House of Commons

Thursday 8th January 2015 Commons Chamber

Thursday 8 January 2015

The House met at half-past Nine o’clock

Prayers

Thursday 8th January 2015 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 8th January 2015 Commons Chamber

The Secretary of State was asked—

[Kerry McCarthy (Bristol East) (Lab)]

1. What steps the Government are taking to increase the value of the minimum wage and encourage firms to pay the living wage.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

On our return to Business questions after the break, may I wish you, Mr Speaker, and all Members a happy new year? I am sure that the thoughts of everybody in the House this morning are with France and, in particular, with the relatives and friends of those who were killed and injured in the appalling terrorist atrocity yesterday.

Last year, the Government announced the first above inflation increase in the national minimum wage since the 2008 banking crisis, benefiting more than 1 million workers. Since 1 October 2014, full-time minimum wage workers have seen an annual cash increase of £355 in their pay packets, and we expect real-terms increases to continue as the economy recovers. We support employers paying the living wage where it is affordable and not at the expense of jobs.

[Kerry McCarthy]

I thank the Secretary of State for that response. He will know that for every £1 that employers pay above the minimum wage to lift workers to the living wage, the Treasury reaps 49p in reduced benefits and increased tax revenues. Why will his Department not consider using that increased revenue to incentivise businesses to pay the living wage for the first 12 months, as Labour is proposing with its make work pay contracts?

[Vince Cable]

It is precisely because of that revenue wedge that the Government have invested so much resource in lifting the threshold so that low-paid workers are not caught in taxation. That has substantially alleviated the pressure on the living standards of low-paid workers.

[Mr Philip Hollobone (Kettering) (Con)]

It is really very important that minimum wage legislation is enforced, as those in receipt of the minimum wage tend to be at the bottom of organisations and among the lowest paid. What sanctions are being used on those at the top of organisations who receive the highest pay—the board directors—when minimum wage legislation is not being followed?

[Vince Cable]

There is a legitimate concern about high pay as well as low pay, which is why the Government introduced reforms of executive pay, with a binding vote on executive pay by shareholders, significantly strengthening the Government’s powers to ensure that shareholders exercise proper responsibility over top pay.

[Mr Frank Field (Birkenhead) (Lab)]

The Secretary of State talks about relieving pressures on the living standards of the lowest paid, but is he aware that the all-party parliamentary group on hunger and food poverty in Britain found, to its surprise, that a number of people using food banks were on the minimum wage? Might he not therefore use whatever powers he can to press those sectors of industry that could pay the living wage, such as banking and finance, to do so?

[Vince Cable]

I suspect that relatively few people are on the minimum wage in the banking and finance sectors, but we support the living wage for those companies that can afford it and are not putting people out of work. My responsibilities are more in respect of strengthening the minimum wage and making enforcement tougher. We are doing that and we are signalling to the Low Pay Commission that we respect its independence but are looking forward to real-terms increases in the minimum wage in the future.

[Paul Blomfield (Sheffield Central) (Lab)]

In a debate in Westminster Hall on the widespread abuse of employment practice for care workers, the Secretary of State’s colleague, the Minister of State, Department of Health, the right hon. Member for North Norfolk (Norman Lamb), said that he was pressing the Department for stronger enforcement against illegal practices. What is the Secretary of State’s Department doing about it?

[Vince Cable]

I worked actively and closely with my colleague in the Department of Health on this issue. There are two issues involved: minimum wage enforcement and ensuring that we have tougher legislation to deal with some of the practices that operate in that sector, such as zero-hours contracts. At the moment, we are looking more widely at employment rights for groups of people who are classified as workers but who do not currently enjoy those rights. The care sector is one such group.

[Yvonne Fovargue (Makerfield) (Lab)]

2. What recent assessment he has made of the effect of copycat websites on consumers.

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

Copycat websites con people out of hard-earned cash. They undermine trust in online services and we are committed to stopping them. We need to work with search engines, to take enforcement action, to improve the consistency of Government websites and to educate consumers.

[Yvonne Fovargue]

The top advertised search result for the European health insurance card if someone searches for “health card” or “national health card” is a site that charges £49 for its so-called services. Will the Minister act to put a stop to that practice by giving similar powers to those of Transport for London and blocking transactions from that site, tackling the problem at source?

[Mr Vaizey]

We have taken a lot of action. We have worked closely with the search engines to ensure that they implement their terms and conditions on copycat website advertising, and the click-through to Government websites has increased by 30%. There is a problem with blocking transactions for websites that charge. A lot of Government services are free and we would not necessarily know whether other websites were charging. We know what Transport for London has done and we continue to keep the issue under review.

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

In fact, I was recently online to renew my European health card. I discovered that most of the top Google search results were sites that made people pay, but a lot of consumers do not realise that they can get the card free. There is an urgent need for the Government to take action to ensure that at least Government-provided services are clearly signposted on websites so that people know they are on a genuine website and not one that will rip them off.

[Mr Vaizey]

I completely agree with the hon. Lady. I hear complaints from my constituents about such websites. We have referred the issue to the Internet Governance Forum and convened a round table of digital traders to discuss strengthening terms and conditions, and we work with Nominet, the UK’s internet registry services provider, to look at ways of prohibiting the registration of such domain names.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

May I associate the members of the Opposition Business, Innovation and Skills Front-Bench team with the Secretary of State’s remarks? We wish you a happy new year, Mr Speaker, and express our sympathies to the families of those killed in Paris.

The Minister seems not to get the point. Many of those services are meant to be free, but the sites imply that people have to pay for them. The Mayor of London obviously does not believe that the Government’s action on copycat websites is good enough because he has introduced legislation to tackle rip-off congestion charge sites. Does the Minister believe the Mayor was right to do that? If so, why is what is good enough for London not good enough for the rest of the UK?

[Mr Vaizey]

I always support the Mayor of London, because he is one of the most brilliant Mayors of London this country has ever seen. He has frozen the Mayor’s precept and introduced Boris bikes. However, it took me an hour and 10 minutes to get to Westminster from Hammersmith on the tube, so perhaps today I am about 99% supportive of the Mayor rather than 100%.

I completely agree with the hon. Lady’s sentiment that we must stamp on these copycat websites. I progressed the issue myself because of complaints from my constituents. That is why I am so pleased that we have made progress with strengthening search engine terms and conditions and started to move away from copycat websites having prominence and seen an increase in people using Government websites.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

3. What steps his Department is taking to increase the number of apprenticeships.

[The Minister for Skills and Equalities (Nick Boles)]

We have achieved our ambition of 2 million new apprenticeships since 2010. The apprenticeship grant for employers is helping smaller business to take on new apprentices. From April 2016, employers will not be required to pay employer national insurance contributions for apprentices under the age of 25.

[Stephen Metcalfe]

Will the Minister join me in congratulating the nearly 800 people in my constituency who started an apprenticeship last year? However, it is not just about quantity; it is also about quality. What steps is he taking to raise quality as well as quantity?

[Nick Boles]

I am delighted to congratulate those who started apprenticeships in my hon. Friend’s constituency this year. There has been a 40% increase since 2009-10 in the number of people starting apprenticeships in his constituency. They are higher-quality apprenticeships than those that existed under the previous Government. They have to last at least 12 months, and they have to be a real job with a real employer. That is a key part of the economic plan that is improving conditions for young people in his constituency.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

The most recent figures show a fall in the number of apprenticeship starts in the north-east. What explanation can the Minister offer for that concerning trend and what does he intend to do about it?

[Nick Boles]

The previous Government created a great number of Mickey Mouse apprenticeships in order to massage the figures. There were apprenticeships for which people did not need an employer, and apprenticeships that lasted way less than 12 months. Under this Government, there is substantial growth in real apprenticeships—those that last more than 12 months and that give people real skills that will improve their earnings. That is why the number of people not in education, employment or training is lower than it has ever been.

[Andrew George (St Ives) (LD)]

The Government should be congratulated on what they have achieved with regard to apprenticeships, but the Minister will be aware that in rural and economically challenged areas such as mine in west Cornwall and the Isles of Scilly, it is quite difficult to advance apprenticeships, particularly in small and micro-businesses. What will the Government do to ensure that small and micro-businesses can enjoy this success?

[Nick Boles]

It is incredibly important that apprenticeships are created not just by the largest employers who obviously have the resources and capacity to engage with the scheme. That is why we introduced the apprenticeship grant for employers, which is specifically focused on small businesses and pays them £1,500 for the first new apprenticeships that they create. We are also looking at ways of making it easier for small businesses to get the Government’s money and to decide with whom they want to work as a training provider. But it is critical—only about 10% of employers are creating apprenticeships; if we could just double that, we could more than double the number of apprenticeships.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Should we not give the Minister the opportunity to withdraw his unfortunate remarks about Mickey Mouse apprenticeships, which really are very disrespectful to all those who worked hard and did a good job in important apprenticeships in the years to which he was referring? Is it not true that most of the increase under this Government, which Members from all parts of the House welcome, has taken place not among 16 to 18-year-olds but in the 20-year-olds-plus group, and we now need apprenticeships that will encourage the younger group into them?

[Nick Boles]

It gives me great pleasure to disagree with literally everything that the hon. Gentleman has said. I certainly will not withdraw my suggestion that the last Government was conning young people. An apprenticeship that lasted less than 12 months and did not even have an employer was a fraud on them, because it was not preparing them for a life of work or giving them relevant skills. It is a bit strange for the Opposition to suggest that nobody over the age of 24 deserves any investment in new skills or any chance to acquire a new ability. I welcome the fact that people over the age of 24 are taking up apprenticeships more than ever before.

[Mr Robin Walker (Worcester) (Con)]

One of the benefits of the real apprenticeships that the Government have brought in is that they provide long-term avenues into work. I recently visited a small business in Worcester that was taking on its 13th apprentice. Every single apprentice that had been through had been given a full-time job by that business. But there is still a challenge in persuading careers advisers that apprenticeships provide real value. What can my hon. Friend do to encourage them to support apprenticeships more generally?

[Nick Boles]

My hon. Friend is absolutely right. It is often careers advisers and teachers who, perhaps for the best reasons in the world, just do not understand the opportunities out there in apprenticeships, or the fact that someone can now get a degree through an apprenticeship or rise to almost any position in the senior management of a company. It is no longer about a young lad under the bonnet of a car; it can still be that, but it can also be about a young woman who has just got a first-class degree at BAE Systems through a higher apprenticeship. We are trying to get that message out in every way we can.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

This Government have contrived to create a country where this generation of young people is now the first generation for a century to be poorer than the generation before them. Young people now face an unemployment queue that is three quarters of a million long; graduates now face £44,000-worth of debt; and from figures published by BIS before Christmas, we learned that the number of apprenticeships for the under-24s has not gone up but down. Social mobility in this country is in reverse, and we need more apprenticeships for young people, not fewer. The Opposition have an ambition that by 2025 as many people should be going into an apprenticeship as are going to university. Is that an ambition that the Minister will match?

[Nick Boles]

What I hope to hear from the right hon. Gentleman is whether that pledge, which we have costed on a reasonable basis, received the approval of the shadow Chancellor. My understanding is that the shadow Chancellor has not approved the approximately £700 million of extra spending, entirely unexplained, that it would cost to support that ambition. The Government are very clear what our ambition is. We will create 3 million new apprenticeships in the life of the next Parliament. Those apprenticeships will be for all people who would benefit from them. Unlike the Labour party and the hon. Member for Coventry North West (Mr Robinson), we do not discriminate against people over the age of 24.

[Mr William Bain (Glasgow North East) (Lab)]

4. What estimate he has made of the contribution net trade will make to GDP over the next four years.

[The Minister for Business and Enterprise (Matthew Hancock)]

Our goal is for exports to reach £1trillion by 2020.

[Mr Bain]

I am grateful for the Minister’s answer, but last month the Office for National Statistics said that exports had remained largely flat for the past four years, and the Office for Budget Responsibility and the British Chambers of Commerce both downgraded their forecasts for net trade this year, so can he confirm that with this failure on economic rebalancing, his targets for Britain to double our exports to £1 trillion by 2020 and to get 100,000 more firms exporting from Britain will be missed?

[Matthew Hancock]

It is a pity to hear the Opposition setting their face against the desire to double exports to £1 trillion. Of course, the eurozone on our border is in deflation and has had a series of recessions over the past four and a half years. Over the past three months our trade deficit has narrowed, so things are improving. This is undoubtedly hard work, but it is hard work that we will pursue.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

5. What progress his Department has made on creating a low-carbon economy.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

The Government have taken strong action to create a low-carbon economy, including setting up the Green Investment Bank and a catapult centre dedicated to new renewables, and electricity market reform. Through the Department’s industrial strategy, we are working with industry to increase green jobs via sector-specific strategies for the offshore wind and nuclear industries.

[Miss McIntosh]

Although I welcome the Government’s commitment to green energy and a low-carbon economy, surely there must be a better way of achieving that than hydraulically fracturing for fossil fuel such as shale gas, which causes huge environmental disbenefits.

[Vince Cable]

I am aware of the hon. Lady’s concern about the areas of outstanding natural beauty in Yorkshire, which she represents. There is indeed an expression of interest, but there are very strong environmental and safety protections around shale gas drilling, and I am sure she will look forward to the extra development that this will produce in her constituency in due course.

[Clive Efford (Eltham) (Lab)]

The Environmental Audit Committee says that our investment in renewable energy is growing at half the rate it needs to grow at to meet our future energy needs. What is the Secretary of State doing about that?

[Vince Cable]

My understanding is that investment in renewable energy is double what it was in the previous Parliament. There are certain aspects of new renewables where we lead the world, including offshore wind.

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

Does the Secretary of State realise that if we are to have a low-carbon economy, he and his Government have to start taking investment in higher education seriously? I chair the Engineering and Physical Sciences Research Council’s committee on sustainable production. If we do not put more money into postgraduate education, and if we do not support higher education and get away from this crazy system where all higher education relies on a mountain of student debt, we are heading for terrible trouble.

[Vince Cable]

That is a rather creative stretch to the low-carbon economy, but specifically on postgraduate education, the hon. Gentleman will be aware that we have just introduced a postgraduate loan scheme for the first time.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

6. What steps he is taking to increase the number of apprenticeship places through Government procurement.

[Mr John Spellar (Warley) (Lab)]

15. If he will make greater use of Government procurement to increase apprenticeship places.

[The Minister for Skills and Equalities (Nick Boles)]

We are keen to look at ways that procurement of major infrastructure projects such as HS2 and new nuclear power plants can drive investment in construction and engineering skills. High Speed 2 will create up to 2,000 apprenticeship opportunities and Crossrail is on track to deliver its target of at least 400 apprenticeships during construction.

[Mr Bailey]

In their response to a Business, Innovation and Skills Committee report on this issue, the Government said that they were

“working on guidance to encourage best practice amongst local authorities”.

This National Apprenticeship Service guidance was subsequently published in July. It was eight pages long, and the first six pages were devoted to problems in securing this policy and case studies of failed projects. Does the Minister agree that if we are to realise the policy’s full potential, we need a far more robust and proactive approach by the Government?

[Nick Boles]

I certainly agree that there is more to be done, which is why I have had several meetings with Lord Deighton, the Commercial Secretary to the Treasury, to work out exactly how we can make it an integral part of the procurement process for all major infrastructure projects that there is a clear commitment by all successful bidders to invest in skills training and in the creation of apprenticeships.

[Mr Spellar]

I recognise that the Minister is new to this place, and that point scoring has its place, especially at this stage in the political cycle, but a previous answer of his did not match the seriousness of the situation. He referred to real apprenticeships leading to real skills, but we still have a huge skills shortage across the economy—for example, in construction, engineering, health and haulage, to name but a few areas. Will he make it a contractual requirement that bidders for national and local contracts have proper ratios of training places, and will he enforce those provisions if bidders fall short?

[Nick Boles]

I am grateful to the right hon. Gentleman for giving me an opportunity to clarify that. I think that it should absolutely be part of the procurement process for all major infrastructure projects that bidders are expected to make appropriate investments either in some form of skills training or, ideally, from my point of view—I am the apprenticeships bore—in the creation of apprenticeships. I hope that he, having criticised our record, will welcome the enormous number of apprenticeships that have been created in his constituency —50% up on 2009-10.

[Sir Bob Russell (Colchester) (LD)]

Is this Government policy applicable to all Departments? Will the Minister specifically have a word with the Ministry of Defence, which perhaps does not know about it?

[Nick Boles]

I have the greatest respect for my hon. Friend and am always nervous about implying that his comments are in any way unfair, but the armed forces in fact create more apprenticeships every single year than any other organisation in the country. I want this to be an integral part of the procurement for major infrastructure projects and, to the extent that the MOD is involved in such projects, it will absolutely apply to it, but the MOD is leading the way in creating apprenticeships, and we should pay credit to it for that.

[Mr Andrew Turner (Isle of Wight) (Con)]

7. What steps he has taken to support manufacturing in the renewable technologies sector.

[The Minister for Business and Enterprise (Matthew Hancock)]

Our industrial strategy and our energy policy support manufacturing of renewables. I welcome the recent announcement from MHI Vestas that it will manufacture the blades for offshore wind turbines in my hon. Friend’s constituency. Of course, as with any other area of our economy, the best support we can give renewables manufacturers is to stick with our long-term economic plan.

[Mr Turner]

I am sure that my right hon. Friend welcomes the recent announcement that MHI Vestas is to restart manufacturing 80-metre offshore wind turbine blades, which, as he said, will be designed, built and tested on the Isle of Wight. Will he assure me that he will continue to support those manufacturing jobs, in which the island is fast becoming a globally important player?

[Matthew Hancock]

I pay tribute not only to my hon. Friend for the work he has done to bring that investment to the UK, and specifically to the Isle of Wight, but to all hon. Members who have worked to make Britain one of the best players in the world in the manufacture of renewables technology. That complements our energy policy. The tie-up between getting the industry and the energy policy right is absolutely vital, and he has played an important role in that.

[Lilian Greenwood (Nottingham South) (Lab)]

8. If he will take steps to ensure that employees working on zero-hours contracts who are in practice working regular hours over an extended period have the right to a fixed-term contract.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

Under flexible working legislation brought in on 30 June 2014, all employees with 26 continuous weeks of service have the right to request flexible working from their employer. Employees on zero-hours contracts can request a change in their contracts, which could of course include a request to move to fixed hours.

[Lilian Greenwood]

Over Christmas, Radio Nottingham carried reports of a zero-hours worker at SportsDirect who was so worried about missing a shift that he went into work despite being critically ill. I have heard from constituents working in health and social care who dare not raise concerns about health and safety or quality of care for fear of losing all their hours. Is it not now absolutely clear that the only way to end that exploitation is to vote Labour on 7 May?

[Jo Swinson]

Unsurprisingly, I disagree with the perspective at the end of the hon. Lady’s question. I agree that there are serious issues with zero-hours contracts. Although they work well for many people, as backed up by Chartered Institute of Personnel and Development surveys, there are other examples—she highlights some from her constituency—where that type of contract is not used as it should be. That is why we are taking action through the Small Business, Enterprise and Employment Bill to ban exclusivity clauses and why we are going further, with the development of sector-specific guidance to show what the proper and responsible use of these contracts looks like.

[Ann McKechin (Glasgow North) (Lab)]

The Minister will be aware that in parcel and distribution services there is not only widespread use of zero-hours contracts but, as we have seen with the collapse of City Link, increased use of self-employed contractors, who have ended up with no rights to redundancy, with losing pay, and with being increasingly abused. How will the Minister regulate the sector so that we halt this race to the bottom in labour conditions?

[Jo Swinson]

The hon. Lady raises a genuine point. The Government do recognise this as an area of concern, particularly as regards different employment statuses. My right hon. Friend the Business Secretary announced a review of employment statuses so that there can be greater clarity about the issues and we can see whether we need to make changes to the way in which different employment statuses are currently set out. The review is ongoing and we expect it to report over the next couple of months.

[Kelvin Hopkins (Luton North) (Lab)]

9. What recent assessment he has made of the effect of the UK’s EU membership on businesses and the UK economy.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

The European single market gives British firms access to 500 million consumers and, as our largest trading partner, is responsible for almost half this country’s exports. There is a clear direct benefit to British businesses from European Union membership.

[Kelvin Hopkins]

Britain has an enormous and persistent trade deficit with the EU, equivalent to about 1 million lost British jobs. The growing crisis in the eurozone will only make the position worse, and there is no end in sight to its economic problems. What are the Government going to do to protect Britain’s economic interests in this dire situation?

[Vince Cable]

I am surprised that the hon. Gentleman does not share the consensus among Opposition Members about the benefits of British membership. I am sure that if he occasionally crosses the border into Luton South and visits the vehicle production institution, he will recognise the EU’s importance to the industry and of its having the European Union negotiate access to bigger markets such as north America, as it currently is.

[Ian Murray (Edinburgh South) (Lab)]

In a recent article in The Times, a host of senior Cabinet members, including the Foreign Secretary, the Chief Whip, and even some Ministers in the Secretary of State’s own Department, stated that they would campaign for an “out” vote in any EU referendum. In the same article, another Cabinet member was reported as saying:

“It would be a continual distraction from…work on the economy”.

Given that, as the Secretary of State said, the EU is one of our largest trading partners, what is his view on the impact on UK trade and jobs in the event of, first, an EU referendum, and, secondly, exit from the EU?

[Vince Cable]

That unnamed member of the Cabinet was probably me; I did take a different view. None the less, I do have common ground with my Government colleagues in believing that the European Union needs to be reformed in quite radical ways. We need to deepen the single market, to reach trade agreements with other countries, and to reduce much of the bureaucracy that surrounds commercial activity.

[Robert Flello (Stoke-on-Trent South) (Lab)]

10. If he will make greater use of Government procurement to increase innovation and develop supply chains.

[The Minister for Universities, Science and Cities (Greg Clark)]

The Government are making greater use of public procurement to increase innovation and develop supply chains. The small business research initiative has provided the most innovative companies with 1,900 contracts worth £235 million, and it will be expanded. The Small Business, Enterprise and Employment Bill implements the reforms proposed by Lord Young radically to simplify Government procurement, such as by making contract opportunities available on a single website to which all businesses can have access.

[Robert Flello]

Given that the Government’s recent science and innovation strategy does not cover departmental research and development, when will the Government outline their plans on the vital role that Whitehall Departments must play in supporting innovation? In the light of his response, perhaps the Minister will place in the Library a short audit of how Departments are responding to the points he mentioned.

[Greg Clark]

The hon. Gentleman is mistaken. If he reads the science and innovation strategy—I invite him to do so and will send a copy—he will see that it makes several references to this matter, including the fact that the SBRI covers a number of Whitehall Departments and will expand. It also recognises the important work of research and development within each Government Department and makes proposals to advance that.

[Mr Speaker]

Question 11. Sir Peter Luff is not here. I call Heidi Alexander.

[Heidi Alexander (Lewisham East) (Lab)]

12. What assessment he has made of recent trends in the number of apprenticeship starts for people under 19; and if he will make a statement.

[The Minister for Skills and Equalities (Nick Boles)]

In 2013-14 there was a total of 119,800 apprenticeship starts for people under 19—5,300 more and a 4.6% increase compared with 2012-13.

[Heidi Alexander]

Last month, the Government’s own apprenticeship pay survey showed that one in four young apprentices are not receiving the legal minimum wage they are entitled to. In 2013-14, how many 16 to 18-year-olds did not receive the £2.68 per hour they are entitled to?

[Nick Boles]

My right hon. Friend the Secretary of State set out very clearly what we are doing to improve enforcement of the national minimum wage. One of the things that is clearly happening is that, given the complexity of the different rates—the rate changes both if someone becomes an apprentice and as they get older—many employers simply get it wrong because people’s ages change as they go through an apprenticeship scheme. That is one of the reasons we have written to the Low Pay Commission strongly suggesting that it should simplify the system and improve the minimum wage rate for 16 to 17-year-olds in apprenticeships. That would deliver a £1 increase, but it would also simplify the system, which would improve enforcement. I am happy to write to the hon. Lady with the detail on the figures she desires.

[Mary Macleod (Brentford and Isleworth) (Con)]

13. What recent steps he has taken to support small businesses.

[The Minister for Business and Enterprise (Matthew Hancock)]

There are a record number of small businesses in Britain—760,000 more than in 2010—and they are employing more people than ever before. As in any other area of our economy, the best support we can give small businesses is to stick with the long-term economic plan.

[Mary Macleod]

I commend the Government for what they have done for small businesses, especially on business rates, which has helped local businesses in my constituency of Brentford and Isleworth. One of the issues that still faces small businesses is late payment. I know some of that will be addressed—by negotiating fairer contracts—in the Government’s Small Business, Enterprise and Employment Bill, but does my right hon. Friend agree that the unfair practices of late payment and supply chain bullying are unacceptable?

[Matthew Hancock]

Yes, I do. We are working incredibly hard—in fact, no Government have done more than this one—to tackle late payment. Changes coming into effect at the end of this month will ensure that 30-day payment terms are driven down the supply chain from public sector purchases. There have been 9,400 business start-ups in my hon. Friend’s constituency during this Parliament—one of the highest figures across the whole country, thanks in no small part to her hard work.

[Mr Jim Cunningham (Coventry South) (Lab)]

A Minister told one of my hon. Friends earlier that the Government would review employment law. Will the Minister for Business and Enterprise also review company law, certainly in relation to City Link? I am sure my hon. Friend the Member for Coventry North West (Mr Robinson) will support me in saying that we should review company law as well as employment law. What happened at City Link, with redundancies being announced on Christmas day, was an absolute disgrace. How would people feel if that happened to them?

[Matthew Hancock]

The timing of the announcement was clearly very difficult, but we are doing all we can to support those affected by the decision. Both the Secretary of State, who was constantly in touch with the company and the unions over Christmas, and I are working hard to support those affected.

[Toby Perkins (Chesterfield) (Lab)]

One of the things that the Government could do to support small businesses is to support Labour’s plans to outlaw pay to stay agreements. We very much welcome the fact that, on the back of pressure from the Opposition, Premier Foods has ceased its pay to stay arrangements. The Government say that such arrangements are unacceptable, but at the same time they refuse to outlaw them. Does the Minister consider some forms of pay to stay acceptable, or are the Government so hostile to any form of regulation that they are willing to stand by while unacceptable business practices evolve and to leave small firms at the mercy of their big business customers?

[Matthew Hancock]

I know that the hon. Gentleman likes to chip in to this debate, but recent events have clearly demonstrated the power of transparency in relation to late payment to small business. As he knows, we are radically improving the position through the small business Bill. When the contracts came to light, the company was held to account and did a U-turn. [Interruption.] They were brought to light by the Federation of Small Businesses, to which I pay tribute for its work in highlighting the issue.

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

14. What steps he is taking to increase the number of engineers.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

The Government are making a series of interventions to increase the number of British engineers—from trailblazer apprenticeships in engineering, manufacturing and automotive sectors to national colleges in advanced manufacturing, high-speed rail, nuclear, oil, gas and wind, with £30 million of funding to address employers’ skills shortages in engineering and £200 million of capital investment in science, technology, engineering and maths teaching facilities in higher education.

[Andrew Jones]

I thank my right hon. Friend for that reply. What more is he doing to inspire younger people, particularly younger women, to take up engineering careers?

[Vince Cable]

I am aware of my hon. Friend’s interest in the issue. Harrogate college recently benefited from significant investment in vocational education. He asks how we promote the message about engineering, particularly to women, who are massively under-represented in the sector. I pay tribute to the STEM network of volunteers; there are about 28,000 of them, and 40% are women. We hope that through that process of campaigning, and visits to schools and education institutions, we will gradually turn this unsatisfactory situation round.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

The UK automotive industry has had another good year, which is welcomed across the House, but it now needs to recruit even more engineers. What is the Automotive Council UK doing to promote the industry to the next generation of engineers?

[Vince Cable]

The Automotive Council UK is one of the success stories of industrial strategy. There is a great deal of commitment from industry and, indeed, on both sides of the House. The talent retention scheme is working well: if engineers are lost in particular sectors of the economy, they are speedily re-employed elsewhere and the skills base—which, as my hon. Friend implies, is inadequate—is maintained.

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

16. What support he is providing to businesses wanting to take on apprentices.

[The Minister for Skills and Equalities (Nick Boles)]

Some £l70 million has been made available between 2014 and 2016 to fund more than 100,000 additional payments of the apprenticeship grant to employers, and the Government’s planned investment in apprenticeships in the current financial year totals £1.5 billion.

[Rehman Chishti]

Will the Minister join me in welcoming the news that in Gillingham and Rainham there were 450 intermediate, 230 advanced, and 20 high-level apprenticeship starts in 2013-14, meaning that 700 young people gained invaluable skills and experiences for future careers? Will he join me in congratulating businesses such as Jubilee Clips and Delphi in my constituency on providing excellent engineering apprenticeships?

[Nick Boles]

Businesses such as those my hon. Friend mentions are leading this country into recovery and ensuring that that benefits everyone in his constituency. Since 2009-10, there has been a 73% increase in the number of new apprenticeships in his constituency, and that extraordinary figure is testament to local employers, colleges, and the local Member of Parliament.

[Joan Walley (Stoke-on-Trent North) (Lab)]

17. What position his Department took at the Competitiveness Council discussions on 4 December 2014 on the product safety and market surveillance package and the provision of mandatory origin marking on consumer products manufactured or imported.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

The UK’s position on the product safety and market surveillance package remains unchanged: we oppose the inclusion of mandatory country of origin marking in the consumer product safety regulation. The issue was briefly raised at the Competitiveness Council meeting on 4 December, but no formal discussion or decisions were taken.

[Joan Walley]

I thank the Minister for that reply, but I am disappointed. On the grounds of public health and putting British manufacturing on a level playing field, we desperately need to hold a consultation and do the necessary research to make the case for compulsory country of origin marking, so that when we turn over a cup or saucer we know exactly where it was manufactured. Why cannot the Government abandon their opposition to that deregulatory measure?

[Jo Swinson]

The hon. Lady is a long-standing campaigner on and advocate for that issue. I do not believe it is a product safety matter, but she is right to say that there is a genuine issue that businesses in her constituency and other parts of the country are concerned about. We are looking into the matter in more detail and we expect a UK study on country of origin marking to complete by next month. The Commission has announced its own study on origin marking, which we will consider closely.

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

18. If he will bring forward legislative proposals to prohibit firms from being asked to make pay to stay agreements to remain or become approved suppliers by large firms.

[The Minister for Business and Enterprise (Matthew Hancock)]

The Government are radically increasing transparency over late payment, drastically shortening public sector payment terms, and consulting on changes to tackle pay to stay arrangements.

[Grahame M. Morris]

The business practices of Premier Foods in charging firms for the privilege of being a supplier have been condemned as unethical and an example of predatory capitalism. Will the Minister join me in condemning the way in which City Link management treated its work force, and will he say what the Government are doing to support City Link workers? Does he support a full inquiry into this dreadful affair, including into the circumstances leading up to the announcement, so that lessons can be learned and we do not have any repeat of such events?

[Matthew Hancock]

The administrator will report on City Link. On the issue of Premier Foods, the practices were hard to defend, as I said earlier. In fact, the company found them impossible to defend when they came to light. The extraordinary increase in transparency will help to make sure that we can see which companies have good payment practices and which have the worst. We can then compare them and hold to account those companies with bad practices. More than that, we are consulting on changes to such contracts and we will have the results of that consultation shortly.

[Heidi Alexander (Lewisham East) (Lab)]

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

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

My Department plays a key role in supporting the rebalancing of the economy through business to deliver growth, while increasing skills and learning.

[Heidi Alexander]

May I press the Minister further on the question of apprenticeships? Not only did the pay survey expose some concerning trends, it also showed that one in five apprentices do not actually receive any training. Given that most people’s idea of an apprenticeship is a placement that combines on-the-job work experience and a specific training programme, I find that deeply concerning. What percentage of the Government’s apprenticeships are not really apprenticeships at all?

[The Minister for Skills and Equalities (Nick Boles)]

There is confusion because sometimes employers will call something an apprenticeship that we do not recognise as an apprenticeship and for which we provide no financial support. They are free to do that: we do not own the trademark of an apprenticeship. We make a choice, however, about which apprenticeships we support, and we have a clear policy that we enforce—they have to last longer than 12 months, they must pay the minimum wage for apprenticeships, and they have to involve training. If the training is not external—some big employers will have internal training arrangements—they have to be Ofsted inspected, like every other training provider.

[Caroline Dinenage (Gosport) (Con)]

T5. What plans do the Government have to strengthen the prompt payment code to stop larger organisations taking advantage of their suppliers?

[The Minister for Business and Enterprise (Matthew Hancock)]

We are strengthening the prompt payment code. We want more companies to sign up to the code and I am writing to all the FTSE 350 companies to encourage them to do so. If a company changes its payment practices for the worse and to the detriment of small businesses, I want to see a situation in which they will be kicked off the prompt payment code so that they cannot wear that badge of pride.

[Mr Chuka Umunna (Streatham) (Lab)]

Following on from the question from my hon. Friend the Member for Coventry South (Mr Cunningham), does the Secretary of State agree that to hear that your job has been put at risk of redundancy not from your employer, but while watching the television news with your family on Christmas day—as was the case with the City Link workers—is an utterly appalling way to be treated?

[Vince Cable]

I certainly agree that for the 2,300 workers involved it was a very sad and dispiriting event. The company can answer for its behaviour, but the fact is that it was no longer viable and was put into administration. [Official Report, 16 January 2015, Vol. 590, c. 9MC.]

[Mr Umunna]

With so many unanswered questions for employees and contractors of City Link, the entire affair stinks. Why, for example, if the firm was technically insolvent on 22 December, as has been reported, was it planning to trade until 26 December? Is it true that contractors were told that rumours of it going into administration were false? Why was a new subsidiary set up on 9 December?

The administrators will do their work and no doubt make a D1 filing with the Department. Given the numbers involved and the public interest in the administration, will the Secretary of State commit to conducting a full and proper inquiry into the matter, as he did with Comet? Those who have lost their jobs and contractors who are owed money deserve nothing less.

[Vince Cable]

The difference with the Comet case is the allegation of serious misconduct by directors, and that may or may not be the case with City Link. In six weeks, the administrator will make a report to our Insolvency Service and, depending on what that says, we may want to initiate an investigation, but let us wait and see the findings of that. [Official Report, 16 January 2015, Vol. 590, c. 10MC.]

[Mary Macleod (Brentford and Isleworth) (Con)]

T6. There have been more than 500 apprenticeship starts in my constituency in the past year, but I want to increase that figure. What more can we do to ensure that businesses support, and schools promote, apprenticeships?

[Nick Boles]

The level of creation of apprenticeships in my hon. Friend’s constituency is fantastic, but more can always be done. The best possible advocates for apprenticeships in schools are the people who have just finished doing them. They are discovering that they are getting great jobs with better pay than their peers. Getting recently graduated apprentices back to their schools to talk to young people about the choices they are about to make is the most powerful way of persuading them of this opportunity.

[Mr William Bain (Glasgow North East) (Lab)]

T2. Five hundred of the City Link redundancies are in Scotland. Does the Secretary of State share the outrage of the Scottish people at the way the workers have been treated and the fact that the taxpayer is expected to pay for part of the multimillion pound redundancy bill? What is he doing to help the workers and their families, in Scotland and across the UK, who have been devastated by this news?

[Vince Cable]

The taxpayer is, of course, always responsible for statutory redundancy and this case is no different. I have talked to the head of the union and the secretary-general of the Trades Union Congress on how to deal with the implications for the labour market. The labour force is very widely distributed across the UK with no major concentrations, but where there are, and if there are people who really need help with finding employment and reskilling, we are certainly willing to do the maximum we possibly can to help.

[Mr Robin Walker (Worcester) (Con)]

T7. The ringing of tills, especially among small independent shops, should always be welcome in this nation of shopkeepers. In the last week of December, Worcester’s high street saw a 13% increase in footfall. That is very welcome. Small shops in Worcester are looking forward to the £1,500 discount to business rates this year. May I urge the Minister, as the Government consider further reform to business rates, to ensure that small businesses continue to benefit?

[Matthew Hancock]

I am delighted to hear of that improvement in Worcester, which is no doubt in part, though not all, down to the work of my hon. Friend. Business rates raise revenue and revenue is necessary, but the review has to ensure that they work better. The £1,500 discount for retailers is a step forward, but this is a major opportunity to improve the way the tax works.

[Sheila Gilmore (Edinburgh East) (Lab)]

T3. The Department for Work and Pensions’ proposals for universal credit will involve more than half a million self-employed people having to submit new and different monthly accounts. The Secretary of State for Business, Innovation and Skills is responsible across government for reducing red tape. What discussions is he having with the Secretary of State for Work and Pensions and the DWP to do something about this? He probably has time, given the delay to universal credit, but this is a matter of considerable concern for people trying to set up their own businesses.

[Matthew Hancock]

There is a series of discussions between officials in my Department and in DWP, and at ministerial level, to do precisely that. The advent of universal credit will help to make work pay. It is a very important change in our welfare system, but it has to be done in a way that supports small businesses which, after all, employ many, many people. The Government’s ongoing work will ensure that that happens.

[Mr David Heath (Somerton and Frome) (LD)]

As of last week, one could go into an Asda supermarket and buy four pints of milk for 89 pence. Milk, with all the work and care that goes into its production, should not be cheaper than plain water. Is it time to look again at the remit of the grocery code adjudicator to give her the opportunity to look at whole supply chains, especially when they greatly disadvantage primary producers?

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

The grocery code adjudicator’s remit is set out clearly in primary legislation, but it is important that the Government keep these issues under review. The Department for Environment, Food and Rural Affairs has engaged significantly with milk producers on this issue. My hon. Friend highlights a real problem concerning the sustainability of those who produce this vital resource.

[Mrs Mary Glindon (North Tyneside) (Lab)]

T4. What does the Minister have to say to members of the Alliance for Inclusive Education, who consider that his requirement for disabled students to contribute £200 towards their computer equipment funded by the disabled students allowance is unacceptable and discriminatory?

[The Minister for Universities, Science and Cities (Greg Clark)]

As the hon. Lady knows, we have reflected carefully on some of the representations made about the proposed package, and we continue to consult on the details and will come forward with a full response in due course. It is fair to say, however, that disabled groups and their representatives have recognised and welcomed the changes.

[Philip Davies (Shipley) (Con)]

Given our huge trade deficit with the EU, will the Secretary of State tell us why he is so certain that were we to leave the EU, it would stop free trade with us? Or is it that kind of woolly thinking that has led to his removal as his party’s economic spokesman at the general election?

[Vince Cable]

I actually remain as our economics spokesman, but that is a minor internal matter.

I think that most Conservative Members fully support British membership of the EU; they might wish to see it reformed, as I think we all do, but membership is fundamental. It is difficult to imagine that Britain could independently negotiate trade agreements with the US, India and other countries with the same authority as the EU.

[Roberta Blackman-Woods (City of Durham) (Lab)]

T8. In the Government’s opinion, at what level of RAB—resource accounting and budgeting—charge does the student loan system become unsustainable?

[Greg Clark]

As the hon. Lady knows, probably the most respected expert in the world on this subject, the OECD, has been clear that “the UK higher education system is excellent for individuals and for the Government” and offers the “most sustainable” system in the world. The system is in robust good health and works well. It offers good value for the taxpayer and students.

[Mr David Willetts (Havant) (Con)]

Will the universities Minister confirm that overseas students will continue to receive a warm welcome in this country, and will he assure me that we will not expect them to leave the country after they graduate and apply for a post-study work visa from abroad?

[Greg Clark]

That is not the Government’s policy and I do not agree with the suggestion. I take great pride in the fact that the brightest and best people in the world want to come and study at our excellent universities. It is great news that we heard just before Christmas that we have record numbers of overseas students applying for admission to university in this country next year. When they come here, they will receive the most cordial of welcomes.

[Ian Lavery (Wansbeck) (Lab)]

Most companies pay the national minimum wage, but increasingly we have seen more companies not wishing to pay it and developing numerous professional scams—making individuals pay for uniforms, non-payment of mileage, bogus employment and bogus apprenticeships. What will the Government do to police the national minimum wage effectively in respect of these companies?

[Jo Swinson]

The hon. Gentleman raises a very serious issues and alludes to today’s TUC report, which I look forward to reading in detail. We have expanded the resources available for the enforcement of the national minimum wage; we have increased the penalties; we have introduced the naming and shaming scheme; and we will continue to clamp down hard on those companies that break the law. Many of the practices he outlined, which would seem to be in the report, are already against the law. The pay and work rights helpline in Her Majesty’s Revenue and Customs will also help to clamp down on these employers.

[Jeremy Lefroy (Stafford) (Con)]

Just before Christmas, Alstom Grid announced its intention to construct a state-of-the-art factory and research facility in Stafford— a vote of confidence in this country’s skills, openness to investment and industrial strategy. Will my right hon. Friend join me in paying tribute not only to Alstom—soon to merge with GE—but to Staffordshire county council, which had the foresight to construct a state-of-the-art business park, in which Alstom will be the first investor?

[Vince Cable]

I happily join the hon. Gentleman in that tribute. I have been to Alstom and seen its advanced electrical equipment manufacturing—it is one of the best in the world—and it is a tribute to the policies we have pursued that it wishes to expand its investment here.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Given that Brent crude has dropped to $50 a barrel—40% of what it was—I am surprised there was not one question on the Order Paper about the effect of that on the supply chain, which is the responsibility of the Secretary of State; I know he knows this. My right hon. Friend the Member for East Renfrewshire (Mr Murphy), the new leader of the Labour party in Scotland, is calling for a summit to cover not just offshore but the supply chain factors affected by this collapse in the oil price. Will the Secretary of State join that summit and help not just the offshore industry but the supply chain, which is also affected?

[Vince Cable]

We understand the importance of that question. One of the sectoral groups in our industrial strategy is specifically concerned with the oil and gas supply chain. The companies around Aberdeen in particular are among the world leaders and could be seriously hit by the contraction of investment. Certainly, we will be getting that group together quickly and making an assessment of what it means. It is important to think long term, of course, as much of the industry does; temporary fluctuations in price are not necessarily as damaging as the hon. Gentleman might believe.

[Mr Philip Hollobone (Kettering) (Con)]

In 2010, the European Union sold to this country £28 billion more in goods than we sold to it. By the end of 2013, this massive figure had risen to £56 billion. Over that period, however, unemployment in this country has fallen significantly. Does that not destroy the Liberal Democrat myth that 3 million UK jobs are dependent on EU membership?

[Vince Cable]

What an extraordinarily primitive view of economics to believe in narrow bilateral balances of trade! One thing that should be said is that we are dealing, of course, not just in goods, but in services, where Britain has a major competitive advantage.

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

Does the Secretary of State approve of, and will he support, the campaign of the all-party group on manufacturing to find a great export in each of the 650 constituencies? Will he back that? It is a cross-party initiative; it has raised the profile of British exports; and I think it is a very good idea.

[Vince Cable]

I am very happy to support it. I remember that a couple of years ago, the hon. Gentleman asked every individual MP to identify companies in their constituencies that had made major manufacturing innovations. I praise the work that this all-party group is doing.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

The Secretary of State has agreed to see my hon. Friend the Member for Coventry South (Mr Cunningham) and me on Monday on the question of City Link. We are grateful for that and look forward to meeting him. Will he take the opportunity now, at probably the last question of this Question Time, to make clear personally how much he deprecates the cynical and disgraceful behaviour of the owners of City Link and put that on the record? No behaviour like this can be justified in the 21st century—it belongs to the 19th century, if it belongs anywhere at all. Will he make that clear today?

[Vince Cable]

Giving lectures in that way is probably not helpful. I need to establish the facts about what has happened. Very serious allegations have been made, and we need to get them properly investigated. It needs to be said for the record, of course, that this is a company that was losing money under a variety of ownerships for as long as five years, so its future has been in question for a long time.

Business of the House

Thursday 8th January 2015 Commons Chamber

10:32

[Ms Angela Eagle (Wallasey) (Lab)]

Will the Leader of the House give us the business for next week?

[The First Secretary of State and Leader of the House of Commons (Mr William Hague)]

The business for next will be:

Monday 12 January—Consideration in Committee and remaining stages of the Stamp Duty Land Tax Bill, followed by consideration of Lords amendments to the Consumer Rights Bill, followed by a motion to approve a carry-over extension on the Consumer Rights Bill.

Tuesday 13 January—Debate on a motion relating to the charter for budget responsibility, followed by a debate on a motion relating to national policy statement on national networks, followed by consideration of Lords amendments to the Criminal Justice and Courts Bill, followed by a motion to approve a carry-over extension on the Criminal Justice and Courts Bill, followed by a motion to approve a carry-over extension on the Deregulation Bill.

Wednesday 14 January—Opposition day (12th allotted day). There will be a debate on an Opposition motion. Subject to be announced.

Thursday 15 January—Debate on a motion relating to contaminated blood, followed by debate on a motion relating to the transatlantic trade and investment partnership. The subjects for both debates were determined by the Backbench Business Committee.

Friday 16 January—Private Members’ Bills.

The provisional business for the week commencing 19 January will include:

Monday 19 January—Consideration of an allocation of time motion, followed by all stages of the Lords Spiritual (Women) Bill.

I should also like to inform the House that the business in Westminster Hall for Thursday 15 January will be:

Thursday 15 January—General debate on national commissioning of NHS specialised services.

[Ms Eagle]

I thank the Leader of the House for announcing next week’s business. In the aftermath of yesterday’s atrocity in Paris, I add my voice to the many who have already expressed their shock and anger at this attack on democracy and free speech. This House, of course, stands in solidarity with the French people and we send our heartfelt condolences to the friends and families of those who were so brutally murdered.

Despite the appalling events of yesterday, I would still like to take this opportunity to wish the whole House a very happy new year and say that I hope the Leader of the House has had a rest over the Christmas period. Judging from the Government’s meagre future business in what is left of this zombie Parliament, the right hon. Gentleman seems to want to extend the period of rest for a few more weeks yet. I hear that the Government Chief Whip, not satisfied with introducing a three-day week for Government Members, has now decided to slim it down to two days for his worried Back Benchers. I suggest that he should be sent as an envoy to the Lords, who this week were forced to debate how to reduce the number of peers attending their House because so many coalition cronies have been crammed into it that it is bursting at the seams. Perhaps a two-day week would be the answer for them too.

Before Christmas, the Governance Committee produced a series of responsible and sensible suggestions and proposals for reforms. It is vital for the new management system to be implemented before the end of this Parliament. I note that the Leader of the House did not announce a date for a debate on the report. Will he confirm that we will consider it very soon, and will he ensure that the House has an opportunity to vote to implement its recommendations rather than merely taking note of them?

The general election campaign seems to have kicked off this week, and I am afraid that the Leader of the House has not had the most auspicious of starts. On Monday he flashed his briefing note at the cameras, and inadvertently revealed secret Tory plans to slash the schools budget after the next election. Perhaps he will now come clean and tell us what cuts that briefing note was trying to hide—or was the Liberal Democrat Education Minister right when he revealed that if the Tories win, they will cut the education budget by a quarter?

At the same press conference, the Chancellor told us that the choice at the general election was between competence and chaos, and on that one issue I actually agree with him. So let us see how the Government are doing on competence. Last year began with severe flooding in the south-west, which they did not even seem to notice until the Somerset levels had been under water for weeks and the hue and cry became too loud to ignore. Then we had the fiasco at the Passport Office when tens of thousands of passport applications were delayed, which caused considerable anxiety and extra cost and ruined many holidays. We have had the ongoing saga of the Secretary of State for Work and Pensions, who has been in denial about the fiasco that is universal credit implementation—now very late and hugely over budget. On the deficit, the Government have missed every target and broken every promise, borrowing £200 billion more than they promised at the start of the current Parliament.

The year has ended with chaos on the railways, and our NHS in crisis. Not content with wasting hundreds of millions on botched rail franchise competitions, the Department for Transport topped even that over Christmas, when thousands of travellers were left stranded, separated from their families and herded around stations like cattle—but the railways Minister toasted the success of rail repairs in her Christmas message, and said she was “chuffed” that there was

“light at the end of the tunnel”.

In the last year, the Government have breached half the service standards that they enshrined in the NHS constitution. In A and E, nearly half a million people have been left waiting more than four hours for treatment—the worst waiting time since records began—while the Prime Minister and the Health Secretary are in denial. If all that is the Chancellor’s definition of competence, we have to wonder what on earth chaos would look like.

Will the Leader of the House grant us a debate on the competence of the Government, and, while we are at it, may we also debate the chaos of the coalition election launches? First we had the Tory campaign poster, a barren road to nowhere which the Chancellor stubbornly insisted was

“a British picture, a British road”.

Actually, it turned out to be in Germany, which presumably explains why there were no potholes in it. Then we had the Liberal Democrats promising to be the heart and spine of any future Government. Well, while we are all in favour of organ donation, it is surely impossible to donate something that you do not already possess.

And then we had the Leader of the House and his colleagues, the least exciting five-piece ever to take the stage. Their fan base is in decline, and they are all jostling to be the lead singer—except the Leader of the House, who is leaving the band. It was not so much One Direction as No Direction.

[Mr Hague]

On the solemn note on which the hon. Lady began, I absolutely join her, as will the whole House, in condemnation of yesterday’s terrorist attack in Paris. The people of France are very much in the thoughts of this House and of the British people today. As the Prime Minister has made clear, we will, of course, offer all possible assistance to our colleagues in France. I think this attack will only redouble the determination of people in Britain, France and across the world to defend freedom of speech, because that is clearly what is at stake here.

The hon. Lady said that, despite that, it was appropriate to wish a happy new year. I am not sure why she thought I particularly needed a rest over the new year, but I join in wishing her a happy a new year. It will, however, still be a year for a considerable amount of work in this House. The hon. Lady used the phrase “zombie Parliament”, and I ought to point out that in this Parliament we will actually sit for 734 days, which is more than the 718 days of the five-year Parliament under the last Government, and that in this Session we are considering, including the Bill to be introduced today, 23 Government Bills, compared with 13 main programme Bills under the Labour party in the last Session of the last Parliament. In the penultimate Session of the last Parliament there were 18 Government Bills, whereas there were 20 in this Parliament. I therefore do not think the Opposition have much to crow about in that regard. The Bills we are considering are not only numerous, but they include the Pension Schemes Bill, which is giving people a freedom on retirement that they never enjoyed under any previous Administration, a small business Bill, which is very good for entrepreneurs, and an Infrastructure Bill, which is giving another multi-billion pound boost to our economy, and these are things that the Opposition do not seem to think are necessary or desirable. That is what is happening in this Session of Parliament.

The hon. Lady asked about the very important report on the governance of the House. I certainly intend that that will be debated soon—almost certainly in the week after next, although I have not been able to announce the full business for that week. That will mean that debate can take place after the meeting of the House of Commons Commission, which, as she knows, will also take place that week, on the 19th. I am sure the House will want to make a decision about how to proceed with this, rather than, as she said, just take note of matters. A great deal of work has gone on in the Governance Committee. It has been very good work, as I am sure the House will agree, and we do now need to get on with implementing many of the conclusions of that report.

The hon. Lady asked about various aspects of political campaigning and advertising in the last week, including a road in Germany. We know that what the Opposition would lead us to is the road to Greece—not the road to Germany, but the road to the deficit of more than 10% of GDP that they left us with.

I am happy to read out to the hon. Lady the note that the press noticed me carrying:

“In this Parliament, we’ve shown that we can protect the front line by making the Education budget more efficient and effective…But putting the economy at risk because Ed Miliband doesn’t have an economic plan, Labour would put our schools at risk.”

I am very happy to read that out to her, but I do not think she can lecture us about competence when the rebuttal document from the Opposition to what we said on Monday first of all confused a “million” with a “billion” three separate times, which does not inspire confidence as to how they would make any numbers add up, and asserted that one of their spokesmen was only a Back-Bench peer, the noble Lord Rosser, when he turns out to have been on their Front Bench for five years now without them even being aware of it in their own party headquarters. So telling us about competence after such a document may not be a very appropriate way to start the new year. Labour has also been forced to drop 12 policies in their entirety over the course of this week. It is too long a list for me to go through them all—

[Mr Peter Bone (Wellingborough) (Con)]

Oh, go on!

[Mr Hague]

Well, the list is too long for me to go through them all, but a proposal to ban food waste from landfill was dropped within minutes of Monday’s press conference. Bringing back Care First—[Interruption.] The shadow Leader of the House says that that has never been Labour’s policy, but according to her colleagues it was. Other policies that were dropped include additional funding for a national refuge fund; justice reforms for 18 to 20-year-olds; a women’s justice board; and reinstating Cycling England. Also, Labour’s opposition to reductions in the Arts Council budget was dropped within hours of Monday’s press conference. So competence has not really been on display from the Opposition this week. I notice that, over the recess, the hon. Member for Wansbeck (Ian Lavery)—I can say this because he is here—gave a very good analysis of the Labour leadership, saying:

“We’ve got an elite which quite frankly frightens me. They haven’t been anywhere or done anything, and when you’ve got an accent like mine, they think, ‘Well, that man doesn’t really know too much’.”

Well, on the basis of that, I think he knows quite a lot. It is time the Labour leadership listened more attentively to the hon. Gentleman’s views on that and perhaps on other things.

[Sir George Young (North West Hampshire) (Con)]

I welcome what my right hon. Friend has just said about an early debate on the governance report. I would be grateful if he could tell us, as a footnote to the question from the shadow Leader of the House, what has happened to the recommendation in paragraph 186, which states:

“We therefore recommend that the ‘paused’ recruitment process be formally terminated. We believe that this action should be taken immediately.”

In his own White Paper, “The implications of devolution for England”, my right hon. Friend has indicated that he would welcome an early debate and a vote on this matter. When he has narrowed down the options, will he give us an idea of the timetable for this? May we have such a debate before the February recess?

[Mr Hague]

On my right hon. Friend’s second question, I certainly hope that we can do so, but there will need to be consultation between the parties about the nature of such a debate as well as its timing. However, I certainly hope that we can have such a debate and, if possible, have it before the February recess, although I cannot rule out it having to be later than that.

On my right hon. Friend’s first point, the implementation of that recommendation of the Governance Committee is a matter for you, Mr Speaker, but I know that it will be possible to discuss these things in the forthcoming meeting of the House of Commons Commission and in the debate.

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

I have been prompted to ask for a debate by something the Prime Minister said this week. He seemed to suggest that there were too many old people in this country, and that that was the reason behind the problems in accident and emergency departments in the national health service. That kind of ageism seems to be creeping into our society.

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

Quite!

[Mr Sheerman]

We have debates in the House on many “isms”, and it is about time we took ageism seriously. May we have an early debate on how we can keep the older population in this country happy and healthy? They are very important electors and very important citizens.

[Mr Winnick]

I’ll vote for that!

[Mr Hague]

I think all of us, including the Prime Minister, are opposed to ageism, and the hon. Member for Walsall North (Mr Winnick) has just loudly proclaimed his opposition to it. We have just lost the hon. Member for Bolsover (Mr Skinner) from the Chamber but I am sure that he, too, would have agreed strongly with these sentiments. He is an advertisement for great activity in slightly older age.

Of course no one is blaming older people for the problems that have been experienced in A and E departments. We now have almost 1,200 more A and E doctors, including 400 more consultants, than we had in 2010, and they are trying to cope with the pressures. The hon. Member for Huddersfield (Mr Sheerman) makes a good case for discussing ageism and for combating it; I fully agree with him.

[Mr Nigel Evans (Ribble Valley) (Con)]

A car is a necessity, not a luxury, in the Ribble valley. It is a rural area, as the Leader of the House knows, and many hard-pressed motorists are now benefiting from the fact that petrol prices have dropped. They have not dropped enough, however; petrol should now be about £1 a litre. May we have a debate on fuel prices so that we can not only shame those organisations that are not fully passing on the price reductions but propose that if they do not do so now, the Government will consider imposing a windfall tax on their profits?

[Mr Hague]

As my hon. Friend knows, the Chancellor has stressed the importance of this matter. As the Chancellor said on Tuesday, the oil price is now at its lowest in five years, and it is vital that this is passed on to families at the petrol pumps, and though utility bills and air fares. The Government are closely monitoring whether companies are passing on to their customers the benefits of plunging oil and gas prices as quickly as possible. Let me add that Ofgem has referred the gas and electricity markets to the competition authorities to ensure that those markets are working effectively, and it has made it clear that it will be looking at the relationship between wholesale costs and retail prices as part of its investigation.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

The Leader of the House will know that the Cabinet Office has recently published its list of upcoming triennial reviews of non-departmental public bodies, helpfully pointing out that they will take six months from start to finish. Will he therefore ask the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Camborne and Redruth (George Eustice) to come to this House to explain why the triennial review for the Marine Management Organisation, which closed in October 2013, with publication due in early 2014—a response to a parliamentary question then said it would be published before the end of 2014—has still not been published? This is the subject of a cross-party request for an investigation into the quality of data, and fishers in my constituency are being affected. Will the Leader of the House please explain what the Department for Environment, Food and Rural Affairs and the Government are hiding?

[Mr Hague]

That is, of course, a question directly for the DEFRA Ministers, and the hon. Lady will have opportunities to ask them directly. I am sure she has done so before, so I encourage her to do that again, but I will make it clear to them the concern that she and other Members have about this matter.

[Sir William Cash (Stone) (Con)]

Yesterday, my Committee deeply deplored the fact that the Prime Minister, despite promises given, provided a mere written statement regarding the most recent European Council. That is greatly to be deplored, but another matter of grave concern to my Committee is the failure to schedule debates on the Floor of the House and to carry those through. I recently asked a similar question of the Leader of the House and he said that he would try to do something about this. We have only recommended 11 debates, including on matters as important as the free movement of persons—that has not been debated, despite the fact that we made the recommendation one whole year ago. It simply will not do. In the circumstances, will he agree to appear before my Committee to explain the situation, because, frankly, we have just about had enough?

