backing to the currency.
If we exchange banknotes in the United Kingdom, we see on the banknote a symbol of our country. We see the monarch’s portrait. It is there partly because we like our monarch, but also as a symbol that the whole taxable capacity, the whole parliamentary and political weight, and the whole authority of the United Kingdom Parliament stands behind that banknote. People trust it, trade it and use it because they know that that is true. In time of crisis Parliament stands behind the Bank of England; the Bank of England stands behind the banknote; and the taxable capacity of the country is there for whatever crisis might arise. The problem with the euro is that there is as yet no symbol or political union to stand behind the banknote. That is why it has been subject to crisis after crisis. Pictures of bridges had to be used on the notes, and they could not be like any actual bridge to be found anywhere in Europe, because that might offend people. An Italian bridge might mean the Spaniards would be jealous; or perhaps they would be grateful that their bridge was not being pledged on the banknote—I do not know. There would have been tension or difficulties even over choosing the symbols for the banknote, so they had to choose something more anodyne.
There is a much bigger and more important political reality behind that; we are discovering that the full taxable capacity of the German state does not yet stand fully behind the euro, and that the rich and successful countries do not want to pool their riches and success with the poorer countries in the Union. Until they do, the currency will be crisis-stricken. The development of a second euro has already happened. The second euro was the Cypriot euro. Unbelievably in a first-world currency, people who had been foolish enough to deposit euros in a Cyprus bank could not take them out. When it was allowed, they were not worth €1; they were devalued before people could have their money back. That had to happen because the German taxable capacity would not stand behind the Cypriot bank. There is no way that, if a city or part of the United Kingdom—it would be invidious to give names—got into balance of payments or financial difficulties, people’s pounds, deposited in a bank in a part of the United Kingdom, would be first frozen and then devalued before they could be taken out. Everyone would rightly be scandalised and think it absurd. Yet that happened in the eurozone, because our reluctant European, Germany, would not stand behind the euro.
My prediction is that Germany is on a slow but inevitable march to standing behind the euro. In a way, I hope it is, because I wish the euro well and it needs to be a grown-up currency with proper transfers behind it; but the more Germany is on that movement towards being the paymaster, founder and discipline-provider of the euro area, the less possible it is for Britain to belong to that system. That is why I welcome the magnificent contribution that my hon. Friend the Member for Stone (Sir William Cash), has once again made to our national debate, and why I hope people are listening outside the Chamber, in addition to those who have kindly come to listen. Today’s debate is about the mighty subject of our generation. We wish our continent and the euro area well, but the United Kingdom must now find a new relationship. Just as surely as Germany needs to become the centrepiece of the political union to make a proper reality of the euro, so the United Kingdom, unwilling and unable to join it, will need a new, looser and different relationship with that emerging superpower—which will be not an armed superpower but an economic one, with, at last, the taxable capacity of Germany standing behind the rest.
It is important for that to happen quickly. I do not want to live in a Europe where there is practically no growth year after year and where there are sometimes rather bad crashes. I do not want to live in a Europe where the banking system is still riven by difficulty and disaster because there is not full support from the euro-area in the way we would expect from an integrated economic zone. I want to live in a Europe that is more vibrant, more exciting and more interesting.
I am very pleased that my country has stayed out of the euro; I am very pleased that, with our own financial and monetary policies, we now have a growth rate of which we can be proud and that gives our people hope; and I am very pleased that unemployment is coming down. It would make things so much easier for us if Europe had a growth rate of which we could be proud, if its unemployment rate was coming down and if it could offer hope to its young people. Europe cannot do that unless it either completes its currency union properly or breaks it up as soon as possible. We cannot join Europe in the former, and we do not wish to lecture it on the latter, so can we please get on with negotiating a relationship that works for Britain? Can we privately, not publicly, remind Germany that if she wishes this mighty project to work, she has to commit herself to it as fully as we have to disengaging?
Dr Julian Lewis (New Forest East) (Con)
In 1997 it was an act of rebellion for a Conservative candidate in the general election to campaign against the UK joining the single currency. Indeed, I had to resign my post at Conservative central office in order to do so. In the lifetime of this Parliament it was also an act of rebellion for a Conservative Member to vote for an in/out referendum. Both those rebellions are now seen as core Conservative commitments, and even the Labour party and many others, as my right hon. Friend the Member for Wokingham (Mr Redwood) said in his outstanding speech, would not dream of going to the electorate pledging themselves to trying to join the single European currency. That shows that, over time, progress can be made in opening people’s eyes to what is at stake with Britain’s troubled relationship with the European Union.
On two grounds in particular, no one could be better qualified to introduce such a debate than my hon. Friend the Member for Stone (Sir William Cash). First, as we have heard, his father won the military cross but also lost his life fighting to liberate France from German occupation in 1944. Secondly, although of course I knew that he is Chair of the European Scrutiny Committee, I did not learn until today that he has served on that Committee scrutinising Euro-legislation for the last 30 years, which is an exercise in self-flagellation bordering on the heroic.
There seem to be two strands to the idea of Germany in Europe, and the first strand appears to have something in common with what used to be said in the early years of NATO, which, as we all know, was once described as being designed
“to keep the Russians out, the Americans in, and the Germans down”.
In other words the idea was that, because Germany had twice brought world war to the European continent, the best way of preventing it happening again was to tie Germany into multinational alliances and institutions. That is one point of view; the other point of view is that it is not only about trying to prevent war in Europe. The question is whether it is an alternative way for Germany to exercise the sort of power and control in Europe that she failed to get by other means in those two terrible conflicts. I do not know which of those two strands is the primary motivation among German democratic politicians. Some of them may indeed be afraid of their country’s past being repeated; others may actually covet ways of gaining, through peaceful methods involving the slow absorption of other countries that are gradually drawn into the EU net, the sort of influence that they failed to gain in the past.
In the 1970s I studied the theory of international relations under the great Professor Sir Michael Howard, as he now is. One of the topics I studied was integration theory. The idea was that countries could be made to merge with each other not by telling them directly what the end product would be, but by drawing them through imperceptible degrees and through the exercise and creation of new common functions into an ever-closer relationship, so that they did not realise where they were going until they had already arrived at their destination.
I must admit that I was sceptical. I thought that countries might start on that path but that at some point they would wake up, realise the destination, decide that they did not want it and turn back. I admit that I have had to qualify my scepticism over the subsequent decades because, time and again, I have seen our country being drawn down that route. I wish I had £5 for every time somebody involved with the European project has said, “The high point”—or the high-water mark, or something else of that sort—“of European integration has now been reached.” Funnily enough, there is always one high-water mark after another. Frankly, I am getting fed up with it.
Mr Redwood
Has my hon. Friend also noticed that each successive federalising treaty has been explained to us as representing no serious transfer of power of any kind? How is it that we have so little power left?
Dr Lewis
Indeed. The process has become such a habit that the mask slips very rarely; but there was one notable occasion when the mask did slip. On new year’s eve just over a decade ago, when the European single currency was about to come into force, I saw the then President of the European Commission, Romano Prodi, being interviewed at midnight, and he was asked the following question: “This is a political project, isn’t it?” For once he let the mask slip, and he smiled beatifically and said, “It is an entirely political project.”
Sir Richard Shepherd (Aldridge-Brownhills) (Con)
I am grateful to my hon. Friend for allowing me a brief intervention. In the 1980s the mantra of Conservative Governments and Ministers was “No essential loss of sovereignty.” That was haunted right through and dragged across the nation as if there was a truth in it. Any time anyone suggested that sovereignty is a perfect construction in itself, they immediately wanted to tell us why sovereignty was no longer sovereignty, having said there would be no loss of sovereignty.
Dr Lewis
I pay tribute to my hon. Friend who, like my hon. Friend the Member for Stone and my right hon. Friend the Member for Wokingham, has done so much over the years to try to arrest the slide to a destination that nobody in this country actually wants. The reality is that if there is a single currency, it will only work if there is a single economy. And if there is a single economy, it will only work if there is a single Government. And if there is a single Government, it will only work if there is a single country, which is what the architects of this scheme want us to have. Although they admit to each other that it is political, what they say to us is that it is economic and that it all depends on our economic and trading relationship with Europe. I conclude by saying that just because one has a strong trading relationship with other states, it does not mean that one has to merge one’s currency, one’s economy, one’s population, one’s foreign policy or one’s country with those other states. We want a good relationship with Europe, but we are our own country, which is how we intend to stay.
Mr Pat McFadden (Wolverhampton South East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my near neighbour in the west midlands, the hon. Member for Stone (Sir William Cash), on securing the debate. I also greet the Minister for Europe, the right hon. Member for Aylesbury (Mr Lidington), with whom this is my first proper exchange since I took up this post a few weeks ago, and I thank all the right hon. and hon. Members who have contributed to the debate.
I have found the debate extremely interesting and revealing. It has been revealing to me because it has illustrated the plight of the Minister and the Prime Minister, for which I have some sympathy. As I have listened to the hon. Member for Stone, the right hon. Member for Wokingham (Mr Redwood) and the other hon. Members who have spoken, I have found myself asking what kind of renegotiation by the Prime Minister could possibly satisfy them, other than one leading to Britain’s withdrawal from the European Union. I would be grateful if the Minister addressed himself to that question in summing up. I have sympathy for the Prime Minister in the task that he has set himself, given the yardsticks set for him in this debate by his hon. and dear Friends.
As the hon. Member for Stone said, we had some interesting exchanges yesterday with the Bundestag’s Committee on the Affairs of the European Union, whose members have been visiting the UK this week. This debate is timely in a sense, because both of our countries are major members of the European Union but we look at the European Union through different eyes.
It is sometimes said that for Britain, EU membership is purely transactional. I hesitate to endorse that verdict. I think it is a mistake to ignore the commitment to democracy, equality, human rights and the peaceful resolution of problems that comes with membership. It is an achievement of no small significance that today it is almost inconceivable that two member states of the European Union could go to war with one another. Given what is happening on the fringes of the European Union, it would be wrong for us to dismiss that achievement.
Britain and Germany have different histories, and we look at the issue through different eyes, but there is an aspect of common values to it, as well as a purely transactional one. On a day-to-day basis, as I am sure the Minister will confirm, Britain and Germany have much in common in our approach to the European Union. In ordinary working meetings of the Council of Ministers, British and German Ministers often agree.
Of course, as this debate has rightly outlined, we do not always face the same issues. Germany is a member of the eurozone; indeed, it is the lead guarantor. The UK is not, and is highly unlikely to join the euro, meaning that Germany faces issues, such as banking union and fiscal compacts with other member states, that we in the UK sometimes do not, and we are not part of some of those agreements. We sometimes have a distinct approach to economic and financial issues. Given our rule and the size of the financial sector in the UK, and its global reach relative to the rest of our economy, it is absolutely right that we should reserve the right to take a distinctive approach on some of those issues.
Mr Redwood
Does that not mean that we need a new relationship? Does the right hon. Gentleman not see that, according to his logic, we cannot be in the room when a lot of financial matters are discussed because we are not part of the compacts relating to the euro?
Mr McFadden
The euro has been in place for some time. During that period, London’s financial strength has if anything grown, not diminished. I would not agree with the right hon. Gentleman if he suggested that being outside the euro somehow meant that we could not play a constructive role within the EU.
Mr McFadden
I will press on, if the right hon. Gentleman does not mind.
Another issue that has arisen in this debate is the free movement of people, which has been at the heart of discussion in the UK in recent months about our relationship with the EU. I have looked up the figures. Eurostat, for example, calculates that net migration from elsewhere in the EU in 2012 was 230,000 for Germany and 82,000 for the UK. It is important to give some context to the view that everyone from everywhere else in the EU is always migrating to the UK. That is not the case. There are significant migration flows into both Germany and Britain, and it is important to have a debate in both countries about the rules under which EU migration should operate.
The Government have made certain announcements about restricting access to benefits for some EU migrants, and my own party agrees that access to benefits should be conditional. Most EU migrants come to work and not to claim—the recent report by University college London showed that overall, they are net contributors—but of course it is not just an issue of accounting. It is important that we have rules that are seen to be fair, and that operate in fairness to our own citizens as well as to those who come here. Today, in my party, the shadow Home Secretary announced that we believe that an EU migration fund should be established to help local areas that find themselves under particular pressure due to freedom of movement. If freedom of movement is to remain a core principle, it is reasonable for member states to ask for some help from the EU budget to help communities adjust where there are consequences for local areas.
I believe that on this question, Britain and Germany have much in common. I do not believe that Germany wants the rules for access to benefits to be abused; a case came to the European Court of Justice the other day. The Prime Minister has taken us into new territory. He is now talking not just about conditionality for benefits under freedom of movement but about changing the principle of free movement itself. That approach appears to have been rebuffed by Chancellor Merkel, with the Der Spiegel report that she sees it as a red line that she would not cross, and that at that point she would stop her efforts to keep Britain in the European Union. It would be one thing if I thought that the Prime Minister’s shift in strategy had been carefully thought out, but he appears to have crossed the line with little thought for what it will mean for his renegotiation. Can the Minister tell us how many member states have told him that they support reform of the principle of free movement since the Prime Minister made his announcement?
Of course some Back Benchers, and perhaps some Conservative Members in this room, will be pleased by the shift because they may not want the Prime Minister’s renegotiation to succeed. Perhaps glory for them is defined not by a successful renegotiation but by one that fails, leading to UK withdrawal from the EU. I am afraid that there I must part company with the hon. Member for Strangford (Jim Shannon), who said that we might all be united in our view today. It is not a consensus shared by me or my party.
There are major British interests, in terms of jobs, employment rights and investment, in getting it right and in remaining part of the EU. What we are seeing is a governmental strategy, if one can call it that, which is led more by party management and trying to keep happy the party members who agree with the hon. Member for Stone than by our national interests. The danger for the Minister and the Government is that if he and his colleagues keep standing at the edge of the cliff and making demands in order that they will not jump, eventually other member states will stop their efforts to stop them from jumping and say, “Go ahead, and be our guest.”
The Minister for Europe (Mr David Lidington)
Mr Robertson, I welcome you to the Chair this afternoon. I also welcome the right hon. Member for Wolverhampton South East (Mr McFadden) to his first outing in Westminster Hall with his new responsibilities. In addition, I congratulate my hon. Friend the Member for Stone (Sir William Cash) on securing the debate. He and I have been discussing these issues for about 25 years—
Mr Lidington
“Since 1990,” my hon. Friend reminds me. And as I will make clear in my remarks, there are some things that we agree upon and other things where there are perhaps some divergences in our respective approaches.
I will start with those areas on which I can find ready agreement with what my hon. Friend said in his opening remarks. I agree with him and other hon. Members when they say that the current levels of unemployment and low growth in Europe are a scandal and a cause of human misery, as well as an important cause of the widespread public discontent and anxiety that we see right across the continent. I also agree with those who have argued today that those economic challenges need to be addressed by a vigorous programme, primarily of supply-side reform, at both national and European level, focusing on the liberalisation of markets, especially in services, on deregulation and on embracing the opportunities offered by free trade. Those economic reforms are right not only for the UK but for Europe as a whole. I also say to hon. Members, frankly, that whether this country were in or out of the EU, endemic low growth and high unemployment in the rest of Europe are very bad news for businesses in this country, given the high proportion of our trade that is done with other EU companies and member states.
I agreed with what my right hon. Friend the Member for Wokingham (Mr Redwood) said when he expressed relief that this country had decided not to take part in the euro. I agree that that would not have been in this country’s interests and I continue to believe that it is not a project that it is in our interests to take part in.
I also agree that for those partners that have committed themselves to membership of the euro, the logic of a single currency and a single monetary policy must be for closer integration of economic and fiscal policy decisions, and in turn for there to be political arrangements to hold such decisions accountable. One of the central political questions for the EU in the years to come—the next decade or so—will be whether we can construct arrangements within Europe that permit those who have committed themselves to a single currency to integrate more closely, while genuinely respecting, and in full, the rights of those who choose to remain outside the euro. That also means ensuring that the EU, in both its rules and its working culture, guards against the kind of caucusing that my hon. Friend the Member for Stone warned us might be a possibility—a caucus among eurozone countries, effectively to write the rules for everybody else regardless of others’ interests or views.
I also agree with the case for more wide-reaching political reform at European level. The EU is too centralised, and is often too bossy. As the hon. Member for Strangford (Jim Shannon) said, we need to have an EU that shows greater flexibility and that is better able to accommodate the diversity that is needed among the 28 member states that there now are, rather than the six member states the EU started with.
There was some discussion about defence. I agree with those who argued that it is NATO and not the EU that is, and should remain, the key alliance for the maintenance of the security of this country and of Europe as a whole. As my hon. Friend the Member for Aldershot (Sir Gerald Howarth) said in an intervention, we still have a veto in regard to Europe’s common security and defence arrangements and we have exercised that veto in the way that he described.
Sir Richard Shepherd
The Minister will remember the visit of Mrs Merkel to the House of Lords, where she said she was absolutely convinced that what had held Europe peaceful was the EU, whereas I think most people in Westminster Hall today would think that it was, in fact, NATO that did that. Is it not NATO that is really the basis of the security of Europe?
Mr Lidington
I will come to that point a bit later on, but I do not think we need to say that those two institutions are polar opposites. It is true that it was NATO that defended democratic western Europe from Soviet militarism and aggression for more than half a century, and in doing so held out the hope of liberty for the enslaved nations of central Europe. I will come on to the role that the EU has played in the past 25 years in cementing democracies in those countries once they escaped from Soviet rule.
I will briefly continue on defence. Any treaty change that provided for EU armed forces would now need not only the agreement of the UK’s Government, under the requirement for unanimity, but, under the European Union Act 2011, an Act of Parliament and a referendum. Those things would be needed before such a change to treaties could take place.
The UK and Germany have different experiences of Europe. My hon. Friend the Member for Stone drew attention to how Germany, in the mid 20th century, saw the collapse or failure of national identity, institutions and culture, whereas for us that period in our history is very much about the vindication of those things. However, if we look at what has happened in the EU in the past quarter of a century, we have seen not only greater prosperity but how the peaceful collapse of the Berlin wall and the integration of the eastern Länder into the Federal Republic was followed by the establishment of the rule of law, democratic institutions and human rights in parts of our continent where those things had been crushed for most of the 20th century. And contrary to the argument of the hon. Member for Aldridge-Brownhills, I believe that it has been the accession process leading to EU membership that has made possible the institutionalisation of those reforms and entrenched them in a way that did not happen when infant democracies were formed after the treaty of Versailles at the end of the first world war.
The question of the UK’s membership of the EU should be based upon a clear-eyed assessment of our national interest, and in my view it ultimately needs to be decided by a referendum of the British people. However, the House needs to acknowledge that any relationship with Germany, or with the EU generally, that preserves simply the things that we like about membership and none of the things that we find difficult or irksome is not within the bounds of political possibility, and the same is true of the notion that leaving the EU would somehow free this country from the EU’s influence or rules. That has not been the experience of Norway or Switzerland, which can trade freely with the EU but also have to implement EU laws, pay into the EU budget and accept freedom of movement, without having any say or any vote upon those matters.
I think there is the prospect of serious EU reform; I also think there is growing recognition around the table in Brussels and in national capitals that that reform is necessary for the prosperity and the continuation of peaceful democracy throughout our continent; and I believe that under the Prime Minister’s leadership that is what we shall achieve.
Armed Forces (Investment)
(10 years ago)
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Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Thank you for calling me to speak, Mr Robertson. I am grateful for being allowed to hold this debate. May I just say what a privilege it is to be the Member of Parliament for Plymouth, Sutton and Devonport? I know that the hon. Member for Upper Bann (David Simpson) will be delighted to hear me say so. My constituency is of course the home of 3 Commando Brigade and one of the principal homes of not only the Royal Navy, but the Royal Marines. I should also potentially declare an interest in that I am a vice-chairman of the all-party parliamentary group for the armed forces, with special responsibility for the Royal Navy and the Royal Marines. I hope that I am their champion in this place.
Upon my election in 2010, I submitted a paper on the strategic defence and security review, which clearly set out that I fully supported the control of public expenditure and in which I named long-term care for the elderly and the defence of the realm as my political priorities within that reduced financial envelope. I argued that any military expeditions should be done within the context of NATO. While I recognise that there is at present no public appetite to put troops on the ground, particularly under conditions where eventual outcomes and aims are unclear, our armed forces have a high level of support. I found that out this weekend when I watched the Plymouth Argyle versus Portsmouth football game, which I will discuss in a moment. The country expects our Government to defend British interests. If we expect our military to engage outside the UK, we must ensure that it is equipped and manned properly. I press the Government to commit to spending at least 2% of our GDP on defence. If not, could we at least have a bit more?
At the weekend, as I mentioned, I went to watch Plymouth Argyle play Portsmouth—the dockyard game—at Home Park on armed forces day. I am delighted to report that Plymouth won 3-0, but I was sad that my hon. Friend the Member for Portsmouth North (Penny Mordaunt) had to see her side get a bit of a pasting. While speaking with some royal naval officers during half-time, I was told of a potential shortage of trained engineers. Indeed, at a meeting earlier today, I learned that the shortage could be 400,000 across the military. When the Minister replies, I will be grateful if he might explain what the Government are doing to ensure that we have the necessary number of trained engineers across all three of our military disciplines.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Gentleman on obtaining the debate. May I put on record the thanks of the vast majority of the people of Northern Ireland for the tremendous work done by the armed forces in the Province, certainly during the difficult times? In this debate about the funding of the armed forces, will he include the aftercare of soldiers and of those who have come home with loss of limbs, mental health problems and so on?
Oliver Colvile
I will come on to that in due course.
I will be grateful if my right hon. Friend the Minister tells me what discussions his Department is having with the Department for Business, Innovation and Skills on plans for a new nuclear engineering college—located, I hope, in my constituency, but we will soon find out about that. In my opinion, the SDSR should not look simply at equipment; it should also continue to look at delivering the armed forces covenant for the families, a point made by the hon. Member for Upper Bann. That means improving housing conditions, providing better health care, especially mental health care, and education.
Most importantly, Britain is an island nation. As we prepare for the next SDSR, I urge the Government to ensure that resources are directed at protecting our trade routes. That means prioritising both the Royal Navy and the Royal Air Force.
Jim Shannon (Strangford) (DUP)
That also means the Army, which I am sure the hon. Gentleman is coming to. When we look to the future, we need to see more boots on the ground. In Northern Ireland, whether regulars or reservists, we have had a big level of recruitment, and the biggest level of recruitment to the Territorial Army or Army Reserve that there has ever been in any part of the United Kingdom. Does he feel, as I feel, that the necessary resources should be made available to ensure that where there are large levels of recruitment, as in Northern Ireland, we continue to make that happen? I understand that resources are being squeezed, but it seems a pity at a time when people want to join the reservists.
Oliver Colvile
I am keen to ensure that we look after the Royal Navy and the Royal Marines as well. I understand that the Army plays a significant role, but my priority this afternoon is to talk up the interests of the Royal Navy, if I may.
My right hon. Friend the Minister should not be surprised about that, because I represent a major naval garrison city and, like him, I am a Navy brat. Without a strong Royal Navy, Christmas could be cancelled. We all expect to find fresh fruit and vegetables in our supermarkets. The majority of us want to buy wines from Australia, South America, South Africa and throughout the world. Imagine the number of letters and e-mails that we would all receive, especially from children, if Christmas were cancelled because such products were not available in our shops. So a key part of our defence strategy must be to retain our nuclear deterrent.
Since the 1990s Devonport has been the only dockyard in Britain that renews and refuels our nuclear submarine fleet. We also have the deep maintenance programme for our surface ships, though we share those somewhat with Portsmouth. Earlier this autumn my right hon. Friend the Secretary of State for Defence announced that he had signed a £2.6 billion agreement with Babcock that will safeguard 4,000 jobs for the next four years or so. I very much welcome that and thank the Secretary of State—if the Minister will pass that back to him—for safeguarding the jobs in our dockyard for the immediate future. I am concerned, though, that in six months’ time Drake’s drum could be called back into service, especially if the polls stay as they are.
Let me make it clear: I desperately hope that we have a Conservative Government with an overall majority after the general election. Many of the pundits, however, are predicting a hung Parliament in which Labour could be looking to do a deal with either the Liberal Democrats or the Scottish National party—
Oliver Colvile
Or the DUP—but let me deal with the other two.
Earlier today I looked at the Liberal Democrats’ website. They are still saying:
“Britain's nuclear deterrent, which consists of four Trident submarines, is out-dated and expensive. It is a relic of the Cold War and not up-to-date in 21st century Britain. Nowadays, most of our threats come from individual terrorist groups, not communist countries with nuclear weapons.
The Liberal Democrats are the only main party willing to face up to those facts.
The UK has four Trident submarines on constant patrol, which are nearing the end of their life. A decision needs to be made about what we do to replace them.”
I emphasise that I am quoting the Liberal Democrats:
“It would be extremely expensive and unnecessary to replace all four submarines, so we propose to replace some of the submarines instead. They would not be on constant patrol but could be deployed if the threat from a nuclear-armed country increased.”
They quite obviously have taken no notice of what has been going on in Ukraine.
Dr Julian Lewis (New Forest East) (Con)
My hon. Friend is making a crucial point. It is worth adding that the Liberal Democrats, when sending a submarine to sea, would send it unarmed, wait for a crisis to arise and then sail the submarine back to its home port in order to put the nuclear weapons on board, presumably by the grace and favour of the country now threatening us.
Oliver Colvile
I thank my hon. Friend for making that point. The Liberal Democrats are making it clear that they want to reduce the number of submarines and they might make that a condition of being in any coalition with the Labour party.
On Saturday, Nicola Sturgeon, the new leader of the SNP, told her party conference:
“My pledge to Scotland today is simple—the SNP will never, ever, put the Tories into government.”
She added that Labour would
“have to think again about putting a new generation of Trident nuclear weapons on the river Clyde.”
On Andrew Marr’s programme on Sunday, Mr Findlay, a candidate to be leader of the Scottish Labour party, set out a radical agenda for his party. He confirmed that under his leadership Scottish Labour would oppose Trident on the Clyde. He confirmed that that had been Scottish Labour’s policy for some little while. That is in line with the position of the Scottish trades unions.
I very much hope that the Minister will confirm that a future Conservative-led Government will remain committed to four continuous at-sea deterrent submarines. My concern is that if the nuclear submarines are thrown out of Scotland, the Government of the day might decide that our submarine base and dockyard should be relocated from Devonport to another site. Some 25,000 people in the travel-to-work area of Devonport depend on defence for their jobs.
Jim Shannon
There will always be a place for the base in Belfast, if that should happen. Be assured of our support for the Trident submarine. The DUP is committed to that.
Oliver Colvile
I thank the hon. Gentleman, but I remind him that I am the Member of Parliament for Plymouth, Sutton and Devonport. I do not want to see the submarines going off to Northern Ireland, although it plays a significant role in things.
During the 10 years that I was the Conservative parliamentary candidate for Plymouth Sutton and, subsequently, for Plymouth, Sutton and Devonport, I found myself campaigning almost every day to keep the Devonport dockyard and naval base open. My interest in Devonport is not only due to my political candidature, but because my grandfather was the first lieutenant of HMS Vivid, the Devonport barracks, having served as the gunnery officer on Devonport-based HMS Valiant at the battle of Jutland, and my uncle commanded Stonehouse barracks before becoming commandant general of the Royal Marines.
The previous Labour Government proposed to move the Type 23s to Portsmouth. That would have left Plymouth with five Type 22s, which have subsequently been scrapped. The Labour Government also proposed to move the submarine fleet to Faslane, while retaining Devonport for the refuelling and refilling of the nuclear submarines, despite the fact that they had not gained agreement from the families. In my opinion, despite the very best efforts of my Labour predecessor, Mrs Linda Gilroy, and the hon. Member for Plymouth, Moor View (Alison Seabeck), the previous Labour Government were slowly but surely killing Devonport’s naval base and dockyard by a thousand cuts. I believe that was because Labour has no political clout in Devon and Cornwall. People need to remember that on 7 May next year.
In the past four and a half years, we have seen Devonport’s future as a naval base and dockyard become much more secure. The coalition Government have kept seven Type 23s at Devonport, moved HMS Protector from Portsmouth to Devonport from 1 April this year so that all our Antarctic resources are placed in one location, and delivered amphibious capability with Royal Marines Tamar at Devonport.
I seek confirmation from the Minister that at least seven of the Type 26s will be based at Devonport, although I would like the whole lot if I am quite honest—I realise that I am a bit greedy—and that one of the Type 26s will be named HMS Plymouth. I also ask him to clarify the timing for the move of the submarine fleet to Faslane and to state when the infrastructure will be ready. By confirming much of that, he will be helping to ensure that Drake’s drum can be put away again for the next five years and that we will not be hearing its drumbeat for many a year.
The Minister for the Armed Forces (Mr Mark Francois)
I congratulate my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) on securing this debate and giving us the opportunity to discuss this important subject. Before turning to the matter at hand, namely investment in our armed forces, I will take this opportunity to offer my public thanks to him for his staunch support of the armed forces, including in his role as the vice-chairman for the Royal Navy and Royal Marines in the all-party group on the armed forces, and for his support of the 350th anniversary of the Royal Marines this year.
As for investment in the armed forces, the UK is one of the 12 founding members of NATO and takes that role seriously. We have the second largest defence budget in the alliance, behind the United States, and the largest in the European Union. This Government are committed to and indeed meet both key NATO spending targets, spending 2% of our GDP on the defence budget and over 20% of that budget on new equipment. Those commitments were reaffirmed in September by the defence spending pledge made at the NATO summit that the UK proudly hosted in Wales.
Our equipment programme represents a substantial investment of some £164 billion over 10 years, and is expressed annually in our published defence equipment plan. The Army is receiving significant investment in a number of equipment programmes. In September, my right hon. Friend the Secretary of State for Defence announced a £3.5 billion contract for the highly advanced Scout armoured vehicle, which will boost our capability and sustain 1,300 jobs across the United Kingdom supply chain. We are also investing in expanding our fleet of battle-proven Foxhound armoured vehicles and upgrading our fleet of Apache attack helicopters and our Challenger 2 main battle tank fleet.
The Royal Air Force boasts an impressive equipment programme, which includes enhancing the Typhoon via Tranche 2 and Tranche 3 upgrades to maintain its battle-winning edge and procuring the new F-35 Lightning II joint strike fighter, which will place this country at the forefront of fighter technology, as the United Kingdom is the only level 1 partner with the United States in that programme. We recently announced agreement in principle to procure the next four F-35B aircraft for the United Kingdom. This month, the Ministry of Defence has taken delivery of its first A400M Atlas, marking the start of the RAF’s next generation of airlift capability. Production and delivery for the remaining fleet will continue at pace to deliver the full fleet of 22 aircraft by early 2018. We have also recently acquired 14 new heavy-lift Chinook Mk 6 helicopters, to be based at RAF Odiham, giving us one of the largest Chinook fleets in the world after the United States.
To move particularly close to my hon. Friend’s heart, the Royal Navy continues to be one of the premier navies in the world, especially as we look forward to the delivery of the Queen Elizabeth class aircraft carriers, the largest ships ever built in the United Kingdom. I was delighted and honoured to be at the naming ceremony of HMS Queen Elizabeth in July, a truly historic occasion. I was also pleased that the Prime Minister announced at the NATO summit that the second carrier, HMS Prince of Wales, will also be brought into service, ensuring that we always have one carrier available 100% of the time. The Navy is also procuring and supporting seven Astute class nuclear attack submarines and six Type 45 Destroyers, and is starting the transition from Type 23 frigates to the new Type 26 global combat ships. The recent contract award for three offshore patrol vessels also serves to strengthen the Royal Navy’s capabilities and maintain shipbuilding skills in the United Kingdom.
Dr Julian Lewis
Will the Minister confirm that 13 Type 26 vessels will be ordered?
Mr Francois
As my hon. Friend will know, we are still at the assessment phase for the Type 26 programme, but 13 is still the planning assumption.
Additionally, the latest version of the Royal Marines’ protected mobility Viking vehicle is being rolled out, and four new Royal Fleet Auxiliary tankers will be built over the next four years, with the first due to enter service in 2016.
We are also making full provision for the successor deterrent system, providing the ultimate guarantee of our national security. In answer to the question asked by my hon. Friend the Member for Plymouth, Sutton and Devonport—and to an intervention by my hon. Friend the Member for New Forest East (Dr Lewis) before he has made it—the Royal Navy has maintained a continuous at-sea deterrent for over 50 years, based on four boats. It is envisaged that that will continue under a new Conservative Government.
Dr Julian Lewis
I would not have liked the Minister to have anticipated an intervention that was not then made, so can we therefore conclude that in a hung Parliament there would be no question of our ever agreeing again to a deal with another party to postpone the main-gate contract signing, as unfortunately happened in 2010?
Mr Francois
My hon. Friend, with his usual eloquence, tempts me down a difficult alley. I cannot give him the assurance that he wants on that point, but I think I have made the party’s position on four boats clear. I regret that I disappoint him, as I know he has hankered for a fifth boat for some time, but I cannot promise that to him either.
Furthermore, we are significantly increasing our investment in cyber-security, ensuring our armed forces are equipped with cutting edge capabilities across all environments. That combined investment is not only securing the best possible military capability, but helping to secure UK jobs and growth. The UK defence industry employs more than 160,000 people, with a turnover of some £22 billion.
I turn now to naval bases. For generations, up and down the country, many communities have given outstanding support to our armed forces. That is particularly true for those around the Royal Navy’s three main naval bases at Devonport, Portsmouth and Clyde.
Her Majesty’s naval base Devonport delivers world-class, safe and secure operational capability and support to the fleet. Devonport is home to Britain’s amphibious ships, HMS Ocean, HMS Bulwark and HMS Albion; HMS Protector, the ice patrol ship; survey vessels; half the Royal Navy’s frigates; flag officer sea training, the training hub of the front-line fleet; and the centre of amphibious excellence at Royal Marines Tamar. Devonport is also the main support base for the Royal Navy, particularly with its unique deep maintenance refuelling and defuelling facility for nuclear submarines.
The Devonport base employs 2,500 service personnel and MOD civilians, supports around 400 local firms and generates around 10% of Plymouth’s income. In all, some 25,000 people in Devonport’s travel-to-work area depend on defence for their livelihoods—and in my hon. Friend the Member for Plymouth, Sutton and Devonport they have a worthy champion.
Portsmouth naval base is home to almost two thirds of the Royal Navy’s surface ships, including the Type 45 destroyers, half the Type 23 fleet and the mine countermeasures and fishery protection squadrons—something close to my heart, as my father, to whom my hon. Friend kindly referred, served on a minesweeper at D-day. HMS Clyde, the Falkland Islands patrol vessel, is also based at Portsmouth, which will be home to the two new Queen Elizabeth class aircraft carriers, the first of which should arrive in early 2017.
Her Majesty’s naval base Clyde is the naval service’s main presence in Scotland. It is home to the core of the submarine service, including the nation’s nuclear deterrent, and the Royal Navy’s newest and most advanced submarines, HMS Astute and HMS Ambush. From 2020, Clyde will be the Royal Navy’s single integrated submarine operating base and submarine centre of specialisation. The nearby Royal Navy armaments depot at Coulport is responsible for the storage, processing, maintenance and issue of key elements of the UK’s trident deterrent missile system and the ammunitioning of all submarine-embarked weapons.
The 2010 strategic defence and security review confirmed the requirement to maintain all three naval bases. This commitment is evidenced by the recently announced maritime support delivery framework—MSDF.
Turning specifically to that framework, on 13 October my right hon. Friend the Secretary of State for Defence notified the House that the Ministry of Defence had awarded two contracts to provide continued support to the management of the UK’s naval bases, and maintenance and repair of Royal Navy warships and submarines to ensure that they are able to meet their operational commitments. The award of these contracts, with a combined value of £3.2 billion, shows a clear indication of our continued commitment to invest in the support provided to the Royal Navy.
MSDF contracts have been awarded to both our industrial partners at naval bases. The contract awarded to Babcock to provide support services at Her Majesty’s naval bases at Devonport and Clyde is valued at £2.6 billion, and the contract awarded to BAE Systems to provide support services at Portsmouth naval base is worth some £600 million. The Babcock MSDF contract covers the 5.5 years to March 2020. The BAE Systems contract covers an initial period of 4.5 years to March 2019, with an option to extend it for an additional year.
We should recognise the contribution that this level of investment will make to the long-term economic health of the nation’s three main naval bases. They will sustain around 7,500 industry jobs across the three naval bases, with 4,000 of those jobs in my hon. Friend’s constituency at Devonport naval base. I thank him for his kind words and I will ensure that his gratitude is passed on personally to my right hon. Friend the Secretary of State, whom I will see in about an hour. I hope my hon. Friend the Member for Plymouth, Sutton and Devonport considers that to be telegraphing the message pretty quickly.
There will also be 1,500 jobs at Clyde naval base and more than 2,000 at Portsmouth. MSDF is a modern commercial and financial strategy replacing a number of existing support contracts with one wider contracting framework with each company. We have consolidated several different contracts into two main ones. This new strategy incentivises industry to transform and rationalise to meet the needs of the Royal Navy, to drive continuous performance improvement and to provide a better deal for defence and the taxpayer by delivering significant savings. We estimate that those savings will be of the order of £350 million over the life of the contracts.
Investment is not just about equipment, infrastructure and support contracts. It is also about people and we are investing in them. Like other employers, our armed forces face a challenge in recruiting and retaining personnel, especially in engineering and nuclear cadres. That is being addressed through a range of measures, including affiliations with four university technical colleges. My hon. Friend the Minister for Defence, Equipment Support and Technology—Min DEST—is in discussion with colleagues at the Department for Business, Innovation and Skills about a new engineering college. My understanding is that those discussions have not yet concluded and that there is still some way to go, but it may assist my hon. Friend the Member for Plymouth, Sutton and Devonport to know that it is planned that the next meeting on the project will take place early in the new year.
Jim Shannon
During an earlier intervention, I mentioned the take-up of reservists in Northern Ireland where, numerically, it is stronger than anywhere else in the United Kingdom, as the Minister will know. An issue that has been brought to my attention is the resources needed to ensure that they can capture more of the potential recruits in Northern Ireland. Can the Minister give us an indication of what he could do with that?
Mr Francois
First, the hon. Gentleman knows a lot about this as he has been a reservist in Northern Ireland; I pay tribute to his service. Secondly, I have visited Northern Ireland at least twice since I have been at the Ministry of Defence and while there I have visited several units, including the 2nd Battalion the Royal Irish Regiment which I believe is one of the best recruited infantry battalions anywhere in the Army Reserve. I was impressed by its spirit and determination and it was one of the best attended Army Reserve centres that I have been to since I have been in this job. We appreciate that in Northern Ireland there is a strong tradition of service in the armed forces and we will do what we can to continue that. I hope that volunteers will continue to come forward enthusiastically, as they have done in the past.
The Government fully understand the importance of our armed forces and the security and protection of our national interests at home and around the world. We absolutely understand the importance of our people and I hope that the House will accept that that is also important for me, as the son of a D-day veteran.
We have sorted out the mess that was defence spending under the previous Government and we have taken hard but necessary decisions. We now look ahead to the realisation of Future Force 2020. We take pride in our battle-winning armed forces that serve to defend this country and its allies. As the son of a man who served in the Royal Navy, I take great pride in the senior service which is so well served by those at Portsmouth, Clyde and Devonport.
