House of Commons

Tuesday 25th November 2014 Commons Chamber

Tuesday 25 November 2014

The House met at half-past Eleven o’clock

Prayers

Tuesday 25th November 2014 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Tuesday 25th November 2014 Commons Chamber

The Secretary of State was asked—

[Andrew Bridgen (North West Leicestershire) (Con)]

1. What steps he is taking to deliver parity of esteem for mental health services.

[The Minister of State, Department of Health (Norman Lamb)]

Parity of esteem has been set out in law, and we are delivering it for people. More than 2.6 million people have entered talking therapy treatment through the Improving Access to Psychological Therapies programme since 2008, and we have secured an additional £120 million over 2014-15 and 2015-16 to support the introduction of the first ever waiting time standards in mental health services.

[Andrew Bridgen]

According to the recent chief medical officer’s report, mental illness is responsible for 70 million sick days a year, at an estimated cost to the economy of around £100 billion a year, so parity of esteem is essential. What more can be done through early intervention to help people with mental health illness by preventing their chronic problems from becoming acute?

[Norman Lamb]

My hon. Friend is absolutely right about the importance of early interventions. Next year, we are introducing for the first time a six-week maximum waiting time standard for access to psychological therapies to start treatment for conditions such as anxiety and depression, and a two-week standard for starting treatment for those suffering a first episode of psychosis. I am also calling on every FTSE 100 company to sign up to Time to Change, so that they can show leadership in how they deal with their employees.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

It is one thing to say it, but completely another to do it. I am sure that the whole House will recognise improvements that happen, but does the Minister understand the scale of the crisis, not simply in the NHS but in the education system where more and more young people are increasingly finding that they simply cannot get anything like the support they need at increasingly difficult points in their lives?

[Norman Lamb]

I completely agree with the hon. Gentleman about the importance of children and young people being able to access treatment and support. If the truth be known, it has always been like this. It has always been the Cinderella of the Cinderella service, which is why we established a taskforce this summer, bringing in a whole load of experts and, importantly, consulting children and young people so that we can develop a modern health service for the mental health problems of children and young people. We hope to report early next year.

[Dr Sarah Wollaston (Totnes) (Con)]

19. As the Cabinet taskforce sets out on this important work, will the Minister reassure me that it will bear in mind the important finding of the Health Committee’s inquiry into CAMHS—Child and Adolescent Mental Health Services—that it is the tier 1 and tier 2 services that really make the difference in preventing the need to access the service when children are much more unwell?

[Norman Lamb]

I very much appreciated and supported the findings of the Health Select Committee report into children and young people’s mental health services. The hon. Lady is absolutely right that we need to focus far more on preventing ill health and preventing a deterioration of it. If we can get into schools and work much better at maintaining people’s mental well-being, we can achieve much better results.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

Despite what the Minister says, in South Shields, financial challenges have contributed to the closure of Bede wing mental health ward. This means that acute in-patient services are no longer provided in our borough. Can the Minister explain why mental health services are, in fact, being eroded under this Government?

[Norman Lamb]

Over the past decade and a half, there has been a very substantial reduction in bed numbers, and it is a trend that we should thoroughly support because we want to move away from institutional care towards supporting people at home in their communities. With children’s mental health, we have invested an extra £7 million this year to ensure that children get access to beds close to home when they need them.

[Paul Burstow (Sutton and Cheam) (LD)]

Will the Minister ensure that the taskforce he mentioned considers the evidence that one in five mothers suffers from mental health problems during pregnancy or within a year of giving birth because the costs of that to society are massive and three quarters of those costs are borne by the child and subsequent generations? Is it not time to make sure that we focus on perinatal mental health because it can make such a big difference?

[Norman Lamb]

I very much agree with my right hon. Friend. Accompanied by my hon. Friend the Member for Torbay (Mr Sanders), I visited a brilliant perinatal mental health service in Torbay recently. My right hon. Friend is absolutely right. The London School of Economics has done a lot of work, showing evidence that if we invest in perinatal mental health, we get a return on the investment, but most importantly, we change people’s lives. I am determined to pursue that.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

The Minister talks about parity of esteem, but it is under this Government that mental health budgets have been unfairly cut, and 1,500 beds and 3,300 nurses have been lost. He has already received a damning Select Committee report on child and adolescent mental health services. Ill people are being locked in police cells, or are travelling hundreds of miles to find a bed. The Minister could not have brought about more disparity if he had tried—and now we hear that there is to be yet another review. He is the Minister in charge. I ask him again: what action is he going to take today?

[Norman Lamb]

Inexplicably, when the last Labour Government introduced access and waiting time standards, they left out mental health. That was an extraordinary decision, and it drives where the money goes. The introduction of mental health waiting time standards next year, for the first time ever, will help to achieve equality for mental health. We have also published a vision of the next five years explaining how we will secure genuine equality for mental health, which is something that the last Labour Government did not achieve.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

The Minister will know that the statutory guidance of the adult autism strategy in England is the keystone of the provision of services under the Autism Act 2009. The updating of that guidance is now imminent, and concern has been expressed to me about the draft wording produced by the Department. Can the Minister assure me that the Department does not intend to weaken the requirements for local authorities to provide services for people with autism and their families?

[Norman Lamb]

I am delighted that my right hon. Friend has become chair of the all-party parliamentary group on autism. She has fought for many years to secure a fair deal for people with autism. I am grateful to her for alerting me to the issue that she has raised, and I shall be sure to look at the guidance. It is absolutely not the intention to water down guidance for local authorities in any way.

[Kerry McCarthy (Bristol East) (Lab)]

2. What recent assessment he has made of the adequacy of provision of student health services.

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

All patients are eligible to register with local primary medical care services, and that includes students who are moving away from home and starting university.

[Kerry McCarthy]

I do not think that the Minister has entirely engaged with the question. Those who run the student health services at Bristol university are warning that young people’s health is very much overlooked and underfunded—particularly mental health, which accounts for a quarter of all consultations. They are being hit by the GP funding changes and by cuts in public health spending on sexual health advice, and they have had to introduce their own meningitis vaccination programme because the Government have not introduced one. What support can the Minister give specifically to student health services?

[Dr Poulter]

I certainly remember being actively encouraged to register with a local GP when I was a student at Bristol university, and I understand that that continues today. As for the important question of children’s and young people’s mental health, the children’s mental health and well-being taskforce is looking at the mental health and well-being of students. Student Minds is involved in the process, and that in particular will help to inform the work of the taskforce in improving access to students with mental ill health.

[Duncan Hames (Chippenham) (LD)]

Students do register with a practice in their university cities, but I was told recently by one of my constituents that she had experienced difficulty in gaining access to timely health care as a temporary resident when she was back at home. What options are available to ensure that students remain registered in the place where they are likely still to be spending half the year?

[Dr Poulter]

We recommend that all students register with university services, or with a GP in their university areas, but if patients are away from the GP with whom they are registered for more than 24 hours and less than three months—and that would include students—they can see a GP in the area where they are staying as temporary residents. GPs should be aware of that entitlement.

[Keith Vaz (Leicester East) (Lab)]

Students with long-term illnesses such as diabetes find it extremely difficult to manage their conditions, and there is evidence that a number of students are skipping their insulin injections. What further steps can be taken to make them aware of the necessity for them to take that important medication?

[Dr Poulter]

This is an incredibly important area of health care. How do we support young people through periods of transition? We know that people with long-term illnesses may struggle particularly, and diabetes and epilepsy are two of the conditions that have been identified. NHS England is currently examining transitional care tariffs to support people during the transition between children’s and adult health services, and educational support is part of that ongoing work.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

My right hon. Friend the Minister for Universities, Science and Cities recently announced that there would be no cap on the number of students wishing to study pharmacy. Does my hon. Friend agree that Plymouth university should now press ahead with the setting up of a pharmacy school given that it is the Peninsula medical school?

[Dr Poulter]

My hon. Friend makes an important point. I visited the Peninsula medical school and his local university to highlight some of their excellent work in training medical and dental students. I believe that there is ample scope to expand provision to train other health care professionals in what is becoming an outstanding medical and health care training facility.

[Grahame M. Morris (Easington) (Lab)]

3. What representations he has received on exemption of the NHS from the provisions of the transatlantic trade and investment partnership.

[The Secretary of State for Health (Mr Jeremy Hunt)]

The Government will not allow TTIP negotiations to harm the NHS. Any suggestion to the contrary is both irresponsible and false. I am grateful to the former Labour shadow Health Secretary for confirming that.

[Grahame M. Morris]

That is an interesting answer but, without specific exemption from TTIP, how can the Secretary of State give any reassurance that predatory organisations such as the Hospital Corporation of America, which was prosecuted for fraud in the US, will not use the TTIP provisions to seek contracts in our NHS?

[Mr Hunt]

The best assurance I can give the hon. Gentleman is not what I have said, but what the EU Trade Commissioner, Karel De Gucht—I challenge colleagues in Hansard to spell that correctly without looking at my notes—has said. In an interview in September, he said:

“Public services are always exempted—”

from TTIP—

“there is no problem about exemption. The argument is abused in your country for political reasons but it has no grounds.”

[Mr Speaker]

Colleagues in Hansard may not even rely on the Secretary of State’s notes; they may have their own source material. They are very special people those reporters.

[David Morris (Morecambe and Lunesdale) (Con)]

I thank my right hon. Friend for that concise answer. I reiterate the message to the unions, which are sticking up billboards in my constituency, that Cameron and Hunt are not selling off the NHS.

[Mr Hunt]

I thank my hon. Friend for his comments. I was quite amused to see that I have a future career as an estate agent, along with the Prime Minister, when our hopefully long careers in politics are over, but the point is that this is scaremongering and it is wrong to scaremonger about something as important as the NHS. To suggest that the NHS is being privatised is fiction. What is not fiction is Labour’s legacy of poor care.

[Clive Efford (Eltham) (Lab)]

The Secretary of State’s definition of “harm” is not the definition that Labour Members have. My Bill, which was passed overwhelmingly on Friday, would require the Secretary of State to bring the matter back to this House should TTIP apply to the NHS in any way whatsoever. Will he support my Bill going into Committee without delay, so that we can discuss the detail and answer the questions he has?

[Mr Hunt]

No, I will not support the hon. Gentleman’s Bill.

[Ms Margaret Ritchie (South Down) (SDLP)]

Given the uncertainty of the French and German Governments on the investor-state dispute settlement mechanism, as well as the indication by EU Commission President Juncker that he will not back it, why have this Government not done more to protect the health service from a practice that would leave it vulnerable to private sector intervention?

[Mr Hunt]

This is what the EU chief negotiator said to the former Labour shadow Health Secretary, who is chair of the all-party group on TTIP:

“the rights of EU Member States to manage their health systems according to their various needs can be fully safeguarded…There is no reason to fear either for the NHS as it stands today or for changes to the NHS in future as a result of TTIP.”

It could not be clearer than that.

[Mr Philip Hollobone (Kettering) (Con)]

4. How many patient episodes there were at Kettering General Hospital in (a) 2010 and (b) the last year for which figures are available; and what assessment he has made of the reasons for the change in the number of such episodes.

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

In 2012-13 there were 85,497 in-patient finished consultant episodes at Kettering General Hospital NHS Foundation Trust, compared to 84,602 in 2011-12. There has also been an increase in the number of accident and emergency attendances, from 76,099 in 2010-11 to 84,055 in 2012-13. That increase is largely attributable to a high demand for services from a growing, ageing population.

[Mr Hollobone]

Kettering general hospital serves one of the areas with the fastest population growth and greatest ageing in the whole country. Today’s report from the Care Quality Commission shows that, while the hospital has some of the most caring staff in the whole of the NHS, many areas of the hospital require considerable improvement. Will the Minister ensure that future NHS funding decisions are better targeted at areas such as Kettering which have such costly demographics?

[Dr Poulter]

My hon. Friend will be aware that the NHS funding formula is set independently, free from political interference. It is reviewed annually. I should like to reassure him that the Nene and Corby clinical commissioning groups have both received higher than real terms growth in their funding allocations and will do so again next year, to move them closer to their target allocations.

[Andy Sawford (Corby) (Lab/Co-op)]

I have been working closely with the hon. Member for Kettering (Mr Hollobone) in recent years on a campaign to support the hospital. We recognise the issues that the CQC has raised, and we support the journey that the hospital is taking towards improvement. When the hon. Gentleman and I come to see the Minister in a few months’ time, will he look favourably on our bid for £20 million of funding to improve our accident and emergency department, whose physical environment has been described by experts as being among the worst in the country?

[Dr Poulter]

I am looking forward to that meeting in the new year. I should like to reassure the hon. Gentleman and my hon. Friend that the Department has provided a total of £5 million of temporary public dividend capital funding and a further £1 million of emergency capital to the trust in the past three months, so support is going into the delivery of high-quality services.

[Norman Baker (Lewes) (LD)]

5. What recent assessment he has made of the potential medicinal benefits of cannabis.

[The Parliamentary Under-Secretary of State for Health (George Freeman)]

Cannabis is classified as a class B drug under the Misuse of Drugs Act 1971, as my right hon. Friend knows. To sell cannabis or preparations made from it as a medicinal product would necessitate obtaining a licence from the Medicines and Healthcare products Regulatory Agency. Cannabis in its raw form is not authorised as a medicinal product in the UK. However, certain cannabis extracts are contained in Sativex spray, which is the only medicine produced from the cannabis plant that is approved for use as a medicinal product in the UK. It is licensed for use in treating spasticity in multiple sclerosis and was approved in June 2010.

[Norman Baker]

Over the last year or so, I have met a number of credible people from all walks of life and with a range of medical conditions who have told me that the only substance that helps their medical condition is cannabis. However, they cannot secure it through the NHS and they risk getting a criminal record if they try to obtain it for themselves. Will the Minister look at the much wider availability of cannabis for medicinal purposes in other countries and try to find a way to help those in need in our country?

[George Freeman]

As a former Home Office Minister, the right hon. Gentleman will be aware of the difficulties of getting this policy right. I do not believe that anyone in the House thinks that we ought to allow the prescription of a controlled substance willy-nilly without good evidence. I should like to draw his attention to this evidence from Cancer Research UK, which states:

“At the moment, there simply isn’t enough evidence to prove that cannabinoids—whether natural or synthetic—work to treat cancer in patients, although research is ongoing. And there’s certainly no evidence that ‘street’ cannabis can treat cancer.”

We continue to keep this matter under close observation, and there is good evidence of science being done by companies and by the National Institute for Health Research.

[Ian Austin (Dudley North) (Lab)]

Has the Minister assessed whether the use of cannabis can result in paranoid and deluded behaviour, leading people to believe, for example, that it is possible in this country to mount a huge conspiracy to pervert the course of justice involving the police, the ambulance services, the security services, the Government of the day and the media, and to pretend that someone who had killed themselves had actually been murdered?

[George Freeman]

The hon. Gentleman makes an interesting parliamentary point, but my responsibilities cover only the licensing of cannabis for medicinal purposes.

[Mark Pritchard (The Wrekin) (Con)]

Cannabis no doubt has some limited medicinal benefits for some illnesses, but will the Minister put it on record that it is not the Government’s intention further to liberalise any licensing of cannabis, especially in the light of the Institute of Psychiatry’s empirical evidence that abuse of the substance can lead to severe mental illness?

[George Freeman]

My hon. Friend makes an important point, and I am happy to give him that undertaking. We have to be careful to maintain a distinction between recognising the damaging effects of the recreational use of cannabis and the specific medicinal benefits of some of its derivatives, when tested and proven, in medicinal products. We intend to make that distinction very clear.

[David T. C. Davies (Monmouth) (Con)]

6. How many patients have received treatment through the cancer drugs fund since the inception of that fund.

[The Secretary of State for Health (Mr Jeremy Hunt)]

More than 60,000 patients in England have received treatment through the cancer drugs fund since its inception in October 2010. They and their relatives will be very concerned at the suggestion made by the shadow Health Secretary last month that a Labour Government could abolish the fund.

[David T. C. Davies]

I congratulate the Secretary of State on that very high figure. Is he aware that some of those people who are being treated have had to sell up their homes and move here from Wales, where they are routinely denied life-prolonging cancer drugs by the Labour-run Welsh Assembly Administration. What does that teach us about the respective differences between the health services in England and Wales?

[Mr Hunt]

I thank my hon. Friend for raising that point. The last Labour Government did leave us with one of the lowest cancer survival rates in western Europe, which is one of the reasons why we introduced the CDF. Unfortunately, the current Labour Government in Wales are continuing with those policies, which is why 6,500 Welsh cancer patients were admitted for treatment in English hospitals last year. [Official Report, 12 January 2015, Vol. 590, c. 5-6MC.]

[Valerie Vaz (Walsall South) (Lab)]

So will the Secretary of State then publish the assessment of the CDF by the chemotherapy intelligence unit before 7 May 2015?

[Mr Hunt]

We are, on the NHS, the most transparent Government in history, and I can see no reason why we would not publish that. We are very proud of what the CDF has achieved. We are very proud that the level of cancer diagnoses has increased by more than 50% compared with what it was under the previous Labour Government, and so we are finally starting to win the battle against cancer.

[Andrew Percy (Brigg and Goole) (Con)]

We all remember the horror stories before the CDF existed locally, and all Government Members certainly support its continued use. Before any drugs are delisted from the CDF, will the Secretary of State make available the scoring of those drugs? Will he also outline what the provisions will be for consultation with patients and their families?

[Mr Hunt]

We will absolutely go through a transparent process on that. My hon. Friend is right to talk about the CDF’s success, which is why we have put its budget up by 40%. As part of the fund’s success, we want to make sure that it is allowing access to the latest drugs and to drugs that really work. Obviously, science has moved on since the fund was set up four years ago, which is why we want to make room for new drugs and take off existing drugs where there is evidence that they are not working as well as possible. However, the process must be transparent.

[Liz Kendall (Leicester West) (Lab)]

Last Wednesday, the Prime Minister denied that there is a problem with cancer care, yet the target for cancer patients to start their treatment 62 days after a general practitioner referral has been missed for nine months in a row. Cancer Research UK says that this target is vital for ensuring swift diagnosis and treatment so that we have the best survival rates in the world. Some 15,000 patients have already waited too long. This is a serious problem requiring serious action, so what is the Secretary of State going to do?

[Mr Hunt]

I think cancer patients in the hon. Lady’s constituency will welcome the fact that under this Government Leicester hospital has 194 more nurses and 120 more doctors, many of them involved in cancer care.

Let me answer the hon. Lady’s question directly. There is pressure on one of the cancer standards, and that is because every year we are now diagnosing 460,000 more people than happened under the last Labour Government, who left us with such a disappointing survival rate. When that many people are being diagnosed, it of course puts pressure on the diagnostic labs and the people doing those processes. But Cancer Research UK is also saying that we are seeing record increases in survival from cancer, and that is happening because of this Government’s policies.

[John Robertson (Glasgow North West) (Lab)]

7. Whether the Government have made a final decision on whether to introduce standardised packaging of tobacco products.

[The Parliamentary Under-Secretary of State for Health (Jane Ellison)]

The Government have not yet made a final decision on whether to introduce standardised packaging. We are carefully considering a large number of responses from the summer consultation, together with detailed responses from EU member states.

[John Robertson]

I thank the Minister for her answer, albeit a disappointing one. Given the majority support for standardised packaging in this place and the fact that elected Members have backed it, perhaps she could explain why the Government have not come to a decision? Will she consider having a debate in the House on the subject, with a vote that people can take forward so that they believe that this Government actually care about people who are trying to stop smoking?

[Jane Ellison]

We are taking this forward. Not everyone in the House may be aware that we are obliged to go through a process with Europe, whereby we notify this policy to EU member states and there is a statutory three months during which member states can give a detailed response. If any member state does so, there is a six-month pause. Four states—Bulgaria, the Czech Republic, Portugal and Romania—have given that detailed opinion, and the window has not yet closed. The House might be interested to know that Ireland received eight detailed responses on this subject. That is part of the process.

[Ian Paisley (North Antrim) (DUP)]

I welcome the Minister’s statement that she will wait for the evidence before moving forward rather than relying on emotion. She knows that the policy, if implemented, would threaten 1,000 jobs in my constituency. Furthermore, will she agree to await the outcome not only of the evidence from Australia but of the tobacco tax directive that is being pushed through Europe?

[Jane Ellison]

I am encouraged by the evidence from Australia. We have seen some really impressive statistics regarding the cessation of smoking. The Government have not yet made a final decision on the matter, but Health Ministers are on the record as saying that we are minded to move forward on this, and we want to make progress. I regret the loss of jobs in the hon. Gentleman’s constituency, but I know that he will be working hard to assist his constituents in looking for other employment.

[John Cryer (Leyton and Wanstead) (Lab)]

If plain packaging were introduced, what assessment has there been on whether that will make life easier or more difficult for the counterfeiters?

[Jane Ellison]

That is one issue that we will weigh up before making a final decision. Obviously, we received a large amount of evidence from the consultation, and we are looking at it in detail. Some of it was around that matter, although it is also the case that Sir Cyril Chantler made some robust statements in his report, rebutting some of the claims, but that is all part of the final consideration that the Government will make.

[Andrew Stephenson (Pendle) (Con)]

8. What steps his Department is taking to accelerate access to innovative medicine and health care technology in the NHS.

[The Parliamentary Under-Secretary of State for Health (George Freeman)]

Accelerating access for patients to innovative medicines and health care technology is central to my mission as the UK’s first Minister for life sciences. Breakthroughs in genetics and the use of data are unlocking a new era of precision medicines, earlier diagnosis and remote monitoring, which can dramatically improve patient outcomes, and the efficiency of our health service. That is why I announced last week a major review of the role of the regulators, the Medicines and Healthcare Products Regulatory Agency and the National Institute for Health and Care Excellence, in accelerating innovation in the NHS.

[Andrew Stephenson]

I know that the Secretary of State has already visited Airedale general hospital to see its telemedicine service. Earlier this month, I visited Marsden Grange care home in Nelson to look at the service from a patient’s perspective. The service is reducing pressure on the ambulance service, local GPs, A and E departments, and, crucially, improving patients’ experiences. How can we ensure that telemedicine is much more widely used?

[George Freeman]

My hon. Friend makes an excellent point. As with Airedale, the Marsden Grange care home initiative shows that we can improve patients’ outcomes, deliver more health for the same amount of money and make our system much more efficient. That is why we so strongly support telemedicine, why NHS England has undertaken a rapid review of the 3 million lives programme and why, last week, we launched our review to accelerate the adoption of innovative med-tech and e-health technologies into the NHS.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

What is the good of innovation if we do not use it? For the 1 million people who suffer from atrial fibrillation, the three new NICE-approved drugs are a life saver; they make life worth living. But only about 6.5% to 7% of people have been prescribed the new drugs, as they are being blocked by clinical commissioning groups and GPs. What will the Minister do about that?

[George Freeman]

The hon. Gentleman is right to raise the matter. We have all seen it coming in recent years. Extraordinary advances in science are developing a huge range of new products, which our system is having to adjust to cope with, and that is precisely why I launched the review last week with NICE and the MHRA. We must look at these transformational technologies that bring new opportunities to our services and at how we can design a system that is better able to target innovations to the patients who need them.

[Mark Menzies (Fylde) (Con)]

18. Dementia is an abhorrent disease that affects thousands of people across the UK, and a significant number in my constituency of Fylde. With that in mind, what steps is the Minister taking to ensure that dementia sufferers have access not only to the most innovative medicine but to the most advanced early diagnosis?

[George Freeman]

My hon. Friend makes an important point. Dementia is one of those diseases where the loved ones and the carers of patients often suffer every bit as much as the patients. That is why, under the Prime Minister’s leadership, we have launched the G8 dementia summit to bring together the world to tackle the disease. We have launched a dementia strategy. Diagnosis rates in Britain have gone from 42% to 55% in two years. We have launched a new dementia service and doubled research spending. We will have 250,000 staff trained by next March, and, from April, we will be investing £3.8 billion into the Better Care fund. It is an important disease that deserves our priority.

[Lilian Greenwood (Nottingham South) (Lab)]

The Ear Foundation recently published a report that estimates that the real cost of adult hearing loss is at least £30 billion a year. I hope that the Minister has read it. What is he doing to ensure that adults who could benefit from improved hearing technologies, including cochlear implants, do so, and when does he plan to publish the action plan on hearing loss that has long been promised?

[George Freeman]

I am not aware of the veracity of the £30 billion figure, but I will happily look at it, and I happily undertake to look at the progress of the report and the work that the hon. Lady raised.

[Mr Adrian Sanders (Torbay) (LD)]

20. It is a well-established fact that type 1 diabetics who have insulin pumps are much more able to control their condition than those who do not, yet the take-up of insulin pumps in the UK compared with Europe and America is pitiful. What is the Department doing to increase the commissioning of insulin pumps? In the long run, the costs go down with better control.

[George Freeman]

My hon. Friend raises a important example of an innovation that, despite costing a little extra at the beginning, saves substantially downstream. One of the challenges in our national health service is tackling a series of ways in which the system is not well geared to incentivising such innovations. NHS England recently set out its five-year forward view, which has, for the first time, a strong commitment to tackling such issues, and we are working with it to see what we can do to remove barriers and promote incentives for earlier adoption.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

What steps are being taken to ensure that emerging treatments for Duchenne muscular dystrophy that receive conditional approval are available through the early access to medicines scheme as early as possible?

[George Freeman]

I was delighted, when we launched the early access to medicines scheme earlier this year, to see the very strong support that we got from the Duchenne dystrophy group. Dystrophy is one of those terrible diseases that desperately need the fast-tracking of new medicines. As I said, last week we launched a major review of our landscape for the earlier adoption of innovative medicines in the NHS, so that patients in the most severe clinical need can take part in cutting-edge research and we get drugs to patients more quickly.

[Mark Durkan (Foyle) (SDLP)]

9. What recent representations he has received on access to off-patent drugs; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Health (George Freeman)]

The hon. Gentleman will be aware of the debate in the House two weeks ago in which I gave a very full statement of the Government’s position on off-patent and off-label drugs. We want to promote their wider use, but we do not believe that the Bill presented to the House is the right mechanism for achieving that.

[Mark Durkan]

Will the Minister borrow from the approach taken with the Medical Innovation Bill, and commit to consulting on whether the Government should support, or how they might pursue, the key purposes of the Off-patent Drugs Bill?

[George Freeman]

As I said in the debate, we absolutely support the Bill’s intention, which is to promote the greater use of off-label and off-patent drugs, but that must remain a decision for clinicians exercising their judgment about what is best for their patients. We do not think it right that the Government should be put in the position of effectively sponsoring new drug licence applications to the Medicines and Healthcare Products Regulatory Agency. I have convened a round table working group with all the stakeholders to try to look at how we can maximise information to clinicians to promote the use of off-label and off-patent drugs.

[Mr David Crausby (Bolton North East) (Lab)]

10. How many (a) NHS trusts and (b) foundation trusts are forecasting a deficit.

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

Thirty-three NHS trusts and 60 foundation trusts are forecasting an end-of-year financial deficit, with the remaining 65 NHS trusts and 87 foundation trusts forecasting an end-of-year surplus.

[Mr Crausby]

Earlier this year, Monitor announced that the number of trusts in financial breach had nearly doubled over the previous 12 months. How confident is the Minister that the number will not double again next year?

[Dr Poulter]

I am very confident that the measures already in place to drive efficiencies in the NHS are on course to save £20 billion during this Parliament. Many of those efficiencies are being delivered by improved procurement practice at a trust level. The Government have also invested £15 billion during this Parliament, which is a real-terms increase of £5 billion in NHS funding to support trusts.

[Robert Halfon (Harlow) (Con)]

The Government have invested hugely in the NHS in Harlow, including millions of pounds to our accident and emergency unit. However, for historical reasons the Princess Alexandra hospital has financial difficulties. Will my hon. Friend look at this and see what the Government can do to help?

[Dr Poulter]

Of course. As my hon. Friend is aware, every local health area—every clinical commissioning group—is receiving an increase in the funding available to it year on year. I would be happy to meet him to discuss the matter further, if that would be helpful.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

As the Minister knows, North West London Hospitals is one of the NHS trusts that is in deficit. It has seen the accident and emergency departments at two nearby hospitals close, and its hospital board estimates that an additional 123 beds are necessary. Will the Minister meet me to discuss the problems of its historical deficit and the need for additional funding to make sure that those 123 medical beds are provided?

[Dr Poulter]

I can reassure the hon. Gentleman that, in the words of the medical directors of all the hospitals affected, there is a very high level of clinical support for the programme across north-west London, and the changes will save many lives each year and significantly improve the services that are available to local patients. I hope that is reassuring to the hon. Gentleman and to local patients.

[John Stevenson (Carlisle) (Con)]

Running a deficit can demonstrate short-term problems which, once resolved, will allow a trust to return to balance. Does my hon. Friend agree that there must be flexibility in the system, particularly for trusts such as North Cumbria, which have been in special measures?

[Dr Poulter]

It is absolutely right that trusts such as North Cumbria need to face up to challenges when those affect the quality of patient care, and that the focus of Care Quality Commission inspections and special measures is to drive up standards of care. It is also important that we continue to invest and support trusts where we can. That is why we are pleased to be increasing the NHS budget by £15 billion during this Parliament.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Is the Minister aware that the Manchester primary care trust ought not to be incurring a deficit because it does not spend sufficient of its money and resources on investigating cases referred to it and on responding to hon. Members such as myself when they write to it over a period of months? Will he look into this incompetence and examine similar behaviour, or lack of it, by the Care Quality Commission?

[Dr Poulter]

It is very important that the NHS faces up to the situation when things have gone wrong so that it can put them right for the benefit of patients in future. If the right hon. Gentleman has concerns about his local NHS not investigating complaints that he has raised with it on behalf of his constituents who are patients of the local trust, I am very happy to investigate those issues for him if he would like to write to me about them, and see what I can do to ensure that he gets the answers that he and his local patients deserve.

[Douglas Carswell (Clacton) (UKIP)]

I understand that pretty much every hospital in Essex faces a yawning deficit, including Colchester hospital. Can the Minister guarantee that we can address the deficit without having to dramatically and radically reconfigure local services in Essex?

[Dr Poulter]

It is important to outline that for the first time this Government have put in place, via section 42 financial agreements with trusts where there is a requirement for interim financial support, measures that will ensure that trusts are held to account for delivering efficiencies—for example, reducing agency staffing costs, improving procurement practice, more efficient estate use and land disposal, and pay restraint of very senior managers. I am therefore confident that the local NHS can continue to deliver efficiencies to direct money to front-line care.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

11. Whether it remains the policy of the cancer drugs fund to provide drugs which NICE has rejected for general use in the NHS.

[The Parliamentary Under-Secretary of State for Health (George Freeman)]

I pay tribute to my hon. Friend for his tireless campaigning on the issue of cancer drugs. I can assure him that the cancer drugs fund now administered by NHS England continues to fund effective cancer drugs which have been not been recommended by the National Institute for Health and Care Excellence. Over 60,000 patients in England have benefited from the fund since October 2010. That is why we announced a £160 million boost to the fund earlier this year.

[Eric Ollerenshaw]

Will my hon. Friend look again at the CDF’s proposal to delist 42 cancer drugs, including Abraxane, which was put on the list only nine months ago and is the first new drug in nearly 40 years to produce an extension of life for pancreatic cancer patients?

[George Freeman]

I am grateful to my hon. Friend for his notice. I have spoken to NICE. It is appraising the use of Abraxane for pancreatic cancer and has not yet published its final guidance. It would not be appropriate for me to intervene at this point. Obviously, we respect NICE’s clinical independence. Abraxane is available through the CDF for patients meeting specific clinical criteria. I understand that the NHS England’s CDF panel plans to reassess the inclusion of Abraxane in the national list, but no decisions have yet been made.

[Mr Jamie Reed (Copeland) (Lab)]

It is a pleasure to follow the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw). Everyone in every part of the United Kingdom wants to improve access to cancer medicines. When the Prime Minister launched the cancer drugs fund in the home of Clive Stone, he promised to get

“more drugs to people more quickly”.

Mr Stone recently criticised proposals to remove a number of drugs from the fund, writing in his local newspaper that

“People are going to die, there is no doubt about it. Why don’t people keep their promises?”

Additionally, the Breakthrough Breast Cancer campaign has said that it is

“deeply concerned that several very effective breast cancer drugs appear on the list of drugs at risk of delisting”.

We all know someone affected by cancer in some way. What does the Secretary of State have to say to those patients relying on those drugs that are being removed from the fund?

[George Freeman]

The first thing I would say is that we have given an undertaking that any patients currently on drugs will not have the drug removed. Secondly, we are dealing with some very difficult issues. We have had extraordinary breakthroughs in the progress and rate of development of new cancer drugs, and we need to have a system for ensuring that the cost-benefits—the health economics—are done properly. NICE leads the world in making these difficult clinical judgments and we support its independence in doing so, but we need to ensure that we are not turning this issue into a political football. I notice that the shadow Health Secretary said that this was good politics but not good policy. It is really important that we ensure that when we set a benchmark on this debate we are guided by what is best for patients.

[Lorraine Fullbrook (South Ribble) (Con)]

12. What progress has been made in improving access to GPs.

[The Secretary of State for Health (Mr Jeremy Hunt)]

The Prime Minister’s £50 million challenge fund is improving GP access for more than 3 million patients across England, helping them to get evening and weekend appointments.

[Lorraine Fullbrook]

Many people in South Ribble will be able to see their GPs in the evening and at weekends, thanks to a locally led initiative by Chorley and South Ribble clinical commissioning group and Greater Preston CCG to extend GP surgery opening hours this winter. Does my right hon. Friend agree that such initiatives, which will give greater flexibility to patients and alleviate pressures on other areas of the NHS, particularly A and E, are exactly what is needed in the busy winter months?

[Mr Hunt]

I do agree with my hon. Friend. I took my own children to an A and E department at the weekend precisely because I did not want to wait until later on to take them to see a GP. We have to recognise that society is changing and people do not always know whether the care that they need is urgent or whether it is an emergency, and making GPs available at weekends will relieve a lot of pressure in A and E departments.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I am afraid it is yet more spin from the Government. Everybody knows that it is getting harder not easier to see a GP under this Health Secretary. He has as much as admitted today that emergency departments across England have failed to hit the Government’s A and E target for 70 consecutive weeks, and that is in part because people are struggling to get a GP appointment in the first place. Will he now get a grip on this problem, and call on his Chancellor of the Exchequer in next week’s autumn statement to use £1 billion from banking fines to help ease pressure on the NHS this winter, as the Labour party has pledged?

[Mr Hunt]

We will not take any lessons from the Labour party about general practice. It is not just the disastrous 2004 GP contract. The president of the Royal College of General Practitioners says that the shadow Health Secretary’s plans

“could destroy everything that is great and that our patients value about general practice and could lead to the demise of family doctoring as we know it.”

[David Tredinnick (Bosworth) (Con)]

13. What steps he is taking to increase patient choice.

[The Secretary of State for Health (Mr Jeremy Hunt)]

This Government are committed to patients having greater choice and control over their health care, and decisions as to which treatments are available on the NHS are taken by GPs on the basis of available scientific evidence.

[David Tredinnick]

Does my right hon. Friend have any plans to increase personal health budgets, and will he ensure that there is greater awareness of the health professions that are regulated by the Complementary and Natural Healthcare Council, the Health and Care Professions Council and the Professional Standards Authority, which has recently accredited the Society of Homeopaths and the British Acupuncture Council?

[Mr Hunt]

I am a strong supporter of personal budgets. People who have complex medical needs want, above all, to have personal control over their own health care, and they will be extremely worried that the Labour party has now said that it wishes to abolish personal budgets.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

With regard to reducing patient choice, can the Secretary of State explain the sudden move to remove dialysis from being regarded as a specialised commissioning service, which is of great concern to a constituent of mine who is a renal patient and to the renal community? Will the Secretary of State now agree to a proper consultation—not over the Christmas holidays—and will he think again about that risky move?

[Mr Hunt]

We hope to have a public consultation on the matter. We are not seeking to restrict access to dialysis—far from it. We want to make it easier for people to access those vital services, and we have been putting more money into the NHS budget because we recognise just how important they are.

[Yasmin Qureshi (Bolton South East) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Health (Mr Jeremy Hunt)]

As we look forward to world AIDS day next Monday, the whole House will want to pay tribute to the 30 NHS volunteers who left for Sierra Leone at the weekend to help in the fight against Ebola. They stand for the very best of the NHS and make us all proud. Last week I formally launched the MyNHS website. It contains 395,000 pieces of information and is the first website of its kind anywhere in the world. It will help people compare vital information about the performance of their local hospitals, GP surgeries, councils, mental health trusts and residential care homes. It will be a vital way to ensure that patients are not kept in the dark about the quality of their NHS services.

[Yasmin Qureshi]

Further to the Secretary of State’s answer to the hon. Member for Worsley and Eccles South (Barbara Keeley), he must know that treating renal failure requires complicated, integrated care and that no one part of it can be separated. He must also know that there are 23,000 dialysis patients in the UK, and transplant patients have overlapping clinical needs. Handing responsibility for commissioning dialysis to commissioning groups is unacceptable, especially as it has been done without any consultation. Can he explain the rationale for all this, and will he meet me and colleagues from the all-party kidney group to discuss the matter?

[Mr Hunt]

I am happy to arrange a meeting between either me or one of my Ministers and members of the APPG to discuss the matter. I stress that we recognise how important those specialised services are. We want to get the benefits of nationally co-ordinated commissioning with the local integrated care that CCGs are in the driving seat to deliver. That is why we are having this discussion.

[Sarah Newton (Truro and Falmouth) (Con)]

T2. Public Health in Cornwall has estimated that 300 people in Cornwall might die from the cold this winter because they are living in cold homes. Last week the Government introduced the first proper fuel poverty strategy to eradicate that totally unacceptable situation by 2030. Will my right hon. Friend join me in praising the work being done in Cornwall by a partnership of over 30 organisations in the Winter Wellness programme to ensure that people stay warm and well this winter?

[Mr Speaker]

Order. On both sides of the House the questions have been too long. It is not fair on other Members who are waiting to contribute. Please cut it out.

[The Parliamentary Under-Secretary of State for Health (Jane Ellison)]

I commend my hon. Friend, who, as many of us know, has worked enormously hard on a whole range of health issues in her constituency. In particular, I know that she has helped deliver the Winter Wellness programme with a number of local organisations. It is important to highlight what help and advice is available for people who need it most in order to stay warm. The Government’s cold weather plan has a series of cost-effective and simple measures that people can take to reduce the harm caused by cold weather.

[Andy Burnham (Leigh) (Lab)]

Two weeks ago, news emerged of serious problems at Colchester hospital. People there still do not know the precise details, as Ministers have not made a statement and the Care Quality Commission has not published its report. But Colchester is not the only hospital in difficulty; we have learnt that hospitals in Scunthorpe, Middlesbrough and King’s Lynn have been turning patients away and others are already on black alert, and that is before winter has even begun. We do not have an accurate picture of what is happening in the NHS right now, because NHS England was due to begin publishing weekly reports on 14 November but has failed to do so. Why has that information not been published, and will the Secretary of State today instruct NHS England to do so without delay?

[Mr Hunt]

That information is published at the decision of NHS England—[Interruption.] It has said that it will publish it in a fortnight’s time. Let me just say to the right hon. Gentleman that it was this Government who decided to publish that information on a weekly basis, something he never did when he was Health Secretary.

[Andy Burnham]

I am afraid that is just not good enough. Who is in charge here? It is not just A and Es that are under pressure; there is a knock-on effect on ambulance services. Reports are now surfacing of serious failures in patient care. Last month, a six-year-old girl from Sunderland was left for three hours with a suspected broken back despite five 999 calls. At the weekend, it was reported that a 56-year-old stroke patient from Huyton was taken to A and E by police on a makeshift stretcher made from window blinds from the man’s home, and he later died. Yesterday, it emerged that a 57-year-old cancer patient from Bishop Auckland died after three ambulances were diverted to other calls. Is it not clear that the situation in the NHS right now is far more serious than the Government have acknowledged, and should not the Secretary of State now make an urgent statement to Parliament setting out what he is doing to reduce the risk of harm to patients this winter?

[Mr Hunt]

There are huge pressures in the NHS. That is why we have put a record £700 million into the NHS to help it to get through this winter. May I gently suggest to the right hon. Gentleman that he should not try to politicise every single operational problem? When the NHS is all about politics, patients get forgotten—as he should know, because that is what happened when he was Health Secretary. Whether in Medway, Colchester, Burton or George Eliot, patients were forgotten because for Labour it was politics before patients every time.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

T6. Will the Secretary of State look again at the funding formula for hospital trusts so that some adjustment can be included to recognise the issues in trusts such as University Hospitals of Morecambe Bay NHS Foundation Trust which cover large and difficult geographical areas?