[Mr Hague]

On the first point about a written statement, the Prime Minister has a very strong record in coming to the House to deliver statements, including after the great majority of European Councils. As my hon. Friend knows, this particular Council meeting took place after the end of Parliament’s sitting, so it would not have been possible to come straight to the House about it. I think there are some Councils and occasions when it is appropriate to give a written statement instead, but on the vast majority of occasions an oral statement is made. I understand the point my hon. Friend is making about the range of reports and requests from the European Scrutiny Committee. It has not been possible to schedule those debates as things stand, but of course I am happy to discuss that further with him.

[Mr John Denham (Southampton, Itchen) (Lab)]

May we have an early debate on compensation for victims of badly installed cavity wall insulation? Many people, including my constituents, have had cavity wall insulation carried out, funded by the obligations placed on energy companies by the Government. When that goes wrong, as it sometimes does, the Government refuse to intervene and the Cavity Insulation Guarantee Agency, the industry regulator, is absolutely useless at taking any action. May we have an early debate with Ministers to see what can be done to sort the problem out?

[Mr Hague]

There will be people caught in a difficult situation as a result of that, and the right hon. Gentleman raises a point that will be important to some people around the country. It would be an appropriate subject to advance for a Backbench Business Committee debate or for an Adjournment debate, but I will also draw the attention of my colleagues at the Department of Energy and Climate Change to what he has said.

[Mr Keith Simpson (Broadland) (Con)]

My right hon. Friend is no doubt aware of the very strong feeling expressed both in this House and in the other place for a speedy report by the Chilcot inquiry into the Iraq war. I accept the fact that, as this is an independent inquiry, he and the Prime Minister have no control over this matter, but I hope that Sir John Chilcot takes note of this concern and expedites the report as quickly as possible. Assuming that he does report by February, Sir John Chilcot will undoubtedly make a press statement and a statement will be made in this House, but can the Leader of the House assure us that we will have a full day’s debate on the report and that there will be a gap between the report’s publication and the debate to allow Members to read the 1 million words that are reported to be in it?

[Mr Hague]

My hon. Friend makes a good point. He is renowned for his reading and his reviews of books, but even he would need some time to read 1 million well-chosen words. Of course it will be important for the House to digest the report before having a full-scale debate on it. Whenever it is published, I certainly expect that to happen, but I cannot undertake—and the Prime Minister made this clear yesterday—that that will be in this Parliament. It may well be something for my successor in the next Parliament to deal with, but I am sure that those running the inquiry will have heard the concern in Parliament, which my hon. Friend has again expressed today.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

May we have a statement or a debate led by the Department for Work and Pensions on the guarantees or guidelines that have been given to local authorities for when the independent living fund is abolished? Sadly, no Conservative Members attended a recent lobby meeting to speak to people who are facing this problem. One representative told me:

“When ILF closes in June 2015, none of the 18,000 disabled people who currently receive the independent living fund, nor their families or friends, have any idea whether they will end up condemned to living in a care home or effectively imprisoned in their own home without adequate support.”

There were poignant tales of people who have gone from independent living to being put into care homes by local authorities. May we have a statement and a debate on this terrible tragedy, which has been caused by the Government’s abolition of the independent living fund?

[Mr Hague]

That is something that can be raised with DWP Ministers at their regular questions. It is a perfectly normal subject for debate, and the hon. Gentleman may wish to pursue all the various means of obtaining a debate—through the Backbench Business Committee and so on—but I will bring this matter to the attention of the Ministers concerned.

[Mary Macleod (Brentford and Isleworth) (Con)]

Affordable housing is a major issue in London, especially in my constituency of Brentford and Isleworth. May we have a debate in this House about that matter and about how we can encourage Government and local authorities to ensure that we have enough affordable housing in planning applications?

[Mr Hague]

Again, there would be a good case for such a debate. As my hon. Friend knows, the national planning policy framework makes it clear that local authorities should use all the evidence available to them to ensure that their local plan meets the objectively assessed need for affordable housing in their area. The Mayor in London is currently revising the London plan to address a likely increase in the capital’s population and is proposing a minimum of 17,000 affordable homes per annum in the future. Again, as I have said to other Members, it is open to her to pursue a debate in all the normal ways.

[Mr John Spellar (Warley) (Lab)]

The Times today carries an alarming story that when public registrars report alleged sham marriages to the Home Office, no action is taken in three-quarters of cases. Moreover the Home Office refuses to provide feedback to the registrars. That shocking state of affairs is only too familiar to MPs and constituents when we report cases of immigration abuse. It is no wonder that there is such concern in all communities about the immigration shambles. May we have a debate so that the Home Secretary can try to justify this incompetence and chaos? It would be even better if she could knock her Department into shape.

[Mr Hague]

The Home Secretary has done a great deal to knock her Department into shape and continues to do so. The right hon. Gentleman raises a legitimate concern, of course, and I have also seen that report in the newspapers today. I know that the Home Office will want to respond to it and I will draw the Home Secretary’s attention to what he has said. I am sure that there will be opportunities to raise the subject further in this House, including with Home Office Ministers.

[Sir Tony Baldry (Banbury) (Con)]

May I thank the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition for the cross-party support for the Bill that will enable women who are consecrated diocesan bishops in the Church of England to be nominated for membership of the House of Lords as soon as possible? I thank the Leader of the House, the shadow Leader of the House and the usual channels for providing time for that one-clause Bill to be debated on Monday week. Will my right hon. Friend confirm that the intention is that if the Commons can cover all stages of the Bill on 19 January there will be time in the other place for the Bill to be passed and enacted during this Parliament so that we can see women bishops in the House of Lords as soon as possible?

[Mr Hague]

My right hon. Friend has been assiduous in ensuring that the Bill was brought forward in a timely way. He asked a few weeks ago for all of its stages to be dealt with in one day and that is what we will be able to do, subject to the agreement of the allocation of time motion on 19 January. Of course, it is very much the intention that it will be possible for the Bill to receive Royal Assent before the dissolution of Parliament. We would not have introduced it with any other expectation. I am pleased that we have been able to introduce it speedily and I hope that we will be able to consider it speedily, and that they will be to do so in the other place as well.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

Will the Leader of the House join me in congratulating the Whitefoot and Downham community group here in London on winning the Paul Goggins memorial prize, which was established by the all-party parliamentary group on poverty and the Webb Memorial Trust? As it was the anniversary of Paul’s death yesterday, will he also extend the sympathy of the House to Paul’s family during this very difficult period?

[Mr Hague]

Yes. What the hon. Gentleman has said will have wide support and will have raised strong feelings across the House and I congratulate the group that won that award. In all parties we have fond memories of the work of Paul Goggins and we remember him again today.

[Mr Speaker]

I thank the hon. Member for Wythenshawe and Sale East (Mike Kane) for what he has said and the Leader of the House for his reply. Paul Goggins was hugely respected and much loved across the House and what has been said today will offer some comfort and succour to his family. That is greatly appreciated.

[Philip Davies (Shipley) (Con)]

May we have a debate on how the honours list is determined? Mr Peter Smith, the Tour de France project co-ordinator for Leeds council, was awarded an MBE in the new year's honours list, which was, I am sure, well merited, but does that not go to show what a glaring omission it was that Gary Verity, who brought the Tour de France to Yorkshire, was ignored? In that debate we can perhaps show the strength of feeling in Yorkshire that Gary Verity should receive a knighthood for what he did, which I hope will be addressed as soon as possible. In any such debate, we could also perhaps discuss the merits of a knighthood for Geoffrey Boycott who, as the Leader of the House knows, is a rival to him as the greatest living Yorkshireman.

[Mr Hague]

Without straying into all parts of that question and recognising that we are not allowed to dispense honours at the Dispatch Box, I am sure that we all agree that many people did tremendous work to bring the Tour de France to Yorkshire. It was a fantastic success. It is right that those people are recognised and I agree with what my hon. Friend said about the crucial and important role that Gary Verity played as leader of Welcome to Yorkshire. I cannot comment on how the honours system operates, but I will certainly convey what my hon. Friend has said about Gary Verity to all those responsible. After all, the new year’s honours list, while an important list, is not the only honours list in the year and so names can be considered for another list as well.

[Jeremy Corbyn (Islington North) (Lab)]

Before the Christmas recess, I raised with the Leader of the House the question of human rights abuses in Bahrain and the opening of a British base there at the same time. He will be aware from my early-day motion and from news reports of the arrest and imprisonment of Sheikh Ali Al-Salman, the leader of the opposition in Bahrain, who remains in detention, as do many other people. Will he put pressure on the Foreign Office to receive a delegation of Members to express serious concerns about human rights in Bahrain and the apparent approval of the Bahrain Government’s record on this by the placing of a British base in that country?

[Mr Hague]

Foreign Office Ministers have, as I know from my experience as Foreign Secretary, been very ready to discuss these things with Members of Parliament, and I am sure that if the hon. Gentleman asks for a meeting for Members of Parliament with Foreign Office Ministers, it would be entirely the normal thing for them to give a positive reply. It is very important to be able to discuss these things. We have often raised human rights concerns directly with the Bahraini Government, but I stress that the minesweepers that are based in Bahrain are there for the protection of our own national security and that of our allies more widely. They provide a very important role in assuring safety of navigation through the strait of Hormuz. So the British military role there is not something simply about Bahrain; it is about our wider collective defence and it should be seen in that context.

[Mr Peter Bone (Wellingborough) (Con)]

May I offer a happy new year to the shadow Leader of the House? She is an excellent shadow Leader of the House and I hope that she continues in that role in the next Parliament. Has the Leader of the House given any thought to the sad day when he delivers the last business statement of this Parliament? Will he do a multi-choice? He has to announce the first week’s business of the new Parliament. Will he announce what the Labour party might do if it was able to form a majority Government? It would obviously have to have an emergency Budget to increase taxes and borrowing. If it was a Conservative majority Government, we would immediately introduce a European Union (referendum) Bill. If it was a Liberal Democrat majority—no, I am not going into fantasy land. Could we have a statement next week?

[Mr Hague]

That is a very attractive idea for the last business statement of the Parliament, which we will come to towards the end of March. I will look at that idea. Certainly, my hon. Friend is right that a Conservative Government will want to have a European Union (referendum) Bill, and to have the earliest possible debate on it as a Government Bill in Government time. I do not know whether there would be time for any of that if there were to be a Labour Government, since they would be dealing with the financial crisis, the huge uncertainty in the markets and the difficulty facing the currency. Since they would be on that road to Greece, I am not sure they would have time for much legislation.

[Kevin Brennan (Cardiff West) (Lab)]

Is there any means by which the business of the House today could be suspended briefly at 12 noon to allow hon. Members to attend in Westminster Hall with a pen, joining journalists and members of staff of this House in a show of solidarity with our French neighbours in the face of what happened yesterday, and to demonstrate that ultimately the pen is mightier than the sword?

[Mr Hague]

The whole House will agree with that sentiment. Any suspension of the sitting is a matter for you, Mr Speaker, although it will be possible for the majority of hon. Members to do that even when the House is sitting. The hon. Gentleman makes a good point about showing our solidarity and determination to protect freedom of expression in this country and across the world.

[Bob Stewart (Beckenham) (Con)]

May we have a debate about national responsibility for the funding of memorials such as St George’s, the RAF memorial chapel at Biggin Hill? It was saved yesterday, but there was some debate and some bad words about the possibility of the local council, Bromley council, having to fund it. Such memorials are a national responsibility and we should have plain, understandable instructions on how they are preserved.

[Mr Hague]

There is, of course, a good case for these things to be clarified, and even for a debate on them. In this particular case, which is very important and which my hon. Friend and other neighbouring Members of Parliament have been assiduous in pursing, as the Prime Minister confirmed yesterday, the chapel at Biggin Hill will be preserved for future generations. We are very pleased that Bromley council wishes to create a heritage centre on the site, and, subject to agreeing suitable terms to secure the site, we will lease the site on a long-term basis to the council for a peppercorn rent, which will help enormously. For today, we should thank all the parties that have come forward in offering their support, which we all greatly appreciate.

[Nic Dakin (Scunthorpe) (Lab)]

We begin 2015 with ownership of Tata Steel UK’s long products division uncertain into the future. This is causing great anxiety in steel communities throughout the land. Is it not time that we had a debate in the Chamber about the future for UK steel?

[Mr Hague]

We have just had Department for Business, Innovation and Skills questions, where there were opportunities to raise that. We had an urgent question some weeks ago about the matter, and of course there are continuing concerns. The hon. Gentleman will be able to continue to raise the matter with BIS Ministers. There will also be opportunities to debate the economy in general over the coming months. There is a strongly improved outlook from the British Chambers of Commerce survey published only today. The hon. Gentleman will be able to find many opportunities to continue to pursue the subject, as he always does.

[Robert Halfon (Harlow) (Con)]

My right hon. Friend will be aware that in Harlow we have had over 100 illegal traveller encampments over the past year and sadly we have a police commissioner who seems to have adopted the unwise mantle of the three monkeys—hear nothing, say nothing and do nothing. Now he wants to increase the police precept and hit the most vulnerable residents across Essex and in my constituency, Harlow. May we have an urgent debate on the police precept? Will my right hon. Friend, with the Home Secretary, ensure that the police commissioner consults local residents before putting up taxes, and will he do everything he can to stop that?

[Mr Hague]

My hon. Friend, as always, raises an issue that is important to his local communities. There is already a statutory requirement for police and crime commissioners to consult their police and crime panel regarding any proposals in relation to the council tax precept, and the police and crime panel has the power to veto the proposed precept and ask the PCC to set it at a higher or lower level. Ultimately, one of the virtues of PCCs being elected is that they are periodically accountable to the local voters for their decisions if they want to stand for re-election.

[Jonathan Ashworth (Leicester South) (Lab)]

May we have a debate on the role and responsibilities of NHS England in ensuring reasonable access to GP surgeries? I raise the matter because the Highfields medical centre in my constituency was forced to leave its premises, giving patients just a couple of weeks’ notice, and move to premises in Leicester East, the neighbouring constituency. I wrote to NHS England on 18 November, raising concerns on behalf of my constituents. I have not yet had a response. Many patients in my Leicester South constituency are now without a GP in that part of the city and are deeply concerned about it.

[Mr Hague]

GP access is extremely important to people all over the country. All Members of Parliament understand that extremely well, and I hope that NHS England will respond quickly to the concerns that the hon. Gentleman raised on behalf of his constituents. There are questions to Health Ministers next week in the House, so he will be able to raise the matter with them directly if he has not achieved satisfaction for his constituents before then.

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

Yesterday Harrogate borough council confirmed its plans to deliver a sixth successive annual council tax freeze, taking advantage of the support from the Government to help it do that. May we have a debate to consider what we can do to encourage and support more local authorities to set fair and sound budgets that are sound for local taxpayers as well?

[Mr Hague]

My hon. Friend’s council is a good example of setting sound budgets. Every part of the public sector needs to do its bit to pay off the deficit left by the previous Government, including local government, which accounts for a quarter of all public spending. We have been working hard to give hard-working people greater financial security by keeping the council tax down so that the local government settlement that was introduced in December is fair to all parts of the country. It helps councils to do that, including freezing council tax bills, and that is a tremendous contrast with the doubling of council tax bills that took place under the previous Government.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I recently discovered that 30 addresses in the midlands accounted for 5,000 bogus emergency calls to the ambulance service in one year, and 600 were to a single address in Birmingham. I have since been advised that there might be a perverse incentive in the operation of the ORCON—operational research consultancy—response system that deters the service from tackling those bogus callers. Given the problems that the health service is facing and the fact that this is clearly not just a local matter, may we have a debate in Government time on bogus calls and the operation of the ambulance ORCON response system?

[Mr Hague]

On the face of it, it sounds as though the hon. Gentleman raises an important point about bogus calls. There is no Government time available for such a debate, but there are many other opportunities to explore such matters, including Adjournment debates and questions to Health Ministers, which we will have next week. I encourage him to take those opportunities, because this is an important matter. If changes can be made that lead to a reduction in such bogus calls, and therefore to the more effective use of emergency services, that would be an important improvement for people across the country. I will refer the points he has raised to the relevant Ministers and encourage them to look into the matter.

[Jeremy Lefroy (Stafford) (Con)]

My hon. Friend the Member for Broadland (Mr Simpson) referred to the Chilcot inquiry, as did the Prime Minister yesterday, which was established only two years after my right hon. Friend first called for it. In my constituency we have seen two inquiries by Sir Robert Francis, the latter a public inquiry steadfastly called for by my hon. Friend the Member for Stone (Sir William Cash). May we have a debate on public inquiries, including how they are initiated, their conduct and, most importantly, whether they achieve their aim of getting to the truth and bringing about change for the better?

[Mr Hague]

There is a good case to be made for such a debate, and my hon. Friend might wish to pursue it more generally, including through the Backbench Business Committee. There are regular calls for major inquiries, and some of them are of huge importance. He referred to those that related to his constituency. The House has heard several times this week about the anxiety that the Chilcot inquiry report should be published. He rightly referred to the fact that in June 2007, two years before the inquiry was set up, some of us tabled a motion in this House, supported by Members now sitting on the Government side, calling for it to be established. Had that happened then, the inquiry would have reported long ago.

[Simon Danczuk (Rochdale) (Lab)]

Over the past few days, police in Bangladesh have continued to crack down on protesters demonstrating against last year’s general election. At least two protesters have been killed, the leader of the opposition has been placed under house arrest and the media have been banned from reporting the views of opposition figures. Does the Leader of the House agree that the behaviour of the Bangladeshi Government is completely unacceptable and that we should have a debate on how the UK can contribute to restoring democracy in that country?

[Mr Hague]

We have been concerned for some time about political events in Bangladesh, which have sometimes impinged on human rights, particularly the events surrounding the last election and the failure of the two main parties there to agree a way forward for elections to take place with wide participation. These events are the result of that continuing failure. The UK Government are certainly concerned about the situation in Bangladesh. We will have questions to Foreign and Commonwealth Office Ministers on 20 January, when the hon. Gentleman will have a further opportunity to raise the matter.

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

Further to my previous question, the Leader of the House will know that illicit tobacco continues to concern my constituents, as it damages local health and the local economy. May we have an urgent statement on the measures that are being taken to tackle this, including the often underused powers available to strip retailers of their lottery and alcohol licences when they are found to be breaking the law?

[Mr Hague]

My hon. Friend has indeed raised this matter before, and I think that I mentioned on that occasion the powers that are available to deal with such situations and the increased attention that is being given to them. He has again made the case for more of those powers to be used, and I am sure that what he has said will be listened to by both the Government and local authorities.

[Clive Efford (Eltham) (Lab)]

Yesterday, the Secretary of State for Health was required to come here to answer an urgent question about the crisis in our accident and emergency services. Is it not right, given the widespread concern up and down the country about A and E services, that we should have a debate on this issue here, in Government time, so that we can examine the details? It would also give the Secretary of State a chance to put right his claim that I misled the House yesterday in stating that he proposed the closure of the Lewisham accident and emergency service, which he certainly did. Subsequently, in October 2013, he lost a judicial review on that same issue, so it is surprising that it seemed to slip his mind. Will the Leader of the House provide an opportunity for the Secretary of State to put the record straight and let us have a debate on this very important issue?

[Mr Hague]

There was a lot of discussion about this in the House yesterday in a lengthy urgent question and during a great deal of Prime Minister’s questions. Next Tuesday, there will be questions to the Secretary of State for Health and his colleagues on the Floor of the House, and next week there is an Opposition day debate in which the Opposition have yet to decide what to debate. Putting all those things together, I am sure that there will be many further opportunities for these issues to be debated on the Floor of the House.

[Mr Philip Hollobone (Kettering) (Con)]

Once again this year over the Christmas period, we have seen our A and E departments and police cells clogged up with people who have simply had too much to drink. A constituent of mine from Barton Seagrave wrote to me this week to say the following:

“I feel that we have to claim back our town centres at the weekends from drunks and protect our Health Service from thoughtless, ignorant abuse. To me it isn’t rocket science. When we see how the Drink Drive campaign has changed behaviour over the years, plus the Seat Belt campaign what we need is a government led campaign to educate against such boozy and loutish behaviour.”

May we have a Government statement or debate in the House on this important topic?

[Mr Hague]

These things have, quite rightly, been debated in the House from time to time. We have introduced a radical package of measures to overhaul the Licensing Act 2003, including providing more local powers to deal with problem premises, doubling the fine for persistent under-age sales, and giving residents a greater say about licensing decisions in their area. We have banned the worst cases of very cheap and harmful alcohol sales. We are challenging the alcohol industry to raise its game in doing more on a voluntary basis, including by widening the availability of lower-strength alternatives in pubs, removing high-volume and high-strength beer and developing new retail standards. I hope that a great deal will continue to be done to address the problem that my hon. Friend rightly raises.

Point of Order

Thursday 8th January 2015 Commons Chamber

11:23

[Chris Bryant (Rhondda) (Lab)]

On a point of order, Mr Speaker. Many hon. Members have referred to the events in Paris yesterday. I wonder whether it would be in order for you to suggest to Members, peers, journalists and anybody else that if they wanted to join other Members in Westminster Hall at noon holding either a pen or a pencil, that would be an act of solidarity with the French people.

[Mr Speaker]

I am extremely grateful to the hon. Gentleman for his point of order. Members who have been present in the Chamber for some minutes will have heard the hon. Member for Cardiff West (Kevin Brennan) mention that it was intended by significant numbers of Members, staff in the service of the House and apparently also journalists to congregate in Westminster Hall holding pens in an act of solidarity with the people of France. Moreover, he suggested that I might wish to suspend the sitting. I hope that he will understand why, at short notice and with scheduled business, I am not minded to suggest a suspension of the sitting.

However, pursuant to what the hon. Member for Rhondda (Chris Bryant) has said, I would certainly wish to offer encouragement to any colleague from the Back Benches who wishes to attend the event in Westminster Hall to do so, in the knowledge that if that Member wishes to speak in the upcoming debate and returns promptly to the Chamber, he or she will suffer no detriment in the pecking order for speeches. I hope that is a suitable way in which to handle this matter. I thank the hon. Gentleman for his point of order.

Bill presented

Corporation Tax (Northern Ireland) Bill

Presentation and First Reading (Standing Order No. 57)

Mr Chancellor of the Exchequer, supported by the Prime Minister, the Deputy Prime Minister, Danny Alexander, Secretary Theresa Villiers, Mr David Gauke, Priti Patel and Andrea Leadsom, presented a Bill to make provision for and in connection with the creation of a Northern Ireland rate of corporation tax.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 149), with explanatory notes (Bill 149-EN).

Backbench Business

Thursday 8th January 2015 Commons Chamber

Higher Education Funding

Thursday 8th January 2015 Commons Chamber

11:25

[Mr Speaker]

I call the Chair of the Business, Innovation and Skills Committee, Mr Adrian Bailey, although I think that he is speaking in a personal capacity.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I beg to move,

That this House notes the Third Report from the Business, Innovation and Skills Committee, Student Loans, HC 558, and the Government response, HC 777; and calls on the Government to outline proposals that will sustain funding for the sector while addressing the projected deficit in public funding.

I thank the Backbench Business Committee for agreeing to hold this debate, which is of huge significance to universities up and down the country and, indeed, to the cohorts of students at or about to go to those universities. The debate is essentially about the Business, Innovation and Skills Committee report on student loans. I must thank my Committee colleagues because the report’s recommendations to the Government were unanimously agreed on a cross-party basis. It is fair to say that they reflect the concerns of Members from both sides of the House.

I will also draw on other reports not mentioned in the motion, including some by academic and university institutions, but particularly a report by the independent Institute for Fiscal Studies and one by the Higher Education Commission. I stress that the IFS is an independent body with expertise across both the academic and economic spheres, and that the Higher Education Commission report was co-chaired by the Conservative peer Lord Norton of Louth and Dr Ruth Thompson. Although the reports’ details may vary, their conclusions are remarkably coherent and consistent.

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

My hon. Friend will know that I used to co-chair the Higher Education Commission. I have a copy of the “Too Good to Fail” report, which we produced on an all-party basis, and I thank him for mentioning it.

[Mr Bailey]

I understand that my hon. Friend is due to speak, so although I will draw on his report, I will not pre-empt him by discussing its conclusions.

The motion mainly deals with the policy’s public spending and budgetary aspects, but it is important to recognise that we are not just talking about money. Higher education is vital to the economy of this country and to our society. It is an £8 billion export earner and attracts students from all over the world, because British universities consistently feature at the top of the rankings of world universities. In addition, universities drive and sustain economic growth in their immediate local economies, which are often in some of the most deprived parts of the country.

For an individual going to university, such an education is a potential path to personal fulfilment, and of course an economic advantage. Various estimates of graduate earnings show a minimum of something like £150,000 earned by a graduate over their lifetime over and above what they might expect had they left school after A-levels, and many estimates show more.

The Treasury estimates added benefits from taxes earned, and further benefit to employers through productivity gains. In short, higher education in this country is a success story that needs to be sustained, and it is crucial to reinforce Britain’s position in a global economy that is becoming ever more competitive.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

I congratulate my hon. Friend and the Business, Innovation and Skills Committee on its report. Clearly, the size of student loans reflects in great part the size of fees. I have read the Government’s response to the consultation in which they state that they have

“no current plans to initiate a formal review of the sustainability of the student loans system in England.”

That means that there are no formal plans for a review of fees. Does my hon. Friend think that that is right or responsible?

[Mr Bailey]

My hon. Friend, as ever, touches on the key issue underlined in the Committee’s report, and I will address that issue in due course.

As I was saying, higher education is a success story and vital for our economy, our society and the aspirations of millions of young people in the country. To underpin it we need a funding system that enables it to respond to the demands that will be placed on it by outside pressures, and to sustain its role as a driver of social change. The current funding system is based on recommendations in the 2010 Browne review and subsequently implemented, with some changes, in 2012. The key change was to replace direct Government funding of university teaching by a fees-based system payable by individual students on the basis of Government loans through the Student Loans Company, capped at £9,000. Those fees are to be repaid after graduation once a salary of £21,000 has been reached, over a period of 30 years.

There were short-term benefits to that model. It removed the cost of funding from public accounts, except for those costs that would have to be written off through under or non-repayment in the future—technically known as the resource accounting and budgeting, or RAB, charge. That model benefited the universities because it led to an increase in funding at least in the short term, and it benefited taxpayers because there was a drop in public subsidy per student of something like 5%. The benefit to the student is far less clear. Although the system delays payment for education until later in life and is income-contingent, the Institute for Fiscal Studies estimates that the average debt per student will be more than £44,000 for a combination of tuition fee and maintenance loans. In its report the Higher Education Commission stated that focus groups demonstrated a low level of awareness among students about that issue and its potential implications for them.

[Mr Sheerman]

The IFS and the commission report highlighted the fact that many students we interviewed had no idea that the debt would be that much. They will possibly never be eligible to get a mortgage later on, which I find absolutely stunning, astounding and disgraceful.

[Mr Bailey]

It is fair to say that the full implications and potential consequences of the projected level of debt for millions of people have yet to be worked through. We are not yet aware of how it will affect people’s economic behaviour when they have that level of debt.

[Mr Brian Binley (Northampton South) (Con)]

Will the hon. Gentleman give way?

[Mr Bailey]

I will give way to my fellow Committee member.

[Mr Binley]

Many of us feel that the contributions being demanded are often too great, but I would not want to overstate that to the point at which we begin to believe that no student will ever be able to buy their own house. That is more than a slight exaggeration and it needs to be corrected.

[Mr Bailey]

I thank the hon. Gentleman for his observation. When I speak to sixth formers and potential undergraduates I always make the point that, compared with the cumulative spend in their lifetimes on cars that depreciate immediately, investing in their education is a very good investment. But it will have consequences for patterns of consumer expenditure, the full implications of which we do not yet know.

[Mr Sheerman]

I am sure that my hon. Friend would not wish to mislead the House and I know that he is replying to an intervention, but the IFS study says that middle earners—the public administrators, the health and education workers—will be particularly affected. That is 40% of graduates, so we are not talking about a small number who may never be able to get a loan for a house.

[Mr Bailey]

I understand the point that my hon. Friend makes and I could talk about it at some length, but I recognise that other people wish to speak in the debate so I will not pursue it any further.

It is now clear that the level of debt repayments is predicted to be much lower than when the scheme was initiated. In the early days, the Committee questioned the Minister on that point, and the estimate was a level of default of between 28% and 30%. It is now acknowledged by the Government that the rate is 45%, and that may rise. In crude terms, for every £100 the Government lend, they get only £55 back. That has huge implications for the Government’s long-term budgeting.

The principal reason for the projected increase in non-repayment is the fact that graduate income has not grown as anticipated by the Office for Budget Responsibility. That will keep an increasing number of graduates below the repayment threshold, and even if they reach the threshold they will repay at the lower rate, commensurate with their lower income. That will mean that they will be unlikely to pay off the debt within 30 years.

The IFS has estimated that 73% of graduates will not repay in full. We can add to that the difficulties that the Student Loans Company has had in securing repayments, particularly from former students living abroad, so there is a basic problem and other administrative problems.

The Select Committee has made recommendations on the latter. If we look at the implications for annual budgetary expenditure, we find that £7.4 billion in loans was given to undergraduates in 2012-13. In 2015-16, that figure is estimated to be £12.6 billion. If we estimate that nearly half of the loans will not be paid back, it is clear that that has enormous implications for future budgetary planning. If that were not a big enough problem in itself, the Chancellor added to it in his 2013 pre-Budget report by announcing the lifting of the cap on student numbers to allow the additional recruitment of 30,000 students. He tacitly admitted that there was a funding problem when he said that that would be funded by the sale of the student loan book. The Committee subsequently questioned Ministers and others on that. We expressed considerable concern that such ongoing expenditure should be financed in this way, and we were very doubtful about the Government’s potential to balance their books by doing so.

[Mr John Denham (Southampton, Itchen) (Lab)]

Does the Chair of the Select Committee accept that, when I was in charge of the Department for Innovation, Universities and Skills, we put considerable effort into trying to sell the previous loan book? We concluded that the inevitable uncertainties—future inflation rates, earnings rates and so on—made it quite impossible to get good value for money from the student loan book. Is that not a second reason why it was quite irresponsible of the Chancellor to suggest that this was an easy way of funding the long-term expansion of higher education?

[Mr Bailey]

I agree with my right hon. Friend. Indeed, the report’s recommendations underline that point. It is significant in another way, too: it was a tacit recognition by the Chancellor that if he were to expand the number of places, extra money would have to come from somewhere, and that that was not being provided for in the then current Budget projections. It is still unclear exactly how the escalating cost—it could well rise to considerably more than 30,000 students if the cap were removed completely—will be dealt with by the Government.

[Mr David Willetts (Havant) (Con)]

The hon. Gentleman talks about costs, budgets and public spending. In the interests of having a clear debate, will he confirm that the resource accounting and budgeting charge is not an item of public expending, as it appears in the national budget or the national accounts?

[Mr Bailey]

I understand the question, because I have heard the former Minister’s, shall we say, robust prosecution of this particular argument before. May I make an admission? I am not an accountant. All I do is go by what the authoritative bodies say. If the right hon. Gentleman wishes to argue with them that is fine, but I think most people would say it is a matter of common sense that if we lend so much money and get only so much back, sooner or later that particular default rate will have to be incorporated in national accounts and people will have to pay for it.

[Mr Denham]

May I add to my hon. Friend’s point? The Office for Budget Responsibility’s fiscal responsibility report makes it clear that there are three sets of national accounts: whole Government accounts, national accounts and resource accounts. The comments made by the right hon. Member for Havant (Mr Willetts) apply to only one of the three ways of looking at the national books. My hon. Friend is absolutely right. If we borrow £10 billion a year and write off £5 billion a year, that is bound to show up somewhere as a cost to the taxpayer—that is common sense.

[Mr Bailey]

I welcome the interventions of two former Ministers, which have shone an economic light on some of the most obscure elements of our education accounting.

To return to my point on the student loan book, the fact that the sale has now been abandoned underlines what my right hon. Friend said about the non-viability of this course of action in funding future financial higher education commitments.

In short, we have an education funding model that is producing an ever-increasing call on the nation’s finances, and actually further commitments are being added. The House of Commons Library paper projects that by the mid-2030s the addition to the national debt incurred as a result of this policy will be equivalent to 8%—about £350 billion to £360 billion at current prices. That is a huge sum of money that will have enormous implications for future Governments—and universities and students—in terms of financial planning.

[The Minister for Universities, Science and Cities (Greg Clark)]

I am sorry to pre-empt my response to the debate, but at the beginning of his contribution the hon. Gentleman mentioned the important benefit—he referred to it as unambiguous—to the Exchequer. Has he made an estimate of that benefit to set against the costs he is referring to?

[Mr Bailey]

I believe that these estimates are projected in the figures from the Institute for Fiscal Studies, and certainly there is the netting off if you like, of these figures. There will be benefits. I said in my opening comments that there would be benefits. However, to have this level of future debt without any policy recognition that it will have to be funded in the future accounts is complacent and, in my view, a dereliction of duty. I shall return to that in one moment.

It was because of the figures that the Committee recommended an urgent review of the sustainability of the system, and obviously the sort of figures the Minister mentioned would be incorporated in such a review. If the model does stack up, I do not see why the Government should have any problem undertaking that review to demonstrate it. In their reply to the Committee’s recommendation, the Government quoted, of course, Andreas Schleicher from the OECD—I believe this featured in exchanges earlier today:

“The Government has no current plans to initiate a formal review of the sustainability of the student loans system in England. Indeed the OECD’s Director for Education and Skills, Andreas Schleicher, considers that we are the first European country to have established a sustainable higher education system.”

However, the Government response did not mention, as the Minister’s earlier response did not, that Andreas Schleicher’s comments were about the pre-2012 funding model, not the current one.

[Greg Clark]

I was aware of this matter, and I was surprised to hear that with uncharacteristic discourtesy—it is not his normal demeanour—the shadow Business Secretary accused me of having misled the House in referring to this endorsement from the OECD. It is important to clarify to the House that I met the author of the report, Mr Schleicher, on the day he published it. I know that overseas visitors often do not get the chance to meet members of the Opposition Front-Bench team, but I had the great privilege of meeting him, and there was never the slightest doubt about what he meant. In fact, he wrote to me this week, on 6 January, having read the report from the shadow Business Secretary. He wrote: “I had made it very clear that the rise to £9,000 fees had not changed the overall assessment by the OECD.” In fact, it is in the opposite direction: “The UK higher education system is excellent for individuals and for the Government. England has got it right on paying for higher education. Among all available approaches, the UK offers still the most scalable and sustainable approach to university finance.” I hope that when he responds, the Minister, on behalf of the shadow Business Secretary, will apologise to me for his accusation.

[Mr Bailey]

Far be it from me to intervene in the exchanges between the Front-Bench teams on this point, but I stand by my earlier point: when this response was made, it was done on the basis of evidence submitted on the pre-2012 model.

[Paul Farrelly]

Let me come to the Select Committee’s aid. Does my hon. Friend recognise that it is not only his Committee that has found the system to be unsustainable, but the former adviser to the right hon. Member for Havant (Mr Willetts) when he was a Minister, Nick Hillman, who said that the Government had got their maths wrong? He is now the director of the Higher Education Policy Institute and he said in March last year:

“The government has got it wrong and therefore there is a big funding gap and something has to be done about it.”

[Mr Bailey]

I agree. What I find odd is that Ministers will pray in aid a body such as the OECD, but refuse to recognise the overwhelming consensus of opinion of experts across the academic and economic sphere in this country that the system is unsustainable.

So far, the Government’s approach has basically been to say that the figures on which the estimates are based are essentially projected hypothetical figures, which could be altered if macro-economic conditions change. I certainly accept that that is absolutely true in broad terms. One point quoted more often than others is that if graduate incomes increase, it will substantially alter the projected potential deficits and increase in RAB charges.

The trouble is that it is possible to look at a whole range of economic variables, many of which might work in the other direction. Let me cite a couple of examples off the top of my head, but there are many others. First, if the cap in student numbers is removed and we have a larger number of graduates coming on the market as a result, that could further depress the starting salaries for graduates to a lower level than before. That could also have a significant impact on future RAB charges. If the Government had to borrow money at a higher rate than applies at the moment in order to re-lend, that, too, could considerably alter RAB charges.

[Mr Speaker]

Order. I am listening intently and with great interest to the hon. Gentleman’s opening speech. I hope he will not take it amiss if I express the hope that the four or five sets of papers arrayed in front of him do not constitute individual chapters in the development of his speech. Although we are not hugely pressed for time, there are several other hon. Members who wish to contribute. The hon. Gentleman, being a considerate and sensitive fellow, will wish to tailor his remarks accordingly.

[Mr Bailey]

Thank you, Mr Speaker. I reassure you that, given the expertise of some Government Members, and one in particular, the papers in front of me are there to provide a factual basis on which I can respond to them. I am coming on to conclude my particular comments.

The broad point is that where it is possible to look at future macro-economic variables that will benefit the RAB charge, it is equally possible to look at a whole range of them that do not or even work in the opposite direction. What I find particularly worrying is that so far, on the basis of available evidence, it is the authoritative research organisations that have predicted an increase in the RAB charge and they have proved to be correct, while the Government sources, which have been very complacent on this issue, have not been proved correct.

I have spoken about the range of the research done on this issue. In summing up, as a Committee, we did not put any specific proposals before the Government. What we wanted was a review. I recognise that a number of organisations and individuals have looked at this in some detail. They include, of course, the Higher Education Commission, and I am sure that my hon. Friend the Member for Huddersfield (Mr Sheerman) will talk about some of its recommendations. They also include my right hon. Friend the Member for Southampton, Itchen (Mr Denham), who I know has done considerable research and will want to talk about his suggestion, and, of course, the shadow Minister, my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne).

I think it important for us to begin by recognising that there is a problem, but the Government do not appear to recognise that. It is not possible to solve a problem without starting from the basis that there is one, and it seems to me that the Government are sticking their head in the sand. All those other organisations and individuals are putting considerable effort and research into finding a solution, but from the Government we have had no response, just the complacent argument that there is no problem so no problem needs to be fixed. I believe, my colleagues on the Committee believe, and an increasing body in the academic and economic world believes that there is a problem, that there needs to be a review, and that we need to look at these issues. There is no easy answer, no silver bullet, but universities and future cohorts of students can reasonably expect to have some sort of answers to these questions.

11:56

[Mr Brian Binley (Northampton South) (Con)]

I pay tribute to my colleague the Chairman of the Business, Innovation and Skills Committee, the hon. Member for West Bromwich West (Mr Bailey), not just for the report, but in recognition of all the years during which we have worked together on the Committee, with me as his would-be vice-Chairman. I believe that I speak as the longest-serving member of the Committee: I have been a member for nine years, and the grey hairs can attest to that record. I also thank all the other Committee members with whom I have worked during those nine years. It has been a fascinating experience.

I hope that I may wander off the main topic of the debate just a little—and it will only be a little. It is about time we saw Select Committee membership as an alternative career choice in the House of Commons. I hope that the importance of Select Committees will be enhanced, because, if that does nothing else, it may end what I consider to be the dangers of patriotism and patronage that apply in this place. I hope that that remark has been recorded, and will be picked up somewhere.

[Greg Clark]

rose—

[Mr Binley]

I was talking about patronage on the Front Bench.

[Greg Clark]

I know that my hon. Friend—and he has been a friend for many years—is a considerable patriot. I cannot imagine that he was deprecating patriotism.

[Mr Binley]

No, not patriotism; I meant patronage, and I am glad that my right hon. Friend has pointed that out. I will now continue to speak according to the terms of the motion, Mr Deputy Speaker, which I am sure will delight you.

My colleague—indeed, I shall use the term “hon. Friend”—the Chairman of the Committee said that he would concentrate on wider issues than that of the money itself. I want to concentrate on the issue of the resource accounting and budgeting charge, the money and the black hole that the charge is producing for future generations.

[Paul Farrelly]

I realise that pinning down the RAB charge is rather like Phil Taylor—the legendary darts player who comes from my constituency of Newcastle-under-Lyme—throwing darts at a moving board, but does the hon. Gentleman agree that, with 45% of student debt expected to be written off in the future, the current system is really not working for students or for the taxpayer? Even in this age of austerity, lower fees would lead to the recovery of more debt, as well as wider potential economic benefits for students as they make their way in the world after university.

[Mr Binley]

I welcome the hon. Gentleman’s remarks. I shall say a little more about my views on the point he raises as my speech unfolds, but I will say now that every small business man in the land—I do not mean small in stature; I mean small in the sense of the size of the business—will know that if he lends money that he will not get back, he will have a cash flow problem that will create real trouble for him, if not now, then certainly in the future. I do not believe that Government money is any different in that respect.

The saga of higher education funding and support has rumbled on for a long time. Reforms in the 1990s created an expansion in higher education that widened participation, which, of course, is welcome. However, those reforms necessitated a change in the financial model for universities and those attending them. That is becoming increasingly unsustainable and could lead, as I have said, to a sizeable black hole in the Exchequer accounting, which the Government seem not to wish to recognise.

Many Government members are also my personal friends, and I am sure they are working on contingencies and do not have this in mind, because I would not ascribe to them the financial inadequacy that not recognising the problem would suggest. I hope my good friend the Minister will recognise that I do not think he is inadequate and I do think he will come up with the answers we require—that he will recognise the problems and consider very carefully the need for a proper review not only of the RAB charge itself and the loans surrounding it, but the way our universities work. I will talk about that as my speech unfolds.

[Bob Stewart (Beckenham) (Con)]

I thank my very hon. Friend for giving way. Is it correct that if my children go to a Scottish university, they will pay a lot of money, whereas those from Scotland, or from France or Poland, do not pay tuition fees? That is unfair and should be addressed, too.

[Mr Binley]

I will allude to that problem, which I hope will be corrected when this place discusses—if it has the courage to do so, and I pray it does—devolution and the Barnett formula, because there is no doubt that Scottish students who attend Scottish universities get a much more helpful and lucrative deal than Scottish citizens who attend English universities. This is a matter not of English or Scots, but of devolution, which in this instance works very much against students in English universities. They are ill done by, as are citizens more broadly, on whom less per head of population is spent than on our fellow Scottish citizens.

The much discussed 50% target for participation in universities, although arbitrary, was entrenched in the need for change in the 1990s and was one of the motivators of the current situation. I was a secondary modern schoolboy under the tripartite system, which could have been enhanced and could have flowered in the extent of choice it gave to parents. I regret that, at a stroke, it was done away with. I fear that was to our great cost and genuinely feel that the extension of offers in education that is beginning to flower now is an important development. Most importantly, we must place apprentices, technologists and all those who are so vital to the well-being of our economy on an exact par with university students, and in the past I fear they have not been given that recognition. I want to see a more equitable division between those who have gone on to higher education in technical fields and those who have chosen the academic areas for which the universities are famous. I think that that is part of the answer and I am sure that the Government will take it on board.

The 2011 White Paper promised that higher education would be put on a financially sustainable basis. The Browne review established the principle that the beneficiaries of higher education would need to make a greater contribution towards the costs, and I agree with that. It was also proposed that graduates should pay a proportion of their salary only when they were earning more than £21,000 a year, and that was widely welcomed. That provides a part-answer to a previous question.

The Select Committee inquiry in the first Session of this Parliament, to which I contributed, drew two conclusions about the affordability of the loan system. We agreed that there should be clarity for students about the relationship between the burden borne by them and that borne by the taxpayer, as a function of the performance of the economy. That seemed to me to be vital, because we have turned students into customers and consumers, and consumers have a right to know that they are getting a fair deal. That fair deal will also have an impact on their children and grandchildren, which is why this matter is so important.

I genuinely believe that we are leaving a massive black hole for future generations to deal with, and I say to my right hon. Friend the Minister that I find that immoral and totally unacceptable. I know that he thinks of politics in terms of an ethical and moral base, and I hope that he will hear my plea. We have no right to lay so much danger and concern on to those who follow us. We are already doing it with a deficit that was built up to far too high a level. That is causing us problems now and will continue to do so for at least the next five, six or seven years. I do not want that problem to be added to by a black hole because we did not take the trouble to consider this issue properly.

That is why I am appealing to my right hon. Friend in this regard, and I do so not for ourselves. Of course the Government can hide the problem away, but if they do so, they will not be acting in the ethical and moral way in which the Minister and I would want them to act. I therefore hope that he will recognise this element of the problem. This is not about the accounting that the Treasury seeks to project; it is about what most Members of the House of Commons want to see. I have served here for almost 10 years, and I believe that Members consider morality, ethics and good practice to be massively important factors in their deliberations, and I hope that we can apply those factors to this issue.

I shall be leaving this place in three months and I want to make a heartfelt appeal to the Minister on behalf of my two children and three grandchildren. The problem could easily be shoved aside, but it will come back to haunt us in a big way in 15 or 20 years if we are not careful.

The Select Committee inquiry drew two conclusions. I have just outlined the first, but the second has greater significance. We stated:

“The affordability of the new system is dependent on a wide range of variables which are outside of Government control.”

The truth is that we doubted that they had been fully taken into account when the system was set up. That gives the Minister the opportunity to say that there is a need to revisit this issue to consider what the other variables outside the Government’s control are. We are not the masters of every issue we face—we are rarely the masters of any issue we face, but that is especially true of this one, which will leave a deficit for our children and grandchildren if we are not careful. This issue is not totally, by any means, within the Government’s control and we need to consider that aspect. If we do not do so, we will be letting future generations down. Consequently, I wish to focus my remarks on the second conclusion.

Let me repeat for the record the doubts I had at the time the reforms were introduced. My right hon. Friend the Member for Havant (Mr Willetts) will know of them, because of some friendly, courteous but relatively robust cross-examinations when he was on the Front Bench. He knows that we were deeply concerned at that time, and nothing that has happened since has changed my mind. I do not believe that proper regard was given in the first place to long-term sustainability, and I want to concentrate on that nub of this matter.

In October 2012, my right hon. Friend the Member for Havant, a wise and certainly highly intelligent Minister, was reported in The Independent—this was “reported”, so I cannot claim he actually said these things, as we all know the dangers that lie in that term—to have said that the RAB on students loans would not rise above 32%, with a 38% ceiling being the worst possible outcome for the taxpayer. In April last year, in response to a parliamentary question, he asserted that estimates at that time placed RAB at about 45%—in such a short time it had already risen way above what I believe were his genuine and heartfelt estimates. In my view, a level not far off 50% has been reached—perhaps it has already moved above that figure—and that simply highlights how important this matter is. To be totally fair, I should point out that he also stated that the Government had achieved significant savings for students, and increased income for universities. I believe he was right to say that, and I welcomed that view then and do so now. We pay tribute to the work he did in the Department, which will benefit my children and grandchildren. I hope I have given an even view of how I see the work of a right hon. Friend I am criticising just a little.

Looking at the reforms from a more detached perspective, it is far from clear that the Government can claim that these changes were a total success, not least on the RAB. A forecast drop in student loan repayments has raised existential questions about the true sustainability of the new system, and we could face a situation in which the effect of trebling tuition fees has resulted in a more expensive settlement for taxpayers, in the way that I have described. A report in March last year by London Economics found that if the charge increases beyond 48.6%, the cost of the reform

“will exceed the 2010-11 system that it replaced.”

That is a startling fact and it ought to add not only to our concern, but to the need for an immediate review in the way the Select Committee is requesting. As I have said, the RAB index is perhaps already above 50%. No business could sustain, and no Government should be prepared to sustain, such a situation, because it is the worst kind of accounting. It is the worst kind of financial thinking about the future, and I reject it, not only as a business man, but as a parent.

[Mr David Lammy (Tottenham) (Lab)]

I hesitate to interrupt the hon. Gentleman during what is emerging as an outstanding contribution on the Floor of the House. Does he agree that, given the Government’s continued repetition of the need to balance the country’s books, this is an extraordinary outlier in relation to that clear view that we have to have a sustainable economy? The fact the RAB is moving beyond 50%, as he is indicating, should cause real alarm.

[Mr Binley]

I am most grateful for the right hon. Gentleman’s remarks, and I add that this situation should cause real alarm to not only every Member of this House, irrespective of their position or party, but to every parent, business man and citizen in the land. At some stage their children and grandchildren will have to meet this charge if we do nothing about it now. I do not take the accounting answer given earlier by a man I respect, my right hon. Friend the Member for Havant, and I welcome the comments made by the right hon. Member for Southampton, Itchen (Mr Denham), a former Labour Minister, who, sadly, is leaving this place, too—that will be a great loss. He made the point that we cannot avoid debt of any kind and we cannot talk it off a balance sheet; it has to be dealt with at some stage. I would rather it be dealt with now than at some point in the future.

Any business would stem the flow of debt immediately, as it would be so damaging—it would threaten the very livelihood and stability of that business. Any business would be looking for ways of tightening up on credit control—it would probably have done that already, because it could never have afforded to have got into this situation. Any business would look for ways of increasing productivity within the system, and you will be pleased to know that I wish to say a few words about that relatively shortly, Mr Deputy Speaker, and then I will sit down. Does that reassure you?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I am sure it reassures the rest of the Chamber.

[Mr Binley]

I fear that they are enjoying my contribution immensely, but your job is another matter.

Any business would be seeking to tighten credit controls and to find ways of increasing productivity in the areas of service provision, and would talk to its bank about contingency arrangements that might be in put in place and how that might be done. We are simply appealing about that aspect, because in this respect our bank is the taxpayer. I wonder what the taxpayer might feel about our not considering those contingencies. I have made that point in a number of ways during these remarks, but it is a vital part of what this place is about.

How must we seek to emulate that good, solid business man who would take those steps? I would seek from the Minister a wish and plans to improve loan contracts, with special emphasis on repayment procedures. We now have the information to prove that the procedures are simply not good enough to reclaim taxpayers’ money, especially from overseas students, and we have to look at that. Secondly, we have to improve collection procedures—again, particularly in respect of overseas students. It is not the job of this House to finance the education of those people, even though doing so creates a better world; I understand that aspect, but it is still not our job to finance their further education for the nations that they come from—I do not believe that our bank of the taxpayer would disagree with that view.

I would also equalise the cost of university education through the nation. My hon. Friend the Member for Beckenham (Bob Stewart), who is no longer in his place, has already talked about the disparity in the fee situation between England and Scotland, which many people find unfair and unacceptable.

We need to increase university productivity. We should also consider compressing the time it takes for a student to complete a course. We could have courses of two years, or even 18 months if we are talking about golf course management. As a businessman, I despair at some of the degrees that come before me when people seek jobs, but that is another matter. We need to think about compressing courses and improving the productivity of a sector of our national life that has had it easy for too long. Members may think that there speaks a secondary modern schoolboy who did not have the opportunity to sit at the high table, but many people in this land believe that our university structure has been too aristocratic and too full of itself and that it needs to recognise that it is a contributor to our national wealth and well-being, and it is from that aspect that I come to this subject. We need to ensure that the Treasury finally improves contingency planning to reduce the impact of the deficit that we say will meet us in ever greater amounts as time goes by.

I have some questions for the Minister. I would welcome his confirmation on some of the details of our assumptions. In particular, what proportion is assumed to be used up by foreign nationals whose offspring would not have legal access to loans? What analysis has there been of the key variables affecting repayment rates, such as the future performance of the economy? A very long telescope is required for such a difficult job. None the less, we must have some contingency plans in place for worst-case scenarios, as they have not been built into the sector.

What work are the Government undertaking to understand more the nature of defaulters and, in the light of other options, the desirability of the continued expansion of higher education, particularly in the context of apprenticeships? We need to put even more effort—I do recognise how much the Government are doing in this regard—into technology apprenticeships and all those practical skills that the target of university entrance has demoted in the minds of many of our young people. I see too many people who think that the only objective in life is to go to uni. What a tragedy that is. We are increasing the number of people who see opportunities in engineering, technology and other such skills, but we are still not putting enough effort into that sector, and we are still not changing the view of young people that university really is the place to be.

[Paul Farrelly]

I take on board the hon. Gentleman’s points about engineering and vocational degrees. But does he also agree that at levels of £9,000 a year plus maintenance loans, many of those degrees at the likes of Imperial, which stretch over more than three years, make it less likely that people from more modest backgrounds will enter those professions, and therefore socially restrict the entry?

[Mr Binley]

That is absolutely correct, and it underlines the need for a proper review and perhaps the need to rebalance things. We should have not an across-the-piece £9,000 level of payment, but a rebalancing of the loans in association with what is required. This is a more complicated business than we first thought, and we need a review to take into account those factors to ensure that we have enough young people who can pay for my pension and the pensions of those who follow me and that this nation has the well-being to compete in an ever-more competitive world. That is what we are talking about. This arrogant view of universities as the place where we produce rounded men who talk with wonderful accents must end. These people who talk the Queen’s English sometimes do so to such an extent that they are not understood by those from a working-class background. I want all of our people to benefit. I want our nation to be serviced by people, from whatever background, with the skills and the ability to ensure that we maintain the well-being that I and other Members of this House have had the good fortune to enjoy.

Finally—you will be delighted to hear that, Mr Deputy Speaker—I want to mention the European dimension to this black hole. What prediction has the Minister made of changes and developments whereby equal access rights and obligations arise for EU nationals to borrow and study in the United Kingdom? If that is to be the case, will we find ourselves increasingly subsidising foreign nationals? I believe that charity and support must start at home.

I have every faith in my right hon. Friend the Minister. I know that he is an honest man and I look forward to his response with great interest, because I think that he might surprise us all and say that he agrees with many of our points.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I did not expect to have to do this, but may I advise Members that the Front Bench speeches will start at 1.45? Two speakers have taken an hour already, and that cannot continue. I would be grateful if all Members could bear that in mind.

12:26

[Mr John Denham (Southampton, Itchen) (Lab)]

I welcome this debate and congratulate colleagues on both sides of the House on securing it. I pay tribute to my hon. Friend the Member for West Bromwich West (Mr Bailey) and the hon. Member for Northampton South (Mr Binley) who opened the debate with their excellent speeches that summarised so well the situation and the conclusions of the Business, Innovation and Skills Committee. I will try not to tread the same ground, but I do wish to strike the same note as the Chairman of the Select Committee and query why the Government are refusing to review the system when so many organisations across higher education as well as in the business community are saying that changes are needed. Such complacency is very dangerous indeed.

It is clear why so many organisations are saying that something has to be done, even if they do not agree on the solutions. It is because English universities are boxed in. As the real value of fees erodes, the squeeze on university incomes threatens teaching quality and research excellence. Over the past few years, universities have done quite well out of the system, and have not faced the sort of pressures that our colleagues in health or local government have experienced. But everyone in universities knows that that will not last. The real value of those fees is now well below £8,500 and continues to shrink. The public finances cannot bear ever more debt write offs, but raising fees and graduate payments is still politically toxic. I would be surprised if any political party goes into the next election promising that. Indeed, I would be surprised if they are not forced to rule it out over the course of the campaign.

The idea of allowing universities to fund their own fees might have some role to play if current fees were much lower, but sanctioning ever-more eye-watering fees is likely to be controversial and socially divisive. All the solutions that people come up with essentially boil down to making graduates pay more, pay earlier, pay at higher rates of interests and pay for a longer period of time. The idea that we can simply solve a problem by going back to graduates and asking them to pay more money, however we dress it up, is clearly not right.

It is worth noting that concerns are coming not just from within the sector, but from a range of business and employer groups, including the CBI, which all claim that the system is not working. I will base my remarks around not one, but two observations. Yes, we need to reform the funding system, but we also need to reform the delivery of some of the higher education systems, to echo what the hon. Member for Northampton South has said. The second of those two points is as important as the first.

We have engaged in this debate for a year now and there is a marked division between those largely in the sector who say that there is nothing wrong with higher education just the way we fund it and those largely outside it who say that it is not just about funding but about the higher education on offer.

Before turning to funding, let us review the problem of delivery, which is intimately linked to it. There is now strong evidence that there is a mismatch between the education of many graduates and the needs of employers, society and the graduates themselves. According to the latest figures, which I got from the Office for National Statistics yesterday, the long-term employment prospects of graduates are continuing to deteriorate. The percentage of graduates not working in graduate jobs five years after graduation has now reached a record 34%, up 4% since 2010. The newest graduates are doing a little better in the sense that the percentage not in graduate jobs just after they graduate has fallen from a peak of 48% two years ago to 44%, but that is still much worse than in any year before 2010 and has happened despite the much-trumpeted increase in overall employment in recent years. Whatever sort of recovery is under way, it is clearly not using the skills and education of recent graduates in high value-added graduate jobs. These levels of graduate underemployment are a far cry from the aspirations of students who now borrow huge sums of money to go to university. At the same time, organisations such as the CBI continue to complain about the quality of graduates being produced.

[Mr Lammy]

Does my right hon. Friend agree, on that fundamental point, that not only is there underemployment among that group of graduates who are not working at the level that was expected, but those graduates have pushed out other young people who are unemployed—in London, one in four young people are unemployed and they are depressed because they are outside the market—who cannot get the jobs that they were hoping to get, often in retail, as a consequence?

[Mr Denham]

That must of course be the case if graduates are working in non-graduate jobs. That is a bigger issue than higher education, of course, but the failure to use a graduate work force in graduate jobs is a huge drag on the economy and is one of the reasons why the RAB charges and debt write-off charges are as bad as they are.

Let me be clear that if we understand an honours degree as giving not just knowledge but technical expertise and the capacity to analyse, think independently, exercise intellectual judgement, take responsibility and innovate, we certainly need 50% or more of our population to be educated in that way. We do not have too many graduates, but too many graduates who are not receiving the most appropriate degree-level education.