Housing Market (London)
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Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
I am glad to have the opportunity to address this Chamber on London’s housing crisis. There is no doubt that if there is one issue that Londoners are agreed on, it is that the housing market in London is in a state of crisis. Before I close my remarks, I would like to touch on the New Era estate in Hackney, which illustrates some wider issues and whose tenants are faced with predator American developers and may be evicted by Christmas.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Will my hon. Friend give way?
Ms Abbott
I will happily give way to my hon. Friend before I sit down.
The current London housing market is broken. The average house price in London is £600,000, nearly twice that in the rest of the country. The average monthly rent of a flat in London is over £1,500 a month and to put that into perspective, across the rest of the UK, landlords ask an average of just over £650. To illustrate how far the crisis has spread, a garage in Hackney was recently put on the market for £375,000 and an eight-car parking space in Mayfair was on offer for £2.25 million.
The effect of the inflated housing prices is manifold. For many young Londoners, owning their own home is just a dream. Does the Minister agree that an entire generation of young Londoners have been failed by the Government and the Mayor? A generation of young Londoners are trapped in an eternal cycle of unstable tenancies and extortionate letting fees, and faced with the inexorable truth that a vast chunk of their monthly earnings is immediately sunk into a black hole from which they can expect no real return. They cannot afford to buy in London, so they are forced to rent well into their 30s or to move outside the M25.
The issue is difficult not just for young Londoners hoping to buy; it is a real issue for employers because the cost of housing in London has dire consequences for recruitment in London. The NHS in London has one of the lowest retention rates and highest vacancy rates in the country. The vastly superheated housing market is a crucial issue behind that. I point the Minister to a report that the London Chamber of Commerce and Industry published in May highlighting the fact that over 40% of London businesses said that their ability to recruit and retain skilled workers was negatively affected by housing costs. I question whether the Government truly understand the impact of such issues in London. Does the Minister understand the seriousness of the implications of the inflated property prices and the difficulties of recruitment for London’s sustainable future?
I have seen first hand in Hackney how high property prices indirectly affect rents, including those in the social housing sector, placing extremely high pressure on our most vulnerable communities. Combined with housing benefit cuts, there is a danger that in the immediate future, we will see a social cleansing of zones 1 and 2.
Another crucial element in London’s housing crisis is super-wealthy, non-domiciled international buyers who want to purchase property in central London. They are using London property as a status symbol and a safe deposit box, often keeping the properties empty for much of the year. Even in Hackney, large developments in Dalston had many units bought off-plan in the far east. The almost limitless supply of super-wealthy, non-domiciled buyers in the centre of London is causing a price ripple throughout zones 2 and 3, making it increasingly harder for ordinary families on average wages in previously affordable boroughs to meet their housing costs. Does the Minister agree that when it comes to international, non-domiciled buyers of central London property, we need to look seriously at financial measures designed to disincentivise that practice?
The other structural deficiency in the London housing market is the fact that local authorities are now allowing—or feeling that they have to allow—planning policies to be persistently flouted and affordable housing quotas to be ignored in the interests of huge overseas development consortia, such as the Malaysian consortium that is currently developing Battersea power station. The bottom line is that the London market is not a functioning market, and simply increasing the supply will not bring the cost of houses down for ordinary Londoners.
It seems to me that there are a number of things we can do. We need to tighten up on exploitative letting agencies that hit new tenants with exorbitant fees, and I am glad to say that Labour is moving in that direction. We need to allow councils to borrow to build; that is probably the single most important thing. The Labour Government had a wonderful record in renovating and doing up estates, but we simply did not build enough genuinely affordable housing. The only way that can be made good now is by allowing local authorities to borrow to build in order to produce housing that ordinary families can actually afford.
Some measure of rent stabilisation or rent control also needs to be considered. They have it in New York, San Francisco and Berlin—those are not Marxist municipalities, so if there is some measure of rent stabilisation in other big international cities, we can have it in London. Only if we can offer renters some prospect of stable rents will we be able to offer them the quality of life and the certainty in their communities that they now crave. Rent controls, in spite of what some Government Members have tried to imply, do not signify the first footfalls of a mass, state-led, nationwide socialist project. In a big international city, unless something is done to stabilise rents, the centre of that city will, over time, become out of reach to ordinary people.
We are leagues behind global leaders in addressing the problem of spiralling rents. Labour has raised the issue of a mansion tax, which I support in principle, but I am arguing that the proceeds from a mansion tax should be kept in the cities where it is raised. That would be in line with the recommendations of the London Finance Commission and other recent reports on finance in our big cities. If the money from the mansion tax in London was hypothecated to a London housing corporation, it could be used to build genuinely affordable housing—not the Boris Johnson version of affordable housing, which is 80% of market rates—and to offer mortgages to key workers in the public sector.
My first mortgage was given to me by Westminster council, which gave out mortgages in the ’80s in the belief that people who got a mortgage and owned their own home would be more likely to be Tories. They got it wrong with me, but none the less, I am grateful for my very first mortgage. The mansion tax is a good idea in principle, but to sell it to Londoners, I believe that they ought to be able to see a direct benefit through investment in affordable housing in London.
That brings me to the New Era estate, which contains over 90 families, many of whom have lived there all their lives. It has always been deemed to be affordable housing, but sadly for those residents, all around Hoxton and in the City fringes of Hackney, a housing bubble has erupted that has made almost irresistible the profits to be made from clearing out those tenants and letting out the accommodation at market rents.
Who has stepped into the breach? A US developer called Westbrook Partners. It could not have less interest in housing ordinary people and in affordable housing. On its website, it describes itself as,
“a privately-owned, fully integrated real estate investment management company with offices in New York, Boston, Washington DC, Palm Beach, San Francisco, Los Angeles, London, Munich, Paris and Tokyo.”
It goes on to boast that it has
“raised…$10 billion of equity in $40 billion of real estate transactions”.
This entity is not interested in providing housing in principle; it is entirely profit driven and does not care about the consequences of its activities for the tenants who fall into its hands.
The company owns properties all over the United States. In 2007, it took over a large development—a rent-controlled building—in the Bronx. From then, the tenants saw heat and hot water being turned off and becoming sporadic. They found that repairs went undone and they started to be harassed. Fortunately, in New York rent-controlled apartments they have some rights, and finally, in April this year, the New York Attorney-General, Eric T. Schneiderman, reached a settlement with Westbrook. It had to make years of repairs and resolve thousands of building violations, and it had to pay more than $1 million in rebates for illegal fees and overcharges. When it comes to Westbrook, we do not have to look in a crystal ball; we can read the book and see how it has exploited tenants in other parts of the world—and yet, these are the predator property developers who have come into Hackney and purchased New Era.
What are Westbrook’s plans? I understand that it intends to issue a notice seeking possession to all the tenants, to clear and refurbish the estate for full market value prices—way out of the reach of most of the existing tenants—and that it has no plans to provide any houses for below market price. I also understand that it intends to sell in four or five years, flipping the properties at a profit.
The mayor of Hackney has written to Westbrook in the past 24 hours, asking it to reconsider its plans and to honour a commitment to no further rent increases until 2016. He is also asking that the new managing agents for New Era, Knight Frank, meet the council and engage with the residents. Even the Mayor of London—the Minister’s colleague, Boris Johnson—is calling for Westbrook to engage with the council and with the tenants.
The tenants, many of whom have, as I said, lived all their lives on the estate, have asked me to say to the Minister that they simply do not understand why a foreign company is allowed to buy the estate and evict 92 residents, with no sense of whether the company is a fit and proper owner and no sense that the tenants have any protection. They have also asked me to ask what the Government will do to offer the tenants protection and support. I hope that the Minister will find it in his heart to say something supportive to those tenants, who are fearing eviction by Christmas.
Meg Hillier
As the constituency Member for the New Era estate, I, likewise, have had many conversations with tenants, who are very worried about their future. I also managed to speak to Knight Frank earlier today to urge if not only to honour the two-year rent and tenancy guarantee, as a minimum, but to look at having affordable rents to make sure that people who have lived there for 20 years or thereabouts—for a long time—do not find that their homes are removed from them. Does my hon. Friend agree that the real issue is people coming in who are looking at this as being about profit rather than about people and their homes, and that in London, we need a long-term private rented sector in which people can bring up families over a generation?
Ms Abbott
I entirely agree with my hon. Friend, although I would say that it is a question not just of long-term tenancies, but of rent stabilisation. It has become completely impossible for people to manage in a rental market in which there is no stabilisation and rents continue to spiral. I have spoken at some length about the New Era situation, because it reflects the way in which Londoners’ homes are becoming pieces on a chessboard for multi-billion-dollar international property developers.
Mr Andy Slaughter (Hammersmith) (Lab)
That reminds me that the Financial Times scoop today is that the Qataris intend to buy up the High Speed 2 sites. One of those is in my constituency, where 24,000 homes are planned, but of course those 24,000 homes will be exactly those sky-high-priced luxury flats, because that is what the Mayor of London wants. Let us not ignore the fact that this is not happening by accident or because of market forces. It is a deliberate policy of this Government, Conservative councils and a Conservative Mayor to price my constituents out of London so that international developers can make a profit there.
Ms Abbott
I am grateful to my hon. Friend. There is no question but that we are seeing a process that is partly about how private developers are being facilitated and partly about what is happening with the Government’s so-called welfare reforms, which, as I said, is resulting in a form of social cleansing of zones 1 and 2 in London. That does not make for a sustainable community. How are hospitals, the fire service, local authorities and the public sector generally to recruit if ordinary people coming into the housing market for the first time increasingly can afford neither to buy nor to rent in zones 1, 2 and even 3? As my hon. Friend said, that is not by chance—by accident. When we have a Mayor who says that affordable means 80% of private sector rents, which is way out of the reach of anyone on an average salary in London, and who seems loth to intervene in what is happening, Londoners have to face the grim reality that a city that has always prided itself on its diversity and cohesiveness will see that diversity and cohesiveness torn asunder as we move towards social cleansing at the centre. If nothing is done about the current situation, London will become a place where people living in zones 1, 2 and 3 either are extremely wealthy or are serving the extremely wealthy. That is the only way people will be able to afford to live there.
As I said, there are a number of remedies that we need to look at. First and foremost, councils need to be able to borrow to build. We need some form of rent stabilisation. We also need to do something about rental agencies and the charges that private sector renters find themselves paying.
However, there are also a few things that we should not do. It has been suggested that one solution to London’s housing crisis lies in building on the green belt. As someone who spent most of her childhood on the edge of the green belt in Harrow and who now lives in the inner city, I do not believe that building on the green belt is the remedy. It is what developers always want, because building on the green belt is easier for them. They build executive houses that they can sell easily. But houses on the green belt are of no use to young professionals in the centre of the city, who want to be within reasonable commuting distance of their work. They are of no use to families in the centre of the city, who want family-sized housing that, again, is within commuting distance of their work. I therefore say very firmly that anyone proposing to build on the green belt is simply falling into a trap set for them by developers. We should look at the more than 50,000 brownfield sites in London and incentivise development on those sites. The truth is that London’s housing issues must be addressed primarily within the M25, because it would defeat the primary objectives of the green belt—to check urban sprawl and to support biodiversity—if we fell for what the developers are telling us and started to build on it in any great numbers.
London is the greatest city in the world. It has never been more energetic, more exciting or more prosperous, but I put it to the Minister that without urgent action to address the housing crisis, London’s future is at risk. The housing crisis is not just a question for young renters, people who cannot afford to buy and people in social housing and council housing, who are being forced out of London in some cases because of the cuts in housing benefit. It is also a question for older people who are themselves well housed but who look at their children, who may have professional jobs, and realise that they will never be able to afford to buy inside the M25. It is also a question for employers. As I said, it has become increasingly difficult for London employers to recruit because of excessive housing costs.
How does the Minister propose that a city such as London can function if teachers cannot live within commuting distance of the schools that they teach in, if nurses cannot live within commuting distance of the hospitals that they work in and if even policemen find themselves living way outside the communities that they police? The state of the housing market in London is our most pressing issue. What is happening on the New Era estate in the constituency of my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) illustrates predatory property developers at their worst.
I am grateful to the House for the time allotted this afternoon to raise these important issues and I look forward to hearing the Minister’s response and his comments on what he and the Government are doing to address this state of affairs.
John Robertson (in the Chair)
If the hon. Lady can make her speech in a minute and a half, she can have it.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Thank you for calling me, Mr Robertson. I want to return to the issue of the New Era estate, because those 92 households reflect one of the real challenges that my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) just touched on. This involves people in low to moderate-income jobs.
I refer people to a report that I partly authored in 2000-01 for the London assembly. These people are in good jobs. They work long hours and work hard. However, they are unable to afford anything in the private rented sector, possibly even in zone 6 in London. Particularly affected are those who would never qualify for social housing. The social housing restrictions are now so tight that single men who perhaps have children but are not living with them have so little choice about where to live that they are forced out of London in many cases. There is a real shortage of long-term, good-quality, affordable rented housing in both the social sector and, crucially, the intermediate private sector.
I urge the Minister to look at this issue. I have had answers before on the Floor of the House: Ministers, with a sweep of the hand, have said, “Oh, we’re doing work to improve the situation and ensure that private landlords can do a better job and invest longer term,” but nothing is mentioned about the rents, and there is real concern about that hugely important area. There was provision on the New Era estate for more than 80 years under the last private landlord—the only owner before it was sold. That has now gone. We saw this with the Crown Estate housing being sold, although happily it was bought by Peabody. That is at least a housing association, which we can have access to and talk to. However, there are real issues. We are seeing estate after estate—the Warner estate in Waltham Forest and other estates in London—
John Robertson (in the Chair)
Order. I am sorry to interrupt the hon. Lady, but we must give the Minister time to respond.
The Minister of State, Department for Communities and Local Government (Brandon Lewis)
Thank you, Mr Robertson. It is a pleasure to respond to the debate under your chairmanship. Certainly towards the end of the speech by the hon. Member for Hackney North and Stoke Newington (Ms Abbott), I found an issue that we agree on—this is probably one of the rare times when we actually agree on something. I am referring to defence of the green belt, on which I absolutely support her comments, particularly in terms of urban sprawl. She makes a very good point on that.
Going backwards from there, I start to disagree with the hon. Lady somewhat. I do not entirely disagree that London is the greatest city in the world, although as a Norfolk Member of Parliament I make a very strong pitch, as I am sure she would appreciate, for the great assets of Norwich. I encourage others to come and see Norwich.
To take the comments this afternoon more generally, it is important that we ensure that there is good-quality, affordable housing for everyone. An effective housing market has been and is a really important priority for the Government. Specifically in London, the Mayor of London has set himself a target of delivering 42,000 new homes a year, a figure that has not been matched in London by any Government since the 1930s. I am pleased that we have devolved power to the Mayor of London, who can look at what is right for London and make decisions for London.
When I visited City Mills development in Hackney this summer, I saw some of the really good regeneration and development that are being done. The development is creating more homes for people—I believe that the total number is going from some 450 to around 750—while getting rid of some ugly tower blocks and bringing back street scenes and community in attractive properties that people can be proud of, so that they can start to build a community again.
Since 2008, with 18 months left of his second term in office, the Mayor of London has already delivered more than 5,100 affordable homes in Hackney. That represents a considerable increase on the 4,220 affordable homes delivered during the previous Mayor’s eight years in office.
Ms Abbott
May I remind the Minister that the Mayor has much broader housing powers than the former Mayor had? That is a consequence of the former Mayor’s campaigning. I also remind the Minister that affordable housing, as the current Mayor defines it, means 80% of private sector rents. That is way out of the reach of ordinary people in Hackney.
Meg Hillier
I point out that on the Colville estate, which is, coincidentally, opposite the New Era estate, the council is building homes for tenants. It is good quality social housing, just as the Minister described. That is a model for what can be achieved with good local leadership and the right funding, and it delivers long-term affordable homes. Surely the Minister can see that as a model, too. Hackney has the answers.
Brandon Lewis
Yes, and I am proud that more council houses are being built under this Government than under the previous Government. Councils are building council houses again. The hon. Member for Hackney North and Stoke Newington spoke about councils being able to deliver more and to borrow more.
At the start of self-financing, councils had borrowing headroom of £2.8 billion, which has not been entirely used up. I encourage councils to go ahead and progress with developing new housing. We have also recognised that some councils needed extra borrowing powers, so we have already announced £122 million of additional borrowing headroom for 22 authorities, to support the delivery of more homes in their areas. We have consulted on proposals to increase local transparency about the value of local authorities’ social housing assets. That is an important step forward.
We have had to rebuild the housing market in this country. There are now more than 4 million households in the private rented sector, and that number is increasing. Private rented sector rents in England—I appreciate that I am talking only about England—have fallen in real terms every year under this Government. Last year, the average increase in England was 1%, which is below inflation, for the 12 months ending in September. In London, rents increased by only 1.5% over the same period, with inflation at 1.2%. Local authorities are responsible for ensuring that standards are met, but the Government are taking steps to improve quality and choice in the private rented sector.
I want to see more people investing in the private rented sector. Landlords who own 10 properties or fewer make up by far the majority of the sector, and it would be good to see more institutional investment and professional experience in the sector. That is why we have established the £1 billion build to rent fund, which will have delivered contracts by March of next year for up to 10,000 new homes.
Some of those contracts are already in place for homes across London, and I expect more to follow. We have established the private rented sector taskforce to encourage more entrants into the sector, and we are determined not to jeopardise that investment by increasing red tape and unnecessary regulations, such as rent controls. Rent controls demolished the market last time they were introduced and reduced it to about 8%, although we are rebuilding that.
We recognise that standards must continue to improve. We want professionalism in the sector to increase, to make it more attractive to investors and tenants. We have taken action to tackle bad landlords so that they either improve or leave the sector. That is why I entirely support what the Mayor is doing with the London rental standard. We are also giving tenants the know-how, through our “How to rent” guide, to get rental deals that meet their needs.
Hon. Members have raised a couple of questions and suggestions. The hon. Member for Hackney North and Stoke Newington said that she supports the mansion tax in principle. I am sure that she will not be surprised to hear that I do not support it, not least because the effective delivery of a mansion tax would involve the revaluation of many homes. When that has been done elsewhere, it has caused problems for people right across the scale and tended to hit the most vulnerable. A mansion tax would also risk penalising people—in the main, pensioners—on low incomes whose properties have appreciated in value. The Opposition’s policy seems to change every day, however, so I have no doubt that it will develop and change further.
Hon. Members have said that they believe that foreign investment in the housing market is having a negative impact, and I think that we need to put that in context. Foreign investment in new housing has been helping to provide the finance required to build the housing that we need, particularly in a global city such as London. Without such up-front investment, financiers would not have released the cash needed for development to go ahead, and building would have completely stalled. The developments that we now have would not be in place.
Not only do those developments provide homes in which people can live and work, but they unlock associated affordable housing development. Even where property is foreign-owned, much of it is rented out, which generates an ongoing return for the investor. A good example is Battersea power station, which has been derelict and undeveloped for about 30 years. Development is now going forward thanks to a combination of private investment from Malaysia and public infrastructure support from the Government. To put the situation in perspective, the Bank of England recently estimated that foreign buyers represent only 3% of all residential property transactions in London.
Meg Hillier
I understand that something as intractable as Battersea power station may have needed a kick start from someone wealthy, wherever they were in the world. In Hackney, however, new developments are being bought off plan by landlords who will never set foot in the country. They were originally built to provide homes for local people, but they never reach the hands of local people. I do not think that that is what the Minister is talking about, and I hope that he does not support that approach.
Brandon Lewis
We sometimes also see British institutional investors—British companies—investing in the private rented sector overseas. In places where that has happened, they tend to be grateful to have good management. I want to see good management, good landlords and good institutional investment coming into the private rented sector. The Mayor of London has recently launched a mayoral concordat on new homes in the capital. Key developers have been contacted and asked to commit to selling new homes on every development to Londoners before, or at the same time as, they go to overseas buyers.
A couple of hon. Members spoke about properties being built and left empty. The number of empty homes across England is at its lowest rate since records began. The vacancy rate in London has dropped to below 2% for the first time ever. Hon. Members have touched on the question of how we improve the private rented sector by looking at letting agents. Although landlords and letting agents are free to set their own charges, they are prohibited from setting unfair terms or fees under existing consumer protection legislation.
Mr Slaughter
The Minister is talking about support for affordable housing and even social housing. Can he explain why he sat on, and subsequently overturned, the Planning Inspectorate’s report on the Shepherd’s Bush Market compulsory purchase order, which will destroy social housing, a 100-year-old market and small businesses simply to build more than 200 luxury flats on the site?
John Robertson (in the Chair)
Order. The Minister will have to write to the hon. Gentleman.
Written Statements
Ministerial Responsibilities
(10 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The new “List of Ministerial Responsibilities” has been published today. Copies have been placed in the Vote Office and the Libraries of both Houses. Copies will also be sent to each hon. Member’s office in this House.
The list can also be accessed on the Cabinet Office website at:
https://www.gov.uk/government/publications/government-ministers-and-responsibilities
Autumn Recess
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
I would like to update hon. Members on the main items of business undertaken by my Department since the House rose for the Autumn Recess.
Increasing house building and supporting the housing market
Official statistics of housing supply released on 13 November showed that the numbers of new homes in England has risen by 10% over the past year the highest percentage increase in 12 years. Since 2010, the Government have delivered a net increase in housing supply of over 530,000 additional homes across England.
New figures also showed the numbers of repossessions are now at their lowest since records began in 2008, thanks to the Government’s long-term economic plan; our deficit reduction programme is keeping interest rates down and making mortgages more affordable. Figures published by the Council of Mortgage Lenders anticipate repossessions falling further in 2015 and 2016.
On 18 November, my Department published a consultation paper on the next step to zero- carbon homes. New homes built today are saving people around £200 on average on their energy bills compared to homes built before the 2010 general election and cutting carbon emissions. From 2016, we are going even further by making all new build homes zero- carbon, and we are now consulting on how to apply this to small house builders to ensure they continue to play their part in building much needed new homes, without them being priced out of the market.
Creating jobs through Enterprise zone
Enterprise Zones are playing a vital role in driving forward England’s growing economy. On 12 November 2014, we announced that that the 24 Enterprise Zones have created an estimated 12,530 jobs, attracted 434 new businesses and generated over £2 billion worth of private investment since opening for business.
The Government-backed sites are providing top-class fiscal incentives and world-class infrastructure, promoting growth across a range of key industries, including the automotive, aerospace, pharmaceutical, and renewable industry sectors––and also boosting the UK’s construction industry and wider supply chain.
Empowering local people with new community rights
On 11 November, we noted millions of people across England are now benefiting from the coalition Government’s community rights programme; local residents are coming together to protect pubs, libraries and leisure centres against sell off, creating neighbourhood plans to decide on new local development and deliver local jobs and improved local services. The total number of uses of the rights has now hit 3,000, with more than 1,500 much loved buildings, assets and green spaces listed and 1,200 neighbourhood plans well underway.
On 14 November, we announced grants to six schemes to help them reopen to the public or transform their existing use enabling them to provide leisure, cultural and care facilities, create local jobs, and help build a stronger economy. Each scheme will receive between £130,000 and £440,000 funding which will pay for repairs and refurbishment for the new community use, and will help provide practical case studies for other communities.
Promoting fire safety
On 17 November, we launched a number of measures to boost the safety of e-cigarettes in response to increasing concerns over the number of fires caused by faulty charging units.
This included new consumer guidance as part of the Fire Kills campaign and electrical fire safety week. In addition, the Department for Business, Innovation and Skills has commissioned a number of local authority trading standards departments to investigate whether current e-cigarette safety information is sufficient and widely available enough to consumers.
Commemorating the Great War
My Department continues to support events to commemorate the centenary of the First World War to help promote united communities. Across the country, community groups including schools, libraries, museums and places of worship to community centres, football clubs and pubs are active participants in commemoration events researching their own local First World War heritage and holding musical recitals, such as the Last Post. Ministers supported a series of events to mark Armistice day, which has a particular resonance this year given the great war commemorations.
I am placing in the Library of the House copies of the press notices and documents associated with these announcements.
Armoured Vehicles (OSCE Mission in Ukraine)
(10 years ago)
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The Minister for Europe (Mr David Lidington)
The Foreign and Commonwealth Office has today laid a departmental minute proposing a gift to Ukraine.
The United Kingdom is committed to supporting Ukraine’s sovereignty and territorial integrity. Throughout the crisis that has unfolded during 2014, the Organisation for Security and Co-operation in Europe (OSCE) has played a crucial role in monitoring events on the ground and facilitating dialogue between Ukrainian and separatist factions in the east of the country. The OSCE’s special monitoring mission has been operating in Ukraine since March 2014, and the UK has been a strong supporter of its role, providing nearly £2 million in funding and seconding a number of UK nationals into the mission.
The Minsk protocol, the peace plan and ceasefire agreed between Ukraine and Russia on 5 September has tasked the SMM with significant additional responsibilities, notably monitoring and verifying the ceasefire and monitoring the Ukraine-Russia border. The ceasefire is just about holding but with continued outbreaks of violence, and fatalities. It is therefore vital that the OSCE special monitoring mission receives the funding and equipment it needs to expand to its full capacity of 500 international monitors and be enabled to fulfil its mandate while operating within an often very challenging environment. As part of a package of enhanced support to the OSCE, the UK therefore intends to provide 10 armoured vehicles to the mission, which have been identified as being crucial to allow monitors to operate securely in the more volatile eastern parts of Ukraine.
This package will be funded by the Government’s conflict pool fund—FCO, MOD and DFID. It is in direct response to a request from Swiss Federal President and OSCE Chairman-in-Office Didier Burkhalter, who has written to OSCE Foreign Ministers requesting the provision of people, money and equipment.
The departmental minute sets out the proposal to gift 10 armoured vehicles and associated communications equipment worth £1,169,006 to the OSCE. The proposed gift will consist of the following UK sourced equipment:
10 armoured vehicles (8 x LC200, 2 x LC105)—£1,120,000
10 AV spares kits—£11,266
10 Motorola DM4601 VHF radio plus ancillaries—£4,740
10 Codan Envoy XI HR radio—£33,000
The proposed gift has been assessed against the consolidated EU and national arms export licensing criteria. The proposed gift has been scrutinised and approved by a senior, cross-Whitehall conflict pool approval board, which has confirmed that it fits with the Government’s strategic and delivery objectives. Foreign and Commonwealth Office officials also assessed the project for human rights risks, using the overseas security and justice assistance guidelines established by the Foreign Secretary in 2011. They concluded that the risk of human rights violations arising from the project’s delivery could be successfully mitigated.
The Treasury has approved the proposal in principle. If, during the period of 14 parliamentary sitting days beginning on the date on which this minute was laid before the House of Commons, a Member signifies an objection by giving notice of a parliamentary question or of a motion relating to the minute, or by otherwise raising the matter in the House, final approval of the gift will be withheld pending an examination of the objection.
Police Reform
(10 years ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
On 22 July, I informed the House that I intended to reform elements of the police disciplinary system to improve transparency and justice and to strengthen protections for police whistleblowers. Today I am launching a six-week public consultation on these measures. Subject to the consultations I intend to implement these measures before the end of this Parliament.
The integrity of the men and women who work in the police service of England and Wales is critical to public trust in policing. Real or perceived misconduct or corruption dents that trust and makes policing by consent more difficult. The vast majority of police officers behave appropriately and conscientiously, which makes it even more important to root out misconduct and malpractice and hold those responsible to account.
I want to ensure that the systems and processes that deal with misconduct by police officers are robust, independent and transparent to the public. In July I commissioned Major-General Chip Chapman to review the police disciplinary system. His report has been completed and I will consult on his recommendations for wide-ranging reform shortly. That consultation will also include proposals to fundamentally reform the police complaints system and further protections for police whistleblowers.
The consultation I am launching today focuses on specific reforms that can be made in the short term that will have a significant impact in making the current system more robust, independent and transparent until such point when more fundamental reforms can be implemented.
To improve justice, I am consulting on a power for disciplinary hearing panels to remove or adjust the compensation payments due to chief officers on termination of their appointment where a disciplinary finding is made against them.
To introduce greater independence into the way police disciplinary hearings are conducted and ensure judgements are legally sound, I am consulting on the introduction of legally qualified chairs to conduct police disciplinary hearings.
To strengthen protections for police whistleblowers and ensure they can come forward with confidence, I am consulting on proposals to ensure whistleblowers will not be subject to disciplinary action for taking the necessary steps to report a concern and that any reprisals against them will be taken seriously.
Finally, to improve transparency and accountability to the public and ensure that the robust response that the police take to misconduct is both visible and open to public scrutiny, I am consulting on holding police disciplinary hearings and appeals in public.
I hope that all those with an interest in these matters will respond to the consultation.
A copy of the consultation document will be placed in the Library of the House.
Prison Competition and Efficiency
(10 years ago)
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The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
In November 2012 the Government announced the start of a new programme of work to drive down costs across prisons in order to deliver value for money for the taxpayer, accelerate cost reductions, maximise savings and to improve outcomes without compromising public safety. The programme included applying a new public sector staffing benchmark that had been developed by the Prison Service in competition with private sector bidders during prison competition phase 2 and the competition of ancillary and through-the-gate resettlement services in public sector prisons.
This approach allows HM Prison Service to focus on core custodial functions, with private and third sector partners adding their expertise and experience by delivering efficient and innovative ancillary and resettlement services.
In June 2013 we announced a competition for the management of a range of works, maintenance and facilities management services in public sector prisons. The competition was formally launched in January 2014, and included: maintenance; works and building projects; management of prison stores; waste disposal and collection; energy and environmental management; cleaning; and escorting of contractors and their vehicles.
I can today announce the outcome of the competition. After a rigorous evaluation of bids, Amey and Carillion have been selected to run the services across four geographical areas. These are:
Lot 1. Amey—North East, North West, Yorkshire and Humberside
Lot 2. Amey—East Midlands, West Midlands, Wales
Lot 3. Carillion—East of England, London
Lot 4. Carillion—South West, South Central, Kent and Sussex
We intend to award five year contracts, with expected savings from these contracts in the region of £115 million over that period. This represents an impressive saving for the taxpayer. We expect the new providers to start delivering these services on 1 June 2015, following a period of mobilisation. Robust arrangements will be in place to manage the new contracts.
Social Justice: Transforming Lives--Progress Report
(10 years ago)
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The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
In 2012, we published “Social Justice: transforming lives”, a landmark document setting out a new vision for supporting the most disadvantaged families and individuals across the UK. The strategy outlined how family breakdown, low educational attainment, worklessness, problem debt, and addiction combine to cause the entrenched poverty affecting many of our communities, highlighting the complexity of the issues that many people face.
To meet this challenge, the strategy signalled that a new approach was needed— putting early intervention first, while tackling the root causes of poverty to give those experiencing disadvantage a meaningful second chance.
Today, I wish to inform the House that later today I am laying the Command Paper “Social Justice: transforming lives—progress report”, which shows what this Government have achieved in turning that vision into a reality, but also renews our commitment to this important agenda.
Over the last 12 months, we have continued the cultural change needed in order to achieve our aims, spanning not only families and individuals, but also public services and the way the Government fund them.
As today’s progress report sets out, delivering this aim has required a complete shift in how the Government tackle social problems: an unrelenting focus on preventing problems arising in the first place; giving people the support they need to make transformational changes to their own lives when problems arise; and spearheading new multi-agency, outcome focused approaches in order to address problems in the round.
The achievements set out in this report show how much can change in two years, and what this change means to individuals. We have made substantial progress against the commitments set out in the original “Social Justice: transforming lives” document, but we have not stopped there, and this report outlines what further action is required and how we should keep up the pressure on what we have created, which carries the profound theme of making meaningful life changes to the most vulnerable in our society.
By restating our commitment to transforming lives, and continuing to drive change in Government, at a local level and across the voluntary sector, in how we help families and individuals in need, we will make social justice a reality for everyone in the United Kingdom.
Let us continue to work together to build on this promising work. Our aim is not just about social justice in this Parliament; it is about social justice for years to come.
Social Security Advisory Committee
(10 years ago)
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The Minister for Employment (Esther McVey)
My noble Friend the Parliamentary Under-Secretary of State for Work and Pensions (Lord Freud) has made the following written ministerial statement.
Today I am launching a review of the Social Security Advisory Committee (SSAC). As part of the Government’s continuing drive for efficiency and effectiveness, all Departments are required to review their arms length bodies at least once in every three year review cycle to challenge whether the functions they perform are still necessary and if so whether it is still appropriate for them to be delivered in the same way. The review of the Social Security Advisory Committee will look at the Committee’s functions and whether it needs to continue to exist. If the review determines that the Committee should continue, it will go on to examine the potential for delivering more effectively and efficiently and the corporate governance mechanisms. I will inform the House of the outcome of the review and place a copy of it in the Libraries of both Houses when it is completed.
Pensions: National Employment Savings Trust Corporation
(10 years ago)
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The Minister for Pensions (Steve Webb)
I am pleased to announce that Mr Otto Thoresen has been appointed as the next Chair of NEST Corporation, the body that runs the National Employment Savings Trust (NEST). Mr Thoresen will take up the appointment from 1 February 2015.
NEST was established as a low-cost, occupational pension scheme to support automatic enrolment. It is focused on a target market of low to moderate earners and smaller employers who the market served inefficiently. Through delivery of its public service obligation, NEST ensures that all employers have a suitable pension arrangement through which to fulfil their automatic enrolment duties.
NEST already has around 1.6 million members and is working with over 9,000 employers. From June 2015, 1.2 million small employers—those with fewer than 50 workers—will start to engage with automatic enrolment. NEST will be critical in ensuring that these small employers are able to access low-cost pension provision for their workers.
Mr Thoresen brings with him a wealth of knowledge and experience of pensions to this challenging role and has a distinguished career of operating at the highest level in large and complex organisations. He is currently director general of the Association of British Insurers (ABI) and has held senior posts at Aegon, Abbey Life, Royal Life Holdings and Scottish Equitable. He is a trustee of Young Enterprise; an adviser to the Citizens Advice Board Edinburgh; a governor of the Pensions Policy Institute; and a trustee of Step Change, a debt charity. His appointment as Chair demonstrates our commitment to recruiting people with a proven track record and the expertise to get the job done.
Grand Committee
Deregulation Bill
(10 years ago)
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The Deputy Chairman of Committees (The Countess of Mar) (CB)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes.
Lord Wallace of Saltaire
Lord Wallace of Saltaire (LD)
My Lords, Schedule 18 amends the Poisons Act 1972. It introduces a common licensing system for the acquisition, importation, possession and use of poisons as well as of chemicals that can be misused to make explosives—termed explosives precursors—within Great Britain.
Current poisons controls are outdated and ineffective. In 2012, the Poisons Board made a number of recommendations after being reconstituted to review the Poisons Act 1972 as part of the Red Tape Challenge retail theme. These included that the Poisons Act 1972, the Poisons Rules 1982 and the Poisons List 1982, which are owned by the Home Office, should be amended to reflect current retail market practices. It also recommended that greater clarity should be given regarding inspection and enforcement of retailers and businesses involved in the trade of poisons, which are very often of course for household use. Schedule 18 does that.
In making these changes, we are aligning controls of dangerous poisons with new regulations that control the sales of explosives precursors that are susceptible to being used to create explosives to commit terrorist attacks. The Control of Explosives Precursors Regulations 2014, which implement EU regulation 98/2013 on the marketing and use of explosives precursors, came into effect on 2 September 2014. The amendments to the Poisons Act 1972 will create a streamlined, cohesive regime that will make it easier for retailers to implement and reduce costs, because there is only one regime to follow.
Schedule 18 removes the current requirement for businesses to annually renew a local authority listing that allows them to sell common household products. This will save businesses some £20,000 a year. Paragraph 1 abolishes the statutory Poisons Board, whose constitution is written into the Poisons Act 1972. Abolishing the statutory body would mean that appropriate and specialist advice can be sought.
The purpose of Amendments 82 to 87 is to make minor technical amendments to Schedule 18. Amendments 82 and 83 provide for the reporting duties in new Section 3C of the Poisons Act 1972 to apply to explosives precursors at all concentrations, as required by EU regulation 98/2013, which is directly applicable in the UK. New Section 3C will impose reporting duties in respect of both poisons and explosives precursors, and is therefore wider than the EU regulation. However, the reporting regime in respect of explosives precursors must be compliant with that regulation.
Amendment 84 creates a new power by which the Secretary of State may, by regulations, make provision modifying new Section 3A of the Poisons Act so far as it applies to any supplies that involve dispatch of a regulated substance to Northern Ireland or export of it from the United Kingdom. Currently, the proposed new Section 11(6) of the Poisons Act provides that any reference in the Act to supplying something does,
“not include … export to a person outside the UK”.
Amendment 87 will remove this aspect of the definition. Amendment 84 will enable the Secretary of State to make regulations about export from the UK, and dispatch to Northern Ireland, having regard to EU regulation 98/2013, in particular its territorial scope, and other prevailing circumstances.
Amendment 85 clarifies that the 12-month time limit for commencing criminal proceedings for offenders under the Poisons Act applies to summary offences only. There is generally no limit for triable offences.
Amendment 86 introduces a transitional provision relating to maximum statutory fines in the magistrates’ court pending the commencement of provisions in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which will remove such maxima.
Amendment 87 is purely consequential on the new regulation-making power introduced by Amendment 84. That is to say, it changes the definition of supply for the purposes of the Poisons Act so it does not automatically exclude exports. I beg to move the amendment and that the schedule stand part of the Bill.
Lord Skelmersdale (Con)
My Lords, I have been prompted to rise to my feet on Amendment 84, to which the Minister has just referred. I will ask a very simple question: are there no regulatory supplies from Northern Ireland, given that Amendment 84 refers to,
“any supplies that involve despatch of the substance to Northern Ireland or export of it from the United Kingdom”?
Of course, Northern Ireland is included in the United Kingdom, so I wonder if the Minister could, at some point in this debate, answer my question.
Baroness Smith of Basildon (Lab)
My Lords, I had not intended to speak on this; I think the Minister might have moved “clause stand part” in error at the end of his comments, because my next amendment is a clause stand part debate. On the Northern Ireland question, my understanding is that Northern Ireland is part of UK, so I was rather surprised that the direction was to Northern Ireland and from the UK. That is a similar point to the one made by the noble Lord, so was it just an error in the drafting of the legislation?
Lord Wallace of Saltaire
My Lords, Northern Ireland has separate legislation that controls sales of poisons and will implement separate legislation that controls sales of explosives precursors and their exports. The reasons for this are entirely clear and that is why this is concerned with Great Britain.
Baroness Smith of Basildon
Then the term “UK” might perhaps be incorrect in terms of drafting.
Lord Wallace of Saltaire
The UK is, of course, an integrated market, so it is difficult to say, “exports from Great Britain”. That is the reason why we vary between Great Britain and the UK in different references.
Lord Stevenson of Balmacara (Lab)
We are getting somewhat held up: I am sure that this can be resolved very quickly. The point raised first by the noble Lord opposite was that we need to know what the Government are trying to say here. Are they saying that material exported out of the United Kingdom, including Northern Ireland by definition, is caught by this, or is it meant to mean that there is a separate territorial area called Northern Ireland for which different regulations apply and that therefore, the schedule bites only on Great Britain?