[Mr Hunt]

I recognise those issues, and I am very happy to take that suggestion away. I particularly want to put on the record that the scare stories put out by Labour in Lancaster about the potential closure of Royal Lancashire Infirmary are false. It is totally irresponsible to scare people in Lancaster in that way.

[Alex Cunningham (Stockton North) (Lab)]

T3. My constituent Corron Sparrow was left lying in the road for two hours with a compound fracture of his leg despite a call from a policeman to the North East Ambulance Service pleading for help. Eventually the service responded by sending an ill-equipped St John Ambulance team who then had to call for professional assistance. There are many more failures. It is now three weeks since I wrote to the chief executive, Yvonne Ormston, asking for an inquiry into this, but she has not even acknowledged my letter. Will the Minister intervene and tell the North East Ambulance Service that it cannot just ignore these matters?

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

I am very sorry to hear about the difficulties experienced by the hon. Gentleman’s constituents, and of course I am happy to look into those and do what I can to help him with that. However, I would also like to make it clear on the record that because this Government have put £15 billion more into the NHS during this Parliament, we are making sure that we are keeping services running efficiently through the winter for the benefit of patients.

[David Rutley (Macclesfield) (Con)]

T7. Eighteen NHS trusts have been placed in special measures, while so far six have come out. What progress is being made with the other 12?

[Mr Hunt]

I am happy to answer that, because for the first time we have a proper independent inspection regime. Labour tried to vote that down so that we could not have it, but we pressed on. A third of these trusts have been turned round. We are making good progress across most of the other 12 hospitals in special measures, including 1,500 more nurses, 200 more doctors, and 53 changes at board level. Where there were problems before, we are sorting them out.

[Hugh Bayley (York Central) (Lab)]

T4. Patients with mental health problems who are referred for psychological therapies wait, on average, less than 40 days for treatment, but in York the wait is 125 days. My constituent, Laura Goodacre, has now waited nearly 350 days. Will the Minister look at this worrying case and the need for our mental health trusts in York to reduce waiting times?

[The Minister of State, Department of Health (Norman Lamb)]

I will absolutely look at that case, and I am happy to talk to the hon. Gentleman about it. This is precisely why we are introducing, for the first time ever, an access standard—a maximum waiting time of six weeks for access to psychological therapies from next April.

[Charlie Elphicke (Dover) (Con)]

T8. After all the cover-ups of the past, what is being done to ensure that the culture of the NHS is always improving, particularly in that patients are treated with dignity and respect and always have the highest standards of safety?

[Mr Hunt]

I thank my hon. Friend for his question. After the Francis report, we now have 5,000 more nurses on our hospital wards. The scores that patients themselves are giving for whether they are treated with dignity and respect are up by 10%. We want to put poor care behind us and behind the NHS. It is time that Labour got on board with this agenda instead of constantly saying that we are running down the NHS by sorting out poor care.

[Ann Coffey (Stockport) (Lab)]

T5. Recent reports indicate that the extent of child sexual exploitation and abuse is more widespread than previously recognised. The trauma of sexual abuse can have massive, life-long consequences on the physical and mental health of victims. Will Ministers consider designating child abuse and child sexual exploitation as a public health priority in the same way as smoking, alcohol, drug use and obesity?

[Jane Ellison]

The hon. Lady is quite right to say that those are incredibly important issues, and we do see this as an important public health issue. We are committed to tackling child sexual abuse. In May the Department published its response to the recommendations of the independent health working group report on child sexual exploitation and we accepted the recommendations in full. We are taking this very seriously.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

T9. Do Ministers agree that the patient transport guidance should be interpreted with an understanding of rural needs, rather than telling my elderly constituents to report to a hospital 60 miles away and to get three buses there and three back that do not connect with each other in order to have treatment or consultation?

[Dr Poulter]

It is particularly important in rural areas that patients with complex medical needs who have difficulties mobilising or who perhaps do not have access to a car are supported by the local NHS to access the services they need. There is provision for local hospitals, as well as for CCGs, to give financial assistance to support patients in accessing services and to give them lifts to hospitals, as appropriate.

[Mr Ben Bradshaw (Exeter) (Lab)]

T10. When I asked the Prime Minister two weeks ago about the financial crisis facing Devon NHS, he seemed completely unaware of it, so could the Health Secretary please explain why Devon NHS faces an unprecedented £430 million deficit and what he is doing to stop the rationing, cuts and total withdrawal of some services that is now being proposed?

[Mr Hunt]

We are not rationing services. In fact, we are doing 1 million more operations every year than were done under the previous Government. I will tell the right hon. Gentleman why that financial pressure exists: we have an ageing population, with nearly 1 million more over-65s than four years ago, and huge pressure to deliver good care in the wake of the Francis report. The NHS will be supported if we have a strong economy that can fund real-terms increases in health spending—something that never happens if the deficit is forgotten.

[Greg Mulholland (Leeds North West) (LD)]

My constituent, six-year-old Sam Brown, is one of 100 people with the rare disease Morquio. His family live in a state of anxiety because they do not know whether the drug Vimizim will be approved for further use on 15 December. Will a Minister please meet me and Katy and Simon, Sam’s parents, to give Sam the Christmas present he needs and to keep Sam smiling?

[The Parliamentary Under-Secretary of State for Health (George Freeman)]

I would be delighted to meet my hon. Friend and his constituents to review that very important issue.

[Mark Reckless (Rochester and Strood) (UKIP)]

Last month one patient waited 35 hours in Medway’s A and E, and in the past year 10 patients have waited more than 24 hours. I was grateful to the Secretary of State for taking up my invitation to visit the hospital. What progress has been made specifically on turning around the A and E department?

[Mr Hunt]

There are more doctors and more nurses operating at Medway hospital and I know that when the hon. Gentleman was sitting on this side of the House he was very pleased with the progress that was being made in turning it around from special measures, but, like UKIP’s policy on the NHS, everything changes.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

May I welcome the recent launch of MyNHS? Does my right hon. Friend agree that transparency of NHS performance, whether it be that of hospitals, GPs or surgeons, will be a major driver in improving patient care, as international evidence suggests, and help us avoid a scandal such as Mid Staffs, which happened under that lot over there?

[Mr Hunt]

Two thirds of the information we are publishing on MyNHS was actually collected by the previous Labour Government, but they refused to publish half of it. That is the difference.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Do Ministers agree that it is a scandal that cold homes are costing the NHS in England more than £1.3 billion every year, with kids growing up in cold homes twice as likely to contract diseases such as asthma? Do they also agree that it is hugely disappointing that not one penny of Treasury infrastructure funding is devoted to energy efficiency? Will they speak to their Government colleagues about that?

[Jane Ellison]

The hon. Lady will know from the answer I gave to my hon. Friend the Member for Truro and Falmouth (Sarah Newton) that the Government published the first fuel poverty strategy for England, which aims to address that very issue. It is also really important that all Members do everything they can locally to publicise the Government’s cold weather plan. Members can really assist local public health officials and their local NHS to get the word out to all communities about the simple measures we can take to keep our constituents warm and safe this winter.

[Charlotte Leslie (Bristol North West) (Con)]

One of the key challenges in improving access to GPs is improving recruitment of GPs. Will the Secretary of State work with the Royal College of General Practitioners and other medical groups to see whether there might be merit in introducing a mandatory stint of working in a GP surgery for junior doctors?

[Dr Poulter]

I am sure that my hon. Friend will welcome the fact that there are now just over 1,000 more GPs working in the NHS and training than when we came into government, but there is more we need to do. We have committed to delivering 5,000 more GPs for the NHS, and part of that work will be working with the Royal College of General Practitioners to ensure that we can support return-to-practice initiatives for GPs who have taken career breaks.

[Several hon. Members]

rose—

[Mr Speaker]

Order. The level of interest in Health questions today has broken box office records. I am sorry not to be able to accommodate remaining demand, but we must now move on.

Petition

Tuesday 25th November 2014 Commons Chamber

Stephen Barclay (North East Cambridgeshire) (Con)

- Hansard - - Excerpts

The petition states:

The petition of residents of the North East Cambridgeshire constituency declares that the Petitioners believe that healthcare should be more localised in North East Cambridgeshire; further that residents of North East Cambridgeshire face long travel times and costs when requiring procedures which should be delivered locally; further that the Petitioners believe that treating patients locally brings significant benefits; and further that there is a community campaign entitled “Treat Me Local” calling for healthcare to be more localised in North East Cambridgeshire which has been signed by 1,389 individuals.

The Petitioners therefore request that the House of Commons urges the Government to ensure that the ten pledges of the Treat Me Local campaign in North East Cambridgeshire are fulfilled within twelve months.

And the Petitioners remain, etc.

[P001401]

Murder of Lee Rigby

Tuesday 25th November 2014 Commons Chamber

12:35

[The Prime Minister (Mr David Cameron)]

Today, the House of Commons Intelligence and Security Committee has published its report into the murder of Fusilier Lee Rigby. He was a British soldier who stood for our country and for our way of life, and he was killed in broad daylight on the streets of our capital city. It was an appalling, sickening act, and a stark reminder of the threat we face from home-grown terrorists and extremists plotting to murder our people. At the same time, we should be clear that it was also a betrayal of Islam, and of the Muslim communities in Britain who give so much to our country.

I am sure the thoughts of the whole House are with Lee Rigby’s friends and family at this time. When I spoke in the House in the aftermath of the attack, I said we would bring those responsible to justice, and learn the lessons of what happened in Woolwich. The two murderers, Michael Adebowale and Michael Adebolajo, have since been convicted and sentenced to life in prison.

Today, this report answers the questions we had about what our security services knew about these murderers, and the lessons we can learn to help to stop similar attacks in the future. I am grateful to my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) and his Committee for their comprehensive report. It contains an unprecedented degree of detail on the current workings of MI5, the Secret Intelligence Service and GCHQ. I wanted us to get to the truth as quickly as possible, without a prolonged judicial process, and that is exactly what has been done with this exceptional report. Few countries in the world would publish this degree of detail about the activities of their security services. It reflects the way we have strengthened the Committee with new powers to hold our security services to account. For this report, the agencies have carried out the same searches they would for proceedings in the law courts.

Before I turn to the key findings, let me be clear that this is a very serious report, and there are significant areas of concern within it. I do not want anyone to be in any doubt that there are lessons to be learned and things that need to change. On the key findings, I am sure the House will welcome the fact that the Committee does

“not consider that, given what the Agencies knew at the time, they were in a position to prevent the murder of Fusilier Lee Rigby.”

Furthermore, the Committee says:

“It is greatly to the Agencies’ credit that they have protected the UK from a number of terrorist plots in recent years”.

As the Commissioner of the Metropolitan Police says, at least four serious plots have been foiled this year alone. So much of what our agencies do necessarily goes unreported. They are Britain’s silent heroes, and the whole country owes them an enormous debt of gratitude.

There are four broad areas where things need to change: first, dealing with the delays in the process of investigating potential terrorists; secondly, dealing with low-priority cases and so-called self-starting terrorists; thirdly, the role and responsibilities of internet companies in helping to keep us safe; and, fourthly, tackling foreign fighters travelling abroad for terrorist purposes. I want to take each in turn.

First, the report identifies a number of serious delays and potential missed opportunities. The Committee expressed concern over the four-month delay in opening an investigation into Michael Adebolajo following his return from Kenya in 2010, and the eight-month delay before Michael Adebowale was first actively investigated in 2012. The report concludes that an application for intrusive surveillance on Michael Adebowale in 2013 took

“nearly twice as long as it should have”,

and that had the original target been met, these further intrusive

“techniques would have been in place during the week before, and on the day of, the attack”.

Crucially, the report goes on to say that

“there is no indication that this would have provided advance warning of the attack: retrospective analysis of all the information now available to the Agencies has not provided any such evidence.”

The report also finds that the two murderers were in contact 39 times between 11 April and 22 May, including seven attempted calls and 16 text messages on the day before the murder. Again, we should be clear that post-event analysis shows that

“none of these text messages revealed any indication of attack planning or indeed anything of significance”.

However, although the Committee accepts that those delays and missed opportunities did not affect the outcome in this case, it is clear that processes need to be substantially improved.

MI5 is improving guidance and training for investigators for its online teams, and looking at new automated processes to act on extremist material online. The MI5 initial lessons learned document has been published in today’s report, and I have asked the Security Service to provide a further detailed report to the Home Secretary and to me in the new year, setting out progress on implementing each and every one of the lessons learned. In all of this we must remember the extreme pressure that our agencies are under. As the director general of MI5 put it in evidence to the Committee:

“We are not an army that has battalions waiting in barracks for deployment.”

Everyone it has is always out there working.

Secondly, one of the most challenging tasks facing our agencies is how to prioritise the many and various potential threats to our security. That is incredibly difficult and it is not an exact science. During the weeks prior to the Woolwich attack, MI5 was running several hundred counter-terrorism investigations, and as the Committee notes, at any one time it is monitoring several thousand subjects of interest. It is obviously essential to focus on the highest priority cases, especially those where there is specific intelligence that terrorists are planning an attack in the UK.

The report details how Michael Adebolajo and Michael Adebowale were both known to the security services for some time. Michael Adebolajo had featured in five separate Security Service investigations since 2008, and MI5 had put significant effort into investigating him as part of several of those investigations. Michael Adebowale featured in two lower priority investigations. Although none of those investigations revealed any intelligence of an attack, the Committee recommends improvements to the processes for dealing with recurring subjects of interest, low priority cases, and so-called “self-starting” terrorists.

This Government have protected budgets for counter-terrorism, and the security services have been clear with me that they have always had the resources they need. However, the increasing threat we face—including from so-called “self-starting” terrorists—means that we should now go further in strengthening our capabilities. My right hon. Friend the Chancellor of the Exchequer will therefore make an additional £130 million available over the next two years, including new funding to enhance our ability to monitor and disrupt those self-starting terrorists.

The report also makes clear the important role of all public bodies in dealing with the threat of self-starting terrorists and extremists. Our counter-terrorism and security Bill, which will be introduced tomorrow, will include for the first time a clear legal obligation on our universities, prisons, councils and schools to play their part in tackling this poisonous extremism. New funding being made available today will include additional resources for programmes to prevent radicalisation.

Thirdly, let me turn to the role of internet companies. The Committee is clear that it found

“one issue that could have been decisive”.

In December 2012, five months before the attack, Michael Adebowale had a crucial online exchange in which he wrote about his desire to kill a soldier, but the automated systems in the internet company concerned did not identify that exchange. When it automatically shut down other accounts used by Michael Adebowale on the grounds of terrorism, there was no mechanism to notify the authorities. This information came to light only several weeks after the attack as a result of a retrospective review by the company. The Committee concluded that

“this is the single issue which—had it been known at the time—might have enabled MI5 to prevent the attack.”

This is a very serious finding.

The report does not name the company, and it would not be appropriate for me to give a running commentary on the level of co-operation from different internet companies. However, the Committee is clear—and I agree—that it has serious concerns about the approach of a number of communications service providers based overseas. This summer, the Government introduced emergency legislation to put beyond doubt in UK law that the Regulation of Investigatory Powers Act 2000 applies to companies based overseas that deliver services in this country. I appointed Sir Nigel Sheinwald as a special envoy on intelligence and law enforcement data sharing to address concerns that there could be a conflict between UK and US law in this area.

Since then, a number of companies have improved their co-operation, but, as I said in my speech to the Australian Parliament earlier this month, there is much further to go. We are already having detailed discussions with internet companies on the new steps they can take, and we expect the companies to report back on progress in the new year. The truth is this: terrorists are using the internet to communicate with each other. We must not accept that those communications are beyond the reach of the authorities or the internet companies themselves. We have taken action. We have passed emergency legislation and we will continue to do everything we can. Crucially, we expect the internet companies to do all they can, too. Their networks are being used to plot murder and mayhem. It is their social responsibility to act on this, and we expect them to live up to that responsibility.

Fourthly, the report raises a series of issues directly relevant to the increased threat in recent months from British citizens travelling to fight abroad—so-called foreign fighters. The Committee expresses concern about what they describe as a “deeply unsatisfactory” response to Michael Adebolajo’s arrest in Kenya. They highlight the importance of tackling British citizens travelling to fight with terrorist groups in Syria and Iraq. The report recommends further powers, including considering whether existing proscription powers should be amended to enable further prosecutions. Tackling foreign fighters is an absolute priority for our agencies. To be fair to the agencies and the police, in the case of Michael Adebolajo he was arrested on his return from Kenya to the UK. Their operational effort has been stepped up, with more than 120 arrests this year for Syria-related offences, compared to just 27 in the whole of 2013. The Committee is right, however, to ask whether we need to give our agencies stronger powers to tackle extremists. Our Counter-Terrorism and Security Bill, which will be introduced tomorrow, will include essential new powers to seize passports to prevent travel, to stop suspects returning unless they do so on our terms, and to relocate suspected terrorists to other parts of the country and away from their extremist networks. I very much hope we can take this Bill forward on a cross-party basis, so our agencies are able to start using these vital powers as soon as possible.

Finally, the Committee criticises the Secret Intelligence Service for the handling of allegations of Michael Adebolajo’s mistreatment in Kenya. This Government took the important step of publishing the consolidated guidance in 2010 on the obligations of our agencies and the Ministry of Defence in relation to detainees held overseas. But, of course, there are cases that fall outside the scope of this guidance, for instance when people are entirely dealt with by overseas agencies but where the Secret Intelligence Service still might have an operational interest. In those cases, the agencies are clear that they always seek assurances on the treatment of detainees and that, in future, they will record the outcome of their investigations and inform Ministers if mistreatment has in any way occurred.

It is of course right that there is vigorous oversight of this issue, so the Government will put the oversight role of the Intelligence Services Commissioner on a statutory footing. I will issue a direction under the Regulation of Investigatory Powers Act 2000 in the coming days to formalise Sir Mark Waller’s role in overseeing the guidance on detainees. Sir Mark will have full access to all the material referred to in the report and will be able to examine the concerns raised by the Committee on the Government’s responsibilities in relation to partner counter-terrorism units overseas.

Today’s report contains a number of very detailed recommendations. We will publish a full response in the new year to all the points raised. We will not shrink from doing what is necessary to keep our people safe. The terrorist threat we face cannot be ignored or contained. We have to confront it. We have to equip our security services with the powers and the information they need to track down these terrorists and stop them attacking our people. We have to confront the extremist ideology that drives this terrorism by defeating the ideas that warp so many young minds. Of course, none of this will be easy. We will need stamina, patience and endurance, but we will in the end defeat this extremism and protect our people and our way of life for generations to come. I commend this statement to the House.

12:49

[Edward Miliband (Doncaster North) (Lab)]

I welcome the Prime Minister’s statement. Fusilier Lee Rigby served our country with huge courage. He was a brave soldier and his murder was an appalling act. For his family and friends, reading the report will mean painfully reliving his brutal killing. They should know that today, across this House, our thoughts are with them. It is welcome that his cowardly killers have been brought to justice. I also thank the members of the Intelligence and Security Committee for their investigation. It is right that it took place, and it is the most detailed account of the agencies’ work ever published.

The security services and the police play a vital role in keeping us safe, often in incredibly challenging circumstances, and do a difficult job in seeking to identify those who pose a risk to our country. However, while perpetrators of terror need to succeed only once to further or achieve their vile aims, our agencies and others need to be successful every time to keep us secure. Insofar as there are criticisms of the agencies in the ISC report, they need to be understood in that light.

As the Prime Minister said, the ISC report details how the two men who killed Lee Rigby, Michael Adebolajo and Michael Adebowale, were under investigation at various times before the murder. I welcome his announcement today of additional resources, but what does he believe is required, beyond additional resources, to put in place a better strategy for dealing with those, such as Adebolajo, who are recurring subjects of interest on the periphery of several investigations, as the report chronicles in detail? In addition, the report points to a lack of co-ordination at times between the agencies and the police, so will he further outline the steps that will be put in place to strengthen the working relationship between the different agencies—MI5, the Secret Intelligence Service and GCHQ—and the police?

As the Prime Minister said, the report also highlights the issue of returning foreign fighters and the missed opportunities in relation to Michael Adebolajo. Of course, we will engage constructively with the Bill being published tomorrow, and we welcome the other decisions made, particularly on reinstating relocation powers. As he says, Michael Adebolajo was arrested, but the report states that his case was not then followed up, so this is not simply about the powers available; it is about how cases are then followed up. Will he assure us that there will be a more rigorous and systematic approach to dealing with returning foreign fighters in the future, as the report recommends, including on the issue, which we have raised before, of mandatory referrals to de-radicalisation programmes, which can play a role?

The report also highlights the fact that these two individuals, particularly Michael Adebowale, were radicalised over several years, including by accessing extremist material online. Precisely because of the risks posed once this has happened, the report compellingly makes the case for an expansion of the Prevent programme and states:

“The scale of the problem indicates that the Government’s counter-radicalisation programmes are not working.”

The amount of money being spent in communities on the Prevent programme has dropped alarmingly over the past few years, as we have mentioned before in the House. Will the Prime Minister explain how the welcome resources announced today will be allocated to the Prevent programme and on what scale? On another issue we have discussed before, will he also assure us that local community groups, organisations and others will be mobilised as part of the Prevent programme? They have an incredibly important role to play in countering the growth of extremism and stopping people being radicalised.

The Prime Minister rightly raises the issue of internet companies, as detailed in the report. There are two issues: first, about whether companies have a responsibility to draw authorities’ attention to potential terror threats; and, secondly, about whether major companies based outside the UK regard themselves as compelled to comply with UK warrants. On the first point, the report states that companies might sometimes

“decide to pass information to the authorities when they close accounts because of links to terrorism”,

but that in this case they did not. This suggests that part of the problem is the existence of different company practices and the absence of agreed procedures.

In cases of child abuse images, a procedure is in place for companies to take action and refer abuse to the authorities, and when it comes to terrorism, there should be much stronger procedures and obligations on companies as well. Does the Prime Minister agree? Is there scope to agree that with the companies? Will he update us on the work being done by Nigel Sheinwald to improve our ability to get information, with a warrant, from companies based overseas, particularly the US?

On detention, we welcome the Prime Minister’s announcement that oversight will be strengthened, but we think we will eventually have to go further. We have said for some time that the framework of commissioners is not strong enough. Will he confirm that David Anderson’s review, which we agreed in the summer, will also cover the strengthening of oversight and the role of the commissioners?

To conclude, this report is a reminder of the threats we face in keeping our country safe. The murder of Fusilier Lee Rigby was an appalling act. We must learn the right lessons, and this is what the ISC report seeks to do. It does so thoroughly and with diligence, and in seeking to put those lessons into practice, the Government will have our full support.

[The Prime Minister]

I thank the right hon. Gentleman for his remarks and for how he has approached this subject. He was right to praise the ISC—it has done a good job—and our agencies; and of course he was right that whereas the terrorist only has to get lucky once, our agencies need to succeed on every occasion.

I shall try to respond to the right hon. Gentleman’s questions. He said we were right to increase resources, and although these are modest additional resources, it is worth pointing out that funding for the security and intelligence services has increased by 5% in cash terms since 2010. Compared to other departments, therefore, it has had a very good settlement, as is right, and that has continued in the 2013 spending round.

The right hon. Gentleman said it was necessary to learn lessons on more rapid decision making and better triaging of cases, particularly when they appear on the fringes of more than one investigation. MI5 has said something about that already in its response today, but I think we will hear more next year. On co-ordination between the agencies and the police, MI5 is confident it now has better systems in place.

On the question about referrals to Prevent, which are considered on a case-by-case basis, the Committee rightly pointed out that referral should at least be considered in every case, but that it did not seem to have been in these two cases. On the issue of money, Lord Carlile’s review of Prevent in 2011 concluded that it should be split, with the money for integration going to the Department for Communities and Local Government, where it is now spent, and the remainder being spent on the Prevent programme, specifically to guide people away from extremism and terrorism; and the money for the latter has gone up from £35 million in 2012 to £40 million in 2014. Lord Carlile found cases of groups we would now consider to support an extremist ideology having received funding, and obviously we want to stop that happening again.

Crucially, on internet companies, the right hon. Gentleman made the sensible point that just as we are getting internet companies co-operate on the definition of unacceptable images of children and child abuse—the Government have done a lot of work on that—so exactly the same needs to happen on terrorist information. We are pushing them on that and will use today’s report to lead a debate about their social responsibility. All the action we have taken—passing legislation, employing Nigel Sheinwald to talk to the Americans and so on—is leading to better co-operation between internet companies and the agencies, but more needs to be done, although for obvious reasons I do not want to give a running commentary on each and every one.

Finally, the right hon. Gentleman asked about David Anderson. His role is very broad—he can look at the threat, the response, the capability and the important safeguards—and I think he has done excellent work on all those grounds.

[Sir Malcolm Rifkind (Kensington) (Con)]

I thank the Prime Minister and the Leader of the Opposition for their welcome for the Committee’s report. I also draw attention to the unprecedented support and co-operation we have had from the intelligence agencies, particularly MI5, which have provided us with all the classified material. In the 190 pages of our report, we have been able to publish for the public more such material than ever before in the history of these matters. There are redactions, but none of them, even if they could be read, would affect the substance of our conclusions and recommendations.

We make some severe criticisms of the agencies, as can be seen in the report, but we have seen no evidence that, even had these errors not been made, the tragic murder of Fusilier Rigby could have been avoided. As the Prime Minister said, there was one online exchange, which came to knowledge some months after the murder of Fusilier Rigby, revealing that Michael Adebowale, months before the murder, had discussed his desire to kill a soldier and that he made various other comments that we refer to in the report. If that intelligence—the one piece of hard evidence that we have seen—had been available to the intelligence agencies at the time, it is at least possible that the murder of Fusilier Rigby could have been avoided.

The Prime Minister has indicated the problem with regard to United States communications providers—the internet companies—and I want to put one question to him. If these United States internet companies feel able to cancel the accounts of some of their clients when their systems demonstrate that either terrorist activity or serious criminal activity are being conducted through these internet exchanges, is there any basis on which they could have an ethical or privacy objection to sharing with the authorities evidence of terrorist intent when that also appears in these same exchanges?

[The Prime Minister]

My right hon. and learned Friend puts the matter into clear perspective. Once it has been discovered on someone’s e-mail account that they are planning or plotting a terrorist outrage, it is hard to think of any justification for not passing that on to the authorities. That is exactly what my right hon. and learned Friend’s Committee finds:

“the companies should accept they have a responsibility to notify the relevant authorities when an automatic trigger indicating terrorism is activated, and allow the authorities, whether US or UK, to take the next step.”

That is absolutely right and I hope that this will trigger a debate among the internet companies themselves about the action that needs to be taken.

[Mr Jack Straw (Blackburn) (Lab)]

First, I commend the Intelligence and Security Committee report, as the Prime Minister and the Leader of the Opposition have done. I also echo what the Prime Minister and the Home Secretary have said about the extreme difficulties that the intelligence and police services face when there is an expectation of success in respect of every investigation. These agencies, and the police, have people who are very highly skilled and dedicated and who are working very long hours—but, with the best will in the world, they are human. There will be some cases where the terrorists escape detection and there will therefore be terrorist outrages, as there have been in previous terrorist campaigns.

Lastly, may I press the Prime Minister again on the issue of the United States-based internet companies and ask him to take it up with the US at the highest level? Is there not a cultural problem among the leadership of some of these companies, which have a distorted “libertarian” ideology and believe that somehow that allows them to be wholly detached from responsibility to Governments and to the peoples whom we democratically represent in this country and abroad?

[The Prime Minister]

I agree with everything that the right hon. Gentleman has said. First, on the work done by MI5 and our agencies, I will repeat the quote from the director general of MI5 that says it all:

“We are not an army that has battalions waiting in barracks for deployment. We are fully deployed all the time so the only way to go on high priority cases is to stop low ones.”

That gives a sense of the pressure that, inevitably, organisations such as this are under; they are trying all the time to think of how they best triage these cases and make sure that they have the maximum input into the most dangerous cases.

The second point that the right hon. Gentleman made was about taking up personally with the US the engagement on the importance of communications data. I can guarantee absolutely that that happens at every level, including with the President. It is a shared challenge for both of us to get this right. We are very clear: wherever these companies are headquartered, if they provide services in the UK they should be subject to UK law. The point he makes with respect to the companies is absolutely right. Of course they worry about their public image in terms of wanting to be in favour of data security, and one can understand that. But they also need to worry about their public image if they are being used by terrorists to plot attacks and they have information about those attacks that they do not pass on. We need to make that point tell in the conversations to come.

[Dr Liam Fox (North Somerset) (Con)]

The intelligence services do a magnificent job but we spend on all three services in a year what we spend on the national health services every six days. The funding settlement has indeed been generous as the Prime Minister said, but is he satisfied that the problems set out in the report are problems of procedure and practice and not of funding priorities? In other words, are the intelligence services big enough to do the job we are asking them to do in this increasingly dangerous era?

[The Prime Minister]

My right hon. Friend asks a very good question. The fact is that we spend over £2 billion a year on our intelligence and security services. We have protected that spending, as we did for counter-terrorism policing. But the truth is that there is no upper limit on what we could spend if we wanted to do more and more activity. We have to make a judgment about what is right.

As I say, I meet the heads of our intelligence agencies regularly and talk to them about the pressures they are under. The reason for providing some extra money today is that there is a specific and growing challenge from these self-starting—they are sometimes called “lone wolf”—jihadis, who have been radicalised on the internet because of what has been happening in Syria but are not necessarily linked up with other terrorist networks. That puts extra pressure on and we need to respond to that. But it is a permanent judgment about how much to spend. We try to give the agencies a long-term perspective so they can plan and bring all their resources to bear.

[Liz McInnes (Heywood and Middleton) (Lab)]

Lee Rigby was a Middleton lad and his family live in my constituency. Will the Prime Minister give assurances to the family, who are bound to have questions about the statement, that he will arrange a meeting with them if necessary and that he will endeavour to ensure that all their questions are given full answers?

[The Prime Minister]

The hon. Lady raises an important point. As the Leader of the Opposition said, the pain that the family will feel on reading this report and reliving everything should be uppermost in our minds. A police liaison team is still working with the family, and they should know that whatever meetings they want, they can ask for and they will get.

[Sir Menzies Campbell (North East Fife) (LD)]

I hope that my right hon. Friend will excuse me for returning to the issue of resources. My quick calculation is that a sum of £130 million over two years amounts to an increase of about 3%. We are facing an unprecedented set of challenges, a matter that is publicly acknowledged not only by the Home Secretary and the Foreign Secretary but by the Commissioner of the Metropolitan Police—and, indeed, the heads of the agencies themselves.

Can we really be satisfied that an increase of the kind that my right hon. Friend has mentioned—which is obviously welcome—will be adequate to deal with a problem that is not static and is almost certainly likely to increase in the years to come? Will he at least consider a review, at every possible stage, of the resources available to those who have the primary responsibility for guarding our security?

[The Prime Minister]

I say to my right hon. and learned Friend, for whom I have great respect, that this is under permanent review. This is a discussion that can be had at any time if there are particular pressures. In the spending review in 2013 we put up spending on the intelligence agencies by 3.4%, at a time when other Departments were, on average, being cut by 2.77% in real terms, on top of the 19% average departmental reduction over the previous four years. They have had a much more generous spending settlement and quite rightly so.

There is also the issue—we discussed this in the National Security Council—of how much to spend on counter-intelligence and how much to spend on counter-terrorism. The argument is often made that it is time to reduce the spend on counter-terrorism. My own view is that that is not the case and that the pressures on counter-terrorism are still very great. As the Home Secretary said yesterday, the threat is greater than for many years, so we need to keep the focus on that part of the work.

[Keith Vaz (Leicester East) (Lab)]

I join the Prime Minister and the Leader of the Opposition in commending the report by the Intelligence and Security Committee and in welcoming the proposals that both he and the Home Secretary have made over the last few days, which I hope will be subject to proper parliamentary scrutiny.

On the issue of returning British citizens, the Prime Minister will know that tomorrow marks the fourth anniversary of Adebolajo’s return from Kenya. The Kenyans were very clear that it was the British Government, or their associated agencies, who asked for the return of Adebolajo to the UK. That mirrored the return of Mohammed Ahmed Mohammed from Somalia. Is the Prime Minister now telling the House that from now on, when a British citizen commits an offence in another country, we will not seek their return until the criminal processes are completed?

[The Prime Minister]

Let me first guarantee to the right hon. Gentleman that there will be proper scrutiny of this legislation. It is fast-track legislation, we hope, rather than emergency legislation. It is not being rushed through in just a couple of days—in the other place, for instance. The time between the stages will be shortened, but the overall amount of time will not be.

Much of this legislation comes from ideas that I put forward back in September and some of it comes from the extremism taskforce, which I set up after the murder of Lee Rigby many months ago, so this is not emergency, knee-jerk legislation, but well thought through. It is not starting from scratch either, because we have very good counter-terrorism legislation in this country. This is about seeing where there are potential gaps and making sure they are filled in.

On the question about people returning from overseas, the power we are taking in the new legislation is to make sure that people can come back only if they do so on our terms. That is the key. We will make sure that if people are to be prosecuted, we are ready to prosecute them and that if they are going to be subject to a TPIM, they will be subject to a TPIM.

[Dr Julian Lewis (New Forest East) (Con)]

One thing not mentioned in the Prime Minister’s statement—and for good reason—was communications data. Whatever one thinks about the Communications Data Bill, our report did not focus on this matter at all significantly because it played no relevant part. Nevertheless, there was a serious leak at an early stage from the unredacted draft of the report, which was reported in a Sunday paper, saying that the report was going to concentrate on this area. Does the Prime Minister agree with me that if MI5 is going to continue to share so much secret material with the Intelligence and Security Committee, leaks of our drafts are absolutely to be deplored and might imperil our ability to do this sort of work in the future?

[The Prime Minister]

I completely agree with my hon. Friend. All leaks are to be deplored, but leaks of this particular sort of material, when we have trusted the Committee with such important and delicate work, are particularly reprehensible. Communications data are vital not just in respect of terrorism, but when we are trying to find abducted children or solve rapes and murders. They are used in almost all serious crimes. What we did in the Bill was simply to stop the situation from getting worse. What we need now is to go forward with more full-throated legislation. I think we need an honest and open debate about that across the House.

[Hazel Blears (Salford and Eccles) (Lab)]

This was a brutal murder of a young man who was serving his country, so all our thoughts today are with his family for the months to come. I welcome the Prime Minister’s statement. Neither of the individuals involved was referred to the Prevent programme. I believe the Prevent programme has been under-resourced and not given the priority it should have had within the Contest strategy. If we can stop the pipeline of people being drawn into extremist behaviour, the money will be extremely well spent. I believe that because such activity has been viewed as something of a soft end to the counter-terrorism strategy, it has been seen as a cultural issue and has not had priority.

I welcome the Home Secretary’s commitment to new legal powers and I welcome the Prime Minister’s commitment to further resources, but we have to change the perspective. The threat we now face, with 500 people out in Syria and Iraq and 250 of them coming back—some of them radicalised and well trained—amounts to a different scenario. I think the Prevent programme must no longer be viewed as a soft and fluffy end of community engagement, but as a hard, targeted counter-ideological strategy and a counter-narrative that stops people from creating a climate for extremism.

[The Prime Minister]

I wholly agree with the right hon. Lady. What we did by separating the integration work from the Prevent work was to make sure that this is not seen as some soft and fluffy programme, but a tough and robust one. It will become more robust because additional funding has been secured; it will become more robust because we are putting it on a statutory footing; and it will become stronger because Channel will be put on a statutory footing, too.

I do not think anyone should underestimate the importance of putting this legal duty on all these organisations. When the right hon. Lady came to our extremism taskforce, I think she could see how the aim was to make sure that whether it be schools, prisons, universities, community centres or whatever, all have a legal duty to prevent extremism and terrorism. That is what we are aiming to do.

[Mr David Davis (Haltemprice and Howden) (Con)]

Adebolajo and Adebowale are both in prison for life, which should provide permanent security to the British public—from them, at least. However, three weeks ago it was made clear in the Investigatory Powers Tribunal that the agencies have, at least since 2010, been breaking the absolute protection on privileged information between lawyers and suspects. If that happened during the course of a terrorism trial, we could find ourselves in a position where that has undermined or even fractured the conviction of proven terrorists, and we could end up having proven terrorists back on the streets. Have the Government considered that problem, and do they have any plans to deal with it?

[The Prime Minister]

I believe that our agencies have appropriate procedures for dealing with legal material. As my right hon. Friend says, it is very important that they do that because we want to make sure that justice is done and that these people remain behind bars.

[Mr Nigel Dodds (Belfast North) (DUP)]

I welcome the Prime Minister’s statement and this Committee’s important report. Our thoughts and prayers are with the family and friends of Lee Rigby today once again.

On the issue of new powers and the counter-terrorism and security Bill, the Prime Minister will be aware that as well as the threat from returning jihadists and Islamic terrorism, we still face a severe terrorist problem in Northern Ireland from dissident republicans, which could spread to the UK mainland. Can the Prime Minister assure the people of Northern Ireland that the increase in attacks from that quarter is still taken extremely seriously and that all the necessary resources will be put in? Can he outline the impact of the new powers in the Bill being brought forward tomorrow on countering that severe threat for UK citizens as well?

[The Prime Minister]

Let me first reassure the right hon. Gentleman and everyone in Northern Ireland that just because there is a growing terrorist threat from citizens of our own country and from people being radicalised in Iraq and Syria, that does not mean that we have taken our eye off the ball of Northern Ireland-related terrorism in any way. Yesterday we had a National Security Council meeting, which was attended by the head of the Police Service of Northern Ireland, and we discussed in some detail what more could be done to enhance the excellent work it is doing. For every one attack made, it is stopping three or four. It is doing an excellent job, and we continue to keep anything else we can do to help under review—respecting, of course, that under this Government, policing and justice in Northern Ireland has been devolved.

[Bob Stewart (Beckenham) (Con)]

Lee Rigby was killed wearing civilian clothes, and all soldiers are easily identifiable whether in civilian clothes or not. Seeing our armed forces in uniform on the streets gives me great pleasure and pride. People may think that wearing uniform incites or indeed attracts attention from these terrorists. It does not. These terrorists will identify our soldiers, sailors and airmen if they want to. I thus add my voice to those of people who say, “Keep our soldiers on the streets in uniform.”

[The Prime Minister]

My hon. Friend is absolutely right, and no one is proposing anything different. The point he makes about the tragic murder of Lee Rigby is right, and we have no plans to change that.

[Mr George Howarth (Knowsley) (Lab)]

The Prime Minister may recall that in May 2009, the Intelligence and Security Committee produced a report on the London bombings, in which we concluded that there were real problems with tracking those on the periphery of investigations or whose names popped up on a regular basis. The recommendation was that there needed to be a proper regular review process in place. The Prime Minister will be aware that a similar conclusion is drawn in this report. Does he not think it is about time that somebody took responsibility for ensuring that these cases are reviewed on a regular basis so that, where necessary, in cases such as those of Adebowale and Adebolajo, the level of surveillance can be increased?

[The Prime Minister]

The right hon. Gentleman, who is a member of the Intelligence and Security Committee, makes an important point. It comes out very clearly in the report, which makes a recommendation about how to deal with these low-level suspects. The agencies’ view is that they are putting in place new measures to ensure that low-level subjects are picked up by the joint programme that they now run with the police, and it is important to see that through. We want to see their actions taken set out in the new year and followed through.

There is also the issue of where subjects of interest appear on the periphery of various investigations. Again, MI5’s view is that it is putting in place a strategy to address that, which it sees as a core part of its investigative process. As I said in my response to the report, no one should be in any doubt that, although the finding was that no specific information was available to get MI5 to stop the dreadful thing that happened, there were many lessons to learn. There is no way that anyone is going to shy away from that. All these points need to be followed through, and then we need to check up that action really has been taken.

[Richard Drax (South Dorset) (Con)]

Does my right hon. Friend agree that our intelligence services operate best in the shadows, and that we must be vey careful indeed not to undermine them when we shine the democratic spotlight on them and follow up cases such as this?

[The Prime Minister]

I do agree with my hon. Friend. The important thing about secret intelligence services is that they are secret. There is, however, a wider consideration. We now have a very good system in place. We have a scrutiny Committee in Parliament, and an Intelligence Services Commissioner. Any warrant to listen to someone’s telephone or intercept their e-mails must be signed personally by the Home Secretary. We have a system of which we can be proud. It is that democratic accountability and that system that enable us to say, whether to internet companies or to others, “You should be co-operating with us properly, because we do this in a proper and decent way.” I think that the safeguards that we put in place not only mean that we scrutinise our intelligence services, but should help to make us safer.