One of the effects of Government policy over the past four years has been to undermine employer-based higher education. Foundation degrees, usually employer supported, have declined by nearly a half under this Government and employer-funded part-time degrees fell from 40,000 to 25,000 in one year. Out of the hundreds of thousands in university, fewer than 20,000 full-time students across the entire higher education system in all years of study are being funded by employers to do their degrees. The work force development programme, created when I was a Minister, was shut by the coalition, even though it alone was creating 20,000 employer co- financed degrees a year by the time of the last election.

There is much that is good and much that is excellent in the English higher education system and we do not need to change all of it, but we need to make changes that increase the diversity of routes to study and enhance employer engagement with delivering higher education. When we talk about funding higher education, we need to think about how we deliver a better system.

Let me make one point about the long-term sustainability of the system. The Business, Innovation and Skills Committee has done an excellent job and I will not go over that ground, but since then we have had the latest fiscal responsibility report from the OBR, which makes interesting reading. Ministers justified heavy cuts in teaching funding as part of a deficit reduction programme, arguing that we should not put the costs on to future generations. The Chancellor said in 2010:

“If we do not deal with these debts and do not have a credible plan, it will be our children and grandchildren who are saddled with the debts that we were not prepared to pay.” —[Official Report, 20 October 2010; Vol. 516, c. 989.]

The leader of the Liberal Democrats said:

“This strikes me as little short of intergenerational theft. It is the equivalent of loading up our credit card with debt and then expecting our kids to pay it off.”

The recent OBR report underlines just how the debts we are building up now will hang around the necks of graduates and non-graduates in years to come. The OBR estimates that additional net debt arising from new loans will reach nearly 10% of GDP in the late 2030s and 2040s. That debt brings cost. Some debt will have to be written off after 30 years and after 2046, when that kicks in, it will leap dramatically to 0.25% of GDP. Graduates will be making cash repayments of about 0.45% of GDP in the same period and the Government will be paying interest on that stock of debt that the Library estimates at 0.3% of GDP. Many of those costs fall on taxpayers as a whole, not just on graduates.

There is a lot of uncertainty about the figures, but those are the best we have. They tell us that in about 30 years, the public and private cost of paying for the regulated debts will be around 1% of GDP. None of that will fund anybody going to university. According to the OECD, in 2010 the UK spent only 1.3% of GDP from public and private sources on higher education and at that time little was being spent on the cost of debt. The simple conclusion from the OBR is that the policies of the Government are pre-empting a massive share of future national wealth being used to pay for their high-fee, high-debt priorities and not being available to fund future higher education. It is the opposite of what Ministers claimed and it is loading debt on to future generations in a way that is unfair and unsustainable. That is my answer to those who say that we should not worry about RAB charges as they are all technical: there comes a point at which these debts have to be paid and when they do, they will take money out of the national economy that will not be available to pay for higher education.

As for the alternative, I have set out my views over the past year on a number of occasions and, given your remarks, Mr Deputy Speaker, I shall make just two brief observations. Let us not deny that this started under the Labour Government, but it has accelerated under this Government, and we have developed a one-size-fits-all higher education system that is entirely focused on 18-year-olds studying for three years away from home for a residential degree. That has been at the cost of part-time education, at the cost of employer co- sponsored education and at the cost of mature student study.

In a constituency such as mine, where even today relatively few young people go to university, we are closing the door on every single person who did not get a chance to go to university by saying that if they did not do it when they were 18 or 19, they cannot afford it, it will not be flexible, it has to be done over three years, they cannot study part time, they cannot do it intensively and all the rest of it. That is a bad thing for social mobility. Of course, the fact that the move towards younger people from deprived backgrounds going to university has continued is welcome, as many of us said at the time, but we must consider the whole picture if we want to see what is happening.

Of course, we have a difficulty in that there is no new public money for higher education so we will have to do something within the skin that we have. The good news is that money, public and private, is wasted hand over fist in the current system. Every year, billions of pounds are borrowed with the intention of writing it off. The RAB charges essentially mean that almost £1 in two is written off. We have the most wasteful, or at least the most expensive, model of higher education in the three-year residential degree. We are by far the outliers in the OECD as regards the extent to which our higher education system is based on a three-year residential degree for young people. Nobody else graduates so many young people so expensively in that model at the moment.

[Paul Farrelly]

I fully appreciate the point that my right hon. Friend is going to make, because I have read all of his work. Germany, to take the example of one of the most successful economies in the world, does not have the levels of fees that we do, so what is Germany doing so wrong that we are doing so right?

[Mr Denham]

That is an interesting point. Germany had a fees system and got rid of it, but the German system is much more diverse. Far fewer German students study away from home. The Germans have a different way—I would not suggest we go down this route —of seeing the diversity of the technical degree-level qualifications and other degrees and allowing people to study over a longer period of time. In other words, they have designed a system that meets the needs of their economy, but I believe it also meets the needs of graduates. I reject those who say, “If you should work more closely with employers, you are corrupting the purpose of higher education.” There will be room in the system for the senior common room on which the hon. Member for Northampton South missed out, and room for those who want to study hard for two years to get an employment-related degree. There is space in the system for everyone.

[Mr Willetts]

Will the right hon. Gentleman confirm that Germany has lower levels of social mobility than us? Many fewer people from low-income backgrounds go to university in Germany, because access in Germany is very restricted compared with access here.

[Mr Denham]

We should therefore not say that there is a simple model to pick off the shelf from somewhere else, but, as I shall say in a moment, we should pick up the elements of our system that work and take elements that work from other systems. We could even invent things of our own that are appropriate to our needs. We have the most expensive model of higher education. Ten years ago, when we first aimed for 50%, very few people, including Labour Members, assumed that the expansion would be done through having so many young people in such an expensive model of higher education.

Because teaching funds have been deliberately cut, fees are higher than would otherwise need to be the case. The private cost has risen, which is important because we should be stewards of what happens to people’s private money just as much as we are stewards of public money. Those who repay do not just repay their own course costs. Their fees help to subsidise research and to pay the fees of those who will never repay in full. I predict that there will be a point at which those graduates kick up against the bills they are being asked to pay for other people.

That is wasteful because the introduction of increased fees has caused politicians on both sides of the House to introduce new elements of public spending that do not teach students anything—Government’s of all parties have made maintenance systems more generous. The current Government required universities, under the Office for Fair Access, to put back 30% of all fees above £6,000 into widening participation, much of which was in fees and bursaries of completely nugatory value, which does not encourage universities at all—they just make universities compete for the same students. We have built waste into the system because politicians have been afraid of the consequences of their decisions. There is huge potential to use public and private money more efficiently to deliver a better system.

I have had a lot of support from the House of Commons Library, for which I am very grateful. Apart from my colleagues, one of the things I will miss most about being a Member of the House is the excellence of the House of Commons Library staff. I asked them to look at a model that would retain current levels of public spending; maintain institutional income to the sector from public and private sources; protect low-income students, so that no one in future would pay as much as people pay today, whatever the mode of study; have more intensive and flexible two-year and part-time courses; and have more employer-funded courses. I asked the Library to consider a system in which 70% of students do the traditional three-year residential degree and 30% study more intensively, have employer-sponsored courses and so on.

I also said to the Library, “Let’s be radical. Let’s spend public money on higher education to teach students something. Let’s strip away as much as we can of the money that is not spent on teaching students something.” That has the effect of reducing fees dramatically and reducing the cost of debt cancellation. In the spirit of my idea of keeping what is good, I said, “Let’s keep the current system that allows students to choose the university they want and take their resources with them—let’s not go back to a fixed allocation of numbers.” Having created a much larger fund for teaching, I would grant every English student a student entitlement that goes to the university that accepts them towards the cost of their fees.

In summary, in my model, public spending is at current levels and university sector income is unchanged, but spending on teaching increases from £0.7 billion to £5.5 billion. RAB charges fall by £3 billion a year. The student entitlement for each student, irrespective of the type of course they do, is £15,000, meaning that fees at full-cost universities, which currently charge £9,000 a year for a three-year degree, would fall to £4,000 a year. A two-year intensively studied degree costs just £4,500 in total—the student would probably study from home. Employers could co-sponsor a degree for an average contribution of £5,000 towards fees, less than typical recruitment and retention costs for a graduate. The same number of people would graduate because intensive study means fewer students at any one time. Spending per student would rise by 13%, an immediate and important boost to university finances.

More graduates would pay for their course in full. Let me be clear that I happen to believe that that is morally right: if we ask people to take on a debt and buy something, they should pay for it in full. For every mode of study, average lifetime payments would be less than they are today. If under that new much lower-cost system the higher-earning graduates—the City high-fliers—were paying too little, there would clearly be scope to introduce a free-standing graduate tax on the highest earnings, which could provide a useful fund for reinvestment in higher education teaching and research.

[Paul Farrelly]

I trust my right hon. Friend’s expertise, rigour and figures, but for the benefit of hon. Members, has he had his figures verified independently, for example by the House of Commons Library?

[Mr Denham]

I take responsibility, as all hon. Members must, for the use of those figures, but I have done my very best to ensure that they and the modelling have been done by the House of Commons Library, using the simplified higher education model produced by the Department for Business, Innovation and Skills.

[Mr Willetts]

Will the right hon. Gentleman give way?

[Mr Denham]

You want me to finish my speech, Mr Deputy Speaker, but I will give way to the right hon. Gentleman.

[Mr Willetts]

Will the right hon. Gentleman clarify one important point? Is he therefore proposing that the maintenance grant goes and is not replaced by maintenance loans, and as a result that many more students do not travel from their home town to go to university?

[Mr Denham]

My proposals would replace the maintenance grant with the maintenance loan. In other words, the income available to the student would remain exactly as it is currently. The key thing is that, provided fees are low enough, the total graduate debt would be less than under the current system. Putting maintenance grant cash into teaching enables us to get the debt cancellation charges down.

I do not want to overstate my case. Producing an outline model with the help of the excellent people in the House of Commons Library is not a policy, but it shows that a different policy is possible. I would look to the Government to do the sort of modelling I have talked about, but properly, completely and within their resources. In the real world, we would not, as I have done, separate honours degrees from level 4 and 5 apprenticeships, and we would not separate higher and further education study in an integrated system, but it is clear that there should be a review, because things could be different and better than they are at the moment.

12:47

[Mr David Willetts (Havant) (Con)]

This has been an illuminating debate, although my successor, the excellent Minister for Universities, Science and Cities, might think he is in danger of hearing from too many former Ministers going through our old arguments. We look forward to his fresh approach. I want to respond to the Business, Innovation and Skills Committee report. I always appreciated the courtesy of the Committee’s interrogations and the acuteness of its questioning.

There is shared ground. Going to university brings substantial public and private benefits. There is little evidence that the benefits are decreasing even when the number of students and graduates is increasing. The private benefits come in the form of significant extra earnings. The public benefits come in many forms, including higher income tax receipts. The extra that a graduate is likely to earn during his or her working life, which on average is £200,000 or more, and the extra that the Exchequer is likely to collect from a graduate during his or her working life, which is possibly another £300,000 or more, are significantly larger than the amount of so-called debt that graduates have—it is a fixed monthly payment through PAYE, so the extent to which it should be regarded as normal debt is open to dispute.

Rightly, we contribute public resources to universities through the Higher Education Funding Council for England grant, which runs at almost £2 billion a year, and through support for students in maintenance grants and other specific payments. It is interesting that we are now hearing from the former Labour Secretary of State a proposal to abolish maintenance grants and replace them with further maintenance loans. Those costs that are paid through the Exchequer—the HEFCE grant to universities and the maintenance grant, disabled students allowance and so on to students—are undoubtedly actual public spending today and are accounted for as such.

There is a third cost—on which too much of the debate has already focused, but I will touch on it now—which is the extent to which these loans that are now being made for students will be collected back in the future, and the extent to which, at the end of the 30-year period, in 2046, people in this Chamber will discuss the public expenditure item that year of writing off the loans that have not been repaid. The former Secretary of State said that there are lots of different methods of treating this, and the Select Committee Chairman said that this was accounting. It is not a fiddly accounting point; it gets to the heart of the system. This is a forecast of what might happen in the future. That is why it is not public spending today. If it were treated as public spending today, we would get into the nonsensical position in which it would affect real things that BIS was doing. A BIS Minister would have to say, “I will cut back spending on catapult centres because I have to spend more money on the possible future write-off of loans in 2046.” That is no way in which Governments should operate and, thank heavens, they do not.

[Mr Binley]

Of course I understand both the experience and knowledge with which my right hon. Friend speaks, but at the end of the day we do have a duty—it is why children and grandchildren have been mentioned so much in this debate—to think about what they will inherit. Does he recognise that, and how does he see that duty being undertaken by this Parliament?

[Mr Willetts]

My hon. Friend makes an important point. This is not public spending, as is explained in the Office for Budget Responsibility “Fiscal Sustainability Report” at page 174, paragraph B.21, which states:

“given the way the National Accounts are measured this does not directly affect our fiscal forecast.”

But that does not mean that we should be cavalier or wilful and say, “It doesn’t matter what the write-offs are. That is a problem for 2046.” My hon. Friend is absolutely right, and that is what I want to touch on. Clearly, we have to do this prudently, which is why this appears as an item of spending in some BIS departmental budgets. Quite rightly, BIS Ministers and Treasury Ministers have to discuss what they think will happen on the write-offs. Incidentally, a very sensible reform a couple of years ago, when even the Treasury understood that having this in the annual budget bouncing around as forecasts was nonsense, was for the accounting charges to happen at a rate of one thirtieth a year. We want to recognise this issue, but it would be a mistake for it to be regarded as just like normal departmental expenditure.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I am conscious that this may be the last time in this Parliament that we have a debate on higher education on the Floor of the House, so it is appropriate to salute the right hon. Gentleman’s extraordinary career and contribution, not just to this field of public policy, but to public policy in this country more generally. [Hon. Members: “Hear, hear.”]

During the last year or so, the right hon. Gentleman has been sanguine about a debt write-off rate that has risen quite dramatically. Why does he therefore think that a debt write-off rate of 100% would be a bad thing? Does he draw from that hypothetical argument that there is an optimum rate, and if so, will he share it with us?

[Mr Willetts]

I thank the shadow Minister for his generous remarks. I, too, as the former Secretary of State was saying, shall miss the House and even, no doubt, these debates. The shadow Minister asks a very fair question: what has happened to the RAB charge and why? The RAB charge is a peculiar calculation. First, it is a forecast, not public spending, and it has several elements. One element is a schematic assumption of the cost of Government borrowing. One reason why I am less worried about the so-called RAB charge than some other Members in the debate is that the RAB charge calculation assumes that the cost to Government borrowing is 2.2% real, when it is not. That is fixed by the Treasury. It may have been before the right hon. Gentleman was Chief Secretary, but under the previous Labour Government in 2005, when they first launched their scheme—very similar in structure to the scheme we have now—the RAB charge was 42%. One of the reasons why it was 42% was that it assumed a Government cost of borrowing of 3.5% real. In 2005, they announced that the actual cost to Government borrowing was 2.2%, and in a stroke, that reduced the RAB charge to 33%.

One piece of advice I would give to my excellent successor is that he should go back to the Treasury and ask why we are all having an argument about a figure that is based on a completely incorrect assumption for the cost of Government borrowing. If he does not do it, and the right hon. Gentleman were to be in Government, I will make a modest prediction that one of the first things that will happen to the RAB charge is that there will be a different and more realistic cost of Government borrowing, and lo and behold, the RAB charge will suddenly be discovered not to be 45%. As the OBR helpfully point out, 1% off the cost of Government borrowing lowers the RAB charge by 10 percentage points. So we are stuck on a calculation, one crucial element of which is fixed by Treasury stipulation. It does not respond to the real world.

Another bit of the calculation absolutely responds to the real world, and with excessive sensitivity. The other reason why it has gone up is what it is thought the £21,000 repayment threshold will be worth in 2016. Clearly, it will be worth more relative to earnings than we thought it would be when we set it. That is because, rightly, Ministers take the OBR earnings forecast, and the OBR’s assessment of what will happen to earnings year on year has kept on changing.

There was a deliberate decision to have a higher threshold than the previous scheme. We wanted to lower graduates’ fixed monthly outgoings. The hon. Member for Huddersfield (Mr Sheerman) asks whether graduates will be able to get into the housing market, and all the lenders to whom I spoke made it clear that when it came to mortgages they looked at fixed outgoings. So if the threshold is raised, fixed outgoings are lowered and the capacity of graduates to take out mortgages is increased. That was one of the arguments for the higher threshold. Nevertheless, it has turned out that that £21,000 will be worth more in 2016 relative to earnings than was expected.

The real impact comes because it is then assumed that the £21,000 threshold is uprated with earnings, year after year for the next 30 years. In other words, the real value of that threshold, relative to earnings, over the 35 years of a graduate’s experience, is entirely determined by the performance of wages between 2011 and 2016 compared with the OBR forecast in 2011. That is a peculiar way of modelling a graduate repayment scheme. The Labour party, which says that that proves it is unsustainable, did not increase the £15,000 threshold during the entire five years after it came into force. The Labour party lowered the RAB charge by changing the figures for the cost of borrowing, and the threshold stood at £15,000 without an annual uprating.

What is happening? The reason why I am so uncomfortable with this focus on the RAB charge is that this is a forecast that we have to make, but it is a very peculiar forecast indeed, and we need to keep it in proportion.

[Mr Byrne]

I am grateful to the right hon. Gentleman for that contribution, because I think he has given us one of the best arguments that I have heard this afternoon for precisely the review that my right hon. Friend the Member for Southampton, Itchen (Mr Denham) has called for. If the right hon. Gentleman poses significant questions about the right interest rate and the right earnings threshold—which we all know was a compromise with the Liberal Democrats—there are obviously some serious questions that demand a review. That is why the logical conclusion is that the Minister should stand up later today and admit that he has changed his mind. I hope that the right hon. Gentleman will just underline an acceptance that, although we might dispute the right way of calculating a RAB charge, being concerned about the level of debt write-off is none the less very important, because the lower we can keep it, the more money there is for future generations.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The right hon. Gentleman should save some speech for later.

[Mr Willetts]

On write-offs, I hope people can accept that what we are talking about here is a forecast shaped with some rather peculiar assumptions, not an item of public spending today. On a review, a lot depends on what people mean. My view is that the last thing that the higher education sector needs is another equivalent of Robbins, Dearing or Browne. All three political parties represented in the Chamber today, when faced with how to finance higher education when money is tight, have all essentially reached the same decision: to go for a graduate repayment scheme. My right hon. Friend the Minister is entirely correct when he quotes Andreas Schleicher and the OECD in saying that this is the sustainable model.

In my experience as Minister—I am sure that it is my right hon. Friend’s experience as well—there were certain Ministers around the world who looked at us and tried to work out how to get something closer to what we have. The last thing we need is a review that throws all this up into the air, particularly if the anxieties that people are focusing on arise from an unfair comparison. The reason why there are so-called anxieties about the sustainability of this model is the forecasts, which are very peculiar indeed, and the assumption that everything is fixed until 2046.

When the advocates of a graduate tax stand up and say that they want a graduate tax, they do not then say, “It’s going to be 9%, and it’s going to have an earnings threshold of £21,000, and we commit now that that will be the threshold related to earnings for 30 years.” As soon as they did that, exactly the same kind of calculations would be possible and we could calculate the x billion pounds that they expect to collect in the next 30 years, and every six months we could recalculate and announce that they had just lost £3 billion and ask what they were going to do about the fiscal crisis in their scheme. In other words, the advocates of a graduate tax are of course assuming that it is a flexible device to ensure that people continue to pay for higher education, and that is what this graduate repayment scheme is. Although designed by Labour and adjusted by us, it is conceptually the same thing. The last thing we need is to reopen that question.

[Mr Denham]

I look forward to hearing the right hon. Gentleman, who I think is pursuing a debate about a pure graduate tax, which is of no interest to my proposals, as he will have heard. Could he tell us what the RAB charge represents? The only common-sense interpretation is that it is the best estimate we have at present of how much money will not be repaid. Does he accept that? It is not good enough to say, “It’s not very good, so I will ignore it.” Surely, the very least that he should be demanding from the Minister is a sensible projection of how much will not be paid back.

[Mr Willetts]

The only country that has a system like ours is Australia. The last time I was in Australia, comparing notes and discussing our two systems, when I asked the leading Australian expert what the Australian equivalent of the RAB charge was, he said, “I think when we launched the scheme five years ago, we did an estimate of write-offs, and come to think of it, we probably ought to have another look at it now.” The idea that every six months a new figure was churned out essentially based on what has happened to earnings in the previous six months compared with the OBR forecast in 2011 would have been regarded as absurd. I would happily have a much more credible set of assessments of write-offs, which would have to allow for the fact that this must be a flexible system.

Returning to the shadow Minister’s intervention, I accept that all of us in all parts of the House should openly recognise that the scheme will not remain unchanged until 2046. We do not sit around with our income tax system, saying, “Well, of course Geoffrey Howe decided income tax rates and thresholds in 1980, and now that 35 years have elapsed we can decide on a new set.” That is not how policy is conducted in this country. One of the reasons why I am unhappy with this focus on a particular way of calculating the RAB charge is that it brings with it a set of assumptions which, unlike any other area of public policy, have been determined until 2046, so the only thing to do if someone wanted to change it is to tear the whole system up and start again.

I completely accept that there will be a necessity—I am interested in this and I am doing something on it at present—for us to discuss the right balance of public and private benefit from higher education and the balance of public and private contribution to the costs of higher education. The graduate repayments must clearly reflect the private benefit from higher education, but nobody should be preoccupied with a set of calculations that are possible only because of some highly precise assumptions that bear no relationship to the real world of higher education over the next 30 years.

[Mr Bailey]

I have been listening to the right hon. Gentleman with great interest. It seems to me that part of the case for a review is that, when the scheme was introduced, the Government based it on certain assumptions about RAB charges that have subsequently proved to be incredibly inaccurate. That may at some time in the future result in a need at least to amend policy. Given that the scheme has been in effect since 2012 and these inaccuracies have been exposed, is not this the most appropriate time to review it to see what changes should be made?

[Mr Willetts]

On inaccuracies, the RAB charge is largely determined by external factors. The 2.2% cost of borrowing is determined by Treasury assumption. The repayment threshold in 2016 relative to earnings is entirely determined by OBR forecasts. We did not go round trying to reach an alternative wages forecast; we just took the OBR forecast, which was the only sensible way to proceed. Then the British jobs market performed differently from what everyone expected in 2010, with good news on employment and less good news on increases in the real value of wages.

There was an error. The error that was made, which emerges from increased research on what has happened to graduates, is that it looks as though graduate earnings do not bounce around as much as was expected. That is another factor, although not a significant one in how the RAB charge is forecast. The forecast is inevitably shaped by the kind of assumptions that I described earlier.

I have spoken for 20 minutes and I do not want to go on any longer. I have touched on my concern about the way this debate is going wrong. It is going wrong by treating the assumptions necessary to make any kind of RAB charge calculations as somehow fixing the design of the system for the next 30 years, when that is absolutely not the purpose of the specification of those assumptions to make the calculation.

[Mr Binley]

I deliberately mentioned black holes because they have an event horizon. Once an object crosses that event horizon, it is stretched out of existence. Part of the reason why I want us to have a review is to know where that event horizon is. That would be one of its important purposes. Is my right hon. Friend eschewing the other aspects that we talked about—better debt collection, better loan agreements and better productivity from our universities—which would be useful now?

[Mr Willetts]

That is very fair, and it is the point on which I want to end. I think debt collection is not a particular weakness of the scheme. Again, some of the Select Committee reports and even the NAO stuff is unfair in regarding debt collection as an area where we could do massively better. Essentially, we are forecasting income tax receipts up to 2045—calculating 9% of earnings above a threshold out to 30 years and discounting its value back. This preoccupation with the RAB charge is relatively new. When Labour’s RAB charge was 42%, we did not have agonised debates about it. It has suddenly become the hot topic of the day, as though it somehow proves that the system is unsustainable.

The real issue, as has been correctly identified by my hon. Friend the Member for Northampton South (Mr Binley) and the right hon. Member for Southampton, Itchen (Mr Denham), is what is happening to the student’s academic experience. When I talk with student unions, I find them relatively relaxed and accepting that 9% of earnings above £21,000 is affordable, but what they say is, “We are entitled to £9,000-worth of higher education today for the fees we pay.” There is a lot of dissatisfaction with the quality of the academic experience—for example, the amount of contact time they have with academics and the quality of the teaching—and that is the real-world challenge for our universities. I am one of the culprits in this regard, but I hope that in future our debates on higher education—I look forward to reading the Hansard reports—will focus a little more on that question and a little less on esoteric calculations of what might or might not be written off in 2046.

13:10

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

What a privilege it is to take part in this debate. The quality of the contributions has been excellent. The House will recall that I have been involved in higher education for a very long time. Over the 10 years that I was the Chair of the Education Committee it partly covered higher education, so I was very absorbed in the subject. I was also a university teacher for 12 years, back when I used to work for a living, as I sometimes say—like the hon. Member for Northampton South (Mr Binley), I am one of the few Members who had a career before entering this place. The fact of the matter is that this has been a very high-quality debate.

I care deeply about higher education and love what it has done for my generation. I am the youngest of five children and the only one to go to university. I got into the local grammar school and was saved by going to Kingston technical college and then getting a scholarship to the London School of Economics, where I am now a governor. Higher education made my life. It gave me opportunities that my brothers and sister never had. I think that we underestimate just how powerful it can be and just what it has done in a short number of years for the people of this country.

I was at the LSE when the Robbins report was being written. Indeed, we had to walk quietly past the great man’s study in case he was behind the door, working on the royal commission. What he came up with still guides us, and I still think that it is right. He said that higher education should be paid for through a fair balance between the individual who benefits, the employer that benefits and society. That thread has run through all the contributions we have heard today. We are still concerned about how to deliver that fairness and that balance.

I do not want to repeat the excellent contributions we have heard on funding or to get into the black hole, so I will instead focus my remarks on delivery. However, I will say that the reason I gave, as co-chair of the Higher Education Commission, for doing a report on the long-term sustainability of higher education in our country was that everyone is talking about it. As my old friend the right hon. Member for Havant (Mr Willetts) knows, the higher education sector is very gossipy, and people in every corner—including vice-chancellors and business people—have been asking whether this is a long-term, viable model. They are asking that because higher education is so vital to our future. To get it wrong would be disastrous for our country’s future.

Fifty years ago Harold Wilson, who was born in my constituency, delivered a speech to the Labour party conference in Scarborough. It is now known as the “white heat of technology” speech. He said that for years this country had been ruled by a few people who went to posh schools and then to Oxford or Cambridge and who were essentially amateurs, but that the new world had no future for people without skills, or even for semi-skilled people. He saw that the future was in high skills, quality management and high science. He told us to look at what was happening in Russia: they had put a man into space before the Americans. He had been to the United States and seen production lines in the automobile industry where nothing was touched by a human hand. He could see that as a country we had to become highly skilled.

Harold Wilson also said some ridiculous things in that speech. He said, “Why do only 5% of people go to university? It should be 10%.” What a silly statement—I say that in jest. Why should we not have a university in every former industrial town? When Labour won the election a few months later, the polytechnics were introduced. There is a lovely story that Harold, when given the list of colleges of technology that were to be brought up to polytechnics, said, “Eee, where’s Huddersfield?”, before writing it in. I mention that because it is an amusing story, but there is a serious point: any town or city in this country that does not have a university cannot get into the super league. Up and down the country, large towns and cities that do not have a university—Huddersfield is lucky to have one—are in a lower league. I do not mean to decry those places, but universities are so important to the life of our communities, to their wealth and success. If we took them out of our towns and cities, we would be left with very little.

[Mr Binley]

I made a point earlier about being a secondary modern schoolboy at a time when only 2% of the population went to university, and I desperately regret not being able to take advantage of further education. I am really glad that so many of our young people can now do so. I was one of those boys that Harold Wilson was perhaps talking about—I was not a great fan of his, but that is another matter. Thank God we have a university that is doing its job so well in Northampton. I agree with the hon. Gentleman in that respect.

[Mr Sheerman]

I have a close relationship with Northampton university and its excellent vice-chancellor and know of its commitment to social enterprise. I am astonished by how few Members are in the Chamber for this debate. Huddersfield university is the biggest employer in my constituency, the biggest bringer of wealth, and it is what makes my town so vibrant. It has 25,000 students, and growing, and a massive number of staff. Think what that means for local businesses and supply chains. It pays very fair wages and sticks to all the principles. Indeed, not only was it last year’s university of the year, but it has just been given an award for the best level of employability of graduates. I will say more about that in a moment.

What Harold Wilson said 50 years ago is even more true today. If we do not produce the high skills we need in this country to compete and earn our living, we will be in dreadful trouble. Out in India, Brazil and China there are masses of people getting high-level and very practical qualifications. In every area where we have expertise we will find more and more competition as time goes on. We have to become brighter and smarter all the time. There is no place in our society for people without skills. That is a tragic aspect, but it is also a hopeful one. We have built up a fantastic university structure.

When I got the “Too Good To Fail” report going, what I wanted to say was that we do not want to throw everything up in the air. I do not want another Browne report, and I do not want to have to go back to the LSE and have another Robbins report. It is time that sensible men and women get together, as we have today, and say, “The system is working fairly well, but there are some real problems—can we fix them intelligently by co-operating?” The interesting and remarkable thing about the way in which higher education policy was produced, as Members might remember, is that it came out of an all-party agreement not to discuss the subject during a general election. We said that we would set up an inquiry agreed by both sides—Opposition and Government—and let it get on with its job.

[Ian Swales (Redcar) (LD)]

The hon. Gentleman is making a very powerful speech that I agree with. He talks about the fantastic system we have. However, it is basically a market-based system that is not delivering the balance of skills that the country needs. For example, we need 500 power engineers a year but we have only 100 undergraduate places. What does he think we should do about how the market delivers what the country needs?

[Mr Sheerman]

The hon. Gentleman anticipates the second part of my remarks, and I do not want to detain the House for much longer.

I wanted to begin by setting the scene in establishing how important universities are to towns, cities and communities. Our higher education system is pretty marvellous. People come from all over the world to see it. I show them around and they marvel at its quality. However, it is not perfect; the hon. Gentleman is absolutely right in many ways. As my right hon. Friend the Member for Southampton, Itchen (Mr Denham) said, we are not delivering the right product in our universities. All my vice-chancellor friends will disown me for saying “product,” but it is a product.

Are we delivering the kinds of graduates our country needs? In lots of cases, we are—they are brilliant. My own university has one of the best design departments in the country. Young people who do its fashion degrees are snapped up by fashion houses all over the world. Indeed, the head of Burberry is one of our graduates. Mechanical engineers and design engineers are snapped up by Formula 1. My right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) has a son who is a graduate working in F1 because of the fine quality of the department. We do loads of things right—of course we do—but often not in a way that is appropriate to what is really needed.

That is not to say that things are not happening. There are people doing two-year degrees in Coventry. Skoda Coventry has people doing degrees either only in the morning so they can work in the afternoon, or only in the afternoon so they can work in the morning. The diversity of what is being done around the country is much greater than we might think.

[Mr Denham]

In its evidence, million+ said that the political sensitivity of fees denies it the chance to run two-year degrees that would cost 80% of the cost of a three-year degree, because that would take the fees to more than £9,000 a year, even though the degree would be cheaper. Does my hon. Friend agree that we need to remove some of the artificial constraints that have stopped universities being as flexible and creative as they would like to be?

[Mr Sheerman]

That is absolutely right. We must find the right model and give opportunities to people. Part-time degrees have plateaued—some say diminished—but not in Scotland and Wales, interestingly. We need a more flexible system.

I get a bit tired of the CBI saying, “We’re not getting the right people with the right skills as graduates”, but there is a strong element of truth in that. When people are delivered having finished their degree, there should be a strong element of their being fit for employment. When a good arts or social sciences graduate comes to see me, I say, “You’ve got an arts degree—go to Cranfield or the LSE and get yourself a business degree or something with economics that is much sharper, because that is what the market is looking for.” That is a good combination, but it creates a greater level of debt, and a lot of people are reluctant to increase their debt.

The level of debt is always on my mind. Young people’s inability to get mortgages is a very important issue. We are in an age when it is getting more and more difficult for people to get a home of their own. Many people are still living at home with their parents when they are in their 30s. Those within the middle-income areas in public services, education and health will be most hit by the inability to get a mortgage.

I do a great deal of work in identifying entrepreneurs and increasing their ability to be entrepreneurs. As some Members will know, a lot of it involves crowdfunding and crowdsourcing. I have been working with a number of universities to ensure that they are knowledgeable about crowdfunding platforms. Then, when their undergraduates become graduates and want to start a business, there is on the campus, as in Northampton, an ability for them to get money through crowdfunding for start-ups. When I go to universities nowadays, I look very carefully at how much space there is for young entrepreneurs. They do not have to be a private entrepreneur; they can be a social entrepreneur. Enterprise and entrepreneurship is going to be the future.

When people ask me why the industrial revolution started in places like Huddersfield, I say that it is because we had cheap power in the form of the water that flowed from the Pennines and turned the water mills that made the factories possible; we had high skills; and—people tend to leave out the third element—we had entrepreneurs who could put all that together and make something. Our universities have to be much more focused on how to create opportunities for entrepreneurship to be not only learned but encouraged. As opposed to the old, tidy world of going into the City, academic life, or whatever—the traditional occupations—we have to make it much more possible for young people, and older people, to find the spark of enterprise and entrepreneurship.

By the time people have graduated, they should understand some of the rules of how to be interviewed properly and organise themselves properly. That would make a real difference. I once horrified some people at a meeting in the House when I said that I would teach management from four years old onwards. I chair the all-party management group. Managing one’s life is pretty darn important. When I talk to undergraduates, I find that they do not know how to manage their life. If they did, they would be much more likely to get a job.

I go round universities all the time. I am a visiting professor at Huddersfield and at the Institute of Education in London. I talk to graduates and they do not know what the British economy is like. I ask, “How many people in this country make anything?”, and they say that the figure is 30% or 40%, but of course it is less than 10%. We have 1% of people working in agriculture, 30% in what Conservative Members tend to call public services—but I call it education, local government and health—and 60% in private services. People working in early-years or later-years care will be on the minimum wage or minimum wage-plus, as will those in retail and distribution. When I tell students this, they say, “Wow, is that true?” Then I say to them, “If you’re on the minimum wage or minimum wage-plus, you can’t have the good life.” Someone at the back always puts their hand up and says, “Mr Sheerman, I really disagree with that. You can have the good life in a cave—it is in your heart.” Then we get into the best discussion of the reason most of us come into Parliament—to give the people we represent and the people of this country the good life. We con people if they end up thinking that one can have the good life without high skills.

The model for universities has to be refined; we do not have to throw everything up in the air. We need more flexible degrees, with much more emphasis on people being work-ready and enterprising so that they can become entrepreneurs.

This has been a tremendous debate, and the quality of the speeches has been excellent. For the first time in a long time, I may not stay until the end. I have a sick elderly relative who has been rushed into hospital with pneumonia, so I may have to disappear, but that is no disrespect to those who speak after me.

13:30

[Paul Blomfield (Sheffield Central) (Lab)]

I echo the comments of my hon. Friend the Member for Huddersfield (Mr Sheerman), who said that one of the advantages of speaking towards the end of a debate is being able to reflect on the quality of the speeches so far.

As we head towards a general election, it is fitting to debate an issue that was central to the last one; I very much feel that as the Member of Parliament who, according to the last census, represents more students than any other. It was certainly an issue on which the Liberal Democrats, who are conspicuously absent from today’s discussion—

[Ian Swales]

indicated dissent.

[Paul Blomfield]

The Liberal Democrats are absent in terms of their contribution. They put the issue at the very centre of the campaign in my constituency. My political neighbour, the right hon. Member for Sheffield, Hallam (Mr Clegg), was very busy at both the universities in Sheffield—they are both in my constituency—emphasising the pledge that he subsequently quickly forgot.

The debate in the early days of this Parliament arguably introduced the biggest changes to higher education funding since those introduced in 1962, following the Anderson committee report. I have enormous respect for the right hon. Member for Havant (Mr Willetts), but I do not agree when he says that the Government simply in some way tweaked the system that they inherited. The fundamental changes introduced in 2012 effectively removed all public funding from the majority of undergraduate courses in most of our universities, which was a very significant alteration to the model that had been in place for the previous 50 years.

As other hon. Members have mentioned, the changes have put huge debts on students. According to the Institute for Fiscal Studies and the Sutton Trust—I think this is the most recent calculation—we are talking of a debt of about £44,000, when maintenance costs are added in, for an ordinary three-year course, and the debt is clearly much higher for medicine, dentistry and other longer courses.

My hon. Friend the Member for Huddersfield was right to view such debts in the context of the other burdens we are placing on the generation graduating this year, who face such debts for the first time. They are also having to deal with a housing market in crisis, and all the costs associated with buying or renting. That generation will not be able to enjoy the benefits of final salary pensions, which many of us expected to have in our careers, and will have to put aside very substantial sums to provide for their old age. We have created a real financial crisis for them.

The problem is not just one for that generation, but one for the public purse. That is the key point of our Select Committee’s report. I underline and echo many of the points made by my good friend and Committee colleague, the hon. Member for Northampton South (Mr Binley). In the unanimously agreed report we said that we were

“concerned that Government is rapidly approaching a tipping point for the financial viability of the student loans system.”

Our point about the tipping point is based on our assessment of the RAB charge. We have discussed that a great deal, and I will talk about it a bit more. The Government, like the right hon. Member for Havant, are keen now—it was not always thus—to talk down the importance of the RAB charge. He said earlier that we are not talking about spending, but about a forecast. That is absolutely right, but it is a forecast of costs that will fall on the public purse, and we cannot get away from that.

The Secretary of State for Business, Innovation and Skills was much more cavalier at last year’s Liberal Democrat conference, when he said:

“These losses crystallise in 30 or 40 years’ time—when I’m well over 100. I shan’t be sitting round, spending the rest of my life worrying about what happens in the year 2000 and whatever it is.”

Actually, the responsibility of this place is to worry about such issues.

It was a very different story when, back in December 2010, we debated proposals to treble fees and to shift the cost of higher education from the Exchequer to students. The Secretary of State was keen to justify the measure by reference to cost savings, and he talked a lot about the RAB charge. Of course, he talked about a RAB charge of 28%, which was subsequently amended to 30%.

At the time, many of us questioned the Government’s assumptions. Most notably, the Higher Education Policy Institute—now led by the former special adviser to the then Minister, the right hon. Member for Havant—argued that the Government had significantly underestimated the RAB charge, and published its own analysis suggesting that it would be about 40%.

When the Select Committee questioned the Secretary of State in October 2012, soon after the introduction of the new system, he was very quick to defend the RAB charge assessment. He refuted HEPI:

“We do not accept that they are right… We had the HEPI view put to us two years ago, when we were thinking of the current changes, so we are aware. But they are an outlier in this whole debate.”

At least in one respect, he was right and HEPI was wrong—not because it overestimated the charge, but because it underestimated it.

We now know that the Government have assessed the RAB charge at 45% and, in an exchange in the Select Committee last year, BIS acknowledged that it is modelling a RAB charge of more than 50%. That is important because once it exceeds 48.6% the new system will cost more than the system it replaced. The new system, introduced in response to the Browne review, was supposed to last for a generation, but after less than three years, it is broken.

The RAB charge is only one part of the problem. In the debate back in 2010, the Deputy Prime Minister desperately tried to save some face on the fees issue by saying that one of the new system’s benefits would be the introduction of loans for part-time students. He said that it was an important initiative and a progressive development, but he did not say that it would be linked to an increase in fees. It has contributed to a 50% fall in the number of part-time students between 2010-11 and 2013-14, according to Higher Education Funding Council for England analysis.

There was also a miscalculation of how fees for full-time students would be set. The assurances given to the House back then have proved worthless. In particular, I remember that the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) sought reassurances that fees of £9,000 would be exceptional. The Business Secretary gave him a clear pledge, saying that he would not allow another

“migration of all universities to the top of the range”.—[Official Report, 9 December 2010; Vol. 520, c. 547.]

Where did we end up? We saw precisely such a migration. Far from being exceptional, £9,000 became the norm, because universities needed to cover their costs, as they told the Government they would.

The Government’s objective was to create a market of fees set between £6,000 and £9,000. Rather than universities meeting their costs, the Government somehow expected them to set their fees in order of perceived quality, presumably with Oxbridge at the top and the rest neatly ranking themselves below. When that did not work, they started tinkering with the controls on student numbers. More recently, they have made an unfunded commitment to lift those controls altogether.

When the Chancellor announced that policy, he suggested that it would be funded from the sale of the income-contingent loan book. As it has become clear that the sale of the loan book is unachievable, the report asks how the Government will fund the expansion of student numbers—however desirable that objective might be—without creating a further £5.5 billion black hole in the Department’s books. Of course, there is already a smaller, but significant, black hole of some £650 million on loans and grants to students in private colleges. That is because of a lack of Department control, which the Select Committee has consistently raised.

There are other issues. Although it is not part of the report, we should not forget the way in which the Home Office’s approach to international students is limiting our ability to maximise university income and the wider economic benefits of a growing worldwide market, preferring to let our competitors benefit by increasing their market share, as the United States, Canada and Australia are doing. I particularly congratulate the right hon. Member for Havant on his comments about the further Home Office proposals that seemed to appear before Christmas but are now retreating.

Where do we go from here? We clearly need to look at alternatives to the current system, and that was the conclusion of the Higher Education Commission inquiry into the sustainability of the current funding model which, as the Chair of the BIS Committee pointed out, was co-led by Conservative peer Lord Norton of Louth. The inquiry involved Members of both Houses from all main parties and experts from the sector and from business. Over nine months they considered the risks to sustainability for student numbers, students, institutions and government, and concluded that it was

“the cumulative impact of these risks that is most concerning. The current funding system represents the worst of both worlds. We have created a system where everybody feels like they are getting a bad deal. This is not sustainable”.

The report went on to argue that we must look at alternatives. The first of those is tweaking the current system, which I guess is probably closest to the Minister’s thinking. I would therefore be grateful if when winding up the debate he answered three questions. First, there will be growing and understandable pressure from universities for an increase in fees. He suggested soon after taking his job that he did not accept that there was a case for increasing fees during the next Parliament, but is that still his view? Secondly, some top universities argue, as they always have done, for a substantial increase in the fee cap—I think the latest argument from the vice-chancellor of Oxford is for a cap of £16,000 a year. Does the Minister rule out any such increase? Thirdly, some have argued that the RAB charge could be reduced by lowering the salary threshold for repayments or increasing interest rates. Will he rule out any such changes?

The Higher Education Commission report offers six options. There are clearly more, and my right hon. Friend the Member for Southampton, Itchen (Mr Denham) made a convincing argument for a different approach. The commission’s second option is one that many of us have supported for years and has been mentioned in the debate, which is that of breaking with income-contingent loans and moving to a more progressive model that replaces fees with a graduate tax.

Although it does not endorse any of the options, the commission highlights the work of London Economics in providing strong evidence to back a graduate tax. That would break the link between the cost of tuition and repayments from students, moving to a graduate contribution that we all accept and that would be based on ability to pay and not on what a student needs to borrow to get through university. The right hon. Member for Havant will know that the modelling by London Economics is specific in the percentages it proposes for different levels of income and the period for which such a model might work. We would need to consider hypothecation and seek a system that covers all tertiary students, addresses the problems with undergraduate maintenance costs, establishes viable support for postgraduate taught courses, which risk becoming the new barrier to social mobility, and deals with issues of transition and historic debt. Those challenges have to be faced because we need a system that is fair and sustainable, and that is why the report calls for, and why we need, a comprehensive review.

13:44

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

This has been a simply excellent debate, and I am grateful that it has presented the Minister with an unanswerable case for the review called for by the Select Committee. Nobody listening to the arguments and evidence presented this afternoon could leave the Chamber and say that everything at the moment is fine and perfect and that nothing must change. Wide-ranging concerns have been raised across the House, and I hope that when he winds up the debate, the Minister will confirm that he will launch that review immediately.

I congratulate the members of the Select Committee on initiating this debate, and I pay particular tribute to the hon. Member for Northampton South (Mr Binley). This will be one of the last set-piece debates in which he participates, and we will all want to salute his sagacity, wisdom and wit, not just in this debate but in many other debates and Committees over the years. At the core of the speech that was referred to earlier, Harold Wilson made a great deal of the difference between amateurs and players, and Members across the House will share the view that the hon. Gentleman is not an amateur but very much a player. The House will be much poorer for his departure.

The reason this debate is so important was set out with great eloquence by my hon. Friend the Member for Huddersfield (Mr Sheerman) and by the Royal Society in its excellent report in 2011, “The Scientific Century: securing our future prosperity”. Unless we grow smarter as a country, we will grow poorer. Over the last century or two, about three quarters of economic growth has been driven by innovation, and there is no reason to doubt that that trend will continue into the future. That is why we need universities that are stronger, and world-class institutions that sit within a world-class system. It is not good enough just to have a country of great universities; we need a system that ensures that world-class universities work together pursuing excellence in mission in a good way. That is why it is not good enough to permit the current system to stand unadjusted and unaltered, because the basic truth revealed by this debate is that our system is falling off a cliff.

The Government are fond of rhetoric about a long-term economic plan, and we wish there were one. However, if we are to be candid with each other, we all know that the current student finance system was not the platonic design of the right hon. Member for Havant (Mr Willetts), but the outcome of a messy negotiation. The Liberal Democrats needed something back for breaking their pledge not to raise fees, and what they received were guarantees on income thresholds that have basically left us with a broken system that is not fit for the future and needs to change.

My next point is that there is tremendous urgency to this matter—that argument was made with much power and eloquence by the hon. Member for Northampton South. We all know that living standards need to rise, and that will be a big part of our debates over the next three or four months. We also know, however, that the only strategic way that Britain will lift itself out of the current cost of living crisis is first by creating a better supply of good, well-paid jobs, but also by building better ladders to those jobs for people, no matter where they start in life. Right now, that is not happening in enough places. In fact, in swathes of the country, the number of jobs in the knowledge economy is not increasing but decreasing.

I started my career flipping burgers in McDonald’s, and I have done every job under the sun. I have started a technology business; I have created jobs for others. I happen to think that any job is better than no job, but during my career I have also learned that a good job is better than a bad job, and right now in large parts of the country there are not enough good jobs. There are 22,000 fewer jobs in the knowledge economy in north-east England today than there were in 2009. In my region of the west midlands there are 2,000 fewer jobs in the knowledge economy, and there are also fewer such jobs in the south-west and in Scotland. All over the country people are tempted to vote for extremist parties because no one is giving them a sensible, realistic story about how we rebuild the opportunity economy for the years to come. Universities are critical to rebalancing our economy in a new way.

Having created those jobs, we have to build the ladders to them. Industry tells us—as I am sure it tells the Government parties—that the skills problem is becoming more and more pronounced. KPMG says that a third of manufacturers cannot reshore jobs to this country because of a skill shortage. Jaguar Land Rover, which works on my doorstep, reminds me that we need around 90,000 engineers a year in this country, and we have some 50,000 graduates—a 40% deficit each year. The Royal Academy of Engineering tells us that we will need 820,000 STEM professionals between now and 2020. We are just not producing enough of them.

The great tragedy in constituencies such as mine, which has the highest youth unemployment, is that we do not have a training and skills system—or a university system—that will create the people for the jobs in the good businesses that we actually have. I asked the Library this morning to tell me how many jobs have been added to the shortage occupation list. Hon. Members will know that if a job is on that list, people from outside the country can be fast-tracked in. I was told that 61 jobs have been added to the shortage occupation list since the last election. In part, that has allowed businesses to fast-track in nearly 200,000 people from outside Britain because they could not find the skills on these islands. Those people brought 142,000 dependants with them, so some 334,000 people have come to Britain because businesses could not find the skills here.

I am a supporter of an immigration system that is a little more generous than the Government have given us, especially when it comes to post-study work visas and students, but the fact that businesses are forced to recruit from abroad because they have failed a resident labour market test is an admission of failure and shows that our skills system is not working. That is why the Committee’s report is so important. As the Chair of the Committee pointed out with such eloquence, this report is not a one-off. It is now one of several reports that have been published over the last 18 months that tell us that the system is in crisis.

Most recently, we had the Higher Education Commission report that questioned the fundamental stability of the system. In April last year, the Institute for Fiscal Studies said that 73% of graduates will never pay back their loans in full. The Public Accounts Committee said that between £70 billion and £80 billion of loans will be written off by 2042—I make that about £500,000 of debt write-off every hour of every working day for the next 28 years. That should concern us all, because it is money that is not available for reinvestment in the future. What has happened over the last three or four years is probably one of the biggest off-balance sheet financing tricks in the history of the public finances. Up to £200 billion has been moved off the public books and shunted from the present into the future. The hon. Member for Northampton South mentioned the curse for future generations and that was a point well made.

In 10 years in this House, I have learned that if something sounds too good to be true, it probably is. That is why we should pay attention to all the warnings we have heard from the PAC, the IFS and now the Business, Innovation and Skills Committee and the Higher Education Commission. I am grateful for the opportunity to salute the contribution from the right hon. Member for Havant, but even he had to admit that the RAB charge, imperfectly constructed as it is, draws our attention to the risks of preserving in aspic every single precise feature of the current design, whether that is the sticker price of tuition fees, the earnings threshold or the rates of interest. The current RAB charge is telling us is that all is not well. The right hon. Gentleman did not say whether he thought that a 100% RAB charge was a bad thing, but I took from his remarks a general acceptance that a high RAB charge is bad and a low RAB charge is good. Therefore, the current trajectory is in the wrong direction and things should change. If things should change, good people should reflect on what those things should be. We should call that reflection a review—and that is what the Committee has called for. An unanswerable case has been made to the Minister this afternoon.

Two extra risks add to the urgency of the review. The first is the marketisation of the higher education system which is driving fiscal risk substantially. The University and College Union raised this issue as early as September 2010 and warned, in an excellent paper, of the fiscal risks of sub-prime education. The union asked us to look at the US, which has had problems of over-recruitment and inadequate safeguards on quality and academic freedom. Those issues have bedevilled higher education in some parts of the US. The union warns us to guard against those risks, but the truth is that we have seen a twentyfold increase in publicly backed funding to students at private colleges—the figure for this year is forecast to be £600 million. The PAC warned us that the Department

“went ahead with its reforms to expand the role of private colleges without ensuring there were controls in place”.

That is an added fiscal risk that we cannot ignore.

The second great risk, which several hon. Members have mentioned, is the hastily constructed plan to uncap student numbers. The rumours in the higher education sector suggest that the plan was largely cooked up in the Treasury rather than BIS. It was certainly unveiled with some speed in the final days—if not hours—before the last Budget and it proposes an ambitious expansion of student numbers, funded by the sale of the student loan book. Most of us were surprised when the Secretary of State for Business, Innovation and Skills told us that the loan book sale was off. We were even more surprised when the Minister answered a question by saying that civil servants were still working on it. In the letter, which he kindly provided yesterday, he was unable to tell me how much the Department is spending on a policy that the Secretary of State has ruled out—I guess that is the reality of coalition Government.

As these fiscal risks multiply, what has most concerned people is that the Department has refused to spell out the departmental expenditure limit provision for maintenance grants and teaching in 2016-17 and beyond. That will be the third year for the extra students who were taken on by universities last year. I suspect that people want to know that the unit cost of funding for 2016-17 will be protected, but that was the big omission from the Minister’s letter to me yesterday. I notice that the student loan book sale is still in the OBR’s fiscal forecasts, so perhaps it will magically appear from left field and save the day, but it would be a significant risk.

We have report after report saying that the current system is not sustainable. The former Minister who was the architect of the current system has told us that some features and functions might need to be adjusted over the next 20 years. We have the extra risks from marketisation and uncapping student numbers. The Minister, with his responsibility for science, is the champion of evidence-based policy making in the Government. I am not sure how he can hear the evidence that has been laid before him this afternoon and say that it is so underwhelming that we do not need a review and that the current system is perfect in design and should persist long into the future.

Especially welcome in this debate have been the contributions that have pointed towards the need for much bolder thinking about a different future for our higher education system, one that offers for the first time a proper, apprenticeship-based professional and technical route to degree-level skills. All of us agree that there is no prosperous future for people without skills, so we must transform—indeed, revolutionise—the number of people on an apprenticeship track who get the chance to go up to degree-level skills. The fact that only 2% of apprentices go on to that level of study is unacceptable and needs to be revolutionised.

I hope that one aspect of the new system will allow further and higher education institutions to come together in a more valuable way, both with each other and with the business communities that they serve. I also hope that the review that I know the Minister will promise in a moment will look at every possible option for protecting the unit cost of funding but also bringing down the cost to students. We know that reducing tuition fees will lower the RAB charge and therefore lower public sector net debt, which is the stated intention of the Government.

Finally, I would like to underline the point made in the excellent speech by my hon. Friend the Member for Sheffield Central (Paul Blomfield). We cannot abstract this debate from what is happening to our young people. Today’s generation is the first for a century who will be poorer than the generation who came before. There are now more young people living in poverty than there are pensioners. Unemployment for young people is still too high and apprenticeship numbers for the under-24s are now falling. We have to change that and it is incumbent on us to do so. That was the argument made in an excellent book called “The Pinch”, which was published towards the end of the previous Parliament.

When I was preparing my own thoughts on higher education reform, one of the documents that influenced me most was a paper prepared in 1962 and 1963 by a group of senior policy makers who wanted to persuade Harold Wilson to implement the Robbins review, which he subsequently did in 1964 and in the years thereafter. One of the phrases that rang out from those pages is that we must not and cannot be

“afraid to build splendidly for our young.”

As we approach the next election, those are good words to inspire us.

14:01

[The Minister for Universities, Science and Cities (Greg Clark)]

We have heard many good words to inspire us in what has been, as many Members have said, an excellent debate. The fact that three of the Members who have spoken will be leaving the House at the election invites us to pay tribute to the contribution they have made over the years. It could be, of course, that more than three may find themselves leaving the House, but three, at any rate, are planning to leave.

I am grateful to the Backbench Business Committee for granting us the opportunity to have this debate, and to the Select Committee, several of whose members have spoken. They have done a valuable job and I echo the tribute paid by my predecessor, my right hon. Friend the Member for Havant (Mr Willetts). They have an important job to do in scrutinising the implementation of the reforms to student finance. As the Chair will know, the Government have rightly adopted many of its specific recommendations, for example on continuously improving the forecasting methodology and on targets for the Student Loans Company. In a different context, I told the Committee that my experience in this House has always been to listen very carefully to the advice of Select Committees. I will always do so.

As the new system is gradually exposed to the clear light of how it works in practice and not in prospect, it is becoming increasingly plain that it is a very considerable achievement and a source of confidence in our future excellence and prosperity. My right hon. Friend the Member for Havant has reason to be very proud of his achievement in carrying through the reforms.

[Paul Farrelly]

Will the Minister give way?

[Greg Clark]

I want to make some progress. I have the least time of all, which is appropriate in a Backbench Business debate. However, if I have some time later, I will of course take an intervention.

Since the Committee took its evidence, which the Chair will acknowledge was about a year ago, the evidence in favour of the positive effects of the reforms has been mounting. We have discussed whether to undertake a review. I encourage the successor Select Committee in the next Parliament to undertake a stocktake of the system in practice. I suspect that it will draw the same conclusion as I have.

In the words of the OECD, which is widely regarded as the leading authority in the world on comparing education systems, the UK is one of the few countries that has figured out a sustainable approach to higher education finance and the investments pay-off for individuals and taxpayers:

“among all available approaches”—

the OECD includes 34 countries—

“the UK offers still the most…sustainable approach to university finance.”

In responding to the debate, I want to summarise how the advantages are clear for students, the taxpayer and universities.

The system is good for students, because it has allowed more of them than ever before to fulfil their dream of a place at university. Many Members have acknowledged the importance of achieving what has previously been beyond the reach of many of our fellow citizens. This autumn, for the first time in the history of this country, half a million applicants were placed in higher education. The head of UCAS put it this way just last month. It is, she said,

“a stunning account of social change, with the most disadvantaged young people over 10 per cent more likely to enter higher education than last year and a third more likely than just five years ago – 40 per cent more likely for higher tariff institutions.”

Despite predictions to the contrary, students have seen that going to university is an exceptional investment. Graduates earn on average £9,000 more than non-graduates. In the past year, the graduate premium for young graduates—those under 30—has risen to £6,000. Graduates are half as likely to be unemployed as non-graduates and two-thirds are in highly skilled jobs, a proportion that has been rising substantially as we recover from recession. Students know that they will pay nothing up front and that they will pay back only if and when they can afford to do so. It is important to be clear to the House that for a graduate earning £30,000, a high salary compared with the population as a whole, for the benefit of a three year degree they will repay £2.22 a day. That is an eminently reasonable reflection of the value they obtain from that degree. It is no wonder that students are responding with such alacrity—more than ever before.

Let me say why the system is good for taxpayers, as the OECD director said. The reforms have made it possible—without them it would not have been possible—to abolish the cap on student numbers. That is overwhelmingly in our national interests, as I think most Members would acknowledge. The earning power of graduates means that it is not just the graduates themselves who gain—the Exchequer gains hundreds of thousands of pounds over a graduate’s lifetime of employment. That is many times more than even the most conservative estimate of the so-called RAB charge. Andreas Schleicher of the OECD said that what one loses through non-payments is small versus the tax revenue uplift from more students earning more in work and that this premium is expanding.