Lord Wallace of Saltaire
I will write to the noble Lord if I am misinformed, but I think that if this were to read, “Export for the United Kingdom” or “Despatch of the substance within the United Kingdom to Northern Ireland,” it would be entirely clear.
Lord Wallace of Saltaire
“(3A) For the purposes of section 3C however, and the meaning of “regulated substance” in or in relation to that section, a “regulated explosives precursor”—
(a) is a substance listed in Part 1 of Schedule 1A, and(b) includes a mixture or another substance in which a substance listed in that Part is present,but, in each case, only if the substance or mixture is not excluded.”
“( ) The Secretary of State may by regulations make provision modifying this section so far as it applies to any supplies that involve despatch of the substance to Northern Ireland or export of it from the United Kingdom.”
“(12) In relation to an offence committed before section 85(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 comes into force—
(a) the reference in subsection (1)(b)(i) to a fine is to be read as a reference to a fine not exceeding the statutory maximum;(b) the reference in subsection (4)(a) to a fine is to be read as a reference to a fine not exceeding level 5 on the standard scale.”
Baroness Smith of Basildon
My Lords, I am grateful for the Minister’s brief introduction to this debate, which he may want to repeat. The reason for tabling a stand part debate is not that we are necessarily opposed to the schedule, but a number of questions arise on which it would be helpful to have clarification. I raised this issue last week when we discussed the clauses on alcohol and the sale of liqueur chocolates to children. I find it difficult when asked to consider schedules to Bills—or any legislation—when there has been a government consultation but we do not have the responses to it. All that is available is the consultation document, the impact assessment and the government response to the consultation, not the consultation responses themselves.
I understand that in some cases there may be reasons of confidentiality, but the consultation document refers to personal information being kept confidential. That is of course appropriate, but I found it difficult to analyse and assess the Government’s proposals. It would have been very helpful to know what some of the experts and petitioners thought and what were the consultation responses. I shall come to a couple of reasons why.
The first issue is that of home use. The impact assessment says that known uses of Part 1 poisons for the home are rodent control and metal extraction. I have worked hard on this, but I do not know what metal extraction in the home is. I should be grateful if the Minister could enlighten me. I can think of other uses for small amounts of poison in the home, but metal extraction has got the better of me.
The list of consultees in the Government’s response to the consultation is interesting. Some clearly involve domestic uses, such as the British Tropical Fish Club, which apparently is different to the Tropical Fish Club. We have the Model Power Boat Association, the Pool and Water Treatment Advisory Group and the Ornamental Aquatic Fish Trade Association. It is more understandable why they would use Part 1 poisons in the home—albeit, I would think, in small quantities—but the issue of metal extraction has got me beat, so any advice would be gratefully received.
The Government’s charts in their summary of responses were helpful. Under questions for home users of Part 1 and Part 2 poisons, less than half of those who currently use such poisons would continue to do so. Perhaps the Government are seeking to reduce the number of poisons on the Part 1 and Part 2 list in the home, but I do not think that that was listed as an objective of the legislation. That is where the consultation responses would have been useful. Two of the questions in the consultation are: what do you use Part 1 poisons for and what you use Part 2 poisons for? Not being a scientist, not knowing what the chemicals are for, I would find that very useful.
The consultation also asked whether alternatives could be used and what they are. In assessing whether it is justified to say that more than half the people would not continue to use those poisons, would it not be helpful to know—and to have it in the summary or published in the consultation—how many of those people are likely to use alternatives to what is available now? As it stands, we may be preventing people who have ornamental fish or tropical fish tanks at home enjoying their hobby, or their sport with model boats and so on. I do not know because we do not have that information. If the Minister can address the issue of the consultation and the points that I have raised about the alternatives available, I would find that quite helpful.
Lord Wallace of Saltaire
My Lords, I thank the noble Baroness for that very detailed and well prepared set of questions. I have to agree with her that in a sense this is a much less deregulatory measure than many of the others in the Bill. It is a revision of regulations more than deregulation. Indeed, in terms of safety, these proposals are designed to strengthen controls over those selling and purchasing dangerous poisons and explosives precursors. We are continuing a long trend of tightening government regulation of poisons and, increasingly, of explosives precursors.
A hundred years ago, a good many arsenic compounds were available for purchase and they were, on occasion, used for nefarious purposes as well. Over the last 40 years, the European Union has increased regulation and, in some cases, has banned a number of poisonous substances for use not only in the home but in gardens and allotments. Here, we are in part implementing those regulations. We are also concerned, as the noble Baroness will understand, with the use of substances which had not been misused as explosives precursors in the past but which are now widely recommended on the internet for those who wish to make explosives for nefarious purposes—hydrogen peroxide and others. I am referring to substances which, when purchased in large quantities, can be mixed into what then becomes explosives. There have been one or two cases of people being accused of terrorist offences who had managed to purchase large quantities of the same substances that hairdressers, for example, purchase in small quantities.
I note in the extensive list that I was given of the various different substances that there are a number of metallic substances. Their main home uses are listed as metal cleaning, etching, electroplating, painting and soldering. I am told that there are those who even use metal substances and metal complexes at home for extracting the gold from their old mobile phones. This is a delicate issue. Members of the Committee may not do this, but others may wish to do all sorts of things at home. Happily, my children did not get into chemistry particularly heavily. On the question of the Poisons Board’s preferred options, I am told that the Poisons Board accepted our policy approach and objectives in its final note to the Minister for Security and Immigration.
The noble Baroness has seen a summary of recommendations and I am happy to talk further to her about what extra things she would like to know about the replies to the consultation.
Baroness Smith of Basildon
It was not a summary of recommendations, but a summary of the consultation responses, and I identified one or two that were not included in the summary but would have been very helpful in considering this clause.
Lord Wallace of Saltaire
My understanding is that Appendix A of the report on the consultation had a summary of consultation responses. I have now been deluged with notes that I will attempt to absorb.
The Department of Health was a statutory consultee as part of the Poisons Board and was consulted on the draft legislation regarding any consequential amendments. The Home Office ran an open research call to find research into alternative substances for Part 1 poisons and licensed explosives precursors. Research proposals are currently being evaluated. The Home Office remains the primary enforcement body, although a range of others, including the police, come into play at certain points.
In some ways I rather wish my wife were here. She is much more experienced in poisons for household and garden use. She has strong views about some aspects of EU regulations because a number of poisonous substances, in safe hands, are very useful to use in the home and garden. However, policy in the United Kingdom and in other countries has been moving in the direction of tightening up controls on these because of what can happen in unskilled hands and how desirable it may therefore be to tighten control of them.
On the question of how much a licence would cost, a new licence application costs £39.50 at the moment for a maximum three-year period. Any amendments to current licences are free of charge to encourage compliance with conditions to notify changes in circumstances. Replacements of lost or stolen licenses cost £25. The Home Office has kept costs to a minimum by using existing IT systems as far as possible. A similar background to the checking process for firearms licensing is being followed up, with some differences. No home inspections or face-to-face interviews will be conducted.
Firearms licensing is governed by a different policy and we are looking to full cost recovery in this area, but I will write to the noble Baroness about the comparisons that she has been making with the licensing of firearms. I understand the point that she is making.
Baroness Smith of Basildon
I appreciate that because I have had different responses from different Ministers on the issue. Before the Minister moves on, I asked about the cost of new licences. I am not sure whether that was the figure he gave me. If it was, I thank him. I was not 100% clear about whether it was the new licence for home use that he referred to. Can he clarify that he was saying that the fire service was not consulted? Will he confirm that he will publish the consultation?
Lord Wallace of Saltaire
I do not have an answer on the fire service and will have to come back to the noble Baroness on that. The costs I was quoting are for new licence applications. I hope that that answers the majority of the questions raised by the noble Baroness, and I am happy to talk further or correspond if necessary on any other questions that I have not followed up. I thank her for the detailed effort she has made to ensure that we have got it right. It is an important area, although I have to say that when I looked at the extremely long list of the various substances that will now be controlled differently, I did not understand what a good many of them were or what their uses are. This is unavoidably a rather specialised field.
There is a regulation-making power in the schedule to vary, add or remove a substance or limit its concentration. After all, chemical substances are changing in terms of how they may be used, and our ability to combine chemicals for various purposes is also changing, so a degree of flexibility is highly desirable.
I have now been told that we have consulted the fire service, particularly on home storage, and that it supports the proposals.
Baroness Smith of Basildon
I am grateful for that, but I am puzzled why, in the list of consultees, the two I asked about were not included, although the Minister has been able to reassure me. It would be helpful to have a comprehensive list of consultees. I have one final point. I asked about the publication of the consultation responses—I made that same point in last week’s debate. Can he confirm that the Government, subject to the normal procedures of ensuring confidentiality of those who have responded, will publish the full consultation responses on the two consultations—poisons and explosives?
Lord Wallace of Saltaire
That is entirely understood. I will do my best on that, and will write to the noble Baroness with the assurances that she is asking for.
Baroness Donaghy (Lab)
My Lords, I am asking the Government to withdraw Clause 71 on social work services and registration. Clearly there is a history to this which I shall not spend a lot of time on, but I have to say a couple of things about it. First, the previous Labour Government issued a guarantee in 2008 that any delegated service would be required to register with the regulator. The Government propose to withdraw that provision. Secondly, in June last year the Delegated Powers and Regulatory Reform Committee criticised the Government’s proposals to remove regulation of social work providers. It said:
“Registration would allow the imposition of national minimum standards and requirements as to the fitness of providers. It would also provide a mechanism for removing providers who are failing to meet standards”.
The Government subsequently retained separate registration but not inspection for external providers through the Providers of Social Work Services (England) Regulations 2013. The discussions are as recent as that. Now the Government are seeking to reverse that decision and to remove the registration requirement. This is despite the fact that there was no clear support for removing regulation in the original consultation responses.
The Government did not consult on this issue as part of the consultation in April 2014 on extending outsourcing in children’s social work. During the debate in Committee in the House of Commons on whether the clause should stand part of the Bill, the Deputy Leader of the Commons, Tom Brake MP, acknowledged that there had been no clear support for removing the registration requirement.
The Office of the Children’s Commissioner for England raised concerns and stated:
“We consider all delegated social care services should be required to have formal registration with Ofsted in addition to an expectation that they will be held to account by rigorous and expert inspection, just as local authorities currently are”.
Ofsted conducted its own consultation on a regulation and inspection regime for social work providers. It consulted children and young people for their views, unlike the Government. Ofsted found that respondents to its consultation wanted thorough checks to be made on companies and applicants that plan to provide delegated functions. They also felt strongly that registration checks should be backed up by later inspection.
Local authorities thought it would be,
“important to ensure there is a proper, external-to-the-local-authority registration process to enable a local authority to be confident in using the services provided by the social work provider”.
I should, perhaps, remind the Committee that the Ofsted registration requirements cover important areas of social work provision, such as the “fit and proper person” test for those running social work providers, financial viability, registered manager, sufficiency of qualified staff, vetting checks and conditions of registration.
The Government propose that the external providers of social work services will not be inspected in their own right by Ofsted, and nor will they be registered as providers in the way that children’s homes and adoption societies are. There will be no overview of their activities across local authorities where they hold contracts and no visible assurances for the public about their financial viability, quality standards or working practices. Unison, the trade union that represents social workers, believes that the regulation and inspection of social care services are essential to safeguarding vulnerable children and their families. It also said that regulations should not be regarded as a burden in this extremely sensitive area.
Internal contract monitoring by local authorities cannot be relied on by itself to ensure that acceptable standards in the safety and quality of social work with looked-after children are upheld. By removing the separate registration of providers, the Government are relying on Ofsted to pick out issues about their fitness to operate as part of its inspections of individual local authorities. However, providers could operate across many local authority areas. Local authorities already face challenges because of funding cuts and it is likely that contracts will be held by larger private or voluntary sector contractors. Close ties with local authority teams and systems will be weakened; their interests and priorities will be different from those of the client authority. The drivers of service provision will be cost driven. Relying on local authority inspection will be inadequate and emphasises the need for a single registration point.
The focus of the single inspection framework is the local authority, and this will necessarily limit the range of regulatory action Ofsted takes in relation to the failings of an outsourced provider. Ofsted needs to be able to focus on the provider in its own right, rather than on individual local areas of work. It also creates a lack of symmetry in the system by requiring providers of children’s homes and fostering and adoption placements to be registered and inspected in their own right while providers of social work services—which are exercising major statutory functions, taking sensitive and critical decisions about placements for children—are not required to do so. How can the Government defend such inequality? Do the Government think that providing social work services is somehow less important? Are the Government confident that this act of abandonment will not lead to a lowering of standards?
Finally, the College of Social Work is calling on the Government to pause, so that the service implications of these regulatory changes can be fully considered in the light of real evidence. There needs to be detailed consideration of potential conflict of interest in the provision of children’s services and the management of risk. The College of Social Work has stated:
“The proposals raise serious and important questions about how services to some of the nation’s most vulnerable children and young people may be delivered in future”.
I can only echo that statement and ask the Government to withdraw Clause 71 before it is tested on Report.
Baroness Meacher (CB)
My Lords, I support the noble Baroness, Lady Donaghy, and agree that Clause 71 should not stand part of the Bill. Among the main reasons for my position is, first, that the delegation of local authority statutory children’s services functions, particularly child protection functions, was approved only very recently, and we simply have not had the time to clarify whether the new arrangements are working. Secondly, the delegation of these functions was approved by statutory instrument, and therefore not subjected to very thorough parliamentary scrutiny—we already have, if you like, an unscrutinised situation, or one subject to inadequate scrutiny, yet these functions are crucial to the future lives of very vulnerable children.
It was presumably no accident that these statutory functions were not included in the Children and Young Persons Act 2008, which provided for the delegation of functions in relation to looked-after children and those leaving care. Those are very sensitive areas of work, and one can question their delegation, but these new functions were not included even then. I should make it clear that, along with members of the College of Social Work, I support the provision of children’s and adult services by the third sector in partnership with the statutory agencies—this is not an ideological point at all—but as recent scandals have shown, the third sector is not immune from providing very poor-quality services to very vulnerable people. It is this risk that needs to be guarded against in equal measure— I emphasise equal measure—with public services. I sometimes worry that the Government assume that any private service is somehow good, while public services are suspect. That seems to me to be an incredibly dangerous assumption.
I share the concern of the noble Baroness about the limited parliamentary debate about the new regulations and, more particularly, the concern that the removal of the one safeguard from these functions is proposed when the evidence for the efficacy or otherwise of these delegated services is not yet available. Will the Minister explain to the Committee why the Government are proposing to remove the requirement to register with the inspectorate from these newly delegated services? Is this a matter of cost? If so, what will be the annual saving to the Exchequer from this change? Has a cost-benefit analysis been done of Clause 71? Is there any evidence to suggest that the proposal will not lead to a deterioration in the quality of service provided? These really are very important questions for the Government to answer.
It would also be helpful to have some explanation about how the local authority responsibility for these delegated services will work. As I understand it, local authorities will remain accountable to the regulators for the quality of the delegated services, but they will surely need to undertake some form of inspection role in order to satisfy themselves that the services are of an acceptable quality. But will they be funded to do that? We know how hard-pressed local authorities are; if they do not have the funding for a job, they will certainly not be able to do it. If not, is it right that a local authority should be held responsible for poor-quality services that do not fall within its purview? It all feels really very difficult from the local authority point of view and therefore the whole thing feels shaky. Who is going to lose? The vulnerable children, at the end of the day. I hope the Minister will respond to these questions and provide some assurance to the Committee that the Government are not taking unreasonable risks in Clause 71.
Baroness King of Bow (Lab)
My Lords, I support this amendment which is also in my name. Never has there been greater concern around failures of child protection and greater revulsion about the scale and breadth of the abuse visited on vulnerable children. In light of so many recent scandals, the Government’s position seems at best puzzling and at worst possibly negligent at some point in the future. The amendment would ensure the continued requirement for those providing social work services on behalf of councils to be registered, regulated or inspected. The two key points at issue are the lack of consultation on the one hand and the general opposition from almost all those involved on the other, as well as the fact that we remain unclear as to how this will work in practice for local authorities.
The Minister will no doubt have read with great interest the views of the College of Social Work. The Government’s approach is puzzling because I accept that they want to improve safeguarding services. The Minister will no doubt set out, like his counterpart in the other place, that the Government view registration of providers of social work services on top of their contractual arrangements as a potential duplication. Those of us opposing this view it as a potential extra risk to children.
The College of Social Work points out that earlier this year the Government published a set of regulations to accompany the Children and Young Persons Act 2008 to allow local authorities to delegate almost all their statutory duties. These reforms, taken in the round, could have an extremely significant impact on the delivery of social work services in England. There is a feeling in the sector and indeed elsewhere that there has been quite simply inadequate debate around these very serious and important issues.
The College of Social Work summarised its objection to Clause 71 as follows:
“The new power to delegate social work functions is at the experimental stage and the evidence is not yet available for conclusions to be reached about the impact on the most vulnerable children and adults. It may in future be appropriate to remove this requirement to register with the regulator but it would be risky to remove this safeguard at the present time”.
My main question to the Minister is: why would he want to take this risk at the present time? Why would the Government want to take the risk, given all the problems that we know are taking place at the moment?
As we heard from my noble friend Lady Donaghy, the consultation carried out by the Government did not find support for this—far from it. Even Ofsted’s own consultation found a strong desire to maintain registration checks. Local authorities themselves are calling for external inspection. Why will there be no overview of quality and working practices in some of the key areas, as outlined by my noble friend Lady Donaghy? Why is asymmetry and inequality in the services essentially being written into the Bill?
In summary, if the registration requirements are removed, the Government are essentially dismantling what the CSW describes as the backstop. Will the Minister explain why in these current circumstances the Government would want to remove a safety backstop? Surely, if anything, the Government should be bolstering the backstop and not weakening it. For that reason, I support the proposition that Clause 71 should not stand part of the Bill.
Lord Wallace of Saltaire
My Lords, I recognise the passion with which these objections have been made, as well as the experience and expertise of those who made them. I shall be very happy to hold further conversations between Committee and Report to make sure that we can come to some agreement about the balance between regulation and potential risk, to which the noble Baroness, Lady King, rightly pointed. We are all quite clear that children’s services are a very important area where we must make sure that we get the balance right.
The Government’s view after consultation and consideration is that the double layer of inspection provided by Ofsted’s national perspective and the responsibility of local authorities to inspect and to license providers is duplication. Our view is that Ofsted’s existing duty to register providers who may discharge children’s social care functions is completely separate from its duty to inspect and to hold local authorities to account in the discharge of their functions.
I am also very grateful for the correct comment of the noble Baroness, Lady Meacher, that we are talking not just about for-profit providers but about third sector providers, which often provide very good services in this area. Nevertheless, one wants to make sure that those services are always of a consistent quality. She has a great deal of experience in this area. I have very limited experience but I am very conscious that third sector organisations can be absolutely superb but sometimes not superb.
It is argued that the removal of the requirement for providers to register with Ofsted is a benefit to the system because it ensures that there is no doubt or confusion about where the statutory responsibilities then lie. That makes it clear that local authorities are fully accountable for any decisions made by third parties to whom they have delegated functions. The argument here is that it should not be the responsibility of Ofsted to make sure that the third parties to whom local authorities wish to delegate functions are fit for the job.
Under the current registration regulations, Ofsted is required to check on: first, the fitness of the provider to do the work; secondly, the appointment and fitness of the registered manager; and, thirdly, the staffing arrangements and premises. The regulations also include provisions for making changes to any of the above. To cover Ofsted’s costs, providers are required to pay fees for registration and for making changes to the registration once made.
These requirements duplicate the “due diligence” that a local authority will perform as part of its procurement of a provider. No local authority would appoint a third party provider to undertake its functions without making such checks. However, the current system creates confusion as to where accountability lies. The requirement for providers to register with Ofsted is separate from Ofsted’s continuing duty to inspect and to hold local authorities to account. How Ofsted inspects local authorities is for it to determine. For other provision—as for children’s homes—it conducts separate inspections, but it has concluded that delegated functions should be inspected as part of the local authority single framework inspection and has published a plan as to how this will operate. The Government consider that that is adequate and that it provides the regulation required without unacceptable risk.
Baroness Donaghy
I apologise to the noble Lord for interrupting but I wish to seek clarification. Clearly, on the face of it, it does look like double accounting, but similar things exist in other areas—for instance, in the construction industry, where there is a pre-qualification system. At the moment local authorities are given confidence in employing a company which might cover a lot of local authorities. There might be a very small strapped-for-cash local authority—as nearly all of them are now—but it is given confidence because the name of that company is on a register. It has already qualified to meet a certain level of standards. I am not sure that in the Minister’s answer so far—he may be coming to it—he has explained how local authorities have the confidence to get to the pre-qualification stage of saying, “Okay, let’s look at these people with a view to hiring them”. I am not saying that they do not have the responsibility to inspect—of course not—but it could save a lot of time and money if there is already in existence a body of knowledge and a body of standards which local authorities can apply.
Lord Wallace of Saltaire
I understand that point. I am not entirely clear as to the balance between for-profit providers and not-for-profit providers but I am getting some information from my officials. There are some important distinctions here, which I would like to take back and discuss further with them because I recognise that it is absolutely important that we get this right. The Government’s case is that the clause provides the necessary protections without unnecessary duplication. I recognise that we need to provide the reassurance to all those who have spoken in this debate that we have got the balance right.
Incidentally, we did consult in January and February 2013 and got only some 20 responses, which broke on both sides. There were mixed opinions as to whether the registration regime should be removed; 45% said no and 40% yes. A majority agreed that the proposal would reduce burdens; 53% said yes and 32% no. So the answer is that it did not give us a clear set of arguments as to how to respond.
Again, I recognise the great concerns which have been put forward. The Government have argued consistently that removing this extra level of the registration regime preserves necessary protections. I am very happy to have further discussions between Committee and Report to make sure that we can provide those assurances before we return to this.
Lord Kennedy of Southwark (Lab)
My Lords, I will be brief in my remarks. I make it clear at the start that I am not in opposition to the clause. I am using this debate as a device to raise a couple of issues and I hope that the Minister will agree to meet me and discuss them outside the Room. I am sure that he will not be able to answer these things today but I wanted to raise these issues.
First, I have considerable respect for the Electoral Commission and its staff, who do some excellent work. I had dealings with them as a senior official of the Labour Party. I was for many years the director of finance and served on the political parties panel, and then I kind of jumped ship and became a commissioner. I served on the Electoral Commission for four years, so I have experience on both sides on the fence. However, the time is rapidly approaching when we need to review the governance arrangements of the Electoral Commission. I accept entirely that it will not happen this side of the general election, but whatever party or parties are in power post the general election next year, we will need to look at the governance arrangements.
I am sure that noble Lords will know that the commission was set up after the 1997 general election. There was an inquiry by the Committee on Standards in Public Life, undertaken by that body at the request of the then Prime Minister, Tony Blair. That then led to the Political Parties, Elections and Referendums Act 2000, which set up the commission. I have always been of the opinion that the Electoral Commission should be a regulator in equal measure of both parties and the electoral registration service carried out by local authorities in England and Wales and by the electoral management boards in Scotland. That is not the case at the moment, as it is skewed much more towards parties, but registration is so important that we need to balance that out a bit.
The commission itself reports to a body known as the Speaker’s Committee, which is made up of senior parliamentarians in the other place. I am not of the opinion that that body necessarily gives the correct level of challenge to the commission all the time. I also know that the Constitutional Affairs Committee has some role in working with it. However, the time has come to discuss that and look at it carefully, and perhaps to give it to a particular Select Committee in the House of Commons to look at it. That may be the Constitutional Affairs Committee or the Public Accounts Committee.
When I came on to the commission I served as one of the first political commissioners. I was on the commission with the noble Baroness, Lady Browning, Sir George Reid, who was the second Presiding Officer of the Scottish Parliament and really should be a Member of your Lordships’ House, and David Howarth, who was the Lib Dem MP for Cambridge.
I think that we all served very honourably and David still serves on the commission. We brought a lot of common sense to the discussion, but I sometimes felt that there was a bit of “them and us” in the commission. We were the political people and they could be a bit biased—could we really be trusted? We actually worked very honourably and well together. I think that we won people over in the end. We proved that it was rubbish, but it was an issue. Having people on the commission who are politicians or have a political understanding is important. We can bring a lot of common sense. I wanted to be involved and for that to be developed and increased. We will need a review to do that.
I will leave it there. I wanted to raise those issues and I hope that the noble Lord will agree to speak to me before Report. I entirely accept that we are doing this Bill here but I wanted to raise those issues because next year, whichever party is in power, there are things that we need to look at.
Lord Wallace of Saltaire
My Lords, I thank the noble Lord, Lord Kennedy, for his remarks, which ranged much more widely than the limited proposals in Clause 72. Clause 72, on the whole, makes technical changes to the governance arrangements for the Electoral Commission. Clause 73 makes similar technical and modest changes to the governance arrangements for the Local Government Boundary Commission.
As the noble Lord said, the Electoral Commission is the independent body established by Parliament and overseen by the Speaker’s Committee with governance arrangements set out in Schedule 1 to the Political Parties, Elections and Referendums Act 2000, known to us with great affection as PPERA.
At present, the Electoral Commission has to provide a five-year corporate plan, with the new plan having to be prepared and submitted annually. The National Audit Office is also required to undertake annual value-for-money studies. The Speaker’s Committee has reviewed these governance arrangements, comparing the Electoral Commission with other modest similar-sized organisations, and has recommended the following changes. First, a five-year corporate plan should be produced in the first financial year of a Parliament. The statutory requirement to update this on an annual basis should be removed, although the Speaker’s Committee should retain the right to request updated plans outside the five-year cycle. Secondly, value-for-money studies by the NAO should be linked to the production of the organisation's five-year plan and not on an annual basis.
Noble Lords will be aware that the approach that central government take to the funding of public bodies is through a spending review. These spending reviews are fixed and spending is planned over a number of years. As such, the existing statutory provisions for the Electoral Commission to provide annual updates to their corporate plan seem excessive.
In terms of removing the statutory requirements for annual value-for-money studies, the NAO has said that it supports such a reduction as the current statutory provisions are disproportionate to the size and spending power of the Electoral Commission. Clause 72 simply implements the recommendations put forward by the Speaker’s Committee. The Government see these as sensible and proportionate changes to the governance arrangements for the Electoral Commission
The noble Lord, Lord Kennedy, raised some wider issues about whether it is not now time, after 14 or 15 years of operation of the Electoral Commission, to review the overall balance, and whether the current arrangements, including, as he said, a Select Committee as well as the Speaker’s Committee, provide sufficient oversight. That is an interesting discussion to throw out. As he rightly remarks, we will not get very far with this over the next five and a half months. But this House may appropriately return to this after the election when we have seen how the Electoral Commission has operated with its responsibilities, which are most important in the course of and the run-up to an election campaign. Perhaps at that point he and I and others might talk together about how we take such wider issues further.
Lord Rooker (Lab)
My Lords, before we leave this clause, I would like to take this opportunity to ask the Minister a question. I am a strong supporter of the Electoral Commission, with no qualification whatever; but next year’s election will be the first time that it has had four and a half years to plan for the date. Therefore, is there an absolute rock-solid guarantee that there will be no chaos in any of the polling stations in this country of the kind that occurred in 2005?
Lord Hunt of Kings Heath (Lab)
My Lords, I join my noble friend and add to what he said. My noble friend knows that I come from Birmingham and I was shocked by some of the behaviours I saw outside some Birmingham polling stations, to which I suspect he is referring. I particularly remember a polling station in Moseley, where large groups of men—about 20 or 30—were outside. This was clearly intimidatory; it was very difficult—particularly for women—to go and vote. The current system is so slow to react to situations like that when they arise. This is a very serious matter: in some parts of the country, people are not able to exercise their democratic right to go to a polling station free and unfettered.
For some years, the Electoral Commission took the view that it could only take measures that applied to each part of the country in an equal way. That was madness; it has been clear for a number of years that we have a real problem in some polling areas and we need a response from the Electoral Commission that recognises that.
Lord Wallace of Saltaire
My Lords, it would be foolhardy to give a cast-iron guarantee that no problems might break out. These are not purely matters for the Electoral Commission; as we all know; the local police and the local electoral registration officers have clear responsibilities here as well.
Lord Hunt of Kings Heath
In the case I mentioned, there was a police van outside; I approached the police van and the officer, of his own volition, went to speak to this group and kind of negotiated that the numbers would come down from about 20 to three or four on either side. I applaud the fact that a police constable, of his own volition, was able to make his own judgment, but that does not necessarily happen, and there is no guarantee that there will be police outside each polling station during the whole of the day. The other problem is that the polling officers are in the polling station in the school, a long way from the road where people can congregate. I accept the point he is making, which is that it is not just down to the Electoral Commission—but the Electoral Commission has a leadership role here.
Lord Wallace of Saltaire
My Lords, let me take that back and make sure that the Electoral Commission is informed of this. I trust that the incidents were reported to the local authorities and the local police at the time. I am conscious from my own experience with polling stations in parts of west Yorkshire that there can be problems; although my strongest memory of the last election is of passing a polling station 10 minutes before it closed and meeting a large extended family coming out of the polling station after voting, having a very sharp and loud argument as to whether each of them had voted the right way. I fear that, in this coming election, there may be rather more of that sort of confusion than any of us would really like to see. Meanwhile, I can assure the noble Lord that I will take these points back and make sure that they are reported to the Electoral Commission. I repeat that local issues like this are very much about local support. It is for the local police, local education and the local political parties, of course, to make sure that the police and the electoral authorities are doing their duty.
“NHS foundation trusts and NHS trusts: acquisitions and dissolutions etc
(1) The National Health Service Act 2006 is amended as follows.
(2) In section 56A (acquisitions), after subsection (4) insert—
“(4A) Where the regulator proposes to grant the application, it may by order make provision for the transfer of employees of B to A on the grant of the application.”
(3) After section 56A (acquisitions) insert—
“56AA Acquisitions under section 56A: supplementary
(1) On the grant of an application under section 56A—
(a) any order made by the regulator under section 56A(4A) takes effect,(b) the property and liabilities of the acquired NHS foundation trust or NHS trust are transferred to the acquiring NHS foundation trust (other than rights and liabilities which may be dealt with by order under section 56A(4A)),(c) the acquired NHS foundation trust or NHS trust is dissolved, and(d) where the acquired trust is an NHS trust, the NHS trust order establishing it is revoked.(2) So far as may be necessary for the purposes of subsection (1)(b)—
(a) anything done before the grant of the application by or in relation to the acquired trust is to be treated (on and after the grant) as having been done by or in relation to the acquiring trust;(b) any reference in a document to the acquired trust is to be read as a reference to the acquiring trust.(3) Anything (including legal proceedings) that, immediately before the grant of the application, is in the process of being done by or in relation to the acquired trust may continue to be done afterwards by or in relation to the acquiring trust.
(4) In subsection (1)—
(a) “liabilities” includes criminal liabilities;(b) “property” includes trust property.”(4) In section 57 (sections 56 to 56B: supplementary), after subsection (3) insert—
“(3A) The order may include provision for the transfer of employees of the trust or trusts dissolved by the order.”
(5) In section 64 (orders and regulations under this Chapter)—
(a) in subsection (4), before paragraph (c) insert—“(ba) section 56A(4A),”;(b) in subsection (4A), after “section” insert “56A(4A),”.(6) In section 65LA (trusts to be dissolved), in subsection (3)(b), for the words following “trust” to the end substitute “—
(i) to an NHS body; (ii) to the Secretary of State;(iii) between more than one NHS body or between one or more NHS bodies and the Secretary of State.”(7) In that section, in subsection (5), for “to an NHS foundation trust” substitute “to an NHS body”.”
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, this clause makes amendments to Sections 56A, 57 and 65LA of the National Health Service Act 2006. These provisions are all concerned with the transfer of property liabilities and staff between NHS bodies. The changes proposed in the amendment simply clarify the provisions in the existing legislation to ensure that it can be used in a seamless and efficient way. They do not create new policy.
The clause is needed to remove the current uncertainty over the powers of an NHS foundation trust in Section 56A to acquire another NHS foundation trust or NHS trust, and to correct the omission of key powers with respect to the transfer of staff and criminal liabilities in this provision. It would also explicitly extend Monitor’s power in Section 65LA to transfer the property and liabilities, including criminal liabilities, of an NHS foundation trust dissolved following special administration.
I am sure that it would help the Committee if I expand on those initial comments. The existing Section 56A provisions are uncertain and open to interpretation. Critically, there is no express explanation in the provision of what happens to the acquired trust’s property and liabilities, or third party rights and obligations. As a consequence of this uncertainty, NHS foundation trusts are unlikely to utilise the current provision for fear of legal challenges. We are keen to ensure that where acquisitions are deemed to be in the best interests of patient care, legislation supports this approach. Accordingly, paragraph 1(3) of the clause inserts new Section 56AA to provide for a direct transfer of property and liabilities by operation of law. The grant of application would also be conclusive proof that the acquired trust is dissolved, and in the case of an acquired NHS trust the establishment order revoked.
The Government are committed to ensuring that staff involved in transfers from one public body to another are treated fairly and consistently, and that their rights are respected. The amendment to Section 56A would give Monitor an additional discretionary power to make an order for the transfer of staff from the acquired to the acquiring trust. This would ensure that in cases where TUPE does not apply, or where it is unclear whether it does, Monitor can set out a clear mechanism of transfer that specifies which of the staff are transferring and the implications of transfer. The amendment would also apply to orders made under Section 57 in respect of mergers and separations.
It is established Department of Health policy that criminal liabilities must be preserved on dissolution and transfer of an NHS trust or NHS foundation trust, so that organisational change does not prevent the initiation or continuation of criminal proceedings. New Section 56AA creates a statutory authority for the criminal liabilities of an acquired NHS trust or an NHS foundation trust to transfer to the acquiring trust. Amending Section 65LA will enable Monitor to implement the recommendations of a trust special administrator. Property and liabilities, including criminal liabilities of a failed NHS foundation trust, may need to transfer to more than one NHS body. Currently, Monitor can only transfer to a single NHS foundation trust, and this is not adequate.
As stated earlier, these changes simply clarify the provisions in existing legislation that already support the NHS in taking the decisions necessary on how to continue to deliver high-quality patient care. I beg to move.
Lord Hunt of Kings Heath
My Lords, like the noble Earl, I make a happy, though unexpected intervention in the proceedings of this Grand Committee. I thank him for giving me advance warning that he intended to move an amendment on the question of trust mergers. I certainly would not oppose the amendment, but I should like to put some points to him. As this is being introduced at such a late stage, perhaps I could ask him about the Department of Health’s approach to deregulation, because it is entirely relevant to the amendment.
The noble Earl will know that a later clause in the Bill introduces a new duty for non-economic regulators to have regard to the desirability of promoting economic growth while exercising their regulatory functions. From the list that we have been given by the Government, we understand that the Care Quality Commission is encompassed in the list of organisations to which the new provisions may apply. The Opposition have asked the CQC for its views on the clause, but we have been informed that the Department of Health has told the CQC that it was not appropriate for the CQC to respond to our query, given that it is an arm’s-length body of government. I am surprised by that. As the noble Earl has frequently said to us, the CQC is an independent body. I am surprised that the CQC even approached the DoH for advice, and I am shocked that the DoH should prevent CQC from giving its advice to parliamentarians on the Bill. I do not expect the noble Earl to respond to this point today, because I doubt that he could, but I ask him to respond to me in due course.
What is the Department of Health’s approach to deregulation? My understanding is that it is in favour, and recently told the Health Select Committee that, unless issues of public safety are concerned, it is not in favour of extending statutory regulation to other professions within the health service, which is entirely consistent with what Ministers are saying in the Bill.
The noble Earl will not be surprised that I then want to ask why the department is still attempting to require non-doctor public health specialists to be statutorily registered. I recently asked a Written Question about that. I cannot for the life of me see that public health non-doctors pose any risk to public safety. That conviction has been reinforced by the evidence that the Professional Standards Authority for Health and Social Care, which is the overarching regulator, has now given to the Government, in which it confirms my view that minimal risks are posed by public health specialists. There is a very limited number of them. Whether they are statutorily regulated or not is not a major issue. The problem is that, by so doing, the Government are threatening the viability of a voluntary register, the UK Public Health Practitioner Register, because it depends on the fees of those non-doctor specialists for its viability. I should have thought that a voluntary register accredited by the Professional Standards Authority is just what a deregulatory approach would lend itself to.
Again, I do not expect the noble Earl to give me a response today, but I wanted to raise with him that there is considerable puzzlement that a Government who brought forward this deregulatory Bill is hell-bent—for some reason that no one can understand—on forcing a statutory approach to non-doctor public health specialists, which will put at risk a voluntary register that is entirely consistent with the deregulatory approach that the Government are taking within the Bill.
I will ask three or four questions about the noble Earl’s amendment. It arises from the issue in Staffordshire. Essentially, the services that were being run by the Mid Staffordshire foundation trust are being transferred to two other trusts: North Staffordshire and the Royal Wolverhampton, one a foundation trust and one an NHS trust. The technical amendment that the noble Earl has brought forward seems eminently reasonable in that context, but I wonder whether he would care to reflect on the process by which that has occurred. He will know of the trust’s special administrators, who were appointed to deal with the problems at Mid Staffordshire. I was very surprised that the estimated cost of that process has been between £12 million and £15 million. Can the noble Earl confirm that and say whether he really thinks that we got value for money from that process?
The second question is whether he can assure me that this new amendment will not make it easier to force through mergers without proper public consultation. Staffordshire health service has a bit of form recently. He will know that the clinical commissioning groups have made some very controversial decisions, including—I think this was announced yesterday—the outsourcing of much of their commissioning responsibility. It is notable that the CCGs are very reluctant to debate or discuss those proposals in public. We have debated Lewisham hospital in south London, which is in a special administration process, and we have had some discussion about how services in Staffordshire are to be reorganised. I have been to a number of meetings in Staffordshire and there is real concern that a lot of these major changes are taking place without adequate public consultation. For instance, in relation to services in Mid Staffordshire, assurances were given—it was called the double-lock assurance—by the Secretary of State that there would, as I understood it, be proper public involvement and support for the changes. I am not entirely sure that that has happened.
I would just like to make two further comments. As I understand it, by statute, mergers have to be approved by Monitor, the economic regulator for NHS foundation trusts—and presumably, for non-foundation trusts, by the NHS Trust Development Authority, acting on behalf of the Secretary of State. In the light of experience, does the noble Earl not think that the Secretary of State should have to give their approval to mergers even if they involve foundation trusts? I realise that this amendment is based on parent legislation that goes back further than 2006—perhaps to 2003—and that we now have a much more fragmented system than we had then.
A trust merger is not a business arrangement; essentially, what usually happens is that one trust has fallen into a great deal of trouble and has to be rescued. That will often have a dynamic impact on the services to be provided; Mid Staffordshire is a good case in point. Given that, should the Secretary of State, because of his direct accountability to Parliament, not have to sign off that merger? The noble Earl may know of Clive Efford’s Private Member’s Bill, which I think is being debated in the Commons on Friday. There is a clause in the Bill which actually says that the merger of NHS trusts or foundation trusts should require the consent of the Secretary of State, so I am sure that this is a matter to which the department will be giving consideration.