[Mr David Winnick (Walsall North) (Lab)]

May I add a word of caution? The new measures to deal with this murderous threat to our people must not be counter-productive, as measures were from time to time when we were dealing with the IRA murder campaign. It was 40 years ago last week that 21 people were murdered in two Birmingham pubs. In the west midlands, certainly, we have not forgotten that. The IRA did not win, despite all the murders, and neither will these latest murderous fanatics.

[The Prime Minister]

I agree with the hon. Gentleman that we will never defeat terrorism if we undermine the freedoms that terrorists want to attack, but successive Governments have found that simply standing back and saying “We will just use the traditional criminal justice system of investigation, prosecution and imprisonment” is not enough. That is why there have been control orders, TPIMs and other such measures. Successive Governments have found that more is needed to face what is a really existential threat from a group of people who not only do not mind if they are killed in the act of carrying out their murderous intent, but positively welcome that. I do not think it would be responsible to stand here and say that there is never anything that we need to do. This is not a knee-jerk or emergency measure; it has been carefully thought through, and it adds to the weapons in our armoury.

[Dr Julian Huppert (Cambridge) (LD)]

This is an impressively detailed report on a brutal murder. It refers to a long list of mistakes: actions not carried out, failures to keep adequate records, delays, months of inaction, and insufficient co-ordination. One key failing is identified on page 108. Apparently, by 2 May there was such a serious risk of Adebowale being involved in terrorist actions that an application was made for further intrusive measures, but that submission was delayed until 21 May. The Prime Minister says that such intrusive surveillance measures would not have made any difference, but how can he be so sure that those detailed intrusive measures could not have prevented this?

[The Prime Minister]

The reason I can be sure is that the Committee subsequently went through, in great detail, the content of the communications that were not being monitored, and found that nothing in them would have given information about an attack. However, the hon. Gentleman is absolutely right to say that there should not have been a delay in putting the intrusive measures in place. They should have been put in place more quickly, because that might have made a difference in another case. Nevertheless, it is very important to read those pages carefully.

[Fiona Mactaggart (Slough) (Lab)]

As a new member of the Intelligence and Security Committee, I was not able to hear all the evidence that led to the conclusions in the report, but I have observed the extensive leaks about its conclusions. Those leaks concern me deeply, because I think that they undermine the impact of the report, and they seem to have been designed to lead people to a particular conclusion. How will the Prime Minister use his office to prevent such leaks from happening from within Government in future?

[The Prime Minister]

The hon. Lady has made an important point, and I shall be happy to discuss with the Chairman of the Committee whether he wants to take further action to try and find out how those leaks happened.

I really care about this, because I think that too often, when something terrible has happened, we in the House immediately reach for the judicial inquiry, or the inquiry that will take place outside the House. In this case, an institution of the House has proved what a good job it can do in garnering all the information, doing a huge amount of hard work, and coming up with very sensible but tough recommendations. I do not want that way of doing things to be undermined by leaks.

[Mr John Baron (Basildon and Billericay) (Con)]

My regimental colleagues, whether serving or not, will greatly welcome the words of the Prime Minister and, indeed, the Leader of the Opposition about Fusilier Lee Rigby, and the assurances given by the Prime Minister in regard to his family. Does the Prime Minister accept, however, that with potentially hundreds of jihadists returning to this country, one of the key lessons of the report is that we must minimise the delay between the gathering of intelligence and the taking of appropriate action?

[The Prime Minister]

My hon. Friend is absolutely right. There are some worrying instances in the report. Some delay is inevitable, because, as I have explained, when a huge range of cases is being covered, from the highest-priority cases to those that are given a less high priority, and more high-priority cases suddenly arise, people have to be removed from something, and that sometimes results in delays. However, I think the report shows that there are sometimes delays that are over and above what is normal in such cases, and that is clearly not acceptable.

[Mike Gapes (Ilford South) (Lab/Co-op)]

Does the Prime Minister agree that we are facing a struggle with an ideology—the ideology of violent Islamist jihadism, which, although it is only a small minority ideology in the Muslim community, is linked to the phenomenon of the self-starting terrorist? Does he agree that we need not just our state institutions but the whole of our society to challenge, confront and defeat that ideology?

[The Prime Minister]

I agree with every word that the hon. Gentleman has said. I think we sometimes make the mistake of looking at a particular area of the world and thinking that that is where the problem is coming from when the problem is actually extremism itself, which manifests itself in the parts of the world with the greatest amount of civil war and trouble and so forth. The problem is the extremist ideology, and, as the hon. Gentleman has said, we do not defeat that just by military means. We defeat it by ensuring that we drive it out of universities, colleges, prisons, schools, community centres where appropriate, and mosques, because some of them have been taken over by extremists on occasion. That is why this public duty, and the funds that we are providing, are so important.

[Mr David Nuttall (Bury North) (Con)]

I thank the Prime Minister for his statement. Does he agree that all the thousands of peace-loving members of the British Muslim community in my constituency will be as supportive of the measures announced this week to strengthen the fight against terrorism as everyone else in my constituency?

[The Prime Minister]

My hon. Friend is absolutely right. I think that that is what the “Not in my name” campaign is all about: it is about Muslims throughout our country saying that this very small minority fringe of people who have been radicalised and who buy this extremist ideology do not speak for Islam. It is very important for us to make that point. British Muslims want to see robust anti-terrorism and criminal justice powers as much as anyone else.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

The Prime Minister will recall coming to Woolwich in the aftermath of the killing of Lee Rigby—to whose memory we all pay tribute—and he will recall the commitment of the local community to preventing this horrific incident from damaging community relations and opening the door to extremism. May I urge him to look again at the issue of Prevent, which has been highlighted by two of my colleagues? I remind him that the Intelligence and Security Committee’s report refers specifically to

“the relatively low priority (and funding) given to Prevent”,

and goes on to say:

“This misses the value that Prevent can offer: successfully diverting individuals from the radicalisation path”.

[The Prime Minister]

Let me reassure the right hon. Gentleman, who has spoken now, as he did then, for the people of Woolwich in standing up to this horrific murder. We definitely think that Prevent is important. That is why we are putting it on a statutory footing, why the funding is going up, why extra resources are being made available today, and why we are backing it with a duty that is being placed on all public bodies in the United Kingdom.

[Jason McCartney (Colne Valley) (Con)]

Does the Prime Minister agree that these vicious murderers who so barbarically took the life of an innocent young soldier have not only betrayed the Muslim community in my constituency, but betrayed Muslim communities throughout the United Kingdom—communities that contribute so, so much to our country?

[The Prime Minister]

My hon. Friend is absolutely right to say that this has no place in the religion of Islam, which is a religion of peace. That is why so many British Muslims have come out so strongly to condemn what happened. One senses their incredible frustration that a small minority of people who have bought into the extremist mindset and rhetoric are causing so much damage. The more people can stand up and say that, the better.

[John Mann (Bassetlaw) (Lab)]

Four years ago, I set up a working group with all the major internet companies and the Anti-Defamation League, and I have met most of the people who moderate content. Does the Prime Minister agree that a voluntary approach will not be sufficient because the internet companies do not have and will not have the expertise to make the decisions? What is needed is legislation or an intergovernmental agreement that ensures that we have the expertise in our police and our security services so that we can draw down the information we want, rather than relying on young, inexperienced moderators of content who will make the wrong call at some stage, to someone’s detriment.

[The Prime Minister]

The hon. Gentleman makes an important point. There is an element of this that is about having legal powers. That is about the ability to gather communications data or to intercept telephone calls, e-mails and other internet communications, which is vital—all done legally, on the basis of a signed warrant. There are also the practices that internet companies should themselves want to take up. Some people say, “You cannot change this and nothing can be done.” I do not accept that. In the case of child pornography, to start with, when we made suggestions about, for example, not returning search items on disgusting child pornography terms, we were told that that was impossible. Now the internet companies have put that in place. Therefore, there is a place for legislation but there is also a place for bringing people together and encouraging proper practice.

[Michael Ellis (Northampton North) (Con)]

Will my right hon. Friend confirm that our security services are this country’s unsung heroes? He knows—many others do not—that they are regularly responsible for tremendous successes, which we hear nothing about. Does he agree that the report shows that social media firms should take action immediately to ensure that their services do not become terrorist safe havens, from where terrorists can almost with impunity launch plots against this country? Internet companies must co-operate and not become some modern version of a mediaeval sanctuary.

[The Prime Minister]

My hon. Friend is right on both bases. We cannot always praise and point out what the security and intelligence services have done, but since I have been Prime Minister there has been at least one major plot every year and this year already at least four plots have been avoided by the work of the security services, so we should thank them for what they do.

On the issue of the internet, I would put it like this. Historically, Governments have always decided that, whether it is people sending each other letters, making fixed-line telephone calls, mobile telephone calls, or sending e-mails, in extremis, on the basis of a warrant signed by the Home Secretary, it is okay to intercept that call, letter or e-mail. The question we must ask is: are we prepared to have a means of communication—the internet and a number of modern methods—that we are not able to intercept? My answer is clear: we should not accept that. We should legislate to ensure that that is the case. I think that that is in the finest traditions of having law that is in favour of security but also in favour of liberty. However, the whole House at some stage will have to come to a view on that.

[Clive Efford (Eltham) (Lab)]

I associate myself with the comments of my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford). Greenwich borough has a long association with the garrison at Woolwich and the murder of Fusilier Lee Rigby was felt particularly powerfully by our local community. May I press the Prime Minister a little more on internet companies? It seems extraordinary that we do not have the co-operation of the companies that are overseas. It seems to me that we need to negotiate and take action at Government level. What is taking place at that level to ensure that, where such companies do not co-operate, regulations are put in place to compel them to do so?

[The Prime Minister]

The hon. Gentleman asks the key question. We are both updating—we did that over the summer—and applying our legislation on the basis that we believe that what matters is whether companies provide services in this country, not where they are based. On that basis, companies should comply with warrants and requests. Therefore, we are progressing that, but at the same time we are trying to deal with one of the sources of the problem, which is the interaction between UK law and American law, specifically the US Wiretap Act. Sir Nigel Sheinwald is holding conversations with America-based companies and the American Government to try to find a way through so we get higher levels of co-operation. However, the levels of co-operation have increased, not least because of the important legislation that this House passed in the summer.

[Sir Tony Baldry (Banbury) (Con)]

Further to the last question, does not the Intelligence and Security Committee report indicate that social media companies need to do more to put in place systems to spot terrorist groups that are using their services to plan attacks?

[The Prime Minister]

My right hon. Friend is right. The companies have to do two things. They have to have systems in place to spot key words, key phrases and other key things that could be part of terrorist plotting. They also need to have a system in place, in our view and as my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) said, to report that to the authorities. This is linked to the point that I made in response to my hon. Friend the Member for South Dorset (Richard Drax). Because we have such a robust system of safeguards in this country, I do not think that it should be a problem for any of these companies to do just that.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I associate myself with the comments of the Prime Minister and many other hon. Members about Fusilier Lee Rigby. The Prime Minister has repeatedly referred to the importance of schools and universities in tackling the threat from radicalisation, yet I have spoken to many young people who are concerned about the absence of, or lack of consistency in information provided to them about how to report and tackle extremism that they find online. I am concerned that it appears that there have been no inter-ministerial meetings about that issue between the devolved Administrations and UK Ministers with responsibility for education and universities. Will the Prime Minister commit to working with education and universities Ministers across the UK to ensure that consistent information is provided to our young people, teachers and youth workers?

[The Prime Minister]

The hon. Gentleman makes an important point. That is one of the reasons for having the public duty on public bodies, including universities, to combat extremism and terrorism. We will set out the guidance on that as the legislation goes through the House. It is important to ensure that this happens on a UK-wide basis. Combating terrorism is a reserved, UK-wide responsibility. We need to discuss with the devolved authorities exactly how they put that in place, but obviously whether it is done is a matter for the UK Government.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

It is the job of the House to pass laws to require internet companies to help to prevent terror attacks, but does the Prime Minister agree that companies such as Facebook, Twitter and other social networks have a moral responsibility—they owe it to the memory of Lee Rigby—to introduce systems, similar to the ones we have introduced to deal with child pornography, to identify terror threats? When they do identify them, they should have a Rigby rule and pass them to the authorities.

[The Prime Minister]

My hon. Friend is absolutely right. Obviously, we can put down legal obligations in terms of complying with warrants from the Home Secretary and legal requirements on providing communications data that are vital in solving crime, but there is a moral responsibility, too. If companies know that terrorist acts are being plotted, they have a moral responsibility to act. I cannot think of any reason why they would not tell the authorities. The debate that will happen following the publication of the report will help to keep us safe.

[Jenny Chapman (Darlington) (Lab)]

Will the Prime Minister urgently examine whether the Prison Service has the resources and, crucially, the skills to deal with radicalisation in our jails?

[The Prime Minister]

The hon. Lady makes an important point, which we discussed in the extremism taskforce. It is a tragic fact that a number of people have gone to prison and become radicalised in prison because there have not been the appropriate services in prison or there has not been the right sort of religious instruction. Therefore, we have a programme going through all our prisons to ensure that that is in place. That is important.

[Mr Peter Bone (Wellingborough) (Con)]

I think the whole House will thank the Prime Minister for the speed with which he has come to the House and for fact that he does so regularly. In his statement he said, “But the automated systems in the internet company concerned did not identify this exchange.” Therefore, it does not appear that there was a deliberate attempt by the internet provider not to provide the information. It seems that its systems were wrong. Has he found out why those systems did not work? I also think that he could say which company it was.

[The Prime Minister]

I do not think that saying which company it was would be right, because I do not want to give a running commentary on which companies are better than others at analysing this problem and reporting it to the Government, for what I would have thought were quite obvious reasons about the signal that that would send to people who want to do us harm. My understanding of what happened in this case is that the company discovered the exchange after the murder took place, when it was searching its systems, and it found out that one automatic shutdown of an account had not been, as it were, referred upwards. We think it is very important to discuss with that company what it is going to put in place to ensure that that does not happen again.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Further to the comments from my right hon. Friends the Members for Salford and Eccles (Hazel Blears) and for Greenwich and Woolwich (Mr Raynsford), I very much welcome the development of the Prevent programme. Will the Prime Minister expound on the expectations that will be placed on schools, universities and community groups to deliver on the legal duty?

[The Prime Minister]

The concept is a simple one. This is linked to what the hon. Member for Ilford South (Mike Gapes) said, which is that the effort of combating extremism is a matter not just for the police and the security services but for everybody. So if schools, universities and colleges know that someone is promoting terrorism in their organisation, they have a duty to act. Some colleges and universities might have taken a very laissez-faire attitude towards this, but that is wrong. We will clearly need to set out in guidance more details of what we expect and how we define this problem.

[Steve Baker (Wycombe) (Con)]

High-quality Islamic scholarship is surely crucial as a tool to confront the extremist ideology that leads to terrorism. Do the Government recognise that it is extremely difficult to find the individuals who have the necessary breadth and depth of knowledge of Islamic theology to make that possible?

[The Prime Minister]

My hon. Friend raises an important point, which we have spent some time discussing. I do not think that we have yet found the right answer. Some other European countries insist on particular training programmes and language abilities for imams, so that they are able to connect with the young people in their mosques. This is an area in which we still need to do more to ensure that people who are in danger of going astray have more people in their community to help to keep them grounded.

[Henry Smith (Crawley) (Con)]

The first British-born suicide bomber in the Syrian civil war was from my constituency. The incident occurred in February this year, and I am grateful to my right hon. Friend the Home Secretary for putting in place a number of Prevent programmes in my constituency over the summer as a result of that. Given the concern about how internet companies and social media might be aiding terrorist activity, will the Prime Minister tell us how we can use those platforms to counter this poisonous ideology?

[The Prime Minister]

First, let me share with my hon. Friend the sense that it is absolutely dreadful that there are people from our own country—many of whom were born, brought up and schooled here—who have had their minds poisoned by this extremist ideology and gone to fight or, in some cases, tried to commit atrocities on our own soil against their fellow countrymen. That is deeply shocking, and it shows how much effort we need to make to combat those activities.

Social media can of course be a great force for good as well as a force for aiding terrorists to talk to each other, and we should be using social media to point out all the positive things that we are doing. For instance, when young people in Muslim communities or other communities are concerned about what is happening in Syria, it is important that they can see instantly that this country is one of the most generous in the world for getting aid to people and giving them shelter, food and a chance of life. We must use social media to communicate that message rather than just leaving it open to the radicals and the extremists.

[Julian Smith (Skipton and Ripon) (Con)]

There has been a pretty concerted campaign by The Guardian, which has been supported by some Members of this House, relating to the transparency and oversight of our security services. Does the Prime Minister agree that this incredibly detailed report will finally put paid to the myths that have been developing over the past few years?

[The Prime Minister]

My hon. Friend makes a good point. There is a balance here. What we have tried to do is improve the institutions that oversee our intelligence agencies. For instance, the Intelligence and Security Committee now has more power, resources and independence, and I have just said that we are going to make the Intelligence Services Commissioner put the role of the agencies on to a statutory basis. So we have updated and upgraded what we do, and I think we have now got to a pretty good place. We should always ask ourselves whether the next step we are going to take will really add to the democratic accountability and legitimacy of what we are doing, or whether it could hold us back.

[Philip Davies (Shipley) (Con)]

The Prime Minister has often said that one of the purposes of overseas aid spending is that it contributes to our security. Given that finances are tight, to say the least, and given the extreme pressure that the Prime Minister admits the intelligence and security services are under, is it not time to divert some of that overseas aid spending to our security services at home? This is the elephant in the room, and to increase spending on the security services by £130 million at a time when overseas aid spending has gone up by about £5 billion is completely unacceptable. Will he put his dogma on overseas aid spending to one side and give the security services the funding that they need to keep us safe? That is what the public expect from him.

[The Prime Minister]

First, we have not only protected but recently increased spending on the security and intelligence services. I do not think that it is an either/or. We should be doing that as well as keeping our promises to the poorest people in the world, not only because we made that promise but because when it comes to dealing with problems in other countries so that they do not come and visit us here, overseas aid has a role.

[Mr Philip Hollobone (Kettering) (Con)]

My constituents were horrified by the murder of Lee Rigby. It is clear from the report that the security services were perhaps not as adept as they might have been at intercepting his killers before the murder took place, but my constituents will be reassured that those two individuals were known to the security services. They would have been more worried had they not been known to them. We have heard many questions to the Prime Minister today about electronic and digital surveillance, but no one has mentioned the “mark 1 eyeball” or the importance of human intelligence. My right hon. Friend sees more of these things than the rest of us. Is he satisfied that proper emphasis is being placed on the infiltration of these radical organisations at a human level, rather than an over-emphasis on electronic and digital surveillance?

[The Prime Minister]

My hon. Friend makes an important point. He is absolutely right to say that, without human intelligence and all of that kind of interaction, a lot of the digital surveillance to which he refers would come to nothing. One thing that has changed since 9/11 is that an enormous amount of effort and work has gone into building up our intelligence and security services in those ways as much as in others.

Iran (Nuclear Talks)

Tuesday 25th November 2014 Commons Chamber

13:47

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

With permission, Mr Speaker, I will make a statement on the negotiations between the E3 plus 3 and Iran regarding the future of Iran’s nuclear programme. In November 2013, the E3 plus 3 signed an interim agreement with Iran which came into force on 20 January 2014 for an initial period of six months. Under that agreement, Iran committed to freezing the areas of its nuclear programme of greatest concern to the international community. In return, Iran received limited sanctions relief and the repatriation of $4.2 billion in oil revenues. Crucially, that interim agreement gave us the time and space to build confidence and begin negotiations on a comprehensive deal to ensure the peaceful nature of Iran’s nuclear programme.

Since February, we have engaged in extensive negotiations with Iran at both official and ministerial level. We always knew these negotiations would be difficult and complex, and they have been—even more so than negotiating the Geneva interim agreement. At the heart of the negotiations is the need to reconcile Iran’s aspirations for a peaceful civil nuclear programme with our insistence on ensuring Iran cannot develop a nuclear weapons capability.

By July 2014, after several rounds of talks with Iran, we had deepened our understanding of the positions of both sides and made progress on areas of the negotiations, but we were still far short of reaching agreement on core issues. The E3 plus 3 and Iran therefore decided to extend the negotiations until 24 November—yesterday.

Since July, negotiations between the E3 plus 3 and Iran have intensified, and we have closed the gap between the parties on a number of important issues, but significant differences remain. I and other Foreign Ministers from the E3 plus 3 met the Iranians in Vienna last Friday and again yesterday to evaluate the prospects of reaching agreement on a political framework for a comprehensive deal within the deadline. The discussions in Vienna highlighted the need for further movement on some big issues by the Iranians and the need for flexibility on both sides. Despite the efforts of all parties, it was clear yesterday morning that we need more time to close the gaps between the E3 plus 3 and Iran, particularly regarding the issue of Iran’s enrichment capacity, which remains at the heart of this negotiation. But, based on the significant progress we have made to date, I remain of the view—one shared by my fellow E3 plus 3 Ministers and Iranian Foreign Minister Zarif— that a comprehensive deal remains possible. We must capitalise on the momentum we have gathered and push forward to achieve that prize.

Iran and the E3 plus 3 have therefore agreed to extend the interim agreement again until the end of June to allow more time to bridge remaining gaps and tie down technical details. We will continue negotiations in December with the shared aim of securing an outline agreement within four months. We would, of course, have preferred to reach a comprehensive deal by yesterday’s deadline, but only if it was the right deal. As we continue to work towards such a deal, we have an interim agreement in place that maintains important constraints on Iran’s nuclear programme and the vast majority of nuclear-related sanctions. Under that arrangement, Iran will continue to be able to repatriate some oil revenues on a similar basis to the current arrangements.

Successive Governments have enjoyed cross-party support in the House for the twin-track approach of sanctions and negotiations. I remain convinced that that approach is the right one, and that it is yielding progress, albeit slow progress. The negotiations with Iran are tough and complex, but a comprehensive agreement would bring enormous benefits to all parties. For Iran, it would herald the beginning of reintegration into the international community, and open the door to an easing of sanctions and access to significant frozen assets. For the international community, it would mark a considerable advance for regional and global security. We cannot and will not succumb to the temptation of sealing a deal at any price, but we will remain steadfast in pursuit of a comprehensive agreement that respects the clear principle that Iran must not be able to develop a nuclear weapons capability. I commend this statement to the House.

13:52

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

I thank the Foreign Secretary for his statement and for advance sight of it. First, on behalf of the Opposition, I wish to acknowledge the work of the EU’s outgoing High Representative for foreign affairs, Baroness Cathy Ashton. Over the past five years, she has played a decisive and constructive role on the world stage, particularly in relation to the Iranian nuclear dossier. Her contribution will be missed, but her legacy—I hope—will prove in time to have been significant.

On yesterday’s events in Vienna, the fact that it was not possible to reach agreement by the already extended deadline of 24 November is, of course, a setback, but it is better than either a bad deal or a rupture in the negotiations that would have freed Iran from its commitment not to accelerate its efforts to develop nuclear energy while negotiations proceed. For many years, Iran has chosen to exploit regional sectarian tensions through supporting terrorist groups in other parts of the region. Today, Iran has the capability to play a much more constructive role. So there should be no doubt that in an already volatile region, at a particularly perilous period, a nuclear-armed Iran would pose a threat not only to Israel and its neighbours, but to wider global security. Therefore, the interim agreement in November 2013 was a significant step forward. The June 2015 extension could allow for a further opportunity for progress to be made towards a vital comprehensive deal. This afternoon, I seek a number of assurances from the Foreign Secretary about the content, extension and negotiation of this proposed deal.

First, on the content of the final agreement, reports suggest that one of the main obstacles to securing a deal remained the crucial issue of the number of centrifuges Iran could operate. The Foreign Secretary did not mention that issue in his statement, so in his response will he set out the Government’s assessment of the appropriate number of centrifuges that Iran can retain while still offering sufficient protections on the so-called “break-out” time?

Secondly, the extension of negotiations must be agreed only alongside sufficient guarantees that it will not allow Iran to gain by running down the clock. The terms of the now-extended agreement explicitly forbid Iran from adding new enrichment capacity and accumulating more enriched uranium, and ban 20% enrichment altogether. Can the Foreign Secretary confirm that those restrictions will remain in place and will continue to be monitored, and that any sign of a breach will warrant an effective response? In particular, is he satisfied by the level of International Atomic Energy Agency access going forward?

Thirdly, could the Foreign Secretary also confirm that Iran will not enjoy any net financial gain through this extension? As he said in his statement, there has been cross-party support for a twin-track approach for a number of years. Yesterday, he confirmed the following:

“The expectation is that there will be a rollover of the current arrangements for Iran to access around $700 million per month of frozen assets”.

In his statement, he said that Iran will continue to repatriate oil revenues on “a similar basis” to before, so can he confirm explicitly that that does not allow for any further extension of sanctions relief without anything in return from Iran?

Of course the focus of today’s statement is on the nuclear negotiations but, with your permission, Mr Speaker, I wish to ask a question about reopening the British embassy in Tehran. I welcomed the announcement in June by the former Foreign Secretary—he is now Leader of the House—that the embassy will be reopened. The Foreign Secretary’s recent written answer to me stated that issues associated with getting the embassy back to a functional level and re-establishing a visa service are still under discussion. Can he offer further details about when he envisages those issues will be resolved? Three years since the attack on the embassy, ensuring its swift but safe reopening must surely remain a priority for those from all parts of this House.

Secretary of State Kerry was right to say that these talks will not get easier just because they go on longer. Unless there is a real breakthrough soon on the key heads of agreement, including on centrifuges and stockpiles, 2015 could see a progressive unravelling of political momentum for a deal on both sides. The onus therefore remains on Iran to be able to give the international community confidence that its nuclear programme is a purely civilian one, and the responsibility of the international community is to negotiate a deal that achieves that goal. As the Foreign Secretary recognised, there has been a bipartisan approach in this House, and he continues to have our support in seeking such an outcome.

[Mr Hammond]

I am grateful to the right hon. Gentleman for his expression of support at the end of his remarks. May I join him in thanking Baroness Ashton and congratulating her on the significant role she has played in these negotiations over the last period? I should also welcome her successor, Federica Mogherini, as new EU High Representative. The E3 parties are discussing—we began a discussion yesterday and will continue it—how we carry forward this process, because, clearly, Baroness Ashton had a large store of accumulated knowledge and had built important relationships. We will discuss with the new High Representative how best we can carry forward these negotiations in a way that gives them the maximum chance of being successful.

I strongly agree with the right hon. Gentleman’s expressed view that no deal is better than a bad deal; a nuclear-armed Iran would be a major destabilising force in the region and, conceivably, in a short period of time, far beyond it. That is not an outcome we can allow to happen, and we are all clearly focused on that. He has asked me for some specific assurances, and I will answer his questions in so far as I can. We agreed yesterday in Vienna that it would not be helpful to have on public display all the various heads of discussion and the various specific ideas that are in play and being discussed. We are clear among us that nothing is agreed until everything is agreed. If we want the discussions to proceed in a spirit of openness, with people testing new ideas, we have to respect the confidentiality around that process. I did say in my opening remarks that Iran’s enrichment capacity—a proxy for centrifuge numbers or centrifuge capability—remained a key issue to be resolved. We are exploring a number of ways of approaching that issue, and will continue to do so with the Iranians.

The right hon. Gentleman asked me to confirm whether the restrictions under the recently expired joint plan of action and the monitoring arrangements would remain in force and also whether access under those monitoring arrangements is considered to be adequate. I can confirm all of those things. He also asked about financial gain. As I said in my opening remarks, Iran will continue to be allowed, for as long as this arrangement is in place and the restrictions on Iran’s activity continue, to access approximately $700 million a month of its oil revenues, as has been the case since the beginning of this year.

Finally, the right hon. Gentleman asked me about the Tehran embassy. Yes, we are committed to reopening embassies between our two countries as soon as possible, but as he knows and has acknowledged there have been some technical issues that we have not found easy to resolve. We need to import into Iran a significant amount of equipment for the embassy to replace what was destroyed during the events of November 2011. If we are to operate effectively, we need to be able to take in that equipment in a way that is secure and that maintains necessary confidentiality. We have not yet been able to agree a way of doing that with the Iranians or to establish how we can deliver an effective visa service in Tehran that will meet the level of demand that is expected. At the same time, we also have to comply with various restrictions that the Iranians have in place, which limit our scope to deliver that service. We are continuing to engage with the Iranians on that issue. We are clear that this is a separate discussion; it is not dependent on, or in any way connected to, the nuclear discussion.

Finally, let me pick up on the right hon. Gentleman’s last comment. He said that to make progress, there needs to be a real breakthrough soon. I know that, in these sorts of discussions, it is always tempting to think that there has to be a sudden breakthrough. I say to him that progress thus far would be better characterised as slow but incremental, a painstaking inching towards each other, a testing of new ideas, and an exploring of new possibilities and of new ways of looking at old problems. We have made significant progress, albeit in very small steps, over the past few months. Rather than having a sudden breakthrough over the next couple of months, I expect us to edge towards each other in this incremental way.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I am sure that everybody who wants one day to see a return to stability in the middle east will be hoping for eventual success in these negotiations. No one wants to see sanctions maintained on Iran and the Iranian people for any longer than is necessary. Will my right hon. Friend assure me, within the sensible constraints of what he can say during negotiations, that any eventual solution must include a system of inspection and monitoring that will continue for the indefinite future so that every interested party can be reassured that any deal will not be slid back on either by the present Iranian Government or any future regime in that country?

[Mr Hammond]

I can reassure my right hon. Friend that transparency and an inspection and verification regime are at the heart of these negotiations. The Iranians understand that the regrettable but none the less undeniable lack of mutual trust between the two sides means that there will have to be robust inspection and verification procedures in place throughout the duration of any agreement. Indeed, there will have to be proper transparency and inspection arrangements in place beyond the duration of any agreement under the usual terms of the nuclear non-proliferation treaty in respect of a non-nuclear power.

[Mr Jack Straw (Blackburn) (Lab)]

I draw the attention of the House to the fact that I am co-chairman of the all-party group on Iran. The Secretary of State’s characterisation of negotiations with the Iranians as tough, complex and painstaking sounds all too familiar. I have every sympathy with him and commend him on his work. All of us want to see a satisfactory deal, but does he accept that there is a danger, if this drifts on, of a hardening of sanctions by the United States Congress and, at the same time, a degradation of sanctions by some of the other parties in the E3 plus 3? Has he any comment to make on the report in Fars News, an Iranian news agency, yesterday that President Vladimir Putin had a telephone conversation with President Rouhani of Iran in which he proposed

“to lift the anti-Iran sanctions in a unilateral and gradual process.”

[Mr Hammond]

I can tell the right hon. Gentleman that Foreign Minister Zarif refers often to the negotiations that took place in the middle of the last decade. I suppose he does that to emphasise that he was involved in the discussion long before any of us at the table were. It is, as the right hon. Gentleman suggests, absolutely essential that the sanctions regime remains robust. Last November, we said that the easing of certain specific sanctions under this deal did not imply, and would not be allowed to imply, a general weakening of the sanctions regime. We have seen nothing to suggest that the sanctions regime has weakened. We monitor it carefully and it remains effective and robust and it must continue to do so. I too saw, while I was still in Vienna yesterday, those remarks attributed to President Putin. I was with Foreign Minister Lavrov, who gave me no reason to believe that they were likely to be true, and I note that they were reported by an Iranian source. We are seeking clarification from the Russians, but I do not expect to see them break ranks. The Russians have been entirely constructive and very much engaged in this process, as have the Chinese.

[Mr Speaker]

Having called one co-chair, a most illustrious co-chair, of an all-party group, I am inclined to call another. Mr Richard Bacon.

[Mr Richard Bacon (South Norfolk) (Con)]

I congratulate the Government and the Foreign Secretary on the wisdom and patience of their approach, which is plainly required in the nuclear talks. It is plain that the Vienna convention requirements must be adhered to before we can consider reopening embassies, but does he agree that, on a broader range of matters such as the return of citizens and nationals, the opening of embassies should be seen not as some sort of reward but as a useful tool that could help in the resolution of a number of the normal kinds of disputes that occur between nations and that on many of those there is in fact some room for negotiation?

[Mr Hammond]

I agree that the opening of an embassy is certainly not a reward; it is a practical step to give effect to what we hope will be an increasing level and intensity of bilateral relations. In particular, we know that there are significant numbers of Iranian citizens who would like to visit the UK, but who find the current visa application regime onerous—I am talking about requiring them to travel outside the country to obtain a visa. We are moving towards reopening the embassy as soon as we practically can. For that to happen, we must have support from the Iranians to facilitate the work that we need to do to rehabilitate the embassy and all its operating equipment.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Is the right hon. Gentleman aware that despite Iran’s vile internal policies—I hope that he has been making protests to the Government of Iran about the imprisonment of a British woman for seeking to watch a volleyball match—there is no evidence that it has been seeking to acquire nuclear weapons capability? A Daily Telegraph journalist has written a very carefully researched book about that. Furthermore, Iran has never committed an act of aggression against another country. That being so, does the right hon. Gentleman accept that it is absolutely right to continue the negotiations, and will he make that clear to the Israeli Government? Will he continue to adopt the Churchillian rule that jaw-jaw is better than war-war?

[Mr Hammond]

We regularly raise consular issues with the Iranians, and we were of course pleased to see the news that Ghoncheh Ghavami has been released on bail pending her appeal. The right hon. Gentleman referred to her as a British citizen. Part of the problem is that she is a dual British-Iranian citizen, and the Iranian constitution does not recognise duality of citizenship, so the Iranians regard her as simply an Iranian citizen. The Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Bournemouth East (Mr Ellwood), met her fiancé this morning; the Prime Minister raised the case with President Rouhani when he met him at the UN General Assembly; I have raised the case with Foreign Minister Zarif, and we will continue to do so.

The right hon. Gentleman talked about the absence of Iranian aggression, and I am happy to agree with that as a matter of historical fact. He will know, however, that there are many in the middle east who see the hand of Iranian asymmetric engagement in their internal affairs and would very much urge the Iranians not to intervene in a way that destabilises the situation in various countries around the Gulf. I can tell him that the Israeli Government are well aware of our position, and equally we are well aware of their position.

[Sir Richard Ottaway (Croydon South) (Con)]

I congratulate the Foreign Secretary on his statement and on the fact that the talks are still live. He says that there are significant differences, but from where I am standing it looks more like an unbridgeable gap, and I would be grateful if he could tell us how he intends to bridge that gap. Can he tell us a bit more about what is going on in Tehran? On the one hand, we have President Rouhani, who clearly wants to move towards a negotiated settlement; on the other, the vibes from the supreme leader’s office are that Iran’s priority is the removal of sanctions but with no retreat from the nuclear programme. Will not those divisions make progress impossible?

[Mr Hammond]

One of the characteristics of the negotiations is that the two key protagonists—on one side the Iranians, and on the other the United States—have complex and non-homogeneous internal political audiences, in which different parts of the system may have very different views. We are quite familiar with dealing with that situation in our own environment, and we have to recognise that it sometimes exists in other countries as well.

I do not agree with my right hon. Friend that there is an unbridgeable gap. If we thought that, we would have called a spade a spade and, if I can mix my metaphors, pulled stumps and gone home on Monday—I am not sure whether the Iranians play cricket. We do not believe that there is an unbridgeable gap; we believe that there is a substantial gap. It is a lot smaller now than it was a month ago, and there was a genuine sense of momentum in the room in Vienna over the weekend. The fact is that the Iranians clearly want to do a deal, and we want to do a deal, but we have to make sure that it is a deal that addresses our absolute and unshakeable conviction that Iran must not obtain the capability to build a nuclear weapon.

[Angus Robertson (Moray) (SNP)]

I commend the Foreign Secretary for making the effort to travel to Vienna and be part of the discussions, and I wish him success with the new time scale. The next nuclear talks in Vienna take place in a fortnight in the international conference on the humanitarian consequences of nuclear weapons. The United States, more than 100 other countries, the United Nations and the Red Cross have all committed to attending; the UK has in the past boycotted the event. Will the Foreign Secretary confirm today whether the UK will attend that conference in Vienna? The question has been asked a number of times, but no answer has yet been forthcoming.

[Mr Hammond]

The hon. Gentleman has asked the question a number of times, and his question has been noted. I have been discussing the conference with other P5 colleagues, and I can assure him that a definitive position on the UK’s attendance will be announced in the next few days.

[Martin Horwood (Cheltenham) (LD)]

The Foreign Secretary is exactly right to highlight the relevance of this issue to regional security, a major factor in which has been the continuing hostility between Iran and Sunni Arab states. How confident is he that the process is accepted and supported by countries in the region such as Saudi Arabia?

[Mr Hammond]

As the hon. Gentleman knows and as I think we would expect, some of Iran’s neighbours are deeply nervous about the process. They want to be absolutely reassured that if a deal is done which relieves the sanctions pressure on Iran, it is done in exchange for a cast-iron, copper-bottomed guarantee, if one can have such a thing. Perhaps it is cast-iron round the sides and copper at the bottom.

[Mr Bacon]

And gold-plated.

[Mr Hammond]

Indeed. Iran’s neighbours seek an absolute guarantee that it will not be able to use its civil nuclear programme to develop the capability to build a bomb.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

There are many other middle east countries with legitimate security concerns who are not at the negotiations. Can the Secretary of State tell the House whether their concerns were addressed in Vienna?

[Mr Hammond]

If the hon. Gentleman is referring to the Gulf countries, I can say that all of the E3 participants have regular discussions with Gulf colleagues, and indeed with Israeli Government representatives. We are very much aware of the views of other countries in the region who are not represented around the table.

[Dr Julian Lewis (New Forest East) (Con)]

It is often said that, because of the mutual hatred between Iran and Saudi Arabia, if Iran got nuclear weapons, Saudi Arabia would follow suit. How realistic is that danger?

[Mr Hammond]

I am not in a position to comment on how Saudi Arabia might react to any hypothetical situation. Our focus is on ensuring that Iran does not acquire nuclear weapons and does not acquire the capability to build them in future.

[Mr Nigel Dodds (Belfast North) (DUP)]

I welcome the Foreign Secretary’s statement and the decision to extend the negotiations because that is clearly a better position than agreeing a bad deal, both for the region and for the world. Can he reassure the House that there will be no question of dismantling sanctions before it has become very clear that Iran’s nuclear capacity has also been dismantled?

[Mr Hammond]

Yes, there will be no question of removing the sanctions until we have seen compliance by Iran with the terms of an agreement. I am clear that that agreement will include a restriction of Iran’s capabilities in terms of enrichment to a level appropriate to the legitimate purposes that it has.

[Mr David Jones (Clwyd West) (Con)]

Last week the Foreign Secretary expressed the view, which he has just repeated at the Dispatch Box, that no deal is better than a bad deal. Can he confirm that that view is shared by the other P5 plus 1 negotiators, and further that it will inform their negotiating position over the months ahead?

[Mr Hammond]

That is the stated view of all the P5 participants—that no deal is better than a bad deal—and I hope that it will inform their negotiating stance over the months ahead.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

Although I endorse the approach that the Foreign Secretary has taken towards the negotiations and the obvious long-term benefit of reaching an agreement, may I express a little bit of surprise at the reasons he has given for not progressing faster with the re-establishment of our embassy in Tehran?

The Foreign Secretary will know that this is not the first time we have had to re-establish an embassy; he may not know, but I do, that I visited as a Minister in 2000 when the Khatami regime was opening up the prospect of re-establishing relationships. Although there are undoubtedly difficulties that have to be overcome to guarantee the freedom of our ambassador and staff to work effectively, I would have thought that if there was a will, there would be a way—and I hope that he will pursue that.

[Mr Hammond]

I assure the right hon. Gentleman that we are pursuing the issue actively with the Iranians, but we are clear that we do not want to reopen an embassy on a half-baked basis. If we are to go back in and reopen our embassy, we have to be able to set up the communications and IT systems that we need, and we must be able to import into Iran the equipment that we need to do that. We continue to discuss with the Iranians the arrangements that we might be able to agree with them to enable us to do that, but we have not succeeded in reaching an agreement.

[James Morris (Halesowen and Rowley Regis) (Con)]

One of the reasons why the Iranians came to the negotiating table in the first place was the tough international sanctions regime. In some sense they have already received a concession through the interim agreement. Does the Foreign Secretary agree that we need to be cautious as these negotiations proceed, to make sure that we do not create a perverse incentive for the Iranians to continue to extend these negotiations as they begin to chip away at the sanctions regime?