It is important to emphasise—it has not been clear in some of the contributions—that this subsidy is nothing like a commercial loan, in which any debt that is written off is somehow a mistaken lending decision. It is not like that. It is a reflection of a set of deliberate policy choices to write off, for example, outstanding debt after 30 years, and to repay at 9% above earnings of £21,000. It is highly progressive, according to the Institute for Fiscal Studies: the lowest earning 10% get a 93% subsidy and the highest earning 10% get a 1% subsidy. For the record, I am perfectly content with all the policy choices that produce the published RAB charge.

[Mr Byrne]

Is the Minister therefore ruling out any further increase in the tuition fees ceiling if he is re-elected?

[Greg Clark]

I have been very clear on this. I am not persuaded that there is any reason to increase the ceiling. I think the ceiling at £9,000 is reflective of the costs of providing a good education to people.

[Paul Farrelly]

Will the Minister give way?

[Greg Clark]

Let me make a bit of progress, but I will come back to the hon. Gentleman.

As my right hon. Friend the Member for Havant said, the published RAB charge, as it is known, is notional and, in fact, ultra-conservative. I mentioned—to the mystification to the OECD, I might add—that it takes no account of the dependable tax revenue uplift that the Treasury takes. It also assumes, as my right hon. Friend said, that the Government’s cost of borrowing is 2.2% a year in real terms. In practice, it has been closer to 0% in real terms. The student loans system is therefore a good deal for students and a good deal for taxpayers.

[Paul Farrelly]

The Minister speaks of confidence in the system. Does he share the widespread concern across the country that other Government changes are making it more difficult for students to cast their verdicts on the fees and funding system they have inherited? The changes to electoral registration rules mean that universities cannot register their students en bloc. For example, at Keele university in Newcastle-under-Lyme just 144 students registered last month, and we have lost nearly 2,600. Is he concerned about the likely effect on student participation and their ability to give a verdict on the system in which he is so confident?

[Greg Clark]

Every Member takes great pains to encourage young people to register to vote. Through the online registration system, it is easier than ever, and I think that everyone in the House, over the next few months, will encourage people in schools and universities to register. The hon. Gentleman mentioned the university of Keele, but he has to accept that without the reforms that my right hon. Friend the Member for Havant introduced, there would be fewer students going to Keele university in the future than is now possible. That would be bad for the university, which I had the privilege to visit just before Christmas, and bad for the hon. Gentleman’s constituents, who benefit substantially from the presence of that fine university.

The system is excellent for universities too. It is an extraordinary achievement, at a time of financial stringency, that, according to the Institute for Fiscal Studies, the resources available to universities for teaching have on average increased significantly. It estimates an increase from £22,000 under the previous system to about £28,000 per student under the current system. The Institute for Public Policy Research, which tends towards the left in its assessments, said that the main strengths of the current system are that it has increased the resource flowing into higher education, which has enabled institutions to maintain or enhance their level of provision. This led the OECD to conclude that the UK is probably the only country in Europe, and one of the few in the world, to be able to support and sustain a big increase in participation and yet raise unit costs. No wonder that recruitment increased last year for all university types with higher tariff providers to record levels.

Our system of university finance offers extraordinary opportunities to students, universities and the taxpayer, which is why it is mystifying that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) called for a review. It was not clear to me in his response whether that was the Opposition’s new policy. They have had four and half years to come up with a policy, but now it seems to be a review. Just a few weeks ago, he was speculating vaguely, just as the success was being recognised, about turning turtle on it. It is completely unclear what his policy is. Is it a review or a change? He has previously said that fees would be reduced by £3,000, but that would blow a £3 billion black hole in the public finances and force universities to go cap in hand to the Treasury every year just to maintain their funding. It would decimate that stunning social progress I referred to earlier, since it would obliterate the funds from the access agreements, which will be worth £718 million next year—I was surprised that the right hon. Member for Southampton, Itchen (Mr Denham) did not think they were worth having—and impose pressure to cut student numbers. The IPPR said that the pressure to cut student numbers would crowd out students from disadvantaged backgrounds.

[Mr Denham]

For the record, I judge that of the roughly £700 million, £300 million is replicating the work that Aimhigher used to do and is of real value in encouraging social mobility, but £400 million is spent on fees, reductions and bursaries, which has almost no value in persuading somebody to go to university.

[Greg Clark]

Those funds are available through the access regulator to be invested in the best way. Social progress has been made and people from my background now have the chance to go to university in increasing numbers. To rob universities and our young people of that help and assistance is an extraordinary suggestion from the Labour party.

For what purpose? It would reduce the payments not for poorer graduates but for the very richest. Those who pay off the £9,000 loans in full would be the only beneficiaries. I am talking about the richest 20% of earners, who would pay off their loans on average 28 years after graduation, when they are in middle age, and when they are earning on average £78,000, according to a think-tank. Ironically, this debate has been largely focused on the concerns that too high a proportion of loans is notionally projected to be written off, yet the Opposition want to write off 100% of loans over £6,000 for all graduates, even the ones who can comfortably pay.

I am not instinctively a partisan politician, and I believe it is strongly in our interest that policy questions about our universities should be, wherever possible, rooted in consensus and stability. That was the intention behind the Browne review, which the hon. Member for Huddersfield (Mr Sheerman) referred to, and which the previous Government set up. My right hon. Friend the Member for Havant implemented that dispassionate and thorough report. I hope that the right hon. Member for Birmingham, Hodge Hill will reflect on the ever more obvious success of the system, get behind it and drop his temptation to engage in a stunt that would plunge the financing of higher education into chaos.

[Mr Binley]

Will my right hon. Friend give way?

[Greg Clark]

I am just about to conclude.

If the right hon. Member for Birmingham, Hodge Hill does get behind the system, in the same spirit, he will attract praise, not opprobrium, from those on the Government Benches—I am sure that my right hon. Friend would be generous in acknowledging that—and he will earn the respect of the sector, which values the stability and the sustainability that we now have in the financing of higher education in this country.

[Mr Binley]

I am sorry that my right hon. Friend did not give way. I hope that that is on the record.

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. I am sure it will be in the record, Mr Binley, as you said it very loudly. Even I heard it. It was just a shame that your right hon. Friend did not.

14:16

[Mr Bailey]

I would like to endorse the comments about the quality of today’s debate. It demonstrates the depth of expertise in the House on this issue. It is appropriate to pay tribute to the right hon. Member for Havant (Mr Willetts). We have had robust exchanges in the Select Committee in the past, but there has never been any doubt about his commitment to higher education and the expertise he brought to the issues it faces. Similarly, I thank my colleague on the Select Committee, the hon. Member for Northampton South (Mr Binley), who is a great believer in Select Committees and in going where the evidence leads. He has been prepared to back me even when, politically, it has been inconvenient for him to do so.

To summarise, the arguments for the review have been made largely, but not entirely, by Opposition Members, but, strangely and perversely, the arguments made by the former Minister and the current Minister in defence of the existing system underlined and reinforced the case for having a review. The right hon. Member for Havant seemed to argue that the current RAB charge calculations are essentially an accountancy issue. If that is the case, why not have a review to demonstrate it to everybody so that all those institutions that are criticising it can get some reassurance from the Government? The Minister’s and the OECD’s argument about the benefits of graduate education and investment in the industry are a given. I understand that. The problem is whether in the future the country finds the level of projected debt that will have to be funded politically acceptable in view of the benefits accruing from it. There is a big debate to be had here, and this review could kick-start it.

Whatever current and past Ministers have said in defence of the existing system does not take away from the opportunity that a review could create to refine and improve the system and address any issues.

Question put and agreed to.

Resolved,

That this House notes the Third Report from the Business, Innovation and Skills Committee, Student Loans, HC 558, and the Government response, HC 777; and calls on the Government to outline proposals that will sustain funding for the sector while addressing the projected deficit in public funding.

Gibraltar

Thursday 8th January 2015 Commons Chamber

14:19

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

I beg to move,

That this House notes the Second Report from the Foreign Affairs Committee, Gibraltar: Time to get off the fence, HC 461, and the Government response, Cm 8917; endorses the Committee’s position that the behaviour of the current Spanish government towards Gibraltar is unacceptable; regrets that trilateral dialogue between the UK, Gibraltar and Spain remains suspended; believes that the time has come for more concerted action; and invites the Government to review its policy towards Spain on Gibraltar.

This motion stands in my name and that of the hon. Member for Ilford South (Mike Gapes). It invites the Government to review their policy towards Spain and their dispute with Gibraltar. Gibraltar is a key strategic asset for Britain and its allies. It has provided employment and prosperity to the region for decades. It is steeped in history and is a notable tourist centre.

Gibraltar has, by extension, been a part of the European Union since the UK joined in 1973. Its membership is accepted in international law, and it is represented in the European Parliament by MEPs from the south-west region. Last year, its football team played its first European football match.

Gibraltar has inevitably been a source of controversy, but it faces a crisis that we all thought was behind us when Spain joined the EU in 1989. The fact is that Spain, a fellow member of the EU and a partner in NATO, is deliberately as a matter of policy undermining the economy of Gibraltar—a British overseas territory. Its hostile behaviour cannot be ignored any longer. Spain’s chosen method is aviation policy and random, unnecessary and superfluous searches of people and vehicles on the border causing, at times, delays of up to six hours or more.

Ironically, the impact is felt on both sides of the border. Up to 10,000 Spanish workers cross the border each day to work in Gibraltar. If someone is running a business and does not know whether the staff will turn up at 9 am or at lunch time, that business suffers. All this has a profound effect on the territory. Visitor numbers have dropped significantly in the last couple of years, with an estimated loss of almost £40 million in tourist expenditure. Interestingly, some of the strongest evidence the Select Committee received was from a Spanish workers’ organisation that was concerned about high unemployment and poverty on the Spanish side of the border. This is an unacceptable situation.

The UK has the responsibility of safeguarding Gibraltar’s territorial waters and ensuring that it is both treated and respected as a member of the EU. Last July, the Foreign Affairs Committee expressed the view that the Government should take a tougher line. In particular, we recommended that if there were no improvement within six months, the Government should invoke article 259 of the EU treaty for violation of EU obligations on the free movement of people. Six months have elapsed since then, and there are still incidents of long and unnecessary delays on the border—despite the personal intervention of the Prime Minister in conversations with the Spanish Prime Minister at the height of the crisis in 2013.

In what I can describe, regrettably, only as a weak response to our report, the Government said that they had not ruled out an article 259 action but would rather leave it to the European Commission to resolve the situation. I hope that the Minister will understand if that response causes some mirthless merriment on these Benches. It could be a long wait. Even worse, the Commission concluded in 2013 that, although the intensity of Spain’s checks was unjustified and it had serious concerns about it, there was no violation of EU law. So in his response to the debate, will the Minister set a deadline for the commencement of action under article 259?

The dispute has a 300-year history, but in the last three years, the Partido Popular Government in Spain have taken a more hard-line approach. They have significantly increased pressure on Gibraltar and its people, and the Gibraltarians have suffered. Apart from the border delays, they have had to put up with aggressive maritime incursions, calculated pressure at the EU and the UN and inflammatory rhetoric from Spanish Ministers about Gibraltar’s sovereignty and its economic affairs.

The difficulties faced by the current UK Government are, in part, a legacy of regrettable decisions made in 2001 to allow joint sovereignty discussions, which raised expectations on the Spanish side. After protests in Gibraltar and an overwhelming referendum supporting continued membership as a British overseas territory, the discussions were dropped.

Since 2004, the Government have sought to maintain a consistent message—first that no discussions will take place without the consent of the people of Gibraltar, and secondly, sovereignty will not be transferred against their wishes. This is the correct approach, and it should be consistently reaffirmed. This double lock has provided Gibraltar with security following a difficult period, and this guarantee of self-determination should never be abandoned again.

Also since 2004, consultations have taken place through a trilateral forum with Spain and Gibraltar. In 2006, the meeting held in Cordoba resulted in agreement on a number of issues—in particular on air movements, recognition of Gibraltarian dialling codes and improved flows at the border. It was also agreed that the UK could pay pensions to Spanish workers affected by Franco’s closure of the border from 1969 to 1982. This is projected to cost the UK taxpayer £73 million.

Following the election of Prime Minister Rajoy in November 2011, however, the trilateral talks have been summarily ended by Spain and some of the terms of the Cordoba agreement have been broken, although the UK, I am proud to say, is keeping its side of the bargain and meeting the agreed pension arrangements. Efforts have been made to hold ad hoc talks, but none have taken place. If a date has still not been fixed, I invite the Minister to assess whether we are being taken for a ride here and whether this might be telling him something—that Spain thinks we are a soft touch.

Meanwhile, the illegal incursions into Gibraltar’s territorial waters continue. These incursions are outside the right of safe passage and now number hundreds since their escalation in 2012. The Spanish vessels making the incursions, which include police vessels, refuse to recognise the authority of the Royal Gibraltar police or, more seriously, the Royal Navy. The aggressive tactics used, resulting in collisions and a danger of serious injury, make it difficult, if not impossible, for the police and the Royal Navy to enforce their authority and British sovereignty.

At worst, there is a danger of a potentially serious incident at sea. Are we going to respond, or are we just a soft touch? Has the Minister considered arresting a Spanish vessel? The Royal Navy has two patrol boats—quite ageing, but they are still working—and three ribs under the commander of British forces in Gibraltar. Will the Minister confirm in his response—this is important to many people—that there will be no reduction in this deployment? We welcome the increased number of warships transiting via Gibraltar, but we believe that there should be a more robust approach to defending Gibraltar’s territorial waters.

The Foreign Office rightly makes diplomatic protests about each incursion, but we were dismayed to discover that they are lodged sometimes weeks after the event. I welcome the Government’s confirmation that a maximum of seven days is now the norm and that an immediate summons of the ambassador applies in serious cases. The Government describe summoning as a

“very serious form of diplomatic protest”

and rightly summoned the ambassador to protest over traffic delays at the border. To digress for a second, that is in stark contrast to the Foreign Office’s refusal to summons the Chinese ambassador when the Foreign Affairs Committee was banned from entering Hong Kong. I am not sure what that tells us about the Foreign Office’s attitude towards the House.

Spain is now engaged in a full-on diplomatic offensive, using international institutions to manifest its hostility to Gibraltar’s sovereignty. In the EU, it has broken terms of the Cordoba agreement and is seeking to exclude Gibraltar from EU aviation legislation.

[Sir Gerald Howarth (Aldershot) (Con)]

I salute the work that my right hon. Friend and his Select Committee have done on this issue and the robust line it has taken. He mentions aviation. Will he confirm what our noble Friend Lord Astor said in the other place—that the Spanish will not apparently allow Royal Air Force aircraft to overfly Spanish airspace on their way to and from Gibraltar? The cost of that to the British taxpayer is an additional £5,000 to £10,000 for each flight. Is that not disgraceful behaviour from a NATO ally?

[Sir Richard Ottaway]

My right hon. Friend is absolutely right. Indeed, not just United Kingdom aircraft but all NATO aircraft are prevented from overflying Spain if they have taken off from Gibraltar. I shall say more about that later.

As I was saying, in the European Union, Spain has broken key terms of the Cordoba agreement and is seeking to exclude Gibraltar from EU aviation legislation. That is damaging the economy: I have heard reports of businesses relocating because of poor flight connections. As for Spain’s behaviour at December’s EU Transport Council, it amounted to nothing less than open hostility. Spain persuaded both the presidency and the Commission to amend the draft single European sky legislation on air traffic control to exclude Gibraltar.

I am pleased that the Under-Secretary of State for Transport, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) is present, and I was also pleased to hear that he had walked out of that meeting in protest. I am not sure that we would expect Foreign Office Ministers to walk out of meetings in protest—it is not quite their style—but I hope that the strong way in which my hon. Friend made his protest will have been noted. I should add that it is to the Government’s credit that they have threatened to veto the proposed EU-Ukraine aviation agreement if Gibraltar is excluded from it. However, the real issue, and what is of real concern, is why the Commission has come down on the side of Spain. So much for leaving the Commission to decide on the rights and wrongs of this dispute.

In the United Nations, Spain continues to lobby against the removal of Gibraltar from the list of non-self-governing territories. As it is obviously not such a territory, it should not be on the list. In May last year, Minister Joe Bassano told a UN special committee that Spain was running a campaign to deprive Gibraltar of its right to self-determination, using the arguments of Franco’s fascist Government. The response was, in the words of Gibraltar’s First Minister—who I am pleased to see is with us today—“a deafening silence”. All that is clear evidence of Spain’s politically motivated campaign. I invite the Minister to update us on developments in all those institutions, and, more important, on what the Government’s response will be—or are we just another soft touch?

In an increasingly troubled world, Spain’s behaviour as an ally is becoming increasingly unreliable. While refuelling Russian warships in its sovereign enclave of Ceuta, it continues to posture inside NATO, at a time when Russia is invading Ukraine and flexing its muscles in the Baltic and the northern approaches. Moreover—this brings me to the point raised by my hon. Friend the Member for Aldershot (Sir Gerald Howarth)—Spain’s ban on NATO forces moving directly between Spain and Gibraltar is immature and to the detriment of western security. If they are landing on or taking off from Gibraltar, the military aircraft of any NATO member are not allowed to overfly Spain.

In the event of trouble, Spain would quickly turn to NATO and the United Kingdom for military help, and would get it. Perhaps, at the moment, it does indeed think that we are a soft touch. In his evidence, the Minister told the Committee that, in the absence of any diplomatic initiative, the UK’s forces simply work around it. That is completely unacceptable. Will the Government review the issue and enlist the support of other NATO countries in ensuring that this strategically illiterate ban is lifted?

To date, the Government have sought to de-escalate tensions. That cautious approach is not producing dividends. The Government fear that a more muscular approach will only make things worse, but at times things must get worse before they can get better. If Gibraltar is prepared to accept the consequences of a more robust approach, we should embark on it. In our report, we said that the Government were “sitting on the fence”; in their response, they peevishly said they had

“never been on the fence”

in the first place. To be fair, however, the Government are continuing the policy that they inherited from the last Government, and the First Minister has acknowledged that the language now is more robust than it has been for 30 years.

Spain is a key partner for the United Kingdom, both bilaterally and in the EU and NATO. It is testimony to the importance that both states ascribe to the bilateral relationship that it remains strong, despite our differences. However, Spain should not be able to pursue aggressive policies towards Gibraltar without consequences for its relationship with the UK. The UK Government have shown restraint in response to provocation by Spain. The hard truth is that the UK’s approach of consistently trying to de-escalate tensions in the face of mounting provocation has had little discernible effect, apart from giving Gibraltarians the impression that not enough is being done. It is now time to end the policy of restraint and to think hard about what measures can be taken to discourage Spain from exerting pressure on Gibraltar in the future.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. I must advise Members who wish to speak in the debate that a time limit may not be necessary if speeches are curtailed to 10 minutes—give or take a minute or two on either side—with interventions. If the position changes during the afternoon, I will of course inform Members, but I think that we should get through the debate comfortably if each Member who has indicated a wish to speak does so for approximately 10 minutes, which will leave time for the winding-up speeches.

14:36

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

Let me begin where the right hon. Member for Croydon South (Sir Richard Ottaway) ended. We in this country have important relations with Spain in the context of a number of issues. As the Committee itself made clear, Spain is an important European Union and NATO partner, and co-operates with the United Kingdom on a number of our strategic priorities. Some of those are listed in the report, including counter-terrorism and the combating of drug smuggling. There is an economic agenda within the European Union, and a reform agenda. Migration policy is a complex issue, and there are wider international and trade matters. Both the United Kingdom and Spain have historic associations with both north and south America that date from the colonial period, and both countries have a strong interest in the current talks on the transatlantic trade and investment partnership. Beyond that, both countries, as democratic, pluralistic societies, are appalled by terrorism, whether it is carried out in Paris or in countries such as Iraq and Syria.

We have a common agenda in many respects, and for that reason it is really shocking that the present right-wing Spanish Government, run by the Partido Popular, have decided to tear up the co-operation developed from 2004 onwards by the previous Labour Government and the previous socialist Government—run by the Partido Socialista Obrero Español—as well as the Cordoba agreement to which the right hon. Member for Croydon South referred.

We began our Gibraltar inquiry following our decision to conduct an inquiry into United Kingdom consular work, and to visit the consular hub that the Foreign and Commonwealth Office had established in Malaga, in southern Spain. From Malaga, we went to Gibraltar. Our visit to Malaga and our conversations with British people living and working in Spain—about 1 million people live there happily—showed us that Spanish people are hospitable, kind, friendly and supportive. Many Spanish people in the local authority that we visited were assisting British citizens who were resident in Spain.

Meanwhile, in the past two or three years an increasing number of Spanish people—predominantly young people—have come to work in London and other parts of the United Kingdom, including cities, because of the economic difficulties in Spain. There is two-way traffic. There are families consisting of children born in one country and parents from the two countries. There is a mixture consisting of many people with connections between the United Kingdom and Spain, including some senior political figures in our Government.

[Mr Nigel Evans (Ribble Valley) (Con)]

Does the hon. Gentleman agree that a huge number of Spanish people work in Gibraltar and get on very well with Gibraltarian people, and that we should respect that?

[Mike Gapes]

The hon. Gentleman pre-empts my next point.

It became apparent to me during the inquiry—the Committee Chairman touched on this—that there are 8,000 or 9,000 people who every day travel from Spain into Gibraltar to work, so a very large number of Spanish citizens depend on the Gibraltarian economy for their employment and prosperity. Why, then, are the Spanish Government behaving in such a stupid way by stopping those workers either travelling to work or coming home because they face queues and delays of two, three or four hours in getting across the border in their vehicles or, sometimes, on foot? This is an ideologically driven agenda designed by people in Madrid who clearly do not care about the livelihoods of the members of the trade unions I met here in the House of Commons who had come from the south of Spain to talk to British MPs about the difficulties they face. They were hosted by Unite, which has associations with workers both in Gibraltar and internationally in Spain.

A clue is provided by the politics of Andalucia and the south of Spain: they generally vote for the left, whereas the Government in Madrid are dominated by the right. Sadly, therefore, since the change in 2011 the Madrid Government have shown contempt for their own citizens and their economic interests by behaving in a vindictive way against Gibraltar and at the same time damaging the interests of Spanish people and workers.

The British Government should be doing more to highlight the situation, as should international organisations such as the International Labour Organisation and those that look at issues to do with human rights and free movement.

Why has this issue come up at this moment in time? In Spain—and, indeed, elsewhere—there has been a rise of populist opposition against the incumbent Government. The governing party might believe it can pander to those opponents by raising the nationalist card over Gibraltar and thereby diverting attention from the country’s internal economic problems. I do not think that is going to work in the long term, but we shall see, because Spain, like the UK, is supposed to have an election this year. I do not think the governing parties in either country will get the results they want, but I do not want to get diverted into domestic politics.

Our Government must be more robust on this matter internationally. We have seen in a number of international forums that when the British Government are determined, they can make a real difference, but we have not been strong enough or vocal enough on the issue of Gibraltar. There is clearly international support for the UK position in many countries, but we are not doing enough to build that support, whereas Spain is working very hard internationally in its own interests.

A resolution tabled in the US Congress last year referred to the rights of self-determination of the people of Gibraltar. It is clear from a letter that has only just become public that, from September, the Spanish ambassador to the United States lobbied extremely hard against it, using all kinds of implied threats about the consequences, to try to stop that bipartisan resolution being carried in the US House of Representatives.

Internationally, it is clear that the present Spanish Government, unlike their predecessors, are not interested in coming to a modus vivendi on these issues. The previous Spanish Government did not accept, and would never accept, that there was any question of British sovereignty of Gibraltar, but they accepted the reality that there was an agreement to differ and that they should therefore deal with the practical issues and leave the other issues to one side. That is how the improvements from 2004 onwards were achieved and sustained. The ideological approach of the current Spanish Government, however, seems to put a nationalist agenda before the interests of their own people, and ahead of co-operation with the UK and the interests of the people of Gibraltar.

Our report has highlighted an important issue. Apparently the situation has improved since we published it, with a reduction in the number and intensity of obstructions to people travelling into and out of Gibraltar, but that can be switched on or off at any time, as we saw when we visited. When we drove into Gibraltar, there was no queue. We went to our hotel and within an hour we had a call saying that suddenly there was a massive backlog at the border because the Spanish police were imposing restrictions and searching all vehicles. There was a big queue and the car park was full in the space of only about 40 minutes to an hour. This is politically motivated and it is being run by special paramilitary police from Madrid, not the local police. It is all part of a special, politically designed operation.

The truth needs to be told. We need to get this agenda out: there are people in Spain who have an agenda based on an ideological approach that damages the working of the EU—it damages the possibility of agreements within the EU being arrived at in a timely manner—as well as the interests of the Spanish people and the democratic, self-determination interests of the people of Gibraltar. I hope the Government will heed what is said in this debate and be more forceful and vocal on these matters in future.

14:39

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

May I begin by congratulating the Committee on producing such an excellent and well thought out report and, perhaps more importantly, the people and the Government of Gibraltar on creating an undoubted international success story? Anyone who has visited Gibraltar in recent times will have seen that it has a vibrant, booming economy, not least because of the low-tax regime the Government operate, which this House would do well to look at.

Visitors to Gibraltar can see the level of investment, such as that by international hotel chains, which is testament to international investors’ confidence in Gibraltar’s future. They can see, as the hon. Member for Ilford South (Mike Gapes) said, the queues of those coming into Gibraltar to work from Spain, whose economy is less than robust at present. Shops in Gibraltar are crammed with Spanish consumers trying to buy goods at lower prices. This is a great opportunity not only for Gibraltar but for the wider region. It is an economic success story, in that only 7% of the Gibraltar economy is now dependent on military spending of any sort.

This is more than just an economic success, however. The population of Gibraltar is confident and secure in Gibraltar’s status as a British overseas territory. The population were given UK citizenship under the British Nationality Act 1981, and they have overwhelmingly restated their desire to remain British, reaffirming their democratic mandate in the 2002 referendum. I make these points because every single one of those facts puts the people of Gibraltar on the right side of international law, and our own Government should make that point clearly at every possible opportunity.

As a former Defence Secretary, I naturally look favourably on Gibraltar’s strategic advantage to the United Kingdom. It has played a major role in our security since it was ceded by Spain—in perpetuity, let us remember—under the treaty of Utrecht. It has always been an important base for the Royal Navy. It has associations with Trafalgar—the Trafalgar cemetery is testament to that—with Crimea, with world war two and with supporting the taskforce in the liberation of the Falklands. Those were all great contributions to our wider security. As Secretary of State, I visited Gibraltar to thank our Royal Navy personnel following the Libya situation, in which Gibraltar again played an important role.

This is not just about our security, however. As an important NATO base and an important signals intelligence gathering station, Gibraltar contributes to the wider security of the alliance. That includes the Spanish people themselves. The intelligence gathering that we do in Gibraltar is for our wider common security, but that is being undermined by the ridiculous antics of the Spanish Government. Gibraltar is also a major stopping-off point for our nuclear submarines and those of the United States, one of our most important allies. The US understands the importance of Gibraltar as a base.

[Sir Gerald Howarth]

My right hon. Friend mentions the United States. Some people there might indeed understand the importance of Gibraltar, but does he agree that, as the hon. Member for Ilford South (Mike Gapes) pointed out, there are many in the United States who are unfortunately tempted by the antics of the Spanish Government into believing that this is somehow about colonialism? Will my right hon. Friend pay tribute to our mutual friend Luke Coffey, who is the Margaret Thatcher Fellow at the Heritage Foundation in Washington? He has done a tremendous amount to raise awareness on Capitol hill of the importance of Gibraltar not only to the United Kingdom but to NATO and the United States.

[Dr Fox]

I am extremely grateful to my hon. Friend for his intervention. Luke Coffey is not only a mutual friend of ours; he was also a special adviser in the Ministry of Defence. His work at the Heritage Foundation has been instrumental in pushing understanding of the wider issues on Capitol hill. The hon. Member for Ilford South mentioned the resolution in Congress. I shall tell the House exactly what it said. It was a bipartisan resolution, as the hon. Gentleman correctly said, and it was put forward in the House of Representatives. It stated:

“Resolved, That it is the sense of the House of Representatives that—

(1) the United States honors the contribution that Gibraltar has made to advancing United States’ security interests in the Mediterranean region since 1801 and extends its deepest appreciation and thanks to the government of Gibraltar and its citizens;

(2) the views and rights of Gibraltarians should be taken into account in any discussion on the future of Gibraltar.”

Our American allies, and our colleagues in the House of Representatives, understand that being on the right side of international law is of prime importance. We need to make that point as clearly as we possibly can.

To be frank, Spain’s behaviour is at best bullying, petulant, childish and utterly hypocritical. The clearest example in recent times has been the air safety deal, which has already been mentioned. Whatever anyone might think of the merits or demerits of the single European sky, it is intended to reduce delays for European passengers and to minimise the risk of near misses, thus improving passenger safety. There is not, as the European Union has stated, a dispute between Britain and Spain over this matter. This is blatant interference by Spain in an EU project that was progressing very nicely, and this ridiculous obstruction will, by definition, make things less safe for Spanish air passengers. I should like to congratulate the Under-Secretary of State for Transport, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) on showing great leadership, clarity and courage in walking out of the meeting on these issues. Absenting himself from what was clearly an Alice in Wonderland situation was the best thing to do, and he deserves great support in the House for having done it.

As has already been mentioned, it is the maritime incursions that most clearly signpost Spain’s behaviour. They have become more frequent and more dangerous. Twice in 2014, the Spanish state survey ship, the Angeles Alvariño, under the command of Spain’s economic ministry, has been responsible for dangerous and irresponsible manoeuvring in British Gibraltarian territorial waters. The Minister for Europe, my right hon. Friend the Member for Aylesbury (Mr Lidington), has said:

“The irresponsible actions and dangerous manoeuvring of this vessel were not only unlawful but also presented a significant risk to the safety of Royal Navy personnel at sea. Under no circumstances should Spanish vessels be provoking a situation that could result in serious injury or a fatality.”

These are our own armed forces, and we must be willing to speak out in the strongest possible terms about the safety of our military personnel.

These activities are part of an attempt to destabilise not only Gibraltar but the wider region. It is worth pointing out what Spain’s behaviour is like in the wider region. She continues to be in disagreement with Morocco over maritime boundaries in the strait of Gibraltar. This is because of Spain’s hold over her north African enclaves and rocks, which she uses to interpret maritime boundaries in her favour. She effectively seeks to deny Morocco any degree of control in the strait. Of course, the Spanish ownership of those north African territories undermines almost every argument she makes about Gibraltar, and demonstrates the most breathtaking hypocrisy in current European policy that I can think of.

On 5 July 2013, Spain sent a letter of official complaint to the United Nations, which the hon. Member for Ilford South mentioned. It complained that Portugal’s Savage islands were rocks. The islands lie halfway between the Canary islands and Madeira. This was yet another attempt by Spain to increase her influence in the wider area. On 17 December 2014—just a month ago—Spain submitted to the Commission on the Limits of the Continental Shelf information on the limits of the shelf beyond 200 nautical miles from the baselines from which the breadth of its territorial sea is measured in respect of the area west of the Canary islands. Again, that move by Spain is at the expense of Portugal and Morocco. There is a clear pattern here; what is happening in Gibraltar is not an isolated incident.

Gibraltar is a great success story and will continue to be one. The people of Gibraltar deserve all the support we can give them. The message to our Spanish colleagues has to be that Gibraltar is British. They need to get over it and start working in a way that is consistent with being a NATO ally and an EU member. But Spain is serious about its approach to Gibraltar. It is time our Government were equally serious about our approach to Spain, if we are serious about Gibraltar ourselves.

14:58

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

It is a great pleasure, if not slightly daunting, to follow my friend and neighbour, my right hon. Friend the Member for North Somerset (Dr Fox). I hope he will forgive me if I repeat one or two of the points he eloquently made.

First, I wish to declare an interest, in that I was honoured to be elected the chairman of the all-party group on Gibraltar in September last year. Unfortunately, it was in the worst of circumstances, following the very sad and sudden death of the former Member for Heywood and Middleton, Jim Dobbin. I am proud to say that Jim was a friend of mine; one of the nicest and most decent Members of Parliament I have ever met and worked with, he is an extremely tough act to follow as chairman. I have been a member of the all-party group since 2010, in which capacity I have been invited to Gibraltar by the Gibraltar Government and visited a number of times over the past four years.

I have got to know Gibraltar very well over the past 10 years or so, and it has important links with the south-west region. In 2004, Gibraltar was able to vote in the European elections for the first time and, as a candidate in that election for the south-west region, I spent many weeks campaigning in Gibraltar that year. When the case was made that Gibraltar should be in the South West region, it was specifically on the basis of the self-evident links that tie Gibraltar with my home region— shared coastal traditions; unique and intertwined maritime heritage; mutual support for defence capability; and interest in contemporary industries, such as tourism. Those dictate that there was no other logical outcome. The south-west is seen by most as the home of the Royal Marines, and it is no coincidence—indeed it is for a proud battle honour—that the cap badge of the Royal Marines is inscribed with the word “Gibraltar”.

Gibraltar is a vital strategic asset, commanding the straits of Gibraltar and being the gateway between the Atlantic and Mediterranean. It is one of the UK’s permanent joint operating bases. It is also used for the forward mounting of operations in the Mediterranean, north Africa and the Gulf and, as my right hon. Friend said, for vital intelligence gathering. I know that our comrades and friends in the United States also see Gibraltar as a vital strategic asset to NATO and to them. Gibraltar continues to be a crucial military base, with approximately 155 UK military personnel serving in the headquarters of the British forces Gibraltar. In addition, approximately 705 Ministry of Defence UK-based and locally employed civilian personnel provide support services to defence operations, including 95 serving in the Gibraltar defence police. The Royal Gibraltar Regiment comprises 226 full-time and 166 reserve personnel, who are routinely deployed on operations and exercises with other units in the British Army. The regiment’s personnel have been deployed to Iraq and Afghanistan, and have been decorated for service in these operational theatres.

I totally agree with what the Chief Minister of Gibraltar said to the Foreign Affairs Committee about his wish to see a larger Royal Navy presence in Gibraltar. I would also argue that too little progress has been made over the past 16 years towards lifting NATO’s reservation against ships travelling between Spanish and Gibraltarian ports, and on overflying rights, which have been mentioned by a couple of my colleagues. The Government should actively seek for this position to be overturned. I thank the Foreign Affairs Committee for its substantial and thorough report.

I fully agree that, while intensifying the diplomatic pressure, the Government have made it clear to the Spanish Government that Gibraltar is self-governing, and the Gibraltarians have consistently and democratically made clear their wish to stay British. In the 2002 referendum held by Gibraltar’s Government, almost 99% voted no to shared Spanish and British sovereignty, on about an 88% turnout. As the Prime Minister pledged in his speech on Gibraltar national day in 2013,

“the British Government wholeheartedly supports your right to determine your political future. As I have said before, we will never agree to any transfer of sovereignty—or even start a process of negotiation of sovereignty—without your consent. And I wouldn’t want us ever to go down that route. Gibraltar has been British for 300 years. Let’s keep it that way.”

The Spanish Government’s recent behaviour towards Gibraltar, be it the illegal and politically motivated border delays of often several hours, the illegal incursions into Gibraltarian territorial waters—in 2013 there were 496 such incursions—the threats against bunkering companies operating in British Gibraltarian territorial waters, which are a big part of Gibraltar’s economy, and the aim of limiting Gibraltar’s aviation rights, is appalling and completely unacceptable. The fact that the Spanish ambassador to the UK has had to be summoned by the Foreign Office five times in the last couple of years is shocking—on that front, our NATO and European ally is in the same group as Syria, Iran and North Korea, which is plainly and frankly ridiculous.

Given the Spanish Government’s ongoing behaviour, it is fully understandable that Gibraltarians feel threatened, bullied and under siege. As far as the incursions by the Spanish into Gibraltarian territory are concerned, the Government should use article 259 to take Spain to the European Court if the situation does not rapidly improve, and the Government should seek a much stronger response from the European Commission on Spain’s behaviour at the border crossing. The current Government of Spain’s attitude to Gibraltar shows complete hypocrisy given their own contested and larger overseas territories—Ceuta, which has been Spanish since 1668, and Melilla, which has been Spanish since 1497—which are surrounded and disputed by Morocco.

I welcome the Government’s response to the Select Committee’s report. Gibraltar should definitely be removed from the UN’s list of non self-governing territories. Indeed not removing it rather undermines the UN’s list as Gibraltar is obviously self-governing. I understand the Government’s response to this, but urge the Foreign Secretary and the Prime Minister to continue to exert pressure. We need more high-profile ministerial visits, which would highlight our solidarity and support for the people of Gibraltar. Is it not time, as others have said, that we have another royal visit to the Rock of Gibraltar?

Gibraltar is a success story of which we can all be proud. Recent economic growth stands at 7%. Its GDP is estimated at £1.4 billion in 2013-14, which is equivalent to just over £43,000 per head. That is considerably higher than the UK as a whole, which is about £26,000 per head, and Spain, which is under £20,000 per head. The GDP of the neighbouring Spanish province of Andalucia was estimated at £14,300 per head in 2013, which may explain why 7,000 to 10,000 Spanish citizens cross the border every day to work in Gibraltar. I understand that the local authorities in Andalucia have complained about border delays to the Spanish Government.

Finally, every time I visit Gibraltar, I marvel that on a small piece of land, the Rock, there is a fantastic melting pot of cultures and religions. We have Jews, Muslims, Hindus, Catholics, Protestants and Sikhs living in harmony and peace, thriving and secure. Indeed, Gibraltar is an example to the world, and I am hugely proud that it is part of the great British family.

15:05

[Robert Neill (Bromley and Chislehurst) (Con)]

I congratulate my right hon. Friend the Member for Croydon South (Sir Richard Ottaway) and his Committee on their excellent report and on giving us the opportunity to debate this important issue today. We have had excellent speeches from everybody in this debate so far. The hon. Member for Ilford South (Mike Gapes) and I may be able to look forward to the day when West Ham United sign up a Gibraltarian professional footballer if Gibraltar’s football team continues with its international success.

On a serious note, important issues have been raised. A key issue that we need to grasp—it was mentioned by the hon. Member for Ilford South and echoed by my right hon. Friend the Member for North Somerset (Dr Fox)—is that Gibraltar has become a central plank of Spanish foreign policy. I regret to say that the defence of the British citizens of Gibraltar is not generally perceived as a central plank of the policy agenda of the Foreign and Commonwealth Office. Although I cannot disagree factually with anything in the Government’s response to the report, the tone could and legitimately should be more assertive in the defence of Gibraltar as a British territory. Sometimes there is this sense, which I know is not shared by my right hon. Friend the Minister, that, going back to the errors of 2001-02, defending Gibraltar has been seen as a bit of an add-on in the Foreign and Commonwealth Office, and we need to do more to put that right.

One area where the Government’s response is not adequate is around the potential use of article 259. It is quite clear that Spain is in breach of its obligations as a member of NATO and of the European Union. Frankly, its behaviour is not consistent with that of a friend and an ally. That is the tragedy and the reality. Although there have been difficulties in the past, it might be worth noting that previous Parti Populaire Governments in Spain, while always wrongly maintaining their claim, have not felt it necessary to escalate the tensions at the border in the way that the current Rajoy Government do. The Aznar Government adopted a rather different approach. Of course the Government are right to want to de-escalate the situation, but it takes two to de-escalate. If Spain is not prepared to do so, and if it is in breach of its international legal obligations, we should not be afraid to use the mechanisms available to us.

May I say gently that I am concerned about the undue reliance on the European Commission in dealing with these matters? I say that because, as a junior Minister, I had experience of the workings of the Commission. History shows that the European Commission cannot be regarded as having acted even-handedly towards Gibraltar in the past. Appendix B of the report sets out the background to the legal dispute, which makes it very clear that Spain should never have been allowed by the Commission to include what is called the Estrecho Oriental—territorial waters site—on the list of sites of community interest under the habitats directive. The habitats directive makes it clear that member states are allowed to designate sites within their own territories. Under international law, the European Commission should not have permitted the area designated by Spain that includes parts of Gibraltan territorial waters to be included. It breached that fundamental requirement, but was not challenged by the Commission, so it is difficult for us to have complete faith in the Commission’s even hand in this regard.

The appendix also sets out what seems to me at least to be a significant charge of negligence against the Foreign Office—even though this happened before the Government came to office, I do not mean this as a party political point—in failing to present the designation of the site of community interest at the time. The previous junior Minister at the Foreign Office said:

“The UK had no reason to and did not check the thousand or so existing or proposed Spanish sites.”

I am sorry, but we know that Spain has consistently adopted a hostile policy towards Gibraltar and that, as my right hon. Friend the Member for North Somerset has said, Spain has consistently sought to adopt an aggressive stance on territorial waters. One might think that if the FCO could have checked that—there is no reason why it could not have—it would have been an obvious check to carry out. It did not check and that is a serious error on the part of the FCO, which needs to live it down by being more robust.

I hope that when my right hon. Friend the Minister replies he will be more robust than the written text put out by the FCO on the question of the hypocrisy over Ceuta and Melilla. The argument is a strong one and the Foreign Office’s written response is too dismissive, simply saying that it is a different case. That is a nice bit of legalese, but morally it is not a different case. We should not only be saying that and putting much more pressure on Spain in that regard, but encouraging the development of practical links with Morocco, which has adopted a very constructive attitude towards Gibraltar in the past. Morocco has a better record of dealing with its recent difficulties than many other north African states and that is something practical we could do to strengthen transport and other links.

My hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) talked about the integration and community cohesion in Gibraltarian society. He is absolutely right and I have noticed that because I, too, had the pleasure of visiting Gibraltar in the autumn and I saw precisely that cohesion and harmony, including among many of the Moroccan residents who have come to Gibraltar and stayed there. Those are links we should develop. We should also remember that Gibraltar has a significant, active and welcome Jewish population. In current times, that is valuable and something we should cherish. Part of the reason for that is that Gibraltar is not only an economic and social success but benefits from a robust common law jurisdiction. During my visit, I had the opportunity to meet senior members of the judiciary and of the police and the legal profession.

At the beginning of last month, we had the opportunity in a Westminster Hall debate to refute some of the utterly false allegations that have been put about by the Spanish Government, which have been swallowed by one or two Members of this House who ought to have known better, that Gibraltar is in any way deficient in its dealing with those issues. It was made very clear—I am delighted to say that my hon. and learned Friend the Solicitor-General said this on behalf of the Government in absolutely unequivocal terms—that Gibraltar meets the highest standards of international legal co-operation. Its police force, its judiciary and its legal profession operate to exactly the same standards as we would expect of those within the United Kingdom.

I am sure that many of us will want to congratulate the Attorney-General of Gibraltar, Ricky Rhoda, on being awarded the honour of Commander of the British Empire. He will be retiring next year after some 15 years in service. He is a distinguished lawyer and a distinguished public servant who works to exactly the same standards as we see in the UK. We need to say that robustly, because part of Spain’s attempt to undermine Gibraltar’s economic interests has been to attack its financial regime, its legal regime and key economic interests such as bunkering, the gaming industry and the aviation industry. We need to be more assertive about this.

I have been critical of the Foreign and Commonwealth Office in some respects, but this autumn I also had the opportunity of visiting our embassy in Madrid and I pay tribute to Simon Manley, the ambassador, and his team there, who do a very professional job. What is required is a clear direction from the centre that we regard Gibraltar and its interests as of the same high priority as Foreign Minister García-Margall has made them for the Spanish Government. There is political will within the House to do that and it would have support on both sides of the House. I hope the debate has given us the opportunity to set out that approach.

We want Spain as an ally and partner within the EU and NATO, but that cannot be at the expense of undermining our protection for a dynamic British overseas territory with British citizens who meet the highest of British standards in every respect. They were—dare I say—developing a thriving democracy before that happened in their larger neighbour. There is irony in the attitude adopted by members of the current Government in Madrid, who have a very short view of history. The Government and the Foreign Office should not be afraid to stand up and say that robustly.

15:15

[Martin Horwood (Cheltenham) (LD)]

I commend the Foreign Affairs Committee for its report, which includes thoughtful analysis. This is a timely debate. The Liberal Democrats have a soft spot for Gibraltar currently. We do not often refer to the outcome of the 2014 European elections, but there was a 49% swing to the Liberal Democrats in Gibraltar, which must be some kind of record for representative democracy, let alone for the Liberal Democrats. That is obviously testament to the outstanding good sense of the people of Gibraltar, but it is also a tribute to the hard work and diligence of Sir Graham Watson, Gibraltar’s Member of the European Parliament, who for many years took a close interest in Gibraltarian matters and was a strong advocate for the people of Gibraltar. I was personally sad that he narrowly missed re-election on that day and pay tribute to his hard work and diligence for all the people of south-west England, but for Gibraltar particularly in the context of the debate. That underlines that Gibraltar is part of the European Union.

Spain’s behaviour towards Gibraltar is completely inappropriate for a fellow European state. There are many bonds of friendship and affection between Britain and Gibraltar, but the current situation is not about that, and not even about keeping Gibraltar British for ever—after all, as we have emphasised, it is a self-governing territory. It is about absolute support for the right to self-determination for the people of Gibraltar. It is also about the rule of law and the proper application of the rules of the European Union. Since the current Spanish Government were elected in 2011, they seem to have been on a singularly aggressive campaign to try to undermine both those principles, which is extremely unfortunate.

In passing, I should say that the Popular party is a member of the European People’s party. It is unfortunate that the Conservative party withdrew from that grouping and thereby lost an opportunity for regular informal dialogue with Spanish leaders, which might have softened the Spanish Government’s approach. That is speculation, but unfortunately, the hard fact is that their attitude has become more and not less aggressive. They have withdrawn from the trilateral forum for dialogue.

[Sir Edward Leigh (Gainsborough) (Con)]

With respect, I do not believe that Spain would alter its view if the Conservative party were in the European People’s party.

[Martin Horwood]

The hon. Gentleman might be right and I accept what he says in good part.

The Spanish Government have withdrawn from the trilateral forum for dialogue, which provided a framework for discussion between the three Governments. They have committed to unravel agreements entered into under the trilateral forum to which Spain had signed up. The Spanish Foreign Minister, Senor Margallo, has called that putting the toothpaste back into the tube. In response, we should tell him that that is generally a messy and pointless process. He has also used slightly more aggressive language. The Select Committee refers to his comment that “play time is over” with respect to Gibraltar, which is intimidating vocabulary. It is unfortunate that it comes from a fellow European democracy.

One arrangement entered into under the forum was that Spain promised to respect the inclusion of Gibraltar airport in EU civil aviation measures, which an hon. Member mentioned. In fact, Spain’s objections have disrupted the single European sky project. “Single European sky” is a phrase calculated to send Eurosceptic Members purple with rage, but it does not mean that Brussels is trying to take over our skies. It is a perfectly sensible and safe improvement to air traffic control measures. It includes Norway and Switzerland, so it does not require membership of the European Union.

[Sir Gerald Howarth]

I am not sure whether my hon. Friend and I have agreed on anything substantial before, but I thought it important to put on the record that what he says about the single European sky is absolutely right. As a Eurosceptic and an aviator, I am fully in support of this sensible co-operative measure.

[Martin Horwood]

The European Union has hidden benefits, which come out in detailed analysis.

Spanish aggression has not finished there. There continue to be delays at the border caused by intensive Spanish controls, which the European Commission has described as disproportionate and which seem to have got worse since the Committee’s report was published. I am told that the delay to enter Spain was about five hours on 1 December, and there have been regular delays of more than an hour going in the other direction. That does not just disrupt life for Gibraltarians; it disrupts life for the 10,000 cross-frontier workers, almost all of them Spanish. We have also seen serious incursions into British Gibraltar territorial waters by Spanish paramilitary or naval vessels. They entered Gibraltar waters more than 100 times just in December 2014, some incursions being rather more serious than others.

What do we do about this? The British Government have to strike a balance between the firm response that all hon. Members are calling for today and avoiding making the situation worse. Walking out of meetings is probably a manoeuvre that has to be used with some caution. We do not want needlessly to escalate or provoke a negative response from the Spanish. Yet, as the Committee’s report rightly points out, the idea of trying to defuse and de-escalate the dispute has not produced many results. Some detailed points in the report, such as those on the delays in lodging protests about some of the incursions into territorial waters, are well made. They send a bad diplomatic signal, and it is good that they have been tightened up.

Other measures can be considered. The UK Government should commit to taking legal action if Gibraltar airport is excluded from any EU civil aviation measures. That is a clear, calm, rational, legal process to enter into, and I would be interested to hear the Government’s response. We should certainly press the EU Commission to pay more attention to the monitoring of the border between Spain and Gibraltar, which it has said is unacceptable. It should send a permanent monitoring mission to that border to see exactly what is going on. I am sure that the British Government, and perhaps the Government of Gibraltar, would be willing to assist with that logistically and financially.

Another interesting possibility, which is discussed in the Select Committee’s report, is the idea of Gibraltar joining the Schengen agreement. That might well reduce some of the obvious problems in the areas of dispute if it was practically supported by other member states. The difficulty pointed out in the report is that the acquis is carefully defined in the European treaties, so it might require treaty change, but treaty change is in the air in Europe. There may be a possibility of treaty change in the next few years, and it might be worth taking up the opportunity of treaty change to include that as a de-escalatory measure. Technically, under Liberal Democrat policy, that would represent an increase in power, albeit a small one, from Britain to Brussels, and would therefore trigger an in-out referendum, but we might be able to embrace that at the time. We need to explore these possibilities in all seriousness. Even if a treaty change might not seem practical right now, if it is possible in the near future, we should consider it.

We should certainly look at what tougher action we can take to prevent and deter incursions into Gibraltar’s territorial waters. Serious sovereignty considerations are at stake here, and, as hon. Members have pointed out, there are fears for the safety of the crews of the Royal Navy, the Royal Gibraltar police and the Gibraltar defence police and of the Spanish vessels involved in these disputes and encounters, which in some cases are proving quite dangerous. Arresting the Spanish vessels might be seen as extremely provocative, but we need to hear from the Minister a new, robust approach to the matter in future.

The people of Gibraltar have a right to self-determination. Spain as well as this country should respect that fundamental democratic right, which is enshrined in the United Nations covenant on civil and political rights. In the past, the Government have supported the right of the people of Gibraltar to determine their own future. The Select Committee supports that right, and the House should support it today.

15:25

[Andrew Rosindell (Romford) (Con)]

I am delighted that we are debating the report today. I commend my right hon. Friend the Member for Croydon South (Sir Richard Ottaway). The debate would not be taking place today had it not been for his casting vote on the Committee to make sure that we have the report. It is right that we should address the multitude of issues that Gibraltar has faced over many years.

However, it is wrong that we as a Foreign Affairs Committee debate and discuss issues relating to a British territory. The Committee deals with the middle east, Europe and our relations with the United States and the wider world. There is only limited time to deal with matters relating to overseas territories that are sovereign British territories, are ultimately governed by this House and are subject to British law. A new arrangement is needed so that overseas territories issues are fast-tracked. There should be a way of dealing with those issues much more quickly to ensure that overseas territories that rely on the British Government to make decisions for them and to help them deal with important matters such as those that we are debating today are able to bring them to a Committee of the House, without having to wait a long time for a Select Committee to happen to look into the matter.

The hon. Member for Ilford South (Mike Gapes) said that the report on Gibraltar arose from a report we were doing on consular services. Had we not done that report and had we not gone to Malaga, I do not think we would ever have gone to Gibraltar to look into this serious issue. There must in future be a better way of dealing with issues relating to overseas territories; otherwise they will be overlooked and a serious debate such as we are having today will never take place.

As is evident from the speeches that we have heard, we are all proud of the special constitutional relationship Gibraltar has with the United Kingdom as a British overseas territory. Gibraltar is British. It has been British for over 300 years and I believe it will always remain British, not because we have decided that but because the people of the Rock have chosen that destiny. They have made their choice over and over again. The sad thing is that our Foreign Office—or our Foreign and Commonwealth Office, as it should be called—has never treated Gibraltar as equally British. It has always treated it like something down the road, to be looked at. We are always worried about upsetting Madrid, always worried about what Spain will say if we do anything on Gibraltar.

Having spoken on the subject for nearly 14 years in the Chamber, I am heartily fed up with the failure of the Foreign Office to acknowledge that Gibraltar should be defended in the same way as we would defend our own constituents. It is time that the Minister and the Foreign Office changed their approach not only to Gibraltar but to British overseas territories in general.

[Mr Nigel Evans]

I am sure my hon. Friend, like me, has had the opportunity to visit Gibraltar on its national day, when everybody turns out and says that they are proud to be from Gibraltar and proud to be British. If our own Minister has not had an opportunity to do so, would it not be a good idea if he visited Gibraltar on national day and joined in the celebrations of being British and being Gibraltarian?

[Andrew Rosindell]

My hon. Friend is right. I have been privileged to go to Gibraltar national day on many occasions over the years. It is impossible to find people who are prouder of their British nationality and more determined to retain that nationality, but who feel, as we do, part of the great British family, yet continually have to justify their desire to stay British. Gibraltar is not treated as equally British, as we would expect our constituencies to be treated if ever they were under threat or if ever they were attacked by a foreign power. We need a new arrangement to give our overseas territories, particularly Gibraltar and the Falkland Islands, which have a similar problem, the right to be heard in this House, via a Select Committee or by some other means.

My hon. Friend the Member for Ribble Valley (Mr Evans) referred to Gibraltar national day. I would like to commend our Prime Minister, who the year before last became the first to send a televised message for national day, which was shown in Casemates square in Gibraltar. However, it is time that he, or even the Minister, visited Gibraltar for national day. Furthermore, it is time that there was a royal visit to Gibraltar, as my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) said. It is more than 60 years since Her Majesty the Queen visited Gibraltar. There has not been a visit by the Queen of Gibraltar in over 60 years. I think that is completely unacceptable. I have raised the matter with the Minister many times but have never got an answer from anyone in the Government.

I am delighted to hear that the Queen is to make a state visit to Germany later this year. Gibraltar is not much further away, and I have no doubt that the Government of Gibraltar would extend a very warm invitation to Her Majesty, so I ask our Government, in the last few months of this Parliament, to clear any block there might be to a royal visit. Please allow the Queen of Gibraltar the opportunity to visit her people on the Rock. There could be no clearer signal that we are utterly committed to Gibraltar and determined to support it and give it the full recognition it deserves as a loyal territory of the Crown.

So much has been said today about the problems with the borders, the maritime disputes, the European Union’s failure properly to address the issues we are debating and the negligence of the Foreign Office. I am pleased that Members of Parliament now understand the situation better than they did 14 years ago. When I was first elected, many barely even knew what Gibraltar was. Now Members on both sides of the House understand that a British overseas territory is British and that we have a duty to look after and defend its people. Dreadful mistakes were made in 2001 and 2002, when the previous Government attempted to impose a joint sovereignty deal with Madrid. I do not think that any political party in this country would make such a horrendous mistake again. That is a good thing, because it means a lesson has been learnt.

However, we cannot move forward unless the Foreign and Commonwealth Office changes its approach root and branch. We must stop appeasing Madrid and being afraid of upsetting the Spanish Government in case they might not co-operate with us on the many areas that the hon. Member for Ilford South referred to. We want to co-operate, but there cannot be good relations with the kingdom of Spain as long as it bullies British subjects living close to its land. We must give Spain the message loud and clear that its attitude to Gibraltar is unacceptable to the British Parliament and to the British people. Only the Foreign Office has the authority to make those kinds of decisions in order to show Spain that its actions have consequences. For as long as Spain continues to behave in this fashion, there will be consequences. Relations between the United Kingdom and Spain will never be warm as long as it continues to bully the people of the Rock. We need a complete shake-up in Government policy. We require a more robust stance in dealing with the issues to which I and other hon. Members have referred today.

There is one other thing that we must do. It is, in my view, completely unacceptable that the only countries and territories within the Commonwealth that are continually denied the right to lay a wreath on Remembrance Sunday are the British overseas territories. It is inexcusable that no one from Gibraltar, the Falkland Islands or any other British territory is invited to lay a wreath. We know what the argument is going to be—that the Foreign Secretary does it on behalf of the overseas territories. Well, I have news for the Minister: the Foreign Secretary was not elected by the citizens of the overseas territories; he is the British Foreign Secretary elected by the British people. The people of Gibraltar have not chosen the Foreign Secretary to lay a wreath on their behalf. Gibraltar has sent soldiers to fight and die for king, queen and country over hundreds of years, and so have the other overseas territories. If they send soldiers to fight, they should be allowed to lay a wreath on behalf of those who have lost their lives. It is inexcusable. I have heard every excuse about the palace objecting, the Foreign Secretary not having a role any more, and so on. It is all nonsense; we all know the truth. It is time that the overseas territories were given this right.

I have here a letter to the Prime Minister from the chairman of the United Kingdom Overseas Territories Association, Albert Poggio GMH OBE, who, as we all know, is the excellent head of the Gibraltar Government office here in London. Let me quote some of his words:

“Countless numbers of persons from Gibraltar and the other Overseas Territories made the supreme sacrifice in the service of the Crown and the United Kingdom in all the Wars of the 20th Century, as well as in the more recent conflicts of the 21st Century. For the Representatives of their Governments to be excluded from the Remembrance Service is, to be frank, offensive and perverse…We believe that it is now time that each of the Overseas Territories had a wreath laid by each of the Territories’ UK Representatives, on the same basis and immediately following those wreaths laid by the Commonwealth High Commissioners.”

Who can argue with that point of view?

We must raise this issue and bring it to a head before the general election. I call on the Prime Minister to intervene personally and once and for all, for ever more, give the British overseas territories the right to lay a wreath on Remembrance Sunday, just as we have this year allowed the Irish Government—the Irish ambassador —to lay a wreath in recognition of the sacrifices that Irish citizens made in the first world war and in other conflicts. This matter is overdue for resolution. I urge the Minister to take it away and resolve it before Parliament is dissolved at the end of March.