My final point is about the impact of the amendment on PFI schemes. The noble Earl has already explained about the transfer of criminal liabilities, which makes eminent sense, but let us say trust A is being acquired by trust B. As I understand it, trust B takes on the liabilities of trust A. But what happens to the indemnity that the Secretary of State has made in respect of a PFI scheme entered into by trust B? When trust A takes on trust B’s liabilities, including possibly a PFI scheme, does the Secretary of State’s indemnity also now apply to trust A? I understand that the Department of Health has said that it does not and I would be grateful for some clarity on that.
Lord Rooker
I did not want to interrupt the noble Earl but perhaps I may intervene as he has raised that point at the beginning of his speech. I know that it will take time to write to my noble friend but in two days’ time this Committee will be discussing the growth duty. It would be useful to have a response before we start that debate because there are a couple of amendments relevant to the growth duty. The Joint Committee fully supported the Government’s response on the growth duty in January, but the committee received representations from certain regulators. I do not recall whether the CQC was one of them—I do not think that it was—but there was an open discussion when we were taking evidence about this. Therefore, it would be quite useful to have an answer by Thursday to the specific question raised by my noble friend because there would still be time to table an amendment. Sometimes it takes a few days or even weeks to get a letter, even with the best intentions of the Minister.
Earl Howe
I note the request from the noble Lord, Lord Rooker, and I can only undertake to do my best on that front. If I can get an answer to the noble Lord, Lord Hunt, by tomorrow, I will. I cannot promise that but I shall use my best endeavours to get an answer to him as quickly as I can.
The noble Lord referred to the administration process at Mid Staffordshire. He is right that the cost of administration has been significant. I cannot confirm the precise cost at this stage but it is substantial and I think that that serves to illustrate that the administration process is not one that any Government, or indeed Monitor, should give the green light to wantonly or ill advisedly. It is a last-resort solution and should always remain so. Clearly, in a challenged health economy, as that has been and still is, it is not surprising that the net result of the exercise is not just a substantial bill in terms of the trust special administration but a very substantial capital commitment by the Department of Health to augment the facilities in the trusts concerned to ensure that the quality of care is as we would all wish it to be. From memory, that net investment will be about £0.25 billion. Therefore, the people of that area should feel satisfied that this process has led to a result that will give them significantly enhanced facilities.
As for the noble Lord’s question about public consultation, this amendment has nothing to do with the process by which a decision is reached on a trust in administration or the consultation requirements that go with it. It merely streamlines the process that takes place after that final decision is taken so that it is not cumbersome.
The noble Lord asked me about the indemnity associated with PFI agreements in relation to a trust that has been taken over. My understanding is that the indemnity does transfer. That is the advice that I have received, but if I need to qualify it in any way, I will correct it immediately after Committee.
As regards the Secretary of State’s approval for trust mergers, it is important to point out that Section 56A provides for the acquisition by an NHS foundation trust of another FT or an NHS trust, and it confers on the sector regulator, Monitor, the power to grant an application for an acquisition. The section was intended to enable acquisitions to take place expeditiously with a minimum level of bureaucracy. The decision to undertake an acquisition, if it is between two foundation trusts, is taken by the FTs themselves with Monitor undertaking a minimal administrative function to implement the decision as long as the set legal process has been followed.
“Births, marriages and death registration: historical searches
(none) After section 34 of the Births and Deaths Registration Act 1953, insert—
“34A Historical searches
(1) The Registrar General may provide a copy of an historical record held by him, which need not be a certified copy, to any person who makes a search and requests such a copy.
(2) A copy provided under subsection (1) may not be used in place of a certified copy as proof of an entry in the register.
(3) For the purposes of this section—
(a) an “historical record” means any entry in a register held by the Registrar General which is more than one hundred years old on the date on which such a request is made;(b) a copy of a record which is not a certified copy means a paper, electronic or other duplication as may be prescribed in regulation.(4) The Registrar General may charge such fees as appropriate in relation to making and delivering a copy of a record which is not a certified copy, but such a fee shall be no more than £3.00 per record.””
Baroness Scott of Needham Market (LD)
I rise to offer the Government an early Christmas gift, cunningly disguised as Amendment 87B. It is a rare jewel; a genuine piece of deregulation which no one as far as I can tell opposes, which saves money and does not cost anything. I shall explain.
In 1837, a system of civil registration of births, deaths and marriages was introduced into this country. For most of the time since then, it has been a legal requirement to register these events with the district registrar, who issues a certificate. The framework has remained largely unchanged since then. Anyone can order a copy of a certificate from the General Register Office, which is currently set at a cost of £9.25. Because possession of a certificate does not confer identity, these certificates could be used for any purpose and many of us at some point or other may have used this service to order a copy certificate.
The one group of people in this country who could really use this service much more extensively are those, like me, who are researching their family history. Should noble Lords think this is a minority pursuit, one website alone, Ancestry, has 2.7 million global subscribers. The success of programmes such as, “Who Do You Think You Are?”, along with the relative ease of internet searching, has led to an explosion of interest in genealogy. This will almost certainly increase this year as the result of the wonderful coverage of the centenary of World War I.
Genealogists from across the globe can trace their ancestors back to these islands. The Irish and Scottish Governments have been much quicker than the English and Welsh Governments to appreciate the great tourist value in people looking for their roots. For genealogists, the information on general registration certificates is invaluable. Birth certificates contain the father’s name and occupation and the mother’s maiden name. A marriage certificate will record both the father’s name and occupation, so in theory you could use the general registration to trace ancestors back for well over 200 years. An ancestor dying in 1837 at the start of registration might well have been born in the 1750s.
Sometimes, the GRO is the only way of resolving the matter by distinguishing between individuals of the same name on census and parish records, but this valuable resource is nothing like as well used as it could be because the only form in which it is legally allowed to be given is by ordering and paying £9.75 for the full certificate. That is not the case in many jurisdictions. In Ireland, for example, the essential information is provided for €4. In Scotland, an extract can be ordered online through the authorised provider, ScotlandsPeople Centre. The General Register Office issues many thousands of historic copies every year. Even at £9.75 it does not make a profit from them. As I will explain in a moment, it would almost certainly be happy to find a less onerous way of doing this kind of historic business. It would also fit in very well with the Government’s deregulation agenda and the drive to digitise public services.
Turning to my amendment, I recognise and say at the outset that my limited expertise will not have produced an amendment that the Government would accept in its current form. But the fundamental point, aimed at allowing the GRO to change the regime for historic events of more than 100 years ago, is one that I hope the Government will take away for consideration. It would mean that for a much reduced fee—I have suggested £3—the data could be sent by e-mail, rather than be issued in a long-form certificate. One hundred years simply reflects the period after which census data are made public and was the period chosen in the 2002 White Paper. A different time could be chosen, or differentials between births, marriages and deaths established.
This issue has been discussed since 1990. A public consultation in 1999 showed overwhelming support for such a change. The GRO itself proposed similar changes in a 2005 regulatory reform order. Ironically I was a member of the Delegated Powers and Regulatory Reform Committee at the time, but sadly the GRO proposed a whole package of measures rather than simply this specific change. Had there been this change only, it probably would have been successful, but unfortunately the package was considered far too wide ranging for a regulatory reform order.
I caution the Government against putting off making this modest reform until a wider package of measures can be drawn up in their own Bill. The reality is that GRO reform is always unlikely to be a priority in the legislative programme of any new Government. The fact that the GRO has been unable to get a Bill in three terms of the Labour Government and one term of the coalition Government says it all. As I said, this is a probing amendment only, which I hope the Government will take away and consider. I recognise that the GRO will need time to consult on changes and draw up the details, but this can be done by secondary legislation. The important thing is to get this change into this Bill. I beg to move.
Lord Wallace of Saltaire
My Lords, I thank the noble Baroness very much. In listening to her, I was remembering that I discovered a new third cousin 10 days ago when the political adviser to someone in the Government in the Emirates got in touch with me. I recognised his unusual name, which happens to be my mother’s maiden name. In inviting him, I asked him to bring the names of his great-grandfather and great-great-grandfather. He arrived with an A3 family tree and the comment from his uncle that the missing bit was a group who had moved away from Somerset, which is where this uncommon local name comes from, and were alleged to have set up as fishmongers in Leicester. That was my grandfather. I now have a new third cousin and quite a useful set of additions to our family tree. I also have a strong desire to visit Australia, where the third cousins who have made good live. They are apparently very generous to their visitors. I should also say that this summer my wife and I were in north Yorkshire looking for her family and we spent a very enjoyable and constructive time in the local history section of Stockton library. The local historians were extremely helpful and provided us with a number of useful bits of family history, including some birth certificates for nothing. The local dimension is as important as the national one.
I can reassure the noble Baroness that officials in the Home Office who lead on this issue will be very happy to meet her soon to discuss the issue further. There are, however, a number of technical issues which mean that the Government cannot accept the amendment as it stands for reasons that I will summarise. The proposed new clause would enable copies of historic births, deaths and marriage records aged 100 years or more to be provided in formats other than a paper certified copy or certificate. It allows for such copies to be produced on paper, electronically or in another prescribed format with a stipulated cost to the customer of,
“no more than £3 per record”.
The amendment seeks to address restrictions laid out in primary legislation that currently prescribe that the only way to access information from a civil registration record, regardless of age, is to purchase a certificate either from the GRO or from the register office where the event was registered, at a standard cost of £9.25 or £10 respectively. While recognising that allowing historic civil registration records to be treated differently from modern records may support government objectives around transparency of data and digitisation, there are some aspects of the clause that make it unworkable in its current form.
For example, the proposed new clause limits the amount that can be charged for an historic record to £3, but further work would be needed to ensure that this allows for compliance with Treasury rules regarding the management of public money—such as rules about full cost recovery. Of course, specifying the fee cap within the clause hinders a regular review of fee levels, as any resultant changes would require further amendment to primary legislation.
The title of the proposed new clause refers to,
“Births, marriages and death registration”,
but the clause seeks to amend only the Births and Deaths Registration Act 1953, which does not provide for the issuing of marriage certificates. We would expect any amendment that provides for a change to the issuing of marriage certificates to be included in the separate marriage legislation, which is the Marriage Act 1949. In addition, the clause applies the same definition of “historic” to all types of records, but this is not aligned—as the noble Baroness has suggested—with the systems of civil registration in place in Scotland and Northern Ireland, which operate under separate legislation. The legislation in place in Scotland and Northern Ireland provides for records to be defined as historic at 100, 75 or 50 years respectively, depending on whether the information relates to a birth, marriage or death, which goes further than the proposed clause suggests.
The clause makes no changes to the information available from the register office where the event was registered, meaning that while the GRO could make historic records available more cheaply centrally, local register offices would have to continue to provide any information from a record, regardless of its age, in the form of a certificate. The impact on the local registration service of introducing a legal distinction between modern and historic records needs further consideration: the amendment as it stands would disadvantage local authorities, which would continue to be legally obliged to maintain the original historic records but would see the demand for information from them decrease as customers chose a cheaper, centrally provided service.
The Government therefore cannot accept the amendment as drafted on the grounds that a number of aspects would prove problematic in practice. In addition, by defining all records as “historic” at 100 years, rather than following the precedent of Scotland and Northern Ireland, and preventing the change to be applied to marriage records by failing to amend the Marriage Act 1949, the clause as it is currently drafted fails overall to achieve the intended aim of opening up as wide a range of records as possible to greater public access. We therefore express sympathy with the aim but reservations about the clause as currently drafted, and we offer an invitation to meet and discuss it further. On that basis, I urge the noble Baroness to withdraw her amendment.
Baroness Scott of Needham Market
My Lords, I am grateful to the Minister and certainly look forward to having a meeting to see how we can progress this further. I have been trying to talk to somebody about this for about five months now, so I hope that even at this late stage it is not too late to bring something forward for the next stage of the Bill, because this is a very important issue for people researching family history. As I have already said, there are many millions of such people. The point about local offices is, of course, valid, but the fact is that most people who order copy certificates would do so through the website of the national GRO. That particularly applies to people from abroad. We should be doing everything we can to open up our records where appropriate to people resident both here and abroad who look to us as their historic homeland. I look forward to having meetings as soon as possible and perhaps taking this further. I beg leave to withdraw the amendment.
Lord Wallace of Saltaire
Lord Wallace of Saltaire
My Lords, I have an extremely long speaking note on this. Amendment 88 is a minor and technical amendment to paragraph 14 of Schedule 19 to the Bill. It makes clear that the repeal to a provision of the Public Audit (Wales) Act 2004 made by that paragraph will come into force only if a duplicated repeal of the same provision made by the Local Audit and Accountability Act 2014 has not yet commenced. The purpose of the amendment is legal clarity. I beg to move.
Lord Sharkey
“(2) This section and paragraphs 1 to 39, 41 and 42 of Schedule 20 may not come into force until the three conditions set out in subsections (3) to (5) are met.
(3) The first condition is that the Law Commission and the Scottish Law Commission (“the Law Commissions”) have reported on whether each item of legislation to be repealed by paragraphs 1 to 39, 41 and 42 of Schedule 20 is, or may be, of practical use; or is no longer of practical use.
(4) The second condition is that the reports of the Law Commissions under subsection (3) have been laid before each House of Parliament.
(5) The third condition is that the Secretary of State has, by regulations made by statutory instrument, removed from the list of legislation to be repealed in Schedule 20 any provisions which the Law Commissions have reported are, or may be, of practical use.
(6) A statutory instrument containing regulations under subsection (5) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(7) Paragraph 40 of Schedule 20 comes into force on the day on which this Act is passed.”
Lord Sharkey
My Lords, I move Amendment 89 and shall speak briefly to Amendments 103 and 104. Amendment 89 deals with Clause 82 and Schedule 20.
Clause 82 is very short. It contains 17 words. It asserts that the laws listed in Schedule 20 are no longer of any practical use and it repeals or amends them all. Schedule 20 is in 10 parts and runs to more than seven pages. It lists at least 84 pieces of primary legislation, seven of which are whole Acts, and eight pieces of secondary legislation. Those numbers will rise in a moment when the Minister moves Amendments 91 and 92, which, at this late stage in the Bill, add a further two pieces of secondary legislation and another three whole Acts to the list of repeals.
Schedule 20 and the Minister’s further additions today are a widely varied and miscellaneous collection. They range from apparently obvious candidates for repeal to deeply complicated amendments. It is probably not dangerous to repeal the 22 sections of the Town Police Clauses Act 1847, creating as it does offences to do with every person who rolls or carries a cask, every person who beats or shakes any carpet, every person who keeps a pigsty and even—the politician’s favourite—every person who flies a kite.
However, most of the provisions in Schedule 20 are not like that. They are repeals of complicated sections of Acts or of whole Acts themselves. There is even one Schedule 20 provision to be repealed which seems not to be “not any longer of practical use”. That is paragraph 40, which repeals Section 13 of the Defamation Act 1996, which allows an individual litigant in defamation cases to waive the ban in Article 9 of the Bill of Rights on proceedings in Parliament being impeached or questioned in court.
That section of the Defamation Act has been much discussed by your Lordships and the Commons, and I support its removal. However, this section is still of practical use. We are removing it because we think that it is wrong, not because it is useless. It may be in the wrong place in the Bill.
In its report, the Joint Committee recommended that items in what was then Schedule 16 be referred to the Law Commissions for confirmation that they are in fact no longer of practical use. We did that because we felt that:
“The skills, research and consultation needed to ensure that Parliament, external organisations and the public can be satisfied that a piece of legislation is genuinely obsolete strongly suggest that the Law Commissions are better placed to conduct that work than Government departments. Added to which, the independence of the Law Commissions from Government and their track record since 1965 reinforce the trust that Parliament places in the … Law Commission Bills including SLR Bills”.
The point here is this. Whom do we trust to certify that Acts or parts of Acts are genuinely no longer of any practical use? Should it be the department’s assessment agreed by a Minister, or should it be by an independent body, such as the Law Commission, to ensure thoroughness of inquiry and absence of any suspicion of political bias? Or should it be Parliament itself? Parliament has not thought so, for good reason. To examine in exhaustive detail the possible consequences of repeals would overwhelm Parliament and would reintroduce the possibility of suspicion of political motivation. That is why Parliament delegated the job to the Law Commissions and why it approved an accelerated procedure for Law Commission Bills.
In the present case, as this Bill passed through the Commons, there was no real discussion of Schedule 16, which is now Schedule 20. So the question resolves itself into this: is it better to accept, without evidence or supporting argument and without substantive discussion, the Government’s assertion that the items in Schedule 20 are really no longer of any practical use or is it better to let the uniquely qualified and independent Law Commission certify that for us? The Joint Committee thought that the second option was better but the Government did not agree. In their response to the Joint Committee’s report, they made three points.
First, they noted that Governments frequently repeal legislation. However, they do not say how frequently this extends to the en-bloc repeal of over 90 items of legislation. Secondly, they disagree on whether departments have the expertise to determine whether legislation is obsolete or to know the importance of accuracy and giving consideration to saving transitional or consequential provisions. Here, they are pleading not guilty to something that they have not been accused of. The Joint Committee simply noted that the Law Commission was better qualified for this task than the departments are. The Government also make no mention in their response of the importance of having independent judgment, free from the possibility of the suspicion of political bias. Thirdly, they agree that some of the provisions in the then Schedule 16 are the type of repeal candidates that can be referred to the Law Commissions. They do not say which or how many.
When the Joint Committee heard evidence from the Law Commission, we were impressed not only by its obvious independence and professionalism but by its willingness to take on more work. We were also struck by the fact that in its last trawl of government departments for suggestions for repeal to be included in the forthcoming SLR Bill, none of the items now in Schedule 20 was put forward. When we asked the Government why this was so, they gave two reasons. In his letter to the committee of 5 November 2013, Mr Clarke noted that the Law Commission generally brings forward an SLR Bill every four years, with the last being in 2012 and the next in 2016. However, as departments have been asked to implement Red Tape Challenge measures in this Parliament, he went on to say that there are a number of such measures in Schedule 20. He did not say which.
Mr Clarke also told us that the existence of legislation that is no longer of practical use had come to light in the course of mainstream departmental work and that the Bill provides the Government with an appropriate legislative vehicle to repeal it and rationalise the statute book. Neither of those points quite answers the question of why none of the Schedule 20 items was referred to the Law Commission when it asked in June 2011 for proposals for repeal.
The Law Commission has also received no suggestions for repeal at all from the Red Tape Challenge people, the Better Regulation Executive. All this raises another question: “What’s the rush?”. Why cannot the Schedule 20 items be left to the independent review of the Law Commissions to decide whether they really are obsolete or not? The Joint Committee asked the Law Commission how long it would take for it to review the legislation in Schedule 20. The answer was that it would probably take between four and 12 months. What is the problem with waiting that long? In previous Committee sessions the noble Lord, Lord Deben, whom I am sorry not to see in his place, and other noble Lords have wondered whether parts of the Bill are there simply so that the Government can say that they have repealed so many pieces of allegedly burdensome legislation, and that this can be a big number.
The situation that we find ourselves in is this. The Government are proposing the wholesale repeal of at least 84 pieces of primary legislation and seven pieces of secondary legislation. If the Bill passes as it stands, this legislation will be repealed without any real examination by Parliament or any examination at all by the Law Commissions. The Government assert that the departments are qualified to make a proper assessment of whether the candidates for appraisal are obsolete. This is an unevidenced assertion but, even if true, it does not mean that they are best qualified. We have heard nothing to suggest that the departments’ assessments are as deep, as consultative or as rigorous as the assessments made by the Law Commissions.
Of course, any departmental assessment approved by a Minister leaves the whole process open to the suspicion of political bias. This is not an independent assessment process; by contrast, assessment by the Law Commission is exactly that. It is independent of government and it has a statutory duty to apply the three tests of external expertise, impartiality and independence in its SLR function. How does a departmental and ministerial review pass these three tests?
Furthermore, the process of assessment and review by the Law Commission is extremely rigorous. It involves research and consultation, and it finishes in a report and a draft Bill. The research phase tests each repeal candidate—there may well be more than a hundred in any repeals project, although there are fewer than that in Schedule 20—to check whether any of it is of any practical utility. This includes checking parliamentary records, including the original debates, examining other public records and studying a range of legal and historical works to provide context and background information. The research is then written up and issued as a consultation paper to people in central and local government, in industry and elsewhere. This consultation typically goes on for up to three months, dealing with inquiries and responses. After the consultation, the report and draft Bill are produced. This is all very rigorous and very thorough, as it must be if we are to be certain that legislation is really no longer of any practical use.
However, this raises a question about departmental assessments. Can the Minister say whether the departments followed the same process? Was there consultation and, if so, with whom? Are there written reports for the proposed repeal candidates? If so, can we see them before Report? On the one hand, we have the Government’s unevidenced assertion that it is safe to repeal the legislation in Schedule 20; on the other hand, we have the Joint Committee’s recommendation that these items be referred for rigorous, impartial and independent review to the Law Commission for certification that it is safe to repeal them. We know that it would take the commission only between four and 12 months to do this. So, again, why the rush? Why not give these pieces of legislation the kind of scrutiny Parliament set up the Law Commission to provide? The Joint Committee thought there was a strong case for doing exactly that.
Amendment 89 proposes exactly what the Joint Committee recommended. Amendment 103 accepts the repeal of Section 13 of the Defamation Act 1996 by exempting it from the provisions of Amendment 89. Amendment 104 makes Clause 82 and Schedule 20 come into force in accordance with the provisions of Amendment 89. I beg to move.
Lord Rooker
My Lords, I have to be brief but I think that I can say without contradiction that the speech that we have just heard from the noble Lord, Lord Sharkey, was made on behalf of the Joint Committee. I cannot think of a single member who would dissent from what he said, which was based, essentially, on our report. When the report was written, over 12 months ago now, it was of course written not just on the basis of Schedule 16, now Schedule 20. There was also the famous list of six other clauses, about which we took evidence on the basis that they were the worst and most offensive Henry VIII clauses ever put before Parliament. The Government took fright at that and took them out of the Bill, so they are not there. The Government were quite right to do that, so they have made the right decision.
However, the committee was faced with the context of cutting corners on parliamentary scrutiny. We had these six clauses, which were pretty bad, and we then got this great list of material, some of it self-evident, that was of no practical use. We also got the Law Commission in front of us. We also realised quite clearly from the evidence—not just the written evidence but what was before our own eyes—that there was a dispute between the Ministers and the Law Commission. It was self-evident, from both the body language and the actual language, that Ministers thought that the Law Commission was working too slowly—not getting on with it and not chopping enough legislation out of the way. But of course that is the way the commission works, and it quite clearly indicated to us that the staff and resources for this were pretty small beer.
Lord Skelmersdale
My Lords, it seems that we are discussing, in an amendment to Clause 82, the whole subject of Schedule 20. Five or six years ago I put down a Question for Written Answer, “To ask Her Majesty’s Government” what the oldest piece of legislation still on the statute book was. It dated from the 14th century, though I cannot remember what it was. Looking very quickly through the items in Schedule 20 I notice that there is nothing older than the 19th century. Why? It is a mystery. I certainly go along with what the noble Lords, Lord Sharkey and Lord Rooker, said about an appropriate and responsible body to delve into and probe obsolete legislation. I could not agree with them more.
Lord Stevenson of Balmacara
My Lords, although I may be being a bit previous in saying this, I think that I am the only Member of your Lordships’ House who so far has sat through every minute of the debates that we have had in Second Reading and Committee. I draw two conclusions from that. Today’s open and discursive discussions illustrate that it is a strange experience to be able, in your Lordships’ House, to roam so widely through these uncharted territories of legislation. Some of it, as has been pointed out, goes back a long way, though not all that far back. We have also tried to come to some conclusions about how we might look at this.
There are two conclusions to draw. First, the exercise in pre-legislative scrutiny that was done in the Bill is a very good thing. The reports that this scrutiny generated, and the actions that were taken and the improvements that were made to the Bill by that process, exemplified by my noble friend Lord Rooker, are things that we should bear in mind. Secondly, we need to utilise that experience better. Perhaps it is something for another time. The periodic appearances of my noble friend Lord Rooker and the noble Lord, Lord Sharkey, have always generated, when they are here, a much better and more focused discussion in our considerations than when they are not; they have been present a lot and have raised good points. It has struck me that when we have been able to interrogate and listen to what they have been saying we have learnt a lot more about the process that we otherwise do.
That leads to a broader truth that came out in all the presentations that we have had around this amendment so far; we are probably rather ill equipped in Parliament under the processes that we have to follow to do the deep and important thinking about some of the legislation that has gone or is currently going through the House. I absolutely take the point that was made by the noble Lord, Lord Sharkey, and my noble friend Lord Rooker that it is inefficient for Parliament to try to scrutinise line by line material which is obscure and possibly not very well expressed in terms of the material we are given and the notes.
I do not want to go through each of the paragraphs in Schedule 20, but I wish to share with the Committee two things about the process. One is that without a Keeling schedule relating to the particularities of the Bills being amended, it is almost impossible to work out what they are. One simply does not have the expertise or even the time to do that, and it would not be fair to ask civil servants, even if they were able to do it, to help the Opposition on this matter. For example, in paragraph 1, the best I could get from the Bill team—and I thank them very much for it—was a set of summaries in which they tried to characterise what is being done by the various enactments. The first, which is an amendment to the Companies Act 2006 simply says:
“The provisions to be repealed were originally included in the Companies Act 2006 to address an anticipated transitional issue in relation to moving the rules requiring audits of some small charitable companies from the Companies Act to charities legislation … This means the provisions are no longer needed”.
You do not have to be an expert in logic to realise that there a bit of imaginative leap in that. I do not know what legislation is being referred to, and I have not been able to track it down, so I am taking at face value what is, I am sure, good advice that the original legislation has indeed been overtaken by changes in charities legislation, but I do not know that. Therefore, I am not able to scrutinise as effectively as I would like the work that has been done.
These are points already well made by the noble Lord, Lord Sharkey, and my noble friend Lord Rooker, and I do not want to go over them. I have a number of points throughout paragraphs 1 to 42 on these matters. I could go through them, but it would take up the good will in this Committee, so I will not do it. However, it makes the point for me that we have to have a body that we can trust as a Parliament to certify that the Bills or legislation that we wish to see excised from the statute book are no longer of practical use. That body has to be independent. It has to have the time to do research, it has to be able to certify to Parliament that it has done a full and comprehensive study of the work, duly taking evidence and drawing conclusions from work carried out in other ways, to provide a draft Bill to be taken forward. Otherwise, we are cutting corners, as my noble friend Lord Rooker said. We simply cannot be certain that what we are doing in this process is not allowing infelicities, injustices and other things to happen in areas where it would be wrong for Parliament to take things forward.
I said I would not go through them, but I cannot resist just one more example. In paragraphs 14 and 15, there are proposals to excise Sections 6 and 7 of the Atomic Energy Act because they are no longer of any use. I could quote the whole of the Explanatory Notes, but I shall jump to the end. They state that the measures define “prescribed substances” that include,
“uranium, plutonium and other substances prescribed by order which can be used for the production of atomic energy or research”.
Then they state—I do not know how to judge this statement—that,
“the United Kingdom no longer needs to search for these substances as it has a steady supply from politically stable countries”.
Need I go on? What sort of judgments are implied in that? To whom and to what Minister has that been put up as a submission? Which Minister has signed off in his or her mind that we no long require for our future energy sources for the longer term to have the right to search for uranium, plutonium and other substances which we need to keep our atomic energy systems going because we can get them easily on the open market from politically stable countries? Okay, Lord Copper, I get what you are at, but this is not sufficient to make a decision of that nature. I may be extending to make the point, but it is typical.
I signed up to this amendment because I thought it was the right thing to do. Having listened to the persuasive arguments of the noble Lord, Lord Sharkey, the detailed criticisms made by my noble friend Lord Rooker and the points made by the noble Lord, Lord Skelmersdale, about how neat and necessary it is to have a proper system here, it seems to me that we need to think very hard about this.
I appeal to the Government; they would not lose this clause if they decided to accept what is proposed here. They could take credit for making sure that the standards that we set in this Parliament are for the long term and for the good. That would be something that we would all applaud.
The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)
My Lords, I thank my noble friend Lord Sharkey for moving his amendment and allowing us to have this opportunity to discuss Clause 82 and Schedule 20, which provide for a number of legislative measures to be repealed or revoked. I am grateful to the noble Lords who have taken part. I get the general message and I hope that I can respond to the points that have been made.
The conditions that are proposed in my noble friend’s amendment would include the need for the Law Commissions of Scotland and of England and Wales—to report, before commencement, on whether or not the legislation to be removed still has a practical use. The amendment, as my noble friend would acknowledge, does not require the Law Commissions to undertake this work. Rather, it indicates that it would not be possible to move forward with regard to the repeal or removal of these provisions from the statute book until such time as the Law Commissions had reported on the legislation contained in Schedule 20. In the absence of any report from the Law Commissions, the obsolete law would simply remain on the statute book.
I hope that there is common ground in this Committee that it is a worthwhile objective to make the statute book simpler to use for practitioners and those in different walks of life when they run up against the law. It is better if it is easier to navigate for the end users of the law. My noble friend makes the point, which I agree with, that the Law Commissions do not have a political agenda. While it is true that many of the provisions in the schedule are a product of the Red Tape Challenge in the sense that they come from a political origin, the purpose of this is to repeal redundant legislation and legislation that is no longer of practical use. The selection of this particular obsolete legislative list may have had a political element in its origin, but in the end the purpose is to ensure that redundant legislation is not on the statute book. Again, I hope that that is a politically neutral statement to make and something that we can all subscribe to.
As my noble friend fairly observed, and as the noble Lord, Lord Rooker, acknowledged, there are clauses that caused considerable offence to the Joint Committee. The Government have accepted that particular recommendation. Those clauses that contained future order-making powers for pieces of legislation that were considered to be redundant were removed. The argument that was made by my noble friend and by the noble Lords, Lord Rooker and Lord Stevenson, would have had greater force if the Government were still trying to defend an order-making position. That is not the case. We took into account the evidence submitted during pre-legislative scrutiny and in the Joint Committee’s recommendations, and the Government removed this power from the Bill.
The origin of this amendment is, of course, that the Joint Committee also recommended that the various items contained in Schedule 16—I think it was at that time—should be referred to the Law Commissions for confirmation that they were indeed no longer of practical use. As has already been alluded to by my noble friend, the Government did not agree with this recommendation. However, I begin by pointing out that one of the main criticisms of the order-making power was that there was an inappropriate level of parliamentary scrutiny.
This schedule, both in the form that it is in today and in its original form, has gone through pre-legislative scrutiny. I hear what the noble Lord, Lord Rooker, says—that he did not think that it was an adequate or long enough opportunity—but it has had pre-legislative scrutiny and Parliament has considered the Bill up to this point, and no evidence has been brought forward that the items contained within it are not redundant. There is an important exception to that, which we are about to debate in the upcoming group of amendments in the names of the noble Lords, Lord Grantchester and Lord Trees, where there was an issue identified by those with a particular interest in dog breeding, and we as a Committee will have an opportunity to consider this.
As the noble Lord, Lord Rooker, said, the report and legislation that comes forward from the Law Commissions takes about three minutes of parliamentary time. This—particularly these provisions—has taken up far more than three minutes of parliamentary time. That is not the point that I wanted to make. It is not just that Parliament has had the opportunity; it is that—and we know this through all the work that we do in Parliament, not just in this Bill but in a whole host of Bills—we are informed in our debates by a whole host of outside bodies that are more than happy to give us the benefit of their experience, expertise and knowledge on these issues.
The noble Lord, Lord Stevenson, referred to paragraphs 14 and 15 regarding the Atomic Energy Act 1946. In the 31 years since I was first elected as a Member of Parliament, I have never known the nuclear industry to be backward in coming forward if it thought there was a problem with something that Parliament was about to propose. There was also a reference to paragraph 28, omitting Section 10 of the Sea Fish (Conservation) Act 1992, which requires that a report on the operation of the Act be laid before Parliament within the period of six months beginning 1 January 1997. Clearly that had to be done by 1997. Having represented for 24 years, both in the other place and in the Scottish Parliament, a constituency that had very strong fishing industry interests, I make the point that the fishing industry was never slow in coming forward either. It had very good people working for it who would spot important issues. With the exception of the amendment that we are about to come on to, in the whole time that these measures have been out there—since, I think, the summer of 2013—no interested bodies have come forward and said that these pieces of legislation still have a purpose and should be kept on the statute book.
I believe that good housekeeping of the statute book is good governance. When we bring forward legislation in the normal course of events, a Bill often has a schedule attached to it that will have repeals. They have never gone anywhere near the Law Commissions, unless it happens to be one of the Law Commissions Bills, which now use the fast-track procedure. It is quite usual for Bills to have a whole series of amendments and repeals because they are no longer going to be of any use, given the new legislation that is coming through. What we are doing here is bringing together a number that one might say were not picked up at the time when other pieces of legislation were brought forward. Nevertheless, Parliament has been invited to accept, as we do on many other occasions, that they will no longer be useful.
Although it is true that some of the pieces of primary legislation contained here are repeal candidates for one of the Law Commissions’ Statute Law (Repeals) Bills, I also make three particular points. The Law Commissions tend to focus their resources on certain themes for each repeals Bill. If a repeal candidate does not fit within the theme of a Bill, it is uncertain whether it would be accepted by the Law Commissions for inclusion. The Law Commissions confine their repeals work to primary legislation. A number of the paragraphs—I think that my noble friend said that there were eight—relate to secondary legislation, which has not historically been within the purview of the Law Commissions when they do repeals work. Although secondary legislation can be revoked using the parent Act, this Bill provides an ideal vehicle to revoke these regulations in an efficient manner.
Secondly, many of the provisions contained within the schedule came out of the Red Tape Challenge. The noble Lord, Lord Rooker, clearly made the point that none of these had in the past been referred to the Law Commissions. I do not think that we are running away from the fact that many of them do come out of the Red Tape Challenge. However, many of the themes were launched after the Law Commission for England and Wales invited submissions from government departments in June 2011 on what should be included in what was its last statute law repeals report, published in April 2012.
The next repeals Bill will not be introduced until 2016, and it is my understanding that the focus of the Law Commission’s repeals work will be on laws relating to overseas territories and churches. The Government do not see why the removal of redundant legislation should wait when the Bill that we have before us provides a legislative vehicle for doing so.
Finally, it is worth noting that government departments are key consultees for the Law Commission in seeking to make these kinds of repeals. As the Law Commission for England and Wales states on its website:
“Sometimes it is impossible to tell whether a provision is repealable without factual information that is not readily ascertainable without ‘inside’ knowledge of a Department or other organisation”.
I know that my noble friend said that the Government were answering a question that they were not asked but it is important to make it clear that this is not arbitrary work and that we have within the departments a considerable amount of expertise. One of the examples that was given in, I think, the response to the Joint Committee’s report is in this Bill. I think that it was one of the other clauses which drew the short straw in having to deal with part 1 of Schedule 6 to this Bill. It repeals the Deeds of Arrangement Act 1914 as part of a package of insolvency measures. Research, conducted by departmental lawyers, indicated that there was still one person who had a deed of arrangement under the 1914 Act, and a decision was made to include a special saving provision in paragraph 3 of Schedule 6.
The noble Lord, Lord Naseby, was not here to move his Amendment 90 but my noble friend Lord Sharkey referred to paragraph 40, which relates to Section 13 of the Defamation Act. I accept and acknowledge that it is not what I would call a redundant provision; it can be argued that it continues to have legal effect. However, the position is that it was a non-government amendment—one that was accepted by the Government due to a previous commitment to remove Section 13 of the Defamation Act when an ideal legislative opportunity presented itself. I think that, left to the Government’s own devices, it would not have appeared in Schedule 20, but that is where it was moved and that amendment was accepted by the House authorities as the case was made that it fitted within the scope of the Bill. That is why it finds itself here and I think that generally it is a provision that is much welcomed. In those circumstances, I invite my noble friend to withdraw his amendment.
Lord Rooker
What is the Minister’s answer to his noble friend Lord Skelmersdale?
Lord Wallace of Tankerness
I do not think that there is a perfect answer to the earliest one being in the 19th century. If the purpose of this is to try to remove redundant legislation, it can be redundant if it no longer serves any useful purpose. An example is the Sea Fish (Conservation) Act 1992, which is very recent—indeed, I remember taking part in the debates on the Bill that became that Act in the other place. But the purpose of this provision is to remove from the statute book measures which, for example, may have expired or served their purpose, which have been superseded by other legislation or which are simply no longer relevant because they relate to an activity that no longer takes place. I accept that flying kites still takes place, but it takes place in a legitimate way. The fact that there was no provision identified prior to the 19th century I do not think in any way detracts from the ones which have been included, which I would certainly argue that Parliament has had a proper opportunity to consider.
Lord Skelmersdale
Surely the noble and learned Lord will appreciate that the statute book is far, far too long. Therefore, if you can get rid of legislation from between the 14th century and the 19th century, somebody ought to jolly well have a go at it.
Lord Wallace of Tankerness
I am in sympathy with what my noble friend says: the statute book is far, far too long. There is probably someone behind me sweating as I say this but I am sure that if he has candidates that he wants to bring forward to addend rather than amend Schedule 20 before Report stage, and if he gives us sufficient time, they could be looked at to see whether they would be worthy of inclusion.
Lord Sharkey
I am grateful to all noble Lords who have spoken and to the Minister for his reply, apart from his reply to my noble friend Lord Skelmersdale in the last sentence. It is the case, despite the Minister’s assertions, that the items in Schedule 20 have not really been subject to scrutiny in any meaningful sense. I agree, of course, that we have now taken up more than three minutes of parliamentary time by discussing the items in Schedule 20, but we have not actually discussed or examined the items themselves in any detail. What we have discussed is whether they should be there in the first place, which is of course not the same thing.
The argument that interested parties essentially would have complained if they had found any faults—a kind of way of saying “The dog did not bark, so clearly these are okay”—makes me wonder, in a way, why we need any kind of parliamentary scrutiny or scrutiny by the Law Commission at all. We could just say “The dog has barked” or not and carry on that way. I do not think that that would work. On waiting for interested dogs—or interested parties—to bark there are, of course, interested parties but the difference between them and the Law Commission is that the Law Commission is precisely not an interested party.
In closing, there are some questions that the Minister did not answer. Perhaps I could persuade him to write to me, in particular about departmental processes, which are at the heart of the matter, the processes that these proposals have gone through and how those processes in fact impact with the processes that the Law Commission itself would use. It would be very helpful to know how those compared.
The real question, however, and I do not think that the Minister touched on this at all, is one that I asked twice, which is: “Why the rush?”. I do not understand why we have to rush this when we know that the Law Commissions could do this in between four and 12 months.
Lord Wallace of Tankerness
I am grateful to my noble friend for giving way. First, the amendment does not make any requirement on the Law Commissions to do this, so there is no guarantee that it will be done within the next six to 12 months. Secondly, these are matters which have been out in the public domain since the summer of 2013. By the time that this Bill proceeds to Royal Assent, it will be the best part of 18 months, if not longer. I do not consider that a rush.