[Mr Hammond]

It is important that I reiterate that the Iranians are not chipping away at the sanctions regime. Some specific reliefs from sanctions have been provided, but the sanctions that deal with proliferation issues remain in place, so the Iranians cannot get access to equipment that would help them in a nuclear programme, the vast majority of their financial assets remain blocked, and in exchange for the limited relaxation that has been given they have had to enter into a series of detailed obligations that involve reducing the usable stockpile of enriched uranium and diverting new enriched uranium as it is produced into uses that could not be converted to military use at a later date. I consider that to be a sustainable situation for both sides while we continue to negotiate.

[Mr Andy Slaughter (Hammersmith) (Lab)]

The Foreign Secretary, in response to my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman), mentioned my constituent, Ghoncheh Ghavami. I am grateful to the Minister with responsibility for the middle east, the hon. Member for Bournemouth East (Mr Ellwood), for meeting Ghoncheh’s family and me earlier today and I am obviously very pleased that she is out of jail. However, she is only on bail; if she loses her appeal she could be returned to prison for at least another seven months and she has a two-year travel ban. Will the Foreign Secretary use the improved atmosphere between the two Governments to encourage the Iranian authorities to allow Ghoncheh now to return to her home in Shepherd’s Bush?

[Mr Hammond]

As I have already told the House, we have raised and will continue to raise this case with the Iranians, but they simply do not recognise our locus. The Iranian constitution does not recognise the concept of dual nationality and therefore our protestations are received politely, but without any obvious effect.

[Mr John Baron (Basildon and Billericay) (Con)]

The extension of the deadline is the second-best option, but one that is welcome all the same—going the extra mile to try to resolve the impasse could unlock so many thorny problems in the region. May I press the Foreign Secretary for absolute clarity as to the west’s position? He said that he does not want Iran to acquire nuclear weapons or to develop nuclear weapons itself. Is it the west’s position that Iran would be allowed to harness technology and capability to the point of break-out?

[Mr Hammond]

The clear position of the E3 plus 3 is that Iran should be allowed to pursue a peaceful civil nuclear programme, but that safeguards should be in place that prevent Iran from acquiring the capability to develop a nuclear weapon.

[Jim Shannon (Strangford) (DUP)]

Three weeks ago, I had in my office a deputation of Iranian Christians who had fled Iran due to persecution and business men who still carry out business in Iran. Both groups informed me that Iran’s verbal statements on its nuclear strategy are untrue and that behind backs Iran is fully focused on developing a nuclear bomb. What discussions has the Foreign Secretary had outside Government with those in Iran who clearly know what is happening on the ground in relation to the nuclear strategy?

[Mr Hammond]

Let us be clear about this: Iranian society, like pretty much every other society, is not homogenous. I would be astonished if there were not people in Iran saying that Iran needs to develop a nuclear bomb. That is not the issue. The issue is the position of the Iranian Government and the Iranian senior leadership.

What we are seeking to do is establish a robust framework within which Iran can develop a civil nuclear programme, while assuring us that it has no intention of developing, and will have no capability to develop, a nuclear weapons capability. It would be unreasonable of me to expect the Iranian Government to vouch for there being not a single individual in Iran who thought that the Government’s stance in engaging with the west in these negotiations was wrong. I am sure there are hard-liners who would prefer these negotiations to break down. Fortunately, that is not the position of the Government of Iran.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I do not think this has been mentioned yet this afternoon, but there are many people who believe that Iran has no intention whatever of getting rid of its nuclear weapons programme and is using negotiations as a delaying tactic. That being the case, if in four or seven months no progress has been made, where do we move to then? Would military action be considered?

[Mr Hammond]

I hear my hon. Friend’s point, but if negotiations under the terms of the joint plan of action are a delaying tactic, they are a very poor one, because what Iran has to do during this period is systematically and steadily to convert its stock of enriched uranium into materials that cannot be used and could not be used for further enrichment and therefore for military purposes. It is a rather poor tactic, if that is what it is.

We are focused on trying to pursue this negotiation and get to a comprehensive agreement. I do not think it would be helpful to speculate on what might happen if we fail, but we are very clear: we are not going to enter into a bad deal. If we cannot get a deal that gives us clear reassurance that Iran is not going to acquire the capability to build a nuclear weapon, we will not do the deal. We will then have to deal with the consequences of such a situation, but it is not helpful to speculate on those now.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I welcome the statement from the Foreign Secretary and the work done by his predecessor on this matter. Along with what is going on in relation to its nuclear capacity, has a lot of pressure been put on Iran for it to stop supporting and harbouring terrorism—whether from Hamas in Israel, from Hezbollah in Lebanon, from interference in Iraq or from support for the brutal regime in Syria? If we want Iran to be a key player in the international community, it must abide by international norms.

[Mr Hammond]

We have a separate bilateral dialogue with the Iranians in which we urge them, as I said earlier, not to meddle in the internal affairs of other countries and not to take actions that would destabilise the region, but these nuclear discussions are taking place at P5 plus 1 or E3 plus 3, whichever people choose to call it. On many of the issues that my hon. Friend listed we would not get agreement among the P5 plus 1 about what is happening on the ground, so we have chosen—I think it is the right decision—to keep these nuclear talks ring-fenced and separate from all other bilateral and multilateral strands of discussion with Iran.

[John Howell (Henley) (Con)]

Does the Foreign Secretary agree that Iran must be asked to provide details of its previous nuclear activity? Otherwise a mechanism for monitoring Iran’s future actions will be fundamentally flawed.

[Mr Hammond]

Yes. An essential part of the agreement will be a proper investigation into, and understanding of, past breaches of Iran’s international obligations in respect of nuclear weapons.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Does my right hon. Friend agree that a successful conclusion of these E3 plus 3 negotiations could lead to greater normalisation of relations with Iran, which would make a number of the problems that my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) mentioned earlier much easier to resolve?

[Mr Hammond]

I agree entirely with my hon. Friend’s point. Iran feels isolated and behaves in a way that sometimes reflects that. The big prize here is that we get Iran to become an active part of the international economy. Iran is a big country, with some sophisticated capabilities, and having it back as a partner in the international economy will be significant. Once Iran feels that it is playing a full role as a normal state in the international community, I hope that we will start to see Iranian behaviour reflecting that, and Iran wanting to resolve issues through bilateral and multilateral discussion rather than through the kind of unilateral action that, unfortunately, we have seen in the past.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

May I echo the Foreign Secretary’s thanks and congratulations to Baroness Cathy Ashton for the tremendous work that she has done during the many years she has been involved in the process? He rightly wants the P5 plus 1 to focus solely on the nuclear negotiations, but Iran exercises enormous political and security influence over Iraq and is shoring up the murderous Assad regime. Have the Iranian authorities attempted to link these nuclear negotiations with help in defeating ISIL?

[Mr Hammond]

No.

[John Glen (Salisbury) (Con)]

I welcome the Foreign Secretary’s determination to make progress on the nuclear issues, but will he reassure the House that he will continue to stand up for persecuted religious minorities in Iran—in particular Pastor Saeed Abedini, who has been locked up for two years without access to legal representation or medical treatment under this brutal regime?

[Mr Hammond]

Yes. Iran’s human rights record is poor, to put it mildly, and while there have been some limited steps in the right direction, it is clear that a huge amount remains to be done. We do raise human rights issues with the Iranians on a regular basis. My hon. Friend is right to draw attention to the particular problem of religious persecution and the unwarranted imprisonment of those practising minority religions in Iran.

[Crispin Blunt (Reigate) (Con)]

It is fairly clear that the negotiations will get much more complex when both Houses of Congress are hostile to the Administration’s negotiating policy. Looking back to Iran, what can the Foreign Secretary tell us about the confidence that the Iranian negotiating team enjoys from the Iranian Parliament? Is there anything that can be done to address the flattering but rather hilarious view in Iran that Britain is at the centre of all evil that befalls Iran and is the directing evil genius of policy towards it?

[Mr Hammond]

Yes, my hon. Friend is right—and not only about Iran. I often discover that we wield a great deal more power and influence in the world than appears to be evident from my seat in the Foreign Office. He is right to say that American congressional politics is a significant complicating factor in moving forward, and, as I said a few moments ago, it very much reflects the diversity of view in Iran also about how this negotiation should be conducted. But the reality, and the thing that is driving things forward, is that there is a huge prize for both sides in getting to an acceptable deal. So long as there is a win-win and something substantial in it for both sides, there will be continued momentum.

[Mr Philip Hollobone (Kettering) (Con)]

In his statement, the Foreign Secretary confirmed that the November 2013 interim agreement commits Iran to freezing certain areas of its nuclear programme in return for limited sanctions relief and the repatriation of $4 billion-worth of oil revenues. Although the sanctions relief and the oil revenues are transparent and measurable, freezing areas of its nuclear programme is not. Given that there is either limited or no inspections access to nuclear and weapons facilities at Fordow, Natanz, Arak and Parchin, how confident can he be that Iran is freezing these areas of nuclear development, and is not secretly using this extended deadline to produce enough fissile material to develop nuclear weapons?

[Mr Hammond]

We are highly confident of that. The technical representatives of the E3 plus 3 review these issues regularly. We do have access to and visibility of what is going on. The arrangements under the interim agreement for monitoring are effective, and we are confident that Iran is complying with its obligations—in some cases, complying with our interpretation of an obligation even where there may be some uncertainty in the wording of the document itself.

[Mr Peter Bone (Wellingborough) (Con)]

I thank the Foreign Secretary for coming to the House and keeping us informed. There are some reports in the media saying that effectively the west is being played for a fool by Iran and that it is developing a nuclear programme, as my hon. Friend the Member for Kettering (Mr Hollobone) suggested. Will the Foreign Secretary tell the House frankly whether he thinks Iran will have nuclear weapons in the future?

[Mr Hammond]

That will depend, crucially, on whether we are successful in reaching an agreement. If we reach an agreement, Iran will have a civil nuclear programme with the support and assistance of the international community, but will not be able to develop the capability to build a nuclear weapon. If we do not reach agreement—indeed, if we had got to the deadline yesterday and not rolled over the interim agreement—Iran would have been able, albeit under the current sanctions regime, to continue to enrich uranium and build a stockpile of fissile material, which is absolutely not in the interests of the international community. There is no alternative to pressing forward, giving it our very best shot, to get an acceptable deal with Iran. If we cannot do that, we cannot do it, but we will give it our very best shot.

Universal Credit

Tuesday 25th November 2014 Commons Chamber

14:37

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I rise to make a statement about the new announcements on the roll-out of the next part of universal credit. Universal credit is a major reform, transforming the welfare state in Britain for the better and bringing £35 billion in economic benefits to the UK. Rightly, for a programme of this scale, the Government’s priority continues to be its safe and secure delivery. That is why, after the successful launch of the pathfinder in April 2013, a controlled expansion of universal credit has been taking place since last year, and in the north-west since June—first to singles, then couples, extending to families from today, across Birkenhead, Warrington, Bromborough, Upton, Wallasey and Hoylake.

In addition, universal credit is live in 81 jobcentres. National roll-out will follow from next year, bringing universal credit to one in three jobcentres by spring 2015. This careful, controlled expansion is the right approach, testing and learning as we go, avoiding some of the big bang failures that have dogged programmes in the past.

Already, universal credit is delivering major benefits. The early results show that the majority of recipients agree that it is easier to understand, easier to claim and provides a better financial incentive to work. I know that many colleagues have visited those centres and will testify to that. People are spending almost twice as much time looking for work as they were before and, above all, universal credit is on track to help them move out of unemployment more quickly, with those in the new system reporting that they are working more over a six-month period than those on jobseeker’s allowance.

Ensuring that work always pays, universal credit will generate up to an additional 300,000 people in work once fully rolled out. Some 3 million households are set to gain by £177 on average and 500,000 working families will receive more help with child care, with 100,000 of those in part-time work or mini jobs benefiting for the first time from entry into work. With the rate of child care support increased from 70% to 85% of costs, parents can receive up to £646 for one child, and £1,108 for two or more children. It is important to point out that that is the element of the roll-out in this particular area and that it covers all the hours that they will be in work—unlike the present system, which puts them only in certain batches of hours.

The number of people reaping those benefits is set to grow exponentially as the universal credit roll-out ramps up. The latest published statistics—up to November—show that nearly 40,000 have made a claim for universal credit, over 20,000 have completed that process and gone on to receive universal credit, and 17,850 are on universal credit currently. Illustrating the scale of the increase, nearly 6,000 claims were made in the month between October and November—over five times as many as there were in June, before we started the north-west expansion.

At the same time, we are bringing forward changes to legacy benefits. That is a ripple effect of the massive cultural shift that universal credit delivers. Around 1 million jobseeker’s allowance claimants have now signed a claimant commitment, which is part of universal credit, making unequivocal once and for all the deal between those looking for work and the taxpayers who support them. That is the massive cultural change that universal credit entails.

Our plans to deliver universal credit are on track, taking the same approach that has delivered success so far, rolling out once we are confident in our capacity and capability. The plans have been assured by the Major Projects Authority, the independent body advising the Government, just as the universal credit business case has now been signed off by the Treasury. The current business case assumes that the last claims to legacy benefits will be accepted during 2017. Following that, the stock of remaining cases will progressively decline, with the rest migrated to universal credit. Should there be no change in the labour market outlook or the pace at which claims are migrated, the current business case assumes that the bulk of this will be complete by 2019.

Our careful approach is set to deliver universal credit under budget, with implementation costs down from £2.4 billion to £1.8 billion, according to the latest figures. The value of the programme to date is unmistakably clear, I hope. Specifically, the investment in IT has a value that hugely outweighs the cost. There are over £130 million-worth of universal credit assets on the balance sheet, as agreed by the National Audit Office. That IT is being used day in, day out, and it will continue to be used even as we start to test an enhanced digital solution from this week. Our decisions will continue to be informed by that digital development.

The important point is that this is about de-risking the roll-out, which the MPA agrees is happening now as a result of this programme. I believe that that represents value for money. It is delivering the maximum benefit from this vital process of welfare reform, renewing work incentives, restoring fairness and rebuilding a welfare system fit for the 21st century.

14:41

[Rachel Reeves (Leeds West) (Lab)]

I thank the Secretary of State for his statement. However, the announcement in this morning’s press release confirms that universal credit is rolling out at a glacial pace. It is just another example of Tory welfare waste. We all know that simplifying and integrating our benefits system has the potential to help people into work and to progress in work. That is why the Opposition have always supported the principle of universal credit and want it to succeed, despite the Secretary of State’s best attempts to make a complete and utter shambles of it.

The Secretary of State has already informed the House that universal credit would be rolled out to families with children this year, but today’s statement tells us nothing more about how many families will be claiming it, in which areas of the country, and whether that will include families with someone in work or families with a disabled member. We were told that at the beginning of next year universal credit would be rolled out to all jobcentres across the country. That has now turned into one in three jobcentres by next spring, but we still do not know which jobcentres, in which parts of the country, whether those jobcentres themselves have been informed and, more importantly, whether local partners, including councils and voluntary sector organisations, which have such a critical role to play in making the roll-out work, have been informed.

However, there was one new revelation buried at the bottom of this morning’s press release: an admission from the Secretary of State that the delivery of this policy will now not be completed until the end of the decade, if then, with only “the bulk” of claimants on legacy benefits transferred by 2019. Let us remind ourselves what the Secretary of State said he would deliver four years ago so that we can see how far plans have gone astray. The White Paper presented to the House in 2010 set out a timetable for

“completing the transfer to Universal Credit by October 2017”.

Since then, the Secretary of State’s timetable has repeatedly slipped, despite repeated assertions that the project was

“on time and on budget”.

In November 2011 the Secretary of State said that he would have 1 million people on universal credit by April 2014. The truth turned out to be just 1% of that figure. The Government told us that they would have 1.7 million people on universal credit by May 2015, but his latest target is for just 100,000 to be on the system by then. As recently as this month, he was insisting that the transfer of all claimants to universal credit would be completed in 2018.

On 5 November, less than three weeks ago, he said in evidence to the Work and Pensions Committee, in response to a question from my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce), that

“we do envisage Universal Credit being complete by the end of 2018.”

Yet buried at the bottom of today’s press release we find the admission that only

“the bulk of this exercise will be complete by 2019”.

I hope that the Secretary of State can answer the following questions and give us some clarification and assurance. First, what on earth does he mean by “the bulk”? Is it a new statistical term that we can appeal to the UK Statistics Authority for clarity on? More importantly, given the concerns and the amount of public money at stake, can he not be more precise about how many people he expects to be left on legacy benefits after 2019? Which claimants will those be, and when can we expect them to be transferred on to universal credit?

Secondly, what are the implications of this further delay in the completion of the roll-out and transfer for the project’s administrative costs and the expected savings and benefits being claimed? Can the Secretary of State confirm that the estimate of £35 billion for the project’s benefits remains correct, and has the full business case now been signed off by HM Treasury?

Thirdly, why did the Secretary of State claim on the BBC’s “Today” programme this morning that “almost 40,000” people are “actually claiming” universal credit when the latest figures show that the current caseload is 17,850? Fourthly, can the Secretary of State tell us how many families he expects to be receiving universal credit by the end of 2014 and by May next year? Will only families with both parents out of work be able to claim? Will families including a disabled member be able to claim by May 2015?

Fifthly, will the Secretary of State place in the House of Commons Library a full list of the “one in three” jobcentres that he expects to be handling universal credit claims by the spring? Sixthly, will the extension of universal credit to families with children, and to jobcentres, be on the new digital platform being developed by the Department, or will it still be running on the old system that we know is inadequate for handling large-scale caseloads? Finally, would the Secretary of State care to repeat his claim that this programme is

“on time and on budget”?

I hope that the Secretary of State will be able to answer those simple and fundamental questions about a programme that was held up as the Government’s flagship welfare reform and has already eaten through more than half a billion pounds of public money. If he cannot give straight answers to straight questions, Members of this House and voters will be forced to conclude that, as with the delays we have seen with disability benefits, the failure of the Work programme and the Youth Contract to help key groups into work, and the failure to tackle the low pay, insecurity and housing shortages that are driving up benefit bills, this is just adding to the legacy of Tory welfare waste—wasted money, wasted time, wasted talents and a wasted opportunity to get our economy and our social security system working for all the people of our country.

[Mr Duncan Smith]

I must say that I think that the hon. Lady thought that up about a week ago, before she even got near what I have just said in the statement, but never mind—she likes to rehash the old ones, and we will deal with them. She made the point at the end of her statement that somehow the Work programme is not working. The Work programme is outperforming all of the figures that it was meant to. It is also outperforming what we were left by the previous Labour Government: record unemployment and more people who had lost work as a result of their crashed economy. We have more people in work than ever before and more young people now returning to work. Those are the standing plans.

Let me deal with some of the other issues the hon. Lady raised. She talked about what we are doing on universal services. We have already undertaken a huge amount of consultative processes with local authorities and all other partners in the areas. We have a programme called universal services, to be delivered locally, and we are working closely with the Local Government Association in trialling all sorts of elements of that, including the exchange of information on housing, which is an area that previously was not working. The LGA is represented on the programme of governance, the partnership forum and the universal credit transition working group. As universal credit is expanded nationally, delivery partnership agreements will be established locally so that local authorities, jobcentres, landlords and employers can adjust their requirements to prepare for the UC roll-out. That is taking place at the moment and it is helping to inform hugely the process of helping to improve the nature of the roll-out.

As I said in my statement—I repeat this because the hon. Lady seemed not to have picked it up—40,000 people had claimed, over 20,000 had completed the claim process, and 17,500 were currently on universal credit. [Interruption.] No, that is exactly what they have done. Forty thousand had claimed, 20,000 had made the claim and received—[Interruption.] I do not want to go through this nonsense with her. Let me remind her that many of those who started a claim went to work and therefore never completed the process. In case she thinks it is not worth people claiming the benefit because they are not staying on it, our position is that the purpose is to get them off the benefit and into work.

I will be happy to give the hon. Lady a list of the one in three jobcentres that will be covered by the spring. As I said, by the end of this year one in eight jobcentres will be covered. Families will be included. Depending on the type of claimants and their particular issues, they will be dealt with in jobcentres as the benefit is rolled out to them. The timing and delivery remain exactly as they were.

As we have announced today, we will also be rolling out the first part of the digital trial process, and that will inform us hugely on how we will be able to roll out and expand the system. The hon. Lady said that I had only just announced the timing of the roll-out, but in fact I had said it previously. She might want to ask the right hon. Member for East Ham (Stephen Timms), who is sitting next to her, about that. All the dates were in the answer to a parliamentary question from him about a week and a half ago; I cannot remember the exact date. Nothing has been hidden at all—we have been very clear about it.

The long-term strategic outline business case covers the lifetime of the programme from 2023 to 2024 and provides even more granular detail on costs and benefits and delivery planning until, it is expected, 2025. The MPA has approved our roll-out plans and given them a very strong sign-off.

The hon. Lady asked about the information that will be shared automatically. Claimants are asked to give consent to our universal credit teams sharing information about their claims with local authorities to help to highlight extra support that may be needed.

The hon. Lady says that she is in favour of universal credit in principle, but she has voted against it and attacked every single thing to do with it, just as Labour Members say they are in favour of welfare reform in principle but attack and vote against every single part of what we are doing. I have to say that the way she is going, she will get a lot of practice at being in opposition.

[Mr Mark Hoban (Fareham) (Con)]

I commend my right hon. Friend for the methodical way in which he is going about the implementation of universal credit. My constituents suffered from over-payments, under-payments and mis-payments under tax credits because Labour in government botched the implementation of the system by doing it as one big bang. We cannot afford the same thing to happen in this case. That is why he is absolutely right to introduce in the way that he is to make sure that it works before it is rolled out further. We should be commending him for that and for not repeating Labour’s mistakes.

[Mr Duncan Smith]

I thank my hon. Friend; he is exactly right. We have worked on this together. As he knows very well, taking the early decisions to ensure that the programme rolls out safely and securely is far more important than, as the hon. Member for Leeds West (Rachel Reeves) seems to suggest, rattling ahead regardless of the consequences. That is exactly what happened with tax credits, where, on day one, 400,000-plus people did not receive any benefits. The disaster of tax credits has stayed with us ever since.

[Dame Anne Begg (Aberdeen South) (Lab)]

Will the Secretary of State confirm that the reason the volumes are so low is that only the simplest cases in the simplest groups are covered? Although it has been rolled out to families, they will still be only the simplest and easiest-to-deal-with families. Given that 250,000 jobseeker’s allowance claims are usually made every month, I wonder how he thinks we are going to get from today’s position of having had 20,000 claims in over a year to having 250,000 in a month. It seems quite a task to get the volumes up to that level and to be able to roll it out across the whole country.

[Mr Duncan Smith]

As the hon. Lady knows, we started with single people, but whenever somebody’s circumstances changed—they may have become a couple or had a family—they stayed in the system and have been dealt with. It is not correct, in any way, to say that these are the simplest cases. The roll-out to families introduces further complications, but we are doing this in way that makes sure that we get it right. By the end of this year, the north-west will have universal credit, so if someone falls unemployed and then goes into work, they will do so on universal credit. That is the key point. All the complications will be dealt with within the existing system.

[Nigel Mills (Amber Valley) (Con)]

I welcome the progress announced in the Secretary of State’s statement. Will he confirm that the Treasury has now signed off the whole business case and laid to rest the fear that it was not going to do so?

[Mr Duncan Smith]

That is exactly what was being asked before the summer break, and the answer is that the Treasury has done that. The MPA has also signed off the roll-out process in saying that it de-risks the nature of the roll-out and approves it exactly as it stands at the moment.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

Somewhat unusually, but fortunately, the House was not subjected this afternoon to a self-serving sermon in the guise of a statement. Does the Secretary of State have as a principle the idea that promises, like pie crusts, are made to be broken? Every promise he has made at that Dispatch Box about the cost of implementing and rolling out universal credit has been broken, so is today’s semi-statement merely more porky pies in the sky?

[Mr Duncan Smith]

I will not follow the mixed metaphors about pies and pie crusts in the sky; I usually like them on a plate myself. The hon. Lady has a choice to make. I would much rather make it clear that we want to deliver this thing safely and securely. After all, we have listened to the MPA and we had the National Audit Office in to look at it last year. We took all the advice, and we are rolling it out in the way that it should be rolled out. I have to say—this is not arrogance—that I believe that future Government programmes will be best rolled out using the test-and-learn process that is securing these roll-outs. That is the right way. Let us get this safely and securely rolled out, not smashed to pieces like tax credits on day one.

[Maria Miller (Basingstoke) (Con)]

I thank the Secretary of State for coming to the House to update us and explain exactly what the situation is with universal credit. Four million people spent most of the last decade trapped on out-of-work benefits. Universal credit is already giving people the opportunity to get back into work more effectively. Why on earth would a Labour Government want to halt these vital reforms for three months when a full roll-out has been approved by the Major Projects Authority? Surely we should be hearing from Labour Members how they would help us to support this being brought forward even more rapidly.

[Mr Duncan Smith]

Of course it is legitimate, as it always is, for the Opposition to question this. All I am saying is that we have taken the decisions to ensure the security and safety of the roll-out. We will not take any decision unless it is clear that it is the right thing to do, and we want to deliver this safely and securely. The experience of those who are on universal credit is getting better. We now find that word of mouth from those groups is so good that people are going into jobcentres wanting to claim universal credit rather than be on jobseeker’s allowance.

[Margaret Hodge (Barking) (Lab)]

Having listened very carefully to the Secretary of State’s statement, I wonder whether he is playing a rather worrying political trick by making a statement on the day before the NAO brings out its publication on progress on universal credit. He well knows that there are huge risks with the value for money of the project and substantial potential for waste of taxpayers’ money. For example, if there are further delays in the implementation of the digital programme, taxpayers will have to continue to pay for the expensive, mainly manually operated live service. Why does he not, just for once, give us an open and straightforward account of the state of play?

[Mr Duncan Smith]

I am sorry that the right hon. Lady takes that view. She may not know the genesis of the statement, so perhaps I can explain it to her. Labour Front Benchers asked for an urgent question today, and I gather that it was negotiated between the various authorities that there would be a statement, not a UQ, because there were to be some very important statements today. The Speaker made that decision, which is quite correct. The reason I am here today is that I was originally asked to be here by the Opposition.

In answer to the right hon. Lady’s question, I fully respect the NAO and we listen carefully to what it has to say. She knows that she will have its team before her when she undertakes the inquiry process. I cannot second-guess what is in tomorrow’s report, but my general belief and hope is that it will welcome this as being the right direction, the right process and the right prioritisation of safe delivery that makes sure that we do not waste money. In cost terms, as I said, we will be spending less, at £1.8 billion, than we were originally set to spend.

[Dr Julian Lewis (New Forest East) (Con)]

Many people are concerned about both welfare tourism and benefit fraud. Will my right hon. Friend explain how they might be diminished as a result of the new system?

[Mr Duncan Smith]

On migrants, we have already made it clear that universal credit is a different type of benefit, so people who come here and are out of work will not be able to claim it as a benefit. The issue of how migrant workers can claim in-work support will be negotiated. We are clear that, under universal credit, family benefits will not be paid to people who are not accompanied by their family, so we will secure such claims, thus cutting costs. On fraud, the automatic processes that check what people are earning and whether they are in work mean that we will cut down on all the fraud related to tax credits.

[Sheila Gilmore (Edinburgh East) (Lab)]

Given that the Department is such a fan of safe and secure roll-out, it is a pity that it did not take a similar view to the personal independence payment. A lot of people were treated like guinea pigs while it was being rolled out—that topic is being debated in Westminster Hall as we speak. The Secretary of State must be aware that 61% of the current claimants of universal credit are under 24 years old. They are the simplest of cases and, after such a long period, 17,000 is a very small number indeed. We have been hearing the “safe and secure” mantra for at least two years. When will the Secretary of State admit that his Department has very serious problems with implementation?

[Mr Duncan Smith]

I would have thought that the hon. Lady, who sits on the Work and Pensions Committee, would be attracted to the idea of trying to land the programme safely and securely. On the one hand she says that she agrees with it, but on the other hand she attacks it for not being fast enough. My view is that it should be expanded and delivered on a safe scale. Of course, the majority of cases will have been simpler ones because we have started with singles, but over the next few months we will see more complicated cases as we roll out to families. The north-west will be fully family when we start rolling out nationally. I am waiting for the hon. Lady to say one day, perhaps in a few years’ time, “You know, they did a jolly good job, because this has benefitted everybody, particularly those on low income.”

[George Hollingbery (Meon Valley) (Con)]

Given the huge importance of universal credit and the scale of the programme, has my right hon. Friend had any confirmation from the Labour party as to whether it actually supports universal credit, as opposed to vaguely supporting it in principle?

[Mr Duncan Smith]

The answer is that I have not, but my hon. Friend probably reached that conclusion after the earlier statement made by the hon. Member for Leeds West, which was really miserable. That is Labour’s position: its Members hate the idea that we are doing this securely and safely. They say that they support it in principle, but attack everything to do with it and never miss a chance to tell everybody how terrible it is when, in actual fact, if they visited and talked to claimants rather than just dash out of the office, they would find that those who are on universal credit think it is the best thing that has happened and it is helping them enormously.

[Yvonne Fovargue (Makerfield) (Lab)]

The Secretary of State has said that 40,000 people have made a claim and 17,850 are in payment, which is less than 1% of the total number affected. In my area, which is a pilot area, local charities that operate food banks say that delays in processing are a significant reason for single people applying for their help. How will the Secretary of State ensure an improvement in processing time if he cannot even deal with 1% at the moment?

[Mr Duncan Smith]

Actually, the number of delays in processing has fallen since this Government came to office. There are now fewer cases of delayed payments. The universal credit process will ensure that even that is improved on, as the automatic payments work quite quickly. All of the centres already provide advice on debt management and any particular personal problems people may have. There are debt advisers available and we are also ready to provide advanced payments if people have such problems. That is all part of the services delivered locally through universal credit. If the hon. Lady wants to raise a particular problem, I would be very happy to deal with it, as would the jobcentre. Jobcentres are able to pay money early to people, and if the hon. Lady has a problem case they will certainly be able to help her.

[Chloe Smith (Norwich North) (Con)]

It was only on Saturday that a constituent of mine—a mother of four, including a disabled child—described to me her current restriction on taking a little paid work. She told me that universal credit would solve that. May I urge my right hon. Friend to proceed as quickly and as safely as possible; to let me and the House know how many households in the country and my constituency will benefit; and to do a good job for my constituents?

[Mr Duncan Smith]

I accept those blandishments from my hon. Friend. There are two very important issues to remember. Universal credit is not just about the IT system; more importantly, it is about the relationship between the claimant and the adviser. When someone claims a benefit under jobseeker’s allowance, after they take a job—a part-time job or whatever—they have to sign off, which means that they do not have any contact with the jobcentre until they fall out of that job and go back again. Under universal credit, they will not sign off. They will be able to afford to take a job with fewer hours, build up their hours, go back to see their adviser and take another job. In other words, the adviser will stay with them until they come off the benefits system. It is that dynamic that is changing the lives of so many claimants and I intend to extend that to all of them,

[Nia Griffith (Llanelli) (Lab)]

We all want to see work paying properly. The Secretary of State will be aware that the Joseph Rowntree Foundation has said that the taper is far too steep and that some families will lose significantly by going into work. In other words, they will get only a couple of pounds more working a full week than they would get if they were entirely on benefits. What is the Secretary of State doing to address that problem with universal credit so that that does not happen and that work will always pay?

[Mr Duncan Smith]

That is a really important question and I thank the hon. Lady for being positive. Two things should be understood about universal credit. First, in-work allowances, which are rather like tax allowances, allow different groups of people—such as those with disabilities and single parents—to earn a certain amount of money before the taper comes in. That gives them a real step up, which is why the bottom 40% with regard to income will benefit to a greater degree than anybody else.

Secondly, I am fully prepared to accept that there is a debate about the taper, but when any future Government budgets they will be able to say, “We want to lower the taper because we want people to be able to up their hours quicker.” Alternatively, if there is full employment, they may say that the taper is not so relevant. That is a debate for Governments. We have instituted a very simple process whereby Back Benchers and others can say whether they want a higher or a lower taper. We have set it at what we think we can afford, and that still makes it better for those claimants going into work. There will always be a debate, so the hon. Lady will be able to argue whether the taper should be raised or lowered.

[David Mowat (Warrington South) (Con)]

The Secretary of State must have been relieved to hear the Opposition reiterate their support for universal credit, even though they are concerned that it is being rolled out too slowly. Has he had a chance to review their four-point plan, which I presume is designed to address the issue? The first point is to stop the roll-out and lay-off about 1,000 people while Labour reviews the programme, and the second and third points are uncosted, significant scope increases, introduced at a late stage in the programme, which will almost certainly mean much higher costs.

[Mr Duncan Smith]

I think my hon. Friend has a point. The Opposition think that the programme is rolling out too slowly, so they want to roll it out even slower or stop it and not roll it out at all. They are caught in a classic Opposition trap—we have all been there; I spent some time in opposition—which is that they know that what the Government are doing is right, but they do not want to say so because that would make it look like they had nothing to say. Therefore, they are talking about little bits and pieces and nit picking, instead of saying that it is a good programme. When I was in opposition, if something was really good I used to say, “Let’s get behind it and support it, and we can deal with the detail later.”

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Is the Secretary of State’s failure on universal credit the reason that fraud and error are likely to increase by £700 million in his Department?

[Mr Duncan Smith]

Actually, we are working very hard to bring down fraud and error. Of course, universal credit will bring down fraud and error. That is one of the driving reasons that it is important to implement universal credit, which is why we are delivering it safely and securely. We all want fraud and error to come down. Of course, we always hear about the mix-up between error and fraud. There is a tendency to think that everyone is defrauding the system, but that is not the case; sometimes, official errors get into the system. Universal credit gets rid of that by simplifying the process, which should make it better. The hon. Gentleman is right to say that we have more to do on fraud and error. We need to keep bearing down on it, which is what any Government would want to do, and universal credit will help enormously.

[John Glen (Salisbury) (Con)]

The working-age welfare budget increased by 40% in real terms between 1996 and 2009, while long-term unemployment doubled. In 2009, a quarter of the unemployed had been on in-work benefits for nine of the previous 10 years. That was the legacy of the previous Government. What does the Secretary of State think the legacy of his Government’s careful roll-out of the very well organised and researched universal credit will be once his period in office ends a long time in the future?

[Mr Duncan Smith]

That is exactly the point. On the first part of my hon. Friend’s question, the Opposition are in a kind of amnesia: they seem to forget that they crashed the economy in the biggest disaster it has ever had, with a fall of some 7% in GDP, and that many people lost their jobs. We have managed to get more people back to work and now have more people in work than ever before, with unemployment falling dramatically, youth unemployment falling and even more people with disabilities now going back to work. As it is rolled out, universal credit will deliver even more to those people—a better income, better support and a much simpler process that they can understand, rather than the chaotic system of tax credits that we have at the moment.

[Mr Marcus Jones (Nuneaton) (Con)]

Universal credit is a life-changing and positive policy. May I urge my right hon. Friend to take his time and make sure that we get this right? The impact of getting it wrong, as with tax credits, would be a complete disaster for many of the families whom I represent, and I hope he will not want to go down the path trodden by the Labour party.

[Mr Duncan Smith]

My hon. Friend is right. I set out to change the roll-out plan because I felt that we would just replicate all the problems of previous roll-outs, in which people tried to rush against an artificial deadline and ended up with a big crisis because they had not thought things through properly. The process of testing, learning and implementing is the way that I believe future programmes should be rolled out. It may not be delivered in the fastest way, which is what people want, but it is about securing people’s lives and, to my mind, that is more important than meeting artificial deadlines.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I congratulate my right hon. Friend on his statement. My constituency has been included in the roll-out of universal credit so far, and I visited the jobcentre to see the progress that has been made. I met a team there, as well as employers and, most importantly, jobseekers, and the feedback was universally positive. They said, “Universal credit is simply making work pay.” That is why I welcome the roll-out, but may I specifically ask how universal credit will support child care?

[Mr Duncan Smith]

I have been to many such jobcentres. I was in Hammersmith last week, when I talked to a number of people who have claimed the benefit. They were very clear about the difference that being able to stay with an adviser in the jobcentre has made to their lives. All of them said that it had allowed them to develop, get on and get a better job as a result.

On the second part of my hon. Friend’s question, we have announced the child care package today. Basically, people will get child care support at 85% of the costs. The reality is that that will be for every hour that they are in work. Unlike with tax credits at the moment, whether they are doing five or 10 hours or 20 or 25 hours, they will get help with child care. That will be a huge help for those with caring responsibilities, particularly lone parents who have to get back to work as well as look after their household.

[Mr Peter Bone (Wellingborough) (Con)]

It is rare to have a Secretary of State who is so passionate about a subject, has so much ability and has so much determination to see something through; in fact, he stood up to the Prime Minister to keep himself in his Department. He has two very able Ministers to support him, the Minister for Employment and the Minister for Pensions—I hope that that does not embarrass the Liberal Democrat on the Front Bench—and there are two worthwhile Opposition shadows, the hon. Member for Leeds West (Rachel Reeves) and the right hon. Member for East Ham (Stephen Timms).

It must be a matter of congratulation for the Secretary of State that universal credit is working. The Opposition want it in as quickly as possible so that they can congratulate him, but I think that he is right to keep rolling it out. Is that not the way to handle future Government programmes?

[Mr Duncan Smith]

My hon. Friend will forgive me if I do not repeat to the Prime Minister the first part of his question. Certainly, the Prime Minister and I are in complete agreement on all these measures, and I am of course implementing only what he wishes to see. I want that point on the record, if possible. Yes, the key thing is that we are trying to deliver universal credit safely and securely. I am pleased that my hon. Friend, from his position, is so supportive.

[Mr Philip Hollobone (Kettering) (Con)]

Her Majesty’s Treasury and the Major Projects Authority must have been attracted by the potential for universal credit to cut administrative costs and reduce benefit fraud or they would not have signed off the programme. Surely one major feature of universal credit is that it makes work pay by giving people extra incentives to keep more of their income as they move into the world of work. What evidence can the Secretary of State point to of jobseekers who are already recipients of universal credit changing their job-search behaviour?

[Mr Duncan Smith]

Interestingly, my hon. Friend is right. The whole point is that there is a static effect, which we know will save money even without any dynamic effect. In other words, offsetting the savings we make from changing tax credits and so on against expenditure puts us in a net positive position.

We are already beginning to run trials on the dynamic effect. So far, people are going into work quicker, and they tend to stay in work longer. They are doing many more job searches than before, because it is easier to do them. That proves my point that most unemployed people want work desperately. They want to be helped to get work, and if we make the system easier, simpler and more accessible, they will do a lot themselves. What is essentially happening is that they have cottoned on to the usability of universal credit, and it is gratifying to see the way in which they are getting back to work quicker.

Parliamentary and Constitutional Reform

Tuesday 25th November 2014 Commons Chamber

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

15:16

[Andrew Rosindell (Romford) (Con)]

I beg to move,

That leave be given to bring in a Bill to reform the powers and structures of the United Kingdom Parliament and the devolved administrations so as to establish a new constitutional settlement for the United Kingdom of Great Britain and Northern Ireland to uphold equal democratic rights, historic identities, liberties and freedoms for the people of England, Scotland, Northern Ireland, Wales and for all British citizens; and for connected purposes.

The result of the Scottish referendum has opened the door to a much-needed debate on England’s constitutional status, but I believe that any new settlement must be in the interests not just of England, but of all the component parts of the United Kingdom and the wider British family. Today, we have a unique and exciting opportunity to be bold and imaginative in the evolution of our British constitution, putting our entire nation on a stronger footing.

The House of Commons is the British Parliament, elected by the British people, and has always included English, Scottish, Northern Irish and Welsh MPs, all of whom sit here as equals. Indeed, our constituents elect us to the House as equal Members of Parliament, with the right to speak, vote and participate on all issues, whichever corner of the Kingdom we may represent.

To change that principle by preventing MPs from one part of the Kingdom from speaking or voting on certain issues would, I fear, be a dangerous road to travel. I believe it would change the nature of this House for ever. With MPs no longer sitting here on an equal basis, I fear that the House of Commons might eventually be seen by those representing parts of the Kingdom that are excluded from certain business as no longer being a Parliament that truly represents the interests of the whole British nation and its peoples. My Bill seeks to ensure that for as long as England, Scotland, Northern Ireland and Wales remain part of the United Kingdom, their elected representatives will always be considered as equal in this Chamber. The House of Commons is not an English Parliament and must never become one.