We could speak about this issue for far longer than we have time for in this debate. I feel deeply passionate about Gibraltar and wholeheartedly endorse all the comments made by my right hon. and hon. Friends. The time has come to stop appeasing Madrid, to stop pussy-footing over this issue, and to show the people of Gibraltar that we are truly on their side. People have died throughout the centuries to defend British freedom, British democracy and British territories. By being so weak over Gibraltar, as we are at the moment, we are betraying all those people who have defended British freedom over all those centuries. It is time for this Government to show real action and to defend Gibraltar as it deserves to be defended: as a British territory—a territory of the Crown—that should always be British. We have a duty to stand by it.

15:38

[Dame Angela Watkinson (Hornchurch and Upminster) (Con)]

I speak as a member of the all-party Gibraltar group. I add my congratulations to my right hon. Friend the Member for Croydon South (Sir Richard Ottaway), the Chairman of the Foreign Affairs Committee, on his excellent report.

A recurring message throughout the report is the sheer frustration of the Government, the Foreign Affairs Committee, the all-party group, and, most of all, Gibraltar itself, at the total failure of that toothless tiger, the EU Commission, to take decisive action to stop Spain’s well-documented illegal actions against Gibraltar.

Anyone who has visited Gibraltar for the joyous celebration on September 10, Gibraltar day, as members of the all-party group have, can be in no doubt about its loyalty to the Queen and to the United Kingdom. Gibraltar is a true friend, and it deserves our full and robust support.

Gratuitous delays of vehicles and pedestrians at the border between Gibraltar and Spain cause unnecessary inconvenience to Spanish people working in Gibraltar, as well as to Gibraltarians. In some cases, delays have lasted as long as seven hours in hot weather, and Guardia Civil officers have behaved aggressively towards local citizens and Spanish commuters. The delays are disproportionate, politically motivated and illegal. The fact that they are switched on and off at will demonstrates that they are simply used as a coercive tool against Gibraltar. Will my right hon. Friend say what prospect there is of a stronger response by the European Commission in more closely monitoring Spain’s activities to stop its exerting such pressure on Gibraltar?

The number of unjustifiable, illegal incursions into Gibraltar’s territorial waters has increased dramatically since 2012. The behaviour of Spanish state vessels is often dangerous, and there has been at least one collision with a Royal Gibraltar Police vessel. These incursions are a violation of sovereignty. I was pleased to read that the Government now send one note verbale for every incursion, and that all protests are made within seven days, but the incursions still continue. What naval or police options might be used in a more robust response to bring these incursions to an end? We must be ready to take whatever action is necessary to defend the sovereignty of Gibraltar.

The reason for the harassment is partly the legacy of the regrettable decision of the Labour Government in 2001-02 to allow joint sovereignty talks that raised expectations on the Spanish side. The guarantee of self-determination should never be abandoned again.

If we are to make progress, tripartite talks need to be resumed, but restraint on the part of the UK Government has not produced the desired result so far. The pressure needs to be intensified without damaging the overall relationship between Spain and the UK, which could be detrimental to Gibraltar in the long run.

Gibraltar is prosperous and entrepreneurial. There must be many other opportunities for mutual trade and business arrangements between Gibraltar and Spain that would benefit both in the area around the border. If Spain were to transfer its efforts from over-zealous border checks to commercial activity, the Spanish economy would surely improve along with relations between Spain and Gibraltar and the UK.

Does the Minister have any plans to visit Gibraltar this year—he will know that this Government’s demonstrations of support are appreciated greatly—and when better to visit than on 10 September? That would show resolve in responding to harassment by the Spanish Government, and reiterate our firm position on sovereignty: Gibraltar will remain British for as long as that is the wish of the people of Gibraltar.

15:40

[Bob Stewart (Beckenham) (Con)]

I rise to speak as a member of the all-party group on Gibraltar, as someone who spent many days and weeks in Gibraltar wearing uniform and as someone who loves Gibraltar and feels totally at home in the place. I therefore want to talk about the defence of Gibraltar.

As has been mentioned, the biggest military unit in Gibraltar is the Royal Gibraltar Regiment, which has both reservist and regular soldiers. The regiment’s primary duty is the defence of the Rock. Within the Rock are 34 miles of tunnels—twice the length of the entire road system around the Rock—which were dug with picks by British sappers. I say that because the Royal Gibraltar Regiment contains the British Army’s primary expertise on fighting in tunnels. In addition, it now sends its officers, non-commissioned officers and soldiers abroad with British military advisory training teams to train other nations. It is an integral part of our Army.

Morocco has already been mentioned, and since 2000 the Royal Gibraltar Regiment has been training the Moroccan army—there are quite close links—and it goes to Morocco every year as part of its overseas exercise. The chair of the all-party Gibraltar group, my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti), who has briefly absented himself from the Chamber, mentioned the gallantry of soldiers from the Rock. Indeed, the last commanding officer of the Royal Gibraltar Regiment was awarded the military cross, the third highest decoration for gallantry in this country. Those people are very much part of our country.

The Royal Navy has a regular presence in Gibraltar with 22 officers and ratings. It has two 16-metre patrol launches: HMS Scimitar and its sister ship HMS Sabre. It also has three rigid inflatables—a very small manning level for somewhere as important as Gibraltar. The squadron spends almost all its time maintaining the security and integrity of British Gibraltan territorial waters, which is not easy. In December 2014, the Royal Gibraltar Police recorded 108 incursions into British Gibraltan territorial waters, and that small force is terribly overworked. In addition, its tiny vessels are far too often dwarfed by Spanish navy ships, and in my view our naval presence in Gibraltar is too small to deal with the continuing Spanish provocation. The RAF also maintains a small presence on Gibraltar with fewer than 10 personnel. No operational RAF aircraft are permanently based there, but the airfield, as has been noted, is always maintained as a forward operating base for British military aircraft, and it has a unique position at the western end of the Mediterranean.

I believe it is time that our Minister increased the military presence in Gibraltar—[Interruption.] He turned back when I said that. There are three reasons for that. First, as Members seem to have demonstrated today, despite our repeated diplomatic protests about the bullying on the frontier and naval incursions into British Gibraltan territorial waters, our NATO and European Union ally, Spain, does absolutely nothing to stop them. Of course no one wants confrontation with Spain—far from it—but that is effectively what the Spanish continue to do to Gibraltar. Fouling up the frontier and repeatedly sending Guardia Civil and Spanish naval vessels into British Gibraltan territorial waters is hardly the act of a close ally, and it is time that we gave a concrete demonstration about our irritation with the situation. Quiet diplomacy and reason have had no impact whatsoever over the years.

Secondly, vacant military facilities in Gibraltar could easily be revitalised with minor modifications, and there are good training facilities on and around the Rock—I used them myself when I was in the Army. For instance, it has a small military training area and ranges, as well as those miles of unused tunnels, which are great fun on exercise. I am sure that such a move would be very popular on the Rock. With its budget surplus, some of the additional costs might be paid by the Government of Gibraltar.

Regular troops from the UK already replace the Royal Gibraltar Regiment when it deploys on annual exercise to Morocco. Why not put a UK-based company there, maybe on rotation from a UK-based battalion? There is space and it could easily fit under command of the Royal Gibraltar Regiment, whose commander is just as qualified to command an infantry battalion as I was in my day.

I have been on HMS Scimitar, one of the two little and very old patrol vessels and, even to a landlubber like me, both Scimitar and Sabre are well past their sell-by dates. In face-offs with much larger Spanish vessels, those small Royal Navy vessels look plain daft and—as I know from my military experience—in a deterrent situation, looks matter. Although the Royal Navy does not have many ships left, one of them could quite easily be sent to Gibraltar and based there. I do not suggest that the Royal Air Force needs to, or indeed should, permanently position aircraft on the Rock, but the frequency of training visits could be increased.

In my view, deliberate breaching of sovereign waters by military vessels can be viewed as an act of war. Spain will not like us reinforcing our military presence on the Rock, but so what? They have tried to coerce Gibraltarians for far too long. In response, our laid-back, solely diplomatic responses have always been weak and remain so. I am sorry to say that the Foreign Office is far too wet on this matter. It is clear to everyone that periodic frontier problems and sea incursions are repeatedly organised by the Spanish Government on a systematic basis. That situation is iniquitous and I call upon our Government’s Foreign Office Ministers to get serious.

We should show that we will not budge in our views on Gibraltar and that we mean business. One way to do that is by putting more military power on Gibraltar. All this aggravation from Spain is totally unnecessary and undemocratic, and we do not like it. In short, Spain should get its hands off the Rock.

15:52

[Sir Edward Leigh (Gainsborough) (Con)]

I am not sure that I can follow the powerful rhetoric from my hon. Friend the Member for Beckenham (Bob Stewart), but I want to start by apologising to you, Madam Deputy Speaker. I had to chair Westminster Hall until 3 pm, so I apologise for my late arrival.

I also want to apologise to the people of Gibraltar. Although I have been a Member of Parliament for nearly 32 years, it was only last September that I went there—although I have always wanted to visit—as a guest of the Gibraltar Government at their national day celebrations. I declare that interest.

I am very interested in naval history so I have always taken a close interest in the history of Gibraltar. We should always remember that, but for Gibraltar, we would have lost the second world war, with all that would have pertained. We should never forget the courage of the people of Gibraltar over many years and the contribution that they have made to the defence and security of our country. That needs saying again and again.

We should also pay tribute to the courage of the Gibraltar people in the very difficult circumstances that they have faced over the last 60 years, especially when the border was closed entirely. It is very moving to talk to people from Gibraltar about those times, and their resolute determination to resist a completely illegal act.

This was the first time I went to Gibraltar. I pay tribute to my hon. Friends sitting around me who have spent years fighting the good fight. But for them, we would be in a much worse position. I urge all Members of Parliament to go to Gibraltar and, in particular, to stand in Casemates square on national day. It is a moving experience. We hear so much criticism from so many people of our country. To be in the square with 10,000 or 12,000 people who love our country, and are absolutely determined to remain a part of it, is a most moving experience.

I was speaking only on Tuesday in a debate on people who misuse their British passports to go on jihad and then try to come back. I said that there was deep anger among British people about people who do not understand our view that being British is about a love of our history and our country, and, above all, tolerance of all people. The thing about Gibraltar is that it is a wonderfully tolerant place. Over the centuries, it has been a superb melting pot for people of Jewish descent and Christians of all denominations. During the dark years of Spanish fascism, it was a beacon of light and democracy. I do not think that the people of Spain should forget that. I urge colleagues to go to Gibraltar. It is a most moving sight.

A lot of criticism has been made of both Spain and the Foreign Office. As I have been sitting here, I have been trying to understand their positions. I can quite understand that certain people in the Foreign Office take the view that Gibraltar is a very small place and Spain is a very important trading partner that we do not want to antagonise unduly. I suspect that the Foreign Office Minister accepts the argument that when one is dealing with a bully, trying to appease the bully simply makes things worse. The way to resolve this issue in the long term is for the Government, and not just us Back Benchers, to be absolutely robust. The Government say that this is a matter of self-determination, but they should mean it and prove it with their actions. When the previous Government proposed joint sovereignty, as I understand it 99% of people wanted to remain British. This principle is a rock on which we stand. There is no other principle at stake here apart from that of self-determination. I commend the words of the right hon. Member for East Renfrewshire (Mr Murphy), who has now risen very high to lead the Labour party in Scotland. When he was a Minister of the Crown he said:

“the UK Government will never—‘never’ is a seldom-used word in politics—enter into an agreement on sovereignty without the agreement of the Government of Gibraltar and their people. In fact, we will never even enter into a process without that agreement.”

We want to be like a rock in our determination—both Government and Members—to say to Spain that, whatever the provocation, it will not do any good. It could close the border entirely. It has tried it before. It could make the life of its workers coming into Gibraltar a misery. That is not going to work either. Whatever it does or says, and whatever aggravation it causes us in the Council of Ministers, we will remain like a rock in defending the right of people to remain British if they want to do so. They have after all been British for 300 years—a very long time.

We want Ministers like my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill). He made a forthright stand and was prepared to walk out of the Council of Ministers and bring the process to an end. That is the sort of language that is understood. I cannot emphasise this point enough: Spain will only be encouraged by weakness and a belief that, although there are Back Benchers around me who are very strong on this issue, there are other people in the Foreign Office who say that we should make some concessions. I hope, therefore, that when the Minister stands up, he will be robust on this point—as robust as all my colleagues who have spoken.

I have tried to understand the position of the Foreign Office. Now I will try to understand Spain’s position. I can understand that many people in Spain no doubt think it wrong that, as they see it, part of their mainland is British, but these things happen in other parts of the world. Reference has already been made to the Spanish enclaves in north Africa, but leaving that aside, would I really be tremendously agitated, would I lie awake at night, if, under the treaty of Utrecht in 1704, Portland bill had been given to Spain and there were only Spanish people living there and they wanted to remain Spanish? Would I not say to myself, “Well, it’s a long time ago. It’s a part of history. These people have a right to self-determination”? Would I not say to these people, “Well, I’m never going to achieve anything by trying to bully you by closing the border or making life intolerable”? No, I would try to love bomb them, I would try to draw them in, and that is what Spain should do.

I hesitate to give advice to Spain—who am I to give advice to Spain?—but I presume that someone in the Spanish embassy will read our debate and report back to the Government. If, over the years, Spain had kept the border entirely open and tried to encourage as much trade and movement as possible, the whole mood in Gibraltar would be different. I am not saying its people would have wanted to give up their British sovereignty, but look at Monaco! It is a city sate. Nobody in France cares that it is independent. One can drive to and fro between Monaco and the south of France. It is bustling with prosperity. All the regions around it are happy and bustling with prosperity. Instead of La Linea and other places in southern Spain being dead ends, with high unemployment, misery and all the rest of it, it could be an economic boom area. So I hope that someone from the Spanish embassy reads this debate. We do not want to be antagonistic to Spain; we want good relations. We want this to be an opportunity for—dare I use this word?—friendship, for moving things forward and for opening borders and exchanging ideas and views. If Spain were to do that, the whole situation could be transformed.

This debate has been a useful one, but before I sit down, I want to say one last thing. All the nations of Europe, particularly Germany—as my hon. Friend the Member for Romford (Andrew Rosindell) said, the Queen is going on a state visit there—proclaim the principle in the EU of the free movement of workers. It is embedded in the EU. It is why we are in the EU. Of course, Spain could knock this ball back into our court, but let us use this argument against it. A nation cannot interfere with the free movement of workers who want to work in Gibraltar. That is the cardinal spirit of the EU, and the Foreign Office has to be absolutely robust with the Commission on this. It is an appalling abuse.

Imagine if we were doing this to Spanish people trying to arrive in Heathrow or tourists arriving at Dover. Imagine the outrage if the Foreign Office retaliated in that way—I am not suggesting it should enflame these matters by doing so. It would be considered an outrage. What is happening on this border, in modern-day Europe, when we are supposed to be part of a European Union and trying to improve relations with each other and improve cross-border trade and movement and all the rest of it, is a throwback to the dark, bad world of the cold war and the 1950s and 1960s. We have to make it clear to the Commission and the Spanish Government that, in the view of the House of Commons, that is simply not acceptable.

16:04

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I congratulate the Chairman of the Foreign Affairs Committee, the right hon. Member for Croydon South (Sir Richard Ottaway), and the rest of the Committee on producing the report that has given rise to this debate, and I thank all Members who have contributed, be they members of the Select Committee or the all-party group on Gibraltar or simply interested in the issue. The Select Committee report really concentrates on three areas: issues at the border; issues affecting British-Gibraltan territorial waters; and the international aspects.

Let me deal with the overall context of this debate, which as hon. Members have mentioned, should be—and could be even more—a good relationship between Britain and Spain. We are fellow members of the EU, fellow members of NATO and allies in many areas. It is therefore tragic that this issue has been rising in importance and has become a real cause of tension.

It makes no sense for the lives of the people of Gibraltar to be deliberately made more difficult as a result of a campaign by Spain to do so. That is wrong in itself and it undermines what is otherwise a strong and long-standing relationship between the UK and Spain.

The hon. Member for Gainsborough (Sir Edward Leigh) referred to comments made by my right hon. Friend the Member for East Renfrewshire (Mr Murphy) when he was a Minister. At that time, my right hon. Friend made it clear that this was a matter not of empire, but of popular will. He said that the constitutional status of Gibraltar would not be changed without the consent of the people of Gibraltar, and that the UK Government would not enter into discussions about that issue without the consent of those people. That was the position then, and it remains the position of my party now. This is the cornerstone of British policy on this issue: it is a position shared by the current Government and it is an important issue in common between us.

Once that is understood by all concerned, there is room for dialogue and co-operation on a number of issues. That was the kind of policy that was in place under the Cordoba agreement and, with good will, it could be resurrected and put in place again. It has to be made clear, however, that it is not the fault of the United Kingdom that the Cordoba agreement has become less effective. That is the result of decisions taken by Spain to adopt a harder line against Gibraltar.

My first question for the Minister—I would like him to address it in his summing up—is where do things stand with the so-called ad hoc discussions between Britain, Gibraltar and Spain? Has there been any indication from the Spanish Government that they are willing to resume these discussions, and do they accept Gibraltar’s place as a full participant in them?

The Select Committee report rightly and strongly criticises the unacceptable and deliberately organised delays at the border crossing, which cause major inconvenience to Gibraltarians, Spanish workers and the huge number of tourists who visit Gibraltar each year. As we have heard, these are causing delays of five, six or sometimes seven hours for cars at the crossing and 90 minutes or more for people crossing on foot. These border issues have had a direct impact on Gibraltar’s tourism trade and constitute an unwarranted and wholly disproportionate barrier to free movement between Gibraltar and Spain.

Let me pick up on another point made by the hon. Member for Gainsborough. Free movement, as we have heard in our broader debates in this House and this country over recent months, is held up as a cardinal principle of membership of the European Union. For a time, it seemed as though the UK Government wanted to compromise the principle of free movement. Many thought that was the implication when the Prime Minister said in his conference speech, “I will sort this issue.” However, his recent speech on EU migration, made just before Christmas, was widely seen as a retreat from that position. It was seen as dealing with issues relating to benefits, and as not compromising the United Kingdom’s attitude to the principle of free movement. If there was any doubt about that position, only yesterday, during his joint press conference with the German Chancellor, the Prime Minister attested to his own belief in, and support for, the principle of free movement. I am sure that that belief and support have been widely welcomed by his colleagues on the Back Benches.

My point to the Minister is that, now that the position has been made clear, he and his colleagues are in a stronger position to make it clear to the Spanish that it is wrong for them to interfere with the free movement of their own citizens who wish to work in Gibraltar, and the ability of the people of Gibraltar to travel freely back and forth across the border.

[Martin Horwood]

The right hon. Gentleman is making a very interesting and significant point. I can certainly say that the Liberal Democrat side of the coalition fully supports the free movement of peoples. It is a very important principle, which will benefit the people of Gibraltar in due course.

[Mr McFadden]

I thank the hon. Gentleman for his intervention. A serious aspect of this issue is that when we question such principles, we may sometimes do so without thinking about how they are used by our own citizens who, in possession of a British passport, can move freely—and live and work freely—throughout the European Union, as many do.

Given the principle of free movement, the Government are absolutely within their rights to complain to the European Commission about what is happening on the Gibraltar-Spain border. They have done so before; may I ask the Minister whether they will do so again, stressing the issue of the recent delays and the impact that they are having on the economy and citizens of Gibraltar? Will the Government also call for Commission visits to be made with little or no notice? As we have heard during the debate, the inconveniences and delays can be turned on and off. Obviously, if lengthy notice is given of a visit, it will be easy to step down the pressure and ensure that the inspectors do not see things as they sometimes are. It matters how such visits are conducted, and when they are conducted.

Paragraph 84 of the report suggests that the Government should consider using article 259 of the Lisbon treaty to take Spain to the European Court. May I ask the Minister for his response to that suggestion, which was also mentioned today by the right hon. Member for Croydon South?

The report gives detailed information about the sharply increased number of transgressions of British- Gibraltan territorial waters, which sometimes occur as often as 50 or 60 times a month. Let us be clear about the fact that this is not about free passage; it is about state-owned vessels violating sovereignty, and trying to erode the status and integrity of Gibraltar's territorial waters.

The Committee drew attention to the Government’s delays in lodging protests against those transgressions, fearing that such delays lessened the impact of our complaints and gave the impression that we were merely going through the motions. In their response to the report, the Government said that practice had changed, and that there was now a weekly submission to the Spanish Government. That is to be welcomed on one level, but the fact that the submission must be weekly prompts another question: what further means of reducing the number of transgressions, and thus the need for weekly submissions, have the Government considered?

I am sure the whole House agrees that the Royal Navy’s Gibraltar Squadron and the Royal Gibraltar Police do a difficult and dangerous job, showing admirable restraint when faced with repeated and sometimes dangerous provocation on the seas. The report also welcomes the use of Gibraltar as a staging post for larger Royal Navy vessels.

May I ask the Minister to address the points made by the hon. Member for Beckenham (Bob Stewart), whose military experience is always valuable in these debates? Is it still Ministers’ view that the squadron there has the ships, equipment and manpower to carry out the tasks assigned to it, or is there a need to reassess this in the way that the hon. Gentleman suggested?

The international aspects of this issue have also been mentioned in this debate. I am sure that the Minister agrees that it is unacceptable to use issues like EU aviation policy or the single European sky policy to put further pressure on Gibraltar. Why should not the airport in Gibraltar and the people travelling there have the same freedom and rights as people elsewhere in the EU?

My hon. Friend the Member for Ilford South (Mike Gapes) mentioned the resolution in Congress recognising Gibraltar’s right to self-determination. I am sure that the attempts by the Spanish Government, in the letter from the ambassador to Congress, to link their support for the coalition against ISIS with the issue of Gibraltarian self-determination would be rejected by all of us. As democratic countries defending pluralism, there should be no linkage between the battle against the ideology and practices of ISIS and self-determination for the people of Gibraltar.

[Mike Gapes]

Is it not also significant that Spain, as in the Madrid bombings of more than a decade ago, has suffered appalling acts of internationally organised terrorism, and it is deplorable that the current Spanish Government have such a short memory of the solidarity that was expressed by the whole world when Spain was attacked?

[Mr McFadden]

My hon. Friend makes a strong point. We have seen a great deal of solidarity with the people of France in the last 24 hours against the appalling acts of yesterday. When these things happen, and when democracies are faced with the ideology of those who would kill and attack pluralism and free speech, we do not seek a chain of other issues to connect to them. We do it because we defend our own values, which are under attack from the ideology that led to the bombings in Madrid, which has led to action in this country and drove those responsible for the terrible events in Paris yesterday. On these international issues, will the Minister say what efforts the UK Government are making to make it clear to the international community that Gibraltar’s status must not be used in this way?

[Sir Richard Ottaway]

The right hon. Gentleman has set out a very sensible, rational analysis of the situation, and analysed our report very accurately. However, does he agree with the central conclusion that a tougher line needs to be taken with Madrid?

[Mr McFadden]

The right hon. Gentleman makes a strong point. Through the Cordoba agreement, we had good co-operation on a number of day-to-day issues to make the relationship between Gibraltar and Spain work. It is not down to any change in the UK’s position that that co-operation has been eroded. We need to take the action necessary to get back to that situation.

A few years ago, we had constructive dialogue, and my message today is that we cannot continue with the current situation. The report says that the people of Gibraltar feel “under siege” by the repeated border delays and transgressions of territorial waters. This has not happened by accident, or because of a change in policy by us. It has happened because of a change in policy by Spain. It is hurting Gibraltar, but it is also hurting the people of Spain. It is in the interests of the United Kingdom, of Gibraltar and of Spain to try to get back to the kind of co-operation that we had a few years ago. With good will, that can happen.

I shall end where I began, by saying that we two countries are allies with much in common. We in the UK do not seek to raise tensions with Spain, and that is why restraint has been shown, but it cannot be right for such undue pressure to continue to be placed on Gibraltar. We must get back to the situation that we had a few years ago, because that is in everyone’s interests. The cornerstone of our policy is the wishes of the people of Gibraltar, and that cornerstone remains firmly in place.

16:20

[The Minister for Europe (Mr David Lidington)]

I thank my right hon. Friend the Member for Croydon South (Sir Richard Ottaway) and the hon. Member for Ilford South (Mike Gapes) for securing this opportunity to debate Gibraltar this afternoon. Before I proceed with my speech, I should like to observe that it seems odd for us to be debating Gibraltar without the presence of the late Jim Dobbin. My hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) rightly paid tribute to Jim, who was chairman of the all-party parliamentary group on Gibraltar until his death last year. He was a great supporter of Gibraltar and its people, and he is greatly missed by his friends and colleagues on both sides of the House.

I want to set out the Government’s policy towards Spain on Gibraltar, the developments that have taken place and the progress that has been made since the Select Committee’s report and the Government’s response were produced last year. I shall start by making it clear that the entire Government will continue to be steadfast in our support for Gibraltar and for the sovereignty of the United Kingdom in Gibraltar. The United Kingdom has given a firm commitment that we will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their wishes. Furthermore, we have given an assurance that we would not even enter into a process of sovereignty negotiations with which Gibraltar was not content. The wishes of the people of Gibraltar to remain British must be respected, as my hon. Friend the Member for Gainsborough (Sir Edward Leigh) and others have pointed out. This is a matter of self-determination; at root, it is a matter of democracy at work, and that democratic will must be respected.

As the hon. Member for Ilford South said, there are important common interests between the United Kingdom and the kingdom of Spain. There are strategically significant issues on which we need to work together, ranging from working against terrorism and against the trafficking of narcotics and people to negotiations on international trade, which would enable the peoples of both countries to prosper, as well as on climate change and on innovative technology. It is striking, for example, that the United Kingdom and Spain have been on the same side in European Union discussions on genetically modified technology. That makes it even more a matter of regret that the short-sighted and, frankly, outmoded and anti-democratic attitude that the Spanish Government are taking towards Gibraltar has prevented that bilateral UK-Spain relationship from developing to the extent, or with the warmth, that we would have preferred.

We must be clear that our primary responsibility in respect of Gibraltar is to uphold the security of the territory and defend its international interests. I take that responsibility seriously, as does every Minister in this Government, but when considering what action to take, we must decide what action is most likely to deliver positive results. As my hon. Friend the Member for Hornchurch and Upminster (Dame Angela Watkinson) said, we are right to be firm in the defence of British sovereignty and the interests of the people of Gibraltar, but we must seek to do so in a way that does not end up inadvertently making their position worse. The mere facts of geography do put Spain in a position to exercise pressure, particularly at the borders.

As part of that work, the Government have sought, under successive Governments in the territory, to work increasingly closely with Her Majesty’s Government of Gibraltar. It is fair to say that this Chief Minister and his predecessor always continue to be firm in standing up for the interests of Gibraltar, but it is also accurate to say that there is a closer relationship now. There is a better habit of working together between the two Governments and of respecting the rules of the 2006 constitution than there has been for many years.

Let me move on to deal with some issues that have been at the centre of today’s debate, starting with EU legislation on aviation. Our starting point is that Gibraltar is, in respect of aviation laws, a part of the European Union. The treaties of the European Union apply to the territory of Gibraltar, except where certain parts are expressly disapplied. Article 355 of the treaty on the functioning of the European Union states clearly, in paragraph 3:

“The provisions of the Treaties shall apply to the European territories for whose external relations a Member State is responsible.”

Therefore, in respect of aviation and other important political questions, Gibraltar falls within the European Union. We are therefore more than disappointed—we are angry—that Spain is seeking to secure the suspension of Gibraltar from EU aviation dossiers. We have been very clear with the Commission and with other member state Governments throughout that such attempts by Spain to secure Gibraltar’s suspension are completely unacceptable, and would be illegal and, in our view, a breach of the European Union treaties.

The irony of all this is that several EU legislative measures now in draft would be of particular value to not only the UK aviation industry, but Europe’s aviation industry more generally. The British Air Transport Association estimates that the failure to make progress with draft legislation on air passenger rights is likely to cost British airlines up to £50 million a year—a figure that will be translated into higher air fares for passengers. The European Commission estimates that the single European sky initiative overall may provide up to €5 billion in greater efficiencies for the European aviation sector. Yet legislation in both policy areas—legislation that would bring practical benefits to citizens throughout Europe—is being stalled by Spain’s insistence on seeking to exclude Gibraltar from its application.

Let me deal with the debate at the Transport Council last year and what has happened since. Gibraltar continues to be included in existing single European sky II legislation, as required under the treaties. The Council has not reached full agreement on the replacement SES II measure, and therefore has no coherent position with which to take this issue to trilogue with the European Parliament. Following the Transport Council, which has been mentioned several times in this debate, the Government have engaged at a senior level with both the Italian and now the Latvian presidencies of the European Union and with the European Commission.

We have secured a clear assurance that this legislation will not be taken forward in a form that is unacceptable to us. I was asked whether, in the event of a measure being passed by qualified majority voting that excluded Gibraltar, we would take legal action. I prefer not to speculate too far on legal action in hypothetical circumstances because our objective is that treaties should be respected, and we believe that the Commission, with a duty to uphold the treaties, and other member state Governments who also have such an interest would support us in such an objective. I think that I have made it clear that we would regard the exclusion of Gibraltar as a breach of the article that I mentioned earlier in my remarks.

On unlawful incursions, we have continued to uphold British sovereignty over British Gibraltan territorial waters with the very professional work of the Royal Navy in Gibraltar to challenge incursions as they happen and by issuing swift diplomatic protests. Where incursions have been particularly serious, such as attempts to exercise jurisdiction in British Gibraltan waters by Spanish survey vessels, we have continued to take particularly strong diplomatic and political action. As was said earlier in the debate, the number of times we have summoned the Spanish ambassador is unprecedented for an EU NATO partner. The latest statistics I saw said that we had summoned the Spanish ambassador now more than the ambassador of any other country bar Assad’s Syria.

[Sir Gerald Howarth]

I am sure that we are all mightily impressed that the Spanish ambassador has been summoned to be reprimanded by my right hon. Friend, but what notice does Spain take? What is the result of his protests? What impact do they have?

[Mr Lidington]

After one summons in respect of an incursion by a survey vessel, that survey vessel’s time in Gibraltar waters was curtailed and the immediate crisis was ended. The various strong actions that we took—the Spanish Government know that a public summons is a very exceptional action for the UK Government to take—did contribute to making that difference. At that time, there were also direct political representations at ministerial and top official level to Madrid. It is not the case that a summons to an ambassador or a protest by note verbale are necessarily the only actions that we take. Such actions are often accompanied by political representations on the appropriate senior channels.

The number of unlawful incursions dropped from 496 in 2013 to 387 last year—about a 22% reduction—but that still leaves us with an unacceptably high number of incursions. We will continue to make it clear to Spain that, as an EU partner and a NATO ally, the escalation of tensions is bound to impose a cost on the bilateral relationship. The normal practice is that Spanish state vessels are challenged by the Royal Navy, and we follow that up with diplomatic and political protests. It is important to make it clear that, although incursions are a violation of sovereignty, they do not threaten or weaken sovereignty in the sense of undermining the strength of our legal case for sovereignty over those waters. That is what made the survey vessel incursions particularly serious. By purporting to exercise jurisdiction by going about survey work in British Gibraltan territorial waters, those survey vessels were acting in a way which, if unchallenged, could be interpreted as our acknowledging a loss or a diminution of our sovereignty over those waters. That accounts for the difference of the calibration of our response to those incursions compared with some of the others by, for example, Guardia Civil vessels.

I was asked about our assessment of naval resources. The Government’s assessment is that the assets, structure and procedures of the Royal Navy Gibraltar Squadron are commensurate with its tasking, including challenging unlawful maritime incursions within British Gibraltan territorial waters. We regularly assess the naval mission and the assets and people required to deliver it to ensure that its responsibilities can be carried out effectively, and I will certainly not rule out reinforcement of the naval mission or of other military assets in Gibraltar.

In making such a determination we would have to decide how such deployments would make a practical difference for good. For example, I was asked about arrests. The legal reality is that state vessels under international law have sovereign immunity from being boarded. That is a legal reality and a breach would have implications well beyond British Gibraltan issues and one would have to think through the possible consequences for British vessels in other circumstances and other parts of the world. When we discuss these questions in government and carry out these reviews, it is a question not just of which vessels and how many people are involved and so on but of which rules of engagement will apply if one dispatches additional reinforcements. We keep the matter under close watch and I have been having regular conversations with my right hon. Friend the Minister for the Armed Forces over recent months. The clear principle is that we will not budge in a resolute defence of British sovereignty over those waters.

We have been in close contact with the European Commission on border delays during the past few months and since the publication of the report and the Government’s response last year. At the request of the United Kingdom, the Commission sent a second border monitoring mission to Gibraltar on 2 July and subsequently wrote to both Gibraltar and Spain. The Commission has stated publicly that it has serious concerns about the lack of progress Spain has made in addressing its earlier recommendations and—critically, this has happened since the publication of the two reports—the Commission has said that checks that give rise to waits of several hours to cross the border are disproportionate. We are using the arguments about the freedom of movement of persons with the Commission, other member states and the Government of Spain. Spain has the right to impose such border checks as are proportionate and sufficient to provide safeguards against crime, smuggling and other illegal activities and it is a fact that not just we and the Gibraltan Government but the Commission, as guardian of that freedom of movement right under the treaties, is saying that those checks are disproportionate to the objectives laid down in European law. That is a significant step.

We continue to lobby the Commission on the need to ensure that Spain carries out its recommendations and to make it clear that we expect the Commission to take legal action should there be little movement.

My hon. Friend the Member for Cheltenham (Martin Horwood) asked about the possibility of a permanent monitoring force or unannounced inspections, as did the right hon. Member for Wolverhampton South East (Mr McFadden). I have already urged the Commission to carry out unannounced inspections and the Government of Gibraltar have made an offer to host a permanent monitoring mission if the new Commission is willing to undertake such an operation.

Spain has now begun construction work at the border area, saying that it is working to improve the system in line with the plans it has submitted to the European Commission, and we have started to see an overall downward trend in the delays, although the level of delays remains unacceptable. We continue to press the Commission to monitor the situation closely.

I do not rule out unilateral action by the United Kingdom under article 259 of the treaty on the functioning of the European Union. My caution about this option is that precedent shows that going to the European Court of Justice in such a way is not a swift process. My judgment for now is that we stand the better chance of securing the outcome we want for the people of Gibraltar if we work through pressure on the European Commission, using the arguments about enforcing European law, and seeing that Spain complies with it, than if we take unilateral action, which would put an end to the work in the European institutions to which we have committed ourselves to date.

[Sir Gerald Howarth]

My right hon. Friend is the embodiment of reasonableness—everything he has said about what his Department is doing is couched in terms of reasonableness and accordance with article this, that or the other—but people are fed up with the United Kingdom and our British overseas territory of Gibraltar being treated in a cavalier fashion by a NATO and European ally. We are looking for a bit of retaliation. To be perfectly candid, what he has done has had no effect. He said that we have reduced the number of incursions by 22%, but we need to send the Spanish defence attaché packing back to Madrid.

[Mr Lidington]

My hon. Friend may say that my manner belies this, but I can assure him that I am as fed up and frustrated as him or any of my hon. Friends about the way in which the Spanish Government have acted, but the Government collectively and I feel a grave responsibility to try to secure an outcome that will result in things getting better and not worse for the people of Gibraltar. That is guiding our judgments on precisely which actions we take.

I want to allow time for my right hon. Friend the Member for Croydon South to respond.

On the economy of Gibraltar and ad hoc talks, my right hon. Friend the Member for North Somerset (Dr Fox) pointed out that the economy of Gibraltar is flourishing despite all the problems thrown at it by Spain, with growth at about 10.3% per annum. In the Chief Minister’s budget speech last November, he said that those

“numbers will rank Gibraltar as one of the fastest growing economies in the world.”

In the past decade, Gibraltar has modernised and diversified its economy, and attracted new inward investment. It is an example to be admired. We need to be clear that, regardless of the extreme provocation that the Spanish tactics represent, they are not working—they are not stopping Gibraltar continue to grow and prosper. Gibraltar is thriving. I applaud the success and commitment that the Government and the people of Gibraltar have shown in defying the difficult circumstances that surround them.

The truth is that Andalucia, the poorest part of Spain, benefits hugely from the prosperity of Gibraltar, not only through the employment of thousands of Spanish citizens who travel to work in Gibraltar every day of the week, but through the spending power of Gibraltans in the Campo and southern Spain more widely. As my hon. Friend the Member for Gainsborough has said, that mutually beneficial economic relationship could be even stronger were Spain to see sense, open the border, and encourage cross-border links and mutual prosperity. That would benefit the people of the Rock and the people of Andalucia. I question why, at a time when about half of young people in Spain are tragically out of work, the Government of Spain resist the opportunity, even in that relatively small way, to enhance growth, prosperity and job creation in one of the most impoverished parts of their country.

[Dr Fox]

There is another way in which the prosperity of Gibraltar could be further enhanced, and that is if our NATO allies were to use the naval facilities in Gibraltar to an even greater extent. As I pointed out, the United States is one of the few allies that does this, largely because if any other ally even thinks about it inside NATO it comes under huge pressure from Spain, even intimidation and threats. Will my right hon. Friend take this opportunity to tell our NATO allies that they would be extremely welcome to use the naval facilities in Gibraltar, which would provide not only the alliance with something of a boost, but potentially employment and prosperity as well?

[Mr Lidington]

I am very happy to do so. Ships from any of our NATO allies would, I know, be more than welcome to call in to Gibraltar. When I went out with the Royal Navy Gibraltar Squadron during my last visit to the Rock, they pointed out to me with pride that they thought there was space in the docks in Gibraltar for one of the new aircraft carriers to moor when she is launched and able to visit that part of the world.

It remains our aim, and that of the Government of Gibraltar, to return to the trilateral forum—the dialogue between the UK, Spain and Gibraltar—which, as the right hon. Member for Wolverhampton South East said, did enable practical, mutually beneficial discussions between the three parties and helped to enhance trust between Administrations where there had been a lot of mistrust for historical reasons that we all understand. I deeply regret the fact that the Spanish Government have withdrawn formally from the trilateral process.

Despite that, we are working in the meantime on ad hoc talks that would be held at official level as a way of making progress on issues of mutual interest. The Spanish authorities have been involved in those conversations with us. We have at times been hopeful that the talks were about to come to fruition. So far we have not been able to strike that final agreement about the modalities of the talks. I hope that they can take place as soon as possible, because there are important practical questions to do with co-operation against smuggling and co-operation on issues to do with pollution, where I have seen complaints both from Gibraltar about Spain and Spain about Gibraltar. We need the two Governments to sit down and talk to each other, and it is important that the talks include all relevant parties, including the Government of Gibraltar and the Government of Spain.

The Government believe that there can be no compromise on the right of the people of Gibraltar to remain British for as long as they choose so to do. There can be no return to the bilateral discussions between the United Kingdom and Spain over sovereignty that characterised some of the talks in the past. Nor can there be any return to the idea of joint sovereignty, which was entertained by the previous Government in 2001 and 2002. The Government are determined to work to uphold and defend the interests of the people of Gibraltar, their right to live in freedom and prosperity, and it is that principle that will guide every aspect of our policy.

16:48

[Sir Richard Ottaway]

One traditionally at the end of these debates politely says what a great debate it has been. I thank all my colleagues for their contributions because it has been an excellent debate, but I have to confess that I am left with a feeling of disappointment about where we have got to with the debate. Concerns have been expressed about aviation, maritime activities and incursions, and border delays, and while we have been sitting here I hear reports of a delay on the border this afternoon. The Minister was asked whether he would rule out a reduction in the defence force, and while he said he did not rule out an increase, he did not say whether he ruled out a reduction. He was asked by Members on the Government Benches and on the Opposition Front Bench whether he would implement article 259, and he fundamentally said no, he did not accept this. The main reason was the delays, yet we have waited years to reach this point. If the process had started some years ago, perhaps that judgment would now have been reaching a conclusion.

There have been no fewer than nine speeches from the Back Benches today, every one of them calling for more robust action. This debate is taking place on a substantive motion that invites the Government to review their policy towards Gibraltar. I assume that unless the massed ranks turn up, the Government have accepted the motion. I have not heard whether my right hon. Friend intends to review the policy. I have the impression that there is no such review. He is concerned, he is frustrated, he feels thwarted, but there is to be no fundamental review. Hence, I feel that the debate has ended with a degree of disappointment.

Question put and agreed to.

Resolved,

That this House notes the Second Report from the Foreign Affairs Committee, Gibraltar: Time to get off the fence, HC 461, and the Government response, Cm 8917; endorses the Committee’s position that the behaviour of the current Spanish Government towards Gibraltar is unacceptable; regrets that trilateral dialogue between the UK, Gibraltar and Spain remains suspended; believes that the time has come for more concerted action; and invites the Government to review its policy towards Spain on Gibraltar.

Historic Properties (Disabled Access)

Thursday 8th January 2015 Commons Chamber

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

16:50

[Chris Skidmore (Kingswood) (Con)]

I start by declaring my interest as the secretary of the all-party group on disability.

This year marks the 20th anniversary of the passing of the Disability Discrimination Act 1995, a landmark piece of legislation that enshrined the right of disabled people to live their lives free from discrimination, to be treated equally to others, and to be given the same opportunities and experiences in life. The passing of the DDA ensured that it became unlawful for service providers to treat disabled people less favourably for a reason related to their disability. From October 1999, service providers had to make reasonable adjustments for disabled people, such as providing extra help or making changes to the way they provide their services. From October 2004, as the Act became fully implemented, service providers had to take reasonable steps to remove, alter or provide reasonable means of avoiding physical features that made it impossible or unreasonably difficult for disabled people to use a service.

The Disability Discrimination Act 2005 went further, making it unlawful for a public authority without justification to discriminate against a disabled person when exercising its functions. The DDA has been superseded by the Equality Act 2010, which places a duty upon service providers to make “reasonable adjustments” to ensure that disabled people are not placed at a substantial disadvantage in comparison with non-disabled people. This legal framework, protecting the rights of individuals and advancing equality of opportunity for all, has finally ensured that it is unlawful to fail to make a reasonable adjustment for access for a disabled person.

We have come a long way since 20 years ago, yet while we celebrate this historic milestone in legislation, I hope that in thinking about the 20th anniversary of the passing of the first Disability Discrimination Act, we can take the opportunity to understand that we can and should be doing more to campaign for equality of access for disabled people.

It is clear that this House has been determined to use legislation to ensure that discrimination is recognised as unacceptable, and that equal access for disabled people to all buildings, historic or not, is of paramount importance. Yet legislation can be effective only if we can at the same time enact a cultural change in attitudes and behaviour, and legislation is worthless without a determination to continually challenge ignorance and prejudice, intolerance and stigma associated with disability. Equally, our past achievements in law should not blind us to the reality that disabled people still face today. My hon. Friend the Minister may be wondering why I have raised the issue of disabled access to historic buildings in particular, but I believe that the particular issue is one that raises a far greater question about what we consider is acceptable for the treatment of disabled people when it comes to accessing some of the most important historic buildings in our land.

I ask my hon. Friend, when he walks out of this Chamber this evening, to look around and question whether Parliament itself, as a historic building, is really meeting the needs of disabled people. In this place of all places, where every man and woman is treated as equal, is it really acceptable that disabled people, upon entering these buildings, have to navigate entirely separate corridors of power? Is it acceptable that we have not managed to put our own House in order, to ensure that every citizen has the same right to access the same rooms and the same routes as any other?

[Sir Peter Bottomley (Worthing West) (Con)]

I hope that my hon. Friend is happy to allow me to take this opportunity to thank the Speaker’s art fund, together with the Schefer foundation, for contributing to the cost of installing a ramp to allow those who use wheelchairs to access St Margaret’s church—our church here in Westminster—which has made life much easier for the elderly, people with children and many others.

[Chris Skidmore]

I thank my hon. Friend for that intervention. I have personal experience of the enormous benefits that the ramp has already brought to St Margaret’s church. In late November I got married in the church, and the ramp allowed my wife’s grandmother, Mabel Hurst, who occasionally uses a wheelchair, easy access. She would otherwise have had to be carried in, or she would have taken a while to get up the steps. Families are already extremely grateful for that improved access. The alterations have been made sensitively and beautifully. It shows that we can adapt listed building without compromising their aesthetic appeal or historic nature.

I believe that we could do more on this side of the road, in this historic royal palace, to make such adaptations. Parliament itself may comply with the Equality Act in providing reasonable access, but the question we must now ask ourselves is whether in such public buildings it is acceptable access. I do not believe that it is, and I hope that with any future refurbishment we can set an example to the rest of the country by providing truly equal access to Parliament and its facilities.

Twenty years on since the passing of the Disability Discrimination Act, I believe that we also need to confront and act upon some uncomfortable truths about attitudes towards disabled access to buildings. Yes, the legislation may now be in place, but change is far from being effected. Only last month the charity DisabledGo published research showing that 20% of high street shops were unable to provide access for wheelchair users because of steps and no ramps. It is clear that many of those high street stores were constructed long ago and that their historic nature has prevented their alteration so far, but today that can no longer be acceptable. The Minister, given his remit, will fully understand the value that culture and tourism can bring to this country. With 12 million people in this country with a disability, and an overall purchasing power of around £200 billion, according to the Department for Work and Pensions, it makes no sense whatsoever to shut the door in the face of people who have a very significant part to play in our economy.

English Heritage has done much to promote inclusive access to our historic buildings and environments. As its website explains,

“historic buildings, landscapes and monuments, the physical survivals of our past are protected for their sake and ours. They are irreplaceable but sometimes they need to be changed...In most cases access can be improved without compromising historic buildings. The key lies in the process of information gathering about the building, understanding its significance and vulnerabilities and knowledge about the needs of people with disabilities”.

In 2012 it provided owners of historic properties and buildings with two excellent guides—“Easy Access to Historic Buildings” and “Easy Access to Historic Landscapes”—that highlight the value of equal access, setting out how physical barriers can be overcome with alterations and adaptations while at the same time navigating the “Approved Document M” building regulations, BS 8300, planning permissions and listed building consent, as well as setting out clearly that an inclusive approach to access recognises everyone as a potential visitor or customer, setting the challenge that each visitor, regardless of age or disability, should have an equally satisfying experience.

The document publishes many excellent examples of the improvements to disabled access that have taken place so far. I wonder whether now is the time to implement a full audit of historic buildings to understand the challenges that remain in increasing disabled access—in particular, which buildings do not come up to an accepted standard. I note that the Department has launched a comprehensive review of the access arrangements for, and treatment of, disabled sports fans at sporting venues. It should ensure that a separate review is carried out into historic buildings and properties, recognising their value.

17:00

Motion lapsed (Standing Order No. 9(3)).

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

[Chris Skidmore]

When, in preparing for this debate, I asked English Heritage whether there was anything that it would like to raise, it said that it would welcome a

“stronger steer from DCMS about the importance of improving access to historic buildings. We do our best but it seems that other requirements (such as improving cafes or providing family friendly access) can take precedence, and in a time of limited funds, it would be good to be given the go ahead to prioritise good quality and innovative solutions.”

In this 20th anniversary year of the DDA, will the Minister look into arranging for one of the sessions of the inter-ministerial meetings on disability to discuss access to historic buildings so that a clear communication from the Department can be given about the value of increasing and furthering disabled access to historic buildings?

The DDA and the Equality Act have done much to remove the physical barriers to disabled access. We must now go further and broaden our horizons to understand that attitudes will be the barriers of the future. I draw the Minister’s attention to Scope’s “End the Awkward” campaign, which highlights the need, above all, for attitudinal change. Sadly, accompanying research shows that two thirds of the British public feel uncomfortable talking to disabled people; over four fifths, or 85%, of the British public believe that disabled people face prejudice; and a quarter, or 24%, of disabled people have experienced attitudes or behaviours in which other people expected less of them because of their disability. Scope has highlighted the fact that attitude is the barrier that needs to fall. With everyday interactions with disabled people and greater public education about disability will come, I hope, increased understanding and acceptance of disabled people.

In investigating how access arrangements can be improved for disabled people in historic buildings, the Minister might reflect that attitude is indeed crucial, and that expanding disabled access to historic buildings should be seen not merely as red tape or ticking a box, but as an historic achievement in itself, reflecting our continuing need, as a society, to make the past relevant to the present, and as a chance for future generations to look back on our own historic achievements in improving disabled access. The Department should encourage the staff of historic buildings and properties to team up with local disabled groups to enact a conversation about how disabled people themselves can help to influence what is important and necessary for change in their local properties and buildings.

Finally, I note that 17 January marks disability access day. I hope that many historic buildings and properties will take the opportunity to highlight their equal access arrangements, and that the Minister will ensure that his Department highlights this important opportunity for historic buildings and properties across the country.

17:03

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

I am grateful to my hon. Friend the Member for Kingswood (Chris Skidmore) for calling this debate. He rightly alluded to the 20th anniversary of the Disability Discrimination Act. It is interesting to reflect on what happens to us over a period of 20 years. If my memory serves me well, the Bill that became that Act was steered through the House by the then Minister for the disabled, my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), who then went on to become Secretary of State for Wales, the leader of the Conservative party, and a very distinguished Foreign Secretary; and this year will see his retirement from this place. I believe that you were a special adviser at the time, Madam Deputy Speaker, and now you sit in that august Chair presiding over these proceedings. In the heartbeat of 20 years, what a rise to power.

I pay tribute to my hon. Friend the Member for Kingswood for the work he does on disabled issues. I am very interested in this issue, although a little frustrated, but let me elaborate on that. He asked whether I thought that Parliament was fit for purpose, and my answer is no, I do not think it is when it comes to access for disabled people. I remember a moment during my ministerial career when one of my officials, who is in a wheelchair, could not attend a meeting because the relevant lift to provide access to the meeting room was broken. That was a difficult occasion for him. We need to do much more in this place to lead by example. As discussions about the refurbishment of this place continue—various figures, which I am sure are far from the truth, about the cost to the public purse have been bandied about in the newspapers—I certainly hope that disabled access will be at the front and centre of our thinking. My hon. Friend put it extremely well when he said that no one with a disability should be denied access to any part of the estate where an able-bodied person can go.

[Sir Peter Bottomley]

May I tell the Minister that the House of Commons has done exceptionally well in one area? People going from this part of the building to Portcullis house through New Palace yard could roll a marble along the ramps, because little fillers have been put in to make sure the surface is smooth. I recommend that for other historic buildings and for every road. We should never have a ridge of even half an inch, when a bit of tarmac or some other filler can ensure that it is smooth. For someone in a wheelchair, we are doing better than anybody else on that, but not on the other things talked about by my hon. Friend the Member for Kingswood (Chris Skidmore).

[Mr Vaizey]

I take my hon. Friend’s point, which leads on to the debate about historic properties. I vividly remember taking a constituent of mine who is in a wheelchair around the town of Wallingford in my constituency a couple of years ago. It is effectively a mediaeval town: it got its charter in 1155, and still has its mediaeval pattern. Of course, it was hell on earth for him to go over the cobbles. For us, cobbles are a charming and wonderful part of the heritage of a historic town. That does not quite encapsulate the entirety of this debate, but it is a small insight into the circles that perhaps have to be squared.

I want to pick up another point made by my hon. Friend the Member for Kingswood. He said that we should not shut the door to people with disabilities in terms of their access to heritage properties. I would go further and say that if a visitor attraction—to use the jargon—opens the door to people with disabilities, it will get a really loyal customer. If it makes the effort to ensure that it can give people with disabilities good access to the property, they will come back. I cover disability issues in other parts of my portfolio, and people with disabilities tell me time and again that if theatres and sports stadiums take the trouble to make the visitor experience enjoyable for them, they will automatically think of that place when they are looking for something to do on a night out or a day out.

I take issue with the advice that my hon. Friend received from English Heritage. As a Minister, I have learned that when an arm’s length body does not have an answer for an assiduous MP, it tends to push the problem back on to the Government. One occasionally gets that from one national museum or another that says it cannot possibly do something because the Government have forbidden it, even though that is nonsense. I have never steered English Heritage towards putting its money into cafés or family-friendly facilities, although I would naturally applaud both, as somebody who likes a café and a family-friendly facility as much as a historic property.

I will certainly not stand in the way of English Heritage if it wants to put its money into facilities to enable disabled people to have access to its properties. It might come back and say that it does not have the money, but we are in the process of reforming English Heritage, which is something I have wanted to do for many years. Effectively, we are separating the two parts. My hon. Friend will be aware of its regulatory function. That is relevant to the debate because that part would sign off any changes to an historic property—for example, steps might have to be changed to provide disabled access. There are also the buildings that English Heritage looks after, and those will be owned by the Government and run by a charitable trust that has a contract with English Heritage. We are giving English Heritage £80 million to make that transition and effect repairs to its historic estate, to bring the buildings to the level of a first-class visitor attraction. I will take a steer from this debate and communicate to the chair of English Heritage my wish to know what plans he has to use that money to improve disabled access to its properties.

In one sense we are lucky to have just a few major players in terms of heritage properties, and we can get round a table five or six people who will probably represent 90% of the major heritage attractions in this country. They include the National Trust, Historic Royal Palaces—it is keen to help with Parliament, if you want to pass on that message Madam Deputy Speaker—and the Historic Houses Association. I therefore suggest a meeting with those key players, which I suggest my hon. Friend attends, to discuss their plans to improve access to historic buildings, and learn what plans are already in place and what changes have been made. It is a matter I feel strongly about.

Interestingly, access to heritage properties for people with disabilities has increased from just under 64% to around 67% of people with disabilities saying that they have visited a heritage property in the last year. The other key player that I should have named is the Heritage Lottery Fund, which gives grants to heritage organisations when there is a disabled element to the grant. The HLF was set up at roughly the same time as the Disability Discrimination Act 1995, and over the past 20 years it has awarded £36 million to 820 projects specifically aimed at benefiting disabled people, £18.5 million to more than 370 projects representing the interests of disabled people, and almost £9 million to 175 projects focused on disabled people exploring the history and heritage of disability.

As an example of what can be done, Historic Royal Palaces applied to HLF for a £1.6 million grant for Kew palace in London. It established an access panel of local disabled people who toured the building, echoing what my hon. Friend said in his speech about involving those who will use the building. It advised the project team on how best to maximise access, and made suggestions on a variety of issues, including graphics. The range of different issues on which advice can be given is interesting, and includes graphics, sound, tactile models and display case design. Physical improvements included a ramp to the main entrance, a lift to all floors that used the shaft of a former privy—that is a heritage term—and a lift to the undercroft where a new learning space was created. As a result of that project, people with mobility impairments gained access to all areas of the palace, and some parts of the building were made available not just to disabled people but to the public for the first time. Members of the project team developed their awareness of access issues faced by disabled people, and as a result, Historic Royal Palaces has established a successful model for working inclusively with local communities that will be used in other buildings under its care.

The HLF has also supported much smaller schemes such as the £4,500 grant to 365 Leeds stories, which uncovered and shared the hidden history of people with learning difficulties in Leeds by interviewing people who remembered Meanwood hospital. It has also supported performing arts group A Quiet Word, which joined members of Pyramid Arts, a learning disability arts group, and Leeds museum discovery centre to uncover and bring to life the hidden history of people with learning difficulties in Leeds.

Our heritage and arts organisations can also look at other issues. Only a few months ago, a visually impaired constituent came to see me because he was finding it very difficult to get a job. He has now secured a job with a private commercial company, but his real ambition was to work as a curator in a museum. I contacted a museum, which I had better not name in the Chamber, but it was not interested. It strikes me that it would be a huge opportunity if a museum employed someone who was visually impaired, because it could ask, “What is your experience when you come to our museum? What could we do to give you a meaningful experience, such as the opportunity to handle our exhibits and the provision of audio descriptions?” People think that all this stuff is too much trouble and cost, but when they get stuck into it, the cost ends up being much lower than they expect, and the enhancement of their facilities—and the opportunity to engage with a community that is too often shut out—is significant.

Finally, I want to express my frustration—as I often do in this House—about the silo nature of the way that Governments work. Like any Government, we have to work harder to join up policy. I had a meeting a couple of years ago with a previous Minister with responsibility for the disabled about access to music venues, but that ran into the sand. My Department does not have money for disabled policies, if I may put it that way. I do have the eAccessibility Forum, which is about encouraging the use of technology to provide access for disabled people to facilities. As a result, we have some video-relay systems so that when people ring a company, a sign-language interpreter is available on a video link. People said that we could not do that because it would cost £100 million. The first company to do it was BT and it cost £20,000. We have written twice now to the FTSE 100 companies to ask them to implement the system, but we are making slow progress. I have now said that I will not have another meeting of the forum unless the Minister for Disabled People, my the hon. Friend the Member for Forest of Dean (Mr Harper) is present. It is really important that policy is joined up.

I have opportunities as Minister for the digital economy, because technology is massively changing the opportunities for disabled people. I am also the Minister with responsibility for performing arts venues, museums and historic properties, all of which are visited by people with disabilities and can benefit from having an audience or visitors who will be very loyal if more attractions make significant efforts to improve access for them. The glass is half full, because many venues already make those efforts, but the more they do so, the more reward they will get from loyal and grateful customers.

Question put and agreed to.

17:18

House adjourned.

Petition

Thursday 8th January 2015 Petitions

Thursday 8 January 2015

Proposed changes to Penkridge Library (Staffordshire)

Thursday 8th January 2015 Petitions

The Petition of members of the community in Penkridge and the surrounding area,

Declares that the Petitioners fully support Penkridge Library; further that the Petitioners recognise the important role that the library plays for all members of the local community; and further that a local Petition urging for the proposed changes to the library to be reconsidered was signed by over 3,000 individuals.