Lord Sharkey
To answer my noble and learned friend’s first point, I will certainly alter the amendment to make sure that the Law Commissions are required to do it in the appropriate time, and I am grateful for that advice. I do not propose to go any further on the issue of rush because I do not think that our minds are meeting on this. I meant the rush to do it without certification, not just getting it done. That seems to me the heart of the matter. Given that we are in Grand Committee, I beg leave to withdraw and may return to this at a later stage.
“Highways (Assessment of Environmental Effects) Regulations 28A The following Regulations are revoked—
(a) the Highways (Assessment of Environmental Effects) Regulations 1988 (S.I. 1988/1241);(b) the Highways (Assessment of Environmental Effects) Regulations 1994 (S.I. 1994/1002).”
Lord Wallace of Tankerness
My Lords, Amendments 91 and 92 add to Schedule 20, which—as we have just debated—makes provision for legislation that is no longer of practical use to be removed. I will start with Amendment 91. Both the 1988 and the 1994 Highways (Assessment of Environmental Effects) Regulations inserted a new Part 5A (Environmental Impact Assessments) into the Highways Act 1980. These provisions have now been superseded by the Highways (Assessment of Environmental Effects) Regulations 1999, which inserted a replacement Part 5A.
Amendment 92 seeks to repeal the Sea Fisheries Act 1868, the Fisheries Act 1891 and the British Fishing Boats Act 1983 in their entirety. The 1868 Act implemented a fisheries agreement between the United Kingdom and France and amended UK law on sea fisheries. Much of the Act has already been repealed and the remaining provisions relate to requirements on the carriage of fishing vessel registration documents and to the enforcement of those requirements. Such requirements are now set out in directly applicable provisions in European Union law. The Fisheries Act 1891 implemented the International Declaration on North Sea Fisheries, made by the United Kingdom and Belgium, and amended UK law on sea fisheries and on salmon and freshwater fisheries. Again, much of the Act has already been repealed and its extant provisions relate principally to the declaration. The subject matter of the declaration is now regulated by EU law, under the common fisheries policy, which is implemented other than under this Act.
The British Fishing Boats Act 1983 prohibits the fishing for and trans-shipment of sea fish by or from British fishing boats, unless those boats satisfy conditions relating to the nationality of the crew prescribed by order. The British Fishing Boats Order 1983 requires at least 75% of the members of the crew to be British citizens or other EU nationals. The Act and the order are no longer enforced and nationality requirements are set out instead in immigration legislation.
As the Committee will know, fisheries is now largely a devolved matter for Scotland, Wales and Northern Ireland and the Government are working with the devolved Administrations to secure legislative consent Motions to repeal these three Acts. I beg to move.
“Sea Fisheries Act 1868 and other fisheries legislation28B The following Acts are repealed—
(a) the Sea Fisheries Act 1868, including so far as it extends outside the United Kingdom by virtue of section 70 of that Act;(b) the Fisheries Act 1891;(c) the British Fishing Boats Act 1983, including so far as it extends outside the United Kingdom by virtue of an Order in Council under section 10 of that Act.28C (1) The following amendments are made in consequence of paragraph 28B.
(2) In the Fishery Limits Act 1976, in Schedule 2, omit paragraph 7.
(3) In the Debtors (Scotland) Act 1987, in Schedule 6, omit paragraph 24.
(4) In the Merchant Shipping Act 1995, in Schedule 13, omit paragraphs 2, 9 and 68.
(5) In the Statute Law (Repeals) Act 1998, in Schedule 2, omit paragraph 9.
(6) In the Tribunals, Courts and Enforcement Act 2007, in Schedule 13, omit paragraph 67.”
Lord Grantchester
Lord Grantchester (Lab)
My Lords, I declare my interest as a dairy farmer, but I no longer have a dog and do not use a dog on the farm. Paragraphs 31 and 32, to which these amendments refer, arise from Part 6 of Schedule 20, “Animals and Food”. Schedule 20 is entitled,
“Legislation no longer of practical use”.
These paragraphs state that under the Breeding of Dogs Act 1973 and the consequential Breeding and Sales of Dogs (Welfare) Act 1999, and their regulations, a local authority need no longer have regard to requiring dog-breeding records to be kept when granting a dog-breeding licence.
When introduced in the Commons stages of the Bill, it was explained that these requirements, to which we shall come shortly, will no longer be required because as from 6 April 2016 all dogs will need to be identified with a microchip. First, however, the legislation cannot be said to be no longer of practical use. The Microchipping of Dogs (England) Regulations 2014 have yet to be examined in either House; I have yet to examine the regulations in detail. Are they the silver bullet to negate the need for the requirement to keep records? Can the Minister guarantee that the Microchipping of Dogs (England) Regulations will be right first time, so that we do not need a period of time to determine from evidence that they are working effectively without further adjustment? Would the Minister not agree that these paragraphs are being introduced prematurely? They give the impression that the Minister’s department was given a target of provisions to be cast aside into this Bill as a vehicle as it passed by. How foolproof the microchipping regulations are going to be needs to be determined before any consequential action is taken.
Secondly, the Committee can ask these questions because the information required to be kept by the provisions of the Acts already stated is not the same information required to be kept on a microchip. I hasten to add that we on these Benches are greatly in favour of the microchipping of dogs, but that is about identity, whereas the Breeding of Dogs Act 1973 is concerned with the welfare of breeding dogs. Under the Act, a licensed dog breeder must ensure suitable accommodation, exercise facilities and adequate provision to prevent the spread of disease. There are also other provisions. Under the 1999 Act, accurate records must be kept in the prescribed form and be available for inspection concerning the mating of dogs, number of litters and so on. That information is entirely different from the information that will be recorded on microchips and, crucially, it is in a standard format that is convenient for licensing authorities. By contrast, the details on a microchip will be restricted to the name and address of the owner at the time of microchipping; the name of the dog; and its breed, colour, gender and date of birth. Can the Minister confirm that Paragraphs 31 and 32 categorically do not affect the welfare elements in the Breeding of Dogs Act 1973 and that the prescribed form of information will still be required?
Thirdly, the welfare of dogs is an important matter of concern to many people and organisations. I have received expressions of concern from the Advisory Council on Welfare Issues of Dog Breeding, the British Veterinary Association and CARIAD—Care and Respect Includes All Dogs. The Minister’s department has recently published updated guidance to support local authorities in the interpretation of the dog-breeding regulations, particularly the Breeding of Dogs Acts 1973 and 1991 and the Breeding and Sale of Dogs (Welfare) Act 1999. That has been produced in conjunction with the Chartered Institute of Environmental Health, the Kennel Club, the RSPCA and the Dogs Trust. Indeed, the Government commissioned the independent inquiry on dog breeding and welfare standards by Professor Sir Patrick Bateson, which also supported those concerns. The Local Government Association has also written to state that it does not support the paragraphs.
Fourthly, the Government do not appear to have conducted consultation on the issue. Consultation is accepted as necessary for new legislative proposals, but does it not also need to be carried out on deregulation? Your Lordships’ Secondary Legislation Scrutiny Committee will be particularly concerned to ensure that there has been adequate and meaningful consultation on the future microchipping statutory instrument. Will it be concerned about the removal of requirements of the Acts concerning dog breeding? Perhaps the Minister can explain the extent of any consultation undertaken and its relevance in regard to my earlier remarks concerning the welfare issues in the dog-breeding Acts.
Lastly, there is concern that a period may open up between the enactment of the Bill and the operations of the provisions on microchipping. At the very least, the paragraphs need a guarantee that they will not become operable before the necessary databases, believed to be increasing to six, are all fully tested and successful in the integration of records from microchipping. Enforcement authorities could be left without any method by which they could trace dogs, assess the welfare of breeding dogs or protect other dogs and the public from the risk of the spread of disease or the trafficking of illegal dogs.
Those are grave charges against the introduction of these provisions into the Bill. I ask the Minister in his reply to this probing amendment to clarify that these paragraphs do not delete the full panoply of requirements concerning the issuing of dog-breeding licences by local authorities. I beg to move.
Lord Trees (CB)
My Lords, I am all for getting rid of rules and regulations that have served no purpose and are redundant, but when we take a scythe to the deep undergrowth, we risk cutting down some very useful plants. I contend that that is happening here in reference to Part 6 of Schedule 20, which amends the Breeding of Dogs Act 1973 and the Breeding and Sale of Dogs (Welfare) Act 1999. What the provision would do, as the noble Lord, Lord Grantchester, has explained, is to remove a critical requirement for the licensed breeder to maintain records to a prescribed form with respect to the breeding of their bitches.
I contend that to remove this requirement is a retrograde step at this time. What we are talking about here is animal welfare and puppy farming. We are witnessing a huge, unprecedented growth in the commercial breeding of dogs purely for financial gain. In many cases, animals are kept under very inappropriate conditions. This is a matter of considerable concern to the public, to the animal welfare charities and to politicians. We had a debate on dog welfare in this House about a year ago, in which puppy farming was dealt with, and there was a debate in the other place on this issue as recently as early September.
We have laws in place to safeguard the animal welfare of breeding bitches: the aforesaid Acts of 1973 and 1999, which laid down limitations on the number of litters that a bitch can be allowed to produce per year and in a lifetime, the minimum age for breeding and so on. However, the Bill proposes to dismantle the very tools that will allow local authorities to ensure that those important laws, which we all agree that we still need, are being obeyed. So the current regulations are relevant and all that removing them will do is to provide meat and drink for unscrupulous dog breeders to exploit their breeding bitches.
As I mentioned, this matter was debated in another place on 4 September, when the Parliamentary Under-Secretary of State’s attention was drawn to this issue. However, in summarising on that debate he made no reference to this problem but did reference the recommendations of the Chartered Institute of Environmental Health on the sorts of conditions which should be included in any regulations. It is made quite clear in the chartered institute’s guidance that maintaining complete and accurate records is regarded as essential. The current requirements are not onerous. There is a simple pro forma to fill in and you keep a record every time that the bitch breeds. To remove that will not see a surge in the gross domestic product of the United Kingdom, so why imperil animal welfare for no obvious purpose?
I suspect that the answer will be that these current requirements are redundant because it is proposed to bring in mandatory microchipping in 2016. I am totally in favour of mandatory microchipping but as was explained by the noble Lord, Lord Grantchester, the microchipping regulations do not cover the areas of concern that I am expressing. Microchipping is there to link a human being with a dog. I have looked at the draft regulations, which require no more than certain details of the owner and certain details about the dog—its colour, breed and so on. The microchipping regulations do not include any information about the sire or dam of the dog in question or, if it is a bitch, whether it has bred at all, how many litters it has had, when it has had those litters and so on, so they do not substitute for the requirements which it is proposed to abolish.
Removing the current requirement is opposed by the Advisory Council on the Welfare Issues of Dog Breeding, the Dogs Trust, the British Veterinary Association and indeed, by the Local Government Association. Removing the requirement will hardly benefit the economy and will certainly not benefit animal welfare, but it will benefit unscrupulous dog breeders in their attempts to exploit their dogs. I contend that the current regulations are relevant and not redundant. I ask the Minister to reconsider.
Lord Stoneham of Droxford (LD)
Given the noble Lord’s great knowledge on this issue, can he comment on the problem of dangerous dogs and interbreeding, and whether this will weaken our controls in that area?
Lord Trees
It might conceivably in the sense that breeders need to record the details of the sire as well as the bitch in the prescribed form. It could have an effect on the matter raised by the noble Lord. Clearly certain breeds are proscribed, so they would not—or should not—be used for breeding, and presumably would not be entered here. That may have some bearing on the matter. The primary concern is the exploitation of bitches in general and overbreeding because of the financial advantages.
Lord Wallace of Tankerness
My Lords, I thank the noble Lord, Lord Grantchester, for giving the Committee an opportunity to consider these important matters, and the noble Lord, Lord Trees, who brings considerable experience and expertise to such issues. I have a dog, but as it is in Scotland it will not be affected by paragraphs 31 or 32 of Schedule 20, covered by the amendment moved by the noble Lord, Lord Grantchester.
I should say at the outset, and quite properly as I am sure the Committee would agree, that the welfare of dogs is vital. We have been described as a nation of dog lovers and we would want nothing less. I understand that the provision in paragraph 31 relates, as has been said, to questions of the keeping of records and does not impinge on other parts of the legislation dealing with welfare. Paragraph 32 is consequential on paragraph 31. That is an important concern to the noble Lord. There are many other provisions that seek to secure the welfare of dogs. I acknowledge from the concerns expressed, not least in the comments of the noble Lord, Lord Trees, that some of these records are important for welfare.
As has been identified, the underlying reason for including these paragraphs in the schedule is because most of the information held on paper records will, as from April 2016, be held on a microchip database. It is also the case that any information that is not held on a microchip database, and which a local authority considers a particular licensed dog breeding establishment should record, can be made an additional condition of the licence, so there is provision if there is concern about a particular breeding establishment. However, we recognise that the repeal of these paragraphs is not intended to commence until the microchipping is in place. The relevant commencement provisions are at Clause 90(2)(n). Subsection (2) states:
“The following provisions come into force at the end of the period of 2 months beginning with the day on which this Act is passed”,
and receives Royal Assent.
Paragraphs 31, 32 and 37, the subject of the next amendment, are excluded from coming into effect after two months but rather, as I read it, will come into force on such a date as the Secretary of State may by statutory instrument appoint. There was concern about this being introduced before the microchipping provision. That will not be the case, but I can go further than that because the Government have been aware of some of the concerns and have decided to consult the key stakeholders on this issue. If there is enough evidence to support retaining the requirement for licensed dog breeders to keep records, the Government will not commence the repeals contained in paragraphs 31 and 32 of Schedule 20.
Lord Grantchester
Will the Minister clarify that the Clause 31 reference to Section 4(i) refers only to the identity of any dog and that there is nothing else involved, such that it entirely mirrors the provision that a microchip will provide?
Lord Wallace of Tankerness
I will be told by those sitting behind me if I am getting this wrong, but my understanding is that what is required under the 1999 regulations, which I assume are made under the registration provisions that we are talking about, is the name of the dog, the date of birth, the address, the breed, the description, the sale details, the weight of the dog, the mating date, the sire details and the number in the litter. The microchipping database covers all but four of these. The four it does not include are the weight of the dog, the mating date, the sire details and the number in the litter. I think that that is as full an answer as I can give the noble Lord.
Lord Grantchester
I am very grateful to the noble and learned Lord for being so helpful. I am very grateful for the support of the noble Lord, Lord Trees, in this short debate. I levied five charges in terms of anxiety and concern on this legislation and I have listened carefully to what the Minister said. I think it will need a period of reflection. Most notably, I ask him to provide details of the consultation exercise that has been conducted so that we can have a look at it before Report. Having said all that, I am very grateful that the noble and learned Lord is content that the border is secure in respect of dogs moving across jurisdictions and I beg leave to withdraw the amendment.
Lord Grantchester
Lord Grantchester
This amendment removes paragraph 37 of Schedule 20 concerning the requirement for a dog to wear a collar with an identifying tag at sale under the provisions of the Breeding and Sale of Dogs (Welfare) Act 1999. This provision is also predicated on the successful introduction of microchipping. Many of the points mentioned in the previous amendment on dog breeding welfare are also relevant here concerning whether the future introduction of compulsory microchipping will necessarily be proven to render the various Acts’ provisions to be no longer necessary, bearing in mind the comments we have just exchanged concerning whether the exact provisions mirror the microchipping possibilities. Under the Breeding and Sale of Dogs (Welfare) Act 1999, which amends and extends the 1973 Act, a puppy may be sold directly to a future owner or, if to a third party, only if the owner possesses a pet shop licence.
A licensing officer can assess whether or not a breeder is meeting the conditions only if the details of the sale and the purchaser are recorded. The microchipping of breeding dogs and puppies does not enable checks on whether puppies have been sold by a breeder to dealers who do not have a pet shop licence. The information on a microchip, limited as it is, merely records hoped-for accuracy at the time of implant. Thereafter, any new keeper must ensure the records on the database are updated accordingly. I understand—although I have not studied this—that the requirements of the microchipping regulations that are shortly to be introduced will deem a dog to be not microchipped if these databases are not correctly updated. Surely, the successful working of this must be evidenced before this clause is implemented. In this regard, I am not referring just to the implementation of this Act after the regulations on microchipping but to a period of time to ascertain that this is all working smoothly.
I imagine that most people have very limited information on any tag on a collar: perhaps just the dog’s name and a phone number. This, at least, is likely to be up to date. If a dog becomes lost, then anyone who comes across the dog can ascertain the present owner—should the dog still have the collar, I grant you. Members of the public will not be able to read a microchip and take the initiative to reunite dog and owner, which can only increase the likelihood that people will deliver dogs to councils. Councils will find it increasingly burdensome to deal with the consequences of this. Does the Minister’s department intend to fund fully this new burden of looking after and aiding the identification of dogs and tracking their owners?
Of more significance, as I have alluded to, is the potential gap between the successful operation of microchipping of dogs and the removal of the requirements under paragraph 37. There should certainly be a much longer requirement for the new regulations to work through the likelihood of sales of dogs as they mature than there is in the prior amendment. I very much look forward to looking at the regulations concerning microchipping. I am certain that microchipping will improve the situation. However, the regulations cannot be seen to be the panacea that can allow these present provisions to be disregarded. They should continue to operate alongside the development of microchipping. I beg to move.
Lord Wallace of Tankerness
Once again, I thank the noble Lord, Lord Grantchester, for moving his amendment and raising an important issue. The amendment would have the effect of continuing to require licensed dog breeders to identify any dog which is sold to a licensed pet shop or Scottish rearing establishment with a tag or badge.
As has been acknowledged, the underlying reason for paragraph 37 is that from April 2016 all dogs will need to be identified with a microchip and therefore there will be no need for dogs sold from licensed dog breeding establishments to pet shops, or indeed to Scottish rearing establishments, to be identified by a tag or badge. It is important to make clear that there will still be a requirement for all dogs in public places to have an identifying badge. That requirement is not removed by this paragraph. It is considered appropriate to retain that, even after compulsory microchipping is introduced, because if a member of the public finds a dog loose in the street, they are not likely to have a scanner in their possession to know where to return the dog.
Because these repeals are not intended to commence two months after Royal Assent, but instead not until April 2016, when the microchipping provisions come in, the Government have decided to consult key stakeholders on this issue, as I indicated on the previous amendment. If there is enough evidence to support retaining the requirement for licensed dog breeders to identify any dogs sold to pet shops or Scottish rearing establishments with a tag or badge, it would not be our intention to commence the repeal contained in paragraph 37 of Schedule 20. Paragraph 37 is also omitted from the more general commencement with regard to Schedule 20.
I have no doubt—indeed of course the noble Lord has mentioned it—that points can be made during that consultation about, as he indicated, the gap in time between microchipping becoming a requirement and seeing how it works in practice. Obviously, it will also be an opportunity to have proper scrutiny of the microchipping regulations, which I think he referred to in his earlier amendment.
Again, I just repeat that there will be a consultation and the responses to that consultation will be weighed up with regard to the very specific point about the tagging badges when licensed dog breeders pass on dogs to pet shops or Scottish rearing establishments. In these circumstances, I invite the noble Lord to withdraw his amendment.
Lord Grantchester
I am grateful to the Minister for clarifying that dogs will still be required to wear an identity tag and that a lot of the concerns on that score can be laid to rest. I am grateful that he has further clarified, under this amendment, that consultation is proceeding with necessary stakeholders on the introduction of these provisions. With that in mind, I beg leave to withdraw my amendment.
Lord Rooker
I have one last, general question on this, which comes as a result of listening to these last two debates. Can the Minister give a commitment that the Government will not bring any new material forward for Schedule 20 at further stages of the Bill?
Lord Wallace of Tankerness
As I am not the Minister in charge of the Bill, I am not sure I can give that commitment and am wary of doing it, having just invited the noble Lord, Lord Skelmersdale, perhaps to suggest candidates—although I did qualify that invitation by saying that he should give plenty of time so they could be properly looked at and considered.
Lord Wallace of Saltaire
I can say that it is not our intention. We will take the warning.
Lord Wallace of Tankerness
I am advised that it is not the Government’s intention to bring forward further pieces of legislation into this. We take heed of the warning that the noble Lord, Lord Rooker, has very effectively delivered.
Lord Rooker
It is not a warning; it is just the fact that it is quite clear that people inside the government machine—I do not blame them—are now looking at what is going to be changing in the future that will make legislation redundant before the action takes place. This is a very suitable vehicle for piling other stuff in, which is clearly the implication of what we have just heard about dog chipping. It is something that is coming in the future that will require this change—here is a nice vehicle. I just wonder what else is around. It would be very unwise from a parliamentary scrutiny point of view.
House of Lords
Local Authorities: Funding
Baroness Farrington of Ribbleton
To ask Her Majesty’s Government what assessment they have made of cuts in funding to local authorities in the most deprived and least deprived areas of England.
Baroness Williams of Trafford (Con)
My Lords, local government accounts for a quarter of all public spending. It is vital that local authorities help tackle the deficit by finding sensible savings and making better use of resources. Local government has risen to the challenge well and public satisfaction with council services remains high.
Baroness Farrington of Ribbleton (Lab)
My Lords, I accept the Minister’s statement but would add that the University of Sheffield’s research shows that areas such as my own—Preston, Blackburn with Darwen, Liverpool and Manchester—have suffered disproportionately in terms of the reductions they are being asked to make. For example, Public Health England found that Manchester, Liverpool, Blackburn with Darwen and Preston face some of the toughest challenges. How can the Government justify giving reduced spending powers to local authorities in the most deprived areas and allowing greater spending in more affluent areas?
Baroness Williams of Trafford
My Lords, this is just not the case. The most deprived councils receive, on average, 50% more than the least deprived. I will give examples from either end of the spectrum. Middlesbrough gets £2,500 per dwelling and Poole gets £1,678 per dwelling.
Lord Laming (CB)
My Lords, in the light of recent media reports, what steps are the Government taking to ensure that child protection services are improved, especially in those areas where the need is greatest?
Baroness Williams of Trafford
Child protection is an incredibly important area—certainly in light of some of the stories we have heard in recent weeks. All local authority officials working with children have a duty of care to those children. This is something we talked about a few weeks ago in terms of firming up some of those multidisciplinary arrangements. These are essential in joining together protections for children.
Lord Shipley (LD)
My Lords, I declare that I am a vice-president of the Local Government Association. In its recent publication Rewiring Public Services, which has all-party support, the association estimated that local government could save the public sector £11 billion annually through joining up service delivery across the public sector as a whole. Does the Minister agree that this is a compelling reason to devolve more power to local areas?
Baroness Williams of Trafford
I certainly do, my Lords. I want at this point to congratulate councils in Greater Manchester, where I was formerly one of the leaders, not only on the steps that they have taken during the past 30 years in doing just that but on the confidence that the Government have placed in them in devolving power and funding to them.
Baroness Wall of New Barnet (Lab)
My Lords, does the Minister accept the implications of local authority cuts for health services? We know from evidence that has come out today, and will continue to come out, of the number of local authorities that have cut beds in the community, ensuring that older people stay in hospital longer. This is affecting my not only own area of Milton Keynes, where I am chair of the Milton Keynes foundation trust, but all over the place. Local authorities are saying outright that this is why they cannot cope with having more beds, so they are closing beds in nursing homes.
Baroness Williams of Trafford
The noble Baroness brings up a very valid point. There needs to be a joined-up approach in both health and social care. It is to be hoped that in due course a better care funding package will deliver this so that there is a seamless transition from hospital to intermediate care to care at home.
The Lord Bishop of St Albans
My Lords, the dedicated funding for local welfare provision has been vital in providing a net for some of the most vulnerable in society. It is proposed that this will no longer be ring-fenced but will be part of a general grant to local councils, at a time when their budgets are increasingly pressed—indeed, there may be a move for that money to be used for core statutory services in future. If that money is not to be ring-fenced, will the Minister tell us how Her Majesty’s Government will monitor the effects of these changes and whether they will be willing to report back to your Lordships’ House on them, to ensure that the most vulnerable are not even further disadvantaged?
Baroness Williams of Trafford
The right reverend Prelate makes a good point. The ring-fenced funding pots were not always used for their intended purposes. It is the Government’s belief that in devolving funds straight to local authorities they will make the best use of them. I shall follow up the right reverend Prelate’s question on reporting back—I am sure that we can report back in due course.
Lord Foulkes of Cumnock (Lab)
Will the Minister ask the Government to consider reviewing council tax and getting a few more bands at the top, so that those people who live in large houses—which might perhaps be described as mansions—could pay a bit more towards keeping local council services going?
Baroness Williams of Trafford
Perhaps that is a question for the noble Lord’s own leader.
Baroness Gardner of Parkes (Con)
Does the Minister think that it is justified for local authorities that provide care services to employ firms that are using zero-hours contracts and paying a minimal amount? I have asked this question of local authorities at a meeting here and they have said that they should not do it. Is this the reason why they do it, with people operating care facilities for patients simply not being paid an adequate amount?
Baroness Williams of Trafford
My Lords, zero-hours contracts are not always a bad thing and they suit certain people, but, certainly, anybody who is working for a local authority needs to be on the minimum wage.
Lord McKenzie of Luton (Lab)
My Lords, there is a clear pattern here: just yesterday, we had a report from the LSE and the ISER looking at the effects of direct tax benefits and pension changes introduced under this Government. Surprise, surprise: it concluded that the poorest half of the income distribution lost out and the top half gained, and that these changes were regressive. To add to that, the Government have not only imposed the biggest funding reductions in the public sector on local councils—with funding cut by 40% over this Parliament —but they have ensured that those areas with the greatest need are shouldering the largest burdens. The noble Baroness cited some figures, but if one looks at what has happened throughout this Parliament, one sees that spending power—the Government’s favourite measure—has been cut for Liverpool by 27%, for Hackney by 27%, for Manchester by 26% and for Birmingham by 23%. However, lo and behold, for Waverley Borough Council and Wokingham Borough Council it has increased by 1%. If that is fair, what definition of fairness is the Minister using?
Baroness Williams of Trafford
My Lords, I take the noble Lord’s point about ring-fenced grants to councils such as Liverpool and Manchester, which lost a lot of theirs. Councils such as Trafford never actually had many ring-fenced grants so they had little to lose in that way. However, that effect has been dampened over the years so that it is not a cliff-like reduction. This Government have a different approach, which tries to rebalance the economy and puts growth at the heart of everything they do, including funding for local areas.
Strategic Defence and Security Review
(10 years ago)
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Lord Alderdice
To ask Her Majesty’s Government when they plan to re-examine the Strategic Defence and Security Review.
Lord Wallace of Saltaire (LD)
My Lords, in January the Prime Minister informed the Joint Committee on the National Security Strategy that work was beginning on the next strategic defence and security review—SDSR. This work is in its preparatory stages and will intensify after the general election for the post-election SDSR.
Lord Alderdice (LD)
I thank my noble friend for that information. The last SDSR took place in the context of a Westminster election and the global economic crisis. From the point of view of many of us, it was overly impacted upon by those things. Since then the situation has changed. The Middle East is dissolving into chaos; the European Union is in disarray; cyberaggression has increased exponentially; and in our relations with Russia, we have not only found difficulties over Syria, Crimea, and Ukraine, but also an increasing statement by Mr Putin of the strength of its nuclear weapons. In the light of this, can my noble friend assure me that during this review, this House will be given an opportunity of having a number of serious debates on the question before the completion of the review, not merely a post-hoc debate after decisions have been made and a posture adopted?
Lord Wallace of Saltaire
I cannot of course commit the next Government in terms of managing the business, but there is time for this House to have a debate on one or two of these issues before then. Since the 2010 SDSR was published, we published in 2011 a cybersecurity strategy, in 2012 a climate change risk assessment and in 2013 the Ministry of Defence’s report on global strategic trends. We are keeping pace as far as we can with all the expected and unexpected developments that the noble Lord mentions.
Lord Davies of Stamford (Lab)
Has it occurred to the Government that the cuts by many NATO countries in defence expenditure, in which this Government—our Government—unfortunately led the way, might just have had something to do with the much more aggressive policies pursued by Mr Putin over the past couple of years?
Lord Wallace of Saltaire
That is a slightly unfair question in many ways. Britain remains the second largest member of NATO in terms of the amount spent on defence. We are currently deterring Russia through the use of sanctions at least as much as through defence. So when we talk about national security we do not only mean defence in strict terms.
Lord Trefgarne (Con)
My Lords, does my noble friend not agree that if by some cruel mischance the Labour Party wins the next general with the assistance of the Scottish nationalists, it will have to find the money to move Trident, not to mention covering all the unemployment in that part of Scotland?
Lord Wallace of Saltaire
I find it very interesting that the noble Lord should describe the possibility of the SNP taking a very large number of seats in Scotland away from the Labour Party as assisting the Labour Party.
Baroness Royall of Blaisdon (Lab)
My Lords, coalition at the end of a fixed-term Parliament is a difficult beast. I would like to know what the Government’s policy is on having a strategic defence review in every Parliament as a statutory review. It is very difficult to ask a member of the Liberal Democrat Party because that is not, I think, its policy. I wonder whether the noble Lord could answer on behalf of the Government.
Lord Wallace of Saltaire
The coalition Government promised in 2010 that there would be moves towards a regular SDSR. The noble Baroness will well understand that this is because the Labour Government did not have a strategic review between 1998 and the end of their 13 years in office. It is our intention that the next Government—however they may be constituted—should conduct a post-election SDSR as a matter of urgency.
Lord Palmer of Childs Hill (LD)
Could the Minister give the House the government assessment of the security risks from terrorism that will be included in the review?
Lord Wallace of Saltaire
My Lords, terrorism, just like transborder organised crime, is clearly one of the major threats that we have to consider. There is a domestic dimension as well as an international one, and the Government are devoting considerable resources to both those overlapping issues.
Transatlantic Trade and Investment Partnership
(10 years ago)
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Baroness Falkner of Margravine
To ask Her Majesty’s Government what discussions they have had with other European Union member states about investor-state dispute settlement, in relation to the Transatlantic Trade and Investment Partnership.
The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)
My Lords, the Government have ongoing discussions on investor-state dispute settlement provisions in the Transatlantic Trade and Investment Partnership, TTIP, with EU member states, the European Commission, MEPs and other stakeholders. We want investment protection provisions that guarantee the right of Governments to legislate in the public interest while ensuring access to justice for investors who are discriminated against or treated unfairly.
Baroness Falkner of Margravine (LD)
My Lords, I belatedly welcome my noble friend to the Dispatch Box. I think that this is my first interaction with him. He will know that in the past 15 years 1,400 investor protection agreements have been agreed by EU member states. In 2012, 60% of them were brought by the EU states alone and only 7.7% by the US. Therefore, it is very depressing to see that it looks like there may be a real backlash against ISDS. What discussions is my noble friend having with the Commission, which has now split the responsibility for this between the vice-president and the commissioner? Indeed, what are the UK Government doing to assure the public that state regulation for the public good will be exempted from this safeguard and that it will be a very good thing for the UK as part of TTIP?
Lord Livingston of Parkhead
My noble friend is entirely correct that investor-state dispute settlement provisions have existed for a long time. There are a great number of them and, to the extent that they are used, they are often used by the EU and not by US corporations. We are having detailed discussions not just with other member states and the Commission but with MEPs. I had the joy of two days in Brussels just last week discussing such matters. We are also engaging NGOs—I am meeting a number of them and other interest groups—and we continue to make the clear case that we will ensure that the UK’s interests and public services are protected in all such discussions.
Baroness Coussins (CB)
My Lords, what progress has been made on incorporating into TTIP some of the features of the investor-state dispute mechanism that were achieved in the free trade agreement with Canada, which I understand incorporated provisions about transparency of proceedings, costs and other issues that meet some of the concerns that have been expressed?
Lord Livingston of Parkhead
The noble Baroness is entirely correct. The agreement with Canada is far more the state of the art. Although we are waiting to see the results later next month of the consultation on ISDS, I hope and assume that they will incorporate much of what we have learnt from CETA. From speaking to the US representatives, I know that they too are very much for things like transparency in ISDS clauses, thus meeting some of the genuine concerns about some of the past ISDS clauses.
Baroness Ludford (LD)
My Lords, is it not the case that these trade negotiations are probably the most transparent ever? Quite rightly, the negotiating mandate has been published, which is good, and it confirms that EU member states will agree to the inclusion of investor protection and ISDS mechanisms only if they allow EU member states to pursue legitimate public policy objectives, including the regulation of public health. This is a great improvement on the past and gives a guarantee that what matters is the substance.
Lord Livingston of Parkhead
My Lords, my noble friend is entirely right. The substance of the ISDS clauses is nowhere near as fearful as some of the claims. Although we can improve the transparency of the discussions, and the UK is certainly seeking to do that, the EU should at least be commended on the degree of public consultation that has taken place on these discussions.
Lord Stevenson of Balmacara (Lab)
My Lords, we share the aspirations for TTIP, as long as the benefits flow to consumers and employees. We welcome the Minister’s mention of discussing the ISDS, which has become a lightning conductor for general discontent about the TTIP treaty. Given that we are talking about mature democracies with strong and robust legal structures, why does he not learn from the great example of Canute, drop the problematic ISDS and get on with selling the rest of the treaty to the country?
Lord Livingston of Parkhead
Given the scale of investment by our two countries, it is appropriate that companies of all sizes have protections. It is also important that we create the right sort of clause for the future. We should not have two classes of country: ones with which we have ISDS clauses, because we do not trust their legal systems, and those with which we do not. It is important to establish the right sort of clause with the US, which, as the noble Lord says, is a stable democracy, that we can then roll out to the rest of the world, making sure that we have the rule of law.
Baroness Jones of Moulsecoomb (GP)
My Lords, can the noble Lord assure the House that there will be no lowering of current EU standards on things like air quality, water quality, employment standards or animal welfare by virtue of TTIP negotiations?
Lord Livingston of Parkhead
The President of the EU, President Barroso, has made it very clear that TTIP is not about lowering standards. It was much the same with the single market which did not, I believe, create lower standards. EU laws and fundamental rights are going to be protected as part of these discussions and in discussions with the US. The US is not seeking to change that, although it regards some of the EU regulations as being too low and it also worries about similar matters.
Lord Foulkes of Cumnock (Lab)
My Lords, does the Minister accept that there is genuine concern that if there is private investment from overseas in our health service and then an incoming Labour Government want to restore it into public financial control, there could be seriously high claims against us which would cause great difficulties? What is being done to ensure that that kind of claim does not cause great difficulties for the NHS in future?
Lord Livingston of Parkhead
I can assure the noble Lord that such claims would not arise because of TTIP, although there may be contractual claims which are a matter of domestic law. CETA, which was mentioned earlier, states:
“The EU reserves the right to adopt or maintain any measure with regard to the provision of all health services which receive public funding or State support in any form”.
It is quite clear that the decision about how these services are provided is a matter for national and, in the case of the UK, commissioning authorities. It is not going to be decided by TTIP or, indeed, any other trade agreement.
The Countess of Mar (CB)
My Lords, can the Minister give the House an assurance that the influence of major multinational companies will not overcome the rights of individuals and small groups of people?
Lord Livingston of Parkhead
I can very much give that assurance. The groups we consult with in the UK and the steering group used by the EU are a mixture of large and small companies, consumer groups and NGOs. That will continue and we are hearing their voices very strongly. It must be understood that TTIP is going to be most beneficial to consumers, who will see lower prices, and to small companies which find the barriers caused by trade distortions far more difficult to cope with than the global multinationals. This will be the first agreement to have a small business chapter and I welcome that very substantially.
Baroness Farrington of Ribbleton (Lab)
My Lords, I have listened extremely carefully to the Minister. He said that, provided the Government do not wish our National Health Service to be privatised, it will be protected. Can he give a guarantee that all parts of our current Government do not intend, with or without TTIP, further to privatise our National Health Service, because they have already started doing it?
Lord Livingston of Parkhead
Decisions regarding the NHS are made by the commissioning authorities. If I recall correctly, substantial privatisation of the health service took place under the previous Government. It will be a matter for the democratically elected Government and the commissioning authorities as to what may be done by private services and what may not.
Baroness Brinton (LD)
My Lords, there has been a great deal of scaremongering about the National Health Service and TTIP. Might it be helpful for BIS to highlight the EU directive on NHS procurement which makes it absolutely clear that the NHS will not be caught by TTIP contracts?
Lord Livingston of Parkhead
That is absolutely correct. In fact, Commissioner de Gucht has been very clear:
“Public services are always exempted ... The argument is abused in your country for political reasons”.
That is pretty clear. The US has also made it entirely clear. Its chief negotiator said that it was not seeking for public services to be incorporated. No one on either side is seeking to have the NHS treated in a different way. The EU is very clear on that and trade agreements to date have always protected public services. That will absolutely continue within TTIP.
Adoption
(10 years ago)
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Baroness King of Bow
To ask Her Majesty’s Government what assessment they have made of the recent drop in referrals of children for adoption by local authorities.
The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)
My Lords, since 2010, adoptions have risen by 63% to a record level of more than 5,000 last year. However, there has been a significant decrease in children coming into the system since September last year. This appears to be in response to particular court judgments. Information collected by the national Adoption Leadership Board has led it to conclude that there has been some misinterpretation of those judgments. Consequently, the board has produced guidance so that everyone who works on adoption can be confident that they are interpreting the judgments correctly.
Baroness King of Bow (Lab)
My Lords, as the mother of three adopted children, I welcome the Government’s attempt to reform adoption. However, according to the most senior family court judge in England and Wales, Lord Justice Munby, the Government’s desire to speed up adoption has clashed with government cuts to legal aid. Is it not unacceptable that the state can say to parents, “We will take away your child” and at the same time say, “We will not guarantee you a lawyer”? Apart from adding to delays, does the Minister have any sympathy for parents facing this situation or, indeed, for Lord Justice Munby, who must rule on such cases and who says that this approach is “unprincipled and unconscionable”?
Baroness Walmsley (LD)
My Lords, does my noble friend agree that although it is highly desirable that children in need should find a loving for-ever family, as they have in the case of the noble Baroness, Lady King, it is much better, where it is in the child’s best interests, to keep them at home with their parents? Could it be that some of the Government’s prevention measures are having an effect here? Could my noble friend say something about the success of the family nurse partnership and some of the pilot schemes set up by my right honourable friend Sarah Teather to provide further support to parents in different parts of the country? Will that scheme be rolled out?
The Lord Bishop of Worcester
My Lords, does the Minister agree that, whatever the assessment of these figures, there remains a task to be done concerning negative perceptions about adoption in this country? Does he agree with the observation of a judge in the adoption of one of my children that whereas conception is sometimes a biological accident, adoption is always an act of love? Does he agree that it is a noble task and a noble thing to do? What are the Government doing to promote adoption in that light?
Lord Nash
As is well known, the Government have in place a very active reform programme on adoption which has had quite a substantial effect. I agree entirely with the right reverend Prelate’s comments. I was interested to see recent research by Professor Julie Selwyn at Bristol which shows that only 3% of adoptions break down. I think there is cross-party consensus that where there is no option of staying with the birth family, a long-term relationship with loving adoptive parents who have been well scrutinised is clearly in the best interests of the child.