I believe that the decision taken by the people of Scotland to remain within the United Kingdom was the right one, but many would of course have preferred Scotland to become an independent country, and they still do. The former First Minister of Scotland accepted the democratic verdict of the people, and he was right to do so, but it would be wrong to believe this issue has now been settled for good. On the contrary, there remains a constitutional imbalance in how the United Kingdom is governed, and it must now be our duty to devise a new constitutional settlement for all Britons.

My Bill would seek to create a new framework, evolving and enhancing the role of our UK Parliament, the Scottish Parliament, and the Northern Ireland and Welsh Assemblies, by creating a British-style federal model of Parliaments and Governments, similar to that which has worked successfully in Australia and Canada—nations with which we already have much in common, not least our constitutional monarchy. The Parliament of the Kingdom would retain overall British responsibilities, for example for defence, the armed forces, foreign affairs, international relations, national security, border control and immigration, management of our British currency, the pound sterling, and other clearly defined areas. A Parliament for England, alongside strengthened Parliaments for Scotland, Wales and Northern Ireland, would provide democratic self-government for all four countries, with autonomy and freedom over their own affairs, and the ability to uphold their own identities, traditions and laws, made by their own MPs in their own Parliaments.

For England I would not propose a separately elected set of English MPs. We do not need additional layers of politicians and vast costs, so English MPs would have a dual role as both British MPs sitting in the House of Commons, and English MPs sitting in the Chamber of an English Parliament. An English Chamber cannot be the one in which we sit today—these green Benches are British and must always remain so. An English Parliament would need its own home. The City of London would be my preference, but whatever the location, it must be one in which the people of England can take pride with their own symbols, English culture and traditions and the St George flag, just as the Scottish take pride in their Parliament, with Scottish symbols, culture, traditions and, of course, the flag of St Andrew—the saltire.

If further devolution in England is sought, it would be a matter for the English Parliament to decide on. It could perhaps be established or based on our traditional counties and great cities, which bring with them historical, social and geographic identities that are cherished by local people and have stood the test of time, rather than large artificial regions.

My Bill would establish a new settlement for the governance of the whole United Kingdom, with four equal countries and a consistent framework for our parliamentary democracy throughout the nation. We must also consider extending those democratic rights equally to the wider British family. Within a new federal structure, there would no longer be any reason not to invite equal representation from all British territories and dependencies. Why not also allow representation from British citizens overseas and armed forces stationed abroad, thus making it fully representative of all Britons?

My Bill is about strengthening the entire scope of our nation and its peoples in every corner of Her Majesty’s Britannic realm. If we are going to do this, let us do it properly and in the overall interests of the entire British family. As an English MP who represents an English constituency, I care deeply about England. Together with many Members from across the House, I believe that the time has come for England to find its voice, but to do so without full consideration of what the consequences might be for the rest of the Kingdom would be divisive and mistaken. My Bill allows for a genuine debate about how we as Britons can work to find a lasting constitutional settlement for our entire nation and all its component parts. With the support of Members from seven different political parties represented in the House of Commons, and from all four countries of which the United Kingdom is comprised, I hope that my Bill will provide a foundation for the next chapter in the evolution of our great British democracy, and I commend it to the House.

Question put and agreed to.

Ordered,

That Andrew Rosindell, Mr Frank Field, Kate Hoey, Mr Douglas Carswell, Greg Mulholland, Mr Elfyn Llwyd, Mr Angus Brendan MacNeil, Sir William Cash, Mr John Redwood, Jim Shannon, Martin Vickers, and Mr Graham Brady present the Bill.

Andrew Rosindell accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 23 January, and to be printed (Bill 125).

Pension Schemes Bill

Tuesday 25th November 2014 Commons Chamber

Consideration of Bill, as amended in the Public Bill Committee

New Clause 1

Policy about factors used to determine each benefit

“(1) Regulations may require the trustees or managers of a pension scheme—

(a) to have a policy as to the factors to be used to determine what proportion of the amount available for the provision of any collective benefits by the scheme is to be available for the provision of a particular collective benefit, and

(b) to follow that policy in calculating any collective benefit.

(2) The regulations may, in particular—

(a) require the trustees or managers to consult about the policy;

(b) make provision about the content of the policy;

(c) set out matters that the trustees or managers must take into account, or principles they must follow, in formulating the policy;

(d) make provision about reviewing and revising the policy.”—(Steve Webb.)

This amendment allows regulations to require trustees or managers to have a policy on the factors used to calculate members’ benefits and to follow it. The amendment also provides that regulations may make various provisions about the policy such as content and matters or principles that should be followed.

Brought up, and read the First time.

15:26

[The Minister for Pensions (Steve Webb)]

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:

Government new clause 2—Power to impose requirements about factors used to determine each benefit.

Government new clause 3—Power to impose requirements about dealing with a deficit or surplus.

Government new clause 4—Requirement to wind up scheme in specified circumstances.

Government new clause 5—Policies about winding up.

Government new clause 6—Working out which assets are available for the provision of which benefits.

Government amendments 2, 3, 5 to 23, 25, 31, 32, 38, 43, 47, 51 to 55.

[Steve Webb]

It is good to see a packed House for this vital pensions Bill. The amendments are in two groups that correspond broadly with the Bill’s two main themes—the new definitions of pension schemes and pension scheme benefits, and budget pensions flexibilities.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

May I invite the Minister to apologise to the Chamber? I estimate that on Report there are 33 new clauses, 62 amendments, and one new schedule. Does he think that is rather a lot for us to cope with?

[Steve Webb]

I am encouraged by the fact that the hon. Gentleman and his friends in opposition have not tabled a single amendment to the Bill. I am pleased that the Opposition thought the Bill was flawless, but the Government did not. In Committee I tried to flag up that additional amendments would be tabled on Report, and I wrote to all members of the Committee setting out what those would be. I will not speculate, but if we use all the time available this afternoon I will be surprised. I hope we have time to properly consider the amendments.

Let us consider the first group of amendments. There are quite a few—the hon. Gentleman makes a fair point—and I hope the House will bear with me while I put on the record what the purpose of them is. I am happy to provide any clarification that may be sought. The majority of the amendments and new clauses change parts 1 and 2 of the Bill in respect of the new pension categories and collective benefits. New clause 1 is minor and technical and relates to provisions on judicial pensions—I will return later to that point.

Changes to parts 1 and 2 of the Bill have been made following debates in the House and in response to points raised by one of the hon. Gentleman’s colleagues on Second Reading. We have continued to talk to what are known in the trade as “stakeholders”—people who care about this stuff—and they have provided us with further feedback. It therefore makes sense to try to amend the Bill while it is going through the House, rather than at a later stage. The changes are in two broad categories: the addition of two regulation-making powers relating to the new pension scheme category definitions in part 1, which will offer more clarity; and to provide more detail and additional regulation-making powers on certain aspects of collective benefits in part 2. They are designed to bolster member safeguards in relation to key activities in the scheme.

Part 1 of the Bill contains provisions for a new framework for categories of pension scheme. The categories are based on the experience of the member about what certainty they have, while they are saving, about their retirement benefit. The intention is to create recognition and to encourage innovation in the shared risk, or defined ambition, category. The three mutually exclusive categories are: defined benefits; shared risk, sometimes known as defined ambition; and defined contribution. The definitions describe certain features of schemes that determine which category they fall into. This framework operates at a scheme level, and as such does not affect the requirements on pension schemes in relation to matters such as scheme funding, which operate at a benefit level. It should be clear from the definitions where existing schemes fit within this framework. The definitions also allow for new scheme designs.

15:30

The amendments do not change any of this, but they provide for two regulation-making powers in response to technical feedback. I will explain those in more detail shortly, but I just flag to the House that one clarifies what

“at a time before the benefit comes into payment”

means in respect of certain schemes, a point raised on Second Reading. The second is to be able to ensure that, going forward, the definition of defined benefits scheme retains its intended meaning as explained in the House, and in various policy publications, namely that the member is not sharing risks, such as investment risk, in a defined benefits scheme.

Part 2 of the Bill introduces a new definition of collective benefits. This definition operates at a benefit level and does not have the same meaning as a shared risk scheme. Collective benefits do not create any additional liabilities for an employer above any pre-agreed level of contributions, and can provide for more stable outcomes for members compared to individual defined contributions schemes. To enable a new collective benefits pension design, part 2 defines the meaning of collective benefit and provides a number of regulation-making powers about key aspects of managing those schemes.

The amendments that I am moving today include powers to improve governance and transparency for members. They add to the powers in the Bill in relation to: enabling regulations to be made in respect of the matters to be taken into account, and the principles trustees and managers must include in the scheme policy, and follow, on key areas where policies are required; enabling regulations to require trustees or managers to act in a specific way in certain circumstances, for example, in relation to dealing with a deficit or surplus in respect of any collective benefits in particular circumstances; and making provision for regulations in respect of identifying collective assets in a scheme, winding up a scheme with collective benefits, calculating collective benefits and applying transfers calculation methods to pensions sharing on divorce. I hope that that high-level overview helps the House to understand the purpose of this group of new clauses and amendments. I will deal with them in turn.

New clauses 1 and 2 help to provide the necessary transparency about how members’ benefits will be calculated. They introduce a requirement for schemes to have a policy, which they will follow, about the factors used to determine each collective benefit. Regulations made under powers in new clause 1 may set out certain requirements about the policy, including in relation to content and matters that the trustees or managers must take into account when drawing up the policy. Regulations made under new clause 2 may impose requirements about factors used to determine each collective benefit.

New clause 3 and amendments 5, 6, 23 and 25 will ensure that schemes act appropriately to keep the scheme on target. In general, trustees and managers will have discretion about how they will respond to a deficit or surplus and will explain in their policy the actions they will take. Amendment 5 allows regulations to specify certain matters that trustees or managers must take into account when formulating that policy. However, there may be particular circumstances in which it would be appropriate for regulations to require that a deficit or surplus is dealt with in a particular way. New clause 3 provides a regulation-making power that will allow us to specify circumstances in which schemes must respond in a particular way to deviations from the required range, and amendment 6 is consequential to that. Amendments 23 and 25 simply insert definitions of “deficit” and “surplus” into the interpretation clause in part 2, and give them the same meanings as the definitions included in clause 19. The word “deficit” in clause 20 has its own, separate, definition.

On Government amendments 7 to 13, trustees and managers of schemes providing collective benefits need to have a policy on calculating cash equivalents, which should cover all circumstances where a cash equivalent might be required. Amendments 7 to 12 simply ensure that the policy deals with calculation of cash equivalents for the purpose of pension sharing on divorce and transfer of pension credit benefits arising from a pension share, as well as revising a cross-reference to the Pension Schemes Act 1993. The amendments also include a power to add, through regulations, further circumstances where a cash equivalent might be required. Amendment 13 allows regulations to set out matters to be taken into account, or principles to be followed in formulating that policy.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

I am beginning to see why my hon. Friend the Member for Edmonton (Mr Love) raised the question of the number of amendments and what they entail. I worry about how that will be interpreted by whoever happens to be a trustee of a pension fund. It will cost an inordinate amount of money, will it not?

[Steve Webb]

I am not sure that I follow the hon. Gentleman’s reasoning. The thing that would cost money would be poorly drafted, ambiguous legislation. What we are doing at the moment is listening and talking to people as the Bill goes through the House. We talk a lot to trustees, pensioners’ lawyers and pensions professionals, as well as to representative bodies of scheme members and so on, to ensure that we pick these things up in real time. I think the hon. Gentleman can take heart from the fact that, rather than stubbornly insisting that the first version of the Bill we published was immaculate, we are saying that we are creating new categories of pension scheme. There have to be rules on wind-ups, divorce and so on. Let us get them right now by further amendment, rather than by stubbornly insisting on our Bill and later discovering that we have a problem. I hope he will be reassured that that is what we are doing this afternoon.

Amendment 22 ensures that trustees or managers of schemes providing collective benefits can be required to seek actuarial advice before making any specified decisions or taking any other specified steps.

Government new clauses 4, 5 and 6, and amendments 14 to 21, all relate to the issue of winding-up schemes with collective benefits. This group of amendments is the result of continuing development of policy on creating the right legal framework for collective benefits. Winding up a pension scheme can be a difficult and complex process, and we need to ensure we have the necessary legislative framework in place. Collective benefits are different, so we need broad regulation-making powers to allow us to work with the pensions industry and others to get the detail right and to respond to developments.

This group of amendments covers: new clause 4, which provides for regulations to set out circumstances where a scheme, or part of a scheme, providing collective benefits must be wound up; and new clause 5, which requires trustees or managers to have and follow a policy about winding up a scheme that provides collective benefits. New clause 6, which is also part of this group, provides a power to make regulations setting out how to work out which assets are available for which benefits. This is not specific to winding up, as it may be used for other purposes as well. There are also a number of amendments that will ensure we can make regulations to ensure schemes providing collective benefits wind up effectively.

Amendments 14 to 17 provide for additional powers to enable regulations to make provision about the winding up of a pension scheme containing collective benefits and to make it clear how collective benefits will be treated when a scheme winds up. Amendments 18 and 19 ensure we can amend existing legislation that might need to change to cater for winding-up schemes providing collective benefits. Amendments 20 and 21 remove the limitation that changes to existing legislation relating to wind-up are only in relation to collective benefits.

Amendment 2 provides for regulations to specify additional requirements which must be met in order for a scheme to fall within the defined benefits scheme definition. Part 1 of the Bill contains provisions for three mutually exclusive categories of pension scheme, as I have mentioned. Government amendment 2 provides for regulations to specify additional requirements which must be met in order for a scheme to fall within the defined benefits scheme definition. It is appropriate for this to be dealt with by regulations and in consultation with the industry rather than on the face of the Bill, because this is about being able to respond to future scheme design and a theoretical risk. The regulations enable additional clarification to ensure policy intent is delivered in respect of future scheme design.

Amendment 2 has been made in response to discussions with industry and testing of the definitions, specifically in relation to theoretical and potential avoidance risks in new scheme designs, which would undermine the delivery of the policy intent for part 1. For example, we would not want a scheme that shared investment risk with the member to be categorised as a defined benefits scheme. Therefore, this regulation-making power provides that regulations can ensure that, as we intended, only schemes that provide members with certainty throughout the accumulation phase about the level of retirement income to be provided will fall within the defined benefits scheme definition.

We are confident that all existing scheme shapes we know about are covered by the definition of a defined benefits scheme in the Bill as it stands, but this does not preclude the possibility that a scheme might be designed in the future satisfying the requirements but also including an element of risk that could be passed on to members. We would not want such a scheme to be included in the defined benefits category. The power is therefore intended as a belt and braces measure to ensure that the policy intent behind the categorisation is not undermined. This is only about which category schemes will fall into; it is not to disallow or prevent forms of scheme design and has no effect on scheme funding commitments or member rights within a given scheme design.

Continuing my canter through this group, amendment 3 addresses the meaning of

“at a time before the benefit comes into payment”,

where a defined contributions scheme might find itself mis-categorised as a shared risk scheme. Clause 5 explains what is meant by the term “pensions promise”, including that it must be made at a time before the benefit comes into payment. Amendment 3, which amends clause 5, is in response to a point raised by the Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg), when referring on Second Reading to a document from the Law Society of Scotland. The query was about the precise meaning of references to “at a time” and the intended application and effect. Amendment 3 addresses that point by excluding certain promises from the definition of pensions promise—if they are made at a particular point in time and conditional on coming into payment by a particular date—and enables the Secretary of State to make regulations on this matter.

We want to capture promises made in relation to income or saving while the member is saving—that is broadly what clause 5 already does—but the amendment caters for defined contributions schemes that also provide an income stream in retirement. Technically, such schemes will need to discuss and make a commitment to the member about that retirement income before the first payment is made. The schemes will usually only make the promise in relation to income that may be derived from the final pot and only in the immediate run-up to the retirement date. This means, in effect, that it provides no more certainty to the member than other defined contributions schemes and so should fall within the defined contributions scheme definition. However, the phrase

“at a time before the benefit comes into payment”,

in the meaning of “pensions promise”, might mean that it would be defined as a shared risk scheme. The amendment and the regulation-making power therefore make an exception in relation to this type of promise and ensure that this type of scheme falls within the defined contributions scheme definition.

We are on the home straight, Madam Deputy Speaker. Clause 49 makes amendments to bring the Bill within the scope of existing references to “pensions legislation” in the Pensions Act 2004 for specific purposes. The purpose behind amendments 32 and 51 to 55 is to move the text of clause 49 into schedule 3. This is sensible because of structural changes made to the Bill as amended in Committee. Having made several structural changes to the Bill in Committee, it makes sense to move what are essentially consequential amendments out of part 6 and into schedule 3. We believe that these changes sit better in schedule 3, which deals with amendments to existing legislation related to parts 1 and 2.

Finally, on judicial pensions, we have a minor amendment required to ensure that fee-paid judges who are subsequently appointed to the salaried judiciary are extended the same transitional protection rights as members moving between existing public service pension schemes. The clause provides that service as a fee-paid judge prior to 1 April 2012 has the transitional protections derived from the Public Service Pensions Act 2013 and the Public Service Pensions Act (Northern Ireland) 2014 applied to it, if that judge subsequently moves to salaried office. Following the O’Brien and Miller judgments in respect of fee-paid pension entitlement, the Lord Chancellor is required to establish a fee-paid judicial pension scheme. In order to ensure no less favourable treatment in the provision of pensions for fee-paid judges, the intention is to provide for transitional protection to apply to members of the fee-paid scheme. Transitional protections are a feature of both the 2013 Act and the 2014 Act. Regulations establishing new public service pension schemes may provide for transitional protection, extending the availability of pension benefits for certain members under existing schemes beyond 31 March 2015.

[Sir Greg Knight (East Yorkshire) (Con)]

Before the Minister sits down, will he tell the House whether steps are being taken within his Department to reduce the number of Government amendments introduced during the passage of future Bills?

[Steve Webb]

I am grateful to my right hon. Friend. The Bill was originally much shorter and obtaining the approval of, originally, the Government to bring it forward took place before the Budget. Therefore, the Budget measures, which both sides of the House welcomed, required substantial additional legislation. The entire second group of amendments relates to measures that were not envisaged when the Bill was published but which implement Budget measures. In other circumstances, there would have been a separate Bill but as we are in the final Session of a Parliament, everything has been on an accelerated timetable.

I can reassure my right hon. Friend that although these amendments have been tabled at a relatively late stage, they reflect extensive consultation over a period of years. The world that will have to deliver these things, as it were, has been extensively involved. In most cases, they are not new policies but are simply technical changes to implement a policy intent that has been well known for some time. But I entirely accept my right hon. Friend’s point; it would be better if these things were brought forward earlier. That is absolutely my view.

I commend to the House the new clauses and amendments. Throughout the Bill we have sought to try to alert members of the Public Bill Committee ahead of time when we knew that we had to table amendments on Report. I hope that the House will agree that the Bill is made much better by these new clauses and amendments, which I commend to the House.

15:45

[Stephen Timms (East Ham) (Lab)]

Given the current cost of living crisis, it is certainly the case that people struggling to set aside money for the future need access to pension schemes that they can trust to give good value for money and to provide them with a decent income in retirement. We welcome the improved opportunities that we hope the Bill will provide, as we have throughout the debates on the Bill.

A lot of important detail is still to come; this is an enabling Bill. However, as interventions from my hon. Friends the Members for Edmonton (Mr. Love) and for Central Ayrshire (Mr Donohoe) and from the right hon. Member for East Yorkshire (Sir Greg Knight) have pointed out, it is pretty extraordinary and very unsatisfactory that in an important Bill, which has in total 55 clauses, we should at this very late stage be debating 33 Government new clauses and 72 new Government amendments.

The Minister knows very well that this is not a field in which haste is fruitful. He attempted in his response to one intervention to make a virtue of the fact that he was “picking these things up in real time.” What he actually means is “making it up on the hoof.” I do not think that is a good way to legislate on pensions. The scope for mistakes in drafting very technical measures such as these is too great.

The point of having proper parliamentary scrutiny is to spot problems early and to allow for them to be corrected. As it is, there will, of course, be many mistakes in the 70 pages, or whatever, of new material in front of the House for our brief debate this afternoon. We can only hope that Members in the other place will spot them and be able to put them right, but things are bound to go wrong. Having said that, I think that the risks are significantly less in this group of amendments than they are in the next, on which I will have more to say. However, it is troubling that there is so much new and technical material here.

I wanted to ask about one particular point. As the Minister has said, the new clauses are imposing new obligations on scheme trustees. As I understand it—I may be mistaken; if I am, I know that the Minister will correct me—the Government have not provided an estimate of the cost of meeting those obligations for scheme trustees. I wonder why not; normally, I would have expected there to be an impact assessment with an estimate. Will the Minister comment, first, on whether I am right—that there is no estimate or at least none has been published so far—and, if so, the reason for that?

Will the Minister set out his intentions over the numerous sets of regulations that are envisaged? Is he able to tell us at this stage which of those sets of regulations are going to be subject to the affirmative as opposed to the negative procedure, so that we can be assured of future debate about those more detailed provisions when they become available?

[Crispin Blunt (Reigate) (Con)]

I have listened to the right hon. Gentleman’s critique of all the new clauses coming forward at this time, but he will have had them at least for some time and the resources of the Opposition have been available to him. I have tabled the only non-Government amendment this afternoon. The right hon. Gentleman is a replacement—a senior one—for the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont). Is he able to say whether the Opposition are going to table further amendments in the other place?

[Stephen Timms]

As the hon. Gentleman is well aware, we have not tabled amendments on Report. Of course, we debated in Committee three Opposition amendments, but we were sadly unsuccessful. I am delighted that the hon. Gentleman has tabled an amendment, which will provide us with a little relief when we get to the second group; at least it will not be entirely Government material on the amendment paper. I commend the hon. Gentleman for his amendment, and he is right that the Opposition have not tabled amendments today.

[Steve Webb]

I shall not detain the House for long, but the right hon. Member for East Ham (Stephen Timms) asked a couple of specific questions. The impact of regulations brought in under the primary Bill in front of us would depend on what they can contain. We cannot do an impact assessment because we have not yet written the regulations. Generally when we produce regulations and they have a cost on business, there is an impact assessment to go with them. I hope that explains why we have not published an assessment at this stage.

On the timing, our broad goal is to have all this in place by April 2016. The right hon. Gentleman will know that a very significant change in April 2016 will be the end of contracting out, so defined benefit pension schemes will be considering what they do in response to that. In particular, if a shared risk scheme or something of that sort is envisaged, there clearly needs to be a legislative framework by around that time—not right on the day, but about that time. That is our goal and the rough timetable that applies.

The right hon. Gentleman asked about the negative and affirmative resolutions. The collective and shared risk regulations are generally subject to the negative procedure. He will see that clause 41 deals more generally with regulation-making powers and considers when they should be negative and when affirmative. In general, as I say, most of these are relatively technical regulations, so the negative procedure applies. I hope that is helpful. I commend the new clause to the House.

Question put and agreed to.

New clause 1 accordingly read a Second time, and added to the Bill.

New Clause 2

Power to impose requirements about factors used to determine each benefit

Regulations may make provision as to the factors to be used to determine what proportion of the amount available for the provision of any collective benefits by a pension scheme is to be available for the provision of a particular collective benefit.—(Steve Webb.)

This amendment allows regulations to set out the factors that must be used to calculate members’ benefits.

Brought up, read the First and Second time, and added to the Bill.

New Clause 3

Power to impose requirements about dealing with a deficit or surplus

(1) Regulations may specify circumstances in which a deficit or surplus in respect of any collective benefits that may be provided by a pension scheme must be dealt with in a particular way.

(2) The regulations may, in particular, specify steps that must be taken by the trustees or managers and the period or periods within which any steps must be taken.—(Steve Webb.)

The amendment allows regulations to set out how a deficit or surplus must be dealt with in specific circumstances, the steps trustees or managers may be required to take and the time period within which those steps must be taken.

Brought up, read the First and Second time, and added to the Bill.

New Clause 4

Requirement to wind up scheme in specified circumstances

(1) Regulations may require the trustees or managers of a pension scheme under which collective benefits may be provided to wind up the whole or part of the scheme in specified circumstances.

(2) The regulations may, in particular—

(a) provide for the winding up of the scheme or part to be as effective in law as if it had been made under powers conferred by or under the scheme;

(b) require the scheme or part to be wound up in spite of any legislative provision or rule of law, or any scheme rule, which would otherwise operate to prevent the winding up;

(c) require the scheme or part to be wound up without regard to any legislative provision, rule of law or scheme rule that would otherwise require, or might otherwise be taken to require, the implementation of any procedure or the obtaining of any consent with a view to the winding up.”—(Steve Webb.)

This allows regulations to require the trustees or managers of a pension scheme under which collective benefits may be provided to wind up the scheme or part of it in circumstances specified in the regulations.

Brought up, read the First and Second time, and added to the Bill.

New Clause 5

Policies about winding up

(1) Regulations may require the trustees or managers of a pension scheme under which collective benefits may be provided—

(a) to have a policy about the winding up of the scheme or part of it;

(b) to follow that policy.

(2) The regulations may, in particular—

(a) require the trustees or managers to consult about the policy;

(b) make provision about the content of the policy;

(c) set out matters that the trustees or managers must take into account, or principles they must follow, in formulating the policy;

(d) make provision about reviewing and revising the policy.

(3) The regulations may, in particular, require the policy—

(a) to contain an explanation of the circumstances in which the trustees or managers are permitted or required to wind up the scheme or part and any requirements about the distribution of assets (including any order of priority);

(b) to contain an explanation of how the trustees or managers intend to use any powers to wind up the scheme or part and how they intend to use any powers in relation to the distribution of assets (including any order of priority);

(c) to contain an explanation of how the costs of winding up are required to be met or how the trustees or managers will use any powers to decide how those costs are to be met.—(Steve Webb.)

This allows regulations to be made requiring the trustees or managers of a pension scheme under which collective benefits may be provided to have a policy about winding up.

Brought up, read the First and Second time, and added to the Bill.

New Clause 6

Working out which assets are available for the provision of which benefits

Regulations may make provision, in relation to a scheme under which any of the benefits that may be provided are collective benefits, about how to work out—

(a) which assets held by the scheme are held for the purposes of providing collective benefits;

(b) which assets held by the scheme are held for the purposes of providing which collective benefits;

(c) which assets held by the scheme are held for the purposes of providing any benefits other than collective benefits.—(Steve Webb.)

This regulation making power will allow provision to be made about how to work out which assets are held for the purposes of providing which benefits.

Brought up, read the First and Second time, and added to the Bill.

New Clause 7

Independent advice in respect of conversions and transfers: Great Britain

(1) Where a member of a pension scheme has subsisting rights in respect of any safeguarded benefits, or a survivor of a member has subsisting rights in respect of any safeguarded benefits, the trustees or managers must check that the member or survivor has received appropriate independent advice before—

(a) converting any of the benefits into different benefits that are flexible benefits under the scheme;

(b) making a transfer payment in respect of any of the benefits with a view to acquiring

flexible benefits for the member or survivor under another pension scheme.

(2) The Secretary of State may by regulations make provision about—

(a) what the trustees or managers must do to check that a member or survivor has received

appropriate independent advice for the purposes of subsection (1), and

(b) when the check must be carried out for the purposes of that subsection.

(3) The Secretary of State may by regulations create exceptions to subsection (1).

(4) In subsection (1)(b) the reference to another pension scheme includes a scheme established in a country or territory outside Great Britain.

(5) Where the trustees or managers fail to carry out a check required by this section, section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who failed to take reasonable steps to ensure that the check was carried out.

(6) Failure to carry out a check required by this section does not affect the validity of any transaction.

(7) In this section—

“appropriate independent advice” has the meaning given by regulations made by the Secretary of State;

“safeguarded benefits” means any benefits other than—

(a) money purchase benefits, and

(b) cash balance benefits.”—(Steve Webb.)

This provides that before trustees or managers of a pension scheme (in Great Britain) in which a person has safeguarded benefits convert them into flexible benefits, or make a transfer to another scheme to acquire flexible benefits, they must check that the person has received appropriate independent advice.

Brought up, and read the First time.

[Steve Webb]

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:

Government new clause 8—Power to require employer to arrange advice for purposes of section (Independent advice in respect of conversions and transfers: Great Britain).

Government new clause 9—Independent advice: consequential amendments—Great Britain.

Government new clause 10—Independent advice in respect of conversions and transfers: Northern Ireland.

Government new clause 11—Power to require employer to arrange advice for purposes of section (Independent advice in respect of conversions and transfers: Northern Ireland).

Government new clause 12—Independent advice: consequential amendments—Northern Ireland.

Government new clause 13—Independent advice: income tax exemption.

Government new clause 14—Sums or assets that may be designated as available for drawdown: Great Britain.

Government new clause 15—Provision about conversion of certain benefits for drawdown: Great Britain.

Government new clause 16—Provision about calculation of lump sums: Great Britain.

Government new clause 17—Restrictions on conversion of benefits during winding up etc: Great Britain.

Government new clause 18—Restriction on payment of lump sums during PPF assessment period: Great Britain.

Government new clause 19—Sums or assets that may be designated as available for drawdown: Northern Ireland.

Government new clause 20—Provision about conversion of certain benefits for drawdown: Northern Ireland.

Government new clause 21—Provision about calculation of lump sums: Northern Ireland.

Government new clause 22—Restrictions on conversion of benefits during winding up etc: Northern Ireland.

Government new clause 23—Restriction on payment of lump sums during PPF assessment period: Northern Ireland.

Government new clause 24—Rights to transfer benefits.

Government new clause 25—Restriction on transfers out of public service defined benefits schemes: Great Britain.

Government new clause 26—Reduction of cash equivalents: funded public service defined benefits schemes: Great Britain.

Government new clause 27—Public service defined benefits schemes: consequential amendments: Great Britain.

Government new clause 28—Restriction on transfers out of public service defined benefits schemes: Northern Ireland.

Government new clause 29—Reduction of cash equivalents: funded public service defined benefits schemes: Northern Ireland.

Government new clause 30—Public service defined benefits schemes: consequential amendments: Northern Ireland.

Government new clause 31—Meaning of “flexible benefit”.

Government new clause 32—Meaning of “cash balance benefit”.

Government new clause 33—Interpretation of Part 4.

Government amendments 4, 24, 26 to 30, 33, 34 to 37, 39 to 42, 44 to 46, 48.

Government new schedule 1—Rights to transfer benefits.

Government amendments 49, 50, 56 to 72.

Amendment 73, page 46, line 25, in schedule 4, at end insert—

‘(1A) Individuals delivering the pensions guidance must ask those receiving the guidance about other potential sources of retirement income in addition to defined contribution pension schemes; this must include an assessment of assets such as housing wealth, savings and investments.”

Government amendment 1.

[Steve Webb]

I am not sure whether the House will be thrilled to know that I have a slightly fuller note on this second group of new clauses and amendments. They are clearly very important, because they relate to the 2014 Budget freedoms that have been so widely welcomed in the House—and, particularly, outside it.

In the 2014 Budget statement, the Government announced that individuals with defined contribution pensions would be able to access their entire pensions flexibly from April 2015 if they wished to do so. This is the most radical reform of how people access their pensions for almost a century, and it returns choice to individuals by trusting them with their own finances. The Government believe that people should be free to make their own choices about how to use their savings, and our reform will give the 320,000 individuals who retire with defined contribution pension wealth every year choice as to how to access those savings.

We have committed ourselves to supporting the pension flexibilities through free, impartial guidance to help people to make informed and confident decisions about how to use their defined contribution pension savings in retirement. The new clauses and amendments cover a number of topics relating to the new flexibilities, and we notified members of the Public Bill Committee that they would be forthcoming. They include new clauses that provide safeguards for individuals who want to transfer to pension schemes to which the flexibilities apply; restrictions on transfers from public service pension schemes; a number of changes to pensions legislation to ensure that the flexibilities work as they are intended to; and further amendments relating to guidance to ensure that the arrangements run smoothly.

[Richard Graham (Gloucester) (Con)]

Will “appropriate independent advice” include consideration of financial assets other than defined contribution pensions? Does the Minister expect the Financial Conduct Authority to clarify in due course what constitutes “appropriate independent advice”?

[Steve Webb]

The issue that my hon. Friend has raised is covered by amendment 73, tabled by our hon. Friend the Member for Reigate (Crispin Blunt). If the House will allow me, I intend to allow our hon. Friend and others to make their points and then to respond to them, rather than trying to pre-empt that debate now. However, the FCA will indeed have more to say on these matters in due course.

New clauses 7 to 12 and new clause 13 create a safeguard to ensure that those who transfer from defined benefit to defined contribution schemes have received appropriate independent advice before doing so. That is important, because continuing membership of a DB scheme is likely to remain most people’s best option. However, the Government recognise that the attractiveness of transferring from DB to DC may increase for a limited number of people as a result of the reforms to DC savings.

New clause 7 creates a requirement for trustees and managers of a scheme to check that a member has received appropriate independent advice before converting a “safeguarded benefit” to a “flexible benefit”, or making a transfer payment in respect of safeguarded benefits to a scheme in which the member will acquire flexible benefits. In this context, the term “member” extends to any current or former employee, and any survivor of a member with subsisting rights to “safeguarded benefits”.

Subsection (2) enables the Secretary of State to set out in regulations the exact details of the regime that trustees or managers must abide by in checking that advice has been taken. Subsection (3) allows the Secretary of State to make regulations to allow exceptions to be made to the advice requirement, which will allow us, for example, to exempt those with a small amount of defined benefit wealth from the requirement to take advice. That approach was set out in the Government’s response to the consultation on freedom and choice in pensions, which was published in July this year.

Subsection (6) establishes that should a trustee or scheme manager fail to carry out a check, the scheme member will not be disadvantaged if the conversion or transfer of his or her benefits is ruled invalid. To ensure that trustees and scheme members carry out the required check, subsection (5) provides for certain civil penalties already used in the regulation of pensions to apply.

New clause 8 enables the Secretary of State to make regulations that set out the circumstances in which employers must pay for advice that is required by the advice safeguard. As we say in our response, we intend these circumstances to be, first, when a transfer is as a result of an employer-led transfer exercise, and secondly when a transfer is between DB and DC sections within the same scheme.

Subsection (2) allows the Secretary of State to ensure that the arrangement is fair for the employer by making regulations that can cap the amount that the employer must pay for advice on behalf of the member. It also allows the Secretary of State to take fairness to the member into account by making regulations preventing employers from attempting to pass the costs of advice back to members. Subsection (3) enables the Secretary of State to make regulations ensuring that employers will have to pay for the advice of former employees who continue to hold accrued DB rights in the employer’s scheme, as well as current employees.

New clause 9 is consequential to new clause 7. It ensures that trustees or scheme managers are not penalised for failing to comply with the provisions in new clause 7 for reasons outside their control—for example, when a check has been carried out, but it has not been possible to establish whether the member received appropriate independent advice. New clauses 10, 11 and 12 and amendments 82, 83 and 84 make provision parallel to that in clauses 7, 8 and 9 for Northern Ireland.

16:00

New clause 13 introduces a specific exemption for income tax purposes that ensures that, where advice provided under new clause 7 is paid for or reimbursed by the employer under new clause 8, it does not count as a benefit in kind or employment earnings and therefore does not become taxable as employment income. There will also be a corresponding disregard for national insurance purposes.

We are introducing the exemption to prevent increased administrative burdens on participating employers in having to report the value to Her Majesty’s Revenue and Customs, and to prevent any liability to income tax for individual employees or their employers resulting from provision of the advice, which the Government are mandating. The amendment therefore introduces a new section into the Income Tax (Earnings and Pensions) Act 2003 which sets out the broad scope of the exemption. The detailed rules will be set out in regulations and the amendment also provides the power to achieve that.

To ensure that the exemption works as intended, the income tax exemption will not be valid if the employer-funded financial advice is provided as part of a salary sacrifice arrangement, in which an employee gives up a portion of their salary in exchange for a non-cash benefit from the employer. A further minor and technical amendment proceeds from that. Amendment 40 ensures that provisions are extended to Northern Ireland, while amendment 42 ensures that the change to the Income Tax (Earnings and Pensions) Act, among others, comes into force on Royal Assent.

After careful consideration and consultation, the Government decided to allow transfers from private sector DB to DC schemes to continue. For the majority of people, it will remain in their best interests to stay in their DB scheme. However, for some it may be better for their personal circumstances to transfer and access their funds flexibly. The principle underlying the Government’s reforms is that it is the individual who is best placed to make that judgment, not the Government. However, the amendments introduce an important safeguard, which will ensure that individuals are fully informed when they come to make decisions about their pension saving.

[Mr Love]

The Minister rightly talks about the safeguards introduced for people who want to transfer from DB to DC schemes, yet he does not think there is a need for a safeguard for people who do not access the guidance guarantee. Should not there be some safeguard for them, because they could lose substantially as people transferring schemes?

[Steve Webb]

The hon. Gentleman raises an important point. Our first strategy is to ensure that the guidance guarantee is accessed by as many people as possible. We are placing a legal duty on schemes and providers to flag up the guidance guarantee to people, both in wake-up packs and when people approach schemes to access their money.

The hon. Gentleman raises the issue of people who do not access the guidance—and indeed those who do, come to think of it, although particularly those who do not. The FCA will have more to say on the requirements on schemes and providers when people approach them having not accessed the guidance. There is already a general duty on providers to “treat customers fairly”, but the FCA will have more to say on whether that safeguard goes far enough, or whether further safeguards are necessary. I am grateful to the hon. Gentleman for raising that point.

As well as the changes in relation to transfers from unfunded public sector schemes and transfers of defined benefit rights, which I will deal with in a moment, new clause 24 and its accompanying schedule amend the existing transfer rights in the Pensions Schemes Act 1993 to ensure that the new flexibilities operate as intended. We will do that by extending the current transfer rights for those with “flexible benefits” up to and beyond their schemes’ normal retirement age, and applying statutory transfer rights at benefit categories, rather than at scheme level. Amending the transfer rules will ensure that individuals with uncrystallised flexible benefits will have the option to transfer their rights to another pension scheme.

Those amendments will also give individuals greater flexibility by giving members a statutory right to transfer at benefit category level, rather than at scheme level. Where an individual has more than one category of benefits under a scheme, they will now have an option to transfer out of a particular category of benefit, or their entire pot if they wish to, provided they have ceased to accrue rights in that particular category of benefit. Amendments 28, 49 and 50 make minor consequential change in respect of new clause 24 and new schedule 1.

New clauses 25 to 30 and Government amendment 29 address the implications of the new flexibilities for public service pension schemes. Regarding new clause 25 and, for Northern Ireland, new clause 28, following further policy development, that clarifies that the ban on transfers is limited to transfers from unfunded defined benefit public service pension schemes to schemes from which flexible benefits can be obtained. Further, the amendment ensures that the changes are delivered in the Pension Schemes Act 1993, rather than in regulations made by HM Treasury.

Additionally, new clause 26—new clause 29 for Northern Ireland—implements a safeguard for transfers out of funded public service pension schemes that is similar to that available in the private sector for reducing transfer values in specific circumstances.

New clause 25 restricts the right under the Pension Schemes Act 1993 to transfer from one pension scheme to another, so as to prevent a member of an unfunded public service defined benefit scheme from using that right to transfer to another pension scheme in which they can obtain flexible benefits. New clause 28 does the same for Northern Ireland. The new clauses also allow the Treasury—and in Northern Ireland, the Department of Finance and Personnel—to make regulations providing for exceptions to the transfer ban.

New clause 26 introduces a new safeguard that gives Ministers a power to designate a funded defined benefit public service pension scheme and in that way require the reduction of cash equivalent transfer values in respect of transfers from that scheme to pension schemes from which flexible benefits can be obtained. New clause 29 does the same for Northern Ireland. The use of the power will be restricted to cases in which the relevant Minister considers that transfers, either singly or in combination with other factors, increase the risk or amount of taxpayer intervention in the scheme.

The new clauses provide a power which, when used, will require the reduction of transfer values in respect of transfers requested after a scheme is designated, and completed before the scheme is no longer designated. The new clauses time-limit the use of the power and place an obligation on the scheme trustees or managers to alert the relevant Minister should they believe either that the power needs to be used or that, having been used, it is no longer needed.

We intend that the level of the reduction to be applied should be set out in regulations made by the Treasury, and new clause 26 also provides regulation-making powers for the Treasury to determine the amount of the reduction that should be made when a pension scheme is designated. Additionally, in the case of certain Scottish schemes, the power to designate a scheme is to be conferred on Scottish Ministers. New clause 29 makes parallel provision for Northern Ireland. In respect of parliamentary and ministerial schemes in England, Scotland and Northern Ireland, the new clauses give that power to the relevant trustees or scheme managers. Finally—that is an interim “finally”, not a final “finally”, by the way—new clauses 27 and 30 make amendments to pensions legislation that are consequential to new clauses 25, 26, 28 and 29.