The Petitioners therefore request that the House of Commons urges the Government to encourage Staffordshire County Council to reconsider proposed changes to the library, and to keep Penkridge as a full-service library, staffed by trained librarians, offering a range of services, workshops and groups for all users.

And the Petitioners remain, etc.—[Presented by Jeremy Lefroy, Official Report, 8 December 2014; Vol. 589, c. 750.]

[P001404]

Observations from the Secretary of State for Communities and Local Government:

The Government acknowledge the important part that libraries play in local communities. However, we have no plans to change the statutory duty under the Public Libraries and Museums Act 1964 that requires every library authority in England to provide a “comprehensive and efficient” library service for people in the local area. The Act provides a framework within which local authorities can operate and does not seek to be overly prescriptive.

The Government have urged councils to protect frontline services by sharing back office functions, cutting wasteful expenditure, improving procurement to get more for less, and bringing senior pay under control.

As democratically elected organisations local authorities are independent from central Government and are responsible for managing their financial budgets and for making spending decisions in line with their priority needs. Councils now have more power than ever before, but they need to act in their residents’ best interests.

Changes or revisions to library service provision are for Staffordshire County Council to determine, ensuring that the service is comprehensive and efficient, while based on local need and within available resources.

Westminster Hall

Thursday 8th January 2015 Westminster Hall

Thursday 8 January 2015

[Sir Edward Leigh in the Chair]

Winter Floods 2013-14

Thursday 8th January 2015 Westminster Hall

[Relevant documents: First Report of the Environment, Food and Rural Affairs Committee session 2014-15: Winter floods 2013-14, HC 240 2014-15, and the Government Response, HC 701 2014-15.]

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

13:30

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Sir Edward, I welcome you to the Chair and wish you a very happy new year. I welcome the Minister and other colleagues as well.

I am delighted to have this opportunity, on behalf of the Select Committee on Environment, Food and Rural Affairs, to debate our report on the winter floods 2013-14 and the Government response to it. In the major event of 2013-14, we can see indications of how the climate is changing. Extreme weather events, such as those in 2012-13 in Yorkshire and the Humber region, and other places, were followed even more dramatically by the events of 2013-14.

We have had a number of significant contributions to the question of reducing the impact of climate change on these flood events. Notably, Sir Michael Pitt, in his 2007 review, looked to achieve a one-stop shop to respond to flood events and considered how to end the automatic right to connect. He recognised that surface water flooding was perhaps the most dramatic new form of flooding in that year alone. We then had the Flood and Water Management Act 2010.

I want to focus on the Committee’s key conclusions and recommendations. First, I recognise the damage done by the widespread flooding last year, particularly in southern England, which cost small businesses alone an estimated £1 billion, not to mention the adverse effects, which took their toll on local residents and rural communities. Certainly, the Committee commends the widespread help and the immediate relief effort provided by the emergency services and others, particularly in the Somerset levels and across the southern half of the country, in response to these floods.

Our key recommendations are as follows. We must be seen to work—particularly the Environment Agency and other the partners involved, including local authorities—with local knowledge. We recognise the role of riparian owners in making good the damage that is done and preventing flood events, and the role of internal drainage boards. It is important that I say at this stage that I am an honorary vice-president of the Association of Drainage Authorities. I pay great tribute to its work in low-lying flood areas such as my own in north Yorkshire, and in East Anglia, the Somerset levels and elsewhere. I commend the work of the coalition Government in seeking to introduce internal drainage boards where they do not currently exist.

In a key recommendation, the Committee firmly believes that we should end the arbitrary split between capital and revenue expenditure and move to a total expenditure. I recognise that this would mean amending Treasury accounting rules, and as most of the recommendations in our report demonstrate, and as reflected in the Government’s response, we are perhaps looking to the next five-year strategic spending review. However, we would like to put down a marker now.

Ofwat and Ofgem have recognised that utility companies such as water companies have moved to a total expenditure approach. It was unacceptable and most frustrating that, as the waters were rising and causing increasing damage in Somerset—I am sure my hon. Friend the Member for Somerton and Frome (Mr Heath) agrees—there was an argument about the size of a pump from Holland to be used to keep the water at bay. Was the pump sufficiently large that the expenditure would constitute capital expenditure or was it deemed to be smaller, therefore falling under what we call revenue or maintenance expenditure? We would like to see an end to that type of argument.

We highly recommend that we revert to a programme of regular maintenance and dredging. A stitch in time saves nine. The most frequently used figures show that for every £1 spent on maintenance and dredging, £8-worth of savings are made in future.

We would also like funding to be more closely matched between maintenance and capital—I will explore that in a little more detail—and the amount in the maintenance and revenue budget in the next spending review should be announced more than one year ahead. The Committee welcomes the Government’s six-year spending forecast, but we believe that, as far as possible, that should also be reflected in the revenue and maintenance spending.

One fact to record is that not one flood defence failed in the winter floods of 2013-14. It cannot be in the interest of any future Government, or in the public interest, for any existing flood defence to fail. That is why it is so important that the maintenance of these capital pieces of kit, not just the regular maintenance and dredging, is protected.

We have said in previous reports that we should not rely on public partners alone, and that is reflected in this report. I personally applaud the Government’s approach to partnership funding. We entirely accept, looking critically and constructively at flood expenditure, that it is a little bit like the health service: there will never be enough money to go round. I note that there are several flood warnings today, particularly for the East Anglia region: Norfolk, Suffolk and Essex. There will always be areas vulnerable to flooding. It is a matter of debate how many houses will be protected under present plans. It is important that we open up to partnership funding and private partners. I welcome and applaud the investment through United Utilities and other water companies in this regard. If we can encourage water companies to invest in upstream flood defences, that will be excellent.

This is the moment to recognise the Pickering “Slowing the Flow” project, which is largely a public partnership approach. Slowing the flow by planting trees upstream, soaking up the excess water, creating bunds and having a softer, more natural flood defence, as set out in the Government’s own natural environment White Paper, shows that there is a lot more we can do. The money will go much further on those projects than on very expensive, hard, physical flood defences, which are capital intensive. Obviously, we will need a number of those, but we need to consider more imaginative processes as well.

The Government have committed £2.3 billion of capital spending up to 2021, but as I have mentioned we must not be seen to neglect the maintenance of flood defences and watercourses if homes, businesses and farmland are to gain better protection against future flooding risk.

The Association of British Insurers has said that, over the last four years, revenue expenditure is down 18% and maintenance expenditure down 40%. That 40% figure relates to dredging and repairing existing walls. We join it in urging the Government to seek a closer match between revenue and maintenance budgets and capital expenditure. The Committee has repeatedly urged the Government, and do so again today, to increase revenue funding in line with funding for new capital schemes so that the necessary maintenance, including dredging and watercourse maintenance, can be carried out to minimise flood risk.

Our understanding is that funding for maintenance remains absolutely at a bare minimum, and that has to be addressed in the next spending review. As I said, it is important to announce maintenance funding more than one year ahead so that everyone knows what the programme is. We must not neglect the costly one-off capital investment that is needed to repair existing flood defence walls. In June last year, the Committee advised Ministers that more fully funded plans are needed to address the backlog of maintenance and to maintain the growing number of man-made flood defences. Regular work to dredge and keep rivers clear can be an essential flood maintenance measure, yet we heard from the Environment Agency in taking evidence for the report that that is exactly what gets squeezed when flood defence budgets are tight. The outgoing chair of the Environment Agency, Lord Smith, told the Committee that the main lesson he had learned from the winter floods while at the Environment Agency was

“to push as hard as we possibly can for keeping and increasing maintenance expenditure alongside capital expenditure, and making sure that Government is aware of the degree of priority that has to be given to that.”

That is the message I think he would like to bring to the House’s attention this afternoon. In the Association of Drainage Authorities’ evidence, it said:

“Fully funded plans should be drawn up to address the backlog of maintenance needed across the country.”

It said that measures to prevent flooding, such as regular maintenance, are less costly and more predictable in the long run.

I will focus on the work of riparian owners. When the pilot schemes have been completed, we would like to see them rolled out nationally. We applaud the public sector agreements the Government have negotiated with the internal drainage boards. The Committee is keen to see internal drainage boards maintain more flood defences. It is important to recognise that internal drainage boards, including the one in my area of the vale of Pickering—I met with it two or three years ago—raise thousands of pounds through a precept. It passes the money on in large measure to the Environment Agency, and it goes into a central pot for regular maintenance. That money never comes back to the vale of Pickering to do the essential maintenance that is required.

The pilot schemes are absolutely essential in ensuring that where the money exists and is being raised locally, such as in the vale of Pickering and other internal drainage board areas, it can be kept and used, utilising local knowledge and the engineering skills that they can buy in. We recognise that local knowledge is the key and that flood risk management priorities must reflect local circumstances. We urge the Government to end, as far as possible, any confusion over maintenance responsibilities—as we conclude in our report—through a widespread education campaign, so that maintenance activity is carried out by internal drainage boards and local landowners, particularly where they are riparian landowners as well.

I repeat that we need to rely more on natural flood defences, the planting of trees and other softer flood defences. We need urgently to ask the Treasury to look favourably on ending the arbitrary division between maintenance and revenue expenditure and capital expenditure. If we can urge the Treasury to amend the accounting rules for areas such as yours, Sir Edward, and mine that are prone to all forms of flooding—coastal, fluvial, river, surface water and groundwater flooding—that one change alone would revolutionise flood defence spending.

I end with a couple of questions to the Minister. The Government are looking to secure £600 million of partnership funding and external funding while achieving 10% efficiency savings over the next six years. It would be interesting to hear how that matches up. It is important that, after the Committee’s debates and the evidence we took, the staffing in the Environment Agency on flood defences has been protected, which is a welcome development. Those staff—many of them were not wearing Environment Agency jackets or uniforms, so local people did not know they were there—and the emergency services played a crucial role in cleaning up in the immediate aftermath of the winter floods. Will the Minister explain what the impact on the six-year investment programme will be if the conditions of partnership funding and external funding and the 10% efficiency savings are not met?

Will the Government look favourably on allocating revenue funding in future for more than one year at a time? Revenue funding has only been allocated to 2015, but we have a six-year commitment on capital funding. That is not helpful to those in the firing line for maintaining flood defences. The Committee recognises that there are only finite funds and that there is a need to balance competing demands on a finite budget, but the avoidance of flood through defences should, as far as possible, take priority over cost-cutting.

The natural environment White Paper was an excellent document, and the Government and the Department could do a lot of work to build on it, looking at softer flood defences and other issues. My hon. Friend the Member for Brent North (Barry Gardiner), if I may call him that—we served on the Committee together—has done a lot of work on the natural capital aspects of the White Paper. The Government are committed to a green, low-carbon economy, and the planting of trees and other softer flood defence options are all part of that strategy.

We commend the report and its recommendations in totality. We recognise that the Government have finite funds and that we should look to other partners as well. As an MP representing one of the most rural communities, I recommend that agricultural land be recognised as worthy of flood defences, and we press the Government further on that. The National Farmers Union gave us the staggering figure of the amount of farming and food production land lost each year through flooding. When I was an Essex MEP, there was a rather alarming proposal on managed retreat that sent the heebie-jeebies through the farming community, so I do not know that we necessarily want to go there. If our food security is coming under increasing pressure, we should protect farmland as far as possible. We set great store on regular dredging and maintenance. The fundamental arguments on merging maintenance and revenue funding, announcing maintenance funding further in advance and removing the arbitrary division between capital and revenue expenditure by going, if Ofwat and Ofgem allow it, to a total expenditure budget would go some way towards protecting farmland. Local farmers and local landowners who, through council tax, are contributing to the funds raised by district councils, county councils and the precept to the internal drainage boards probably feel they are contributing more than anyone else to flood defence. It is important to recognise the contributions being made locally.

The Flood and Water Management Act 2010 is pretty much up and running in my area. I applaud North Yorkshire county council’s work in setting out its flood management risk assessment and for having the foresight to get somebody who used to work for Yorkshire Water to set it up. I hope that can be replicated by other local authorities.

I commend our conclusions to the House. We are grateful for the opportunity to debate them, and I look forward to the debate and the Minister’s response.

13:50

[Chris Ruane (Vale of Clwyd) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. I apologise for the fact that I may have to leave early. I am on the Infrastructure Bill Committee, which sits at 2 o’clock, although I have a little leeway from the Whip.

My constituency was flooded in the winters of 2012 and 2013. In 2012, more than 500 houses were flooded in St Asaph by a combination of three days of heavy rain, river flooding and a high tide. In the winter of 2013, the community of east Rhyl was flooded after 50-foot waves landed in an impoundment area, which subsequently burst and flooded 140 houses. Over the past two or three years, my constituency has had the second highest number of homes flooded in the UK.

This issue is of particular concern to me as the MP, Assembly Member Alun Jones, my local councillors and, most importantly, the residents and constituents of the Vale of Clwyd. I have taken a great interest in this issue since those floods. I have campaigned on it, spoken in Parliament, questioned Ministers through written and oral questions and had productive meetings with the Minister—I thank him for his comprehensive responses. I have had meetings with Welsh Government Ministers, Natural Resources Wales, the local authority and local emergency services about the flooding in my constituency.

I congratulate the Environment, Food and Rural Affairs Committee on its report, and I thank the Government for their response. I will touch on a few of the issues raised by the Committee’s report and the Government’s response. Riparian ownership is a key issue. Knowing who owns what and who is responsible for what can be complex. In the coastal area of my constituency, the railway line runs only metres from the coast, so Network Rail, which cleans the ditches, Natural Resources Wales, Welsh Water, the local authority and local land owners are all involved. It can get complicated and there is often a lot of finger-pointing—people say, “This isn’t our responsibility; it’s their responsibility.” There is a lot of confusion. I welcome the Committee’s recommendations concerning the clarification of riparian ownership and who does what about cleaning and maintaining ditches.

Recommendations 10, 11 and 12 address the allocation of funding, which is a critical issue. As has been said, for every pound invested, £8 will be saved. If somebody said, “If you give me a pound, I’ll give you £8 back”, who in their right mind would not accept such a good deal? In coastal and low-lying communities, that issue is of absolute importance. Investment is crucial for protecting our properties, homes and communities.

To be critical of the Government, they have tried to cloud this issue in a number of ways. The graph of investment for the past 15 years shows a massive increase until 2010, as investment went up to £500 million or £600 million from about £30 million or £40 million. In 2010, a deliberate decision was made to cut back the funding. When questions were asked about the cut-back, the actual inflation rates were not used—I will not call it false accounting—so the Government were painted in a better light than they should have been. The Committee said that the additional funding was not actually additional but reallocated funding—money taken from here to there by sleight of hand. We need more openness and honesty about the funding of flood defences in the UK.

Investment should be increased and, as the Committee said, it should be transparent and open. Predictions should be made so that local authorities, Natural Resources Wales and the Environment Agency in England can rely on the funding and plan for expenditure on flood improvements because they take a long time to come to fruition. A lot of research must be done about the topography, geology and geography of the area and about displacement. If an improvement is made to one area of a coast, we must look at what will happen further down the coast. It takes a lot of time to get the resources and funding together, so long-term financial planning is crucial, and it needs to be improved.

The replacement of the statement of principles—the Flood Re scheme—should have been finished in July 2013. Labour introduced the scheme in 2007 because after the Gloucestershire floods we realised that people needed help. The Government came to power in 2010, and they had three years to replace it. They went right to the wire, and beyond, as the deadline was extended from July 2013 to August 2013.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

The hon. Gentleman has made a number of points, and I will address as many of them as I can later, but the issue of Flood Re is particularly important. It is a very different system to the statement of principles, which it replaces—and the hon. Gentleman is absolutely right to point out that the previous Government put it in place. But there was nothing in train when the Government came to power to bring forward the Flood Re system, which will be established this year. We have moved a huge distance, and it is a shame that the hon. Gentleman is painting it in a negative light.

[Chris Ruane]

It is not just me who is upset about it, but my constituents. After the 2012 floods in my constituency, I spoke to a young mother in St Asaph, whose insurance increased from £269 to £1,269 per year and whose excess increased from about £500 per incident to about £10,000 per incident. Hopefully, the issue will be settled by next summer. A cap on the flood element of household insurance of approximately £200 for the lowest band will be introduced, and we are grateful for that. However, in the two years since 2012, my constituents have had to pay enormous excesses and they have had enormous increases in their premiums. They are ordinary people—it is not a rich community. In fact, east Rhyl has an elderly population on fixed incomes, who do not have the privilege of being able to reach into their back pockets and stump up the additional amounts that the insurance companies require. The issue should have been settled two years ago and it has not been, although I welcome the fact that it will be.

[Rebecca Harris (Castle Point) (Con)]

On the hon. Gentleman’s point about people being unable to cope with the large excesses that they have been charged, my constituency has had two successive floods and a lot of my residents who were flooded last summer did not make a claim. They paid for it themselves and kept quiet about it because they were concerned that it would affect not only their insurance premiums but the potential sale of their houses in the future.

[Chris Ruane]

I thank the hon. Lady for that intervention. That might be possible if the flood waters just lap over the person’s front garden or run just underneath their floorboards, but it is not possible when they have five feet of water in their house. The floods in my constituency were serious. In St Asaph, a 92-year-old lady died in five and a half feet of water. These are serious issues that require the Government’s serious consideration.

The communities in east Rhyl and St Asaph responded tremendously. One of the few good things to come out of the floods was the community spirit that was engendered. Some individuals were heroes, such as John Wyn Jones. His own property was threatened, but instead of securing his valuables, he was out there on the flood bank warning everyone to get out of their homes. He was washed off the edge of the flood bank into his own estate—thank God it was that way and not into the river—by a one-metre wave.

Among other local residents involved in the aftermath, Colin Marriott has been a fantastic researcher and has challenged the local authority, Natural Resources Wales, the Welsh Government and me with facts and figures, bringing his evidence to bear to ensure that when remedial measures are taken to improve the flood banks in St Asaph, they will be taken correctly. I pay tribute not only to John Wyn Jones and Colin Marriott, but to dozens of other local people in St Asaph who helped during the floods and to the community as a whole, which came together and raised hundreds of thousands of pounds.

The same was true in Rhyl. The town council opened a flood fund and, if I may put it like this, funds came flooding in, to be distributed among people affected. I pay tribute to the mayor of Rhyl, Andy Rutherford, who organised the fund, and to local residents who, again, have been at my heels and at the heels of the local authority, the Welsh Government, the Assembly Member and the councillors. For example, I spoke to Charles Moore on Monday, and he and other residents have been ensuring that we do our jobs. That is why I am in the Chamber today, to do my job representing their views in the Houses of Parliament. What they want to see, however, is not my hot air, or that of Ministers or whoever, but action. The key to that is investment.

Moving on to the points made in recommendations 3, 15 and 16 of the report, which concern river maintenance and natural environmental land management, that is a key to improving flood prevention in an environmentally sensitive and, dare I say, cheap way. I was switched on to this by George Monbiot, in a fantastic article from The Guardian or The Observer. I know that he is not the farmers’ best friend, but what he said in the article about contour planting made sense.

Contour planting is the planting of trees along a contour line of a vale or valley so that when the water falls on a mountainside or hillside and rushes down the slope, it does not go into the river, rivulet or stream and on into the sea, but hits the contour planting of trees or bushes and is then vired underground. George Monbiot, in his article, said that such planting is 67 times more effective in viring water underground than a meadow is. The beauty of such a scheme is that the whole mountainside does not have to be planted; only 5% planting will result in a 30% drop in flooding and in rainwater hitting the rivers further down the valley. Planting the whole mountainside would reduce flooding by 50%, but only 5% planting along a specific contour can achieve massive reductions in flooding in our vales and valleys, such as the Vale of Clwyd.

Contour planting was pioneered by farmers in south Wales, although they were not planning for flooding. The farmers wanted a barrier of trees, shrubs or bushes behind either side of which their sheep or cattle could hide during storms or high winds. They noticed incidentally, however, that flooding was reduced. The idea was therefore pioneered in Wales and we should learn from it. It is a Welsh solution to a UK or even international problem.

I met with the Welsh Minister responsible for flood defences, Carl Sargeant, on Monday, when he visited east and west Rhyl. I mentioned contour planting at a meeting I had secured with him and the Assembly Member, Ann Jones, to discuss the issue in Wales, but it is too important an issue not to have any cross-border co-operation possible between the Minister present in the Chamber and Welsh Ministers. We also need the Environment Agency in England and Natural Resources Wales to co-operate on such schemes, because many Welsh rivers run through England and many English rivers run through Wales. We need a degree of co-operation.

Contour planting definitely needs to be looked at and schemes piloted. There would be an additional benefit for seaside towns with estuaries and rivers in their hinterland. Towns such as Rhyl have failed to achieve the higher European standard for water bathing quality because of the impact of agriculture in the hinterland. I do not want to be too rude, but when horses, cattle and sheep defecate and urinate or whatever, that gets washed down into the river and is smeared along the coast, possibly altering the readings for bathing water quality. If contour planting took place, some of that water would be vired underground and naturally filtered, so that there would be a better chance of seaside towns, many of which are struggling, having better water quality. Many of those towns are there only because of the quality of their water; they were established between the 1850s and 1950s because of the popularity of bathing. If they do not reach the higher standards, the towns will be penalised in economic and tourism terms. Contour planting is a win-win situation and we should at least start to pilot such schemes.

I pay tribute to the Welsh Government Minister, Carl Sargeant, who visited my constituency on Monday. He announced £1.9 million of additional Welsh Government funding for the extension of coastal sea defences in Rhyl. The Welsh Government have already spent £7 million on raising the harbour wall by more than 1 metre. They now hope to extend that by 450 yards towards the town centre. They have also spent £4 million on raising the banks of the River Clwyd. All that is welcome.

[Sir Edward Leigh (in the Chair)]

Order. I am getting concerned about the time, with other Members trying to get in and the hon. Gentleman wanting to leave early. He has been speaking for 16 minutes so perhaps, I gently suggest, he could think about drawing his remarks to a close.

[Chris Ruane]

I apologise, Sir Edward, I thought we were short of speakers, but I will conclude my remarks.

I was paying tribute to the Welsh Government, to flood defences Minister Carl Sargeant, his predecessor Alun Davies and their boss Edwina Hart. They are co-operating well with Natural Resources Wales and Denbighshire county council to improve the flooding situation in my constituency. The Minister in the UK Government should make an assessment of what has gone on there and perhaps learn from Wales.

14:07

[Mr David Heath (Somerton and Frome) (LD)]

It is a pleasure to serve under your chairmanship, Sir Edward.

I will not say that it is delightful to come back to the subject of flooding, because I feel that I have spoken about it at rather frequent intervals over the past year, but it is extremely good to be having a reasoned and, I hope, informed debate. I am grateful to the Chair of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), for introducing it and for the work that her Committee did on the report.

I welcome the report, which was done when we were under the greatest pressure in Somerset, but it might be instructive for a future Committee to look back on the consequences in areas such as Somerset—what was done later, what worked and did not work—to look, with the benefit of perhaps a year’s experience or so, at whether what was done was effective in reducing flooding, and to take evidence from local people. I know that there was not the opportunity to do that at the time.

In the main Chamber earlier, in business questions, the shadow Leader of the House, the hon. Member for Wallasey (Ms Eagle), said that the Government were unaware for a long time of what was happening in Somerset. I have to say that that was absolutely, categorically not the case. Looking back at the record, I first raised the issue in the House on 6 January, which I think was the first sitting day of last year. Furthermore, the issues on the Somerset levels have been known for many years. Again, without claiming any clairvoyance on my part, but simply because I speak for my constituents, I have repeatedly drawn attention to the need to do more to protect the levels, including in a clear statement in 2009 on what dredging was needed.

It is reasonable to say that nothing would have removed completely the hazard last winter, when we had unprecedented levels of rainfall, but things could have been done that would have mitigated the effects, got the water away more quickly and reduced the impact on local communities. There were three basic reasons why those things were not done.

The first is the basic neglect of an artificial landscape. To me it is obvious that we need to maintain the structures that drain the Somerset levels if we want to retain the current form of its unique landscape, but that was not obvious to those who thought it was somehow possible to reduce maintenance while still preserving that unique environment.

The second reason is the malign effects of cost-benefit analysis and Treasury rules. We understand why they are in place, but they do not help when a small, dispersed population faces a massive problem. They are designed to protect cities and urban areas, and do not protect rural areas. I am glad that the hon. Member for Thirsk and Malton drew attention to the need to look at the importance of not only agricultural land but rural communities in flood protection zones.

[Barry Gardiner (Brent North) (Lab)]

The hon. Gentleman is absolutely right to highlight the importance of maintaining the landscape. Does he agree that certain changes in land management practice have been a real contributory factor to the problems in Somerset? In particular, there is the pursuit of maize as a crop, which leaves soil bare over winter, allowing it to flow into rivers and be washed away, and the increased subsidy for removing vegetation from the uplands. Changes to the landscape as a result of that changed land management practice have had a really important impact.

[Mr Heath]

It is undoubtedly true that changes in land management have an effect. Land compaction and the growing of different crops on more upland areas affect the rate of flow into what is effectively a large sponge. I have lived in Somerset all my life, and the landscape is still pretty recognisable as what it was when I was a boy. We could not really say that there has been a revolution in agronomy in the area; it is still principally a livestock area, and crops are grown there as forage rather than as commercial crops. Although the hon. Gentleman makes an important point, which I will come back to later, it is possible to overstate land management as part of the cause and effect.

The third reason for the lack of action I mentioned was in my view an environmental heresy, namely the decision, for some reason, that the watercourses in Somerset were the centre of ecological interest, rather than the land in between them. That is, I am afraid, nonsense. The watercourses are artificial drainage channels. It was ridiculous to “save” the flora and fauna of the drainage channels but lose the irreplaceable flora and fauna living on the land in between them; that has been the effect.

I will deal quickly with what has happened since. The Government have done an awful lot of the things we asked them to, and I am grateful to Ministers for that. We were lucky: we had the attention of the national and, indeed, the world media for a short period of time. If the Thames valley had flooded before the Somerset levels, we might not have attracted the same attention. We secured visits from very senior members of the Government: the Prime Minister made a number of visits, as did the Deputy Prime Minister and more than one Secretary of State, as well as the Minister with responsibility for floods. We were very grateful that they came to see for themselves what needed to be done.

[Chris Ruane]

This may sound a little sour, but even though 500 houses were flooded in St Asaph and 140 were flooded in east Rhyl, the Prime Minister failed to visit either community.

[Mr Heath]

I am very sorry to hear that. In the previous year the Prime Minister did not put in an appearance in Somerset, so perhaps it was a case of hitting the right moment and of the strength with which representations were made. Certainly we had the Government’s attention, which had an effect.

To deal first with the immediate response, before I move on to the Government’s response I have to pay tribute again to the huge voluntary effort. People behaved quite extraordinarily in helping their neighbours, and people from further away helped those whom they did not know. There were enormous numbers of charity donations. I spend a day at the Somerset Community Foundation opening letters that were quite heartbreaking, with donations from people who could ill afford them but were giving them because they felt it was necessary to help those in distress. As many people will know, there were donations of forage for animals from farmers in other parts of the country, which were hugely welcome. That has led to the setting up of what I hope will be a permanent exchange, which will be of value.

[Rebecca Harris]

Is the hon. Gentleman aware that a delegation from Castle Point Motors arranged for a large shipment to go down to the Somerset levels last year, so help was coming from as far away as Benfleet and Canvey Island?

[Mr Heath]

I hope the hon. Lady will accept my grateful thanks on behalf of my constituents, because that was literally a life-saver for people and livestock in my area.

There was, I have to say, a belated response from the military, an issue that might need to be looked at. Perhaps the principal local authority did not ask for help sufficiently promptly, but until the Prime Minister intervened there was also a difficulty with the cost of involving the military. That should not happen. The Royal Marines are on our doorstep, so we do not expect that they will not be able to help when we are underwater. They are well placed to assist and would have been happy to have done so, had they been able to. When they were introduced, they were very valuable.

Local authorities worked extremely well to ensure that people were safe and had alternative housing. Enormous pumps were introduced—the hon. Member for Thirsk and Malton drew attention to them in her remarks, and they were quite the biggest I have ever seen. A great benefit of what happened is that we now have proper hard standing, so that those pumps can be deployed at short notice in future. However, that raises questions about some of the rather elderly pumping stations on the levels. Those stations saw their best years possibly 50 or 60 to 100 years ago. How much longer they can continue to do their unsung work I do not know.

After the immediate issues were dealt with, next came the new protections, key among which was dredging. There was a great deal of scepticism in my constituency that the Environment Agency would carry out the dredging it had promised. Such was the suspicion that it was felt that the agency would waft a dredger in the direction of the River Parrett and the River Tone and that would be about all that was done. But it was not; the dredging was done with dispatch and real urgency. The initial dredging has been completed and there is now a study looking at other areas of the river system that will need action. I hope that will go ahead in the very near future.

Where necessary, individual communities were protected. For instance, the ring barriers around Thorney and Muchelney pottery will make a real difference. They are not quite finished yet and we look at the skies with some trepidation, but they are well in hand. The Environment Agency has undertaken asset repairs on a wide scale, including at Beer Wall, and many other parts of the system are now improved.

One of the issues that grabbed the media’s attention was access problems, such as those to the village—then an island—of Muchelney. Although there was not as much water ingress into properties there as there was at Thorney, it was cut off for a long time and people found it hugely difficult to cope with that. The county council is attending to that by raising one of the road accesses to Muchelney. Unfortunately, that work has not been finished in the time scale that we hoped would apply, but we can look forward to that happening soon. We have also had a major resilience study on the greater south-west and access issues.

I turn to the big money issues, including the establishment of the Somerset rivers authority. Crucial to the Committee’s report is how we get local expertise, together with external professional expertise, to work on the entire water system. At one point I despaired that we would never reach the conclusion that we should create a Somerset rivers authority, simply because the Department for Communities and Local Government—there is no Minister from that Department here today, so I can say what I think—said that it could not be done, as the creation of such an authority would set a precedent and the funding mechanism was too difficult. I found that frustrating, so I am pleased that the Secretary of State for Environment, Food and Rural Affairs managed to find the immediate funding required, but that prompts the question of where such funding will come from in the future. We can get it going, at least, but it is essential that a sustainable funding system is put in place.

There is the question of how we use the Sowy and Kings Sedgemoor drain complex as a major extension to the drainage system. Again, that involves big engineering issues, but feasibility studies have been done, and I hope that we will make progress on that in the near future.

The biggest project of all is the Parrett sluice—or barrage, depending on what people choose to call it—which will keep the sea out at high tide and ensure continuous flow in the right direction rather than the wrong one. That will help us to keep the water levels lower. So, what is not done? Apart from—

[Sir Edward Leigh (in the Chair)]

Order. Before the hon. Gentleman comes on to what is not done, may I remind him that two of his colleagues are yet to speak? Could he keep an eye on the time and perhaps bring his remarks to a conclusion, so that his colleagues can get a decent innings?

[Mr Heath]

I will happily do so, Sir Edward. Is this not a three-hour debate, though? In which case, they would have a further hour each.

[Sir Edward Leigh (in the Chair)]

That is entirely my fault. The hon. Gentleman can go on for as long as he likes.

[Mr Heath]

I am most grateful, Sir Edward. Having been encouraged to go on for as long as I like, I probably will not, now. I am sorry to have reminded you of that, but I did feel that an hour was probably sufficient to allow hon. Members to say what they wanted.

I come to the issues that still need to be dealt with. One of them is insurance, which was mentioned, although I think in slightly the wrong way, by the hon. Member for Vale of Clwyd (Chris Ruane). Flood Re is coming along and, even though I did not have personal experience of working on it in the Department for Environment, Food and Rural Affairs, I know how much hard work was put in by Ministers at DEFRA and the Treasury and everyone else over a long period to try to secure agreement with the insurance industry to get it in place. However, until it is operational, there is a difficulty, in that people’s insurance premiums are increasing substantially.

The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall (Dan Rogerson), went to my constituency and met local authority members and others recently to discuss insurance; I am grateful to him for that. It particularly irks people to see their premiums going up just as protections have been built. They are therefore paying much higher premiums even though their risk has reduced substantially since last year owing to the work and investment put in by the Government. That cannot be right, but that is, I am afraid, something that has been reported to me too many times. I hope that that will be dealt with.

On the second issue, the Government and their agencies get a partial tick. The Environment Agency has very much improved its relationship and information flow with local communities. It was not good; indeed, most people felt that the management did not really understand their issues. I must say that that was no reflection on local officers, who did an extraordinary job and were recognised for having done so, but there was a “them and us” feeling, which has not entirely vanished.

I will give two examples from a recent visit I made to Aller. First, there was a degree of falling out between the Environment Agency and landowners about appropriate compensation for work done on their land. It would appear that the Environment Agency had a rather high-handed attitude to such work, though that probably came from its lawyers rather than the officers directly involved.

Secondly—this worried me even more—while the floods were still in progress, ballast was put in place, at short notice, to help protect the sides of a watercourse. However, the ballast had just been dumped. The landowner had said, “If you put that there like that, it won’t be there come next winter,” and they were right; it all washed away. That is just silly and a waste of money. The message to be taken from that is to listen to the people who really know the countryside and understand what happens on land that they own and see every day of the week. I hope that the Somerset rivers authority will help to that end.

We then have the upstream issues, which, again, the hon. Member for Vale of Clwyd mentioned. I do not think we yet have a comprehensive and sustainable view on how we mitigate flooding by river catchment planning and by, for instance, using pillar two money to encourage planting on higher ground and changes in agricultural practice where appropriate—all the things that will help farmers on slightly higher ground to farm water to a point at which they reduce the flow and, therefore, slow the ingress of water into what used to be the great mere, the Somerset moors and levels, so that it can be removed in an orderly way. I would like to see much more attention given to that.

Indeed, on urban drainage, we have the sustainable drainage systems, but I am not yet convinced that planning is based on real understanding of concepts of water management. That goes both ways.

[Miss McIntosh]

I am grateful to my hon. Friend for mentioning SUDS. Does he not think that if we stopped building in inappropriate places and ensured that planning permission for future developments was given only once SUDS were in place, that would go some way towards creating greater resilience to future floods?

[Mr Heath]

I do. We need a much more aggressive statement of concern from the Environment Agency and, where appropriate, the water companies, that says that there is an issue that the planning authority must address, and the planning authorities would need to respond to that.

The problem is really not that difficult to understand. When the floods were at their worst, I went down a flooded road, Aller Drove, and the one thing that really struck me was that a lot of the houses there were bungalows that had been built in the past 30 or 40 years on what is more than a floodplain—it is an inland sea, on reclaimed land that is below the level of the river that runs alongside them. The same thing can be seen in Moorland village in the neighbouring constituency of Bridgwater and West Somerset. That is nonsense. Even our iron-age predecessors knew how to do that properly. There are archaeological remains in Somerset, in the village of Meare. It is very famous—the Glastonbury lake village. The lake village was completely built on stilts, because people there knew what would happen every winter, and knew that building on the ground was rather futile.

[Rebecca Harris]

I am enjoying and agree with the interesting points that the hon. Gentleman makes. He is absolutely spot on. He spoke about the need for the organisations and agencies to take more account of what people who know the land have to say. Does he agree that sometimes the Environment Agency or the water companies do not object to a local plan for housing on what all the local people know is a floodplain? It is often completely baffling to local people that their better knowledge of such issues does not seem to be taken into account.

[Mr Heath]

I am still a great believer in folk memory. People who have been around for a few years can point to where the water level reached in their grandad’s day, because we remember that sort of thing. We can say, “You build there, and it may not be this year or next year, but some time, you will be underwater. You either need to find a different site, need to construct your building in a different way, or need a mitigating factor that provides the protection that is needed. It is not for the Government eventually to come and bail you out when you have built a stupid building in a stupid place and it is underwater, so get it right in the first place.” The other side of the coin applies in terms of lack of water, and I hope that the Minister may accept the representations made by the water companies for more of a statutory interest in planning when they feel that there is a danger to their water supplies from various forms of construction or utilisation of land resources.

If we get these things right, we will be moving in the right direction. I turn to my biggest concern. So far this year, I have not had to put on more than my wellies—on my feet at least—in order to visit constituents. Wellies have been sufficient, but last year, they were not; I needed a boat. That may all change this weekend—who knows? The Somerset levels will always flood, and anyone who thinks that what has been done will prevent them from flooding does not, I am afraid, recognise the nature of the landscape and the environment. However, as I have said so many times, there is a world of difference between 3 feet deep for three weeks and 10 feet deep for 10 weeks, and that is what we are asking the Government to deal with.

The Government have done a very good job in recognising the concerns that I and my neighbours in Somerset have been raising over the last year. Having spoken on this subject 18 times, I think, in the last year, I would love to think that this may be the last time I will have to. However, the Minister can be absolutely assured that if the race against time to get the remaining things in place is lost, and if we have major flooding again in Somerset and people are forced out of their homes and trapped on islands created between the villages for the third year running, I will be making a lot of noise about it, as will my constituents, and we will want to know why.

[Sir Edward Leigh (in the Chair)]

I am grateful to the hon. Gentleman for his gentle progress through the beautiful hedgerows of Somerset. I now call Martin Vickers for similar progress through the beautiful hedgerows of Lincolnshire.

14:33

[Martin Vickers (Cleethorpes) (Con)]

Absolutely, Sir Edward—as you well know, Lincolnshire is the greatest of our counties. It is always a pleasure to serve under your chairmanship, and I congratulate the Chairman and members of the Environment, Food and Rural Affairs Committee for the work they have done in producing this timely report. It is also good to see the Minister in his place yet again. I think this is the fifth time that he has responded to a flooding debate in which I have spoken. He will be pleased to know that tempting though it was to have an action replay of one of my previous speeches, I spent time this morning producing a different one.

Despite what we have heard about Somerset and the levels and so on, I think I am right in saying that in terms of the number of properties flooded, the Humber region suffered worst following the December 2013 tidal surge. As I have pointed out in previous debates, the Humber ports, in particular, are vital for maintaining supplies to industry. Thirty per cent. of the coal that supplies our power stations passes through the port of Immingham in my constituency. Had the port been out of action for weeks, rather than days, it would certainly have meant a major disruption to power supplies throughout the country.

I mentioned that in the floods of late 2013 and early 2014, the Humber was the most affected area. I think I am right in saying that more homes were flooded in my neighbour constituency of Brigg and Goole than in any other constituency in the country at the time of the surge—my hon. Friend the Member for Brigg and Goole (Andrew Percy) asked me to pass on his apologies; he wanted to speak in this debate, but he had a prior, long-standing engagement in his constituency.

I note that in the introduction to the report, paragraph 3 states:

“Nevertheless, last winter showed that there are lessons still to learn about: the capability of the country’s flood defences; the suitability of the Government’s flood risk management priorities; and whether sufficient funding is available in the face of increasingly frequent weather events”.

Despite all the work that has been done over the last 12 months—I acknowledge that that is the case—there remains, in my constituency and elsewhere, I am sure, considerable concern not just among residents who know that their properties remain at risk, but within local authorities, drainage boards and the farming community, all of whom have considerable expertise in such matters. Their concerns are understandable, particularly when we read paragraphs 11 and 12 of the report. Paragraph 11 states:

“The Environment Agency has permissive powers (but not a duty) to carry out flood and coastal risk management work and to regulate the actions of other flood risk management authorities on main rivers and the coast. Local councils have powers to carry out work on other watercourses and coastal erosion protection assets, except for watercourses within Internal Drainage Board (IDB) Districts and public sewers (which are the responsibility of IDBs and water companies respectively).

Paragraph 12 goes on to state:

“We heard evidence that there is confusion over the division of responsibility for maintenance activities, particularly in relation to the maintenance of watercourses. Regardless of the legal division of responsibilities, many people perceive maintenance to be solely the responsibility of the Environment Agency. The Flood Hazard Research Centre at Middlesex University (FHRC) is concerned that: ‘responsibilities are unclear, confused and fragmented…in the case of maintenance of watercourses, it is increasingly assumed that the Environment Agency will undertake those maintenance activities including those for which there is a legal duty on riparian owners to perform.’”

Members throughout the House will bear witness to the fact that when we have cases involving water, there is always confusion about whether it is rain water, sea water, or surface water. The reality, of course, is that if someone’s home or business is flooded, they do not care where the water came from. They only want it sorted out and reassurance that action will be taken to ensure that it does not happen again.

If I may quote the report again, paragraph 14 states:

“Defra must work with the Environment Agency to improve public awareness and understanding of the division of maintenance powers and duties, particularly in relation to”—

yet again it comes up—

“watercourse maintenance, and to ensure that riparian owners discharge their watercourse maintenance duties.”

Rather than improving public awareness, would it not be better to consolidate the various responsibilities into, if not one, at least a smaller number of agencies?

In respect of riparian owners, I rather suspect that many of them are like those living close to an ancient parish church who suddenly find that they are responsible for the maintenance of the church tower, which needs thousands of pounds spending on it to keep it standing. The fact is that most of them do not know. If they do, they try to avoid it, and more often than not, even if they accept it, they find that they do not have the resources to carry out the work. That leads to long legal battles and no resolution to the problem.

In my Adjournment debate about flooding in my constituency last January, I referred to the knowledge of farmers, local councils and others who serve on internal drainage boards. We have heard from previous speakers today how important it is that local knowledge is used. At that time, I was pleased with the Minister’s response, and I am pleased that at paragraph 38, this report states:

“Where responsibility for maintenance work is devolved to make the best use of local knowledge and expertise, the allocation of Defra funding should reflect this to support the organisation undertaking the work.”

I also urge that local expertise has some input into the allocation of resources. We must make better use of local knowledge. Despite all the warm words, I am still not sure that that is happening sufficiently.

Sir Edward, you will recall the floods in 2007, when I was working as your constituency agent. After those floods, we toured the Gainsborough constituency. We saw homes, farms and businesses that had been flooded, and the message that we got was, “We knew this was going to happen.” The local people said, “We told the planners and the Environment Agency this was going to happen.” The local knowledge knew better, but seven years later, we still have exactly the same issue. I am sure that, during that time, work has been done to try to bring in local people and all the various types of local expertise, but the fact is that seven years on from the 2007 floods, the same message was coming through to me and, as we have heard, to other hon. Members.

I very much support the recommendations in paragraphs 28 and 29 of the report that greater recognition be given to the importance of agriculture as a “major industry” and that funding allocations

“recognise the economic and social value of agricultural land.”

Now we come to dredging. The public remain unconvinced by official reassurances that it is of limited value. At paragraph 32, the report states:

“Historically, rivers were dredged more frequently to remove silt to improve land drainage and support agricultural production. Over the past seven years Government policy has established the Environment Agency’s priority as managing flood risk and not land drainage.”

It is not clear to me from the Government response whether the Environment Agency’s priorities remain unchanged in that respect. Perhaps the Minister could clarify that in his reply.

The Minister will be aware of the work done by the Humber local enterprise partnership, local authorities and other agencies in producing a report that has been submitted to his Department. The report calls for a 17-year programme costing £1.28 billion. That, of course, is a huge amount of money—or is it? It would be used over 17 years to protect the whole of the Humber estuary, which is of great strategic importance. I suggest that that is a serious proposition and affordable.

My hon. Friend the Member for Brigg and Goole and I have met not just DEFRA Ministers but the Chancellor of the Exchequer, and all the Humber MPs met the Prime Minister, to press our case. It is clear from their response that they recognise the importance of the matter not just for residents, but for the strategic case in respect of industry. The £80 million announced by the Chancellor in the autumn statement was widely welcomed by my constituents and, indeed, throughout the region and it will allow preliminary work to be done, but I hope that the Minister will be able—if not today, in the very near future—to provide the reassurance that is urgently needed that a longer-term commitment to fund the proposals will be forthcoming not just for the residents, but because of the massive investment coming into the Humber region and the great potential that it has to bring prosperity not just to the area itself, but to the UK as a whole.

I acknowledge, of course, that there has been limited time since the proposal was put forward five or six months ago. It would be unreasonable to expect DEFRA to be able to make announcements now. Obviously, before a commitment can be made to spend £1 billion, a lot of work will have to be done, but I hope that the Minister will agree to provide some reassurance, particularly to industry and investors, through a meeting between key stakeholders such as Associated British Ports and Network Rail, which have key assets in the area, and the local authorities, which have put together the proposal. If he or, indeed, the Secretary of State herself would agree to a meeting in the near future, that would be helpful. I think that it would give some reassurance to all concerned.

It has been a very traumatic period for many of my constituents since December 2013, when their homes and businesses were flooded. We have made some progress. We are extremely grateful for the £80 million that is already on its way, but I hope that the Minister can provide, as I said, the reassurance that is needed for the future.

14:45

[Rebecca Harris (Castle Point) (Con)]

I would like to reiterate what a pleasure it is to serve under your chairmanship, Sir Edward, and to add my congratulations to the Select Committee on this report. My constituency did not suffer in the particular winter that it refers to. We survived the tidal surge because we have the best tidal defences in the country. However, we have had serious problems with surface water flooding. There was a small, very localised amount of flooding last winter, but it was a particular issue in August 2013 and again in July 2014. We believe that well over 600 properties were affected. It is impossible to get the correct figure as a result of the enormous reluctance of people to admit that they were flooded, because of the fear of the impact that that would have on both their insurance and the value of their homes, but we have had two very significant flooding events. Much in this report is of considerable relevance to the experience that we have had in my constituency. After those dramatic events, it became clear to all my residents that not enough maintenance had taken place in previous years and, in their view, the various organisations responsible were not working together in the way in which they should.

I place on the record again my great gratitude to the Department, both for its own review of my flooding event and for allowing the chief scientific adviser, Sir Mark Walport, to do an independent review of what had happened. That was critical to restoring the confidence of my residents and, I think, had quite an impact in terms of ensuring that the various agencies stepped up to the plate on this occasion. I have to say that they have done that. There is still work to do, but a huge amount of work has been going on regarding the maintenance of watercourses around my borough. That has brought to light a lot of problems and inadequacies underground. There is the problem of appalling connections; there are people whose drains are not connected to anything at all.

The issue raised in the report about awareness of responsibility and confusion over maintenance responsibility was writ large in Castle Point. Shockingly, we discovered that quite a lot of the organisations—the county council, the Environment Agency and the water company—were not aware who owned which part of the stock. If someone is not sure whether they own a particular bit of stock, it is probably quite unlikely that they have been maintaining it properly. Some of my residents’ suspicions have certainly been found to be right and we are getting, I am pleased to say, to the bottom of it.

It was likewise with private landowners who have a riparian responsibility. As my hon. Friend the Member for Cleethorpes (Martin Vickers) mentioned, it was quite a shock to some of them to discover that they had responsibilities; they did not realise that. I am very grateful to my local county council, which has put in some gratings and grilles to try to protect parts of the watercourses to ensure that debris is not flushing through to people’s private properties. It is sometimes very difficult for them to deal with the problem.

We definitely need greater understanding not just among organisations and agencies but among the public of the importance of watercourses and whose responsibility it is to keep them clear. Frankly, I suspect that gangs come from London and fly-tip in Castle Point, and they have absolutely no regard for the fact that dumping an old sofa in what looks like a dodgy old ditch is quite likely to cause someone to flood down the line in a couple of days. We have lost touch with our understanding of the land and the importance of watercourses, and we need to bring that back. I know that the Environment Agency has great difficulty in trying to deal with the culprits who do fly-tipping, but they need to be educated about the damage that they could be causing to people.

There is now much more partnership working in my borough, I am delighted to say. The organisations are talking to one another. They are doing their gully cleaning and what have you in consultation with one another, and a lot of progress is being made.

We now have the Canvey urban drainage survey, which is a comprehensive survey of all the problems—largely underground—on Canvey Island. An unusual feature of Canvey Island is that it is below sea level, in effect, at high tide, surrounded by a fantastic flood defence wall. There are 45,000 people living there, which causes particular issues for water management. The physics make it quite important that we get things right, so the programme is an important one. I am in the strange position of being quite enthusiastic when I see it raining, because although I worry about my residents flooding, I know that the more rain we have, the sooner we will get the answers to our queries from the testing and telemetry that is going on underground to work out what is happening with our watercourses. I suspect that we will be able to come cap in hand to the Department with a bid for funding when we have the results of that survey later this year.

I am enormously grateful for the Chancellor’s announcement in the autumn statement of more than £20 million for flood defences in Castle Point. I find myself in agreement with the Committee when they talk about loosening the rules governing what is maintenance and what is capital spend. That money is notionally capital spend, although there are some capital projects that one can undertake that lead to better maintenance, such as automatic dredge clearing and telemetry. The Environment Agency could be quite clever about that. It is sometimes hard to say what is capital and what is maintenance, but we need ongoing maintenance.

[Mr Heath]

I make the observation from my years of leading a county council that sometimes a certain fuzziness in that definition is helpful. Being able to wrap up some revenue expenditure as capital or capital expenditure as revenue, depending on the rules applied by the Treasury that year, is extraordinarily helpful in making sure that whatever needs to be done is done.

[Rebecca Harris]

From the point of view of my residents, whatever needs doing should be done, and as much fuzziness as possible would be appreciated. I have seen evidence of some fuzziness, which I am grateful for, from the various agencies already. We are, none the less, grateful for the money.

A DEFRA report mentioned the need for tree planting to mitigate the situation. That is not, strictly speaking, relevant in my area but, in some cases, the removal of large numbers of trees to build housing developments has clearly altered the water table. In my constituency, a housing development in Kiln Road, Thundersley seems to have altered the water table greatly. That was not anticipated during the planning process and therefore not taken into account. That reinforces the need for a firm statement from Government, the Environment Agency and other agencies to the effect that before housing is put in, the flooding capacity must be looked at carefully. Such consideration must cover both the urban drainage capacity and the network that it will be looped into—which may be totally inadequate, however good the standards are on a new estate—and whether the development will change the water table. In too many of the numerous housing developments in Castle Point, such things have not been taken into account, much to the cost of my residents.

I hope that the Minister will make a statement on the progress with Flood Re, because it is critical. Residents have told me, as we have already heard, that even though a considerable amount of flood alleviation work has been done in their area, and even though they have been grateful recipients of the protect and renew grant—because they flooded last summer as well—and have made considerable improvements to the flood-worthiness of their property, they are still being told that they have to pay enormous premiums and increased insurance costs. One constituent told me that her insurer had withdrawn from the ABI over Flood Re and would not be part of the scheme. That is an enormous concern to me, and it will be a major problem in an area such as Castle Point. I would be grateful if the Minister could give us an update on the progress of negotiations over Flood Re, and tell us whether he is aware of the issue that I have raised.

[Mr Charles Walker in the Chair]

I conclude by saying that I am very encouraged, oddly, by how much progress has been made by the Department and the Environment Agency in their understanding of the importance of flood risk as a result of the devastating and horrendous events that have occurred, which have really upped everyone’s game and focused attention on the issue. We have been talking about climate change for years, but we are increasingly addressing the other side of the question, namely that if we are going to get climate change, we need to adapt so that it does not damage our residents’ lives and security. I am delighted that we are looking at that as a major issue for the country. I warn that I will keep pressing my local authority, my local council and my water company, as marvellous a job as they are doing, to keep doing more and working harder, because the job is not done yet.

14:55

[Barry Gardiner (Brent North) (Lab)]

I begin by welcoming you to the Chair, Mr Walker, and thanking you for your guidance in the remainder of the debate. I congratulate the hon. Member for Thirsk and Malton (Miss McIntosh), the Chair of the Select Committee, on an interesting report. I echo the tribute that several hon. Members have paid to the volunteers who helped others during the floods, and to those who worked around the clock to save life and property.

The risk of flooding has increased and is increasing. The Government abandoned our focus on reducing flood risk, and they abandoned the commitment they made before the 2010 election to deliver on the findings of the Pitt review, which would have reduced the cost of flooding to well-being and the economy. In that, the Government failed the country last winter. In addition to gradual changes in patterns of rainfall and a rise in sea level, climate change is likely to result in an increase in the frequency and severity of extreme weather events such as the floods and storms of last winter. The risk of catastrophic flooding happening in England within the next two decades, causing in excess of £10 billion in damage, now stands at one in 10—a 10% risk. That is the risk of a flood 10 times more damaging than the 2013-14 floods and three to four times more damaging than the widespread flooding of 2007. The Minister will know better than anyone that we are completely unprepared for such a flood, which would be four times greater than the largest civil emergency since the end of the second world war.

[Dan Rogerson]

I am keen to hear the hon. Gentleman develop his argument on the way forward, looking at the Select Committee’s report and the Government’s response. He seems to be suggesting, however, that actions taken or not taken by this Government over our period of office led to the flooding of properties during the winter floods of 2013-14. I should be grateful if he let me know specifically which of those properties flooded as a result of a change in policy. We heard from my hon. Friend the Member for Somerton and Frome (Mr Heath) about some policies that had been changed over a number of years, and there are schemes that have been in development in other parts of the country, which may have a problem. I am concerned to clarify whether the hon. Gentleman was alleging that there were properties that were flooded through the fault of the Government, rather than as a result of the extreme weather. The future is a different matter, and we can debate that at some length, but I am specifically concerned about the winter of 2013-14.

[Barry Gardiner]

It is quite clear that the Government abandoned the focus on reducing flood risk. They took it out of the Department’s priorities. That was one of the first things done in 2010. They abandoned that focus and reduced the budget dramatically, and as a result the Environment Agency was much less well prepared, financed and resourced to cope with the floods. The Minister knows perfectly well that hundreds of posts were taken out of the Environment Agency, not only back-room posts but front-line ones.

[Dan Rogerson]

It is absolutely true that we delivered efficiencies right the way across Government. The hon. Gentleman knows the financial position that the Government were left when we came into office. The point that I sought to make was not about the available resources and so on, but about the results. I am sure he would agree that it is possible to be more efficient and still have guaranteed outcomes. There have been problems, and it is devastating for anybody to experience flooding. I will have the opportunity to talk about that and to respond to some other points later on—

[Mr Charles Walker (in the Chair)]

Order. The Minister is making an intervention, not a speech.

[Barry Gardiner]

I am grateful for your guidance, Mr Walker. I am happy to engage with the Minister— we have engaged in many debates on such issues—but he has to acknowledge that, after coming into office in 2010, his Government specifically removed flooding from the Department’s priorities. He can only accept that that meant that the country was less well prepared for last year’s floods and is now critically less well prepared for the future. I am interested to see whether the Minister will pick this up in his remarks, but we now have a 10% risk of a flood that is 10 times greater than the flooding of 2013-14 and four times more damaging than the widespread flooding of 2007. The Minister knows that that issue must be addressed, and unfortunately the Government have not even begun to address it. Last year’s floods have passed, and the broken promises to flooded communities have been forgotten. The Government think they have got away with it.

I will briefly address the Government’s responsibility for the impact of the 2013 floods, but my comments will focus on how policy should have changed since the floods and how policy has not changed. Among the Government’s blunders, the 2013-14 floods stand out as an example of the real pain that incompetent Governments can cause to communities and businesses—I acknowledge that the Minister touched on that. For the communities and businesses affected, the floods were not simply a natural disaster. The Government slashed investment in flood protection when they entered office, and with that they broke the promise they made before the election to deliver on the findings of the Pitt review of the 2007 floods.

[Miss McIntosh]

The Committee obviously greatly misses the hon. Gentleman. From the evidence we have heard I am having great difficulty reaching the same conclusion of a 10% increase in the risk of flooding. On what is he basing that conclusion?

[Barry Gardiner]

I am happy to advise the hon. Lady that I am basing my conclusion on the reports and work of the adaptation sub-committee and the Committee on Climate Change. If she is interested, I will happily send her the references.

The Government not only cut the budget for new defences; they decided to stop maintaining existing defences properly, and they cut the budget by 20%. Why? Because they cannot cut a ribbon on an essential maintenance project—they need new projects for that. The decision to remove flooding from the Department’s list of priorities was never just about the previous Secretary of State’s illiterate theories on climate change; the larger issue is the Government’s rejection of the responsibility to protect people from risks that are beyond their control. It was interesting to hear comments earlier in the debate about the need for the Government to step in and about Flood Re, which I echo. Both coalition parties supported the Pitt review strategy that the previous Labour Government were delivering before 2010, but both parties abandoned it straight after the election because they felt they could get away with it. They crossed their fingers and hoped that no one would notice the unbuilt defences, the collapsing sea walls, the eroded riverbanks and the clogged up culverts. Forty-six of the Pitt review’s 92 recommendations have not been implemented.

[Mr Heath]

Before the hon. Gentleman gets too carried away with the idea that, somehow, the flooding in Somerset was all the result of the current Government’s misguided decisions, I remind him that the rivers in Somerset, the Parrett and the Tone, have not been dredged not for four years but for 25 years. We drew attention to that throughout the period of the Labour Government. In 2009 I told the House:

“I am convinced that if we had proper dredging of some of our rivers and proper clearing of debris and strengthening of banks on some of the smaller tributary streams, it would make a substantial difference to the way in which we deal with these matters.”—[Official Report, 12 March 2009; Vol. 489, c. 553.]

It was not done by his Government, so let us stop the nonsense of pretending that the 2013 floods were the result of this Government’s actions. They were the result of long-term neglect.

[Barry Gardiner]

I am sorry that the hon. Gentleman is getting so exercised. He was the responsible Minister in the Department at the time, and I understand that he wishes to protect his record but, equally, he must accept—I am sure he knows this—that after the 2007 floods the previous Government made huge efforts both to ramp up the funding—[Interruption.] He does not disagree with that.

[Mr Heath]

I am telling the hon. Gentleman that not a penny was spent on dredging in Somerset, which is where the floods were. Does he remember?