Baroness Billingham (Lab)
My Lords, every day delayed in finding a loving home for a child is a day wasted of the life of that child, and I speak as one who spent part of my childhood in care; I well remember the insecurity I felt. The Minister indicated that there had been some misunderstandings between various organisations and authorities. Can he assure this House that everything is being done to speed up and remove any obstacles? Adoption is such a crucial part of a child’s life that it has to be given the highest priority.
Lord Elystan-Morgan
Does the Minister agree that when a court is deciding on the question of adoption, it should make an adoption order only within the strict terms of the Adoption Act 1976? An adoption order should be made in the best interests of that child and most consistent with its welfare. Even though local authorities may be reluctant to have long-term, laborious care orders, those pressures should be resisted unless a compelling case is made out strictly in accordance with the wording of the statute.
Lord Lexden (Con)
My Lords, what action have the Government taken to improve and strengthen the overall support available to families who adopt children?
Baroness Armstrong of Hill Top (Lab)
My Lords, can the Minister tell the House what the Government are doing to support kinship care? That is overwhelmingly the most successful means of looking after children who are very vulnerable.
Childcare Payments Bill
Social Action, Responsibility and Heroism Bill
(10 years ago)
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Lord Hunt of Wirral
(a) ”
Lord Hunt of Wirral (Con)
My Lords, I declare the interests set out in the register, including in particular my partnership within the global legal firm, DAC Beachcroft, as well as my other entries. The amendments in my name are designed to promote responsible behaviour by motor insurers in order to focus on getting people better rather than by paying them cash which is not then used for treatment.
In putting these amendments together, and in this speech in particular, I have borrowed substantially from a very good report published last July by the insurers, Aviva, called Road to Reform, which I commend to the House. As your Lordships know, for many years I have urged that we should adopt a rehabilitation system of this kind for minor injury claims. It chimes very well with the Government’s agenda of people taking responsibility for themselves, so we should embrace the concept of providing treatment for those who need it rather than compensation and legal costs for what has now become hundreds of thousands of claimants every year, many of whom do not need treatment at all. That is what lay behind the amendment that I successfully moved during the passage of the Compensation Act 2006, which is now Section 2 of that Act:
“An apology, an offer of treatment or other redress, shall not of itself amount to an admission of negligence or breach of statutory duty”.
In these amendments I seek to go one stage further by substituting treatment for payment in low-value cases. We are not talking about serious injuries here, but about temporary distress or discomfort which leaves no lasting effect. According to Aviva’s research, 98% of drivers want further costs taken out of the system to keep motor insurance premiums affordable. We should therefore encourage people with genuine minor injuries simply to make a claim to repair their body rather than for cash. After all, we get the car repaired—why not the genuine minor injury as well? By doing that, we will effectively look after those who need treatment and at the same time will tackle those who seek to abuse the system.
UK motorists do not have the weakest necks in Europe; we have a whiplash culture because as a society we have not taken the same stance as other European countries to avoid these claims in the first place. In other countries you have to prove a level or percentage of disability before you can even make a claim. Aviva’s data show, for instance, that 94% of all personal injury claims for a UK motor accident are for minor whiplash injuries, while in France it is estimated that whiplash accounts for just 3% of personal injury claims.
I hope that I have taken the House with me so far. How, then, do we turn this into meaningful legislation? These amendments propose a threshold of 15% loss of function or less. Doctors will make better sense of that than I can, but I understand that a similar measure has been used in New South Wales since 2002. In case it is felt that we have little to learn from our Australian friends either on the sporting field or off it, the DWP also uses a threshold of 14% for payment of industrial injuries disablement benefit, which is paid only for lasting conditions. In truth, I am not necessarily wedded to the 15% figure as long as there is a clear dividing line between minor road traffic injuries not deserving of compensation if treatment can be and is made available at insurers’ expense, and more significant injuries where compensation can be properly targeted. Aviva estimates that if the simple measure in this amendment was adopted, with insurers still covering the cost of treatment for those who genuinely need it, that could save £32 on everybody’s premiums.
I have spoken before about the other cause for concern behind this approach. As the Association of British Insurers and the British Insurance Brokers’ Association, which I have the honour to chair, put it, we have become the “whiplash capital of Europe”. Fraudsters know it and they are exploiting the ease of our current compensation system. There has been a growing rise in the frequency of whiplash claims and a significant increase in the number of so-called “crash for cash” scams faced by insurers. Particularly troubling is the increase in the number of induced accidents where fraudsters deliberately target innocent motorists to cause an accident. According to Aviva, these increased by 51% last year, and that has to be a cause of major concern.
I am not sure that I have yet persuaded the noble Lord opposite but I am told by my noble friend Lord Henley that to persuade him I just have to quote from Dickens. I am not sure whether that is right—
Lord Beecham (Lab)
I have to say that I have no great expectations in that regard.
Lord Hunt of Wirral
I should stop now. However, I want to stress here that we are not talking about Fagin-type organised crime or Bill Sikes’s opportunist crime, but about the inflation of otherwise genuine claims. It has become a huge industry and insurers are now being forced to spend millions of pounds to tackle it. Organised gangs are at the heart of the increase in the number of these induced accidents. “Crash for cash” not only threatens motorists’ safety but also their pockets. It is estimated that it adds about £400 million to the annual cost of car insurance.
It has become an unfortunate fact that as a society we are faced with so many whiplash claims. It would be easy just to blame the claims farmers, and the House has heard my views on them before. However, despite a series of measures, often encouraged in this House, they continue to proliferate. They plague us with nuisance calls and texts about injury claims from accidents in which we have never been involved and that we have never heard of.
On the subject of nuisance calls, although I welcome the recent consultation by the Department for Culture, Media and Sport, I believe that the current threshold of substantial damage or distress is just too high and that the Information Commissioner’s Office needs to lower the test to ensure that it can tackle more effectively those who are abusing the system and bombarding the British public. I beg to move.
Lord Pannick (CB)
My Lords, this Bill has a purpose—a futile and anodyne purpose in the view of many of us who spoke at Second Reading, but a purpose none the less. Its purpose is to encourage heroism, volunteering and action taken for the benefit of the community. I respectfully suggest to the noble Lord, Lord Hunt, that his amendments are a long, long way away from the purpose of this Bill.
Lord Hunt of Wirral
It may assist the noble Lord if I explain that I was motivated by the speech of the noble and learned Lord, Lord Lloyd of Berwick, in particular, to think of amendments that would add substance to the Bill.
Lord Pannick
I am delighted to hear that because when the noble and learned Lord, Lord Lloyd, comes to move his proposal that Clause 2 should not stand part of the Bill, the noble Lord will no doubt express his wholehearted support for that proposition.
These amendments have no place in this Bill. They would fundamentally alter the scope and effect of the Bill, very much to its detriment. They would prohibit the courts from awarding damages in respect of personal injury in defined circumstances. The existing provisions of the Bill simply identify factors for the court to take into account in deciding whether there has been a breach of the duty of care.
I am also troubled by the detail of the amendments, and I am not reassured at all by what the noble Lord has just said. The amendments beg a large number of questions as to what it means for the defendant to “fund treatment”. At what level of care would that happen, and who is to assess the adequacy of such treatment? If the defendant’s insurer pays for my treatment as the victim of a car accident, would these amendments prevent me recovering compensation for pain and suffering as a result of the accident? That presumably amounts to damages,
“in respect of any personal injury”,
but the amendments seem to prohibit that.
I confess that I am puzzled by the amendments. If the defendant or their insurer has already funded adequate treatment, surely the claimant is going to have to give credit for that in seeking damages. I also do not understand why, if the noble Lord thinks that his amendments are such a good idea, they apply only in respect of,
“loss of function of 15% or less”.
For the Committee to give the amendments any encouragement would in my view, to quote Clause 3 of this curious Bill, not be,
“a generally responsible approach towards protecting the safety or other interests of others”.
Lord Beecham
My Lords, I begin by congratulating the noble Lord, Lord Hunt, on his recent appointment, or on its announcement, as an honorary bencher of an inn of court—I am not quite sure which one. He is to be complimented on that award, whichever one it is. Having said that, I cannot extend that degree of praise to the noble Lord’s amendment. I respectfully adopt much of what the noble Lord, Lord Pannick, has said in that regard.
The amendments seem to elevate insurance companies to the pantheon of heroes—and there may be a degree of heroism involved in that. Alternatively, it characterises them as pillars of social action and responsibility. That is not a view generally taken of insurance companies, for pretty good reasons. We now have a SARAH Bill; the noble Lord seems to want a RIP Bill—a “reduce insurance premiums Bill”. While many of us would want to see insurance premiums being reduced, there may be better ways of achieving that, one of which might be to look at the profits that the insurance companies make.
In any event, as the noble Lord, Lord Pannick, has already demonstrated, there are a number of queries about the provision. One point that he may not have made is that it is open to the NHS when it offers treatment to recover that from the other driver or his insurers. I am not sure what the Bill adds to that provision. While I entirely agree with the noble Lord, Lord Hunt, that it is entirely necessary to deal with the abuses of the present system, this amendment will achieve very little in that respect. The criticisms made by the noble Lord, Lord Pannick, seem to me overwhelmingly persuasive. In particular, the amendments do not lend any substance to an already thin Bill, and I agree with the noble Lord that they are basically out of scope.
I congratulate the noble Lord, Lord Hunt, on his ingenuity in trying to achieve the objectives that he sets out—and he is, of course, entitled to achieve those objectives—but surely this is not the Bill in which to do that. I hope that, when he has heard what the Minister has to say, he will not press the amendment either today or at a later stage, because we will certainly not support it from these Benches.
Lord Walton of Detchant (CB)
My Lords, I had no intention of speaking on this matter when I came to listen to the debate this afternoon but, as a neurologist—a doctor concerned with damage to the nervous system—I have over the years seen a considerable number of patients who were referred to me for an opinion either by a firm of solicitors or by an insurance company. They sought evidence as to whether there was a case to be made out suggesting that the so-called syndrome resulting from whiplash—the sudden flexing and extension of head and neck following a car accident—represented a genuine disability.
I have great sympathy with what the noble Lord, Lord Hunt, had to say as there is clear evidence in some cases that a whiplash has caused significant damage to the spinal cord or to the ligaments of the neck. This evidence can be identified by a number of medical methods. However, there is also clear evidence that a very large number of individuals referred with that type of injury are not suffering from a significant disability. As the noble Lord said, the “crash for cash” issue has arisen in a considerable number of cases over the last year or two, where it is perfectly clear that the symptoms are feigned and are not generally physically realistic. These attempts to obtain compensation are scams. I am persuaded by what my noble friend Lord Pannick and the noble Lord, Lord Beecham, have said. Frankly, I do not believe that this significant issue is properly dealt with by the Bill. Therefore, despite my sympathy with what the noble Lord, Lord Hunt, said, I feel that I cannot support the amendment.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, I am extremely grateful to my noble friend Lord Hunt for bringing these amendments before the Committee and for his explanation of some of the problems that have beset our legal system and our society more generally. They are problems of which the Government are extremely aware and on which they have taken, and are taking, various steps to try to improve the situation. For example, the compensation culture, such as it is, was certainly fed by the cost incentives identified by Sir Rupert Jackson in his report. The reforms have made the costs of litigation much more controlled and your Lordships approved Part 2 of the LASPO Bill, which has resulted in a much more moderate personal injury claims litigation scene.
Noble Lords will be well aware of the dishonesty that sometimes besets personal injury claims. The Government are bringing forward provisions in the Criminal Justice and Courts Bill whereby, if a claimant is fundamentally dishonest, even if some element of the claim is genuine, he or she will not be able to recover any damages at all. We are also acutely aware of the problems with claims management, referral fees and the like. I am glad to say that claims management firms are reducing in number very considerably as they find this a less profitable field in which to plough their furrow. They are now much better regulated and fines of a considerable order are imposed on them if they act in a way which contravenes the law, so all these measures are going in the right direction.
Furthermore, the Government are setting up a regime to deal with whiplash claims. The noble Lord, Lord Walton, identified the difficulty of diagnosis in whiplash cases, which I think is well acknowledged in the medical profession. Although some people undoubtedly genuinely suffer the consequences of whiplash injuries, these injuries are not easily detectable objectively through scans or the like. Thus there is the temptation for claimants to bring claims, often egged on by third parties. It is often easier for insurance companies to pay out sums of money, even though they know that these claims may well be false, because the cost of fighting them is prohibitive.
All of this is a most unattractive landscape. My noble friend Lord Hunt is quite right to bring all those issues to the attention of the Committee. Before I move on to the amendments I should also say that it was as a result of my noble friend’s contribution to the Compensation Act 2006—to which he referred—regarding the provision on apologies not being an admission of liability that has helpfully altered the conduct of some litigation. Indeed, I can declare an interest, having relied on that section in one case.
Lord Hunt of Wirral
My Lords, I am very grateful to all those who have spoken in this debate. I am only comforted by the fact that the noble Lord, Lord Pannick, had rather made up his mind before he heard my speech, because I referred to a number of issues which—I hope—cause him considerable concern. I commend the speech of the noble Lord, Lord Walton of Detchant, because there is a serious problem here and we cannot ignore it.
I am grateful to the noble Lord, Lord Beecham, for his kind remarks at the outset of his speech. I readily accept his acknowledgement that there is a problem here. He may or may not recall—but I know that the noble Lord, Lord McKenzie, behind him, will—that the previous Government attempted to introduce a scheme of rehabilitation rather than cash in employers’ liability claims. It was Jane Kennedy, the Minister, who proposed that. Sadly, although I supported it strongly, it did not succeed at the time. The pilot scheme was rejected but I hope that this House will return to the issue of rehabilitation because we have to make sure that people get the treatment they need. I was taught that at the outset, when I had the honour to become solicitor for the Transport and General Workers’ Union. I became one of the legendary Mr Albert Blyghton’s solicitors, and we constantly strived to get employers to introduce a better system of rehabilitation. I am not sure that we have reached that stage yet.
Lord Beecham
That is about right. I am sure that the noble Lord, Lord Hunt, and I, when representing members of that trade union in their claims, would have sought rehabilitation but we would also have sought proper compensation for the injuries that they suffered. The two things are not necessarily in conflict but I would not like to see rehabilitation to the exclusion of proper compensation in the appropriate case.
Lord Hunt of Wirral
In the appropriate case. I hope that the noble Lord will not mind if I look for agreement in his disagreement. However, there is a general view that we cannot go on like this, and I am pleased in particular with the words of my noble friend the Minister. I will go away and ponder carefully the various ideas he put forward on tackling a menace to society. It is harassing a substantial number of people, which is why I want to return to this subject at a later stage but, in the mean time, I beg leave to withdraw the amendment.
Lord Beecham
“( ) Nothing in this Act shall serve to exempt from vicarious liability an employer or other person for any act or omission referred to in sections 1 to 4 of this Act.”
Lord Beecham
My Lords, assuming for the moment and for the purposes of this debate and the scrutiny role of Committee that the Bill makes any significant difference to the law, save in respect of Clause 3, to which we will come in due course, the amendment seeks to address an issue that has hitherto gone unremarked, except for the reference I made to it at Second Reading. That issue is whether it is reasonable for an employer or other person to escape liability to pay compensation for damage inflicted by another for whom he has responsibility in the event—the unlikely event—of the Bill availing a defence to the person who has caused the injury. After all, why should the injured person not recover against such an employer or, more realistically, from the employer’s insurers under the doctrine of vicarious liability, which makes an employer liable for the negligence of his employee?
I raised the issue at Second Reading but answer came there none from the government Benches. The amendment would not affect the position of an individual whose actions caused injury or loss but would merely ensure that his employer did not escape liability by the back door. It is entirely consistent with the declared objectives of the Bill, which, in the words of the Explanatory Notes,
“forms part of the Coalition Government’s wider programme to encourage participation in civil society and the Coalition Agreement contained a specific commitment to ‘take a range of measures to encourage volunteering and involvement in social action’”.
The Explanatory Notes and the muted fanfare given by the Government to the Bill make no reference to what appears to amount, by accident or design, to a covert intention to shield not just those volunteers but their employers and public authorities from legitimate claims by the innocent victims of negligence.
This morning I met some people who were much engaged with the problems of military personnel on active service now or who have returned to civilian life. They expressed concern that the Bill and in particular Clause 3, to which we will come, could offer an escape route for the Ministry of Defence from being required to compensate those sustaining injury as a result of a breach in the duty to take reasonable care, or indeed a breach of statutory duty. In their view, which I share, that would be another breach of the military covenant, to stand alongside the Ministry of Defence’s refusal to augment the staffing required to operate the veterans’ compensation scheme, despite the recently disclosed substantial backlog in dealing with claims under that scheme.
I accept that the Minister will not be able to do this today, but I invite him to confirm whether the Ministry of Defence will be entitled by the provisions of this Bill to avoid paying compensation to members of the Armed Forces or to others that hitherto it might be obliged to pay, not under the voluntary scheme, but under the normal rules of personal injury claims. Perhaps the Minister could indicate whether there is any rationale, which I failed to detect, in what appears to be an exclusion of employers’ liability or other vicarious liability as a means ultimately of reducing the number of claims that might otherwise be validly brought. It that is the case—it is not a declared purpose of the Bill although it may well be achieving that—we need to address this and ensure that it does not occur. I beg to move.
Lord Pannick
My Lords, I hope that the Minister will be able to reassure the Committee that the amendment is unnecessary. Nothing in the Bill exempts an employer or other person from vicarious liability. I doubt that the Bill as drafted would have any effect on vicarious liability. That is because the scope of the Bill is confined by Clause 1 to claims that “a person” has been negligent or in breach of statutory duty. Clause 1 states that the Bill addresses the steps that the person was required to take to meet a standard of care.
Clauses 2 to 4 are concerned with that person acting for the benefit of society, acting responsibly or acting heroically. I understand that to be concerned with the alleged negligence of the primary defendant. I do not understand it to have any application to a person who has not themselves acted for the benefit of society, responsibly or heroically, but is said to be vicariously liable for someone who has so acted. I hope that the Minister can confirm that my understanding is correct.
Lord Faulks
My Lords, in short, I can confirm what the noble Lord, Lord Pannick, said. Amendment 1 would insert a new subsection at the end of Clause 1, stating that nothing in the Act provides an exemption from vicarious liability to an employer or other person. The Government do not believe that this is necessary. As I endeavoured to explain in my recent letter dealing with points raised by the noble Lord and other Members of the House at Second Reading, while the Bill requires the courts to consider certain factors before reaching a decision about liability, it does not tell the court what conclusion it should reach or prevent a person being found negligent if all the circumstances of the case warrant it. It will not therefore give anyone licence to take unnecessary risks with people’s safety or leave the injured party without a remedy when the defendant has failed to meet the applicable standard of care in all the circumstances of the case.
If the actions of an employer, for example, were risky or careless and they led to an injury, it would be open to the courts to conclude that the factors in the Bill did not outweigh other pertinent factors, such as the size and foreseeability of the risk, the adequacy of training and the extent of the injury, and, as a result, to reach a finding of negligence if appropriate. This will equally be the case where a claim is brought against the employer in respect of the allegedly negligent act or omissions of an employee under the law on vicarious liability. It is important to stress that the Bill is not intended to have any bearing on the rules governing the imposition of vicarious liability, which are well established in law. In the light of this, I can reassure the noble Lord that any suggestion that the Bill would leave injured Armed Forces personnel without a remedy in the civil courts, whether under the law on vicarious liability or otherwise, is misleading. There is nothing in the Bill to prevent a claim being brought against an employer by an injured employee, whether in the Armed Forces, the emergency services or more generally.
Of course, the liability of the Ministry of Defence has recently been the subject of a great deal of litigation, not least in the case of Smith v Ministry of Defence. The noble Lord and the Committee may be aware of the difficult arguments about the scope of so-called battlefield immunity and the relevance of the Human Rights Act. But all those issues, difficult though they are, are nothing to the point in relation to the conventional rules on vicarious liability. For the reasons that the noble Lord, Lord Pannick, gave in his analysis of the Bill, I can assure the noble Lord—I understand why there is anxiety and I wish to allay that anxiety—that there is no need for anxiety and vicarious liability is not intended to nor will be altered in any way by the provisions of the Bill.
In those circumstances, we respectfully suggest that the provision suggested by the noble Lord is unnecessary, and I hope that I have reassured him sufficiently to feel able to withdraw his amendment.
Lord Beecham
I am extremely grateful to the noble Lord for his clarification of his position, and he is now on the record. Obviously, it will be read as the correct interpretation of the Bill if the Bill ends up being enacted in one form or another. I therefore beg leave to withdraw the amendment.
Lord Pannick
“Deterrent effect of potential liability
In section 1 of the Compensation Act 2006 (deterrent effect of potential liability), for the word “may” substitute “must”.”
Lord Pannick
My Lords, Amendment 2 seeks to give the Bill some coherent purpose and effect—not an easy task, as we debated at Second Reading.
Amendment 2 draws attention to an important legislative fact, which, surprisingly, is entirely ignored by the content of the Bill; that is, we already have on the statute book a provision which expressly addresses the very issues with which the Bill is concerned. The legislative provision is Section 1 of the Compensation Act 2006. It is a far more tightly and appropriately worded provision than the Bill, which, as we discussed at Second Reading, reads like an edition of the Valiant comic that I used to buy as a schoolboy.
Section 1 of the 2006 Act does the job. It has the title, “Deterrent effect of potential liability”, and states:
“A court considering a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might … prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way, or … discourage persons from undertaking functions in connection with a desirable activity”.
Amendment 2 recognises that there is a distinction between Section 1 of the 2006 Act and this Bill. The 2006 Act sets out factors that the judge may take into account. This Bill sets out factors that the judge must consider. If the Government are determined to change the law, all that is needed, even on their arguments, is to amend Section 1 of the 2006 Act so that “may” is replaced by “must”. That is what Amendment 2 would secure.
If Amendment 2 were accepted, we could and should remove Clauses 2 to 4 from the Bill. One of the many puzzling features of the Bill is that it entirely ignores Section 1 of the 2006 Act. It does not repeal Section 1 of the 2006 Act. It does not amend Section 1 of that Act. If, therefore, the Bill were to be enacted in its current form, the law would then state that under Section 1 of the 2006 Act judges “may” take account of the social benefit of the activity, and that under this legislation judges “must” take account of the social benefit of the activity, defined in different language.
According to the Lord Chancellor in the other place, the Bill is designed to send a message to potential volunteers and heroes. If Parliament were, through this Bill, to enact the legislative equivalent of a text message, the only message likely to be received is one of pure confusion. The man or woman thinking of volunteering or thinking of jumping into the lake to save the drowning victim is not—as the Lord Chancellor apparently believes —going to be comforted by their recollection of the contents of Halsbury’s Statutes of England. Once the Bill is enacted, the potential hero will pause while he or she consults leading counsel for advice on the implications of the fact that the statute book now contains both Section 1 of the 2006 Act and this new legislation.
Amendment 2 provides a simple and obvious solution to this problem, which I commend to the Committee. I normally agree with the noble Lord, Lord Beecham, but I cannot share his concern about Parliament in this context telling judges that they must take something into account. I do not share his concern because it will remain a matter for the judges what weight, if any, to give to the social benefit context in the circumstances of the particular case. Amendment 2 provides that the social benefit must be taken into account. It would do so in the very sensible context of the 2006 Act, which has worked very well since it was brought into force. Clauses 2 to 4 can then be removed, as the noble and learned Lord, Lord Lloyd of Berwick, will be proposing.
I hope that the Minister will respond favourably to this amendment, which is designed to be constructive. That is very difficult in the context of the Bill. If he is not able to accept this amendment, will he explain to the Committee whether it is really the Government’s intention to have on the statute book two differently worded sets of provisions that will be addressing precisely the same issue? I beg to move.
Lord Beecham
My Lords, I shall speak to Amendment 2, moved by the noble Lord, Lord Pannick, and to my Amendments 3, 5 and 9, which deal with the issue of judicial discretion in applying to any claim within the province of the Bill the provisions that the Bill sets out.
At Second Reading, the noble and learned Lord, Lord Brown of Eaton-under-Heywood, averred that the change the Bill seeks to make in the provision of the Compensation Act 2006 that the court “may” take into account the factors that the Act spells out, to one which declares it now “must” take such matters into account will, in his words,
“actually make no difference whatever”.—[Official Report, 4/11/14; col. 1559.]
Perhaps that is a suitable epitaph for the whole of the Bill, it might be thought.
The noble Lord, Lord Pannick, from whose company I must unusually and regretfully depart on this occasion, seeks to replace the Compensation Act’s provision of “may” with this Bill’s “must”, presumably therefore reflecting the view of the noble and learned Lord, Lord Brown. The view that the two are the same, however, is not the Government’s view, as the Minister made clear at Second Reading, when he reminded the House that,
“the difference between ‘may’ and ‘must’ … caused the House to be divided on more than one occasion”.—[Official Report, 4/11/14; col. 1576.]
He also reminded us that there is a difference between the provisions in this Bill and the provisions in the Compensation Act.
To the extent that the obliteration of that difference could represent yet another and in this case, given its source, inadvertent legislative attempt to fetter judicial discretion—one of many such attempts made by this Government, some, alas, successfully—the Committee should resist that proposition. The JCHR in one of its more damning and dismissive, albeit characteristically elegantly phrased, reports published in recent years echoed its concerns about similar provisions in relation to judicial review in the Criminal Justice and Courts Bill. We have seen a succession of measures designed to fetter judicial discretion. I fear that, for all the intentions to the contrary, the noble Lord’s amendment might encourage that process. I therefore hope that, on this occasion, he will not object to my taking a different path, but it will be interesting to hear whether the Minister has changed his view since that expressed at Second Reading.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, I shall deal briefly with the suggested distinction between “may” in the 2006 Act and “must” in the present Bill which, as the noble Lord, Lord Beecham, has said, I touched on at Second Reading. The Minister submitted then that this was a significant distinction and he compared it to the critical difference between those same two words, “may” and “must”, on which the Government the previous week had been defeated three times when the House divided on three clauses in Part 4 of the Criminal Justice and Courts Bill, all about judicial review. With respect to the Minister, for whom I have the highest regard, this was an uncharacteristically and thoroughly bad point and an inept comparison, because of course there was all the difference in the world between saying in the original Clause 70 of the Criminal Justice and Courts Bill that the High Court “must” refuse in certain specified circumstances to grant judicial review relief and saying, as on amendment to that Bill Clause 70 now does, that the court “may” refuse to grant relief. It is a completely different position in a Bill like the one now before us where the provision is simply about the court having regard to a particular consideration.
It is notable that when the noble Baroness, Lady Ashton, who promoted the 2006 Bill in Committee, resisted what was then a proposed amendment from “may” to “shall”—which is much the same as “must”—she said:
“The reason why we said “may” rather than “shall” is that when a court looks at a negligence claim it takes into account all the circumstances of an individual case; those circumstances, of course, vary dramatically from one case to another, as all those who are members of the legal profession will know far better than I. It would not be appropriate to require the courts to take the factor in Clause 1 into account in all cases, which would be the effect of changing “may” to “shall”. In some cases, it will just not be relevant, so by making that change we would be trying to make the courts do something that in the normal course of their activities we would not expect them to do—which is, to take into account factors that have no relevance at all. So we have said that they may take them into account, but we are not requiring them to, because of the range and variety of cases”.—[Official Report, 15/12/05; col. GC200.]
A little later she contrasted a negligence claim against an accountant, where the concept of a “desirable activity” would of course be irrelevant, with an injury suffered at Girl Guides or on a school trip, where a “desirable activity” becomes a highly relevant concept. Frankly, it would have mattered little, even in the cases where it was quite irrelevant, if the courts had in fact been bound to have regard to this irrelevant consideration before then summarily discarding it. So too here: it can make no material difference to the outcome of any case whether the word used is “may” or “must”. That is the central point, as I made plain at Second Reading. There is no real difference between this Bill, the 2006 Act, and indeed the common law as it was already developing without the need for any statutory intervention at all. Accordingly, for my part I am quite indifferent to both of these competing Amendments 2 and 3. Rather, in common with the noble and learned Lord, Lord Lloyd, I object to the Bill as a whole. If the House eventually divides on Report, I shall vote that none of these provisions should stand part.
Lord Faulks
My Lords, I am grateful for the debate and the contributions from the noble Lords, Lord Beecham and Lord Pannick, and the noble and learned Lord, Lord Brown. They seem to agree about the Bill, but not about the amendments. The noble Lord, Lord Beecham, is not enthusiastic about the Compensation Act. I think it is fair to say that he said that in fact he thought the previous Labour Government had nodded, as did Homer, when they brought it in. Therefore the words of the noble Baroness, Lady Ashton, relied upon by the noble Lord, Lord Pannick, would have less to commend them in his view. The noble Lord, Lord Pannick, on the other hand, says that the Compensation Act has been working well.
The view of the Government is that the Labour Party was quite right to identify the issue and to endeavour to reflect the problems that were identified by the committee which eventually decided to report. There followed the Compensation Bill, but it failed to go far enough. A number of other steps have followed, the common law has of course developed as I entirely accept, and here we have a Bill that endeavours to deal with what I have frankly said is a very difficult target to hit. I know that noble Lords feel that it is a target that can be hit by the common law without any statutory intervention.
However, the amendments put forward here come into different categories. I accept that there are similarities between Section 1 of the Compensation Act and Clause 2 of this Bill. The 2006 Act provides that the court may, when determining whether a defendant has taken reasonable care, consider whether a finding of negligence could prevent a desirable activity from being undertaken or discourage others from undertaking functions in connection with such an activity. It does not require the court to enter into such consideration.
However, Clause 2 of SARAH takes a different and firmer approach than the Compensation Act by requiring the courts to consider in every case whether a person was acting for the benefit of society or any of its members. It focuses more firmly on the actions of the defendant in a particular case than on the effect that a finding of negligence might have on others participating in similar activities. For these reasons we consider that Clause 2 of our Bill will provide greater reassurance than the 2006 Act has done to those in the voluntary sector and elsewhere who are still deterred from getting involved in socially valuable activities by worries about liability. I do not suppose that they will have Halsbury’s Laws of England to hand when making these difficult decisions, but their general approach will be affected by the climate and the context in which we live and the way the law reflects that.
The noble Lord says that if we want to compel the courts to consider the type of factors set out in Clauses 2 to 4 of the current Bill, we could have achieved that simply by requiring the courts to consider the points in Section 1 of the Compensation Act. His Amendment 2 would therefore replace the word “may” in that Act with the word “must”. I am not convinced that changing one word in the Compensation Act would have the same impact as our standalone Bill, which has been deliberately designed to be comprehensible to non-lawyers. Indeed, the National Council for Voluntary Organisations mentioned in oral evidence that if the Bill is passed, it could help to publicise that via its volunteering network. As I have said, Clause 2 has a different and clearer focus than Section 1 of the 2006 Act, and I believe that it better addresses the genuine concerns of volunteers and others.
I turn now to Amendments 3, 5 and 9 tabled by the noble Lords, Lord Beecham and Lord Kennedy of Southwark. They would remove the requirement for the courts to consider the factors in the Bill in any case in which they were determined, whether someone was negligent or in breach of a relevant statutory duty. Instead, it would be purely a matter of discretion as to whether they took account of the factors in the Bill. This would revert to the terminology of the Compensation Act, which, as I have said, provides that the courts “may” consider whether a finding of negligence might prevent a desirable activity from being undertaken or discourage people from undertaking functions in connection with such an activity.
In our view, that could unacceptably weaken the Bill. The main point of the Bill is to provide people who are deterred from getting involved with greater reassurance that the courts will always look at the context of their actions before reaching a conclusion on liability. It is our view that the Compensation Act has not done enough to address people’s worries about liability, as recent polls carried out by the National Council for Voluntary Organisations, St John Ambulance and the British Heart Foundation have demonstrated. We are hopeful that the Bill will do more than the Compensation Act did to increase public confidence in the law and increase participation in socially valuable activities. We fear that reverting to the terminology used in the 2006 Act, which as I have indicated the noble Lord, Lord Beecham, has reservations about, would not be helpful in this regard. In many cases it may not make much difference whether the word is “must” or “may”, and all will depend on the particular facts of the case.
I accept the strictures about transposing arguments from one Bill to another made by the noble and learned Lord, Lord Brown. Enthusiasm probably overtook me in making that analogy, having recently suffered several defeats on the part of the Government in that context. My point, however, remains that there is a difference between the words “must” and “may”, but that difference will depend very much on the context. Judges are well used to having to fight their way through the undergrowth of statutory terminology; sometimes they must do something and sometimes they may do it. They will of course be approaching these cases very much on the facts. We think that in this difficult area the Bill does its best to fulfil the social objective that lies behind it and, with great respect, we do not think that it would be improved by any of these amendments. It is in those circumstances that I ask the noble Lord to withdraw the amendment.
Lord Pannick
I am very grateful to the Minister. He said that it is a difficult target to hit, but I suggest that the problem is that you are certainly going to find it difficult to hit a target that does not actually exist. You will find it particularly hard to hit a target if you are not armed with any weapon that is capable of hitting it, even if it did exist.
The Minister’s other point was that the aim here is to produce legislation which is comprehensible to non-lawyers, but it also has to be implemented by the courts. If it is not in a coherent form that sits easily with other legislation, all the Government are going to do is cause confusion which will promote litigation at great expense to non-lawyers. The Minister simply did not address the main concern behind Amendment 2, which is that if the Bill is enacted in its current form, there will be two statutes addressing the same general issue in different language. Before we come back, I ask the Minister and the Bill team to give some thought to whether it is sensible not to address Section 1 of the 2006 Act at all by amending or repealing it in this legislation. For the moment, I beg leave to withdraw the amendment.
Lord Hunt of Wirral
“(2) When assessing whether a voluntary organisation, charitable organisation or volunteer has been negligent or in breach of statutory duty, the court shall have regard to—
(a) the resources available to the volunteer, voluntary organisation or charitable organisation and the competing demands on those resources;(b) the level of training and qualification which volunteers should be expected to undertake; and(c) the provision of similar services by other voluntary organisations and charitable organisations.(3) When assessing whether a state-funded organisation has been negligent or in breach of statutory duty, the court shall have regard to—
(a) the funding available to the organisation and the competing demands on that funding;(b) the reasons for the allocation of resource by the organisation; and(c) the level of provision of services by other similar state-funded organisations taking into account the prevailing conditions and funding constraints.”
Lord Hunt of Wirral
My Lords, I say at the outset that I strongly support the Bill, as long as the Minister is prepared to accept that it must do something to change the law. For many years, scientists have said that even the act of observation can be enough to change the object being observed. That is true with this Bill, just as it was with Section 1 of the Compensation Act 2006 when that was introduced. I am sad that no one has paid tribute to the noble and learned Lord, Lord Scott of Foscote, who has been sitting patiently listening to this debate, because, in the words of the Minister, Section 1 of the Compensation Act 2006 was originally based on his brilliant judgment. I would not expect the noble and learned Lord to comment on that, but we all read his judgment, and I concluded that it was one of the best judgments that I have ever read. I hope he will not mind if I use this opportunity to pay tribute to his tremendous skill as a judge.
Surely the effect of this Bill is as follows. A judge hearing a case needs to say to herself or himself, “My decision was going to be this, but before I make that decision I must take account of the Social Action, Responsibility and Heroism Act. Having done that, my decision is now this”. Of course, the decision may ultimately be exactly the same, but the process by which it is reached will be subtly different. Today is an opportunity to debate whether the changes to the law introduced by this Bill ought to be rather more overt. This amendment, and others in my name, is intended to stimulate that debate.
I hope the noble Lord, Lord Pannick, will forgive me if I say that I have given up. Every time I set up a target, he puts the patch over his good eye and does not see it. He then protests that there is not a target. I will continue to supply targets. All I would ask is that, as with rehabilitation, he should focus on the issue and then work with all noble Lords to try to improve the Bill rather than seek to reject it as useless. Surely the whole purpose of this House—above all, this Chamber—is that we should seek to improve legislation, not to dismiss it as lacking substance. Let us give it some substance. I am sorry, I must not get too emotional about this.
Amendment 4 is quite detailed but its overall effect is simple enough. In terms, it requires a court to have regard to the resources of the voluntary or charitable organisation, or a state-funded organisation. I regard this as an important adjunct to the common law position. Too often we hear of front-line resources being diverted to pay for compensation claims instead of paying for services. I shall give one example. Alarm—the Association of Local Authority Risk Managers—reports that councils paid out £32 million for pothole claims in 2012, and in the same period fixed 2.2 million potholes, but that the average English authority was £6.2 million short of the money it needed to complete the repairs properly. That risks generating more claims and taking more money away from councils’ budgets. In these times of significant pressure on state resources, a spiral of compensation claims is surely not the way forward. Likewise, the voluntary and charitable sector has finite resources which should properly be concentrated on its various good causes. If its limited budget has to go to fund claims or pay increased insurance premiums, what on earth is the sense in that?
I believe that this amendment would help both sectors to bring their resources to focus on helping society, not the compensation bandwagon. It is no accident that when I searched for the statistics I used earlier, the search results started with, “Pothole Bike Accident—injured by pothole?”, and, “Entitled to compensation?”. I shall not name the organisations because they do not deserve that publicity, but they were a claimant solicitor firm and a claims farmer respectively. Surely there must be a better way. I beg to move.
Lord Beecham
My Lords, it is interesting that the noble Lord seeks to give carte blanche to any organisation, whether it be a statutory organisation or a voluntary organisation, to preside over a situation in which injuries can be sustained but no compensation paid because the organisation would have difficulty in funding the claim. There are considerable difficulties with that approach. The first is that it entirely removes any incentive to prevent accidents occurring in the first place. This Bill is supposed to encourage people to volunteer. The effect of the noble Lord’s amendment would be to encourage statutory and other authorities to take no precautions whatever because they can always demonstrate that they need more money. It would be more relevant if the noble Lord addressed his colleagues on the government Benches to ensure, for example, that the health service and local authorities are adequately funded to carry out all their responsibilities, whether dealing with potholes or treating people properly in hospital and avoiding clinical negligence claims and the like.
It strikes me as extraordinary that the noble Lord should be making a proposition which would completely exclude compensation for an innocent injured party who proves injury, bearing in mind that all these cases depend on a claimant proving on the balance of probabilities that he or she has been the victim of negligence leading to the injuries for which he or she seeks compensation. Those are quite extraordinary propositions, and I hope the Committee—and in due course, if the noble Lord brings the matter back on Report, the House—will not countenance them. They would remove from compensation a large number of people who are entirely justified in making a claim.
Let us be quite clear: nobody has any sympathy with claims farmers or anybody attempting to make a fraudulent claim, whether or not they are represented by —shall we put it gently?—overambitious solicitors or others in promoting such matters. Many of us regularly report to this House being approached by such organisations on our telephones, computers and Blackberries, let alone through adverts in the press and other media. That is something that is entirely reprehensible. We are at one with the noble Lord in wanting to see those matters regulated. I congratulate the Government on the steps that they are taking in that respect. These proposals go much too far and would have an adverse effect on people with legitimate claims. I hope that, on reflection, the noble Lord will feel able to withdraw them.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I rise briefly to support the amendment of my noble friend Lord Hunt of Wirral, which seems a potentially sensible and proportionate addition to the Bill.