I should like to explain the thinking behind these measures, Currently, only a small number of transfers take place out of the public service pension schemes to defined contribution schemes, but the introduction of the flexibilities might make transfers out to defined contribution schemes more attractive for some. In unfunded public service pension schemes, there is no fund of assets with which to finance transfer payments. Instead, they are funded from contributions and through general Government expenditure. So for every extra pound paid out in transfers, the Government will have a pound less to spend that year on public services. We have estimated that if 1% of all public service workers reaching retirement took their benefits flexibly, it would cost the taxpayer £200 million a year, and we do not think it fair to ask the taxpayer to meet those up-front costs.

Unlike with unfunded schemes, there is a pool of assets to support the payment of pensions in funded public service pension schemes, which can be used to meet the immediate cost of transfers out. Our expectation therefore is that, in the vast majority of cases, allowing greater flexibility in the funded public service pension schemes will not impact on public finances. However, it would be inappropriate for the Government to provide these freedoms to members of public service pension schemes and provide no back-stop protection to taxpayers, should transfers—either singly or in combination with other factors—contribute to a scheme needing support from local or national taxpayers to meet the cost of its liabilities. This is aligned with the position the Government have taken on the unfunded pension schemes, in which we have taken the decision to ban such transfers in the light of the cost risk to the Exchequer, and ultimately the taxpayer. Should a situation arise in which there is a risk to the taxpayer, this new safeguard will give Ministers and scheme managers the appropriate tools to address it.

The Government intend to legislate for some limited exceptions to this ban, and these provisions give the Treasury powers to make regulations providing exceptions to the transfer ban. It is intended that the Treasury will prescribe certain limited circumstances in which a transfer will be permitted. We will announce further details in due course, but we are considering options such as some specific circumstances under Fair Deal. Amendment 29 removes clause 36 and, as discussed earlier, new clause 25 is the replacement provision.

Moving on to the treatment of draw-down and to the Pension Protection Fund assessment, which are covered by new clauses 14 to 23, we are introducing changes to allow occupational pension schemes to offer the new forms of access to pension saving being created by the Taxation of Pensions Bill. In future, schemes will be able to offer more options for decumulation, including draw-down pensions and lump sums. Schemes will be able to offer options to allow all or part of money purchase funds, as defined under tax legislation, to be designated for draw-down after the minimum age—generally 55—is reached. They will also be able of offer members the option to take one or more lump sums from their money purchase funds after the minimum age has been reached.

We are making changes to pensions legislation to allow occupational pension schemes to offer flexibilities to members, and to ensure that the flexibilities operate as intended in relation to cash balance benefits when schemes wind up or enter the Pension Protection Fund assessment period. Cash balance benefits involve guarantees about the amount of a member’s accrued fund and cannot easily be designated for the payment of draw-down. For draw-down funds to operate as intended, cash balance benefits need to be turned into money purchase benefits before designated as “draw-down”. New clause 14 limits draw-down to money purchase benefits.

In addition, the Government will bring forward regulations to allow modification of scheme rules to convert cash balance benefits into money purchase benefits, where the member wants to exercise draw-down. Schemes will need to convert cash balance benefits into money purchase benefits, and new clauses 15 and 16 contain regulation- making powers for this conversion process. They are fall-back powers, as no scheme is currently offering the extended forms of access and we have no evidence of how such conversions might be undertaken. If there is evidence that schemes are not offering fair value for cash balance benefits in conversion or as a lump sum, we will bring forward regulations to impose requirements.

If an occupational pension scheme is underfunded at wind-up, assets relating to non-money purchase benefits shall be distributed according to a specified priority order. Members therefore see a reduction in their benefits in accordance with that priority order. New clause 17 contains provisions about the conversion of benefits during wind up. We want to prevent some members from avoiding any reduction to Pension Protection Fund levels of compensation. Therefore, we want to prevent members from converting non-money purchase benefits to money purchase after a scheme begins to wind up. If we did not do that, there would be a risk that benefits converted to money purchase would be discharged in full, to the potential detriment of other members.

If schemes offer the new decumulation options, we need to set out how rights under the scheme are treated if the scheme enters the PPF. Our provisions restrict what can be done with non-money purchase benefits when a scheme is in a PPF assessment period. New clause 17 prevents the conversion or replacement of non-money purchase benefits with money purchase benefits. New clause 18 restricts the payment of lump sums to those that would be payable if the scheme transferred into the PPF. Crucially, a scheme needs to be in as steady a state as possible while it is assessed for transfer into the PPF, so that its overall financial position can be determined. In addition, if members were able to transfer or discharge their benefits, this would delay the process and deplete the assets available to be transferred with which to pay compensation to other members. There are no restrictions on the payment, transfer or discharge of money purchase benefits. New clauses 19 and 23 replicate these provisions for Northern Ireland.

In new clauses 31 and 33, we introduce several definitional terms that will apply to a number of areas we are amending under part 4 of the Bill. New clause 31 introduces the definition of a “flexible benefit”, which will determine whether the requirements relating to independent advice, draw-down, treatment of lump sums and transfers will apply to that form of benefit or not. New clause 32 contains definitions of “cash balance benefits”. which are a form of benefit that will fall within the scope of flexible benefits. Those definitions seek to ensure that where a member’s pension saving results in a cash amount, as opposed to an income amount, they are able to access those benefits flexibly. The definition of “flexible benefit” is intended to include all those benefit categories that fall within the scope of the flexibilities introduced by the Taxation of Pensions Bill. The definition includes money purchase benefits, cash balance benefits and a residual category of benefits which are neither money purchase nor cash balance benefits for the purposes of pensions legislation, other than the provisions relating to pensions in the Finance Act 2004. This residual category may include a benefit structure which provides a sum of money at the member’s retirement date but is also subject to an additional guarantee, such as the option of a guaranteed annuity rate offered before the member becomes entitled to receive their pension. New clause 33 also defines a range of terms to ensure that the flexibilities apply to the right individuals, both members and those who may be entitled to survivor rights, as well as at the right points in time.

Government amendments 56 to 72 relate to the smooth running of the pensions guidance service and ensure that the legislative framework works as it should. They fall into three groups, the first of which comprises those aligning definitions with the ones used in the rest of the Bill. The second group comprises those ensuring that those delivering guidance work together effectively and share information. The third group comprises the consequential amendments. I outlined earlier the new definition of “flexible benefits”, which is used in this Bill to refer to money purchase or defined contribution schemes. Amendments 56 and 57 introduce the language of flexible benefits into the high-level definition of pensions guidance. Amendments 30, 58, 67, 68, 69 and 72 are necessary as a consequence of these definitional changes.

On information sharing, amendment 60 inserts new section 333EA in new part 20A of the Financial Services and Markets Act 2000. Subsection (1) provides for a duty on designated guidance providers and the Treasury to co-operate in the giving of pensions guidance. Subsection (2) provides for a gateway to share information. Ensuring that delivery partners and the Treasury are under an obligation to work together and, importantly, that they may share information with each other, subject to the usual data protection requirements, is important. It ensures a well-integrated and well-functioning guidance service; allows delivery partners to learn from each other and for evaluation of the overall service; and, finally and most importantly, facilitates a smooth journey for consumers through the service. The remaining provisions in this group make minor or consequential changes, principally to ensure that the guidance framework slots into the Financial Services and Markets Act 2000. They include amendments 61 and 63.

16:15

Finally, there are a series of “back of the Bill” amendments: on powers to make consequential amendments; on regulations; on crown application; on extent; on commencement and on the long title of the Bill. Just to be clear, I am referring to amendments 4, 24, 26, 27, 33 to 37, 39 to 42, 44 to 46, 48 and 1.

[Mr Love]

I apologise to the Minister for asking this now. He was going at such a pace that I did not catch up with him until he had moved on to a separate set of amendments. I want to press him on the guidance amendments. Will guidance be rationed to a once-only offer, or will the Financial Conduct Authority introduce some flexibility in that regard?

[Steve Webb]

Obviously, that issue is not spelled out in the Bill, but it is important none the less. What we envisage is that people will contact the guidance service, which by then will have a brand, an identity, a phone number and all the rest of it, and will make an appointment if they want face-to-face or telephone-based guidance. Obviously, they can access the website as many times as they like, but if they wish to have face-to-face or telephone-based guidance, it will be at a set time on a set date. There will be a period between the initial contact and the guidance appointment for the gathering of information to make the session more useful. Coming out of that session will be documentation and signposting for further sources of information, guidance and, if they wish, regulated financial advice.

Clearly, we want everybody to be able to access the guidance, so the core model is that a person does that once. But the Pensions Advisory Service has a business as usual role anyway and it is inconceivable that, even if a person has had their formal guidance session with the service and then rang it up the next day with a question, it would put the phone down on them; of course it would not, so there would be flexibility. Clearly, we need to think further on that. We need to reflect on the fact that if someone has a guidance session and then has additional needs, is a formal second guidance session appropriate or necessary or are there other ways of dealing with those needs? The core model is one session, but other resources, such as signposting, are available on tap. We are considering whether further flexibility could be introduced.

I hope that I am near to conclusion. I ran through the relatively minor and consequential amendments that come towards the back of the Bill and that are relatively uncontentious. On the title of the Bill, amendment 1 amends the title of the Bill to include

“provision designed to give people greater flexibility in accessing benefits and to help them make informed decisions about what to do with benefits.”

That change is to reflect more accurately the content of the Bill in the light of the new amendments on the pension flexibilities.

In sum, these new provisions are designed to ensure that the guidance guarantee works as effectively as possible; that the various rules on transfers do not act to the detriment of people who are left behind in the schemes; and that the process is properly overseen with the provision of independent financial advice. They also spell out who pays for the help, and whether or not it is taxed. The provisions help to flesh out some of the detail of this important policy, and I commend new clause 7 to the House.

[Stephen Timms]

We are now embarking on a debate on 27 Government new clauses, 40 new Government amendments and—providing welcome relief—an amendment from the hon. Member for Reigate (Crispin Blunt) and the right hon. Member for Sutton and Cheam (Paul Burstow).

The changes the Government have announced will introduce much-increased flexibility for savers, which is welcome. They will also make the pensions market more diverse and complicated and lead to a whole new range of products about which consumers have not had to make decisions in the past. Of course it is right that safeguards need to be in place to protect savers adequately from the danger of being taken advantage of, as we have seen happen in this market in the past.

We are dealing with an area full of technicalities, some of which we have just been hearing about, and fraught with difficulty. I appreciate that the Minister had no choice but to introduce these measures at the same time as the implementation of the Budget changes, but he will recognise, as the House certainly will, that there is a danger, in providing so little opportunity for the House to conduct proper scrutiny, of creating serious problems and a future mis-selling scandal.

We have set out three tests for the new flexibility. First, is there reliable advice for people saving for their retirement? Secondly, is the system fair to those on middle and lower incomes who want to secure retirement income? Thirdly, are the Government confident that the changes will not result in extra costs to the state, either through social care costs or by increasing the cost of housing benefit? I would welcome the Minister’s comments on the extent to which he believes the changes before the House will meet those tests.

The annual workplace pension survey carried out by the National Association of Pension Funds this year showed that only 19% of savers feel very capable of knowing what to do with their savings. That is ahead of the very major changes about to take effect, and we can be certain that consumer bewilderment will rocket from next April. The new arrangements are supposed to be in place from that date—in less than six months—but we do not yet know how they will work.

In previous discussion about the form that the guidance will take, the Minister said that

“it is not formal, detailed or product-specific”.

That is rather different from what was said by the Financial Conduct Authority when it launched its consultation on guidance. It seemed to envisage something rather more substantial than the Minister suggested in his remarks, but the FCA will produce only the standards; Her Majesty’s Treasury will oversee the drafting of the guidance. Nobody can yet feel confident about what will emerge from that process. A number of questions must be asked, such as the one posed by my hon. Friend the Member for Edmonton (Mr Love) earlier. It is not clear even who exactly will pay for the advice or through what mechanism it will be paid for. I would welcome the Minister’s comments on how he envisages that process working.

The challenges were helpfully illuminated by the article on the front page of The Daily Telegraph on Saturday which said, “Pension mis-selling: scandal hits 100,000 retired savers a year”. The article explained that

“one in four pensioners who retired with a private pension in the past seven years is entitled to a larger annual pension income.

Savers with medical conditions including diabetes, high blood pressure and even smokers should have been offered an increased annuity based on their lower life expectancy.”

It went on to say that

“just seven per cent of those who are entitled to the increased pay outs have automatically received them. Studies indicate the true figure should be closer to 60 per cent.

Now Aviva, Britain’s largest insurer, is paying compensation and increasing the annual payouts of hundreds of customers after discovering staff sold inappropriate deals.”

[Crispin Blunt]

I am interested in the issue because two highly innovative companies in my constituency, Partnership and Just Retirement, sold these products to people approaching the point where they had to make a decision about an annuity. Of course, they are anxious about guidance because if people are given guidance about the nature of the market, they can then go to the right place to make those decisions. Is the right hon. Gentleman saying that existing providers should have provided such guidance? He used the words “should have”. These products were available in the market. There was a failure in the previous annuity market which I hope this guidance will address, pointing people to the right kinds of provider.

[Stephen Timms]

We welcomed the new flexibility that is being provided. I hope the guidance that we are legislating for will deliver the improvement that the hon. Gentleman describes, but we cannot yet be confident that that will be the case. This brief debate gives us an opportunity to press the Minister to give us rather more reassurance about that. I shall refer to some of the comments of JustRetirement, one of the companies that the hon. Member for Reigate (Crispin Blunt) mentioned.

The most recent Association of British Insurers data show that overall annuity sales are down 14% from the second quarter of this year, and by 56% compared with the third quarter of last year. Consumers are presumably waiting until the reforms go live in April next year before deciding how to use their defined contribution pension savings. The same ABI data show external annuity sales—that is, annuities bought on the open market—down from 49% to 35% in the third quarter of this year. Internal annuity sales, where an annuity is bought from the incumbent pension provider, have increased from 51% to 65% in the same period. The overall share of enhanced annuity sales has fallen from 28% to 22%.

The ABI data highlight the risk of the kind of consumer detriment described in the article in The Daily Telegraph on Saturday. Together, they suggest that problems will continue unless the Financial Conduct Authority intervenes actively. Just Retirement makes the point particularly strongly and effectively that there is an urgent need for a second line of defence requirement for providers. What happens if the guidance on offer is not taken up? That is not provided for in the amendments.

Legal and General has highlighted the lesson from the pilot that it undertook with public support—that in practice the guidance on offer will very likely not be taken up. As the Minister knows, the take-up was very small—2.5%—in the pilot that it set up and supported. If that happens on a significant scale when these arrangements come into force next year, it opens up the possibility of very large-scale new consumer detriment. JustRetirement, along with others, is right to argue that by introducing a second line of defence requirement, the FCA can apply a crucial brake against this potential future consumer detriment by requiring providers to check consumers’ circumstances when they come to access their DC pension savings.

The hon. Member for Gloucester (Richard Graham) asked whether the guidance would take account of other financial assets beyond DC pension savings. That is a good question.

[Mr Love]

The Minister alluded to discussions taking place between the Department and the FCA, but the formal FCA position given earlier in the consideration of the Bill was that consumer take-up would be a matter of public choice, leaving it to the person concerned. With all the emerging evidence, surely we cannot be confident that that will answer the question.

[Stephen Timms]

I fear my hon. Friend is right. If in practice only a tiny proportion of people, or even a modest proportion, take up the guidance being offered, there is every chance of very serious problems in this market in the future. The House cannot be satisfied with that likelihood.

A number of organisations have pressed vigorously for a second line of defence requirement and they make a telling case. Proceeding without that safeguard will leave many consumers exposed—we should bear in mind that this is all supposed to happen from next April—making people guinea pigs and opening up the real possibility of another mis-selling scandal in the coming months.

[Richard Graham]

The right hon. Gentleman raises an issue that may not technically arise from the amendments that we are debating, but in which all hon. Members have some interest. What could a possible second line of defence look like?

[Stephen Timms]

That is a good question. I do not have a proposition to make. I would hope that those who are reflecting on these matters, particularly in the FCA, will be giving that some thought. There is time for it to incorporate something else and to put that second line of defence in its conduct rules. What it would look like, I am not in a position to propose this afternoon, but the need for it is clear. If the hon. Gentleman is about to propose something, I would welcome that.

[Richard Graham]

The right hon. Gentleman is being very generous and Madam Deputy Speaker is indulging us gently so I will be brief. I guess—perhaps the Minister might nod sagely at this stage—that this is an issue primarily for the FCA, but I hope that the message has gone out from us today that we are interested in it.

[Stephen Timms]

I am grateful to the hon. Gentleman. I hope that those who follow these debates will take that as an endorsement of the need for that second line of defence to be devised and put in place. If it was not there, there is a real risk of exposing consumers to risk of a kind that we have all seen before, and which would undermine these important reforms from the outset.

As the Minister explained, independent financial advice amendments are set out in new clauses 7 to 13. New clause 7 requires that when a member requests a transfer of safeguarded benefits, which are anything other than the cash balance or other money purchase benefits, with a view to acquiring flexible benefits, which are anything that is not safeguarded, the trustees

“must check that the member or survivor has received appropriate independent advice”.

I want to pick up a number of issues. What exactly are the trustees being required to do? Are they being asked to evaluate the appropriateness of the advice that was given to the scheme member? It does not seem right that they should be called upon to do that. It is quite a big undertaking for them and they are probably not in a position to do it. That wording could be understood to mean that that is what they are being asked to do. I would be grateful if the Minister commented on that.

We are seeing the creation of two new categories of benefits—safeguarded benefits and flexible benefits. I gather that the use of these terms is completely new; they are not used elsewhere in the statute. We have three new categories of scheme set out in the Bill, but this is the first time that we have had reference to safeguarded and flexible benefits. The use of those terms seems unfortunate, because safeguarded rights has a particular meaning, which was familiar when, admittedly now rather a long time ago, I was in the office that the Minister now holds. In the context of contracting out, safeguarded rights had a particular meaning. That term is now being introduced in the amendments before us to mean something completely different. The term “flexible” also has a specific meaning in pensions tax terms. Again, there is a real risk of confusion in reusing that particular term to mean something very different from the one people familiar with pensions tax arrangements understand it to mean.

The National Association of Pension Funds has argued that the statute should state that where the member has requested a transfer of his or her benefits, other than cash balance or other money purchase benefits to a scheme in which they will be paid a cash balance or money purchase benefits, the trustees should require appropriate proof from the member that he or she has received independent financial advice from a person authorised by the Financial Conduct Authority to give such advice. The regulations could define “appropriate financial advice” in that way. The NAPF makes the point that the language in front of us is rather ambiguous about what exactly is envisaged. Perhaps the Minister could comment on the alternative wording proposed by the NAPF, which it thinks would make it clearer and would not give the impression that trustees were being called upon to do something that is actually very difficult for them.

New schedule 1, as the Minister has told us, deals with the detail of the calculation of the cash equivalent transfer valuation, replacing the current CETV provisions under the 1993 Act. I fear that the tangle gets worse here. The distinction is between money purchase benefits, flexible benefits that are not money purchase benefits—in other words, cash balance benefits—and benefits that are not flexible benefits, previously defined as safeguarded benefits. There are also transferable benefits, which are benefits

“by virtue of which this Chapter applies to the member.”

This is all quite complicated stuff. One of the fears is that the changes in terminology, and the reuse of previously familiar terms to mean completely different things, significantly increase the amount of confusion being created. Instead of just removing the current statutory requirement that all benefits be transferred if a member wants to transfer any benefits, the effect here is to prohibit schemes from having rules that require transfer of other categories of benefits if the member wants to transfer only one category, or that

“prevent a member who exercises a right under this Chapter in relation to a category of benefits from accruing rights to benefits in another category.”

Again, the NAPF makes the point that that last provision is “incredibly wide”. It points out that schemes do not let members participate in various sections willy-nilly; there are all sorts of rules about who can accrue what sorts of benefits and under what circumstances. The fact that somebody has asked for a CETV in one section of the scheme should not entitle them to benefits in other sections, but that is the way that this provision has been written. Perhaps the Minister could comment on whether that is what he really intends.

New clauses 14 to 16 seem to allow the Secretary of State to forbid draw-down from schemes that give members a guaranteed return, because draw-down can only be from money purchase benefits. That seems odd as well. Perhaps the Minister could tell us whether he or his officials discussed that with anybody before producing these new clauses. Certainly, the NAPF tells me that it is not aware of any discussions about that with it, or with anybody else. It well understands that schemes with guarantees must comply with the funding regime, but it does not understand why they should not be allowed to do draw-down or UFPLS—uncrystallised funds pension lump sum. Perhaps the Minister could comment on that.

The Bill requires members of defined benefit schemes to have received independent financial advice before being permitted to transfer into a defined contribution arrangement, unless they have pension wealth amounting to less than £30,000. The NAPF is concerned that that will impose a requirement that it would be very difficult, if not impossible, to meet. People will be required to prove that they do not have pension wealth in excess of £30,000, which will be very difficult for the average saver. There is the potential for a lot of confusion for savers attempting to assess their level of pension wealth. They might not realise that previously crystallised pension assets will be counted towards that threshold. They might find it difficult to assess the current value of such assets.

The average person may well not understand—nor should they be expected to understand—that the £30,000 will be measured not by the current CETV system but using the methodology created to measure benefits against the lifetime allowance, information that members are not currently entitled to get from other schemes. As a result, many defined benefit members will not be able to exercise their rights in the way that the Bill intends. The NAPF urges that savers should be able to access a total of £30,000 of defined benefit benefits calculated on a CETV basis, regardless of any additional defined contributions savings that they may have. Will the Minister respond to that point?

As with the previous group of amendments, I ask the Minister to set out his intentions on the regulations that are envisaged. He gave a clear and helpful response to my earlier question, but as he is well aware, it is good practice where regulations are referred to in primary legislation for Members who are scrutinising that legislation at least to have a draft in front of them when determining whether they support the provisions. The Minister said that it was not possible to give the costs for trustees because there was not yet a draft of the regulations. I think he will accept that it is very difficult for Members to decide whether to support these provisions if the House has not been told the cost for those who have to operate the regulations. Telling Members that the Government have no idea, at this stage, of what the cost of all this will be for everybody makes it impossible for us to do the job that we are required to do in properly scrutinising the costs and benefits that the legislation provides.

I was rather down-hearted by the content of the Minister’s previous answer, but I will ask the question again as regards these measures. Does he anticipate bringing forward the regulations on the same sort of time scale as the one he indicated earlier? Is there any prospect at least that draft regulations might be available to Members in the other place when they scrutinise the Bill? Does he expect that, as he said before, the majority of the regulations will be subject to the negative rather than the affirmative procedure? Will he draw the House’s attention to any exceptions, as he did last time, and point to those that will be subject to the affirmative procedure?

I am not going to urge the House to vote against any of the measures before us. I look forward to hearing the hon. Member for Reigate (Crispin Blunt) speak about his amendment. I have to tell the Minister that the House is being placed in a pretty unsatisfactory situation. I hope that even though we have not been able properly to scrutinise these measures because of the lack of information to support that scrutiny, he might encourage us by saying that those in the other place will have a better chance to do so.

[Crispin Blunt]

I am delighted to follow the right hon. Member for East Ham (Stephen Timms) and to know that I have the opportunity to persuade the massed ranks of the Labour party of the merits of my amendment. I shall do my very best to do so.

Four of the most significant players in the United Kingdom pensions market are based in my constituency of Reigate: Just Retirement, Legal and General, Partnership, and Fidelity. I should declare, if it is an interest, that my son works for one of those companies—Just Retirement. Between them, they employ a pretty significant number of the constituents I am privileged to represent. The past six months since the announcement in the Budget of the measures in this Bill have not been easy for them. The number of annuities purchased has dropped off a cliff, as customers and financial advisers await the implementation of the reforms.

Overall, however, the need for and the rightness of the reforms cannot be doubted. The pensions market has for too long been shackled by the obligation to annuitise; annuity rates have fallen consistently over the past two decades; and strenuous competition and liberalisation is just what the industry needs if each new batch of retirees are not going to find themselves commensurately worse off than their predecessors. The proposals are right not only on a practical level, but ethically as well. It is farcical that we have deemed retirees incapable of managing their own finances and have paternalistically restricted access to the money for which they have worked hard throughout their lives.

16:45

I intervened earlier on the shadow Minister, the right hon. Member for East Ham (Stephen Timms), on the issue of the kind of market we want to create. There needs to be guidance, but in the end it can only be guidance; the decisions are the responsibility of the people themselves, operating on the best possible guidance and, indeed, informed advice should they wish to go down that route and pay for it.

The success over the past decade of both Just Retirement and Partnership—two of the smaller companies in my constituency—has been driven by their innovation, entrepreneurship and ingenuity. They have led the market in the development of specialist annuity products better targeted at the needs of precisely the types of consumers referred to by the shadow Minister. They are well-led and nimble businesses, and models such as theirs should be best placed for success in a reinvigorated market. However, the Government’s lack of detail on the issue of guidance will not only handicap those companies as they wait for it, but potentially put the success of the whole reform in peril.

The Government’s commitment to the guidance guarantee has, of course, been well received by the industry and consumers, but widespread consumer ignorance of the pensions market is well documented. The Department’s own 2012 “Attitudes to Pensions” survey found that 49% had no knowledge of the requirement to annuitise.

[Richard Graham]

My hon. Friend is making some good points on an important issue, but does he agree that the providers and creators in financial companies have missed a trick over the years with regard to product innovation, and that they have depended too much on the monopoly of annuitisation, which has inhibited them—in effect, it has prevented them—from creating new products more suited to many of our constituents?

[Crispin Blunt]

My hon. Friend is absolutely right. That is the market in which Just Retirement and Partnership, as two smaller companies, identified the need for better, value-for-money products for individuals such as smokers and others with more limited life expectancy so that they could get greater annuity rates. They tried to promote those products in the market, but their problem was inertia in the market. People simply did not evaluate the options open to them and simply rolled over their pension pot provision in order to get an annuity from their existing provider, without looking at what was available in the rest of the market. What we are trying to do with the guidance—this is why I wholeheartedly support the reforms—is make sure that we create a much more active, liberal market whereby people are aware that they have choices to exercise and are able get the information in order to do so in an informed way.

[Richard Graham]

Some Opposition members of the Bill Committee raised concerns about guidance, but does my hon. Friend agree that the fundamental point of the changes that this Bill and the Treasury’s Taxation of Pensions Bill will introduce is recognition that annuitisation as was will undoubtedly lead to some scandals and mis-selling, which this Bill should put right and prevent in the future?

[Crispin Blunt]

That was the exact result of the paternalistic way in which we legislated to require annuities. Frankly, it led to market failure as a result of inertia in the market and people not exercising the choices available to them, because we seemed to be telling them precisely what they had to do. Now that we are liberalising the system and giving people the responsibility to manage the money they have saved, we obviously have to deal with the vexed issue of guidance to make sure that people make sensible decisions, by and large, but at least they should be informed decisions about the resources they have saved. These market reforms are founded on a belief in consumer empowerment, but without the effective implementation of the guidance guarantee, they may fail. That is why the guidance guarantee is so important.

We have already heard about the detail of and debated the need for a second line of defence, in that the Financial Conduct Authority must protect the estimated 8% to 96% of people—rather a wide estimate—who might not take up the guidance. That, however, is not the purpose of amendment 73.

The industry and consumers need the Treasury to take a lead and confirm the contents of the guidance. Why the Treasury continues to maintain its conspiracy of silence is a mystery to me. It is of some concern that four and a half months before the start date, the FCA, Citizens Advice, the Pensions Advisory Service and providers have no concrete clue about exactly what the guidance will entail, including whether it will consider sources of income that are alternatives to defined contribution pension schemes.

Dominic Lindley, an author and consultant at Which?, gave evidence in Committee suggesting that as little as 4% of a saver’s wealth is tied up in defined- contribution schemes. The over-55s have an average of £271,000 invested in property, and it is natural that such assets should increasingly form a component of retirement income. The average amount lent through an equity release scheme jumped 12% to £67,000 last year, while defined contribution pension pots remain stagnant at £20,000 on average.

The Conservative party and I presume our allies—including the right hon. Member for Sutton and Cheam (Paul Burstow), who supports my amendment 73—have always believed in the value of property ownership, and the Government must reflect that in their pensions policy. That is why we must recognise that equity release will be a critical part of future retirement provision. When we appreciate that £1.4 trillion-worth of property assets are held by older people, that puts into perspective the scale of the assets that have the potential to give older people a more comfortable retirement, if they can properly access them.

In Committee, the Minister said that he anticipated—he repeated this in an intervention—that the information that consumers would be encouraged to gather in a standardised format before they received the guidance would include state pension rights and assets such as housing equity. He also remarked that the more they put into the guidance session, the more they would get out of it.

The Equity Release Council is pleased by the recognition that assets other than defined contribution pension savings should be taken into consideration. However, that has not been explicitly stated in the Bill, and so far it relates only to the initial phone call to set up the guidance session. I support the Equity Release Council’s wish for the Government explicitly to recognise that housing wealth represents a significant source of potential retirement income, and for that to be considered during the delivery of pensions guidance.

I will therefore listen very carefully to the Minister before I invite the massed ranks of Opposition Members and, I hope, Government Members to support my amendment 73. I am reasonably hopeful that the Minister will give me a satisfactory response.

[Mr Love]

There is a clear—well, not so clear—dividing line between generic advice and product-specific advice. The hon. Gentleman seems to be suggesting that where there are significant housing assets, part of the guidance guarantee should include advice on equity release. Is he straying across that line?

[Crispin Blunt]

I am trying to suggest what is in the amendment:

“Individuals delivering the pensions guidance must ask those receiving the guidance about other potential sources of retirement income in addition to defined contribution pension schemes; this must include an assessment of assets such as housing wealth, savings and investments.”

It is not meant to be prescriptive, but if someone has a tiny portfolio as their defined contribution scheme, relative to their whole portfolio, why are they not directed to their major asset, which is likely to be their house? What consideration might they give to using that asset to make their retirement more comfortable than it would otherwise be?

Pension reform seeks to give people sensible access to their assets, and for them to make sensible decisions. With equity release, for example, does it make sense to sell and downsize and give the estate agent a whack of money while being forced to move in order to release assets, or rather to stay in the house and release assets through an equity release scheme?

[Richard Graham]

It is an interesting point, and I am sure my hon. Friend would agree that the difficulty in the wording is because it is up to the individual to explain their circumstances and list their own assets, if indeed they have any. The vast majority of my constituents—and, I suspect, those of many other Members—have little in the way of assets, other than what they have been encouraged or able to save through their pension.

[Crispin Blunt]

Everybody’s position will be different. There will be people with small pensions sitting in quite large houses, and they will have limited income but a significant capital asset. When they receive advice on pension provision on retirement, what is their plan to be? We must try to get such people into the best possible place and to make sensible decisions about their future. It is not only the Equity Release Council saying that.

[David Mowat (Warrington South) (Con)]

I have been reflecting on the wording of the amendment and the use of the word “must”. Had adequate guidance been provided, it would have taken into account the whole gamut of somebody’s circumstances. If that question was not asked, however, what remedy does my hon. Friend suggest? Is he saying that the guidance would void future contracts? If an advisor or guider had not asked the question suggested in the amendment, would any contract subsequently entered into be voided?

[Crispin Blunt]

Those would be matters for the FCA. It would regulate the guidance and say how it should be implemented, and state the consequences if people are misguided in the process. The point about putting “must” into the Bill is to be clear that the rather basic duty to assess everybody’s assets would be a requirement. What the consequences would be if misguidance was delivered would be a matter for the FCA. I do not want to get into that territory—it is a rather more expert territory than I would want to address to provide the solution my hon. Friend seeks.

I will conclude with a quote in support of my arguments from the director of policy and deputy director general of the Association of British Insurers, Huw Evans. He made it clear today that:

“While the Treasury is responsible for deciding the content of the guidance and delivering the online service, other critical partners also need certainty soon including the pension providers who have to signpost their customers to it, the FCA which needs to regulate it and the Government’s formal delivery partners, Citizens Advice and the Pensions Advisory Service…It is critical for the success of the reforms that the vast majority of customers use their new-found freedoms to make a choice that is right for them…It is very important at this stage that Ministers hold their nerve and stick to their original plan of a broader based guidance service that can genuinely help people approaching retirement to consider everything they need to be thinking about to take decisions about their finances…The Chancellor was right to think a guidance service was a necessary ingredient in the new world of pension freedom; now he needs to ensure it is worth having.”

That is what amendment 73 seeks to assist in doing.

[Paul Burstow (Sutton and Cheam) (LD)]

I will be very brief in my support of the amendment that stands in my name and the name of my hon. Friend the Member for Reigate (Crispin Blunt).

17:00

I want to start by picking up on my hon. Friend’s last point. In a way, it is a contribution to a wider debate on later life planning and how we ensure that people look at their later life in the round in terms of the assets available to them to support a quality of life they want, and to meet the unforeseen eventualities that life can throw up, not least care needs. My hon. Friend referred to innovation in the market and, in particular, to Partnership. It has been one of the leading providers of immediate needs annuities, a product that I suspect is unaffected by these changes but which makes a significant difference to those who want certainty in meeting care costs, particularly in residential settings. It can often mean that people never fall back on the state. This product therefore has a double benefit: it protects the individual and the taxpayer too.

I want to pick up on remarks the Minister made in Committee on 4 November. He talked about two phases in the way the guidance guarantee is delivered: gathering relevant information, which my hon. Friend talked about; and the follow-up phase. Of course, between those two phases there is the conversation phase, where the information that has been gathered is used to best effect. The Minister said that information gathered would include housing asset information, but suggested that it would be part of a standardised format. He implied that it would be developed over time. The issue is, therefore, how much time it will take to be developed and how standardised it will be from the outset. Evidence was presented to the Committee at the beginning of its deliberations on the relative share of wealth attributable to defined contribution savings compared with the significant share of wealth that is represented, particularly among the first cohorts of populations that are going to benefit, which is property wealth. There is a vital need not to leave that asset out of the equation. The figure I have seen most recently for the 60 to 69-year age group is that they have property wealth of about £993 billion—that is an extraordinary figure—and three quarters of them are mortgage-free.

Building other assets, particularly housing assets, into the information-gathering stage, the conversation and the follow-up is essential. The anxiety that has given rise to the amendment is that it was not entirely clear from what the Minister said in Committee whether all three phases would need to take them fully into account. I hope the Minister can give us both the reassurance we seek. I hope the statutory guidance is the place where this is properly dealt with and that it conveys clearly the way all three phases of the guidance guarantee are delivered to ensure that housing wealth is properly taken into account and followed up. People will then be able to make informed choices that support them and their families, enabling them to have the later lives they want. That will not be delivered solely by focusing on defined contribution savings.

I support the amendment. It is intended to probe and secure clarification from the Government clarification. I look forward to that clarification.

[Steve Webb]

This has been a helpful debate covering a wide range of issues. I shall address the questions raised by the right hon. Member for East Ham (Stephen Timms), particularly about the Government new clauses, before moving on to the guidance guarantee.

On the budget freedoms, the right hon. Gentleman said the Labour party had set out three tests. I assume he thinks that if any of them are not successful, Labour will oppose the budget freedoms, though I am not clear if that is the logic of his position. We think those tests are met—I shall run through them—but I think Labour is a little ambivalent: it is instinctively paternalistic and does not really like these freedoms, but it realises they are popular so it decides to set some tests so it sounds as if it is scrutinising. It is unclear, however, whether Labour is committed to seeing these things through if it takes up office—but we will see, perhaps.

The right hon. Gentleman set out his three tests. First, he asked whether reliable advice would be available. He said “advice”, but we are not promising advice; we are promising guidance. He knows that those are different, so I am not sure that the test is the right question. If the question is, “Will reliable guidance be available?”, the answer is, “Absolutely”. We have made it clear that people will have the choice of face-to-face, phone-based or internet-based guidance, and that it will be of a high quality and delivered by trusted partners, such as the Pensions Advisory Service, the network of citizens advice bureaux and the Treasury’s own website. We will require providers to flag the guidance up when people try to access their money, possibly through the provision of wake-up packs.

On take-up, which my hon. Friend the Member for Reigate (Crispin Blunt) joked about, clearly there have been a variety of trials, tests and surveys. The Legal & General pilot, which was mentioned, had a 2% or 3% take-up, but the Chartered Insurance Institute explained it to people and told us that demand could be as high as 90%. I am confident it will be in the latter range. It is important to stress, however, that we are evolving—a theme to which I shall return in a moment. This is work in progress. We are talking to people in this target group about what they want from the guidance; using behavioural insights to maximise take-up; and trying to find out what people want from the sessions and what means of communication work for them.

I hear the plea of my hon. Friend the Member for Reigate and the firms in his constituency—they want certainty, they want it now, they want it in the Bill—but the crucial thing is that when we get to April, we have something that works and which has been tested and refined. That is the tension.

Everybody wants certainty; barely a day goes by when I am not at a pensions conference where someone is not asking about guidance and demanding certainty, when what they really want is something that works. That is one of our reservations about trying to spell it all out in the Bill. We want to talk to the people affected. It has been said that the Pensions Advisory Service does not know what it will be asked to do, but it is in and out of my office and the Treasury all the time. It has people on the Treasury team drawing up the plans. Of course, these things are not finalised, but the PAS and Citizens Advice are working hand in glove with the Treasury as our delivery partners.

[Crispin Blunt]

I would be grateful if the Minister got it across to his Treasury colleagues that this is not just about ensuring that the guidance works; it is about the detailed regulations, as yet unavailable, for the products that will replace much of the annuity market and which companies will have immense difficulty designing if they are not told the exact requirements. I realise this is an issue for the Treasury and the Prudential Regulation Authority—as I understand it—but I would be grateful if he took that message back to them.

[Steve Webb]

I can perhaps distinguish between the specification by the Government and the Financial Conduct Authority of what the guidance will contain and the issue of product regulation, which are obviously two different things. On the former, my hon. Friend will know that the FCA set out some ideas about what the guidance should contain and consulted on them, and we will shortly be publishing its conclusions.

This has been a consultative process. We were condemned on Budget day for not having consulted, but when we consult extensively, we are condemned for not having definite answers—you’re damned if you do and damned if you don’t. I hear what my hon. Friend says though. We are trying to get to a position where we can be as clear as possible as soon as possible about the content of the guidance and the process, while trying to evolve, learn, listen and refine our approach, so that when it goes live in April we are in a good place.

I am not absolutely sure I understand what people who are thinking of bringing out products need to know. There is already an FCA regulatory regime and a duty on providers to treat customers fairly. In general the FCA does not pre-approve products so it is not the case that a provider comes up with a product, goes off to the FCA and says, “Is this all right?” That is not the way it works, but I do know that the FCA is in dialogue with the product providers, including those in my hon. Friend’s constituency, about the sorts of products they are thinking of bringing forward.

[Crispin Blunt]

There is a different set of issues, arising particularly out of EU Solvency II, but there is the same time scale and it is the PRA that is having to provide product regulation around this. That is not an issue for the Minister’s Department, but I just thought, as I am seeking a meeting with the Exchequer Secretary to address this—we have yet to get a date—that I would use this occasion to make a similar point to the Minister and invite him to get that message across.

[Steve Webb]

I am very happy to relay to the Exchequer Secretary that my hon. Friend is seeking such a meeting.

We believe that reliable and high-quality guidance will be available. The right hon. Member for East Ham asked about those on lower incomes. The irony is that in the bad old world it was the people in the middle who were completely stuck. If someone had a tiny pension pot, they could take the cash, and if they had a big pension pot, they had choices and draw-down and probably paid for some advice. It was all those poor souls in the middle who just ended up having to buy an annuity faute de mieux. This new reform gives new options and new choices to those on lower and middle incomes who have not had them before, so it seems to us that we are being fairer to those in that group. They can buy an annuity if they want to, but we are giving them new options, so we do not think we have any problem with that test.

The right hon. Gentleman asked finally about the issue of costs to the Exchequer. He will be aware that these are being updated at the time of the autumn statement, so we will be providing fresh estimates of the tax implications of the changes and the public expenditure implications, but I would say that in its July long-term fiscal report the OBR did not assume any impact on public spending from these reforms. I do not think that by that it meant there would be nil, and I do not mean there would be nil, but think of the context of long-term pension spending, the very substantial reforms we have brought in to the state pension age, the new single tier pension and the multiple tens of billions of pounds-worth of reforms—we are not talking anything like that in respect of the implication for public spending of these new freedoms.