[Barry Gardiner]

The hon. Gentleman has a very selective memory, because the floods were not only in Somerset. In fact, more houses were flooded on the Thames estuary than in Somerset, so he must be selective in his memory. My point is that, after 2007, the previous Government undertook a huge programme and established the Pitt review. Both the hon. Gentleman’s party and the Conservative party said they would continue to implement the review, but neither did so when they got into government. He cannot say other than that because it is the truth, as he knows. I would be happy to give way to him once again if he wants to deny it on the record, but it is the truth, and I am afraid he really has to accept that.

Flooding not only destroys property, it makes homes unliveable for months and sometimes years. Flooding ruins businesses and destroys crops and livestock. We learned from the 2007 floods that those affected by flooding display between a twofold and a fivefold increase in stress and depression. The effect of flooding on people’s lives is enormous and long lasting, which is why prevention is so important, but the Government chose to cancel new flood defences, slash maintenance and sack front-line flooding staff.

The Government like to talk about competence, but we all remember the chaotic infighting between the previous Secretary of State for Environment, Food and Rural Affairs and the Secretary of State for Communities and Local Government when so much of the country was under water. We all remember the failure to recognise the emergency until it hit the south-east. The Chair of the Select Committee alluded to the argument over the size of the pump and the capital expenditure and revenue dispute, which delayed action at the time. I agree with her call to consider this in terms of total expenditure, and I hope that change will eventually come. Her Committee makes an important point on that in its report.

We all remember the Prime Minister’s cruelly disingenuous promise that money is no object, and it is difficult to decide whether the original statement or the retraction of it in November marked a lower point. Will the Minister confirm how much of the flood support package for home owners and businesses has been received by those affected? Thankfully, many people were protected because, as the Committee on Climate Change has pointed out, the previous Government implemented 46 of the Pitt review’s key findings to increase our resilience to flood emergencies. We established the flood forecasting centre in 2008 as a joint venture between the Environment Agency and the Met Office. As the December 2013 tidal surge hit, the Environment Agency issued 160,000 flood warnings, and an estimated 18,000 people were evacuated from homes in coastal areas. At one stage during the surge, 64 areas had the highest warning level in place, reflecting a danger to life.

What lessons were learned? What has changed since the floods of last year? Many thousands of people were forced to leave their homes last winter. Transport was disrupted for weeks, in some cases months. Businesses were wrecked, and many closed and never reopened. After the flood, the Government promised that they had reviewed their approach to flooding and that the autumn statement would contain a proper long-term flood risk strategy. Well, the National Audit Office and the Committee on Climate Change reviewed that investment programme and found that nothing has changed. Three quarters of flood defences in England have not been maintained according to their identified needs in 2014-15. The Government’s investment plans will see the number of properties at significant risk rise by 80,000 every five years.

The budget for the ongoing maintenance of flood defences was cut by 20% in the 2010 spending review and has not been restored. The failure to maintain flood defences to the required standard has increased the risk of high-consequence flood defences, such as sea walls, failing. The failure of such defences would put lives as well as livelihoods at risk. I need to impress on the Minister that that is not simply my view but that of the National Audit Office and the Committee on Climate Change, and he really needs to take notice of it.

The failure to maintain flood defences to the required standard has led to a huge increase in flood risk. The Government have put the headline first. Of the

“over 1,400 schemes going ahead across the country”

announced by the Chancellor, only 310 are fully funded, and only 97 of those 310 are new. Some 1,119 of the 1,400 schemes may never receive full funding, because they are eligible for only 20% grant in aid funding—the rest has to be made up by partnership funding. The black hole in the Government’s funding announcements could be as large as £830 million.

The Government say their plans will reduce flood risk by 5%—true, but disingenuous, and the Minister knows that very well. The Government have put a cheap headline ahead of reducing risk for the most vulnerable. Instead of focusing on reducing risk for high and medium-risk households, they have focused on moving households at low risk into the lowest risk category. That is completely irresponsible. Limited capital investment should be protecting homes at high risk, which is a one in 30 risk, or at medium risk, which is a one in 75 to a one in 100 risk, rather than being used to provide additional protection to those at low risk, which is a risk of one in 1,000 or more. That is how the Minister gets his 5%, but it is meaningless—it is wrong.

This decision will put more homes, lives and livelihoods at significant risk. In a sign of just how far the Government are willing to go to get their headline, they chose to exclude consideration of risk to life from their analysis. If the Minister wants to deny that, let him challenge me now, but the evidence is there in the impact assessment: the Government have left out of it any assessment of risk to life. How could a Minister ask their civil servants to prepare such an assessment for them?

Does the Minister agree with the Committee on Climate Change and the National Audit Office that the number of properties at risk of flooding is increasing? If not, will he give us his figure for the predicted net change in the number of properties at high and medium risk over the next five to 10 years? Will he confirm that although his 5% net reduction figure is true, it is also true that the number of properties at high and medium risk has increased? Will he have the good grace at least to blush when he acknowledges that?

Will the Minister confirm that the long-term investment strategy assumes, against the evidence, that development on the floodplain will stop after 2014-15? The Committee on Climate Change says that 20,000 new properties are built on the floodplain each year, including 4,000 a year in areas of significant flood risk. Does the Minister disagree?

The Government’s strategy says:

“We have tested our findings against a range of possible climate change projections using the latest scenarios.”

However, if we read further, we find that the strategy assumes minimal climate change. The assumptions section on page 18—I challenge the Minister to read it—states:

“The main assumptions in this ‘baseline’ result are that the climate will change in line with the medium rate of change in UKCP09”—

UK Climate Projections 2009—

“and that no allowance is made for development in the flood plain.”

[Miss McIntosh]

I am following the hon. Gentleman’s argument carefully, although it is for the Minister to respond from the Government’s point of view—good luck! However, what would the Labour party do were it to form a Government? That is the missing link.

[Barry Gardiner]

The hon. Lady and I have worked in partnership for many years, but I did not expect her to be my straight man in quite that wonderful fashion—I was just coming to that point, so I thank her very much.

The point I want to press is that, instead of planning for the worst, the Government are ignoring the inconvenient truth: they are ignoring the risks and abandoning the most vulnerable.

The Chair of the Select Committee asks what the Labour alternative is. The Government scrapped our approach to flooding and climate change, which was based on the findings of the Pitt review into the 2007 floods. They abandoned our focus on reducing flood risk. They abandoned our commitment to invest to protect the most vulnerable and to reduce the cost of flooding to well-being and the economy. We will deliver on the findings of the Pitt review—the other 46 recommendations, which have still not been implemented. However, a Labour Government will go further. We will introduce a new national adaptation plan based on the Committee on Climate Change’s recommendations, because that is the only way to ensure that all sectors of the economy and all communities are prepared for climate change. We will end the confusion and chaos in flood investment by establishing a national infrastructure commission to identify our long-term infrastructure needs and get cross-party support to meet them.

I conclude as I began: the risk of flooding has increased, and the risk of a catastrophic flood is increasing. The Government failed the country last winter. Now, they have tied themselves to a plan that risks catastrophic failure in the future. The Prime Minister was tested in last year’s floods, and he failed that test. Shortly, the electors of our country will have the opportunity to ensure that, when the next floods come, he is no longer in charge and in a position to fail again.

15:09

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

It is a pleasure to serve under your chairmanship, Mr Walker. I apologise if I tested your patience a little with my interventions. I now have the opportunity to respond to and probe the arguments of my hon. Friend of sorts—the hon. Member for Brent North (Barry Gardiner). Your predecessor in the Chair, Sir Edward, was so keen to hear the remaining speeches that he hoped we would conclude before he left. As it turns out, however, we have now had the benefit of your chairmanship, for which I am grateful, as well as that of Sir Edward, who presided in such great style earlier.

I thank the Chairman of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), for all the work she and the Committee have done. I might be seen as a little biased, having served on the Committee in the past. So, too, has the hon. Member for Brent North, and other members of the Committee are also present. The Committee has done the House and the country great service on many topics, and its contribution to this debate is very helpful. It is always a matter of great excitement for Ministers to be called before it, and I enjoy that as much as I am sure my predecessors did. I congratulate the Chairman on securing time for the debate through the Liaison Committee.

I want to start by setting some of the issues in context. As my hon. Friend the Member for Cleethorpes (Martin Vickers) said, we have had a number of these debates—some have covered issues relating to his constituency—and my hon. Friend the Member for Somerton and Frome said the same. None the less, it is important that we remind ourselves of the extreme levels of rainfall and the impact of the weather during the winter of 2013-14. There were record levels of rainfall, and it was the stormiest period for at least 20 years. There were record river flows, sea levels, wave heights and groundwater levels in many locations, and that led to the flooding of more than 8,300 homes, and caused damage or disruption to businesses, infrastructure, transport and utilities. Like other hon. Members, I have seen the damage caused by last winter’s flooding, and its devastating impact on people’s day-to-day lives. My sympathies go out to all those affected, especially those who still cannot go home.

There has been a major Government recovery effort to help people to get back on their feet, which included committing more than £560 million in recovery support funding. Many organisations were involved in responding to the exceptional weather, including the Government and their agencies, the emergency services and the military, and many voluntary organisations, as well as transport and utility companies. As the hon. Member for Vale of Clwyd (Chris Ruane), who is no longer in his place, said, individuals stepped forward to help neighbours and vulnerable people as part of the response effort. Also, people elsewhere who had seen what was happening wanted to help in some way and send assistance, which was gratefully received in areas such as the Somerset levels.

We have reviewed what happened and made improvements, which mean that we are now better prepared for flooding. In England alone, 844 flood defence assets were damaged last winter, including those managed by the Environment Agency, local authorities and internal drainage boards. In response to the exceptional weather, DEFRA made an extra £270 million available to repair, restore and maintain the most critical flood defences. Repair work at many of those sites started as soon as weather conditions allowed and, thanks to the tremendous effort by all involved, all areas will have at least the same standard of protection as they did before that winter. In discussions earlier with Environment Agency colleagues, I heard that their counterparts in the Netherlands, who watched the efforts here with interest and offered some input as to what they do in their jurisdiction, were incredibly impressed with the speed with which the repairs were done. It is good to hear praise for the excellent work done by the Environment Agency, its contractors and the local authorities it works with; they put tremendous effort into restoring the defences, given the investment.

Permanent defences were restored to more than 200,000 properties on schedule, by the end of October, and, for a small number of sites where repairs are continuing, contingency measures such as mobile pumps and temporary flood defences have been put in place to ensure that communities are protected until completion. More than 99% of permanent repairs should be completed by March, assuming that there is no further damage over the next few months—something that we need to keep a close eye on. For the remaining three sites, permanent repairs are not expected to be completed until March 2016. Interim contingencies are in place for all three sites. We are investing £3.2 billion in flood management in the current Parliament. That is a real-terms increase, and £500 million more than was spent in the previous Parliament. It includes both capital and resource funding. We are also making a record £2.3 billion capital commitment to improving defences, which is a further 9% real-terms average increase.

On 2 December we published a flood defence improvement project pipeline. We will be investing in more than 1,400 projects across the country over the next six years. That investment will protect more than 300,000 properties, in addition to the 230,000 households already protected so far this Parliament, keeping families safe from the misery that flooding can cause. It will also protect more than 420,000 acres of agricultural land, 205 miles of railway and 340 miles of roads. That investment is not just about protecting people’s lives and property now and in future. Throughout the country, businesses, infrastructure and farmland will also benefit. We estimate that our record investment will help to prevent about £30 billion of economic damage, including giving a £1.5 billion boost to the farming sector. That is an average of at least £8 in benefit for every £1 invested. There was some discussion earlier of the impact on the Somerset levels. Although quite a low number of properties suffered inundation, the economic impact lasted a long time. Rural and some urban communities had additional transport needs, and daily life was interrupted, and we must take account of that wider effect in what we do.

Tackling the risk of flooding can also help economic development and growth, unlocking opportunities for inward investment and helping to create and sustain jobs. We estimate that the benefits to the local economy are worth an additional £4 to £9 per £1 invested. Local enterprise partnerships, along with local authorities and other private sector partners, have increasingly been taking account of such issues in local growth bids when deciding where to invest for communities. That gives us confidence that the partnership model is the best approach. We can attract extra investment alongside Government investment through grant in aid.

What I have outlined demonstrates the Government’s commitment to reducing flood risk. However, that is not a task for the Government alone. Our partnership funding approach, which was introduced in 2011, has already exceeded our expectations in enabling others to contribute. We expect that the investment programme that we announced last month will attract more than £600 million pounds in local contributions, to expand on the work that could be done by Government alone. The Government will legislate to ensure that businesses’ contributions to flood and coastal erosion risk management schemes are tax deductible, as a way of incentivising their investment.

[Barry Gardiner]

What percentage of the previous target for partnership funding has been realised?

[Dan Rogerson]

I think we are on course to achieve about £140 million—I will confirm that in writing—during the present financial period to invest in those schemes. That compares with about £13 million under the previous Government, so it is a big step forward.

[Barry Gardiner]

As a percentage of the target.

[Dan Rogerson]

The hon. Gentleman was keen to point out that many of the schemes in the pipeline will require partnership funding. We have never sought to hide that fact: it is out there. It means that record investment can go even further. We also want to continue to secure efficiencies in delivery. The hon. Gentleman has talked about the resources available and the number of staff in the Environment Agency, but it is outputs that are important.

I pay tribute to the Environment Agency for the way in which it, like many other public sector organisations, has had to adjust to the reality of the deficit that we were left, and the need to tackle it. The shadow Chancellor has been keen to get out and persuade everyone that he gets it now, and understands the importance of dealing with it; and we have all had to tackle it. The Environment Agency has done particularly well in generating efficiencies—for example, taking out the regional tier, which is difficult in any organisation. It did it, and has been able to spend the resources made available by the Government more efficiently than ever, so that we can proceed with the investments. Because of the Government’s £3.2 billion investment in flood risk management during the current Parliament and the record levels of investment announced in the autumn statement, we will over the next six years reduce by 5% the risk that flooding poses to communities and businesses across the country.

There were several discussions during the debate about the effectiveness of dredging. Dredging and contour planting are tools that can help to reduce flood risk. Each catchment is different. It would in many cases be wrong to dredge where there is a fast-responding catchment. I am not an expert, but it seems to make sense that speeding the water to the next pinch point will cause problems further along the catchment. In landscapes such as those I saw in Somerset where the rate of flow is not the swiftest in the world—landscapes that, as my hon. Friend the Member for Somerton and Frome pointed out, are man-made—what is needed when there is a huge volume of water is to try to help it to get out to sea.

[Mr Heath]

It is the understatement of the year to say that the Parrett is not the swiftest-flowing river. It is probably the slowest, and has a gradient of 1 foot every mile, which makes it all the more nonsensical that so-called experts told us that had we dredged it, an unstoppable torrent of water would have descended on Bridgwater. Some hope.

[Dan Rogerson]

I have heard other Members of this House seek to debate that fact with my hon. Friend, so I am convinced of his expert knowledge of the area in which he grew up, and which he now represents so effectively.

We had many visits from right hon. and hon. Friends to the area in Somerset. As my hon. Friend knows, I was appointed in October, and the first east coast surge came a few weeks later, in early December. I went with him to Somerset early in the new year to see the impacts for myself, and came back with him and other hon. Friends to make the case for dredging work, which I am pleased to say has now taken place, as he pointed out. We hope that it will make a difference—not, as he said, by making the Somerset moors and levels bone-dry for the foreseeable future, but by helping with the management of that important landscape.

The effectiveness of dredging in managing flood risk varies from place to place. In some areas, dredging is the most cost-effective approach; in others, it would divert resources away from other flood risk management activities that are far more beneficial to local communities, such as maintaining pumps, sluice gates and raised embankments. It is right, therefore, that the Environment Agency should assess its value carefully, taking account of the other options available on a location-by-location basis, while working in very close consultation with local communities and organisations, a point made repeatedly and rightly by my hon. Friend the Member for Cleethorpes.

Approximately £10 million of the extra £70 million allocated by DEFRA to maintenance this financial year and the next is being invested in dredging. That is in addition to the dredging recently completed in Somerset. Maintenance and other flood risk management work is not just about what the Government can do; we want to enable others to undertake maintenance, including in partnership with the agency. The Government recognise and support the important work undertaken by internal drainage boards to manage water levels, reduce flood risk, support local growth and protect critical infrastructure.

There are excellent examples of partnership working between the Environment Agency and IDBs; my hon. Friend the Member for Thirsk and Malton was keen to make that point, and she was absolutely right. That includes sharing work programmes and agreeing to work together, for example by completing work on one another’s behalf through public sector co-operation agreements. There are now 28 public sector co-operation agreements in place and a further 30 agreed in principle, and the Environment Agency has already undertaken some work on behalf of IDBs. Such agreements can create efficiencies, and we want many more agreed over the next year. Recent work by IDBs on main rivers has included grass cutting, weed control, tree work, dredging, obstruction removal, operation of sluices and incident response.

During the summer of 2014, the Environment Agency held meetings across the country to explain the agency’s maintenance plans and give local stakeholders an opportunity to contribute to them and influence the maintenance programme for the year ahead. Maintenance plans for 2015-16 will be shared with IDBs and other risk management authorities early this year. We are grateful to IDBs for their help in the exercise to identify potential areas for dredging, as it is helping to build our evidence base on where dredging can be beneficial in managing flood risk. The evidence gathered is being assessed by the Environment Agency. Alongside evidence on other flood management options, it will help to ensure that the available funding is prioritised as effectively as possible.

The issue of agricultural land has been raised. As stated in the Government’s response to the report, we very much agree with the Committee on the importance of agriculture to the rural economy. The Environment Agency prioritises flood risk management asset maintenance according to the highest benefit, helping protect approximately 50% of the agricultural land at flood risk in England, including the majority of the most productive grade 1 and 2 land. As I have explained, we will spend more than £3.2 billion over the course of this Parliament on flood and erosion risk management, and much of the 1.3 million hectares of agricultural land at flood risk will benefit from that investment.

Capital investment also helps. Projects in the last three years have provided an improved standard of flood protection to more than 235,000 hectares of farmland. We made changes in 2011 to introduce financial contributions for worthwhile schemes to increase flood risk management work through the partnership funding we discussed earlier. Rural areas are benefiting from that approach; about 25% more schemes are proceeding with DEFRA grant in aid than would have been possible under the old rules.

Flood insurance was mentioned by a number of hon. Friends, and by the hon. Member for Vale of Clwyd, who is no longer in his place. I am grateful to my hon. Friend the Member for Somerton and Frome, given his experience in the Department prior to mine, for setting out the huge amount of work going on to deliver the Flood Re scheme. It is a very detailed form of negotiation, and we must ensure that it works effectively and does the job that it is designed to do.

I was a little disappointed that the hon. Gentleman opposite—I am not pointing at the shadow Minister, but over his shoulder to where the hon. Member for Vale of Clwyd was sitting, although he has, sadly, been called to business elsewhere—felt that the scheme was failing in some way. Actually, although it is an involved negotiation, we are delivering on it, and I pay tribute to all those across Government who have been involved in ensuring that we get it right, as well as to colleagues in the Association of British Insurers. We have been negotiating, which sometimes leads one organisation to face another across a table, but there is a spirit of co-operation on delivering Flood Re, which I think will make a difference.

I say to colleagues whose constituents have had problems obtaining insurance that I understand those frustrations. As my hon. Friend the Member for Somerton and Frome said, I recently attended a meeting in Somerset with constituents and representatives of others about some of those problems. Flood Re will help, which is why it is important that we move forward on delivery. I look forward to the opportunity to do something similar in his constituency, so that we can talk about some of the problems.

[Barry Gardiner]

I am grateful for the Minister’s clarification of the remarks made on Flood Re. Can he expand on how he envisages Flood Re will work, over the next 25 years, to move the consumer towards risk-reflective pricing, as it is supposed to? Although Flood Re certainly postpones that question, it is not clear how the transition to risk-reflective pricing will be made.

[Dan Rogerson]

Clearly, the Government’s responsibility across that period—the hon. Gentleman has alluded to the importance of considering the issue, modelling based on our changing climate and so on—is to continue investing in defences, but also to be clear in planning. My hon. Friend the Member for Somerton and Frome pointed out that earlier in the last century, perhaps it was not quite as clear that development should take place in areas that will not add to problems for the future. That is not to say that there should never be development in areas that are technically floodplains; as a London MP, the hon. Member for Brent North will know that a great deal of this wonderful city is in that situation, which is why we have the Thames barrier and other schemes moving forward. We want that economic development and investment. There are other towns, cities and villages in the same situation, but we must take account of the risk and deal with it as part of any development.

[Barry Gardiner]

That raises a point of contention that I put to the Minister. He has acknowledged, and I accept—indeed, I made this point—that there still is, and will continue to be, development on the floodplain, so why, in the main assumptions in the baseline result, is that precisely excluded from the Government’s own projections when they assess risk?

[Dan Rogerson]

We are clear that we should not develop on floodplains in a way that will leave the new properties at risk. We are talking about areas that are currently protected, or that will be protected as part of development. There are ongoing local growth scheme investment programmes aimed at economic regeneration that involve flood protection as part of development. That money comes from a different source from flood defence grant in aid, allowing those communities to continue to grow and enabling us to see that investment. However, we want to ensure that we continue to invest in flood defences in order to keep people and communities safe. By using partnership funding, we can make that money go even further.

The hon. Gentleman sought to set out particular groups, saying that he felt that some might benefit more than others in the categories that he mentioned. I hear on a daily and weekly basis from hon. Members throughout the House on their concerns about areas in their constituencies. The pipeline of projects announced in December sets out for hon. Members a great deal of ambition on how we can protect their communities and keep them safer. It has been welcomed by local authorities and those communities, and they can now seek to put those funding packages together.

I was involved in a debate—not a debate, but a reflective piece—on a local radio station this week, looking back to the period we are considering today, considering what has changed since then and talking about how the partnership funding is coming together from the different local authorities in the area and the private sector to deliver a project. In that local community, they do not expect the Government to fund the whole project through grant aid. They understand the principle of partnership funding and they are participating in delivering that solution.

[Barry Gardiner]

The point I am making is a good deal simpler than that, and it does not involve partnership funding. It is simply that the Committee on Climate Change says that 20,000 new properties are being built on flood plains each year, 4,000 of which are being built in areas of significant flood risk, and yet the long-term investment strategy that the Government have in place assumes that there will be no further building on flood plains. Why?

[Dan Rogerson]

As always, I welcome the work of the Committee on Climate Change, but the basis upon which it has made its calculations is a 2009 report by the Environment Agency, which will be updated this year. We look forward to seeing what the Committee makes of the updated calculations, which reflect the position now. Our mapping and understanding of flood risk is improving and growing all the time.

I want to turn to the issue of response.

[Mr Heath]

Before he moves off the issue of insurance, can I ask my hon. Friend the Minister whether he is continuing a dialogue with the insurance companies about the two things that I see as being difficult? One is the lack of recognition of mitigation work that has been put in place, which reduces flood risk but is not recognised in the premium. The second is a phenomenon that I personally have experienced. When I tried to renew the insurance on my house recently, I found that at least half the insurance companies I contacted would not offer me a quotation because I happen to live in a house that was built in the 17th century or early 18th century, and I happen to have a river at the end of my garden. I do not believe that I am in significant danger of flood risk, but those companies would not even offer me a quotation, based on those two facts.

[Dan Rogerson]

When one is dealing with a market such as insurance, there is a complicated picture. There are brokers that can help with those discussions, helping to find the right policy in those locations and working with those companies that are prepared to take account of mitigating factors. I hope that my hon. Friend agrees that that is an incentive for those companies; they will get that business. Also, Flood Re, by giving some confidence to insurers that the flood element of the policy can be supported and underwritten, will mean that those insurers can compete on the other aspects of the policy as well, and that will help a great deal in this situation. I very much welcome the support that we have had from across the House in moving towards the introduction of that policy.

I turn now to the issue of response. Following the events of last winter, action has been taken at all levels of Government to improve the country’s resilience and response capability. The floods highlighted the valuable contribution that our armed forces can make to the response to domestic emergencies. New arrangements have been put in place to strengthen military involvement in local emergency planning and preparedness, and to make it easier for responders to access support from the armed forces in an emergency if they need it. Perhaps the issue that my hon. Friend the Member for Somerton and Frome was pointing to in discussing local experience was about when the armed forces are called. Certainly, we made it absolutely clear from the centre that that resource was available. Perhaps the problem was about perception, not reality, and what the impact might be on a local situation if that support was called on. Ultimately, the armed forces were deployed and they made a real contribution, so we are just making it clear that as they are involved in the planning process, all those relationships are much clearer, and local communities can have confidence that if there is any need to draw down that support at an early stage, it is available.

Last winter also saw disruption to our transport, energy and water supply networks. Extensive work has taken place to make sure that we are better placed to deal with any similar events in future, with action being led by both the Government and service providers. I have already mentioned the work undertaken by the Environment Agency to improve engagement with local communities, but we have also been encouraging local authorities to plan for flood risk. Bringing all their activity together in a local flood risk management strategy is an important way for local authorities to communicate with and reassure local people that they are well prepared to respond to flooding, and we will continue to encourage action at the local level. We have resourced local authorities to bring together their local strategies, and I have taken the opportunity on a number of occasions to remind in writing those local authorities that perhaps have not quite gone through that process yet that it is important that they do so as soon as is possible.

Recovery from the flooding of last year has gone well and is continuing. The Government have committed more than £560 million in flood recovery support funding. We are currently reviewing the position with regards to recovery funding, identifying lessons learned from 2013-14 and considering how Government can be better prepared to provide support during a long-term recovery programme. My officials are working across Whitehall to consider new arrangements that will ensure that future recovery schemes will be part of a clear, co-ordinated, flexible package of support, which will be easily and readily accessible by people, businesses and places.

As lead Department for recovery, the Department for Communities and Local Government is also undertaking a review of the Bellwin scheme, which allows local authorities to reclaim emergency response costs incurred to protect lives and properties. A number of changes to the scheme have been considered in light of last winter’s experiences, and DCLG consulted on those late last year. That consultation closed on 1 January and DCLG will be announcing the next steps in due course.

As far as the Department for Environment, Food and Rural Affairs recovery schemes are concerned, so far around 4,200 applications have been received by local authorities for the repair and renew grant. Local authorities have approved RRG applications to the value of £8.7 million; that was one of the points that the hon. Member for Brent North was keen to have an update on.

We are aware that a number of local authorities have expressed concerns about meeting the 31 March 2015 deadline for RRG claims, and we are doing everything we can to resolve the situation and to provide some flexibility for them. As we speak, discussions are still ongoing about extending this deadline, and we expect to notify local authorities imminently. We are keen that as many eligible people as possible benefit from that grant. All applications for the farming recovery fund were processed last year, with a total value of £5.14 million.

I hope I have reassured hon. Members about the implementation of Flood Re and the question of flood insurance. I understand the aspiration across the House to explore how to make best use of revenue and capital funding to deliver better outcomes for communities, people and their property, and those discussions will continue. As the Chairman of the Select Committee pointed out, some of those questions will have to remain for the next spending review period, but as she rightly said, the Committee has put down a marker and I am certainly keen to explore ways in which we can respond. Important principles exist to ensure that we have capital invested in infrastructure and that we maintain those necessary fiscal controls on revenue spending; nevertheless, I understand the point the Committee made.

Reference was made to the importance of agricultural schemes. My hon. Friend the Member for Cleethorpes talked about support for partners coming together. That is a process to be led at local level—as he said, those partnerships are emerging—but I am happy to explore with him the support we might be able to offer and what the best approach might be.

Despite the exceptional weather experienced last winter, the impacts were significantly less than previous events of similar magnitude. For example, our existing flood defences protected some 1.4 million properties and more than 2,500 sq km of farmland from flooding. That reinforces the importance of continuing our investment in flood defence schemes and forecasting capability.

The hon. Member for Brent North talked about the Pitt review. Some of its recommendations are for Government, but others are for agencies and bodies such as local authorities. Some are ongoing—they are not the sort of thing we can just deliver on and then tick off; they have to be constantly examined and updated. However, the Government have moved forward on those recommendations. Had we been debating this subject at this point last year, the hon. Gentleman could rightly have raised the question of sustainable drainage systems, but we have now moved forward on SUDS, as he is aware, and we are working with our colleagues at DCLG on a regime to implement that scheme. That was therefore an important recommendation.

Some of the hon. Gentleman’s colleagues have raised in previous debates the question of the statutory responsibility for fire and rescue services, an issue of particular concern to them. The advice of the chief adviser at DCLG, which we have taken, is that the suggested approach is not appropriate. However, the Pitt review recommended that we consider that suggestion in detail, and we did.

[Barry Gardiner]

It is good that there has been progress on some of the other 46 recommendations of the review that had not been addressed before. Will the Minister agree to report back on that progress? One problem with knowing what has been going on is that in 2012, the Government announced that they would not provide further updates on progress with the Pitt review. It would help if that progress report was updated.

Before he closes, will the Minister simply answer my question about the increase in the number of properties at significant and high risk? Does he think that the reduction of 5%, which the Government have talked about, in respect of the lowest-risk properties is a proper use of capital expenditure?

[Dan Rogerson]

As I have sought to set out, our pipeline of projects, which is informed by calculations of the sort the hon. Gentleman mentions, will go a long way to helping communities, people and businesses around the country, and to meeting the demands and appropriate needs of local authorities, Members and individuals in their areas. I am happy, as always, to look at and review both the projects and the underlying assumptions.

We have also said that the pipeline gives an indication of which projects have met the test for funding so far. Some projects may change during the six-year period as other information emerges or local circumstances change, and as other sources of partnership funding come forward that people might want to integrate into such a scheme. Other projects that have not yet provided the level of detail needed to be in a scheme may move into that six-year programme. In setting out that programme, we have done more than any previous Government to give people confidence that we are serious about investing to keep them safe for the future.

Alongside that, we have one of the best forecasting and warning systems in the world and we are investing more in such computing power. Although we cannot control the weather and cannot stop flooding altogether, we are determined to reduce the risk further and to provide better protection for people’s homes and for farms and businesses across the country. We have acted on the lessons learned from last winter and have put in place numerous measures to improve response capability at all levels. With local partners at the helm of flood preparedness, coupled with the Government’s record level of investment in flood defences, we will be better equipped to deal with the risk of flooding this winter and beyond.

[Mr Charles Walker (in the Chair)]

Unfortunately, the hon. Lady only has two minutes to respond to about an hour’s-worth of Front-Bench speeches.

15:52

[Miss McIntosh]

I welcome you to the Chair, Mr Walker, and congratulate you on your richly deserved honour in the new year’s list.

It has been an excellent and, for the most part, good-natured debate, although my hon. Friend the Member for Somerton and Frome almost lost his usual good humour. There were common strands throughout the debate, including the need for greater transparency regarding flood defences. We have made a good case for merging the capital and revenue expenditure into a total budget. A Library note, which I am sure the hon. Member for Brent North could access, shows that nearly every aspect of Pitt has been covered, although as hon. Friends said we still do not know exactly who is responsible for the drains and for maintaining them. In addition, ending the automatic right to connect is not yet in place.

The loss and invasion felt by flood victims is very real, but it does invoke the very best community spirit in response. I ask my hon. Friend the Minister to use his good offices to ensure that the Bellwin formula applies in cases such as that of north Yorkshire. For example, 100% of costs should be recovered in respect of bridges and roads and the properties flooded in Yorkshire and the Humber during the previous year.

On Flood Re, we should look closely at leaseholders and urge the Competition and Markets Authority review to cover affordability of all leaseholder properties.

I welcome today’s debate, and I am sure the Government and the Opposition will keep the matter under review. Future financing is for the next Parliament and the next Government to determine, but this has been a particularly appropriate, timely and positive contribution to the discussion.

Question put and agreed to.

15:54

Sitting adjourned.

Written Statements

Thursday 8th January 2015 Written Statements

Thursday 8 January 2015

Seychelles (Accession to the WTO)

Thursday 8th January 2015 Written Statements

[The Minister for Business and Enterprise (Matthew Hancock)]

My noble Friend the Minister of State for Trade and Investment (Lord Livingston) has today made the following statement.

I wish to inform the House that the Government have opted in to the Council decision relating to the accession of the Seychelles to the World Trade Organisation.

We are strong supporters of trade liberalisation, which promotes prosperity and jobs.

Opting in will help to achieve the Government’s trade policy objective of expanding the WTO’s membership.

The Government have supported the accession of the Seychelles to the WTO on the right terms. In acceding to the WTO, the Seychelles will embrace a series of rules and commitments which form the foundation of an open, transparent and non-discriminatory global trading system and which will provide important guarantees for them and for the other WTO members.

Accession to the WTO will bring the Seychelles more firmly into the global economy and make the Seychelles a more attractive place to do business.

The Council decision has the effect of extending to the Seychelles the horizontal commitments the UK makes to all WTO members, including in the provision of services by natural persons from third countries, otherwise known as “mode 4”. It is the presence of these mode 4 commitments in the relevant instruments which triggers the UK Justice and Home Affairs opt-in.

[HCWS174]

Armed Forces Pay Review Body (Appointment)

Thursday 8th January 2015 Written Statements

[The Secretary of State for Defence (Michael Fallon)]

I am pleased to announce that I have appointed Mr Brendan Connor as a member of the Armed Forces’ Pay Review Body until 28 February 2018. This appointment has been conducted in accordance with the guidance of the Office of the Commissioner for Public Appointments.

[HCWS177]

Infrastructure Review

Thursday 8th January 2015 Written Statements

[The Secretary of State for Defence (Michael Fallon)]

The US Department of Defence has today announced the outcome of a review of its requirement for bases for US forces in Europe. These decisions reflect the impact of force structure changes, the changing security environment, advances in technology and the fiscal climate.

I am delighted to inform the House that, following consultations between the two Governments, the US has decided that RAF Lakenheath in Suffolk will be the first location in Europe to host its F-35 aircraft, a decision that reflects the closeness of the UK/US defence relationship. Two squadrons of US F-35 aircraft will be based there, with the first aircraft scheduled to arrive in 2020. Their relative proximity to the RAF’s F-35 Lightning II aircraft—to be based at RAF Marham in Norfolk—paves the way for continued close collaboration between our respective forces. In particular, it offers further opportunities for the UK and US air forces to work and train together, including simulator training where the UK has made a significant investment.

Elsewhere, the US has decided to withdraw from its base at RAF Mildenhall—adjacent to RAF Lakenheath—and to consolidate at RAF Croughton in Northamptonshire its activities at RAF Alconbury and RAF Molesworth. The precise timing is not yet determined; withdrawal from RAF Mildenhall is unlikely to begin until 2019. The US presence at RAF Fairford, Menwith Hill and other sites is not affected by this review.

The end of US basing at Mildenhall, Alconbury and Molesworth is disappointing, not least to the communities of which US forces have been a part for so long. However, the advance notice the US has given us, coupled with the investment it is making at RAF Lakenheath and RAF Croughton, will help mitigate the local impact. The Department for Business, Innovation and Skills will convene the Mildenhall, Alconbury and Molesworth (MAM) Working Group that brings together the local authorities, the local enterprise partnerships, BIS Local, the Ministry of Defence and other key stakeholders to agree how we manage this at local level.

When the US plans mature, we will start a period of formal trades union consultation and affected MOD civil servants will be provided with appropriate advice and support to make decisions about their future.

The US also employs other UK personnel directly, outside the civil service. My Department will work closely with the US and local partners to manage the impact of any job losses, via the Jobcentre Plus rapid response service, the Skills Funding Agency and where appropriate, the talent retention solution.

US Forces have been based in the UK for over 50 years. These decisions confirm their presence here until the 2050s. Basing their latest generation of aircraft in the UK underlines the US commitment to NATO and Europe and the strength of our bilateral defence relationship.

[HCWS178]

Government's Overseas Scholarship Schemes

Thursday 8th January 2015 Written Statements

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

The Foreign and Commonwealth Office and the Department for International Development have recently commenced a review of the Government’s overseas scholarship schemes. It will build on the triennial reviews of the Commonwealth Scholarship Commission and the Marshall Aid Commemoration Commission and examine those schemes together with the Chevening scholarship programme to assess:

Whether there is scope for further efficiencies and synergies across the schemes;

If so, what alterations in structure, administration or delivery might realise those improvements?

The extent to which efficiencies have already been put in place in recent years.

While the scope of this review is limited to the Commonwealth, Chevening and Marshall schemes, the newly created BIS Newton Fund will also be considered in the process of evidence gathering.

Amanda Spielman, chair of the Office of Qualifications and Examinations Regulation has been contracted to conduct the review. The outcome of the review will be published in March 2015 and copies will be placed in the Libraries of both Houses.

[HCWS176]

Rail in the North: Rolling Stock

Thursday 8th January 2015 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

My Department has reached agreement with TransPennine Express and Northern Rail on plans to maintain and increase capacity on key routes and these plans will offer extra rolling stock for the north of England.

Rail services across the north are vital for passengers and for the economy. By helping people access work and leisure more easily, we are securing long-term economic growth across the region.

That is why my Department has worked hard with Northern and TransPennine Express to reach an agreement which means that existing rail services will continue, from May 2015. This follows a decision by rolling stock leasing company Porterbrook to move Class 170 diesel trains running on the Northern and TransPennine Express routes to the Chiltern franchise.

In addition, the Department for Transport has taken this opportunity to secure benefits for passengers and has reached agreement with the operators of the two franchises to offer more carriages and seats, increasing capacity on a number of routes in the North, including between Blackpool and Manchester and into and out of Sheffield in the peaks.

Northern Rail will also be increasing capacity on the Cumbrian coast line and will be finalising details on this shortly. I will make a further statement on this in due course.

[HCWS175]

House of Lords

Thursday 8th January 2015 Lords Chamber

Thursday, 8 January 2015.

11:00

A minute’s silence was observed in memory of the victims of the shootings in Paris on 7 January.

Prayers—read by the Lord Bishop of St Albans.

Electricity Generation

Thursday 8th January 2015 Lords Chamber

Question

11:07

Asked by

[The Lord Bishop of Chester]

To ask Her Majesty’s Government what proportion of United Kingdom electricity consumption was generated abroad in the last year for which statistics are available.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)]

My Lords, between October 2013 and September 2014, electricity imported into the United Kingdom was 7% of total electricity consumption. Electricity interconnection strengthens our security of supply and can lead to lower bills. Its flexibility supports renewable electricity generation. Greater interconnection means we can export excess power and import at times of stress.

[The Lord Bishop of Chester]

I thank the noble Baroness for that reply, although 7% seems quite a large figure. What assumptions are made for the availability of imported electricity to meet our peak demand? What contractual agreements are in place to undergird the availability of that supply?

[Baroness Verma]

My Lords, the right reverend Prelate raises an important issue about making sure that we have supply available all the time. The investment framework we have introduced means that we are getting on board two new interconnectors. They will make their final investment decisions this March. We realise that we need to do much more and that is why we have looked at the interconnectors as part of a programme that enables energy supply when it is needed most.

[Lord Lawson of Blaby (Con)]

My Lords, so far as indigenous energy resources are concerned, can my noble friend the Minister confirm that it is the Government’s policy to encourage the most rapid, practicable exploration of our UK shale gas resources? In that context, will she join me in deploring the unreasonable delays currently imposed by Lancashire County Council?

[Baroness Verma]

My Lords, my noble friend is of course a great advocate of shale gas, which offers huge potential for adding to the UK’s energy source but we need a diverse mix of energy supply. As a Government, we have tried to remove many barriers that get in the way of exploration but we have to work very closely with local communities to ensure that they come on board.

[Baroness Liddell of Coatdyke (Lab)]

My Lords, further to that point about shale gas, one of the main reasons for the interconnector clicking into the UK direction is the rather dodgy state of our generation capacity at the moment. Given the glut of oil and the impact on oil prices, which knocks on to gas prices, what discussions have the Government had with the major generators about their long-term projections now and their choices for sources of generation? That impacts on shale gas and shale oil because the cost of exploration and production is not cheap.

[Baroness Verma]

My Lords, the noble Baroness’s point is well intended. As she rightly says, we need to look at the long term. While we have a drive-down of prices today, we need to see how the longer-term picture will encapsulate all energy supplies. That is why I am really pleased that this Government at least took the decision to make a greater diversity of energy supply available through the Energy Act 2013. That enabled the renewables sector to come and work on a par with traditional fuels. However, we have to make sure that whatever we do and whichever source we try to promote—in this case, shale offers huge potential—we support all supplies that make us less dependent on imported energy.

[Lord Teverson (LD)]

My Lords, I congratulate the Minister and the Government on revitalising the interconnector debate. Given that this is a way to reduce the cost of a decarbonised electricity system in the UK, what is happening specifically about negotiations with the Government of Iceland, where a huge amount of geothermal and hydro power is available? I understand that there are difficulties with European regulations in allowing the interconnector market to go ahead. What are the Government doing to renegotiate some of those rather unhelpful single market rules?

[Baroness Verma]

My noble friend is absolutely right: Iceland has vast geothermal, hydro and wind resources. We stand ready to liaise further with the Icelandic Government to determine the potential for interconnection in future that will benefit both countries.

[Lord Elis-Thomas (PC)]

My Lords, the Government of Latvia have announced the formation of an energy union within the European Union as one of their priorities for their term in the presidency. Can we have an assurance in this House that that will be fully supported by Her Majesty’s Government in the United Kingdom?

[Baroness Verma]

My Lords, this Government have been supportive of making sure that the UK is well managed within its own production at home, but of course we need to ensure that our European partners are also rising to the game. We are working very hard with our European partners to make sure that they are as ambitious as we are.

[Lord Oxburgh (CB)]

My Lords, the Minister will know that this country is now the largest external supplier of electricity to Germany through the interconnectors. At times of high pressure on electricity supplies in Europe, how and by whom is it decided in which direction the electricity flows down the interconnectors? Is that simply a matter of market forces and, if the prices are higher in Germany, do the lights go out in the UK?

[Baroness Verma]

My Lords, let me reassure the noble Lord that the lights are not going out.

[Noble Lords]

Oh!

[Baroness Verma]

We have enough capacity here. As the noble Lord is fully aware, Ofgem has worked very hard to ensure that the balanced reserves are in absolutely the right place. Yes, our margins have tightened somewhat, but that is not unusual; it has happened in the past. We currently have four gigawatts of interconnection. We are looking, through the least regret scenario, to introduce another five gigawatts of interconnection. Noble Lords should be reassured that this Government are taking that very seriously.

[Lord Elton (Con)]

My Lords—

[Baroness Worthington (Lab)]

My Lords, the Minister is correct to say that the lights are not in imminent danger of going out. Interconnectors are increasing and delivering, demand for electricity is going down and gas prices are softening, so there is no imminent danger. However, we now find ourselves in a strange situation where we are paying old polluting coal stations to stay open at the same time as paying to close them. When will the Government address that anomaly?

[Baroness Verma]

My Lords, the noble Baroness is absolutely aware that we need to ensure that we are also being cost-sensitive to the consumer. Consumers cannot be bearing the brunt of us closing plants down and putting the prices up.

[Lord Howell of Guildford (Con)]

My Lords, I declare an interest as an adviser to Mitsubishi Electric. My noble friend mentioned interconnectors; does she agree that it is not just a question of the Iceland possibility? We could get electricity from Norway and Denmark, wind electricity from Ireland, or via other interconnectors from France and Belgium. Does she agree that all these prospects are there and could contribute vastly to our electricity supply, and will she confirm that the Government are encouraging all of them?

[Baroness Verma]

I am extremely grateful for my noble friend’s intervention. Yes, of course those countries are very important to us and, through the cap and floor regime introduced by Ofgem, we have seen five interconnector projects in its first application. There is a lot of good work going on with the interconnectors.

Transport: Shared Space Crossings

Thursday 8th January 2015 Lords Chamber

Question

11:16

Asked by

[Lord McAvoy]

To ask Her Majesty’s Government what is their assessment of the impact of shared space crossings on the safety of blind and partially sighted people and other people with a disability.

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

My Lords, the safety of all road users is of paramount importance. Our guidance on designing shared spaces makes it clear that the needs of all groups, including disabled people, must be considered during development. The design of shared space schemes, including types of crossing and assessment of safety implications, is for local authorities to determine. We have circulated guidance headed “Access for Blind People in Towns”, provided by the National Federation of the Blind, to 3,300 local authority and practitioner contacts.

[Lord McAvoy (Lab)]

My Lords, I thank the Minister for her full Answer. Recently I met with a delegation of people from Gloucester, including a Mr Bill Waddell from the partially sighted and blind organisations, and I have become aware, having since done a bit of work on it, that there is extreme anxiety among that community about the impact of shared space crossings on them. Will the Minister be willing to meet with me and a representative from the Royal National Institute of Blind People to discuss further how we can assist that community in making sure that they do not feel discriminated against? If the Minister is also agreeable to it, I suggest that we include the noble Lords, Lord Low of Dalston and Lord Holmes of Richmond, in that meeting.

[Baroness Kramer]

I would be absolutely delighted to meet. I meet the RNIB quite frequently, and if the noble Lord could ask whether it could bring me an update on the guide dog puppy Kramer, that would be really appreciated.

[Lord Holmes of Richmond (Con)]

My Lords, Blackpool has done a U-turn and Gloucester and Warwick have also done a U-turn on shared space crossings. What advice would my noble friend the Minister give to any authority contemplating these architectural conceits and planning follies—these health and safety disasters?

[Baroness Kramer]

My Lords, as you know, the Government provided detailed guidance in a publication in 2011, which was based on extensive research. As I said, we have also made available to all relevant groups the advice from the National Federation of the Blind, which covers these kinds of issues. However, I would point out that well designed shared space can work for people. For example, for those who have mobility issues or use a wheelchair, the removal of kerbs can be a tremendous advantage, so it is important that they are very well designed and, obviously, that equality law prevails in this area.

[Lord Davies of Oldham (Lab)]

My Lords, one of the sites that received enormous attention was Exhibition Road, between the museums in South Kensington. Over Christmas time I sought to escort three grandchildren, all under the age of 10, out of the Science Museum to the V&A. They moved out into a road which was absolutely tenanted by pedestrians, because the museums are enormously popular, but the other side of the road was temporarily free of pedestrians and then one car and one taxi went past at about 30 miles per hour—the speed limit is meant to be 20. We cannot possibly have a situation where the speed limit is not maintained and surveyed carefully in these spaces; otherwise, pedestrians are greatly at risk.

[Baroness Kramer]

I would be very happy to try to encourage enforcement. That is obviously part of the programme which should be in place.

[Lord Bradshaw (LD)]

I rather agree with the Minister that local authorities are best placed to deal with these matters, but one change that the Government could make would be to ensure that all bicycles had a bell on them. That measure could be very cheap, and it would be very effective in preventing accidents between all sorts of people.

[Baroness Kramer]

My Lords, it is true that very often there is a tension between cyclists and pedestrians of various kinds. I do not have a good answer for him, but I will investigate and write.

Ukraine

Thursday 8th January 2015 Lords Chamber

Question

11:20

Asked by

[Lord Spicer]

To ask Her Majesty’s Government what is their most recent assessment of the position in Ukraine.

[The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)]

My Lords, we remain very concerned about the situation in eastern Ukraine. While the verbal ceasefire agreed on 9 December has led to a decrease in shelling and casualties, Russia continues to supply the separatists with weapons and personnel. We welcome recent diplomatic activity and we hope that the talks scheduled for mid-January in Astana will result in all parties fulfilling the commitments that they made in Minsk in September.

[Lord Spicer (Con)]

My Lords, is not the stark reality that so far diplomacy has failed, that economic sanctions have made Mr Putin more aggressive rather than less and that the West will have to be prepared to engage in a Cold War with Russia and to rearm accordingly?

[Baroness Anelay of St Johns]

My Lords, I do not adopt my noble friend’s route to rearming and I am not as pessimistic. Perhaps that is because I am ever hopeful and because I am impressed by the level of diplomacy delivered through our Foreign and Commonwealth Office as well as through our colleagues throughout the European Union, the United Nations and the Commonwealth, all of whom have a common view. Yesterday the Prime Minister met Chancellor Angela Merkel and in his press release he made it clear that we continue to stand by Ukraine and that, although he and Chancellor Merkel regretted the fact that this was a second G7 summit without Russia,

“We both want to find a solution to this crisis ... Russia is rightly feeling the cost of its illegal actions … And … we’ll be discussing how we try and keep up the pressure”.

The Normandy format talks that are expected to take place next week, on 15 January, in Astana are promising and deserve to be given a chance.

[Lord West of Spithead (Lab)]

My Lords, the Minister will be aware of the huge increase in Russian defence expenditure, particularly on its whole nuclear triad, with brand new ballistic missile submarines, a brand new ballistic missile and a brand new attack submarine with a new cruise nuclear weapon, while it is also running its nuclear trains again—all the indicators that during the Cold War would have had me terrified as Chief of Defence Intelligence. There is also the articulation of Putin’s policy of de-escalation, which in fact, when you read it, is talking about nuclear escalation. Is it not time to inject a sense of urgency into these talks? We are constantly getting near misses over the Baltic. Things are very risky indeed and we need to have proper talks, fully involving the Russians, who I believe have a real and proper interest in the Ukraine. We also need to give a sense of realism to some of the Ukrainian expectations. We need to get this going quickly with everyone involved, including the Russians, otherwise we might move towards a scenario that none of us would like.

[Baroness Anelay of St Johns]

My Lords, I entirely sympathise with the noble Lord’s views. The talks that are expected to take place next week will indeed involve the Russians with Mr Poroshenko, Monsieur Hollande and Chancellor Merkel, and those talks deserve to be given a chance. The Russians are feeling the brunt of sanctions, as they should for their illegal occupation of Crimea and for what they are doing in sending their troops into eastern Ukraine and making the humanitarian situation there worse. Diplomacy can be a strong tool—let us ensure that it is.

[Lord Hannay of Chiswick (CB)]

My Lords, does the Minister not agree that an absolute precondition for any change in sanctions has to be that Russia observes the commitments that it entered into in Minsk and that those commitments are verified by international organisations such as the OSCE? Could she perhaps say how she would characterise the proposition that if we had not been so beastly to Mr Putin, he would be behaving a lot better?

[Baroness Anelay of St Johns]

My Lords, I entirely agree with the noble Lord’s proposition with regard to the fact that the Minsk protocol must be adhered to by Russia; it must have oversight by the OSCE. It is absolutely clear that being beastly to Mr Putin has been no part of this country’s activity. We have sought to make sure that Russia keeps within its international commitments and international law, to which it has signed up. Nobody is to blame for what is happening to Russia now except Mr Putin.

[Baroness Falkner of Margravine (LD)]

My Lords, does my noble friend accept that a political collapse in Ukraine will have not only profound security but also economic consequences for the entire West? Will she therefore tell the House why the international and multilateral institutions are being so very cautious in putting in place a Marshall plan for Ukraine? If the Ukrainian Government collapse, it will be too little, too late if this caution continues to prevail.

[Baroness Anelay of St Johns]

My Lords, I am sure that my noble friend is aware that the IMF has been carrying out a study within Ukraine. It was clear when the Ukrainian Government put forward their first budget, which was adopted by the Rada, that there was a shortfall—it did not properly reflect the need for international activity. We are now waiting for the IMF to report on its findings before we can make further estimates about what action to take. I understand entirely why my noble friend is so concerned.

[Lord Cromwell (CB)]

My Lords, I declare an interest as reflected in the register. Will the Minister agree with me that the winner of this argument will be the party that brings economic development in particular to western Ukraine rather than picking fights with the Russians and their friends in the east?

[Baroness Anelay of St Johns]

My Lords, we are not picking fights with the Russians; it was the Russians who invaded and took Crimea. We are simply making sure that we hold them to their international obligations. The noble Lord is right to point to the importance of the development of Ukraine, but first, of course, they have a lot to do in addressing reform in their country, in particular corruption.

[Lord Anderson of Swansea (Lab)]

My Lords, is the Minister confident that the West and the international financial institutions are geared to prevent an imminent collapse of the economy of Ukraine? The conventional figure being bandied around is $27 billion, but she may have noticed in this morning’s Financial Times that George Soros was talking about $50 billion and saying that the defence of the economy of the Ukraine is effectively the defence of the West. Are we geared to respond adequately?

[Baroness Anelay of St Johns]

My Lords, we are watching very carefully what will happen when the IMF reports. The noble Lord, Lord Anderson, is absolutely right to draw attention to what could be a very severe development and I am aware of Mr Soros’s article this morning. However, until we see the assessment by the IMF, it would be improper of me to make a guess as to what action we should take. It is clear, however, that we and our allies across Europe and in the United States are determined that Ukraine should be able to continue to receive proper support.

[Lord Howell of Guildford (Con)]

My Lords, just as “General Winter” did for Napoleon in Russia, is there not a good chance that “General Oil Price” will do the same for Vladimir Putin?

[Baroness Anelay of St Johns]

My noble friend is far more expert in matters of energy and oil prices, but we have all noticed the drop in the oil price to below $50 a barrel, which is having a severe effect on the Russian economy. However, certainly as far as Mr Putin is concerned, with regard to Ukraine there is a straightforward answer to achieving the relaxation of sanctions, which is to abide by the Minsk protocol and to remove his troops from a sovereign state.

[Lord Dykes (LD)]

Does my noble friend heed the wise words of the noble Lord, Lord West, earlier on in these exchanges about no excessive overreaction in the West, bearing in mind that Russia—not only Putin, but many people in Russia—feel very resentful about American triumphalism after the collapse of the Soviet Union, with overreaction, threats of new missiles and so on? The whole long litany of mistakes made by the West has caused Russia to find excuses for bad behaviour.

[Baroness Anelay of St Johns]

My Lords, given that Mr Putin invaded a sovereign state and has seized part of that sovereign state, where the humanitarian situation, in particular for Crimean Tatars, is deteriorating, our response has been moderate and proportionate.

[The Lord Bishop of St Albans]

My Lords, we must not forget those Ukrainians living in Crimea who now find themselves under the Russian state. Could the Minister update us on what representations have been made on their behalf and, in particular, whether the OSCE monitors have made any progress in gaining access and finding out what is going on?

[Baroness Anelay of St Johns]

My Lords, the right reverend Prelate is right to raise these issues. We are still trying to ensure that the OSCE monitors gain access to Crimea, as they should be permitted to, but there have been many obstacles in their way. We are aware that conditions for the Crimean Tatars have deteriorated. That is a matter of great concern, which is discussed by us and our allies across Europe with the ICRC and other humanitarian organisations.

Higher Education: Funding

Thursday 8th January 2015 Lords Chamber

Question

11:30

Asked by

[Lord Stevenson of Balmacara]

To ask Her Majesty’s Government what assessment they have made of the long-term sustainability of higher education funding in the United Kingdom.

[Baroness Williams of Trafford (Con)]

My Lords, participation in higher education has huge benefits for both student and state, and that is why the English higher education funding system shares the cost of study. The system of grants and government-subsidised student loans, which are based on income-contingent repayment, has enabled us to maintain student numbers, and universities now have a sustainable income stream. In 2014, we have had record participation rates both for 18 year-olds and for disadvantaged students.

[Lord Stevenson of Balmacara (Lab)]

I thank the Minister for that full reply. I thought that she would simply refer me to the Answer that she gave on 15 December to a very similar Question from her noble friend the noble Lord, Lord Sharkey. I have read the OECD report that she quoted on that occasion—in fact, she quoted it three times—to support her assertion that the coalition Government have a sustainable system of higher education funding. On page 261 of that report, the OECD notes:

“Since 2009, further changes have been made to tuition fees and public support systems”,

in the United Kingdom.

“However, the data presented here … do not reflect these more recent changes”.

In other words, since the tripling of university fees, the elimination of HEFCE’s teaching grant and the introduction of punitive interest rates for student loans, the OECD has actually made no statement about the sustainability or otherwise of the coalition Government’s present HE funding system, and it is surely disingenuous of Ministers to assert otherwise. In the light of this, would the Minister confirm that her quote was taken out of context from the OECD report, apologise for misleading this House and withdraw the comments that she made on behalf of the Government on 15 December?

[Baroness Williams of Trafford]

My Lords, to say that a Minister is misleading the House is quite a strong thing to say and should definitely be backed up by facts. I refer the noble Lord to a comment by Andreas Schleicher, the OECD’s director for education and skills, two days ago in an article, where he said that,

“the UK offers still the most scalable and sustainable approach to university finance”.

I wonder whether the noble Lord might in fact withdraw his comments.

[Baroness Sharp of Guildford (LD)]

My Lords, I declare an interest as a member of the Higher Education Commission, which questioned the sustainability of the system. Is the Minister aware that the IFS now reckons that, at £44,000, the average debt of UK students is higher than that of students in the United States? Is it really right that a teacher aged 35 should be unable to obtain a mortgage because of the student debt that they still owe? The typical average teacher is likely to be unable to pay off that debt throughout their career.

[Baroness Williams of Trafford]

My Lords, the way in which the repayment system is structured means that no student, when they complete their studies, should ever be at a financial disadvantage. No graduate has to pay back their loan until they achieve an earning of £21,000 a year. There should not be any fear of an inability to pay back for the postgraduate student.

[Lord Morgan (Lab)]

My Lords, is there not a serious imbalance in university funding in terms of research, which has not been covered so far? The biblical precept has been followed of “To him who hath, more”—much more—“shall be given”. The effect is that only a small number of large, highly endowed universities are able to conduct a full research programme and be research active. Is it not seriously damaging to higher education in this country that our financing of research should be based on this inbuilt inequality?

[Baroness Williams of Trafford]

The noble Lord is absolutely right that research is fundamental both to universities and to the economic future of the country. I refer him to the Chancellor’s Autumn Statement, in which the Chancellor announced a significant amount of new money for research.

[Lord Foulkes of Cumnock (Lab)]

My Lords, the Minister’s reply implies that the system of university funding is the same throughout the United Kingdom. That is clearly not the case: there is an entirely different system in Scotland. Would she consider the UK Government and the Scottish Government setting up a joint investigation into the cost-effectiveness of both systems and reporting to both Parliaments?