In this group, we have a clause stand part debate in the names of the noble and learned Lord, Lord Lloyd of Berwick, and the noble Lord, Lord Pannick. I was wondering if they were going to speak to this because I have an interest in it.
Lord Faulks
I understand that the noble and learned Lord has decoupled that from the amendment.
Lord Hodgson of Astley Abbotts
In that case, I shall wait until the clause stand part debate and speak on that occasion.
Lord Faulks
I understand my noble friend Lord Hodgson’s slight surprise. It was a late, though perfectly legitimate, move. Until recently, a number of us thought that whether the clause should stand part was to be debated with the amendment. As it is, we are debating one amendment, Amendment 4 in the name of my noble friend Lord Hunt of Wirral, which would build on Clause 2 by requiring courts to consider certain factors about the nature of an organisation’s activities when determining whether it had been negligent or in breach of a relevant statutory duty. Where the organisation concerned was a voluntary organisation, the courts would have to consider what resources were available to it; whether there were competing demands on those resources; the level of training that volunteers could be expected to undertake; and how similar organisations would have provided those resources. Where the organisation was state-funded, the court would again have to consider what resources were available to it and whether there were any competing demands on funding. It would also have to consider whether there were specific reasons why funding had been allocated in a certain way and how similar state-funded organisations manage similar activities.
My noble friend was instrumental in tabling amendments to the Compensation Act 2006 during its passage through Parliament and those very much helped to improve the legislation. I am grateful for his constructive suggestions during today’s debate. In this difficult area, it is useful sometimes to think differently from the traditional way in which we have approached claims of this sort. Normally, a judge simply ignores the resources of the defendant as not being relevant. The question is whether there has been a breach of whatever duty of care is impugned by the claim. Many people believe it is relevant, as a matter of justice, to think beyond that. However, the Government do not believe that this amendment is appropriate. As I have explained, the Bill will require the court to consider certain factors to do with the context of a person’s actions before reaching a decision on liability. The Bill does not change the general way in which the courts consider claims of negligence or for breach of statutory duty. They will continue to judge a person’s conduct against that of the ordinary and reasonable man. There are a range of factors that the court already considers in determining whether reasonable care has been taken in a particular case. For example, it looks at the nature of the activity in question and the degree of care required; the gravity of the harm which might be suffered if insufficient care were taken; and the cost of mitigating any risk.
We have not attempted to set out these matters in the Bill; nor do we intend to do so. Such an exercise would add unnecessary length and complexity to what is a clear and—even its critics would accept—concise Bill.
Some noble Lords have already expressed reservations that the current Bill fetters the discretion of the courts by requiring them to consider certain factors about the context of the defendant’s actions. As I have already explained, the Bill does not purport to tell courts how much weight to put on each factor, covered by Clauses 2 to 4, or to prevent them finding negligence where the circumstances of the case warrant it. However, the effect of being too prescriptive—for example, about the type of evidence the courts need to look at when determining whether an organisation was negligent—could introduce new burdens, which we think, on balance, would not be desirable. That being the case, while renewing my tribute to my noble friend’s attempt to add constructive suggestions to the Bill and his insight into this particular area, I respectfully ask him to withdraw his amendment.
Lord Hunt of Wirral
My Lords, I am very grateful to my noble friend Lord Hodgson for his support. I say to the noble Lord, Lord Beecham, that I should like to return to this subject again at a later stage. In the mean time, if he could reflect on the case of Wilkinson v City of York Council, he would understand that I am not seeking to achieve what he described. I seek merely to respond to the words of the Court of Appeal in that case. I will not go into too much detail, but he will see what I mean if I quote just one sentence:
“A judge, it seems to me, should be slow to reject the evidence given by a responsible council official that resources did not permit a more frequent inspection than that which was given”.
The conclusion in that case was that, whereas the question of manpower resources was able to be considered in relation to other sections in the Highways Act, the particular section—Section 58—did not make reference to this shortage of resources as a factor to be taken into account. Therefore, the Court of Appeal concluded that Parliament had not wanted it to be a relevant factor. I therefore hope that the noble Lord will see that I am seeking to meet a particular problem in a specific way.
Lord Beecham
I understand the point that the noble Lord is making, and I will certainly look at that case. However, his amendment does not seem to be confined to that particular issue; it would apply much more generally, and I invite him perhaps to consider whether it would be better narrowed to the kind of incidents to which he has referred. Having said that, I do not necessarily pledge myself to support him should he come back with something like that. It seems that the way he has put the matter is rather different from how the amendments as presently drafted would be interpreted.
Lord Hunt of Wirral
I am very grateful to the noble Lord, and to the Minister for his comments. I will of course reflect on and consider the points that have been raised. In the mean time, I beg leave to withdraw the amendment.
Lord Lloyd of Berwick (CB)
My Lords, I oppose Clause 2 standing part of the Bill, and my reason is simple: it adds nothing useful to what is already contained in Section 1 of the Compensation Act 2006. It adds nothing to what was contained in the pre-existing common law, as my noble and learned friend Lord Brown has already demonstrated. What, then, does Section 1 say? It has already been read by my noble friend Lord Pannick but I find it a little wordy, so I will do my best to paraphrase it. It provides that a court may have regard to whether the desirable activity would be prevented or discouraged if defendants were required to take some precaution or undertake some action to avoid liability in claims for negligence.
Clause 2 says:
“The court must have regard to whether the … negligence … occurred when the person was acting for the benefit of society”.
The simple question for the Committee is whether there is any distinction between,
“acting for the benefit of society”,
and a “desirable activity”. If not, the clause and the section provide exactly the same.
Nobody has yet been able to suggest a distinction between those two ways of putting it. If Clause 2 is to stand part of the Bill—putting aside for the moment the must/may distinction—we will have, as my noble friend Lord Pannick stressed, two provisions on the statute book covering exactly the same ground. I suggest that that is not a good idea. It is said that it may not matter and does no harm. However, in this instance it matters a great deal because the drafting of Clause 2 is so defective that, if it is to stand part, it will give rise to what one witness described as “massive unintended consequences”. I will come back to that later.
I want to refer to the evidence of Mr Fraser Whitehead, who gave evidence to the Public Bill Committee on 4 September. Mr Whitehead is chair of the legal affairs and policy board of the Law Society. In his view, Clause 2 is unnecessary because the subject is already covered by Section 1 of the Compensation Act. He said that it adds nothing of value. That evidence was never challenged on behalf of the Government. Mr Vara, the Parliamentary Under-Secretary of State, instead of challenging the evidence, attacked Mr Whitehead’s credibility. I think it is best in those circumstances if I quote from Hansard, which I would not normally do, but the Committee may find it helpful.
Mr Whitehead was asked whether he had consulted the many thousands of members of the Law Society and if so, whether by line, survey or in writing. Mr Whitehead replied that he had not consulted widely but he had discussed the Bill with the various chairs of the various relevant sub-committees of the Law Society. I take up what was said in Hansard. Mr Vara said:
“Are these personal views that are shared by a limited number of colleagues in the Law Society—the other chairs that you mentioned—as opposed to the views of the majority of the Law Society, whom you admit that you have not consulted?”.
Mr Whitehead said:
“The position I am putting forward is the Law Society’s position”.
Mr Vara asked,
“am I right in saying that this is your view and the view of one or two other people? You mentioned the chair of one committee or another, but how many people precisely have had an input into the views that you have put forward today? Are they principally your views? If not yours alone, how many other individuals have you spoken to who share your views? Finally, will you kindly tell me the precise number and their names, if possible?”.
Mr Whitehead explained that the:
“Law Society is actually a democratic structure”,
and was interrupted by Mr Vara:
“Forgive me for interrupting … As a former solicitor, I am aware of the structure of the Law Society. Basically, you have not consulted your members. You are relying on the views of a small number of people who sit on a specific committee of the Law Society”.
To that, Mr Whitehead said:
“The people on whom I am relying are a wide cross section of specialists.
Mr Vara: How many, please?
Fraser Whitehead: The total number is approximately 35”.
Mr Vara asked:
“Have 35 people given you their views, either in writing or by speaking to you?
Fraser Whitehead: No, but we have discussed—
Mr Vara: Thank you. I am mindful that time is limited, and I am happy to give way to someone else”.—[Official Report, Commons, Social Action, Responsibility and Heroism Bill Committee, 4/9/14; cols. 9-10.]
I do not know what impression that sort of questioning gives your Lordships. All I can say about it is that, in itself, it would be sufficient reason for the Government to lose this Bill, and they would deserve to do so. But of course there are many other reasons also, to which I shall come in a moment.
Next I come to the Lord Chancellor and the reasons that he gave for bringing this Bill forward in the first place. The key thing is that it lays down,
“a series of principles off the back of which the courts will evolve a jurisprudence”.
He said that there had been a number of examples over recent years in which Parliament has adopted that approach. Unfortunately, he did not give any details of those examples, so it is difficult to know exactly what he had in mind. A little later he said that the Bill would,
“consolidate the law, which exists in fragmented places around past legislation”.—[Official Report, Commons, 21/7/14; col. 1191.]
Again, he was not specific, but I think that he must have been referring to the Compensation Act—although, oddly enough, he does not actually mention it. I have not myself been able to find any other “fragmented” pieces of legislation dealing with social activity, so I assume that what I have said so far is his view. If so, I can summarise his approach by saying that, in his view, Clause 2 does not change the law—otherwise, he would hardly have described Clause 2 as consolidating the law. He must have been aware that the whole purpose of a consolidation Bill is that it does not change the law. I leave it at that.
I return to the evidence of Mr Fraser Whitehead and the massive unintended consequences to which I referred earlier. For example, he mentioned the use of the word “person” in Clause 2. No doubt the Lord Chancellor had in mind organisations and individuals such as the Scouts but, of course, “person” is not confined to individuals. It goes far wider than that; for example, it would include the banks. Are they entitled to the benefit of the clause? Is that what is intended by the Bill? Suppose that a bank were being sued for negligent misrepresentation, would it be able to argue that it acts,
“for the benefit of society or one of its members”,
whenever it cashes a cheque? Presumably, it would. No doubt “person” could have been amended by substituting “individual”, if that is the real intention. However, it is now much too late for the Government to do that and there is no government amendment to that effect. In any event, Mr Vara was present in the Public Bill Committee when Mr Whitehead described what he then referred to as the “horrific” unintended consequences of Clause 2. Mr Vara never challenged that evidence. All one can therefore conclude is that the Government were content with that evidence and accepted it. It remains unchallenged.
Moreover, “person” is not the only word in Clause 2 that is likely to give rise to trouble. What about the phrase,
“society or any of its members”?
What on earth is that supposed to mean? The drafting of Clause 2 is so woolly that I could not help wondering who did the drafting. That is a question I am not allowed to ask, so I shall: was it perhaps the Lord Chancellor himself? Is the Bill before the Committee something which the Lord Chancellor scribbled down on the back of an envelope, as seems to be the practice nowadays? To a lawyer like me, that is exactly what it looks like.
Lastly, I come to the Minister—the noble Lord, Lord Faulks. He finds himself in an awkward position. Either he accepts the Lord Chancellor’s view that the Bill does not change the law or he accepts the view of the Parliamentary Under-Secretary—Mr Vara—that it indeed does. The Minister’s solution to that problem is, as always, ingenious: he comes down in the middle. He says that Clause 3 does, indeed, change the law because it refers to “a generally responsible approach”. He says that those words are new and I am sure that they are. They have never been seen before in any form of legislation with which I am familiar. That is part of what will be dealt with by the noble Lord, Lord Beecham, when we discuss Clause 3. However, it is interesting that the Minister does not say the same about Clause 2. On 4 November, he accepted, at col. 1573 of Hansard, that Clause 2 covers “broadly similar territory” to what we have before us today but added that the approach “is different”. As he did not actually spell out the difference, I pressed him on this. His answer was that the 2006 Act had been “ineffective” and had not achieved what it set out to achieve. However, he did not explain why Clause 2 would be any better or more effective than Section 1 had been. When the noble Lord, Lord Beecham, pressed him again on that distinction, he said:
“I am entirely aware of the question that the noble Lord asked and I am attempting to answer it”.—[Official Report, 4/11/14; col. 1574.]
He then moved on. Of course, there are verbal distinctions between the Compensation Act and Clause 2 of this Bill. One important difference is that the Compensation Act is rather carefully drafted whereas Clause 2 is not, but the substance is the same.
Lord Pannick
My Lords, I have added my name to that of the noble and learned Lord, Lord Lloyd of Berwick, in opposing Clause 2 standing part of this Bill, and I agree with everything that he has said. At Second Reading the noble Lord, Lord Beecham, and the noble Baroness, Lady Browning, each quoted Shakespeare in their competing assessments of the value of Clause 2, and indeed of the whole of this Bill. At that stage I was unable to contribute at such a high literary level—I could offer only a quotation from Basil Fawlty.
Since then, I have received a valuable e-mail from Paul Mitchard QC of the Faculty of Law at the Chinese University of Hong Kong. He assures me, and I assure the Committee, that the Official Report on this Bill is being carefully studied in the special administrative region of the People’s Republic of China. Mr Mitchard has drawn my attention to a valuable quotation from the works of Shakespeare which is relevant to whether Clause 2 should stand part of this Bill. On being complimented on making a perceptive comment, Beatrice responds by emphasising the obvious nature of what she had said:
“I have a good eye, uncle; I can see a church by daylight”.
Most appropriately for our purposes, the quotation comes, of course, from “Much Ado About Nothing”. Given that a few moments ago the Minister praised the concise nature of this Bill, perhaps “little ado about nothing” is more appropriate.
Judges can already see a church by daylight. They already take account of beneficial action—responsibility, heroism—when they decide on potential liability for negligence or breach of statutory duty. Noble Lords discussed the case law relevant to this matter at Second Reading; I will not repeat it. The Lord Chancellor’s defence of Clause 2—as the noble and learned Lord, Lord Lloyd, has said—is not that Clause 2 will change the law. The Government have identified no cases which would have been decided differently had Clause 2 been in force. The point made by the Lord Chancellor—the point made by the Government—in support of Clause 2 is that people do not understand the existing law and therefore we, Parliament, should send a message to people who are worried that conduct beneficial to society may result in legal liability, even though those worries are entirely baseless. I do not know whether the Lord Chancellor is on Facebook or Twitter but they would be far more effective methods of communicating a message—if it is the intention of the Government to do so—than the legislative time being taken up by the Bill.
I hope that it is appropriate to say that I cannot put out of my mind—although I hope to do so by ventilating it in this Committee—an image of the Lord Chancellor and the noble Lord, Lord Faulks, as the parliamentary equivalent of the Bee Gees singing their hit, “I’ve Gotta Get a Message to You”. The problem is that there is really no point sending a message unless there is something of value to communicate and unless one has reason to think that it is going to be received. There is simply no evidence whatever to suggest that those thinking of performing beneficial acts or heroism are deterred by a misunderstanding of the protection that the law already offers them.
The Joint Committee on Human Rights, in its report published last week, helpfully summarised the position in relation to this crucial point. I draw the Committee’s attention to paragraph 2.23. It refers to the Explanatory Notes to the Bill, which,
“say that there is ‘some evidence’ that people are deterred from participating in socially useful activities due to worries about risk … or liability”.
The Explanatory Notes, as the Joint Committee points out, cite only an example of a survey conducted in 2006-07. The committee asked the Government if there were any other evidence upon which the Bill is based in relation to the suggested need for a message to be sent. This was the report’s conclusion at paragraph 2.26, which stated:
“We have considered carefully the strength of the evidence base showing that the specific risk of legal liability, as opposed to risk generally, is a reason why people do not volunteer, and we have found it weak. The evidence relied on by the Government as demonstrating a public perception that volunteering carried too great a risk of legal liability is almost entirely anecdotal, and we do not consider such evidence to be a sound basis for legislating”.
I respectfully agree. If the Government are bringing forward Clause 2 on the basis that there is a need to send a message, they need to present to this House some evidence to support that assertion. Anecdotal accounts are simply not good enough. I therefore share the view of the noble and learned Lord, Lord Lloyd of Berwick, that Clause 2 serves no useful purpose; it should not stand part of the Bill.
Lord Hodgson of Astley Abbotts
I have been listening carefully to the two speeches. The noble and learned Lord, Lord Lloyd of Berwick, referred to the interplay between this piece of legislation and the Compensation Act 2006. I had to note that after he said that he thought that the Compensation Act was sending a message, he added that the message may or may not have been received, which is part of the issue that we are tackling today—that the message has not been received. I listened carefully to the remarks of the noble Lord, Lord Pannick, and have read with equal care his article about this piece of legislation in last Thursday’s Times, which was headed “UK negligence law is already fit for heroes” and saying that we do not need this Bill. Its tone can only be described as uncompromising throughout.
Regrettably I was abroad on business during the week beginning 3 November and therefore was unable to participate in the Second Reading debate. The proposal of the noble and learned Lord, Lord Lloyd, and the noble Lord, Lord Pannick, that Clause 2, headed “Social action”, should not stand part of the Bill clearly rips the heart out of a large part of this measure and deserves a response. With respect to the noble Lord, Lord Pannick, I do not think that people’s fears are baseless.
Before I go any further, I need to declare an interest. First, I am not a lawyer. Hearing the interchanges I sometimes feel that I have joined a party to which I have not been properly invited. Secondly and more importantly, in late 2010 I was asked by the Government to chair a task force to look at those factors affecting the growth of the charitable and voluntary sector, especially among smaller charities and voluntary groups.
I was asked to look at three specific questions. What stopped people giving their time to volunteering, for example? What deterred them from giving their money? What stopped smaller charities and voluntary groups from growing in general terms? The task force’s report, entitled Unshackling Good Neighbours, was published in May 2011 and remains available for aficionados on the Cabinet Office website.
Only the first of those three tasks is relevant to our deliberations today. With the greatest respect to the noble Lord and noble and learned Lord, with the experience of that task force and the evidence that we received. I think that they have seen this issue too exclusively, through an over-narrow legal prism. I agree with their view that this problem of volunteer concern will not be solved by change to the law alone. There is no silver bullet and I would not claim that this Bill is one. The problem can be addressed by multiple bullets and this Bill provides one of them.
The noble Lord, Lord Pannick, is aware of the importance that I attach to the rule of law. I have had the pleasure of participating with him in debates on the Motion of the noble and learned Lord, Lord Woolf, about the importance of the rule of law abroad and Britain’s reputation. I have also had the pleasure of speaking with the noble Lord on the Justice and Security Bill. To maintain the rule of law, the law must command general respect. It must not become disconnected from the regulars of the saloon bar in the Dog and Duck. I fear that in this area it is becoming so disconnected. Some of the disconnection is direct and some is indirect, in that the law is being considered to support approaches that our fellow citizens think are at best foolish and at worst downright unhelpful.
Let me give an example of what is happening, which was provided to the task force. A young woman, an undergraduate at Oxford University, saw an advertisement in the paper asking for individuals to act as room curators at one of the city’s museums. Like many or perhaps most undergraduates she was short of money and anxious to earn some additional sums. The job required her to sit in the corner of a gallery, watching that visitors going by did not interfere or tamper with the exhibits, or steal them. When she applied for the job she was immediately told that it required her to have a Criminal Records Bureau check. She was not keen on what she found a disproportionately untrusting attitude.
At this point she was put in touch with the task force. I knew that CRB regulations check that a job applicant is suitable for “frequent and intensive” contact with children or vulnerable adults and could not see how this undergraduate sitting in the corner of a room in a museum would call that principle into question. So I asked her to write to the university authorities and ask them for the basis of their CRB requirement. The answer was that the museum authorities had consulted their solicitors and had been told that to cover all the bases, including generally, a failure to have CRB checks would increase the likelihood of the trustees being found liable if there were problems in any of the operations of the museum. In the event, the young woman did not take the job because she refused to have the CRB check and the museum would not amend its policy.
That example could be replicated thousands of times up and down the country. I could—but will not —bore the House with examples: the Punch and Judy show on Hastings pier; the Women’s Institute putting flowers on a Welsh railway station; or a retired doctor seeking to read a few hours a month to Alzheimer’s patients in Northumberland. Each case results in people being reluctant to get involved.
Lord Beecham
Can the noble Lord explain the relevance of the cases he has just cited to the Bill—or, to put it the other way round, the relevance of the Bill to the cases he has just cited? The Bill is speaking about claims for negligence.
Lord Hodgson of Astley Abbotts
What I am talking about here is the provision that the court,
“must have regard to … the alleged negligence or breach”.
In the case of the Oxford museum, the solicitors were indicating that failure to have CRB checks could render the museum liable for a negligence claim in the event of there being a problem.
Lord Pannick
Perhaps I might point out to the noble Lord that the Minister assured the Committee in relation to the first group of amendments that the Bill would have no effect whatever on vicarious liability. Therefore, the museum’s approach—which does not sound very sensible—would not be affected in any way by the Bill.
Lord Hodgson of Astley Abbotts
I am not going to try to argue a fine legal point with the noble Lord but the fact of the matter is that the museum was advised that unless there were full and clear CRB checks for all individuals, it would be liable. This piece of legislation gives us an opportunity because in a case such as this, the museum,
“was acting for the benefit of society or any of its members”.
I have to say to the noble Lord, Lord Beecham, that I was disappointed with his remarks at Second Reading when he said:
“The irony is, of course, that banging on about a compensation culture is itself likely to create the very apprehension that the Bill purports to allay”.—[Official Report, 4/11/14; col. 1552.]
Regrettably, the apprehension is already very widespread. If he wishes to find out what is causing that apprehension, I invite him and other noble Lords to read the briefing sent by the Association of Personal Injury Lawyers, which describes the impact of the Bill as follows. It says that,
“those who ‘employ’ volunteers may be less rigorous in their risk assessments, thereby leaving those in their care more vulnerable to harm. An example is the chairman of a local football club where volunteers coach children. As a result of this Bill, the chairman may be tempted to cut corners in vetting the suitability of his volunteers”.
To suggest that those of us who support the Bill are somehow careless about our children’s future is unfair, unworthy and, indeed, outrageous.
I referred earlier to my support for the rule of law but I have an equally deep affection for the right of free association. It is on this right that our civil society is built. Many argue that in this screen-based age, our society is becoming more atomised and more self-centred. Whether or not this is true, I believe strongly that a vibrant civil society improves social well-being and social cohesion. All possible steps should be taken to avoid people being discouraged from getting involved.
I expect that the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Lloyd of Berwick, will argue that if a case with the characteristics I have described were to come to court, it would be thrown out. That is as may be. I am certainly not going to try to swap legal precedents with them as that would be a battle I would surely lose. But I ask the Committee to consider that for the noble Lord and the noble and learned Lord, a day in court is another day at the office, but for the defendant it is an entirely strange world —working to unfamiliar and not always understandable procedures, often taking quite a long time to come to court and incurring considerable cost and expense. It is a highly stressful experience for the layman or laywoman as well as for their families and work colleagues. Of course, if the defendant is a trustee of a charity which is not a CIO, he or she has unlimited liability.
In the background is the advice we were given at the time of the task force by an experienced litigation solicitor who explained that he would do everything he could to prevent his clerk going to court in what he called “volunteer liability” type cases because, as he put it, they are always complex and judgmental. Once you appear before a judge, and even more so before a judge and jury, the potential for unpleasant surprises increases significantly.
Earlier in the Bill, I said this was one of a series of bullets that needed to be fired to tackle this problem. So that the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Lloyd of Berwick, do not think that I am trying to attack the lawyers, I will give two brief examples of other bullets that need to be fired. One is the availability of insurance. The task force found that improving the clarity and comparability of insurance cover would have a major impact on encouraging volunteers. As the task force recommended, the Government have established a working party that includes representatives of the insurance industry and the voluntary sector to tackle this and other insurance problems. For the second bullet, I follow what the noble Lord, Lord Pannick, said earlier, when he wrote in his Times article, “Why not just issue a press release or pay for a newspaper advertisement?”. This raises the issue of myths. My task force was appalled at what we found, and we listed the 20 most extraordinary in our report. They include people worried that they could not put a plaster on a child’s cut; that goggles could not be worn in a swimming lesson; that they could not take photographs of their children at a school play, and that they could not offer meeting space in an office to a local community group. I hope that in parallel with implementing this Bill the Government will take active steps to ensure that where myths occur, they are duly busted.
To conclude, valuable steps have already been taken as regards the law in this respect. The Compensation Act was the subject of our debate this afternoon. The restrictions on contingent-fee legal work and after-the-event insurance are most welcome. We need, however, to continue to explore ways to encourage, or at least not discourage, our fellow citizens to get involved in civil society, and this Bill is important in that regard. I hope that the noble Lord will not divide the House tonight on the proposal that Clause 2 should stand part of the Bill and that my noble friend on the Front Bench will be robust in rejecting the Motion.
Lord Blair of Boughton (CB)
My Lords, I find myself very surprised to be supporting the Motion, if that is the right term, of the noble and learned Lord, Lord Lloyd of Berwick, and the noble Lord, Lord Pannick, but I do. I am surprised because, although I am broadly in sympathy with what the noble Lord, Lord Hodgson, has been saying, I think this piece of legislation is, frankly, a lousy way to do it.
Most years I would take part in a little-known ceremony called the Provincial Police Award, which is for the greatest act of heroism by a member of the public. This is what happens when a member of the public sees a red mist and goes for the armed robbers. It is fantastic. The award could actually be called the Unluckiest Robber of the Year Award, which would be a more accurate term. Having said that, we know how difficult it is to legislate in this field. I was involved in a number of the cases concerned with health and safety legislation and the police and the fire service. Those cases were extraordinarily difficult. After a number of pretty climactic events, we ended up in long, detailed and creative discussions with the Health and Safety Executive about the right way to deal with issues which affect not only members of the public, but also the individuals who work for these services. Can they climb ladders? Can a sergeant order somebody to climb a ladder? Can they dive into rivers? It needs really detailed work. What this clause does is smooth over all that with a series of words that have very little meaning in relation to the detail.
The noble Lord, Lord Pannick, talked about the Bee Gees. In my view, what the Government are attempting here is more like Don Quixote and Sancho Panza: they are riding along and tilting at windmills.
Lord Hope of Craighead (CB)
My Lords, I am troubled by this clause for a reason related to the two speeches that have been just been made. I can express it in a slightly different way.
There was a tragic incident in Scotland a few years ago where a young woman had been walking in the country and fell down a hole, which I think had been created by old mine workings, and she could not get out. The fire brigade was summoned and its officers were prepared to go down the hole and rescue her, which they had to do because I think she was injured and could not use a rope or a ladder. They were perfectly willing to help her, and you might say that that was an act of heroism of the kind that Clause 4 is asking us to think about. But the fireman who really wanted to go was ordered not to do so by his superior officer, no doubt for reasons of health and safety. Unfortunately, the woman died of hypothermia because by the time the appropriate equipment, which the person who was prepared to go down was happy to dispense with, reached the site, it was too late.
The case caused great concern in Scotland. I know that it is a Scottish case which did not occur in this jurisdiction, but it is an example of something that I do not believe this Bill deals with. It is an example of the way in which the Bill has not been properly thought through. I think that there is a real problem for employers who are contemplating health and safety legislation and thinking not so much about themselves as their liability. It may be vicarious liability, which I understand the Minister is not interested in, or it may be a direct liability for something they failed to do to protect an officer who is himself injured or killed. It is a great shame that all these clauses have not faced up to that.
That is due partly to the wording of Clauses 1, 2 and 4, which concentrate on an individual who is described as “a person” and “the person”. It is feature of this Bill that one is asked to think of the same person all the way through; in other words, the person who is said to be negligent or in breach of statutory duty is the same person that you are supposed to be thinking of when you contemplate whether they were acting heroically. In the example I am talking about, the person who was at risk of being sued, or thought that his organisation was at risk of being sued, was not the person who was acting heroically. Therefore, Clause 4 in particular—and, I suspect, Clause 2 as well—misses the real target where the most difficult problem in dealing with these situations arises.
Funnily enough, if you look carefully at Section 1 of the Compensation Act 2006, you see that it does not create that problem because it does not use such precise language; rather, it is framed in a general way that covers the kind of situation I am talking about. One is not asked to be so precise in looking at the person who is undertaking particular acts or is prepared to do so.
For those reasons, I am deeply troubled by Clauses 2 and 4. I really do not think that they have been framed in a way that meets the full range of cases, in particular cases where employers instruct those who are prepared to do these things not to do them. It is not quite the same as the example in Oxford, but I suspect that it is not far removed. Perhaps the noble Lord, Lord Blair, can think of examples where police forces have suffered exactly the same problems. It is a great shame that the Government have not thought this through, faced up to the real problem, and addressed it in a proper way.
Lord Faulks
My Lords, the noble and learned Lord, Lord Lloyd of Berwick, and the noble Lord, Lord Pannick, contend that Clause 2, along with Clauses 3 and 4, should be removed from the Bill for a number of reasons, one of which is that it covers the same ground as the Compensation Act 2006. There is a breadth of criticism of this clause, including that it is not well drafted and that there is insufficient evidence to justify the whole Bill, but in particular this clause. The two are, in a sense, not entirely unconnected.
The question is how we deal in legislative terms with a problem that may not be seen as a problem by those who are skilful in the law. The noble Lord, Lord Pannick, will navigate his life secure in his knowledge of the law and the likely outcome of any case. His conduct will be so affected. Others are less knowledgeable about the law and much of their conduct is based on an imperfect understanding of what the legal position is and what it might be in the unhappy event, as my noble friend Lord Hodgson says, of finding themselves in court.
Successive bodies, such as the committee of the Department of Constitutional Affairs, which preceded the Compensation Act, found that there was a perception of a compensation culture, as did my noble friend Lord Young of Graffham, in his report Common Sense, Common Safety. Those outside the law would quite confidently assert that there was a compensation culture. Quite what they meant by that would no doubt vary between individuals, but some of the instances cited by my noble friend Lord Hodgson are instructive. He provided evidence based on what his committee heard. This was not a single assertion. It was not based on one person’s experience. It was an accumulation of evidence.
Those in your Lordships’ House who are not lawyers would, I suggest, recognise the very problem that the Bill seeks to confront. My noble friend Lord Hodgson is absolutely right to say that the Bill is not the answer to that problem. It is just one possible answer to that problem. With respect to the fault in the drafting that the noble and learned Lord, Lord Lloyd, said he found, I just wonder whether someone who is not skilled and learned in the law would have much difficulty in understanding what was meant by Clause 2. It conveys that somebody who is potentially to be sued for being in breach of statutory duty or negligence would have their actions, if acting for the benefit of society or any of its members, taken into account. Is that so difficult a concept? I suggest not. It would provide some reassurance.
It is said to be rather unworthy of Parliament that we should be sending a message. The noble Lord, Lord Pannick, who shows the breadth of his allusions to popular culture and Shakespeare, relies on the Bee Gees. Sending a message is not, of course, the primary purpose of legislation but, as I said at Second Reading, we legislate in a particular context. We do not live in a hermetically sealed Chamber where we do not take into account what people on the outside think and say. We should indeed not be out of step with those who drink at the Dog and Duck, who are aware of the possibility of a compensation culture. If the Bill chimes in common-sense terms with what ordinary people feel—that we have gone too far—then the Bill is providing a useful purpose.
Lord Beecham
The Minister is not resiling, is he, from the position that Clauses 2 and 4 do not change the existing law?
Lord Faulks
At the moment we are debating Clause 2. I gather that we are to have the delight of a debate on Clause 4 in due course. The position is that, were the Bill to be enacted, a judge would have to have regard to the matters contained in, among others, Clause 2. It has been said, rightly, that judges would normally be expected to pay attention to the matters in Clause 2 in any event, but I suggest that it is sometimes useful for a judge, perhaps faced with a seriously injured claimant, to bear in mind a specific statutory provision when considering what is often an extremely hard task for a judge—to turn down a badly injured person—because the injury was sustained as a result of the act of someone acting for the benefit of society or any of its members. It should not change the law, but it is sometimes useful to put into statutory form what is often difficult to find in the morass of common-law decisions.
The noble and learned Lord, Lord Lloyd, referred to the evidence that was given in Committee in the House of Commons, commented on what my ministerial colleague had said and asked, and pointed to so-called horrific unintended consequences that were not challenged. I am not entirely clear what the horrific unintended consequences were, and although I understand what he meant by saying that they were not challenged, we should be a little careful in drawing an analogy between not challenging something in court, which is often of great significance, and the rather less structured method in which evidence is adduced in committees. None the less, I take his point that the cross-examination was perhaps less than ideal and not particularly illuminating.
I respectfully suggest that there is evidence to support the clause. A survey of volunteering and charitable giving carried out in 2006 and 2007 by the National Centre for Social Research and the Institute for Volunteering Research found that worries about risk and liability were one of the significant reasons cited by 47% of respondents to the survey who volunteered. The National Council for Voluntary Organisations confirmed that these concerns remained a real issue for many voluntary organisations when it gave evidence to the Public Bill Committee following the introduction of the Bill.
In terms of people being deterred from helping others in emergencies, a recent survey, carried out in August 2014 by St John Ambulance, showed that 34% of more than 2,000 adults questioned said that they might be deterred from intervening due to worries about legal repercussions. Evidence also suggests that responsible employers worry about spurious or speculative claims being brought by disgruntled or opportunistic employees. We heard at Second Reading the speech from my noble friend Lord Cotter. Then there is the report by the noble Lord, Lord Young, Common Sense, Common Safety, and the report of the red tape task force under the chairmanship of my noble friend Lord Hodgson, from whom the Committee has heard today. I submit that there is evidence, of a positive sort, of a perception.
We should not underestimate what acceding to the amendment to remove Clause 2 would do: it would emasculate the Bill. At the moment, it is broadly drafted so it would apply in a wide range of situations where people are acting for the benefit of others, whether they are doing so on a voluntary basis or in a paid capacity. For example, it could include organised charitable activities such as running a village fete or informal, individual activities such as helping an elderly neighbour with their shopping. It could also cover workers such as teachers, doctors and members of the emergency services, who are acting for the benefit of society as part of their jobs.
The clause does not tell the court what conclusion it should reach and will not prevent a person engaged in socially beneficial action being found negligent if the circumstances of the case warrant it. It will be for the court to determine whether a person was acting for the benefit of society and, if so, what weight it should give to that factor in all the circumstances of an individual case. I accept what the noble Lord, Lord Blair, said about trying to frame appropriate legislation in the context of health and safety. It is very difficult to cater for the myriad circumstances that arise. However, the idea is that this will give the courts the maximum flexibility to reach fair and just decisions, while sending a strong signal to give reassurance to the public that they will, in all cases, consider the wider context of the defendant’s actions, prior to reaching a conclusion on liability.
I have already addressed the Committee on the difference between the Compensation Act 2006 and this Bill—the use of the word “may” and the requirement that is contained in this Bill. I do not think the Committee would like me to repeat that. There are, of course, similarities, but the Bill requires the court to consider in every case.
Reassurance is important: we want to encourage volunteering. I am glad to say that volunteering is increasing, but it could increase still further. As my noble friend Lord Hodgson said, it is a desirable trend and it is tragic if people are deterred by the fear of litigation. I do not apologise for saying that this is a difficult target to hit. The noble Lord, Lord Pannick, may fire bullets at me all afternoon, but we are trying to identify, through this legislation, matters that it is hoped will reassure, by legislating in a way that is in tune with how the public see the current situation. I respectfully submit that the Bill, which may be unusually short and unusually drafted, in the sense that it uses ordinary language—
Lord Elystan-Morgan (CB)
My Lords, I am preoccupied by what the Minister said earlier: that the effect of the Bill, essentially, would be to cut through a morass of various decisions in the common law and, thereby, clarify the situation for the assistance of the judge. I think I have paraphrased what he said reasonably well. Could the Minister deal with a technical point? Is there not a presumption in our law that the common law will be changed by statute only where statute makes it clear, beyond peradventure of doubt, that it is changing the common law? In other words, what common law is being changed by this particular clause that was not already dealt with by the 2006 Act? In other words, what specific common law, now extant, is being changed, if at all? If not, can there be any validity to the clause at all?
Lord Faulks
I do not think that one would find any common law decision the ratio of which was precisely what we find in Clause 2. My point was simply that in deciding a particular case of negligence, judges will, on the whole, have regard to overall principle. There may or may not be another case sufficiently on all fours on the facts to be worth drawing to the attention of the judge. This does not overrule any of those cases, but it provides a clear statutory provision to which the judge could be referred in approaching the facts of a case. There may well be some authority on the facts which could also be provided for the assistance of the court which would not conflict with this provision. That is my answer to the noble Lord.
I submit that this clause should remain part of the Bill and that this Bill serves a useful purpose.
Lord Lloyd of Berwick
My Lords, I am grateful to my noble friend Lord Blair and to my noble and learned friend Lord Hope of Craighead for supporting me. The Minister has not dealt with most of the difficulties which some of us feel. He has not really dealt with the fact that the ground is already adequately covered by the Compensation Act, and he has not dealt with the defective drafting and the unintended consequences which are bound to arise as a result. He said that the target at which he is aiming is very difficult to hit. At this stage, all I can say to him is that he has not hit it. I will certainly return to the matter on Report.
Lord Beecham
Lord Beecham
My Lords, Amendment 6 deals with the provisions of Clause 3, which purports to be—and as I understand it, the Government agree to be—the only substantive change in the law that the Bill promotes. That, of course, raises the question of the relevance of the other clauses of this ephemeral legislative concoction, but it is also unacceptable in itself.
Clause 3 requires the court to,
“have regard to whether the person, in carrying out the activity in the course of which the alleged negligence or breach of statutory duty occurred, demonstrated a generally responsible approach towards protecting the safety or other interests of others”.
At Second Reading I asked what was meant by a “generally responsible” approach. The Minister did not vouchsafe a reply. I do not blame him. The Lord Chancellor and the Minister in the Commons were unable to supply a meaningful interpretation: a case of the inscrutable in search of the unintelligible, or perhaps vice versa.
The Government’s obsession with the so-called compensation culture was reflected in the Lord Chancellor’s response to an Oral Question quoted by the Joint Committee on Human Rights at paragraph 2.35 of its report. The Lord Chancellor talked of the need,
“to provide a deterrent to an employee who tries it on in the face of a responsible employer who has done the right thing, when someone in their employment has done something stupid and still tries to sue. As part of our long-term economic plan”—
I note in parenthesis that it is a long-term economic plan which appears to be growing ever more long-term by the day—
“I want to see those responsible employers protected against spurious claims, and that is what the Bill will do”.—[Official Report, Commons, 1/7/14; col. 731.]
There are, to put it mildly, several problems with that argument. The first is the sheer paucity of evidence for the existence of the compensation culture, apart perhaps from the road traffic cases of whiplash and the like about which we have heard so much today. The second is the apparent belief that the courts are unable to detect whether or not a claim is spurious, given that a claimant has to prove it. The third is that, despite its apparent belief that the Bill,
“is not designed to reduce standards of health and safety in the workplace”,
and,
“will not protect negligent employers who do not have a responsible approach to health and safety”,
the Joint Committee concluded that:
“To the extent that Clause 3 of the Bill will lead to some health and safety cases against employers being decided differently, we do not consider that the Government has demonstrated the need to change the law to restrict employees’ right of access to court for personal injury in the workplace”.