Will there be somebody who blows the lot and claims a means-tested benefit? Yes, there will—having said which, we already have rules in place for those who artificially dispose of their capital, as the right hon. Gentleman well knows. So there are safeguards. We may find that public expenditure is saved; we already know from survey evidence that pension saving is more popular as a result of our freedoms. If more people decide to save for their retirement through pension saving and have more income and wealth in retirement, we may save money. We do not expect a substantial impact on public spending, therefore, although I am not saying it will be zero. We will provide updated estimates at the time of the autumn statement.

The right hon. Gentleman asked about who will pay for the guidance and he seemed to think there was some confusion. I do not think there is any confusion. The £20 million that the Chancellor has identified is seed-corn funding to get the thing going, and it is already being spent as we speak—on designing the website and getting things started. Once it is up and running there will be a levy on the financial services industry. The FCA has already put out a consultation on exactly how that will fall.

Basically, the idea is that those firms that will benefit should pay the levy, but we are also consulting on exempting small firms of advisers with low turnover from paying the levy. So unless I have missed something, I do not think there is any uncertainty about who is going to be paying for this: it will not be the consumer directly; it will be a levy on the financial services industry.

The issue was raised—and this phrase has come up—of a second line of defence, and that is an important concept. As we discussed a moment ago, what happens when people have not accessed the guidance, or indeed if they have? The FCA has committed to consider this issue and it will be publishing an update on its requirement on pension providers very shortly. We have had some discussions as to whether that will be by Christmas, by winter or by late autumn, but it will be very shortly, so we will have more information on that. I assure the House that the FCA is taking this issue seriously.

[Mr Love]

Will the Government consult on this, as they have consulted everyone on aspects of reform?

17:15

[Steve Webb]

This is in response to a consultation. During the consultation, one of the issues raised was about people who had not accessed the guidance. This is the response to that.

Reference was made to a story in The Daily Telegraph about people buying annuities that were not as good as they should have been, given their health condition. The FCA is undertaking a thematic review of the annuity market and looking at at-retirement choices. A lot of reporting and recommendations from the FCA will come out over the next couple of months. The Government have investigated some of the failures of the annuities market. We are tackling them by giving people new choices and it is about time that that was done.

The right hon. Member for East Ham asked about DB to DC transfers and what trustees have to do. They have to make sure that, before a DB to DC transfer happens, the member has accessed independent financial advice by a regulated IFA or similar. They do not have to look at what the IFA has said and see whether it is any good or appropriate; that is not what we mean. But before they say yes to the transfer, each trustee will have to say to the scheme member, “Have you accessed independent financial advice?” That is only right and proper because, in general, we still think that most DB scheme members should remain in DB. That will be the right thing for most. That is why we think the advice test is the right thing to do.

The right hon. Gentleman asked about forbidding draw-down in schemes that provide cash-balance benefits. To be clear: our intention is to ensure that members are appropriately protected by ring-fencing their pots from those of other members. That means that assets must always meet the liabilities in relation to those benefits. Keeping conversion to money purchase is the simplest way of achieving that. This is about ring-fencing cash-balance benefits.

The right hon. Gentleman asked how people would calculate their overall level of pension wealth from the point of view of the £30,000 threshold. Obviously, the details of that will be set out in regulations. We are consulting the NAPF on that. It is interesting that the NAPF thinks that nobody is talking to it; we talk to the NAPF all the time. We are also consulting the ABI and other interested parties.

The nitty-gritty of how we set the £30,000, what it includes and whether it is all of someone’s assets will be subject to detailed discussions and regulation. But the principle has to be right: if we are to require people to have advice, we do not want people to be forced to pay, say, £1,000 for advice if they only have a pension pot of £5,000 or £12,000. There has to be some sort of cut-off. Clearly, we need a sensible operational definition of what that is, but I do not think the principle is at issue.

[Stephen Timms]

I am grateful to the Minister for giving way and for the thorough way in which he is responding. May I take him back to his response to my question on the duties of trustees in an instance where a member wants to switch from DB to DC? The proposition from the NAPF was that the sole responsibility of trustees should be to require adequate proof from the member that they have received independent financial advice from a person authorised by the FCA to give such advice. It sounds to me that the Minister is saying that that is what he intends. Is he happy with that form of wording proposed by the NAPF?

[Steve Webb]

I am aware that our conversations are occasionally listened into by lawyers, so I am reluctant on the hoof to say that the wording from the NAPF is better than the wording that my lawyers have come up with, which is in the Bill. Clearly the point is not that the trustees have to second-guess an independent financial adviser—that is absolutely not what we are saying—but we are concerned to make sure that trustees do not simply nod through DB to DC transfers without ensuring that the scheme member has accessed suitable financial advice.

The right hon. Gentleman asked whether regulations will be under the negative procedure or affirmative procedure. In general they will be under the negative procedure, but the regulations under new section 97A(11) in new clause 26 are affirmative. Given the speed at which we are working and the importance of getting all this in place, it is not realistic to think that we will have draft regulations for their lordships’ consideration in a few weeks’ time. But their lordships obviously will want to probe the likely content of the regulations and we will continue to try to be as helpful as we can in that regard.

[Stephen Timms]

Will the Minister accept that it is pretty unsatisfactory for the Bill to go through both Houses with the Members of neither of them having a draft of the regulations to consider so that they can see what exactly the Government have in mind?

[Steve Webb]

No, I would not accept that. The right hon. Gentleman will know, from having taken quite a few Bills through the House, that there is a balance to be struck among primary powers, giving the House a general sense of direction, our stating on the record what the regulations seek to do and separate scrutiny for the regulations themselves. We will always try to make clear our intentions and what the regulations will try to achieve and we will continue to talk to the experts outside and inside Government about the fine detail. It is perfectly normal to pass primary legislation without every last regulation being produced in draft form. The right hon. Gentleman was responsible for welfare reform legislation in which large swathes of regulations were not produced in draft form when Royal Assent was given.

[Stephen Timms]

The right hon. Gentleman is pressing my memory with that, but my understanding of what has generally been regarded as good practice is that there should at least be draft regulations in front of Members. We do not necessarily need every last detail and he is quite right to make the point that there will be further discussions before things are finalised, but for Members of neither House to be able to see even a draft of the regulations is unusual and pretty unsatisfactory.

[Steve Webb]

I do not agree that it is either unusual or unsatisfactory. It is clearly important that the House accepts and is familiarised with the basic principles of approach and that we set out what will be in the regulations and what we are going to try to achieve through them, but often the regulations will be subject to separate consultation exercises. There is an awful lot of scrutiny; I can assure the right hon. Gentleman that these things are never knowingly unscrutinised.

The right hon. Gentleman asked about the timetable. Let us put it this way: our lawyers are not taking Christmas holidays. We are working as fast as we can.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The Minister talks about the lawyers not taking Christmas holidays. We are almost in December, so how certain can those people across the United Kingdom who are preparing for retirement in April, May or June of next year be in the weeks that follow the autumn statement and the non-holiday taking of the lawyers that they will have clarity, and that it will come before April?

[Steve Webb]

I think that the grouping of the amendments means that we are muddying together two completely separate things. The guidance guarantee and the budget freedoms will be in place on 6 April and the legislative framework will be in place—period.

Also in this group are regulations about defined ambition pensions, risk sharing and so on and they must be in place by April 2016. I think perhaps our conversation has been slightly at cross purposes. What has to be in place by April 2015 will be. There has been lots of consultation and a lot of it is not about regulation but about FCA rules. The FCA has already been consulting extensively and will publish more shortly. Separately, we will have many regulations to produce on defined ambition and so on. That will take longer and there will be further consultations on all that. I do not think there is anything particularly unprecedented about any of this.

Let me move on, finally, to amendment 73, tabled by my hon. Friend the Member for Reigate and my right hon. Friend the Member for Sutton and Cheam (Paul Burstow). They obviously raise an important point about the context of the guidance guarantee and the fact that DC pension pots these days, although hopefully not in the distant future, might be only a small part of people’s overall retirement wealth. I would not dispute for a moment the premise that decisions have to be made in context and that, as far as possible, we want well-informed consumers making the best decisions in their own interests.

I do not want to over-promise what this relatively limited conversation can cover or achieve. It clearly is not regulated financial advice. It is not a fact check or a fact finder. It will not lead people to say at the end, “It’s equity release for me.” I am not saying that that is what my right hon. and hon. Friends are saying, but we must be absolutely clear that we will not stretch this thing to achieve other goals, laudable as they might be, when they are not what it is being set up to do. For example, people who do not have DC pension pots might also want to think about equity release, but they will not access the guidance guarantee because they will not have a pot. If we think people should be accessing equity release more often, we need policies to deliver that. Shoehorning them into the guidance guarantee inappropriately will hit some people and not others. We must ensure that the guidance conversation delivers what it is meant to do and if we try to cram too much into it, we risk undermining that. That is one of the things we are testing through the surveying we are doing and through behavioural testing. If we bombard people with lots of products, issues and options, one of the worries is that they will just buy an annuity with their own provider and we will almost go back to where we started. So we are trying to strike that balance, and I wanted to put the caveat in first.

Let me now try to be a little more positive. My hon. Friend the Member for Reigate asked for more detail on the guidance guarantee. Our colleagues at the Treasury have committed to providing further information in an update on progress on implementation that will be published before the end of the year on 31 December. That deals with the guidance guarantee.

To be clear, I would welcome the opportunity provided by my hon. Friends to clarify that the objective of the guidance is to ensure that consumers are empowered to make effective decisions about their retirement income options. While the focal point for the guidance session will be an individual’s DC pot, the guidance will cover the range of issues that affect an individual’s financial decision-making. That includes their wider financial circumstances—debts, others assets including their home and their personal motivations and goals, including attitudes to risk, desire for an income and so forth.

This is all provided for in the FCA’s proposed standards, which will be published in final form very shortly. They require that the guidance service encourages people to provide relevant information about their financial and personal circumstances and their objectives to ensure that they can get maximum value from their guidance. The financial information might include pension pots or benefits, other sources of wealth or income, including where the individual has a spouse or partner, tax status and debt position.

Our colleagues at the Treasury, along with the delivery partners, are working up the detail of the guidance in line with FCA standards, including scope and what it should cover. I hope my right hon. and hon. Friends will accept that it is not appropriate to hardwire those things directly into the Bill. My hon. Friend the Member for Reigate said during the course of the Taxation of Pensions Bill:

“It will have to be capable of being improved in the light of experience”.—[Official Report, 29 October 2014; Vol. 587, c. 340.]

I agree with him on that point. Stipulating these things in legislation does not allow us to adapt the guidance in this way. We want to give people context, but not try to hardwire things into primary legislation when we are trying to evolve the best possible guidance offer.

I should stress, as I have said, that we are not talking about regulated financial advice. Guidance will help consumers consider their assets such as housing, wealth, savings and investment in the context of their retirement decision, but it is not a fully holistic financial planning service, such as one might get from multiple sessions with a professional regulated financial adviser. We are clear that the guidance will not replicate the services of professional financial advice, but will complement it. We will ensure that the consumers know both the value of seeking financial advice and where to go next. Referring again to Second Reading of the Taxation of Pensions Bill, my hon. Friend made the point:

“If the guidance can push people in that direction, to properly regulated and properly informed independent financial advisers, we will have properly informed consumers making proper choices.”—[Official Report, 29 October 2014; Vol. 587, c. 341.]

I am happy to reassure him that the guidance will do just that.

My right hon. Friend the Member for Sutton and Cheam asked about social care. I can assure him that our Treasury colleagues are working on how to hand individuals on to the right place after using guidance. On social care, we are in discussions with a range of organisations, including Age UK, while we are discussing with the Department of Health how to link in to the statutory duty on local authorities, in which I believe my right hon. Friend might have had some involvement, to refer people to local care and advice services. I can assure both my hon. Friend and my right hon. Friend that we take these issues seriously. This is not advice; it is guidance, but it is guidance in a financial context. We want to equip consumers to make the best choices they can. I hope the House will leave us with flexibilities to go on evolving that, while recognising that greater certainty is needed as soon as possible.

[Crispin Blunt]

I am grateful to my right hon. Friend for his answers. There will obviously be an ongoing debate about this issue. He is right to turn my own words round on me, when I made comments on the other Bill associated with these measures. I shall not seek to press my amendment.

[Steve Webb]

I am grateful to my hon. Friend and my right hon. Friend the Member for Sutton and Cheam for tabling their amendment, providing an opportunity to discuss these important issues. I commend new clause 7 to the House.

Question put and agreed to.

New clause 7 accordingly read a Second time, and added to the Bill.

New Clause 8

Power to require employer to arrange advice for purposes of section (Independent advice in respect of conversions and transfers: Great Britain)

‘(1) The Secretary of State may by regulations specify circumstances in which an employer must arrange or pay for a member of a pension scheme, or a survivor of a member of a pension scheme, to receive appropriate independent advice for the purpose of satisfying a requirement imposed by section (Independent advice in respect of conversions and transfers: Great Britain).

(2) Regulations under subsection (1) may, in particular—

(a) impose limitations on the amount that an employer may be required to pay;

(b) prohibit an employer from seeking in any way to recover, from a member or survivor, costs incurred by the employer in complying with the regulations;

(c) provide for section 10 of the Pensions Act 1995 (civil penalties) to apply to a failure by an employer to comply with the regulations.

(3) In this section “employer” has the meaning given by regulations made by the Secretary of State.”—(Steve Webb.)

This gives the Secretary of State the ability to make regulations requiring an employer to pay for the advice required by NC7 in the circumstances specified in the regulations.

Brought up, read the First and Second time, and added to the Bill.

New Clause 9

Independent advice: consequential amendments - Great Britain

‘(1) The Pension Schemes Act 1993 is amended as follows.

(2) In section 99 (trustees’ duties after exercise of option), after subsection (1) insert—

“(1A) Subsection (2) does not apply if—

(a) the trustees or managers have been unable to carry out the check required by section (Independent advice in respect of conversions and transfers: Great Britain) of the Pension Schemes Act 2014 by reason of factors outside their control, or

(b) the trustees or managers have carried out the check required by section (Independent advice in respect of conversions and transfers: Great Britain) of the Pension Schemes Act 2014 but the check did not confirm that the member had received appropriate independent advice.”

(3) In section 101J (time for compliance with transfer notice in respect of pension credit benefits), after subsection (2) insert—

“(2A) Subsection (1) does not apply if—

(a) the trustees or managers have been unable to carry out the check required by section (Independent advice in respect of conversions and transfers: Great Britain) of the Pension Schemes Act 2014 by reason of factors outside their control, or

(b) the trustees or managers have carried out the check required by section (Independent advice in respect of conversions and transfers: Great Britain) of the Pension Schemes Act 2014 but the check did not confirm that the member had received appropriate independent advice.”” .—(Steve Webb.)

This amendment is consequential upon NC7

Brought up, read the First and Second time, and added to the Bill.

New Clause 10

Independent advice in respect of conversions and transfers: Northern Ireland

‘(1) Where a member of a pension scheme has subsisting rights in respect of any safeguarded benefits, or a survivor of a member has subsisting rights in respect of any safeguarded benefits, the trustees or managers must check that the member or survivor has received appropriate independent advice before—

(a) converting any of the benefits into different benefits that are flexible benefits under the scheme;

(b) making a transfer payment in respect of any of the benefits with a view to acquiring flexible benefits for the member or survivor under another pension scheme.

(2) The Department for Social Development in Northern Ireland may by regulations make provision about—

(a) what the trustees or managers must do to check that a member or survivor has received appropriate independent advice for the purposes of subsection (1), and

(b) when the check must be carried out for the purposes of that subsection.

(3) The Department for Social Development in Northern Ireland may by regulations create exceptions to subsection (1).

(4) In subsection (1)(b) the reference to another pension scheme includes a scheme established in a country or territory outside Northern Ireland.

(5) Where the trustees or managers fail to carry out a check required by this section, Article 10 of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)) (civil penalties) applies to any trustee or manager who failed to take reasonable steps to ensure that the check was carried out.

(6) Failure to carry out a check required by this section does not affect the validity of any transaction.

(7) In this section—

“appropriate independent advice” has the meaning given by regulations made by the Department for Social Development in Northern Ireland;

“safeguarded benefits” means any benefits other than —

(a) money purchase benefits, and

(b) cash balance benefits.”—(Steve Webb.)

This provides that before trustees or managers of a pension scheme (in Northern Ireland) in which a person has safeguarded benefits convert them into flexible benefits, or make a transfer to another scheme to acquire flexible benefits, they must check that the person has received appropriate independent advice.

Brought up, read the First and Second time, and added to the Bill.



New Clause 11

Power to require employer to arrange advice for purposes of section (Independent advice in respect of conversions and transfers: Northern Ireland)

‘(1) The Department for Social Development in Northern Ireland may by regulations specify circumstances in which an employer must arrange or pay for a member of a pension scheme, or a survivor of a member of a pension scheme, to receive appropriate independent advice for the purpose of satisfying a requirement imposed by section (Independent advice in respect of conversions and transfers: Northern Ireland).

(2) Regulations under subsection (1) may, in particular—

(a) impose limitations on the amount that an employer may be required to pay;

(b) prohibit an employer from seeking in any way to recover, from a member or survivor, costs incurred by the employer in complying with the regulations;

(c) provide for Article 10 of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)) (civil penalties) to apply to a failure by an employer to comply with the regulations.

(3) In this section “employer” has the meaning given by regulations made by the Department for Social Development in Northern Ireland.” .—(Steve Webb.)

The Department for Social Development in Northern Ireland can make regulations requiring an employer to pay for the advice required by NC10 in the circumstances specified in the regulations.

Brought up, read the First and Second time, and added to the Bill.



New Clause 12

Independent advice: consequential amendments - Northern Ireland

‘(1) The Pension Schemes (Northern Ireland) Act 1993 is amended as follows.

(2) In section 95 (trustees’ duties after exercise of option), after subsection (1) insert—

“(1A) Subsection (2) does not apply if—

(a) the trustees or managers have been unable to carry out the check required by section (Independent advice in respect of conversions and transfers: Northern Ireland) of the Pension Schemes Act 2014 by reason of factors outside their control, or

(b) the trustees or managers have carried out the check required by section (Independent advice in respect of conversions and transfers: Northern Ireland) of the Pension Schemes Act 2014 but the check did not confirm that the member had received appropriate independent advice.”

(3) In section 97J (time for compliance with transfer notice in respect of pension credit benefits), after subsection (2) insert—

“(2A) Subsection (1) does not apply if—

(a) the trustees or managers have been unable to carry out the check required by section (Independent advice in respect of conversions and transfers: Northern Ireland) of the Pension Schemes Act 2014 by reason of factors outside their control, or

(b) the trustees or managers have carried out the check required by section (Independent advice in respect of conversions and transfers: Northern Ireland) of the Pension Schemes Act 2014 but the check did not confirm that the member had received appropriate independent advice.”” .—(Steve Webb.)

This amendment is consequential upon NC10.

Brought up, read the First and Second time, and added to the Bill.

New Clause 13

Independent advice: income tax exemption

‘(1) In Part 4 of the Income Tax (Earnings and Pensions) Act 2003 (employment income: exemptions), in Chapter 9 (exemptions: pension provision), after section 308A insert—

“308B Independent advice in respect of conversions and transfers of pension scheme benefits

(1) No liability to income tax arises in respect of—

(a) the provision to an employee or former employee of appropriate independent advice, or

(b) the payment or reimbursement, to or in respect of an employee or former employee, of the cost of such advice,

if conditions A to C are met.

(2) Condition A is that the provision, payment or reimbursement is required by regulations under section (Power to require employer to arrange advice for purposes of section (Independent advice in respect of conversions and transfers: Great Britain)) or (Power to require employer to arrange advice for purposes of section (Independent advice in respect of conversions and transfers: Northern Ireland)) of the Pension Schemes Act 2014 (power to require employer to arrange independent advice in respect of conversions and transfers).

(3) If condition A is met only as respects part of the payment or reimbursement because the amount of the payment or reimbursement exceeds the amount required to be paid or reimbursed, subsection (1) applies in respect of that part.

(4) Condition B is that the provision, payment or reimbursement is not pursuant to relevant salary sacrifice arrangements.

(5) Condition C is that such other requirements as may be specified in regulations made by the Treasury are satisfied in relation to the provision, payment or reimbursement.

(6) In this section—

“appropriate independent advice”—

(a) in relation to England and Wales and Scotland, has the meaning given by regulations under section (Independent advice in respect of conversions and transfers: Great Britain) of the Pension Schemes Act 2014;

(b) in relation to Northern Ireland, has the meaning given by regulations under section (Independent advice in respect of conversions and transfers: Northern Ireland) of that Act;

“relevant salary sacrifice arrangements” means arrangements (whenever made, whether before or after the employment began) under which an employee gives up the right to receive an amount of general earnings or specific employment income in return for the provision of appropriate independent advice or the payment or reimbursement of the cost of such advice.”

(2) In that Part of that Act, in section 228 (effect of exemptions on liability under provisions outside Part 2), in subsection (2), after paragraph (d) insert—

“(da) section 308B (independent advice in respect of conversions and transfers of pension scheme benefits),”.

(3) The amendments made by this section have effect for the tax year 2015-16 and subsequent tax years.” .—(Steve Webb.)

This amendment is consequential upon NC7, NC8, NC10 and NC11. It prevents the cost of independent financial advice, relating to the conversion or transfer of certain pension benefits, that is paid for or reimbursed by an employer from being treated as a taxable benefit in kind for income tax purposes if conditions are met.

Brought up, read the First and Second time, and added to the Bill.

New Clause 14

Sums or assets that may be designated as available for drawdown: Great Britain

‘(1) In the case of a member of an occupational pension scheme the only sums or assets that may be designated as available for the payment of drawdown pension for the member under the scheme are sums or assets held for the purposes of providing money purchase benefits to or in respect of the member.

(2) In the case of a survivor of a member of an occupational pension scheme the only sums or assets that may be designated as available for the payment of dependants’ drawdown pension for the survivor under the scheme are sums or assets held for the purposes of providing money purchase benefits to the survivor.

(3) This section overrides any provision of an occupational pension scheme to the extent that there is a conflict.

(4) This section does not apply in relation to sums or assets designated before 6 April 2015.” .—(Steve Webb.)

This ensures that occupational pension schemes may only pay drawdown pensions out of assets held for the purpose of providing money purchase benefits. The requirement applies to assets designated on or after 6 April 2015 as available for payment of drawdown, and overrides any conflicting provision in scheme rules.

Brought up, read the First and Second time, and added to the Bill.

New Clause 15

Provision about conversion of certain benefits for drawdown: Great Britain

‘(1) The Secretary of State may by regulations make provision about the conversion of benefits under an occupational pension scheme in circumstances where—

(a) a member of the scheme, or a survivor of a member of the scheme, has subsisting rights in respect of any flexible benefits other than money purchase benefits under the scheme, and

(b) the member or survivor exercises an option to convert any of the benefits into money purchase benefits for the purposes of enabling sums or assets to be designated as available for the payment of drawdown pension or dependants’ drawdown pension.

(2) Regulations under subsection (1) may, in particular, make provision about how the rate or amount of any benefits not converted are to be calculated in future.

(3) In relation to a conversion that takes place before the member or survivor reaches normal pension age, regulations under subsection (1) may in particular make provision about—

(a) the manner in which benefits are to be calculated for the purpose of converting them into money purchase benefits;

(b) the use of any power to reduce benefits.

(4) Regulations made under this section may include provision for them to override the provisions of a pension scheme to the extent that there is a conflict.” .—(Steve Webb.)

This provides a power to make regulations in relation to the conversion of flexible benefits into money purchase benefits for the purpose of paying a drawdown pension, where an occupational scheme offers that option to members or their survivors. The clause outlines particular areas which such regulations may cover.

Brought up, read the First and Second time, and added to the Bill.

New Clause 16

Provision about calculation of lump sums: Great Britain

‘(1) The Secretary of State may by regulations make provision about the calculation of lump sums in circumstances where—

(a) a member of an occupational pension scheme, or a survivor of a member of the scheme, has subsisting rights in respect of any flexible benefits other than money purchase benefits under the scheme, and

(b) the member or survivor exercises an option to be paid a lump sum in respect of any of those benefits.

(2) Regulations under subsection (1) may, in particular, make provision about how the rate or amount of any remaining benefits are to be calculated in future.

(3) In a case where a member or survivor exercises an option to be paid a lump sum before reaching normal pension age, regulations under subsection (1) may in particular make provision about—

(a) the manner in which benefits are to be calculated for the purpose of determining the amount available for the payment of the lump sum;

(a) the use of any power to reduce the amount of the lump sum.

(4) Regulations made under this section may include provision for them to override the provisions of a pension scheme to the extent that there is a conflict.” .—(Steve Webb.)

This provides a power to make regulations in relation to the payment of lump sums by occupational pension schemes in respect of flexible benefits. The clause outlines particular areas which such regulations may cover.

Brought up, read the First and Second time, and added to the Bill.

New Clause 17

Restrictions on conversion of benefits during winding up etc: Great Britain

‘(1) In section 73A of the Pensions Act 1995 (operation of scheme during winding up period), after subsection (6) insert—

“(6A) During the winding up period no right or entitlement of any member, or of any other person in respect of a member, to a benefit that is not a money purchase benefit is to be converted into, or replaced with, a right or entitlement to a money purchase benefit under the scheme rules.”

(2) In section 73B of that Act (sections 73 and 73A: supplementary), in subsections (1) and (3), after “section 73A(3)” insert “or (6A)”.

(3) In section 135 of the Pensions Act 2004 (restrictions on winding up, discharge of liabilities etc during assessment period), in subsection (4), before paragraph (a) insert—

“(za) no right or entitlement of any member, or of any other person in respect of a member, to a benefit that is not a money purchase benefit is to be converted into, or replaced with, a right or entitlement to a money purchase benefit under the scheme rules,”.” .—(Steve Webb.)

Where an occupational pension scheme is winding up or being assessed for transfer into the Pension Protection Fund, this amendment prevents any right under the scheme to a benefit which is not a money purchase benefit being converted into a money purchase benefit.

Brought up, read the First and Second time, and added to the Bill.

New Clause 18

Restriction on payment of lump sums during PPF assessment period: Great Britain

‘(1) Section 138 of the Pensions Act 2004 (payment of scheme benefits during assessment period) is amended as follows.

(2) In subsection (1), after “Subsections (2)” insert “, (2A)”.

(3) After subsection (2) insert—

“(2A) Benefits in the form of a lump sum may be paid to or in respect of a member under the scheme rules during the assessment period only in the circumstances in which, and to the extent to which, lump sum compensation would be payable to or in respect of the member in accordance with this Chapter if—

(a) the Board assumed responsibility for the scheme in accordance with this Chapter, and

(b) the assessment date referred to in Schedule 7 were the date on which the assessment period began.”

(4) In subsection (3), omit “But”.

(5) In subsection (5), for “subsection (2)” substitute “subsections (2) and (2A)”.

(6) In subsection (6), for “subsection (3)” substitute “subsections (2A) and (3)”.

(7) In subsection (7), after “Subsections (2),” insert “(2A),”.

(8) In subsection (8), after “subsections (2)” insert “, (2A)”.

(9) In subsection (9), for “subsections (2) and (3)” substitute “subsections (2) to (3)”.

(10) After subsection (9) insert—

“(9A) Regulations may make provision as to circumstances in which benefits in the form of a lump sum are to be treated for the purposes of subsection (2A) as being paid in the circumstances in which lump sum compensation would be payable in accordance with this Chapter.

(9B) Regulations may create exceptions to subsection (2A).”

(11) In subsection (12), for “subsection (2)” substitute “subsections (2) and (2A)”.

(12) In subsection (13), after “subsection (2)” insert “, (2A)”.” .—(Steve Webb.)

This clarifies restrictions on the payment of benefits by an occupational pension scheme which is being assessed for transfer into the Pension Protection Fund. It specifies the types of lump sums that can be paid, and includes a power to make further provision in relation to particular circumstances.

Brought up, read the First and Second time, and added to the Bill.

New Clause 19

Sums or assets that may be designated as available for drawdown: Northern Ireland

‘(1) In the case of a member of an occupational pension scheme the only sums or assets that may be designated as available for the payment of drawdown pension for the member under the scheme are sums or assets held for the purposes of providing money purchase benefits to or in respect of the member.

(2) In the case of a survivor of a member of an occupational pension scheme the only sums or assets that may be designated as available for the payment of dependants’ drawdown pension for the survivor under the scheme are sums or assets held for the purposes of providing money purchase benefits to the survivor.

(3) This section overrides any provision of an occupational pension scheme to the extent that there is a conflict.

(4) This section does not apply in relation to sums or assets designated before 6 April 2015.” .—(Steve Webb.)

This ensures that occupational pension schemes may only pay drawdown pensions out of assets held for the purpose of providing money purchase benefits. The requirement applies to assets designated on or after 6 April 2015 as available for payment of drawdown, and overrides any conflicting provision in scheme rules.

Brought up, read the First and Second time, and added to the Bill.

New Clause 20

Provision about conversion of certain benefits for drawdown: Northern Ireland

‘(1) The Department for Social Development in Northern Ireland may by regulations make provision about the conversion of benefits under an occupational pension scheme in circumstances where—

(a) a member of the scheme, or a survivor of a member of the scheme, has subsisting rights in respect of any flexible benefits other than money purchase benefits under the scheme, and

(b) the member or survivor exercises an option to convert any of the benefits into money purchase benefits for the purposes of enabling sums or assets to be designated as available for the payment of drawdown pension or dependants’ drawdown pension.

(2) Regulations under subsection (1) may, in particular, make provision about how the rate or amount of any benefits not converted are to be calculated in future.

(3) In relation to a conversion that takes place before the member or survivor reaches normal pension age, regulations under subsection (1) may in particular make provision about—

(a) the manner in which benefits are to be calculated for the purpose of converting them into money purchase benefits;

(b) the use of any power to reduce benefits.

(4) Regulations made under this section may include provision for them to override the provisions of a pension scheme to the extent that there is a conflict.” .—(Steve Webb.)

This provides a power to make regulations in relation to the conversion of flexible benefits into money purchase benefits for the purpose of paying a drawdown pension, where an occupational scheme offers that option to members or their survivors. The clause outlines particular areas which such regulations may cover.

Brought up, read the First and Second time, and added to the Bill.

New Clause 21

Provision about calculation of lump sums: Northern Ireland

‘(1) The Department for Social Development in Northern Ireland may by regulations make provision about the calculation of lump sums in circumstances where—

(a) a member of an occupational pension scheme, or a survivor of a member of the scheme, has subsisting rights in respect of any flexible benefits other than money purchase benefits under the scheme, and

(b) the member or survivor exercises an option to be paid a lump sum in respect of any of those benefits.

(2) Regulations under subsection (1) may, in particular, make provision about how the rate or amount of any remaining benefits are to be calculated in future.

(3) In a case where a member or survivor exercises an option to be paid a lump sum before reaching normal pension age, regulations under subsection (1) may in particular make provision about—

(a) the manner in which benefits are to be calculated for the purpose of determining the amount available for the payment of the lump sum;

(a) the use of any power to reduce the amount of the lump sum.

(4) Regulations made under this section may include provision for them to override the provisions of a pension scheme to the extent that there is a conflict.” .—(Steve Webb.)

This provides a power to make regulations in relation to the payment of lump sums by occupational pension schemes in respect of flexible benefits. The clause outlines particular areas which such regulations may cover.

Brought up, read the First and Second time, and added to the Bill.

New Clause 22

Restrictions on conversion of benefits during winding up etc: Northern Ireland

‘(1) In Article 73A of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)) (operation of scheme during winding up period), after paragraph (6) insert—

“(6A) During the winding up period no right or entitlement of any member, or of any other person in respect of a member, to a benefit that is not a money purchase benefit is to be converted into, or replaced with, a right or entitlement to a money purchase benefit under the scheme rules.”

(2) In Article 73B of that Order (Articles 73 and 73A: supplementary), in paragraphs (1) and (3), after “Article 73A(3)” insert “or (6A)”.

(3) In Article 119 of the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1)) (restrictions on winding up, discharge of liabilities etc during assessment period), in paragraph (4), before sub-paragraph (a) insert—

“(za) no right or entitlement of any member, or of any other person in respect of a member, to a benefit that is not a money purchase benefit is to be converted into, or replaced with, a right or entitlement to a money purchase benefit under the scheme rules,”.” .—(Steve Webb.)

Where an occupational pension scheme is winding up or being assessed for transfer into the Pension Protection Fund, this amendment prevents any right under the scheme to a benefit which is not a money purchase benefit being converted into a money purchase benefit.

Brought up, read the First and Second time, and added to the Bill.

New Clause 24

Rights to transfer benefits

Schedule (Rights to transfer benefits) contains amendments that confer new statutory rights to transfer benefits.” .—(Steve Webb.)

This introduces a new Schedule which makes changes to the right a member has to transfer their pension savings prior to accessing those savings.

Brought up, read the First and Second time, and added to the Bill.

New Clause 25

Restriction on transfers out of public service defined benefits schemes: Great Britain

‘(1) The Pension Schemes Act 1993 is amended as follows.

(2) In section 95 (ways of taking right to cash equivalent), in subsection (2), after “occupational pension scheme” insert “that is not an unfunded public service defined benefits scheme”.

(3) In section 95, after subsection (2) insert—

“(2A) In the case of a member of an occupational pension scheme that is an unfunded public service defined benefits scheme, the ways referred to in subsection (1) are—

(a) for acquiring transfer credits allowed under the rules of another occupational pension scheme if—

(i) the benefits that may be provided under the other scheme by virtue of the transfer credits are not flexible benefits,

(ii) the trustees or managers of the other scheme are able and willing to accept payment in respect of the member’s transferrable rights, and

(iii) the other scheme satisfies requirements prescribed in regulations made by the Secretary of State or the Treasury;

(b) for acquiring rights allowed under the rules of a personal pension scheme if—

(i) the benefits that may be provided under the personal pension scheme by virtue of the acquired rights are not flexible benefits,

(ii) the trustees or managers of the personal pension scheme are able and willing to accept payment in respect of the member’s transferrable rights, and

(iii) the personal pension scheme satisfies requirements prescribed in regulations made by the Secretary of State or the Treasury;

(c) for purchasing from one or more insurers such as are mentioned in section 19(4)(a), chosen by the member and willing to accept payment on account of the member from the trustees or managers, one or more annuities which satisfy requirements prescribed in regulations made by the Secretary of State or the Treasury;

(d) for subscribing to other pension arrangements which satisfy requirements prescribed in regulations made by the Secretary of State or the Treasury.

(2B) The Treasury may by regulations provide for sub-paragraph (i) of subsection (2A)(a) or (b) not to apply in prescribed circumstances or in relation to prescribed schemes or schemes of a prescribed description.

(2C) In subsection (2A) “unfunded public service defined benefits scheme” means a public service pension scheme that—

(a) is a defined benefits scheme within the meaning given by section 37 of the Public Service Pensions Act 2013, and

(b) meets some or all of its liabilities otherwise than out of a fund accumulated for the purpose during the life of the scheme.”

(4) In section 95(5)(a), for “subsection (2) is” substitute “subsections (2) and (2A) are”.

(5) In section 95(6)—

(a) after “subsections (2)” insert “, (2A)”;

(b) after “subsection (2)” insert “or (2A)”.

(6) In section 96 (further provisions concerning exercise of option under section 95), in subsection (2)(b), after “subsection (2)” insert “, subsection (2A)”.

(7) In section 100 (withdrawal of applications), in subsection (2), after “subsection (2)” insert “, subsection (2A)”.

(8) The amendments made by this section have no effect in relation to an application made under section 95(1) of the Pension Schemes Act 1993 before 6 April 2015.

(9) Until the coming into force of the first regulations made under a provision of section 95(2A) of the Pension Schemes Act 1993 specified in the first column of the table, regulations made under the provision of section 95(2) of that Act specified in the corresponding entry in the second column apply (with any necessary modifications) for the purposes of the provision specified in the first column—

17:31

[Steve Webb]

I beg to move, That the Bill be now read the Third time.

Together with the Taxation of Pensions Bill, this Bill introduces the latest radical reform of pensions. Its ground-breaking pension reforms were the centrepiece of the Queen’s Speech, and are intended to give people freedom and security in retirement.

The Bill follows the Government’s extensive pensions reform. It is about enabling innovation in the pensions industry better to meet the needs of business and individuals, and about giving people greater flexibility in regard to how and when they access their savings. It will do that in two ways: by encouraging and enabling defined ambition or risk-sharing pension schemes and collective benefits, and by giving individuals new freedom and flexibility in relation to how and when they access their pension savings. It builds on the previous pension reform, including the new state pension and the highly successful implementation of automatic enrolment. Defined ambition legislation is a radical reshaping of pensions legislation to ensure that it remains relevant for future generations. It is intended to reflect, recognise and reinvigorate innovation in consumer-focused product design in shared-risk, or defined ambition, pensions.

The Bill introduces three categories of pension scheme based on the type of promise that the scheme provides for savers during the saving phase about the benefits that will be available to them on retirement. It will also enable schemes in the United Kingdom to offer collective benefits, and to ensure that there is appropriate regulation in regard to such benefits. The crucial point here concerns risk-sharing. The current legislation is based on a binary structure of just money purchase or non-money purchase benefits. While both those types of pension can be the right product for many, is it right that the only future for pensions that our legislation encourages is one that requires either the individual consumer or the employer to take on the full financial risk of such long-term savings? We think not.

Many employers have found the increasing costs of longevity and investment risk too heavy to bear, but if defined contribution schemes are the only alternative, outcomes for savers will be less certain and more volatile than for earlier generations, making it much harder for future generations of savers to plan for later life. That is why the Bill provides for new definitions of private pensions, which include the new defined ambition category and collective benefits.

[Mr Love]

It would appear that the defined ambition scheme has been created to attract employers who have defined contribution schemes. What evidence is there that there is a demand for defined ambition schemes? Is there not a danger that employers with defined benefit schemes will be encouraged to move to defined ambition schemes?

[Steve Webb]

Our view is that the shared risk space will suit firms coming from either direction: from DB or DC. I have lost track of the number of times someone has said, “Such and such a measure was the final nail in the coffin of DB.” There must be no more room for any more nails in that coffin. It is clear that, if we do nothing, there will be no DB outside the public sector—sooner or later there will be nothing. The abolition of contracting out may be a further trigger, but if we do nothing we will just have individual DC, so shared risk says that employers who want to do more—employers who are willing to share some of the risk with their employees—should have a space to do that.

We may catch some firms coming out of DB that were going to go out of DB anyway. We may stop them in the middle, rather than going to the opposite extreme, but we may also find employers who offered DC schemes and found that their employees could not afford to retire because the DC benefits were not good enough, or employees who object to the volatility of individual DC and start saying to their bosses, “I want something a bit more predictable and certain. Can you mitigate the risk?” Therefore, my judgment is that some people will come out of DB and some will come out of DC. That does not undermine DB. The writing was on the wall for private sector DB, to be honest.

On the freedom and choice agenda, as we have discussed, Budget 2014 announced radical flexibilities in how and when people access their pension arrangements. The Government undertook a consultation. The response was published in July and draft tax clauses for technical comment were published in August.

This Bill, along with the Taxation of Pensions Bill, will mean that, from April 2015, individuals from the age of 55 will be able to access that pension flexibility if they wish, subject to their marginal rate of income tax, rather than the current 55% tax charge. The Bill will make the required changes to pension legislation. As we have discussed, it includes a guidance guarantee that means everyone with money purchase benefits or cash balance benefits will be offered free, impartial guidance so they are clear on the range of options available to them at retirement. The Bill contains a duty on providers and schemes to ensure that they make people aware of their right to guidance.

The Taxation of Pensions Bill will legislate for the required tax regime changes. The Government will continue to allow members of private sector schemes offering safeguarded benefits—that is, benefits other than money purchase or cash balance benefits—the freedom to transfer to other types of scheme. In the majority of cases where a member has safeguarded benefits, it will continue to be in the best interests of the individual to remain in the scheme.

As we have discussed, there will be two additional safeguards: the requirement to take advice from a financial adviser, and guidance for trustees on using their existing powers to delay transfers and on taking account of scheme funding when deciding transfer values. In addition, the Exchequer will put in place safeguards in general not allowing unfunded public service defined benefit scheme transfers. For funded public service schemes, Ministers will have a power to reduce cash equivalent transfer values.

These are radical reforms that build on the Government’s changes to improve pensions in the UK. We believe that giving people greater choice has to be at the heart of the reforms: greater choice for business on the pensions they offer and greater choice for individuals on how they can access their pension savings. These are important changes to allow the private pensions market to flourish. I commend the Bill to the House.

17:38

[Stephen Timms]

The cost of living crisis underlines the need for people in work who are struggling to set money aside for the future to be able to access pension schemes they can trust to give them good value for money and a decent income in retirement. Therefore, we welcome the proposed establishment of collective defined contribution pension schemes, which my hon. Friends called for earlier this year. Those schemes have the potential to provide a more reliable retirement income than individual defined contribution schemes. For that reason, they are to be welcomed. They operate in other countries: the Netherlands, for example. They are potentially better for individuals than individual defined contribution schemes because they can pool risk across and between generations. Research by the Institute for Public Policy Research at the end of last year concluded that there was “strong public support” for a collective pension, that it was the most popular of the options it tested and that it appealed across different income levels, life stages and ages.

We also support the establishment of shared risk schemes and the rule preventing transfers out of most public service schemes—with some exceptions that the Minister talked about earlier. We support the power to redefine the pension regulator’s powers to appoint or replace trustees and the power that will allow the Secretary of State to make payments into the Remploy pension scheme.

We have not opposed the Bill, and we will not do so this afternoon, although there are parts that, in our view, should have been strengthened. We are also disappointed that the Government have not been willing to make the changes for which we argued in Committee. We welcome the new pension flexibilities that were announced in the Budget, but we are concerned that Ministers are not yet providing adequate safeguards in the Bill to protect the savings of people who have worked hard all their lives from the risk of excessively high charges.

The changes will introduce increased flexibility for savers, and we agree that that is welcome. They will also make the pensions market much more complicated, however, and safeguards need to be put in place to protect savers from being taken advantage of, given the confusion that could arise as the changes bed down. We simply cannot afford to have another pensions mis-selling scandal like the one that was presided over by the last Conservative Government, which did a great deal of damage.

The Bill contains 55 clauses, which were substantially rewritten in Committee, and the fact that the Government have today added 33 new clauses—over half as many as we started out with at the beginning of the afternoon—and made 77 additional new amendments does not inspire confidence that these complex changes in an area of such immense importance have been properly thought through. This looks rather like a case of legislate in haste, repent at leisure. We can only hope that Members in the other place, among whom there is substantial expertise in this area, can make significant improvements. Trying to make these important changes at the same time as enacting the Budget changes is of course making the task more difficult and more risky.

A few minutes ago, towards the end of the last debate, the Minister gave a full answer to my question about regulations, for which I was grateful. His answer was a full one, but it was not particularly satisfactory. He pressed me about my experience of taking Bills through the House. My recollection is that if such a Bill had referred to regulations that were going to be introduced, I would at least have expected to put a note in front of members of the Committee explaining what those regulations were going to do. Ideally, there would be draft regulations to put in front of the Committee. In this case, as far as I can establish, there is no information at all about any of the regulations referred to in the new clauses and amendments. I was disappointed when the Minister said that no such information would be put in front of Members in the other place either.

[Steve Webb]

I think there is a danger of the right hon. Gentleman overdoing this a bit. A lot of the regulatory framework for the budgetary freedoms involves the Financial Conduct Authority, so we are not talking about statutory instruments or any other stuff that goes through this House. The FCA has consulted and published its principles, and it will be publishing its final statutory guidance. All of that will be entirely available to Members in the other place. So a lot of this stuff is out there already; it has been consulted on and will be published. A lot of the regulations that the right hon. Gentleman is talking about relate to defined ambition and risk-sharing, for which the timetable is much slower.

[Stephen Timms]

That is helpful, and I am grateful to the right hon. Gentleman, but I was making the point that, in my experience as a Minister, I would normally have expected to be able to provide some documentation about each set of regulations referred to in a clause that I was advocating to the House. There is no such information relating to the significant number of the new clauses and amendments that refer to regulations and that now form part of this Bill. The right hon. Gentleman suggested that that was normal, but I do not think it is. I was recalling my experience from the Welfare Reform Bill, on which I led for the Opposition. There was a problem there, because at the outset no information was provided about regulations being referred to in the Bill. However, by the time we got to the end of the Committee we were reliably getting, before we debated each clause, some information about the regulations being referred to in it. So I urge him, if he can take even more holiday time away from the lawyers, to look at whether he might be able at least to give their lordships some information about each set of regulations being referred to.

In the earlier debate, I mentioned the three tests we have set for the new flexibility, and I am grateful to the Minister for his response to each. My party has commissioned Professor David Blake of the pensions institute at Cass business school to lead a review of how to support a pensions market that works for all, retaining flexibility and choice on how savings are accessed and drawn down, while ensuring that all savers, including those on low and modest incomes, are protected and are able to secure a decent and reliable retirement income. One question he will consider is whether income draw-down products should be subject to a new charge cap, which could offer some safeguards that are not envisaged at the moment.

Widespread concern has been expressed about the crucial guidance provisions. We do not know a great deal yet about how this is all going to work, and it is supposed to be up and running by next April. There is serious worry, which we have debated earlier, that the guidance on offer will not be taken up in practice. We will certainly be looking with great interest at what the FCA says—the Minister has assured us that it will be referring to this—about the second line of defence.

The TUC has made the point that

“half an hour of the best possible advice will not equip people for what could be thirty years of managing their pension pot”.

It has argued for the kind of careful consideration of evidence undertaken by the last Government, which has underpinned the success of auto-enrolment—that successful measure was developed over a period, decided on by the previous Government and taken forward by the current Government and, in particular, the Minister on the Bench today. Everybody would agree that the proper deliberation that underpinned it has been an important element in its success, but we are not seeing the same thing with these changes. I fear that nobody can, as yet, feel confident about what is going to emerge.

The Minister also knows that we have concerns about the governance of collective defined contribution schemes and about the so called “independent governance committees” proposed for defined contribution schemes; and about the restrictions on the National Employment Savings Trust—NEST—which my colleague who normally speaks on these matters has long argued should be removed and which the Minister said in July last year would be removed “as soon as possible “. In fact, they remain in place, and the opportunity to remove them in this Bill has not been taken.

The Bill is worth while, but a worryingly large amount more still needs to be done. Working people must not become the victims of yet another mis-selling scandal—that has happened too often already. The dangers of ill-thought-out and rushed legislation are all too clear, and doing all this at the same time as the Treasury changes makes the risks much worse. We can only hope that Members in the other place will have the information they need and will be able to deliver some of the scrutiny which Members in this House have not, sadly, been able to provide.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Self-Build and Custom Housebuilding bill (Money)

Queen’s recommendation signified.

Resolved,

That, for the purposes of any Act resulting from the Self-build and Custom Housebuilding Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Brandon Lewis.)

Self-Build and Custom Housebuilding bill (Ways and Means)

Resolved,

That, for the purposes of any Act resulting from the Self-build and Custom Housebuilding Bill, it is expedient to authorise the charging of fees under the Act.—(Brandon Lewis.)



Local government (Review of Decisions) Bill: Money

Queen’s Recommendation signified.

Resolved,

That, for the purposes of any Act resulting from the Local Government (Review of Decisions) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Kris Hopkins.)

Health and Social Care (Safety and Quality) Bill: Money

Tuesday 25th November 2014 Commons Chamber

Queen’s Recommendation signified.

17:50

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (George Freeman)]

I beg to move,

That, for the purposes of any Act resulting from the Health and Social Care (Safety and Quality) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.

I will, if I may, pay tribute to my hon. Friend the Member for Stafford (Jeremy Lefroy) for his tireless work on this Bill, particularly for his championing of the cause of information sharing, which sits right at the heart of the Government’s commitment to transparency in health care.

Question put and agreed to.

Control of Horses: Instruction

Tuesday 25th November 2014 Commons Chamber

17:50

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

I beg to move,

That it be an instruction to the Control of Horses Bill Committee that it has power to make provision in the Bill about the powers of owners or occupiers of any land in England in relation to horses which are on the land without lawful authority.

The Control of Horses Bill sponsored by my hon. Friend the Member for York Outer (Julian Sturdy) was supported by the Government on Second Reading and enjoyed support from across the House. I congratulate him on bringing this Bill forward.

The Bill amends section 7 of the Animals Act 1971 with respect to the process for managing horses present on land without lawful authority and applies to England only. In the case of fly-grazing, horses are often abandoned or deliberately placed on another person’s land without permission to do so. The Bill reduces the time that a landowner or a local authority is required to detain a horse before disposing of it from 14 days to four working days, and also creates alternative ways to dispose of horses, other than through sale at auction.

During the debate, the Government also accepted my hon. Friend’s request for this motion. The instruction is needed because the long title of the Bill provides for dealing with horses in public places only. With this instruction it will be possible for the Bill Committee to consider amendments to the Bill to extend its provision to private land. Should the Committee agree to those amendments, the long title of the Bill would then be adjusted accordingly.

This is an important Bill. It has cross-party support, and I congratulate my hon. Friend on bringing it forward and commend the motion to the House.

17:52

[Angela Smith (Penistone and Stocksbridge) (Lab)]

I join the Minister in congratulating the hon. Member for York Outer (Julian Sturdy) on bringing forward the Bill. The Opposition support this motion. I will not repeat the points that we made on Second Reading about why we are where we are, because we just have to deal with the situation as it is. We are pleased to see the Government correcting their position by including private land in the Bill’s provisions and in the title of the Bill.

We are committed to seeing this Bill go through the legislative process as quickly as possible. In fact, the sooner we can get it on the statute book the better, because it is about not just the welfare standards of horses but the significant resource being absorbed by the Royal Society for the Prevention of Cruelty to Animals and by local authorities in dealing with the issue.

17:53

[Julian Sturdy (York Outer) (Con)]

I thank the Minister and, through him, the Secretary of State for tabling today’s instruction. I will, if I may, speak very briefly in support of the instruction and about the comments that have just been made by the Minister and the shadow Minister.

It is absolutely essential that we crack down on illegal fly-grazing across England. As was stated by the Minister, the shadow Minister, many Members and me on Second Reading, it is important that that happens not just on public land, but on private land. It would be perverse if private farmland were to become an unintended refuge for suffering and abandoned horses, with landowners ill-equipped to alleviate the animals’ suffering. A true refuge would be for the horses to be rescued and re-homed with a loving family or in an animal welfare sanctuary, and that power is proposed under this Bill. I would like the House to be in no doubt of the potential dangers of fly-grazing or the scale of the problem. Since Second Reading last month, abandoned horses have yet again been causing safety issues on Stockton lane in my constituency. It is simply not acceptable for road users and local residents to be put at risk because irresponsible owners have abandoned their horses near the roadside.

Horses require daily care and attention, and today’s instruction will empower private landowners to prevent such neglect, which jeopardises the safety of families travelling on the roads. If we fail to act, it is only a matter of time, sadly, before someone else is seriously injured or killed. I am pleased that there is cross-party support for this motion to allow the Bill to apply to both public and private land, and for the Bill to proceed into Committee and, ultimately, to deliver the powers to end the suffering of abandoned horses and help to prevent any further tragedies.

Question put and agreed to.

Business without Debate

Tuesday 25th November 2014 Commons Chamber

DELEGATED LEGISLATION

[Madam Deputy Speaker (Dame Dawn Primarolo)]

With the leave of the House, we shall take motions 8 to 13 together.

Motion made, and Question put forthwith, (Standing Order No. 118(6)),

Electricity

That the draft Electricity and Gas (Energy Companies Obligation) (Amendment) (No. 2) Order 2014, which was laid before this House on 22 July, be approved.

That the draft Electricity and Gas (Energy Company Obligation) Order 2014, which was laid before this House on 24 October, be approved.

Social Security

That the draft Social Security (Contributions) (Limited Liability Partnership) Regulations 2014, which were laid before this House on 13 October, be approved.

That the draft Social Security (Contributions) (Amendment No. 5) Regulations 2014, which were laid before this House on 13 October, be approved.

Health Care and Associated Professions

That the draft Nursing and Midwifery (Amendment) Order 2014, which was laid before this House on 13 October, be approved.

Local Government

That the draft Business Improvement Districts (Property Owners) (England) Regulations 2014, which were laid before this House on 22 October, be approved.—(Damian Hinds.)

Question agreed to.

Localised Health Care in North East Cambridgeshire

Tuesday 25th November 2014 Commons Chamber

17:56

[Stephen Barclay (North East Cambridgeshire) (Con)]

The petition states:

The petition of residents of the North East Cambridgeshire constituency declares that the Petitioners believe that healthcare should be more localised in North East Cambridgeshire; further that residents of North East Cambridgeshire face long travel times and costs when requiring procedures which should be delivered locally; further that the Petitioners believe that treating patients locally brings significant benefits; and further that there is a community campaign entitled “Treat Me Local” calling for healthcare to be more localised in North East Cambridgeshire which has been signed by 1,389 individuals.

The Petitioners therefore request that the House of Commons urges the Government to ensure that the ten pledges of the Treat Me Local campaign in North East Cambridgeshire are fulfilled within twelve months.

And the Petitioners remain, etc.

[P001401]

Breast Cancer

Tuesday 25th November 2014 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—Damian Hinds.)

17:57

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I am very pleased to have secured this debate, as it permits further discussion on some of the work that my hon. Friend the Member for Winchester (Steve Brine), the hon. Member for Washington and Sunderland West (Mrs Hodgson) and I, as co-chairs of the all-party parliamentary group on breast cancer, have been engaged in over the past four years. We work with all the major breast cancer charities, including Breakthrough Breast Cancer, which provides the secretariat for our group, Breast Cancer Campaign, which is merging with Breakthrough next year, and Breast Cancer Care. We thank them all for their work and support.

Breast cancer is a disease that many of us will know about and have experience of. With nearly 55,000 people diagnosed with the disease in the United Kingdom every year, everyone will know of somebody—a loved one, a friend or even themselves—who has experienced this disease. It is still the most common cancer in the UK, and around a third of all new cancers diagnosed in women are breast cancer.

Over the past few decades, great strides have been made in treatment and care, leading to much improved outcomes. Since the 1980s, breast cancer deaths have fallen by more than a third, and today more people survive breast cancer than ever before. More than eight out of 10 people are living five years or more following their diagnosis. The all-party parliamentary group recently carried out an inquiry into breast cancer in older women. The resulting report is entitled “Age is just a Number”. We discovered that there were many improvements that could be made to ensure earlier diagnosis, better communication, and better treatment and support. We are pleased that many of our recommendations will be implemented and hence overall life chances will be improved further.

[Steve Brine (Winchester) (Con)]

I congratulate my right hon. Friend, at the end of her time in the House, on bringing the topic of breast cancer to the Floor of the House of Commons in the way that she has. She conducted the inquiry with me and, as she knows, one of the things that I was so struck by is the belief out there that the risks of contracting breast cancer go down as one gets older and passes the screening age, whereas we know and the evidence shows that, on the contrary, they go up.

[Annette Brooke]

I thank my hon. Friend for the great leadership that he gave in the inquiry. I believe we brought out a great number of myths, which will much improve the approach to primary breast cancer. However, fewer people know about secondary breast cancer.

In October 2010, the United Kingdom had its first secondary breast cancer awareness day. In secondary breast cancer, sometimes known as metastatic, advanced or stage 4 breast cancer, the breast cancer cells have spread to other parts of the body, most commonly the bones, brain, liver or lungs. Secondary breast cancer is incurable and, sadly, 11,600 people die every year as a result of secondary breast cancer—the equivalent of 32 people every day. Many people diagnosed with secondary breast cancer live with the disease for a number of years. In such cases, the care and support that they receive can make a real difference to their quality of life.

I was able to raise the issue of data collection directly with the Prime Minister during Prime Minister’s questions in 2010. At that time there was no reliable data collection on how many people were living with the disease in the UK, meaning that care and support services could not be accurately costed or developed. Subsequently the main breast cancer charities and the three co-chairs of the all-party parliamentary group met the Prime Minister to discuss what was needed. We were very pleased to welcome in 2011 the publication of the Department of Health cancer strategy, “Improving Outcomes: A Strategy for Cancer.” The strategy included the aim of beginning a full collection of statistics on secondary breast cancer from April 2012, yet there still seem to be considerable gaps, as I shall outline later in my speech.

The purpose of data collection is to make sure that the quality of services offered is improved. Although we can undoubtedly find examples of best practice, there are still many concerns about the overall level of service provision in this area.

[Steve Brine]

I am sorry to interrupt my right hon. Friend’s flow again. One of the things that came out of our time with the Prime Minister on collecting the data on secondary breast cancer was the importance of secondary breast cancer care nurses. I pay tribute to the work of Breast Cancer Care in this respect. Does my right hon. Friend agree that those nurses can make a transformative difference to women and their families who are going through secondary breast cancer, by linking them up to other services in the NHS and providing knowledgeable support to them?

[Annette Brooke]

Again, I thank my hon. Friend. Over the years we found that the provision of a specialist nurse makes a crucial difference. When someone has a symptom that they are not quite sure about and they think, “I don’t want to bother to go to my GP”, being able to pick up the phone and get expert advice deals with the problem quickly, takes away the worry, and if it is necessary to see a doctor, they can go, confident in the knowledge that they are not just imagining the symptom and that it is important for them to follow it through.

A recent survey by Breast Cancer Care, which was released to mark this year’s secondary breast cancer awareness day on 13 October, reported that 90% of people with a secondary breast cancer diagnosis have experienced pain as a result of the disease in the past month. Half of those described their pain as moderate or severe. For 78% of people, their pain meant that they were unable to undertake normal everyday activities, such as household chores, work, child care, hobbies or socialising. Pain is one of the most common symptoms of secondary breast cancer, but much of it can be controlled and managed through access to palliative care. In fact, guidelines from the National Institute for Health and Care Excellence state that referrals to palliative care should be offered soon after a secondary breast cancer diagnosis. However, the same survey by Breast Cancer Care found that only 41% had been offered a referral to a palliative care team. That means that thousands of people are experiencing pain that could be controlled and managed. I am sure that we can all agree that it is unacceptable that anyone should be expected to live with unnecessary pain.

Another indicator of where the care and treatment for secondary breast cancer is not good enough is the lack of secondary breast cancer clinical nurse specialists. The NICE quality standard for breast cancer highlights that everyone with secondary breast cancer should have access to a clinical nurse specialist. The most recent results of the national cancer patient experience survey also found that access to a named clinical nurse specialist was often associated with having a more positive experience in care. For primary breast cancer—I am pleased that progress has been made in this area—it is much more routine for patients to have a clinical nurse specialist to help to co-ordinate their care and provide the support they need.

[Mr Mark Spencer (Sherwood) (Con)]

I congratulate my right hon. Friend on not only securing the debate but the work she has done in the House on this topic together with my hon. Friend the Member for Winchester (Steve Brine). Will she recognise that as well as the physical pain, the psychological aspect of this disease is quite dramatic? One way of fighting the psychological impact is to give hope to those victims that their life can be extended for as long as possible. The data that she seeks to collate and collect can give medical advancement and hope to those victims at the same time.

[Annette Brooke]

I thank my hon. Friend, and yes, it is so important. We have the good news that life expectancy is increasing under these circumstances, but that makes it all the more important to think about the quality of those extra years.

There are far fewer clinical nurse specialists for secondary breast cancer. There is no definitive figure, but estimates from Breast Cancer Care suggest that there may be no more than 20 clinical nurse specialists who have expertise or experience of working with secondary breast cancer. This is despite there being approximately 36,000 people living with a secondary breast cancer diagnosis. Given the results of the cancer patient experience survey, and anecdotal evidence from those living with secondary breast cancer, we can assume that many secondary breast cancer patients are not having as positive an experience in their care as those with a primary diagnosis. Unfortunately, we do not know for certain as the cancer patient experience survey does not include a specific stand-alone question on secondary breast cancer. It is essential that the survey continues, so could it not include a question on secondary breast cancer?

Breast Cancer Care ran a taskforce on secondary breast cancer in 2006. Its final report, published in 2008, highlighted a number of issues, other than those already mentioned, that patients with secondary breast cancer face. Those include multi-disciplinary teams not discussing secondary breast cancer routinely, the information needs of patients not being met, and patients not being assessed for their psychological or social needs following a diagnosis—the point that my hon. Friend has just made. Unfortunately, it seems that little progress has been made in the six years since that report was released.

Underpinning the problems with care and treatment for secondary breast cancer—and key to much of this debate—is the lack of data and information about patients diagnosed and living with the disease. As I have already mentioned, we still do not have an accurate figure for the number of people who have been diagnosed with secondary breast cancer, only an estimate. We do not have enough quantitative evidence about the experiences of secondary breast cancer patients.

I had the opportunity to meet some women at a recent Breast Cancer Care event to mark secondary breast cancer awareness day last month, and they told me that the care they received was often inadequate, and certainly not at the same standard as the care that followed their primary breast cancer diagnosis. Some typical comments from patients with secondary breast cancer include:

“A diagnosis of secondary breast cancer changes your life completely—nothing is ever the same again”;

“When you’re diagnosed with secondary breast cancer you can have no idea of just how far and in how many different ways it’s going to change your life. So many people don’t understand what a secondary diagnosis means”;

“So many people tell me how great I look, or tell me that I can beat it with chemo and surgery. They don’t understand that I am in pain and I can’t be cured”;

“The pain I had, from when I was diagnosed, basically it was excruciating. But the pain had started slowly and I’d always had aching pains in my chest area. To the point that it was so bad that I couldn’t hold a glass in my hand or put a handbag on my shoulder. I couldn’t touch my head, I couldn’t dress myself. I couldn’t sleep. I couldn’t turn on my side. And also I couldn’t breathe properly”;

“One thing that does distress me is the lack of continuity in my care and I think that if I had one person who was with me through it all that would help a lot”;

and

“The strange thing about this whole disease is that they don’t really prepare you at all. It’s almost finding out as you go along”.

I think that those comments highlight how much progress we have made on primary breast cancer, with all the advice and support that is given to patients very early on. I want to use this debate to highlight not only that progress, but the need to address those issues for secondary breast cancer, some of which have been faced with primary breast cancer.

Although the comments I have just read out highlight the human story, they are not enough to help us find the solutions. Without firm data and evidence, it is impossible to understand fully the impact of secondary breast cancer. We do not really know enough about the types of treatment that patients are receiving or how the quality of a patient’s life changes over time. That lack of information makes it virtually impossible for commissioners to be able to plan and commission services properly that meet local needs. That, in turn, makes it much harder for clinical nurse specialists with the right knowledge and skills to be recruited, particularly when NHS budgets are under pressure. The result is that patients continue to miss out on the vital support and care they need.

As I mentioned earlier, the Government have committed to improving the collection of data on secondary breast cancer, making it mandatory for the NHS in England. When my colleagues and I met the Prime Minister, he agreed that adequate data collection was required. Following that meeting, in January 2011, the Department of Health published its national cancer strategy, “Improving Outcomes”, which committed to collecting data on secondary breast cancer for the first time, stating:

“During 2011/12 we will pilot the collection of data on recurrence/metastasis on patients with breast cancer with the aim of undertaking full collection from April 2012.”

[Jim Shannon (Strangford) (DUP)]

I thank the right hon. Lady for giving way and apologise for not being here for the beginning of her speech; I was at a do down below and could not get here in time. She has just outlined the importance of collecting and then using data to respond to those who have breast cancer. She will also be aware that Breast Cancer Care has campaigned strongly to ensure that data are collected in England. I understand that it hopes to have a similar initiative in Scotland, Wales and, hopefully, Northern Ireland. She refers to the NHS in England. Does she share my opinion that the data should be collected for the whole of the UK so that we can agree a strategy that all four regions of the United Kingdom of Great Britain and Northern Ireland can benefit from?

[Annette Brooke]

I thank the hon. Gentleman for his intervention. I hope that the Minister has taken that point on board, because it is really important. Although data are being collected, they are not being received by various groups, and the purpose of this debate is to address that.

The pilot was run by the National Cancer Intelligence Network in collaboration with Breast Cancer Care, and it involved 15 breast cancer units across England. The pilot report, published in March 2012, identified 598 patients with recurrent or metastatic breast cancer. Of those, only 53% were recorded as being referred to a clinical nurse specialist, palliative care nurse specialist or other key worker at the time of diagnosis. That is despite the NICE quality standards and the evidence in the cancer patient experience survey of the benefit to patients of a named nurse.

[Steve Brine]

The pathway—the person who can help to pilot the patient through services—is not only found in the public sector; there are also services in the third sector. Is my right hon. Friend aware of the amazing work of Breast Cancer Haven, which has two centres—and, I hope, a third on the way in our Wessex area next year? It provides a complementary service that helps women to feel human again after they have had surgery and a devastating secondary diagnosis. This is not just about connecting them to services in the NHS; it is also sometimes about the charitable sector.

[Annette Brooke]

I thank my hon. Friend for reminding us of those very important services. I very much hope that I can visit one of Breast Cancer Haven’s units in due course, because I have not yet done so.

The pilot recommended that all breast cancer units in England submit data on patients with recurrent and metastatic breast cancer using existing data collection mechanisms. However, since the pilot no such data have been published. Since January 2013, it has been mandatory for all new recurrent and metastatic diagnoses to be recorded in England. The third annual report on the strategy confirms that this collection is taking place, but the problem is that the data do not seem to be publicly available.

A recent parliamentary question by the hon. Member for Ealing, Southall (Mr Sharma) about diagnosis of metastatic breast cancer in his constituency was responded to by the Office of National Statistics, which said:

“Detailed information about secondary cancer diagnoses is not routinely recorded on individual cancer registrations sent to ONS for processing and publishing as National Statistics. For these reasons it is not possible to provide figures on secondary breast cancer.”

This information needs to be made publicly available to allow scrutiny of the data and to help highlight areas that require action. It would be helpful if the Minister outlined what plans are in place to start publishing these data and whether the data include routes of referral. If there are no such plans, what is the reason for not making the data publicly available?

Not only have we seen no data published on secondary breast cancer, but there is also evidence to suggest that the data collection is not happening consistently across England. Breast Cancer Care is concerned that this will impact on the quality of the data that could be made available. Whether we will have a clearer picture on the needs of secondary breast cancer patients remains to be seen. Once consistently collected, it is also imperative that data can be accessed by research organisations, including charities, to drive improvements in care. Obviously, it is crucial that there are strong safeguards on privacy, but for numerous other reasons, including uncertainty following the restructuring of the NHS, there is great concern that routinely collected pseudonymised data sets are not consistently being made available for health research.

Breast Cancer Campaign has drawn my attention to some detailed points about data collection. The first relates to the current review of the national cancer peer review programme, which routinely monitors the quality and safety of NHS cancer services. I understand that it collects data on a number of key measures related to secondary breast cancer. There are concerns that it may not continue next year in its current form, or at all. I hope the Minister will comment on that. How will patients be provided with information on the safety and quality of their local cancer services, should the national cancer peer review programme be discontinued?

Secondly, if we are to achieve the Health Secretary’s goal of being among the best in Europe for cancer survival, measures to hold clinical commissioning groups to account for the cancer services they provide are vital. What consideration has the Minister given to the inclusion of indicators on cancer patient access to a clinical nurse specialist and multidisciplinary teams in the CCG outcomes indicator set, and what steps can she take to ensure that CCGs are held to account on their performance against that set? What further discussions is the Minister actually having?

In conclusion, the Government should be congratulated on the important progress they have made on cancer over the past four years. Initiatives such as the cancer drugs fund have made a big difference to patients in improving access to clinically effective drugs and treatments. However, in order to achieve the Government’s stated ambition of being the best place in Europe to survive cancer, more needs to be done. For that to happen, evidence is needed to provide the intelligence and insight required to enable local commissioners and health care professionals to plan effectively to meet their patients’ needs. I hope the Minister will join me in agreeing that it is no longer acceptable that the collection of data on secondary breast cancer does not consistently take place.

This is an important public issue. A petition by Breast Cancer Care calling for secondary breast cancer to be a priority for this Government has to date secured almost 12,000 signatures—a fitting milestone, given that almost the same number are dying from secondary breast cancer every year. Will the Minister commit to making secondary breast cancer a priority for her Department and, once more evidence is highlighted from the data, to working with Breast Cancer Care and other charities to improve the support and care that patients receive?

Only once everyone has the opportunity to access a clinical nurse specialist to support their care, to be referred to palliative care so they are not in unnecessary pain, and to receive the best possible care and treatment to live as good a quality of life as possible with the disease can we truly consider the United Kingdom to be one of the best in Europe for cancer care.

18:23

[The Parliamentary Under-Secretary of State for Health (Jane Ellison)]

May I begin by thanking my right hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), not just for securing this debate, but, as has been rightly said, for her work throughout her parliamentary career and in this Parliament on this issue, and for the thorough and humane way in which she has introduced the debate? I congratulate her. We are lucky to have a very active all-party group on breast cancer. Unsurprisingly, my hon. Friend the Member for Winchester (Steve Brine) is in his place, as are other Members who are interested in and have engaged with this important subject.

I echo the words of thanks to the charities that operate in this area. I deal with many of them regularly and, like other hon. Members, have taken part in some of their fundraising and awareness-raising activities. They do great work and it is good that we have a regular opportunity to record our thanks to them.

As my right hon. Friend the Member for Mid Dorset and North Poole mentioned, the Government want to lead the world in tackling cancer, but we know that we are not there yet. As she said, the Government’s cancer outcomes strategy, which is backed by more than £750 million, set the ambition to save an additional 5,000 lives a year from cancer by 2014-15. That of course includes breast cancer.

One study alone has shown that we could save 2,000 additional lives each year from breast cancer if we matched the best European survival rates. That is quite thought-provoking in itself, but we are starting to close that gap. The NHS is treating more people for cancer than ever, and we are helping more people than ever to survive. Sometimes when people hear of large numbers being referred, they perhaps think that that is a sign of failure. However, we know that referral, particularly early referral, is so important, so large numbers being referred is in many ways a sign of success, because we are intervening and getting them into services more quickly. We also know that there is a long way to go.

[Steve Brine]

May I thank the Minister for thanking the three big breast cancer charities? Breakthrough, with support from the others, provides the secretariat for our all-party group. She will be aware of the work of CoppaFeel and its “Rethink Cancer” campaign. Treatment and survival are obviously critical—today’s debate is about that—but prevention is clearly better than cure. Will she take this opportunity to endorse CoppaFeel’s work in educating young women, and men, to spot the signs and symptoms of cancer early so that we can prevent primary breast cancers from developing in the first place? She will know that Kris, who runs CoppaFeel—she has a terminal diagnosis—is passionate about this, and has done so much to put it on the agenda for young women in this country.

[Jane Ellison]

I certainly pay tribute to all those who are trying to drive awareness of this issue. There are a number of very important campaigns. Prevention is so important; for example, it was good that it was right at the heart of the recent NHS “Five Year Forward View”. There is a lot more to do, and I have recently had discussions with some of the breast cancer charities about how we use their reach and undoubted public credibility, which is enormous, to raise awareness more about some of the things that people can do on the prevention front, as well as about their important work on care and drugs. I join my hon. Friend in paying tribute to those campaigners.

The NHS is treating more people with cancer than ever, as I have said. Survival rates for breast cancer are improving, with more than 85% of women with breast cancer in England and Wales now living for more than five years. The work that all the charities have done in that regard is really important. They have all made significant contributions, but we know that more needs to be done, and that is the focus of this debate. We need to catch breast cancers earlier, and to avoid the risk of secondary breast cancers. We also need to improve the detection and treatment of secondary breast cancer, as my right hon. Friend has highlighted.

My right hon. Friend spoke very movingly about pain and its management. I am sure that we all agree that our NHS doctors and nurses do everything that they can to alleviate pain. In fact, it was good to see from the 2014 cancer patient experience survey that only 1% of patients reported that they did not think that hospital staff did everything they could to control their pain. Indeed, 86% of patients—the highest level in the four surveys so far—reported that staff did everything they could to control their pain. She is right to say that referral to specialist palliative care services can provide more by way of effective pain relief. The NHS must do what it can to ensure that women with secondary breast cancer have access to the right services. She is also right to highlight the room for improvement on that.

On the patient experience for women with secondary breast cancer, the results of the 2014 cancer patient experience survey show improvements in many areas, with 89% of all patients reporting that their care was either excellent or very good. As my right hon. Friend said, there are two specific references to secondary breast cancer in the NICE quality standard. The first states that people who develop it should

“have their treatment and care discussed by the multidisciplinary team”,

and the second states that people with recurrent or advanced breast cancer

“have access to a ‘key worker’, who is a clinical nurse specialist whose role is to provide continuity of care and support”—

she mentioned that—

“offer referral to psychological services if required and liaise with other healthcare professionals, including the GP and specialist palliative care services.”

NICE clinical guidelines represent best practice, and we expect commissioners and clinicians to take them into account when making decisions, including on the provision of cancer nurse specialists. On the whole, breast cancer patients reported a more positive experience than many other cancer patients, and 93% were given the name of a clinical nurse specialist. My right hon. Friend is right to highlight the fact that we are not doing as well for patients with secondary cancer or a recurrence of cancer—those patients reported a worse experience and were less likely to have a clinical nurse specialist. NHS England is working with NHS Improving Quality, Macmillan Cancer Support and strategic clinical networks to improve the cancer patient experience and spread good practice across hospitals providing cancer care. That includes support from a clinical nurse specialist for those with secondary breast cancer.

[Jim Shannon]

The Minister is good in debates such as this and we always appreciate her response. One thing that is not always mentioned is the work done by pharmaceutical companies and their investigations to find and perfect new drugs to combat cancer. Current TV programmes often show people saying, “We’re almost there” when speaking about a cure for cancer—well, we are halfway there anyway. Together with pharmaceutical companies, universities such as Queen’s university in Belfast do fantastic work to find new drugs to address cancer and many other things. Sometimes that point is missed in debates such as this, so perhaps this is an occasion to get that on the record.

[Jane Ellison]

I pay tribute to the hon. Gentleman who is always present in health debates and makes an important contribution. If he were to secure a debate on research and clinical trials, I would be delighted to respond. He is right to say that that topic is sometimes a bit unsung, and it is enormously hope-giving for people to hear what is in the pipeline. He is right to highlight that issue, and perhaps we could explore it in a bit more detail on another occasion.

I alluded earlier to work that is taking place to bring everybody up to the best standard. That includes pairing highly rated cancer trusts with those that have potential to improve, regional events for commissioners to consider how patient experience survey results inform commissioning decisions, and the publication of guidance on using survey data to drive improvement. The survey is used in very hands-on ways, and in previous debates I have been impressed at the extent to which data are used right at the front line to say, “This is what really good looks like”, or to highlight where services can be improved by reference to those who are doing things well.

The need to improve is recognised by the NHS. In his forward to the 2014 survey report, Sean Duffy, NHS England’s national clinical director for cancer, recognised the importance of clinical nurse specialists and the need to be particularly sensitive to the needs of patients with a recurrence of cancer. We all recognise the picture that my right hon. Friend painted of people telling others of their diagnosis and what they say and the enormity of the news they are trying to convey not really being understood. Sean Duffy also highlighted the need for sensitivity when the cancer has not responded to treatment as had been hoped.

I understand that NHS England has no plans to discontinue the cancer patient experience survey. I have drawn on it a number of times when responding to debates, and it has been extremely valuable to front-line clinicians for understanding where excellence is being practised. I am keen and have stressed to NHS England on a number of occasions how much Members of the House appreciate the survey and feel that it informs our debates and the knowledge of our constituents.

The survey is overseen by the cancer patient experience advisory group, chaired by Neil Churchill, NHS England’s director of patient experience. Suggestions for amendments or additions to the survey can be addressed to that group. I will obviously draw this debate to the attention of NHS England, and the all-party group on breast cancer will continue to engage with it on ways that the survey could be improved or amended.



My right hon. Friend mentioned the need to improve detection and treatment of people with secondary breast cancer. We need to have good data about those affected. As she said, in the 2011 cancer outcomes strategy we committed to pilot the collection of data about metastatic disease, which had previously not been recorded. In March 2012, a report on the pilot data collection project was published. The pilot programme included data from 15 units and enabled the National Cancer Intelligence Network to identify deficits in the information recorded for those patients. Lessons learned from the pilot have now been applied to a country-wide programme. Since April 2012, all breast units have been required to submit information on all patients diagnosed with a new recurrence or with metastatic disease through the cancer waiting times process.

Analysis of the cancer waiting times data, based on referrals to hospital between 1 April 2012 and March 2013, shows that 7,176 patients were diagnosed or treated for recurrent breast cancer in England. However, we know we need to improve the quality of the data to ensure that we are getting the full picture. There are significant discrepancies between trusts and the analysis will need to be updated with more recent cancer waiting times data to ensure that the figures are robust. The NCIN, Macmillan and the Public Health England knowledge and intelligence teams are working collaboratively on a system to detect patients with recurrent breast cancer by looking at treatment patterns. Results from that collaborative work should be available in 2015. I know it is a source of frustration that they have not been available to date, but that work is at least ongoing. I will pursue that point further with Public Health England after the debate. We have regular meetings. I will of course raise the issue and ensure we keep the House up to date.

On the national peer review programme, I would like to assure my right hon. Friend that NHS England is currently reviewing the national cancer peer review programme with a view to considering how its success might be extended into other new areas of specialised commissioning. Regardless of the outcome of the review, cancer peer review will continue to play a critical part in any broader peer review programme the NHS might introduce. Further details will be published shortly as part of the wider review into specialist commissioning.

The clinical commissioning group outcomes indicator set is not designed for use as an accountability tool. For that, NHS England uses the CCG assurance delivery dashboard—I apologise for the jargon, which, unfortunately, is a feature of these debates—to hold CCGs to account. “Everyone Counts: Planning for Patients 2014/15-2018/19” was used by NHS England to identify the relevant indicators for reporting in the CCG dashboard. In addition, as new data have come on line throughout 2013-14, as well as feedback received on the indicators that are currently being used, NHS England has reviewed whether there is potential to make improvements in 2014-15. The cancer indicators used in the CCG assurance dashboard are based on cancer waiting times. NHS England is continually looking to improve the delivery dashboard. I know the all-party group will continue to engage with that process, as will the charity that supports it and the other charities.

As well as improving patient experience, we want to ensure that women are informed about the risks of metastatic disease so it can be diagnosed early. NHS England breast cancer clinical reference group is determined to ensure that everything possible is done to reduce the risk of secondary breast cancer. It is preparing a service specification for the provision of breast cancer services in England. NHS England knows that the information currently given to patients on the risk of secondary breast cancer is variable and frequently inadequate. That was brought to life for all of us in the Chamber by the deeply moving extracts from the comments of sufferers that were read out by my right hon. Friend. I do not think that any of us could have been unaffected by them. The clinical reference group’s service specification will require that all patients should have an end of primary treatment consultation, which will include advice on signs and symptoms that might indicate secondary breast cancer. That information needs to be delivered together with an holistic needs assessment as part of a recovery package. The evidence that this has been done will have to be recorded in the records of every breast cancer patient.

Touching briefly on research, the National Institute for Health Research is enabling patients to take part in trials of new treatments for metastatic breast cancer through its clinical research network.

As we all know, early diagnosis is key. Alongside the work to increase awareness, the Government have committed £450 million to achieve earlier diagnosis and the associated improved cancer survival rates. On breast cancer specifically, in February and March, we ran a Be Clear on Cancer campaign to increase awareness of breast cancer in women over 70. The proportion of women spontaneously mentioning breast cancer rose significantly, as did confidence in people’s knowledge of signs and symptoms of breast cancer. The campaign was well recognised, with many agreeing that the advertising would prompt them to talk to somebody close to them about the symptoms to watch out for. As well as increasing awareness, the campaign appears to have resulted in a large increase in referrals to secondary care in the target age group. The analysis, although only interim, suggests a significant increase in the number of women over 70 self-referring for breast screening. We are encouraged by that.

In addition, Public Health England is funding the biggest randomised control trial in the world and extending the NHS breast screening programme to women in the 47 to 49 age group and the 71 to 73 age group. As the trial is studying the effects of screening on breast cancer mortality rates over time, the results will not be known until the early 2020s, but it is an important and extensive study.

To conclude, I thank my right hon. Friend once again for bringing this debate to the House, the manner in which she introduced it and her important work on this subject throughout her parliamentary career, and I thank my other hon. Friends who have supported her and who also take a great interest in this subject. She is right to point out that fundamentally there is a message hope: so great is our progress that we can now compare of where we want to be with secondary breast cancer with where we increasingly are with breast cancer. However, she also rightly reminds us that more progress needs to be made.

I shall draw this debate to the attention of the national clinical director, Sean Duffy, and make him aware of the concern expressed in the House on this subject. I reassure my right hon. Friend of the Government’s commitment to reducing the incidence of secondary breast cancer and to improving outcomes for everyone diagnosed with this terrible disease. I offer a message of hope and improvement to all of them.

Question put and agreed to.

18:42

House adjourned.