Can the Minister give an assurance that the Joint Committee’s fears in that respect are misplaced and that the Bill is not intended to and will not affect such health and safety cases? He gave a general assurance this afternoon, for which I am grateful, about claims for employers’ liability. The JCHR raised a specific point in relation to health and safety, and perhaps he will deal with that aspect.
The fourth problem is that the Bill is not, in any event, confined to personal injury cases, and still less to cases brought by employees against their employer, which seemed to be the burden of the Lord Chancellor’s principal concern. Clause 3 refers not just to injury but to safety and “other interests”. It must be taken to include economic interests, such as claims concerning damage to property or professional negligence by, say, an accountant, a financial adviser or, heaven help me, a solicitor. This much was made clear by Mr Vara in his heroic attempts to make the case for this generally irresponsible measure. At column 693 of Hansard he proudly announced:
“We have deliberately drafted the clause broadly ... This ensures that it will be relevant in a wide range of situations … The clause is not restricted to personal injury claims and could in principle be applicable in relation to other instances of negligence, such as damage to property or economic loss, where issues of safety may not necessarily be relevant”.—[Official Report, Commons, 20/10/14; col. 693.]
Presumably, issues of heroism would be equally irrelevant. Note that he assumes that negligence exists in such claims but excuses it in the manner of the old saw about the housemaid’s baby: “It’s only a little one”—a “Downton Abbey” analogy, I suppose. It is a rather curious way to approach legislation.
Perhaps the Minister will tell us the difference between being responsible and being generally responsible, and why the clause extends to a wide variety of claims which have nothing whatever to do with social action, volunteering or heroism. Perhaps he will also comment on the paucity of any evidence provided to the Joint Committee by the Government in answer to its request for examples of what the Lord Chancellor described as,
“a jobsworth culture or a legalistic culture that seems to stop common sense in its tracks”.
It asked for such information but received none. Where, one might ask, is the evidence of a common-sense approach, let alone one grounded in an understanding of the law and the courts that one has the right to expect a Lord Chancellor to display?
The twofold approach that I adopt in moving the amendment and speaking to the clause stand part debate is, first, to endeavour to effect a modest improvement in Clause 3 by removing the word “generally” so that that fairly vague and opaque term disappears; and, secondly, to address the general position in relation to the clause stand part debate—that this is the only substantive change in the Bill, and it is not acceptable. If the Government continue to press for this it will certainly be a matter to which I will return on Report. I hope the Government will concede that it is ill designed and likely to produce effects that are not consistent with the overall theme, however repetitive it might be, of the Compensation Act 2006, and therefore that it contributes nothing but potential difficulty for the future. I beg to move.
Lord Hunt of Wirral
My Lords, in drawing attention to Amendment 7, I am returning to the points I referred to earlier. The first part of the amendment reminds the Committee how society as a whole has become a victim of insurance fraud where organised criminals are now manufacturing situations in which innocent motorists are caused to collide with their vehicles in a manner which indicates negligence on the part of the innocent motorist. That is why I wanted to bring this amendment again to the attention of the House.
The second part of the amendment intends once again to remind your Lordships of the importance of non-monetary offers and, where they have been made by defendants, how they should be considered when the courts come to decide whether to award damages and the extent of the damages payable. I know that rehabilitation treatment is often offered to those injured in accidents but in many cases, because of the action of an intermediary, that treatment is often refused by the injured party and the period of suffering prolonged in an attempt to increase the award of damages in which that intermediary may be interested. If the courts were to be permitted to order that the treatment provided by a defendant and his representatives is a fair reward in compensation for the injury suffered, then the motivation of fraudsters to pursue “crash for cash” accidents should be reduced.
Lord Pannick
Before the noble Lord sits down, could I ask him whether the first part of Amendment 7 would not be covered by the existing law of causation and, indeed, by the law on contributory negligence?
Lord Hunt of Wirral
It is partly covered, but I think this makes it much clearer.
Earl Attlee (Con)
My Lords, it is well known that I generally support this Bill but I have to confess that I do not have the foggiest clue what Clause 3 is for. It would be much better to have a social action and heroism Bill. If the noble Lord wishes to return to it at a later stage, he will have to amend Clause 5 and the Long Title. A clearer, simpler Bill would send a clearer, simpler message.
Lord Faulks
My noble friend Lord Attlee would like to make a short Bill shorter. I submit that this particular clause seeks, as does the Bill as a whole, to reassure ordinary, hard-working people that, when something goes wrong and they are sued, the courts will take into account that they have adopted, during the course of an activity,
“a generally responsible approach towards protecting the safety or other interests of others”.
Most people would understand that expression.
At Second Reading, we heard from my noble friend Lord Cotter how court proceedings can affect the owners of small businesses in particular. Even if they have taken reasonable steps to protect people’s safety, they might be worried about expending the time or resources defending themselves in court and some might prefer to settle claims before they reach that stage. Others will defend themselves in court but we heard from my noble friend Lady Hodgson of Abinger about the psychological effect that this can have on a defendant. She pointed out that, even if the courts reached the right conclusion, the defendant might have gone through the most stressful and distressing time to get there, possibly putting relationships at work and at home under strain.
We hope that Clause 3 will give the owners of small businesses and employers greater confidence to stand up to those who try to bring opportunistic and speculative claims by showing them that the law is on their side. One important theme running through this Bill is that we want to stop people suing at all in cases which do not have any merit, so that a judge never has to decide any case either by referring to cases in negligence nor by virtue of this Bill should it become law.
Clause 3 is not just about protecting small businesses. In previous debates we discussed examples provided by members of the Cheshire Fire and Rescue Service who said that they had been sued by passers-by who tripped over their hoses when they were attending the scene of a blaze. During oral evidence sessions in the other place, Justin Davis Smith, Executive Director of Volunteering and Development at the National Council for Voluntary Organisations, spoke about voluntary organisations which have considered closing or stopping some of their most valuable operations because of worries about being sued. He provided an example of one charity which helped to take elderly people to hospital in the absence of any accessible bus routes. The charity was being sued after a patient slipped and broke her leg getting into a volunteer’s car and this had caused it to consider whether such activities could be continued.
The Government believe that it is right, in cases such as this, to require the courts to take into account the general approach of the defendant to safety during the course of the activity in question. This will reassure organisations that, if something goes wrong in the course of that activity, in spite of their efforts to keep people safe, the courts will always consider the context of their actions. However, the clause will not stop organisations being found negligent, nor, proportionate and just decisions being reached if all the circumstances of the case warrant it.
Earl Attlee
Earl Attlee
My Lords, I shall also speak to my Amendments 12 and 14. I have tabled these amendments on the basis that we will have to send back to another place something that actually works.
At Second Reading many noble Lords observed that, for a person to benefit from the heroism provision in Clause 4, they must act without regard to the person’s own safety or other interests. That would mean that if I intervened in an emergency, and I undertook a proper dynamic risk assessment and eliminated all avoidable and non-necessary risk to myself—and in doing so probably to anyone else—I would get no protection from the Bill. On the other hand, an imprudent rescuer would benefit from Clause 4, assuming for the moment that as drafted it changes the law.
Amendment 12 is my substantive amendment, which removes the offending words and changes the drafting to read: “to assist an individual in danger and without acting perversely”. The Committee will be aware that the noble Lord, Lord Aberdare, has an amendment that has a similar effect to mine, and I anticipate that he will go into greater detail about the problems with the need for the rescuer to act without regard to his own safety.
Amendment 14 defines what is meant by “acting perversely”. I fully accept that the courts might not need the benefit of this amendment and, if it or something similar does not find favour with the Committee, that will not be a surprise to me. I understand that my words, in the circumstances, would mean that the level of skill, knowledge, experience and training enjoyed by the rescuer would be taken into consideration by the courts—and in any case it already is.
I hope that by this stage of the Committee we will understand whether the Bill changes the law, but I myself am still not clear. I am sure that the noble Lord, Lord Pannick, will tell the Committee that my amendment would change the law and the effect of the Bill. If it does, I am sure that it can do so only very slightly. As the Committee knows perfectly well, and as I have always understood, the courts have never made an unhelpful judgment in that area of law. However, as I indicated at Second Reading, the fear of legal action or, as the Minister put it, an imperfect understanding of the law causes the mischief.
It would be very helpful if some noble and learned Lord or the Minister could describe to the Committee a situation in which the effect of my amendment would be to deny someone compensation for negligence when they would otherwise have secured it. I suspect that the Minister himself is struggling to determine whether the Bill is supposed to change the law or not. By now the Committee seems to have the view that the Bill makes no significant difference to the law apart from, possibly, Clause 3. However, if a first aid instructor could have the future SARAH Act confined to one PowerPoint slide, that could make a practical and beneficial difference. That is because, as the Minister pointed out during our debate on Amendment 2, the Bill has deliberately been designed to be comprehensible.
I suggest that the Committee cannot tolerate a provision in the Bill where an imprudent person enjoys greater protection than a person who has taken steps to avoid unnecessary risks. I am relaxed if the amendment in the name of the noble Lord, Lord Aberdare, finds greater favour with the Committee than my amendment, although his amendment may have the difficulty that it does not change the law at all. I would love to know if we were supposed to be changing the law or not.
Clause 4 is the most useful clause. I certainly have no entrenched position, but by Report we will need to have worked out what we can do to make this clause and the Bill do what they say on the tin. I beg to move.
Lord Pannick
My Lords, Amendment 10 is in my name and in the name of the noble Lord, Lord Beecham. It would remove the final words of Clause 4:
“and without regard to the person’s own safety or other interests”.
The inclusion of those words frustrates the purpose of Clause 4 for the reasons already given by the noble Earl, Lord Attlee. Those final words suggest that if I am thinking of acting heroically by jumping in the lake to save the drowning victim, Clause 4 will not protect me if I have regard to my own safety or other interests, perhaps by taking off my valuable watch before I jump in or, if we are to follow the Government’s reasoning as regards Clause 4, by consulting my solicitor. Surely the hero deserves protection whether he or she jumps in “without regard to” their own safety or with regard to their own safety. What matters is that they jump in to save the victim. Clause 4, as drafted, protects the instinctive hero but not the thoughtful hero, and that distinction is entirely unjustified.
Amendment 10, which again is designed to be constructive, would remove that arbitrary distinction from Clause 4. However, I cannot agree with the noble Earl, Lord Attlee, that the law of negligence in this area should be replaced by a test of perversity, which is a test far more favourable to the defendant. He asked for views from Members of the Committee as to whether his amendment would change the law; it undoubtedly would. I anticipate that we will take different views on the merits of that change, but to introduce a test of perversity would be a substantial change.
Earl Attlee
My Lords, would the noble Lord be able to illustrate to the Committee how that difference would work—a case where someone would be protected, and someone else would not? That would be very helpful to the Committee.
Lord Pannick
At the moment the court assesses whether in all the circumstances the defendant has acted with reasonable care, and the court will take account, as it will under the Bill, of whether in all the circumstances, including that of heroism, the defendant has acted reasonably. However, that is a very different test from a test of perversity. It will not help the Committee to try to identify particular factual circumstances, but I can tell the noble Earl that there is a very real difference between a test of reasonable care and a test of whether the defendant has acted perversely—in other words, has taken leave of his or her senses.
I have also indicated my objection to Clause 4 standing part of the Bill; that is part of this group of amendments. The objections to Clause 2 standing part of the Bill, which we debated earlier this afternoon, are equally applicable to Clause 4, and I will certainly not repeat all those points. However, there is an additional, specific reason why Clause 4 should not stand part of the Bill. The simple reason is that it adds absolutely nothing to Clause 2. I cannot envisage any case in which a person is acting heroically for the purposes of Clause 4 which is not also a case where that person is protected by Clause 2 as currently drafted. If you act heroically for the purposes of Clause 4 you act,
“for the benefit of society or any of its members”,
for the purposes of Clause 2. Does the Minister agree with that analysis and, if not, can he please give the Committee some explanation of the sort of circumstances that potentially come within Clause 4 that would nevertheless be outside Clause 2?
Lord Aberdare (CB)
My Lords, I will speak to my Amendment 11 as well as to Amendments 8, 10, 12 and 14 in this group. I remind your Lordships of my interests as a trustee of St John Cymru Wales and as a vice-president of the First Aid All-Party Parliamentary Group.
As I indicated at Second Reading, the leading first aid organisations including St John Ambulance and the British Red Cross welcome the Bill in principle. Anything that serves to reduce or overcome people’s reluctance to step forward to provide assistance in emergency situations has to be good news. It can, as we have heard, be argued what actual difference the Bill makes to the law as it stands. However, if there is a perception that it removes the likelihood of people being sued after trying to give life-saving assistance in an emergency, and if people believe that the Bill gives them some extra protection, that in itself is worth having.
My concern is that Clause 4 as it stands is not seen by the leading first aid organisations as giving that reassurance. We know from the research I quoted at Second Reading that the people most likely to help in an emergency are those who have actually received first aid training. So these potential life-savers go along to their first aid courses, where they are taught to:
“Protect yourself and any casualties from danger—never put yourself at risk”.
I quote from the standard First Aid Manual. During their training, they may well ask, “If I take action to provide first-aid assistance in an emergency, can I be confident that I will not subsequently be sued if something goes wrong?”. To which the answer from the first aid training body would have to be, “As long as you act without regard to your own safety or other interests, you should have protection under this law; but we recommend that you should consider your own safety before acting, in which case this law would not seem to help you”. I suggest this would be more than a little confusing and unlikely to provide the reassurance which the Minister has emphasised several times is the object of this Bill.
I thank the Minister for copying me on his letter to the noble Lord, Lord Beecham, and I welcome his confirmation in that letter of the Government’s desire to encourage first aid and his recognition of the concerns of St John Ambulance and others. He also states that the Government will, quite rightly, work with voluntary organisations and other bodies during implementation phases to ensure that the Bill’s contents are brought to the attention of all those with whom they engage. In that case it would seem rather important that those bodies should themselves see the wording of the Bill as helpful to their own concerns.
Let me briefly cite some examples, provided by the British Red Cross and St John Ambulance, of how Clause 4 might affect the actions of a potential life-saver. First, I shall give two examples of heroic actions for which Clause 4 as it stands would seem to offer no reassurance at all. If a person has fallen off a ladder and is lying unconscious on their back, a responder might be afraid of moving them because of the risk of causing damage to their back or neck. Leaving them on their back could cause them to die from a blocked airway, often described as swallowing one’s tongue, so the heroic act would be to move them on to their side in the recovery position, with an open airway, even if this might cause other injury. Similarly, a responder may be concerned about causing injury through giving CPR—particularly if it might subsequently turn out to have been unnecessary because the person’s heart had not actually stopped. CPR requires quite forceful pressure on a casualty’s chest, which may result in injury such as broken ribs. Again, inaction could have much more severe, possibly fatal, consequences than unnecessary action. I cannot see that the wording of Clause 4 offers any reassurance at all in these instances.
I will look at situations more specifically covered by the wording of Clause 4. If someone has been electrocuted and a first aider rushes into action without considering whether the power source is still live and the casualty still in contact with it, he or she might well be acting heroically, but is likely to make the situation worse, with two casualties instead of one. We often hear of people plunging into cold or fast-flowing water to try to rescue someone in difficulties, only to end up drowning themselves, or suffering a cardiac arrest from the shock of sudden immersion in cold water, when they may have been able to help more effectively from the shore. Yet this is the sort of rash and unreasonable action that the wording of Clause 4 might seem to envisage, if not encourage.
There are a number of options before noble Lords to improve this part of the Bill and ensure it sends a clear, positive and unambiguous message to potential life-savers and, of course, to those who train them. Amendment 10 from the noble Lord, Lord Pannick, simply removes the unsatisfactory wording from the end of Clause 4. Amendments 8, 12 and 14 from the noble Earl, Lord Attlee, improve on this by replacing these words with the phrase “and without acting perversely”, which is defined in terms of how a reasonable person would act in the circumstances. My own Amendment 11—which needless to say is the one I recommend to your Lordships—replaces the same words with the phrase,
“and was acting reasonably and with a public-spirited intention”.
Any of these three options would improve the Bill; better still, of course, would be for the Government themselves to come up at a later stage with a form of words to define the sort of behaviour that is both heroic and consistent with good first aid practice, in order to give real reassurance to potential life-savers that they are unlikely to be successfully prosecuted if they act in a way that is reasonable and public-spirited, as well as heroic.
Lord Hope of Craighead
My Lords, I am in the happy position of not having my name to any of the amendments and therefore can offer such thoughts as might be useful as to which of them is to be preferred. I support a lot of what the noble Lord, Lord Aberdare, has said about the wording as it stands at the end of Clause 4 but I prefer the simplicity of the amendment from the noble Lord, Lord Pannick. The more you qualify the proposition that ends with,
“to assist an individual in danger”,
the more you open up the possibility of argument. The simpler the message, the better. The message is well conveyed by stopping at “danger” without introducing these complications and therefore I support the amendment from the noble Lord, Lord Pannick.
Lord Beecham
I, too, support the amendment from the noble Lord, Lord Pannick. I sympathise with the amendment from the noble Lord, Lord Aberdare, but the whole point of the law of negligence is that it is for a claimant to establish that the defendant did not act reasonably. Some of the cases cited by the noble Lord would be very unlikely indeed to attract any award of damages against somebody acting reasonably in an emergency situation to help somebody with unfortunate consequences. I cannot see that any such claim would succeed but he is right to differ slightly from the amendment tabled by the noble Earl, Lord Attlee. However, the best formulation is that put forward by the noble Lord, Lord Pannick, and I hope the Minister will accept it.
Lord Faulks
My Lords, we have had a very useful debate on this group. The noble Lord, Lord Pannick, said that Clause 4 should be removed from the Bill but has also proposed a specific amendment that would amend the definition of acting heroically, should the clause be retained. The noble Lords, Lord Beecham and Lord Aberdare, and my noble friend Lord Attlee suggested various amendments to the clause, as indeed did my noble friend Lord Hunt of Wirral, who is not in his place.
I will respond to the argument that Clause 4 should be removed and then I will deal with the amendments. As I explained at Second Reading, Clause 4 requires the court to,
“have regard to whether the alleged negligence or breach of statutory duty occurred when the person was acting heroically by intervening in an emergency to assist an individual in danger and without regard to the person’s own safety or other interests”.
Unfortunately, all too often people are unwilling to intervene and step forward in emergencies due to the fear that they might be sued and ordered to pay damages should they attempt to help. This is not to suggest that people do not act spontaneously and positively in such circumstances; many do, assisting others and coming to the aid of distressed individuals without a second thought to their own interests. However, we have heard how other people stand by and do nothing because they feel that it is safer not to get involved and run the risk, however unlikely, of a negligence claim being brought against them. Clause 4 helps to allay these concerns by giving a reassurance to those brave and laudable members of our society that heroic behaviour in emergencies will be taken into account by the courts in the event that a claim for negligence or breach of a relevant statutory duty is brought against them. It will assure those who are in two minds about intervening to assist an individual in distress that doing the right thing is recognised by the law. The noble Lord, Lord Pannick, said that the Compensation Act 2006 covers similar territory but, as I have already explained, we prefer the approach taken in the current Bill for the reasons I have given, and I do not think that it would be helpful if I went over them again.
I now turn to the specific amendments that have been tabled in relation to Clause 4. Amendments 8, 10, 11, 12 and 14 would all amend the wording in the clause which provides clarification as to what is meant by “acting heroically”. The noble Lords, Lord Pannick and Lord Beecham, supported by the noble and learned Lord, Lord Hope, have proposed in Amendment 10 to remove the final words of the clause, which refer to acting,
“without regard to the person’s own safety or other interests.”
I am grateful to them for tabling this amendment because we have been considering this issue carefully following correspondence received from St John Ambulance. I am also mindful of the persuasive points made at Second Reading and again today by the noble Lord, Lord Aberdare, on that organisation’s behalf. As the noble Lord said, St John Ambulance has indicated that the words,
“acting without regard to one’s own safety”,
conflict with first aid practice, which encourages first aiders to do precisely the opposite; namely, to have regard to whether intervening in an emergency might put themselves or others at risk. Although we think that it is unlikely that the courts would misinterpret the clause in that way, we can understand why St John Ambulance has raised concerns about this issue. If its misgivings can be allayed through the omission of the words in question, that is certainly something we would be willing to consider before Report.
I turn to Amendments 8, 11, 12 and 14, tabled by the noble Lord, Lord Aberdare, and my noble friend Lord Attlee. I realise they may seek to address the same issue identified by St John Ambulance but, rather than omitting the final 11 words of the clause, as proposed by the noble Lord, Lord Pannick, they suggest an alternative form of words. The noble Lord, Lord Aberdare, has suggested that,
“without regard to the person’s own safety or other interests”,
should be replaced with a requirement that the defendant acted,
“reasonably and with a public-spirited intention”.
Meanwhile, my noble friend Lord Attlee’s amendments seek to replace them with a requirement that the defendant must not have been acting “perversely”. He defines perversely in Amendment 14 as,
“a course of action that a reasonable person … would not take in the circumstances, irrespective of”,
whether that person was putting his own safety at risk. I suspect that both my noble friend and the noble Lord are thinking about situations in which a person intervenes in an emergency and then does something so risky or careless that it makes the position of the injured person even worse. They would not want the Bill to help defendants who have acted in that way. I am grateful for their attempts to improve the clause, which I know are very well intentioned. I have already mentioned in response to the amendment proposed by the noble Lords, Lord Pannick and Lord Beecham, that we would be prepared to look more closely at whether a government amendment along those lines might be desirable. There is certainly a consensus that the final 11 words of the clause are problematic and we will consider the options carefully before Report.
I turn to the final amendment in this group, tabled by my noble friend Lord Hunt. Amendment 13 would add a further subsection to Clause 4 which would require the courts, when reaching a decision on liability and damages, to consider,
“the circumstances in which the rescuer acted … the eventual outcome and outcome anticipated by the rescuer … and … the risks to which the rescuer was exposed”,
as an effect of his or her actions. I am grateful to my noble friend for tabling this amendment, but I believe that the additional wording would add unnecessary complexity to the clause, the purpose of which is to reassure brave members of the public who act heroically by coming to the aid of someone in danger or distress that the courts will take the context of their actions into account in the event of their being sued.
I gratefully decline the invitation offered to me by the noble Lord, Lord Pannick, to cite examples that would be entirely separate in the various clauses; there is bound to be a degree of overlap—there often is. The scenario that the clause evokes in most people’s imagination is sufficiently clear for it to be worth a clause on its own, but I accept that there will inevitably be instances that might be covered by both clauses. I hope that the undertaking I have given in relation to the final 11 words of the clause, which could either be removed or replaced by a government amendment, will be such that noble Lords who have tabled amendments in this connection will be prepared not to press them.
Earl Attlee
My Lords, I am grateful to all noble Lords who have contributed to this debate, and in particular the noble Lord, Lord Pannick, who of course did a far better job than I of explaining the difficulties with the last few words of Clause 4. I accept that using my perversity test was a much higher barrier for a claimant to climb, but it was designed to be. I am extremely grateful for the support of the noble Lord, Lord Aberdare, and the briefings from St John Ambulance and the Red Cross. However, I was a bit disappointed that neither the noble Lord, Lord Pannick, nor my noble friend the Minister were able to illustrate how my amendment would change the law. We were just told by the noble Lord, Lord Pannick, that the courts would take it all into account.
I accept the guidance of the Minister on my amendment, but I am extremely grateful, as I am sure the rest of the Committee is, for his positive response to the principles behind Amendment 10, as proposed by the noble Lord, Lord Pannick. Therefore, in the mean time and subject to the usual caveats, I beg leave to withdraw my amendment.
Marriage of Same Sex Couples (Conversion of Civil Partnership) Regulations 2014
Baroness Garden of Frognal
That the draft regulations laid before the House on 15 October be approved.
Relevant documents: 10th Report from the Joint Committee on Statutory Instruments and 11th Report from the Secondary Legislation Scrutiny Committee.
Baroness Garden of Frognal (LD)
My Lords, both this House and the other place overwhelmingly supported the passage of the Marriage (Same Sex Couples) Act 2013, a change which has brought joy to a great many people who now feel that they are truly recognised as equal under the law of this land. That is a major development for this country, and one very much to be celebrated.
I am pleased to be able to bring these statutory instruments before the House, allowing conversion of civil partnerships into marriages and allowing couples who wish to do so to remain married if one or both of them change their legal gender. Subject to the passage of the necessary instruments through this House and the other place, we intend those provisions to come into force on 10 December this year.
There has been a lot of discussion about these proposals since we first laid instruments in July. People felt that these were too restrictive and did not allow sufficient flexibility for the celebration of their marriage for couples who had chosen to enter civil partnerships at a time when marriage was not available. As a result, we agreed to see what we could do to provide greater choice for couples. We have done that, and these instruments offer more flexibility, allowing conversions to be completed in the same range of venues where same-sex couples can currently marry.
I will briefly explain each of the three affirmative instruments in turn. The Marriage of Same Sex Couples (Conversion of Civil Partnership) Regulations 2014 set out the procedure for couples who wish to convert their civil partnership into a marriage in England and Wales, and overseas in British consulates and Armed Forces bases. The simplest conversion procedure can be completed in one visit to the superintendent registrar. The couple will provide evidence of their identity and sign a declaration to confirm that they are in a civil partnership with each other and wish to convert that into marriage. The superintendent registrar will also sign and that completes the procedure.
Alternatively, they can opt to go to the superintendent registrar with the required evidence and then complete the conversion into marriage by signing the declaration in approved premises, such as a hotel, where a ceremony is then to be held. If the couple want a religious ceremony, the registrar can complete the declaration on religious premises where the religious consents required under the Act have been obtained and where a ceremony under Section 46 of the Marriage Act 1949 is then to be held. Section 46 provides for religious marriage ceremonies to be held following the registration of a marriage by a civil registrar, and the 2013 Act amended it to include ceremonies following the conversion of a civil partnership into a marriage, ensuring that the religious protections, which we all worked hard on during the passage of the Act, applied to such ceremonies. Where one of the couple is housebound, detained or seriously ill and not expected to recover, the superintendent registrar will go to the couple where they are, and after the declaration is signed they may have a ceremony, including a religious ceremony, if they wish. These regulations will also allow the conversion of a civil partnership into marriage at consulates and Armed Forces bases overseas where the authorities in the host country have consented to this.
I turn to the Marriage (Same Sex Couples) Act 2013 (Consequential and Contrary Provisions and Scotland) and Marriage and Civil Partnership (Scotland) Act 2014 (Consequential Provisions) Order 2014. First, the order makes necessary consequential amendments to primary legislation to allow conversions of civil partnerships into marriage to take place. Most significantly, the order clarifies the way Section 46 of the Marriage Act 1949 works, making clear that a ceremony can be held following a housebound, detained or deathbed conversion, or Armed Forces conversions which take place overseas. It also names the appropriate Jewish and Quaker governing authorities and makes it clear that ceremonies of other religions are covered, thus ensuring the protections apply appropriately in these cases.
Secondly, the order makes amendments to support the provisions of the Act, enabling couples who wish to do so to stay married where one or both of them changes legal gender. Notably, it ensures that where a person changes gender their spouse will not lose any pension expectations they would otherwise have had. Thirdly, the order also includes specific provision in relation to particular pension schemes—for example, to ensure gender-specific treatment in relation to a specific Armed Forces pension scheme.
Finally, the order revokes Article 5 of the earlier Marriage (Same Sex Couples) Act 2013 (Consequential and Contrary Provisions and Scotland) Order, under which marriages of same-sex couples solemnised in England and Wales are treated as civil partnerships in Scotland. This is simply to ensure that, from 16 December, when marriage of same-sex couples will become possible in Scotland, they can be recognised as marriages under Scottish law. This order also makes associated transitional and saving arrangements and further amendments in consequence of the Marriage and Civil Partnership (Scotland) Act 2014.
I turn finally to the Consular Marriages and Marriages under Foreign Law (No. 2) Order. This revokes and re-enacts, with some additions, an earlier order. It provides for: consular marriages; the issuing of certificates of no impediment by consular officers; the Registrar-General for England and Wales to pass on to the Registrar-General for Scotland relevant consular marriage certificates; the registrars general to provide certified copies of certificates; and for superintendent registrars to issue certificates of no impediment.
Although technical in nature, these instruments allow us to give effect to the provisions of the 2013 Act to allow couples in civil partnerships to convert their relationship into marriage and to enable couples where one or both change legal gender to remain married, which is of very great significance to couples affected and an occasion of joy for many. I hope that the House will support them.
Lord Paddick (LD)
My Lords, I declare an interest, having married a Norwegian man in 2009 in Norway. My marriage is now recognised as a marriage in the UK, whereas previously it was recognised only as a civil partnership.
Today we are nearing the end of the legislative road as far as equality for same-sex couples in the UK is concerned. There have been some ironies along the way. The late Lady Thatcher—considered by many to have been a conviction politician—and the Conservative Government that she led, introduced Section 28 into the Local Government Act 1988, provoking the noble Lord, Lord Cashman, and others to form the pressure group Stonewall to fight for equality for lesbian, gay and bisexual people. When the Labour Party came to power, it repealed Section 28, although it had to invoke the Parliament Act to overcome opposition in this House. How times have changed.
Under a Labour Government, civil partnerships were introduced in 2004. That was progress but still not equality. It was left to this coalition Government—a Conservative-led coalition Government—to achieve equality for same-sex couples. It was the Liberal Democrat MP, the right honourable Lynne Featherstone—the then Parliamentary Under-Secretary of State for Equalities—who proposed that the Government introduce legislation to allow equal marriage. To his credit, the Prime Minister agreed despite opposition from many in his own party. In contrast to its implacable opposition to the repeal of Section 28, this House agreed to equal marriage without a Division at Third Reading.
I place on record my thanks to Nick Boles MP and to my noble friend Lady Northover for achieving the changes to these regulations to allow those wishing to celebrate the conversion of their civil partnership to an equal marriage to do so in places and in ways that those same-sex couples not previously in a civil partnership are allowed to do.
I say that we are nearing the end of the legislative road as far as equal marriage is concerned but it is to be regretted that equal marriage is still not possible in Northern Ireland. The Liberal Democrats not only support the approval of these regulations but we are also very proud to have played such a prominent role in achieving equal marriage in England, Wales and Scotland.
Lord Collins of Highbury (Lab)
My Lords, I, too, acknowledge the journey we have travelled. It has been a long and sometimes very difficult one but nothing gives me greater pleasure than to acknowledge that we have a cross-party consensus on equality under the law. That is something that we can be proud of in this country and is not something to be ashamed of.
I, too, thank the Minister, Nick Boles, and the noble Baroness, Lady Northover, for listening to all those people in civil partnerships who, like me, want to take this final step of equality under the law by marrying in front of our friends and family. I was really pleased that the original drafts were taken back, and that we are still now able, with the help of the department, to stick to the original timetable. It is a great achievement and I am pleased that the Minister was able to do that. It is not easy, sometimes, for Ministers to take something back and work on it, but they did a great job and I am thankful to them.
Lord Jenkin of Roding (Con)
My Lords, I too support these regulations. Perhaps I might just respond to the noble Lord, Lord Paddick, by reminding him that there was only one party that actually included same-sex marriage in its manifesto. That was the Conservative Party. The Conservative Party was the only one to promise the original Act in its manifesto. Having said that, I too rejoice that this now has complete cross-party approval.
One of the issues that needs to be remembered is that in contrast to what happened in the other place, those in favour of the Bill as it then was—what is now the 2013 Act—always were a majority on the Conservative side in this House. For that we can take some credit, considering—as the noble Lord, Lord Paddick, said—the history of Clause 28, which happily has now been confined completely to history. This House has distinguished itself very much in this whole area.
I also make the point that the Secondary Legislation Scrutiny Committee looked at this question and asked itself why the original orders were withdrawn and new orders had to be introduced. The noble Lord, Lord Collins of Highbury, has kept me well informed on this—not that I have a direct personal interest: noble Lords may remember that at Second Reading I declared to the House that my wife and I had celebrated our diamond wedding anniversary the year before the Bill was introduced. Nevertheless, I then spoke very much in favour of the Bill and was delighted when, in the end, it became law. However, the scrutiny committee asked itself why this had happened. The short answer was that the Government had not consulted properly on the draft orders. Paragraph 17 of its report said:
“While we note that there was extensive consultation in relation to the Act and general principles, it would appear that even a brief consultation on the proposed detail of these Regulations might have avoided the need to withdraw and re-lay these instruments and the uncertainty that will have caused those making arrangements for conversions soon after the planned 10 December implementation date”.
I think the noble Lord, Lord Collins of Highbury, and his colleagues are much to be congratulated on having spotted the limitations in the original order relating to where these marriages could be celebrated, and persuaded the Minister, Nick Boles, who is listed as the Equalities Minister for same-sex marriages—and I have no doubt my noble friend Lady Northover—to withdraw it. It is a pity that there was no proper consultation beforehand.
However, here we are: it is almost the last chapter of this legislation and I am delighted that it has now been introduced. I hope that the regulations will be approved by both Houses of Parliament so that the noble Lord, Lord Collins, can celebrate his marriage to his partner before Christmas.
Baroness Thornton (Lab)
My Lords, we all know that it is rare, as parliamentarians, to see through a piece of legislation which has the direct effect of making so many people so happy. We have all seen the joy of the couples who have been married since the Act came into effect in March. While I welcome the noble Baroness, Lady Garden, to her place and thank her for explaining the orders so comprehensively, I am sad that the noble Baroness, Lady Northover, is not here to see these orders through, due to her very well deserved promotion. However, I place on record my thanks to her, and to her colleague the Minister, Mr Nick Boles, for the open and accessible way in which they conducted these proceedings. I also thank my noble friend Lord Collins for the eloquent and sometimes forceful way in which he supported the need to withdraw these orders as they were drafted in July, which—along with the threat of mobilisation to defeat the orders, if necessary, by my noble friend Lord Alli—I am convinced swung the decision to withdraw them, much to everyone’s relief.
My view at the time—which I expressed to the civil servants concerned—was that the original draft showed a lack of emotional intelligence about the way to proceed which had not been there during the rest of the passage of this Bill. It could well be that that was through lack of consultation.
We have, in passing these further measures, the privilege of creating more happiness for those who wish to convert from civil partnerships to marriage and, crucially, to celebrate this conversion in the way that they choose. I know of several couples who are waiting for confirmation that these orders have been enacted in time for them to celebrate their marriage conversion—some of them very close at hand.
For example, my friends John Nickson and Simon Rew had their civil partnership on the very first day in Westminster Register Office and will be married on 19 December this year. They have been together since the early 1980s, certainly for more than 30 years. Like many couples they have been anxious to get on with organising this very happy occasion, and we need to apologise to them and others for causing them worry about whether they would be able to proceed on the dates the Government promised at the beginning of the year. We also need to wish John and Simon, and indeed my noble friend Lord Collins and Rafe, a very happy day when they eventually convert.
On these benches we will not be raising issues to delay the passage of the orders before the House today. These new orders allow same-sex marriages to take place in any if the 6,729 premises licensed to conduct civil marriages and civil partnerships, in addition to registry offices.
We are satisfied with the consequential provisions detailed in these regulations and believe that the dual path offered to people—to have a sort of cheap-and-cheerful conversion or a celebration—is exactly the right way to go. We are also pleased that couples will be able to have their civil partnerships converted on religious premises, where those premises have been approved to marry same-sex couples. This is an important issue of religious freedom and one that respects the protections for religious organisations enshrined within the Act. I was also pleased that the marriage certificate will look very similar to the marriage certificate I received 40 years ago. Such things are important.
My noble friend mentioned that the Stonewall brief mentions conversions in British consulates. Will the Minister assure the House that all consulates are properly briefed about how and when to conduct conversions? My second question relates to guidance and training for those whose job it is to administer these conversions, and making sure that the two options of how to convert are properly available.
I know that everyone is referring to these orders as the final chapter in the enactment of the same-sex marriage Act. Indeed, they are the final issue to be resolved for same-sex marriages. However, the Act was also amended in your Lordships’ House to include the new provision for legalising humanist weddings. I take this opportunity to ask the Minister about the progress in that direction. Indeed, the amendments to legalise humanist marriage had majority support in both Houses. The Government’s amendment allowed for a review and consultation on the matter and included order-making powers. The review and consultation are over and there have been more than 1,900 responses. They seem to show that this continues to be an issue with wide public support. Last year the British Humanist Association was assured that this process would be completed well before the end of the year, giving enough time to make orders in good time before the general election. This has not happened. When will the report emerge and when will we see the orders? I am very concerned that we get on with this.
In Scotland, where more than 10% of all marriages are now humanist marriages, the first ever same-sex marriage on 31 December will be a humanist marriage. The experience in Scotland has been nothing but positive. In fact, humanist marriages have accounted for 54% of the overall net increase in marriages. We are pleased to see the Government’s “family test” policy and the criteria by which all policies now have to be assessed; the legalisation of humanist marriage would perfectly fit those criteria and strengthen the institution of marriage—and no doubt lead to an increase in marriage, as it has in Scotland.
Given that the public consultation has closed and that the responses were, I gather, overwhelmingly favourable, can the Minister explain when the Government are publishing their report, and when the orders will be laid? I am worried because I hear rumours of heels being dragged at No.10 and that there may be some resistance at senior levels in the Church of England, which I hope both institutions will strenuously deny. There is a suggestion that humanist weddings should be limited only to places that are licensed for marriage, which kind of defeats the point of having a humanist wedding in the place of one’s choice. The reason that this is important is the same reason why the timetable for the orders under consideration today is so important to those who wish to convert their civil partnerships. People plan their weddings years in advance and I can inform the House that my sister, who is a humanist celebrant—I probably need to declare her as an interest—is already receiving inquiries about humanist weddings next summer and autumn. She, along with the hundreds of other humanist celebrants, has a dilemma over how to answer those questions. Perhaps the Minister can advise on that.
We welcome these orders and I congratulate the Government on bringing them forward in time for all the happy events to take place before Christmas.
Baroness Garden of Frognal
My Lords, I am most grateful to all noble Lords who have contributed to the debate. They were constructive, considered and supportive. I place on record also my thanks to all those who took the time over the summer to discuss their concerns to help us get these statutory instruments to a better place. I am sure that all noble Lords will agree that it has been worth it.
I turn to some of the points raised. The noble Lord, Lord Collins, and the noble Baroness, Lady Thornton, referred to consular services. In fact, the GOV.uk website is already providing information about conversions, and will be constantly updated. Detailed guidance is being provided to all consular offices to make sure that they are familiar. This has obviously been quite a steep learning curve for a number of consular offices but there is nothing now to delay it. Consular offices have been provided with full guidance and correct information. We therefore hope that some of the early misconceptions will therefore have been addressed.
Marriage (Same Sex Couples) Act 2013 (Consequential and Contrary Provisions and Scotland) and Marriage and Civil Partnership (Scotland) Act 2014 (Consequential Provisions) Order 2014
Baroness Garden of Frognal
That the draft order laid before the House on 15 October be approved.
Relevant documents: 10th Report from the Joint Committee on Statutory Instruments and 11th Report from the Secondary Legislation Scrutiny Committee
Consular Marriages and Marriages under Foreign Law (No. 2) Order 2014
Baroness Garden of Frognal
That the draft order laid before the House on 24 October be approved.
Relevant document: 10th Report from the Joint Committee on Statutory Instruments