[Baroness Williams of Trafford]

My Lords, that is possibly a matter for the devolved Administrations to decide.

[Lord Sutherland of Houndwood (CB)]

My Lords, since the changes in the funding of universities have taken place, one of the problems which has come to the surface is the funding of postgraduate students. That is because undergraduates graduate and leave with a fairly large debt, which makes them unready, unwilling and perhaps unable to fund further postgraduate work. Will the noble Baroness go back to the department and look at how we can deal with this?

[Baroness Williams of Trafford]

My Lords, the noble Lord may be aware that the Chancellor recently announced that, from 2016, postgraduate students will be able to get a loan of up to £10,000 for their studies.

[Lord Elystan-Morgan (CB)]

My Lords, is it not the case that Her Majesty’s Government have made an assessment of what proportion of student loans are likely to be recoverable? Will the noble Baroness tell the House what that figure is?

[Baroness Williams of Trafford]

My Lords, that figure varies—I think that my noble friend is referring to the RAB charge—because of macroeconomic factors such as earning potential and, therefore, the ability to repay. It is currently estimated to be around 45%.

[Baroness Walmsley (LD)]

My Lords, how many mortgage lenders are taking student loans into account when considering applications for mortgages?

[Baroness Williams of Trafford]

I do not know the answer to that question but am very happy to write to my noble friend.

[Lord Winston (Lab)]

My Lords, I was astounded to hear the Minister suggest that research in universities is properly funded when in fact they have laboured because the research councils have supported flat cash for the last five years, so there has been no adjustment at all for inflation. That has had a very serious effect on all aspects of research, including postgraduate education.

[Baroness Williams of Trafford]

My Lords, the point I made was that the Chancellor announced a significant amount of funding for research in the Autumn Statement.

Business of the House

Thursday 8th January 2015 Lords Chamber

Timing of Debates

11:37

Moved by

[Baroness Stowell of Beeston]

That the debates on the Motions in the names of Baroness Massey of Darwen and Lord Turnberg set down for today shall each be limited to two and a half hours.

Motion agreed.

Early Years Intervention

Thursday 8th January 2015 Lords Chamber

Motion to Take Note

11:38

Moved by

[Baroness Massey of Darwen]

That this House takes note of the case for early years intervention in breaking the cycle of deprivation and promoting social mobility

[Baroness Massey of Darwen (Lab)]

My Lords, I am delighted to have secured this debate and, with it, an array of knowledgeable and talented speakers. In this election year, I hope that the issue of early intervention and improving the life chances of children will be high on the agenda of all political parties. It may even win votes. Without such intervention, children will suffer in terms of education, health and the acquisition of skills. That deprivation will continue to impact on social life and economic prosperity.

Research by charities, academics and politicians clearly indicates the connections between early years intervention and future economic mobility. The splendid work of children’s charities gives us valuable insights into the needs and implications of early intervention. Research from Tickell, Munro, Coughlan, Field, Allen and the Rowntree Foundation—to name but a few—is clear and forceful, and the all-party manifesto for intervention in the nought-to-two age range is a call to action.

There are many reasons for deprivation and lack of social mobility. There are particular children and families who need extra help—the disabled, those with poor health conditions or language skills, those in care, those who have experienced violence and those who are poor. I shall refer later to an ongoing Scottish programme, the Early Years Collaborative, which is an interesting model of successful intervention.

Just before Christmas I was struck by two news items. One involved the damning findings of an OECD report pointing out the link between inequality and growth in the UK. Those concerns were echoed by the Office for National Statistics. The UK has lower levels of intergenerational earnings mobility compared with other OECD countries. In fact, we have the worst performance and are way behind the Nordic countries, Canada and Australia. It is estimated that the UK economy would have been more than 20% bigger had the gap between rich and poor not widened since the 1980s. It is a shocking indictment of our society. The second news item, and indictment, was a statement by the former Archbishop of Canterbury, George Carey—the noble and right reverend Lord, Lord Carey—that parents were giving up food so that they could feed their children and were suffering levels of hardship not seen in Britain since before the NHS was created in 1948. How depressing and debilitating.

We cannot ignore the evidence that social mobility in the UK is poor and that we need to look at early intervention as a way of combating the situation. Graham Allen MP has called for decisive leadership at the political level and for effective planning and co-ordination to shift resources to early intervention. I agree. One thing is clear: unless Governments are very focused about early intervention, with precise and measurable targets and evaluation of outcomes, we will fail children and families. Unless Governments ring-fence funding for children we will fail those children. Unless Governments encourage services to work together nationally and locally to benefit children and families, we shall fail them. We have too many examples, from government departments to local services, of lack of co-ordination and slow action which we should not ignore—for example, in sharing data about children and the joint commissioning of services. There are also, of course, examples of good practice, but this practice is often not shared because there is no strategy for doing so. It is a waste of money and resources. Does the Minister agree?

A key issue for children from birth onwards is developing confidence, self-esteem and resilience. It is known—but rarely given enough emphasis—that social and emotional skills, as well as academic skills, are important for success. It is known that succeeding at tasks—whether those tasks are academic, artistic, sporting or something else—helps to build a positive self-concept which protects against adversity and encourages the confidence needed to succeed. It is known that speech and language ability is essential for communicating and self-confidence and supports all learning. A University of London study has shown that children with higher levels of emotional, behavioural, social and school well-being have higher academic achievement, are more engaged in school and make more progress.

Although material wealth is, of course, not necessarily a predictor of success, it is a powerful factor. As we know, poverty in families can mean depression and poor health and have long-lasting effects. By the age of 16, children receiving free school meals achieve lower grades than children who live in wealthier circumstances. Leaving school with fewer qualifications may mean—does mean—lower earnings or unemployment.

I should declare that I am a member of the Select Committee on Affordable Childcare, which is so ably chaired by the noble Lord, Lord Sutherland. Although our deliberations are not yet complete, we have already found that the systems and structures of childcare which parents have to negotiate are complex and confusing. We have found variability in the provision and quality of services, which is often to the detriment of poorer areas, and we have found that there is often no advantage to middle and lower income families in going out to work.

Ofsted has pointed out that only a little over one-third of children from low-income families reached a good level of development in 2013. Ofsted describes children’s centres as,

“a sector that is characterised by turbulence and volatility”,

where the accountability of the local authority may be seen as more important than that of children’s centres. Structures are changing, but often not for the better. We know that local authorities are spending less on children’s centres than they did in 2013-14, yet children’s centres can genuinely provide a place where education, health and well-being can be combined and where parents are supported. An earlier government report—the early years framework of 2011—speaks of the importance of retaining Sure Start centres, reducing bureaucracy and improving quality. The social mobility strategy of 2011 emphasised the need to encourage parental involvement, so it is ironic that all this is now at risk. Can the Minister comment?

Child health is key to counteracting deprivation. In 2012, the Chief Medical Officer called her report Our Children Deserve Better. It stated that—an obvious point—what happens in early life is a predictor of what happens throughout life and that outcomes in the UK are poorer than in other developed countries in relation to morbidity, mortality and well-being. This carries enormous costs, both financially and to child development. The long-term costs of obesity and mental health in England are simply enormous.

An initiative in Scotland called the Early Years Collaborative, which was begun in 2013, is the world’s first national multiagency quality improvement programme for children and families. Its stated commitment is to ensure that every baby, child and parent has access to the best possible support available. It seeks to shift the balance of public services towards early intervention and prevention by 2016. It is a coalition of community planning that involves all 32 community planning partnerships, including organisations such as social services, health, educators, the police and the third sector. Training of professionals and parents is a cornerstone. It involves children and families in testing ideas for improvement. The initiative has been described as a shift in culture and a social movement focused on early intervention. Results so far are promising in relation to the health, well-being and confidence of parents and children. The model has much to offer. Will the Minister look at this model and encourage his colleagues in government to do so as well?

In order to break the cycle of deprivation and improve social mobility, there are some obvious priorities: improve parenting skills; make childcare simpler to manage, with clear standards and assessment measures; ensure that services such as health, education and social services work together at community level; and ensure that the Government provide clear leadership, with a stated emphasis on the prevention of problems rather than attempted cures for the consequences of problems later on. We have a fractured early years system that is a tangle of clumsy structures—that is not a criticism of those dedicated professionals who work in those structures, with whom I sympathise. Early intervention is absolutely key to improving health, well-being, learning and social competence; neglecting it is disastrous. I hope to receive assurances that the Government understand the problem. I beg to move.

11:48

[Lord Freeman (Con)]

My Lords, I congratulate the noble Baroness. She has tremendous experience, she has already made a great contribution and I hope that she will continue with her hard work.

I would like to complement what the noble Baroness has said by concentrating on the nine to 11 year-olds—and, indeed, right up to school-leaving age at 16—because child poverty, in my humble judgment, is not to be defined simply in terms of the very early years. The impacts of economic poverty, and the poverty of guidance by parents, the local community and brothers and sisters, can last a lifetime and has to be addressed at different stages. The noble Baroness has aptly, and in a very clear way, concentrated in part on the very early years.

My limited experience, when compared with the noble Baroness, dates back to the former Prime Minister Gordon Brown’s excellent initiative in commencing what became known as SkillForce when he was Chancellor of the Exchequer. Subsequently, the Ministry of Defence, and now the Department for Education, took up sponsorship, initially financially and now in terms of model support, for the work that SkillForce does. It is largely staffed by ex-service men and women, some of whom suffered injuries, and now works with 180 schools in the United Kingdom with 4,000 children. The children are aged between nine and 16. They are identified as disruptive children in school by head teachers.

In part, they are disruptive because of child poverty. Very often they come from single-parent families. If a mother has to go to work in a supermarket, and has to leave very early and does not come back until late at night, one can imagine the depressing effect that that has on a child who is bussed back from school, particularly in rural areas such as East Anglia which I know very well. The child may travel long distances and go back to an empty home. Almost by definition, it will be a poor home. The experience of that type of poverty sometimes leads to disruption in class. That might affect only 5% of a class but it can affect the academic and social education, guidance and achievement of the rest of the class. That is where our staff, who, as I say, are mainly ex-service men and women, work very hard.

The situation is excellently set out in your Lordships’ briefing pack, The Case for Early Years Intervention in Breaking the Cycle of Deprivation and Promoting Social Mobility, prepared by Heather Evennett. I commend it to noble Lords who wish to follow up this debate. The study makes the point that attention should not be age limited to the very early years but has to be given right through to age 16. I have been chairman of the trustees of SkillForce for more than 10 years. I am glad to say that it has had a dramatic impact on reducing the NEET—not in employment, education or training—figures for those who are under-privileged and, in the early years, in economic as well as social and parental poverty. I strongly support the achievements of SkillForce.

I ask the Minister to comment on the likelihood of the United Kingdom receiving a substantial portion of the European fund that has been set aside by the European Union to deal with youth unemployment. The European Union Committee, on which I have had the pleasure to serve, has been monitoring progress, which seems remarkably slow. Any funds from Europe to help, in particular, 14 to 16 year-olds into employment—young people who might have no social skills and no background of employment—would be very helpful.

11:54

[Lord Sawyer (Lab)]

My Lords, I thank my noble friend Lady Massey for introducing this extremely important debate. I have the good fortune to be a member of the Select Committee on Affordable Childcare, under the chairmanship of the noble Lord, Lord Sutherland of Houndwood, from whom we shall hear shortly. That experience has caused me to think about the subject of today’s debate.

I have been surprised at the complexity of the issues surrounding the case for government intervention in early childhood education. Within that complexity are the varying approaches of hundreds of academics, think tanks and other organisations. It is an extremely complex issue. However, through all that complexity, what I have learnt is quite simple. In order to help break the cycle of deprivation and to promote greater social mobility, intervention in the home/learning environment at the earliest possible opportunity is absolutely essential. That includes the development of early speech, language and vocabulary, and recognition by professionals and parents that working with the young to stimulate early learning is both socially advantageous and deeply rewarding for parents, professionals and children. That is the number one thing that needs to be considered and promoted.

I have also learnt that, in nursery and child-minding settings, getting the highest quality staff possible on the front line working with children from disadvantaged backgrounds is essential. That means accepting fully the recommendations of the Nutbrown review and investing in a better trained and qualified workforce, many of whom will need to work with disadvantaged children. The Government should target and champion the expansion of high-quality provision in the most deprived areas.

I spoke this week to the head teacher at Abingdon primary school in the centre of Middlesbrough, a town which has provided excellent nursery education, who is experiencing great difficulty in coping with an expansion of parent-led demand in the inner city. She is unable to meet the demand because there are physical space requirements which she cannot afford. This means widening the gap between the children in the more affluent parts of the town and the inner core and increasing the cycle of underachievement and deprivation. That is the sort of thing that the Government could help with because targeted funding would have a major impact and effect on helping children in the inner city areas. If we do not do this we create differences in ambition and achievement at a very early age which will never be recovered.

Government recognition of the problem and intervention will probably never be enough and the problems of the poor can never be resolved without the support of the better off. Although we received evidence in our committee that the cost of childcare in the UK is 33% of net household income compared to an OECD average of 15%, something tells me that there is not a lot of room for increased parental contribution from the better off. To get a better contribution from wealthier parents, we need to look more carefully at the way in which we organise work and at how we can enhance the lives of the more affluent. This means that employers should think a lot more about how professionals can do the job they are paid to do and also manage childcare at the same time. Good work is being done on this. Some companies are working more flexibly, with greater agility and sensitivity, so that people can fulfil their roles at work and also their family responsibilities. We all know about job sharing and reduced hours flexibility, but a culture where the success of a business is recognised by its having successful employees at work and at home is very important.

I stopped being a trade union official 20 years ago. At that time I started to think about these kinds of issues but not in the fully-developed way in which I think about them now. Today, in unionised and other workplaces, childcare and early education should be at the top of the bargaining agenda. I thought about it a little 20 years ago but now I am fully full steam behind it. As with sickness, health and safety, pensions and all the other things that enhance the lifestyle of people at work, the bargaining agenda, with or without unions, should involve the quality of their lives. That is very important. For the almost 7 million lone working parents with dependent children, it is almost a necessity. A recent survey showed that half of these parents are unable to leave work on time and cannot eat with their children, so for them this is a necessity, and for the growing number of young fathers who are resentful about their work/life balance, it is also a necessity.

We have a lot of work to do with employers, businesses and Government to try to get people to think a lot more about how they can be successful in their careers and also take full responsibility—men and women—for childcare.

[Lord Storey (LD)]

My Lords, I, too, thank the noble Baroness, Lady Massey, not only for securing this debate but also for all her work with young people and on education. We know from almost every report which has looked at the issue of how to deal with the problem of social mobility—in my day we called it “life chances”—that there are two main things that we can do. One is about poverty and the other is about early years provision and the opportunities for intervention at a very young age. Children who are exposed to quality childcare and early years provision have improved outcomes. There is no argument about that, and those outcomes are also better in their adult life. Most important, the positive impact of high-quality childcare is more pronounced in those who start out behind their peers; that is, those with less educated parents, from lower income groups or with English as a second language. We know that as a fact.

What can we do? We have to make sure that we get early years education right. The social benefits for individuals and for society as a whole mean that it is of paramount importance to do that. All political parties sing from the same hymn sheet on this, while successive Governments have done their bit. The last Labour Government brought in the hugely successful Sure Start centres, the early years foundation curriculum in 2006, and free entitlement to part-time provision. This Government brought forward through the Children and Families Act 2014 early years educator and teaching qualifications, plus 15 hours a week of free pre-school care and education for the most disadvantaged. I will come back to that in a moment, if time permits.

I have six steps that we should take now. They are not controversial or difficult and they do not cost a lot of money, but they would enhance what we do. The first is this. Every indicator in reports and from practice overseas shows that the presence of high-quality staff boosts the quality of the care delivered, and the impact is greatest when staff spend a substantial amount of their time interacting directly with children and they are responsible for the curriculum. We do not want to see graduates working in early years education filling in forms but working with children so that their passion can be shared with other staff.

Secondly, from the perspective of child development alone, it is better to prioritise access to high-quality care from an early age. There should be more provision at 18 months to two years and increased hours for three to four year-olds. If we get it right for younger ages, it has more of an impact. If resources are limited, we know where they should be spent.

Thirdly, early years provision needs to resist “schoolification”. We do not want the early years to be a carbon copy of primary and secondary school. Yes, get children ready for school, but they should be able to learn through discovery and exploration and by using their imaginations. Those are all hugely important in the early years. We should resist any move to dress up our little tots in school uniforms, give them pens and paper and sit them down to learn to read and write. That is not for the early years, and actually it is very damaging indeed.

Fourthly, early years provision should engage with parents because they are the other side of the coin. That is why the Sure Start centres were so important; they engaged with parents. Early years provision that engages with parents has a positive influence on the home learning environment. Early years settings that encourage parents to read stories to their children and sing songs and encourage the children to paint and to play with friends have hugely important developmental benefits for children.

Fifthly, we need to ensure that the provision is of the highest quality. Yes, Ofsted is there to monitor and to judge, but it is not best placed to improve standards. That has to be done by others. Local authorities have a huge role to play in improving standards in early years, for example in training and development, which is really crucial.

My last point, the sixth of my six steps, is for children from 18 to 36 months. Cognitive development for older toddlers is best supported in lower-ratio formal group provision. More hours in centre-based care for two to three year-olds is associated with better language skills and better maths, leading to higher academic outcomes in primary schools.

Those are the six steps, but I will add one other point, which I think another noble Lord mentioned. This is very complicated for parents. We need to make sure that it is very simple and that parents know how to access early years—it needs to be clearly signposted, but we use all these different phrases and words. I went to the launch of Ofsted’s last early years report, which made the very same point: we use different terms for early years. Let us use one term so that we can be clear about it and make sure that parents can access it.

My final point is that I would like somebody to come up with a different term from “childminders”, because “minding” a child is not what early years should be about. Perhaps the Minister could find a different term from “childminding”.

12:06

[Lord Sutherland of Houndwood (CB)]

My Lords, I would suggest “child carer” as an alternative to “childminder”, but that is for further discussion. I thank the noble Baroness, Lady Massey, for securing the debate on this very important topic. I also pay tribute to her for what she does in this area, which is much appreciated, in this House and far beyond.

Just for the avoidance of doubt, I have the privilege of chairing the Select Committee which will report on this—we hope in good time in February—but my remarks today will not specifically be related to that report. There is another theme, or hobby-horse, that I want to ride, which is what I shall do today. To give your Lordships forewarning, that is the hobby-horse of language. The focus of what I have to say will inevitably be on early years intervention related to education in some way, but as the noble Baroness, Lady Massey, made plain, there are many elements to early intervention which have to come together, such as health, sociability and so on. I shall focus on the provision for issues related to language.

There has been good progress in school education over the last two years in relation to STEM subjects, which has been very welcome and much appreciated across the community. There is a growing awareness of the importance of language in the sense of learning a second language, be it Mandarin or Spanish. That is progress and should be encouraged. However, my focus today is to add language in the broader sense to that list where there has been progress. If you talk to primary school teachers, particularly those in reception classes and certainly those who are now dealing with three and four year-olds, you will discover very quickly that they have a distinctive set of issues and problems to face. Their work is very rewarding, and some of them are exceptionally good and patient at it—I stress the word patient—but they face difficulties which are not so apparent later in the system. I do not just mean toilet training or teaching children to tie their shoelaces or button their coats, although all that is part of early intervention at an educational level.

At the core of all this, I argue, is language. That includes, but should not simply focus on, second-language families. That is part of it and is an additional issue today, but this is about the question of learning the basic skills of communication, being sociable, asking and answering questions, making interventions or comments and securing the attention of the teacher when one is in difficulty. It has to do with commenting on and responding to what goes on in the classroom and what other pupils say. It has to do, basically, with getting away from the law of the jungle, which by and large most two year-olds inhabit, and if you have not got out of it by the time you start formal education you are in difficulty, as are your teachers and fellow pupils. It has to do with being part of a community or a tribe, not living just on the basis of what you can grab.

This is a very subtle issue. For many children, this is not a problem. For many children, this is what they learn in the rough and tumble of the family, from having siblings and from playing with the kids next door. For many, it develops in due course through education. But I ask the Minister whether he perhaps might return to the department and ask questions about how we are focusing on the acquisition of the ability to communicate—language in that broad sense.

The ways in which I think progress should be made were spelt out more than 250 years ago by David Hume and Adam Smith. Your Lordships might find this a bit esoteric and think, “Well, he did teach philosophy and we have to restrain him”, but Hume saw this process of socialisation as fundamental. It is not an add-on for as many human beings as you can manage; it is part of being a human being—being able to socialise, communicate, share and understand what others say but also what they desire and what they can reasonably expect. I will quote from one of the recent commentators on Hume’s close friend, Adam Smith. Nicholas Phillipson writes that Smith,

“held that all our sentiments”—

that is, emotions and beliefs—

“– moral, political, intellectual and aesthetic – were acquired, developed and refined in the process of learning to communicate with others”.

You do not learn language and then learn how to feel; the two go hand in hand, and unless adequate attention is paid to the development of communication, these things will also fail.

This may seem very fluffy. It is not. It is fundamental. Look further up the system. In terms of social mobility, if you measure the number of people in prison who have deficient literary and mathematical skills, that is what you will find. It starts at this age.

12:12

[The Lord Bishop of St Albans]

I, too, thank the noble Baroness, Lady Massey, for pressing this very important issue. It is, as has already been noted, an extremely complex one. We are talking about nothing less than a profound culture change in many local communities if we are to break the cycle of deprivation and increase social mobility.

For some years I worked in two parts of the West Midlands—wonderful places to live and work; I have many friends there still—but they were both characterised as areas that had extremely low aspirations. It was one thing to change the school but if the child went home and was told repeatedly, “Actually, that sort of thing does not make any difference to us. You are wasting your time”, all the work was undone. There needs to be a profound social and cultural change in the family as well.

That was one of the things that struck me when I was reading the comments in the interim report of the All-Party Parliamentary Group on Social Mobility, which reported back in 2012. It summarised its conclusions into seven “key truths”. I will pick out just the first four, which show precisely this connection. The first key truth was:

“The point of greatest leverage for social mobility is what happens between ages 0 and 3, primarily in the home”.

The second and third were:

“You can also break the cycle through education … the most important controllable factor being the quality of your teaching”.

Then it flips back to the family in the fourth one:

“But it’s also about what happens after the school bell rings”,

and the child goes home.

That same point was made very eloquently in the excellent cross-party report The 1001 Critical Days: The Importance of the Conception to Age Two Period, which was published last June. In other words, any approach needs to work not only with our schools but with everybody in the home—a parent or parents, and siblings—and every place in which the child and their family will find themselves in seeking to change that culture and that level of aspiration.

We have some collaborative holistic models; for example, the outstanding work done in the Troubled Families programme. Louise Casey, who heads up the programme, was quoted in a report published last October. She said:

“This programme is working so effectively because it deals with the whole family and all of their problems, with 1 key worker going in through the front door and getting to grips with an average of 9 different problems, rather than a series of services failing to engage or get the family to change”.

We need some imagination about the practical ways that we can get holistic approaches working at every level of the family and the child’s life if we are going to break these cycles of deprivation and increase social mobility. It will need significant resources and people with first-class skills focused over the long term. I hope that, with a general election coming up, we will steady ourselves with some of the programmes that are now beginning to bear fruit and not simply ditch them and reinvent new ones all the time.

I also plead that we work hard on establishing partnerships and close working relationships with the statutory and, more importantly, the voluntary and charitable sectors. I shall pick up on a couple of them. I have recently been in touch with the Stefanou Foundation, which is based in Welwyn Garden City, in my diocese. A major part of its work is entitled “Healthy Relationships: Healthy Baby”. It includes training in parenting. It has taken the lead in working with the police, local government, and health and probation services. It is about to launch a programme this April in Stevenage and in Westminster. It is a fascinating example of a group taking a lead on this and building on these connections, drawing in everybody to try to get this holistic approach so that we are getting some synergy, which seems fundamental.

However, we should not forget the quiet, unsung work that is going on that probably never gets on anybody’s radar. I shall give an example. I was recently in one of my churches, Christ Church in Bedford. That parish church employs a full-time families worker called Monica Cooper. It has raised the money to do this. Most people in the area probably do not know what is going on. It is long-term work. Much of it is about teaching parenting skills. The result is that Monica has been able to support a number of families. The results have been quite notable for a small number of families. It is very intensive work. It means that some children who had more or less dropped out of school are now regularly attending school. The work has been commended by a local head teacher. It is long-term and costly. If we are to find a way forward, we need local authorities to deliver clearly focused work and to act as co-ordinating bodies, engaging with national and local charities, all pulling together in the same direction.

12:18

[Lord Giddens (Lab)]

My Lords, when a technical concept in social sciences is imported into political discourse there are often problems. This has happened with the notion of social mobility. We must distinguish between what sociologists call absolute mobility on one hand and relative mobility on the other. Absolute mobility refers to changes in the labour market and occupational system that creates jobs for people to move into. Relative social mobility is the movement of individuals up and down the social scale. In principle, these two things are completely different. If we do not recognise this, we will never get appropriate policy in this area.

Almost all the social mobility experienced between the 1960s and the early 2000s was absolute social mobility; that is, it depended on the expansion of white collar and professional jobs as deindustrialisation took hold. The number of blue collar jobs shrank dramatically. Rates of relative mobility—that is, individuals supplanting others who move up and down—remained low throughout this period and remain very low today. With relative social mobility, it is crucial to understand that for those at the bottom to rise up, others above them must experience downward social mobility. This does not happen very much, because privileged groups are normally able to deploy strategies to ensure that it does not happen and to keep ahead—that has important policy implications that I will come back to.

For this reason, interventionist policies, no matter how well intentioned and designed to help individuals in a direct way, whether in early years or not, will never be more than of limited effectiveness. We have an awful lot of evidence on this: it comes especially from the Head Start programme in the United States, which was initiated as long ago as 1965 as part of the war on poverty. I can assure noble Lords that those results are immediately and directly consequential for and relevant to this country. Sure Start here was based on Head Start—one could say that the Americans had a big head start over Sure Start and put a lot more resources into it.

I shall mention three conclusions, based on an awful lot of research—good intentions are not enough in this area. First, amazingly, as a result of many studies, there is no real consensus among academics on how effective the Head Start programme has been. Some studies show improvement in cognitive and behavioural skills; others find no correlation at all. A lot of money has been spent, but the level of feedback and the implicational consequences have been relatively low. It is really important to bear this in mind: as I have said, all policy must be evidence-based; it is not enough to be based just on good intentions.

Secondly, where positive results are found, they tend to fade after a few years. This is known in the literature as Head Start “fade” and is a well established phenomenon. It means that you cannot just depend on early intervention. As at least one noble Lord mentioned, there must be subsequent interventions at other ages for these policies to work. This is clearly, plainly and empirically demonstrated; such policies have to stretch across the school years as a whole.

Thirdly, the old idea that early years are somehow a magic phase of child development, decisive for later years, has to be abandoned, at least in the case of social mobility. They are not. The Government’s social mobility and child poverty strategy is therefore quite inadequate as it is set out.

I have two questions for the Minister. First, active policies are needed to counter the strategies of affluent parents who try to ensure that their advantages are passed on to their children. This is a crucial mechanism whereby relative mobility is kept limited. The Prime Minister referred to such parents as the “sharp-elbowed middle classes”. Dare the Government stand up to the sharp-elbowed middle classes? You will not improve social mobility for people from poor backgrounds unless there is some kind of strategy along these lines.

Secondly and finally, does the Minister agree that active intervention at the level of the labour market will be crucial to ensure that dead-end jobs do not produce an underclass where there is virtually no mobility at all? Inequality always trumps mobility, and it is intervention in the area of absolute mobility that will really make the difference.

12:24

[Lord Northbourne (CB)]

My Lords, like other noble Lords, I am most grateful to the noble Baroness, Lady Massey, for getting this debate and for the wonderful work that she does for children in all sorts of other contexts. I also congratulate the Government on recognising the crucial importance of each child’s early years and on introducing the early years programme, which I fully support.

My contribution this afternoon is on one issue that your Lordships might think tangential—but it is fundamental. I do not believe that the early years programme alone as it is designed today will be enough to make a confident, committed and supportive parent out of a young person who has never known life in a secure and supportive family. We have a cycle of disadvantage to break.

All secondary schools, especially those serving disadvantaged communities, should work towards a policy that helps as many teenagers as possible to develop not only their academic skills but also their self-confidence and personal, interpersonal and emotional skills—sometimes called the soft skills—to give them the character and resilience that they need in both the workplace and raising a family as they grow up. Such a policy, alongside appropriate academic education, could be a powerful agent to increase social mobility and justice in our society—concerns about which have been so clearly expressed by noble Lords already. We know that secondary schools can do this because the best ones are doing it today. Alas, too many are not. On the same issue of supporting young people as they grow up to become parents, weekly boarding for children from severely disadvantaged families can be immensely effective.

These issues are touched on in two recent government reports published in November which I happened to find. The first is Social Justice: Transforming Lives—Progress Report. It says:

“The family is the most important influence in a child’s life”,

and that families are,

“the bedrock of our society”.

It goes on to discuss support for families but makes little or no reference to preparing young people in school for the responsibilities of adult life and parenting.

The second report is the Government’s response to the second annual report of the Social Mobility and Child Poverty Commission. It says:

“Children’s development in their early years provides the crucial building blocks for later life”.

The recommendation was that the Government should give,

“more focus to preparing children for the world beyond schools”.

The Government said in their response:

“We absolutely agree that preparing children for the world beyond education should be a key focus for all schools”.

However, they gave no indication of how they will do that.

I suggest a wider remit for secondary schools so that they provide opportunities for pupils. This is done in the best schools through team games, a cadet force, athletics, challenges, adventure and opportunities in drama, art, music and dancing, as well as debates and appropriate involvement in the running and discipline of the school—everywhere and always there are opportunities for belonging and to succeed. Not only secondary schools but youth movements and cadets should also participate in developing and helping tomorrow’s parents.

I expect noble Lords will think that this will be very expensive and difficult to do. It will of course cost more, and it will need more teachers and teacher training, as well as money for facilities. But if noble Lords are worried about cost, I ask them to think about the cost of dysfunctional families today, recently estimated at more than £40 billion a year. We live today in a society where disadvantage is passed down from generation to generation. Our policy should be that that must stop.

[Baroness Garden of Frognal (LD)]

My Lords, I apologise for intervening, but the timing of this debate is beginning to drift. I remind noble Lords that when the clock reads “5” your time is up.

12:29

[Lord Winston (Lab)]

My Lords, I will refer to two groups of experiments. First, in the 1960s, there was a classic neuroscientific experiment where newborn kittens were blindfolded for various lengths of time. After a short time of complete darkness, once the blindfold was removed, there were permanent changes in the visual cortex of the brain. That could not be fully corrected by any subsequent exposure to light. Although I completely agree with my noble friend Lord Giddens about the early years not being a special part, none the less, there are key experiences that we need during development which are not entirely ruled out by the arguments being made.

Secondly, I point out that that is exactly why I take issue with the noble Lord, Lord Storey. I do not believe that it is as simple as he makes out. This is a very competitive area. I think that I can demonstrate that by the most amazing report done in 2001 by Lars Bygren of Sweden, who looked at a village in the far north of Sweden, near the Gulf of Bothnia. He showed that of males aged nine who were subjected to a good harvest during the period that he studied in the late 1800s and early 1900s, their paternal grandchildren, the sons, had a shorter longevity than any other members of the family. That is an extraordinary finding and suggests that there is programming. At the time, the report was not taken seriously, but since then a number of interesting epigenetic experiments have been carried out which show that many things that we inherit not directly through our DNA but through the way that the genes function make a massive difference.

For example, Gregory Dunn, in Pennsylvania, has recently published a study in which he shows that an obese great-grandmother mouse passes on a trait through only her male children which causes their grandchildren, if they are female, to be obese. Obesity is a very complicated issue. This will apply to all sorts of areas of inheritance—it could well apply to cognition as well. The field of epigenetics is extremely confusing. That is why we need to be very careful not to make snap judgments about the complexity of early childhood learning. That is borne out by all sorts of other experiments which I do not have time to address.

With regard to environment, I am surprised that the millennium cohort study has not been mentioned already; your Lordships will be aware of it, I am sure. It has looked at 19,000 children born since 2000-01. That study, funded by the ESRC, and a very good example of British cohort studies—one of the reasons why we want to support British research—has been a mine for all sorts of overseas investigators in France and elsewhere who have used those data. For example, it looked at parenting, childcare, school choice, behaviour, cognitive development and health. It looked at those children at nine months, three years, five years, seven years and nine years. It bears out some of the things that my noble friend Lord Giddens said. Although there may be serious evidence of undoubted changes in cognition in early years—certainly between three and five—by the age of seven, that can often be adjusted by other factors.

[Lord Giddens]

I point out that we are not a team and it is coincidental that we are sitting next to one another.

[Lord Winston]

I thought that in a time-limited debate the noble Lord would not interrupt me, but I forgive him as he is a noble friend.

My point is that a whole range of claims are made by all sorts of authorities about maternal health and how it affects cognition, breastfeeding, socialisation, social recognition and play. Undoubtedly, when there is severe deprivation—for example, in Romania—there is clear evidence of massive changes. Nelson and his group at Harvard University have shown clearly that good fostering makes a massive difference when a child has been in institutional care for a long period but, sadly, most of those children never recover completely—certainly, in their ability to deal with emotion, stress, some aspects of cognition and so on.

Although I argue that we certainly need to do more about early years learning, it is very important that successive Governments focus this work in the best possible way to have the key access to those most at risk. That is one reason why the Sure Start programme was a good start in trying to do that.

12:35

[Baroness Walmsley (LD)]

My Lords, I thank the noble Baroness, Lady Massey, for giving me this opportunity to speak about preventing the abuse and neglect of children. Scientific and social research have proved that the development of a baby during the first two to three years has an enormous effect on the personality, happiness and achievement of the adult, and thus on the whole of society. National and local government policy can and should be mobilised to ensure that all babies can have good, healthy physical and mental growth and develop resilience. These matters affect their social mobility and, consequently, are the very foundation of progress towards social justice.

International experts have shown the effects of stress, violence, poor parental attachment, neglect and poverty on babies’ brains. We now know that during the first two years, new synapses are being added at a rate of more than a million per second and that the nature of these pathways is affected by the treatment that the child receives. We also know, without a shadow of a doubt, that the child’s brain can be damaged irrevocably by violence and maltreatment.

Politicians have played their part, too, but there is one organisation that has played a greater part than any other in bringing these matters to the attention of government and in developing policies and strategies to address them. It is the WAVE Trust, of which I am honoured to be a patron, led by its founder and CEO George Hosking. WAVE began in 1995 when George realised that the levels of child abuse in this country had not reduced in 60 years and that the majority of the policies and the money spent were reactive, simply cleaning up the mess which was left in individuals and society. He realised that unless we develop effective preventive strategies we will never be able to improve the situation, so he began researching worldwide for strategies that worked. One of the most outstanding was the family nurse partnership in the USA, and George managed to persuade the Blair Labour Government to start one up here. It has since been expanded by the coalition Government.

It is vital that we work with young mothers who are at risk in order to ensure the physical and mental health of their babies. Despite its success, however, the FNP deals with only the tip of the iceberg and is expensive, so we need other strategies to help more parents who are struggling to do the best for their babies. WAVE’s report, Conception to Age 2—The Age of Opportunity, sets out a blueprint for local authorities. It has been widely used in the UK and recommended by UNICEF for use by countries across the world. WAVE is now leading a campaign to reduce child abuse and neglect by 70% by 2030. Responding to the challenge of providing hard evidence of how results can be achieved cost effectively during the normal life of a Government, it designed the Pioneer Communities project to test the effect of a comprehensive approach to preventing harm to children before it happens. The aim is to do this in six communities in the UK between this year and 2020. A pilot in four small areas is being supported by a £15 million grant from the Treasury. I am confident that the project will prove the case for prevention as a cost-effective approach to individual child well-being and social justice but it needs more financial support. We need a general national shift to primary prevention, not just a test in four small areas.

WAVE has also led a consortium of organisations which helped the Scottish Government to improve their Children and Young People (Scotland) Act to deliver that Government’s aims. One of the ways that it has done this is through the Scottish Early Years Collaborative, which was mentioned by the noble Baroness, Lady Massey. This could be done on a regional basis in England. Will the Government consider this collaborative approach which has been so beneficial in Scotland?

Finally, the WHO recently called for a public health prevention approach: specifically, a national action plan to reduce child maltreatment by 20% by 2020. Last October, Luciana Berger MP asked a Written Question of the DfE asking if it would respond positively to this. The Minister, Edward Timpson, answered:

“Responsibility for action to tackle child maltreatment and respond to the needs of vulnerable children rests primarily with local government … health services and the police … co-ordinated by local safeguarding children boards”.

I fear that I find this answer extremely disappointing. It smacks of passing the buck. We need a nationally co-ordinated primary prevention plan, supported by the Government. Can the Minister do better than his colleague in another place? The evidence is there, the experts have spoken and the financial case is currently being made. It is time that this country was a leader in this matter, not a follower, and we could start by introducing a complete ban on hitting children and by introducing the mandatory reporting of child abuse.

12:39

[Lord Bhatia (Non-Afl)]

My Lords, I strongly support the noble Baroness, Lady Massey, in raising this serious issue, which is causing harm to the most vulnerable children in our society. I have been involved in early childhood education for over 50 years in east Africa, from where I come, in the United Kingdom and in Michigan in the USA.

I was a board member of one of the most eminent early childhood foundations, the HighScope Educational Research Foundation in Michigan. HighScope’s Perry preschool research study examined the lives of 123 children born in poverty and at high risk of failing in school. The study found that adults at age 40 who had the preschool programme had higher earnings, were more likely to hold a job, had committed fewer crimes and were more likely to have graduated from high school than adults who did not have preschool education. It was estimated that when the US Government spent $1 on preschool education, it saved $7 in the long run as it cost more to deal with the crime and delinquency of the children who did not receive preschool education.

In a report that I read a few years ago, I found the following information:

“A wealth of evidence shows that education is a key determinant of life chances. As well as being a right in itself”,

education allows,

“individuals to develop the skills, capacity and confidence to secure other rights and economic opportunities”.

We need to constantly remember and remind ourselves that education starts at the age of two, which is why early years education, free for all, is an imperative. By the time the child reaches school age, most key brain wiring, language ability and cognitive foundations have been set in place. The early years are critical in the formation of intelligence, personality, social behaviour and physical development.

Investment in the early years offers outstanding returns in both human and financial terms. If children become confident and enthusiastic for learning early on in life, they are more likely to be better students. Children who get a good start do better in school, are healthier and function better as adults. Recent studies, including those by the Nobel laureate James Heckman, have shown that investment in childhood education is more efficient and cost effective than remedial programmes for adults. A 2007 UNESCO paper suggests that one of the compelling arguments for investment in early childhood education is that the failure to do so perpetuates social and economic disparity and the waste of social and human potential.

There is a business case, as well as an educational case, for the Government making early years education free and mandatory. It is sad to see that early years education provision suffers every time there are economic crises, which ends up hitting the most vulnerable children and their families.

Will the Minister tell the House whether free preschool education for children of two to four years can be made available, with trained teachers and facilities, over the next five years? What would be the estimated cost of such a five-year programme? Would the estimated cost be ring-fenced in the national budget?

12:44

[Lord Farmer (Con)]

My Lords, I also thank the noble Baroness, Lady Massey, for bringing this extremely important subject to our attention by securing this debate.

Children in the earliest years of life are so vulnerable and so dependent on their parents that our focus has to be on strengthening families. Giving a child the best possible chance to avoid succumbing to an intergenerational cycle of disadvantage very often gives both the mother and the father a vital second chance to turn their lives around. They are frequently the product of a broken, fatherless or dysfunctional family themselves.

Too often, fathers are unjustifiably ruled out of the picture and considered to be surplus to requirement, yet they can make a significant contribution to children’s development of identity and self-esteem and can bring vital material and less tangible resources into the family. When fathers play with, read to, and help care for their children, the children have fewer behavioural problems, both in the early school years and in adolescence, and have higher IQs at age three than children from otherwise similar social backgrounds whose fathers are not involved. The public understands this: a recent YouGov poll found that 95% of adults believe that fathers are important to a child’s well-being. Yet around a million children today have no meaningful contact with their fathers.

The section in the Welfare Reform Act 2009 which made fathers’ inclusion on birth certificates compulsory unless grounds for exemption were met was never brought into force, but I urge the Government to do so. If fathers fail to register on the birth certificate, that predicts less involvement and low or non-payment of child maintenance.

Early years provision, particularly based in Sure Start children’s centres, has a vital role to play by drawing in fathers. Sure Start has evolved greatly from its beginnings, but it needs to keep on doing so. Various organisations such as the Centre for Social Justice, 4Children and others are pressing all the political parties to make the development of family hubs, particularly out of existing children’s centres, a manifesto promise. What would those family hubs do? They would be local “nerve centres”, co-ordinating all family-related support, including universal and specialist services, to help both parents.

Given the very high levels of family breakdown in this country, Sure Start family hubs would include couple relationship support and education as part of their core offer to families before, during and after separation. Local health commissioners would ensure that all ante and post-natal services are co-located within or co-ordinated from family hubs. Father engagement would be part of family hubs’ reformed core purpose and would be included in Ofsted and Care Quality Commission inspections and local authorities’ payment by results frameworks. All birth registrations would take place within family hubs; if new parents were able to register births in these family-focused settings they would see from the outset the help that is available.

Concerns about the prevalence of domestic abuse are often raised to argue against making efforts to involve fathers. Children’s safety is obviously of paramount concern, so we urgently need more effective projects which work with male perpetrators of domestic abuse where they are genuinely desperate to change. I am not minimising perpetrators’ responsibility for harm inflicted, but we have to recognise that, even if they are absent, fathers still exist in the mind of the child and can influence little ones’ behaviour, self-worth and sense of identity.

I support the right reverend Prelate’s enthusiasm for “Healthy Relationships: Healthy Baby”, a project supported by the Stefanou Foundation. In the pilots in Westminster and Stevenage, both parents receive the therapeutic help they need, whether they are the abuser or the abused, to stop perpetrating and overcome the impact of abuse and to address difficulties arising from their own childhoods. Crucially, and with safety as the overriding consideration, they are helped to co-parent the baby and other children, even if they decide not to remain together as a couple. Getting to the roots of why parents are unable to provide the consistent love upon which their children’s well-being is so dependent has to be prioritised.

We are, as a society, never going to reverse the tide of family breakdown and dysfunction that tends to affect children’s life chances so gravely unless we help parents address the drivers of their own disadvantage. This requires difficult and careful work that draws in expertise and funding from the public, private and social sectors, but also community goodwill. Behind very many grass-roots organisations is a well of resource and friendship based, perhaps, in a local church or other faith community. This is a classic area in which the welfare society has to stand four-square alongside the welfare state.

12:50

[Baroness Warwick of Undercliffe (Lab)]

My Lords, I am grateful to my noble friend Lady Massey for creating the opportunity to debate what has become a perennially important issue.

We are by now familiar with the research showing that, by 22 months, a bright child from a disadvantaged background begins to be overtaken in key abilities by a less bright but privileged child. We are told that a child’s development score at 22 months is an accurate predictor of educational outcomes at age 26, yet still the public debate about life chances and social mobility seems to focus on 18 year-olds and what university they should go to rather than on whether our under-fours are receiving the best possible early years education to give them the opportunities in life that they deserve.

Graham Allen MP argues passionately for a shift from our late reaction culture to one of early intervention. His 2011 report, Early Intervention: Smart Investment, Massive Savings, is persuasive that early intervention has the power to,

“forestall many persistent social problems and end their transmission from one generation to the next”.

His views and findings are supported by many others working in the field.

The previous Labour Government had an impressive record of investment in preventive policies targeted at children, families and disadvantaged communities. The coalition Government have pulled back on many of those reforms, but they have sustained a commitment to early intervention, particularly through the work of voluntary organisations and the private sector—and here I should declare an interest, as my sister is an early years professional and has two nurseries in Nottingham. There is a clear consensus that early intervention is needed to ensure that all our children get the best possible start in life. We know that high-quality early education is one of the most important determinants of every child’s life chances.

The Government’s child poverty strategy made a welcome commitment to 15 hours of free childcare for all three and four year-olds, and for two year-olds from low-income families. The introduction of an early years pupil premium to help three and four year-olds from the most disadvantaged backgrounds from April this year is also welcome, but it is still considerably below the help given through the older children’s pupil premium. The National Day Nurseries Association independent research for the Pre-school Learning Alliance showed that 70% of local authorities have never updated costs since the introduction of the funding formula, and that providers are losing an average £900 per child per 15-hour nursery place per year, making many unsustainable and pushing up the fees that parents have to pay for extra hours of childcare. Given the coalition’s avowed commitment to high-quality early years education, will the Minister commit to a review of the level of funding at least for two year-olds if not for under-fives?

The Family and Childcare Trust believes that, while the introduction of universal credit and tax-free childcare gives welcome extra support with childcare costs, there will be at least 335,000 families who may miss out on this vital support because of the complexity and overlap between the two systems. We know that those at the most risk of poverty are the least likely to take up their entitlement to free early learning and childcare places. The trust argues that the Government need to review childcare funding to simplify the system for parents. Can the Minister give any assurance that this will be considered?

Like my noble friend Lord Sawyer, I am also concerned about how we ensure the quality of this provision, and particularly high-quality staff. Low wages and the lack of career structure among nursery staff is an ongoing concern and will not change at all if provision is underfunded.

I have just one last point about the importance of early years education for a particularly disadvantaged group, children in care. A 2012 report from the APPG on Looked After Children and Care Leavers, Education Matters in Care, noted that despite the best efforts of social services, schools, carers and government, looked-after children remained,

“disproportionately destined to a life of academic underachievement”.

Evidence to the APPG inquiry showed that interventions in the early years can have a tremendous and long-lasting impact on the future outcomes of children in care, particularly in relation to their education. I should add that research has also shown that early intervention before the age of four can be critical for children with disabilities where language is impaired or for those with autism, attention deficit hyperactivity disorder or dyslexia.

Finally, I do not underestimate the complexity of the task. I endorse what the right reverend Prelate the Bishop of St Albans said about whole-system change. All agencies, local authorities, health and early years professionals, schools and parents need to work together if success is to be sustained. But in all this early years education is crucial to our attempts to improve the later life chances of younger children. Early intervention and its funding—sustainable funding—must become a key priority if we are to transform both the economic and the social potential of future generations.

12:55

[Lord Ramsbotham (CB)]

My Lords, like other noble Lords, I pay tribute to the noble Baroness, Lady Massey, and thank her for obtaining the debate. I also pay tribute to her for the informed, determined and far-sighted way in which she chairs the all-party children group. I echo the noble Lord, Lord Freeman, in paying tribute to Heather Evennett for her excellent Library Note. Finally, I pay tribute to the Minister who, ever since he has taken up his post, has made himself available to those of us who wish to discuss developments with him. I am particularly grateful for the provision of education, health and care plans for those in young offender institutions, which I know he is responsible for.

I am very glad that the noble Lord, Lord Freeman, mentioned SkillForce, with which I have been associated ever since it began as a project in the MoD. While observing the children looked after by SkillForce, and during my time as Chief Inspector of Prisons, I began to wonder how the children who appeared in the criminal justice system had got there, and what could be done to prevent them entering it. That led me on to the two hobby-horses which I intend to ride for the remainder of my contribution.

First, communication skills were referred to persuasively by my noble friend Lord Sutherland. I discovered that an awful lot of people in young offender institutions were simply unable to communicate and, of course, if they failed to communicate, you did not know what was wrong with them. By trialling the use of speech and language therapists in those institutions, we discovered that a great deal could be done. However, that in turn led to the conclusion that if this process had been started far earlier in these young people’s lives, they would not face the prospect of entering the criminal justice system at the age of 15.

I chair the All-Party Group on Speech and Language Difficulties, which published a report on the link between speech, language and communication needs and social deprivation, which is the subject of this debate. Some of our conclusions have already been referred to in the debate—for example, a talented child from a poor background will be overtaken by a less talented child from a privileged background unless something is done to identify, nurture and develop their talents. We strongly recommended that every child’s communication needs should be assessed before the age of two. Indeed, that is happening in some parts of the country. It is being done by health visitors who are trained by speech, language and communication therapists. However, as the noble Baroness, Lady Massey, said, what is needed is co-ordination so that this happens across the country. Good practice needs to be identified and become common practice everywhere. As the noble Lord, Lord Winston, mentioned, people change and therefore an assessment is needed not just at the age of two; rather, a programme of assessments is needed throughout these young people’s childhoods because their circumstances and conditions will change.

The second thing I want to say links up with what the noble Baroness, Lady Walmsley, said about the adolescent brain. I have been fascinated by the question of nutrition, and declare an interest as the vice-chairman of the Institute for Food, Brain and Behaviour. We have done work in schools and prisons that found that correct nutrition leads to a reduction in bad behaviour. More than that, Professor Michael Crawford has carried out a great deal of work on the importance of nutrition on the unborn. If I have one request to the Minister, it is for education on nutrition, particularly for girls, to be included in schools and young offender and other institutions so that they may prevent some of the problems that we have been talking about being developed by the as yet unborn.

13:00

[Lord Touhig (Lab)]

My Lords, my noble friend Lady Massey is to be congratulated on securing this debate, and she has most powerfully set out her case highlighting the range of interventions that would help in early years. I agree with much of what she has said and share her ambitions, although I come to this issue from a different point of view. This is because, in my experience, the common factor that has influenced and failed so many people today is the lack of a role model, support, guidance and someone going that extra mile during their early years.

A year or so before I retired from the Commons, I visited a village school in my constituency and the headmaster said to me, “Do you know, Don, when I came here to this school no one expected anything from me because no one in this village has been to university? Not because they are dull or stupid but simply because they never had the opportunity”. He said that he had had a conversation with a mother a week previously, and said to her, “Work with me. Your son is going to university”. She said, “University? You’re off your head. That’s not for the likes of us”. This story illustrates what I call the poverty of ambition—“College and university is not for the likes of us”. It is to our shame this view is widespread, especially in the south Wales valleys where I come from.

That was not always the case. I grew up in a small mining village called Abersychan. Education there was seen as a pathway out of poverty. People consumed learning and the opportunities to learn as if their lives depended on it and, if they were miners trying to get out of the pit, their lives would certainly depend on their success in learning. Education and learning were breathed as if they were oxygen. What the state or the county council failed to provide, the miners’ welfare at the top of High Street certainly provided. The Abersychan miners’ welfare was not just a place to have a game of billiards or a Friday dance, it was a library—newspapers were there. It was the centre of debate and argument; all sorts of societies met within its walls, and there were classes on every subject one could imagine. Most of the students attending the classes were miners looking to education to give them a better life—a chance to get out of the pit. There was certainly no poverty of ambition among these lads. On top of that—this might not be seen as the measure of success or achievement by today’s standards—five lads from the small village of Abersychan got to the House of Commons. Two even managed to get into your Lordships’ House. It is important to bear in mind that such effort is crucial.

Now, not everyone wants to, or should, go to college or university, but everyone should have the best possible chance. Ambition should not be seen as a sin. Social mobility is not something that should be shunned or despised. Perhaps those of us like me who are moving on a little in years and have seen many great changes in our lives should be at the forefront of encouraging those younger to reach out and achieve, and be ambitious, bold and confident. We have to be role models drawing on our varied experiences and backgrounds. We can do all the things that noble Lords have spoken of in this debate, but one thing we must make sure that we do is have an open system of education in this country that continues throughout it.

Just because we close most of our schools at 4 pm from Monday to Friday and entirely at weekends, and thus deny the public access to wonderful facilities that they have spent millions of pounds providing, it does not mean that we have to shut down education at 16, 18 or 20-plus. I had a constituent living in the village of Markham who got a university degree at 82. When I called on him, he set up a new challenge: “Parlez-vous Français?” he said. He had started to learn French. These opportunities have to be grasped. If I had one opportunity to do something positive to help the early years, I would start with the parents and grandparents, making sure that they were the role models and pushed ahead to give those following them a good chance.

Almost 20 years ago, I came across an extraordinary statistic and was shaken by it. In the United States, 80% of people in work have been back in a learning situation or classroom since leaving school. The figure was 56% in Germany and Japan, and 30% in the UK. That is the measure of how far we have to go. We have to invest in upskilling and training our people. That is the best way to ensure that young people, in their early years in particular, have role models on whom they can focus and who can say that they can achieve these things, too. This is the best medicine that can cure the sickness of poverty of ambition. Invest in upskilling and training our people to ensure that they have opportunities to use the liberation that education and learning can bring to their lives. Will this make a difference for young people? I bet it will. I have never been more certain of anything in my life.

13:05

[Baroness Tyler of Enfield (LD)]

My Lords, I, too, add my congratulations to the noble Baroness, Lady Massey.

As many other noble Lords have said, action to promote social mobility must start early. The gap between disadvantaged and more advantaged children emerges by the age of three and, as the work of the Nobel prize-winning economist James Heckman demonstrates, the earlier the intervention, the greater the effect will be in the long term. Indeed, I was pleased to hear the right reverend Prelate the Bishop of St Albans quote the Seven Key Truths report of the All-Party Parliamentary Group on Social Mobility, which I have the honour to chair. It clearly indicated:

“The point of greatest leverage for social mobility is what happens between ages 0 and 3, primarily in the home”.

The link between early intervention and social mobility is well established. We have the evidence by the bucketload. Many noble Lords will be familiar with the effective preschool, primary and secondary education study, which stated that children who attended preschool education performed better in their GCSEs and were more likely to be on track for a university degree—with all the attendant benefits in terms of lifetime earnings. These effects are even stronger for children of parents with low qualifications, indicating that early education provision is a key intervention to help disadvantaged children get a much-needed leg up.

The October 2014 State of the Nation report from the Social Mobility and Child Poverty Commission recently re-emphasised the link, stating:

“The early years matter profoundly to child poverty and social mobility. It is here that children learn basic skills such as language and communication, which are the foundations of their future learning”.

That report noted that poor children are nine months behind those from more advantaged backgrounds at age three, have smaller vocabularies and are slower to learn new words. That, of course, is why various language development programmes aimed at under-threes—such as the Born to Learn programme, which works with parents and toddlers identified by health visitors as being at risk—are so valuable.

I, too, have the privilege to be a member of the Select Committee on Affordable Childcare. From the mass of evidence we have received, one particular lesson stands out. Yes, early education can be a powerful tool in enhancing social mobility, but only if we deliver it effectively. In short, early education can have the most positive benefits only if it is of high quality. It is ironic that disadvantaged children, who have the most to gain from access to quality early education, currently often have the worst access to such provision. This is where we should be focusing a lot of our attention, and I hope that it is an area where the Select Committee can have powerful things to say when we report shortly.

Having highlighted some of the pressing concerns, I want to make clear how much has been done in this Parliament to enable more children to benefit from high-quality early years education. I applaud the policies of this Government to expand the free early education entitlement to three and four year-olds and to extend it to 40% of the most disadvantaged two year-olds. Like others, I consider the recent introduction of an early years premium to be very much welcomed.

However, what more could and should be done? First, it is clear that affordable and high-quality childcare and early education will feature predominantly in all parties’ manifestos. One could say that there may be a bidding war. I do not mind; it is a good thing that it is there. Secondly, I should like to see manifesto commitments to other things, such as the introduction of children and family hubs—the sort being developed by the charity for children which we have already heard about this morning. These are building on and extending existing children’s centres, and I, too, pay real tribute to the previous Government for introducing them. They bring together a broad range of local services, including health, childcare and social care, into a single place in a non-stigmatising way, and they provide a really excellent model of cost-effective joint working.

Finally, we need to see action to raise the quality of the early education workforce. As Cathy Nutbrown wrote in her review, not much matters more for the quality of early years education than the quality of the staff who provide it. I should like to see more action taken in that area.

Having made those points, I want to go back to where I started. Promoting good child development has to start at home. Research shows that parenting is the single strongest factor in shaping children’s development. We also know that good parenting has a particularly large impact on character and resilience. Good parenting practices can be taught and promoted through relatively simple interventions. That is one reason why the all-party groups on both social mobility and parents and families are about to embark on a short joint inquiry into some of the most effective non-stigmatising approaches to parenting support. The inquiry will report in March and I look forward to reporting its conclusions to your Lordships’ House.

13:11

[Baroness Finlay of Llandaff (CB)]

My Lords, like others, I congratulate the noble Baroness, Lady Massey of Darwen, on having secured this debate and on attracting a large number of speakers.

I want to focus on the development of the brain. Without our brains, we cannot learn, we cannot learn language and we cannot interact. If in the next generation we do not ensure that brains are developed property, we will not break the cycle of maltreatment and failure within the social environment and every other environment in society.

It is worth noting that 90% of brain size has been acquired by the age of three, so the focus on the first 1,001 days—that is, from conception to the age of two—which has already been alluded to by other speakers, is critical. The Wave Trust has done a lot to raise awareness and to pull together the evidence in this area. The long-lasting effects of maltreatment are in the physical, socioemotional, cognitive and behavioural domains.

The consequences and costs of such maltreatment are phenomenal. As has already been said, managing it costs about £15 billion a year. As well as the physical and mental suffering of the individual and the damage to educational prospects, there are also high levels of aggression, which damages others in society. It is of note that 68% of those in the prison population have been abused or neglected in childhood. The Christie commission in Scotland estimated that 40% of public spending is necessary only because of our failure to intervene early enough. We are accumulating huge future expenditure by not looking at this very important area.

It is also worth noting that about one in five children is maltreated, the peak time being in the first year of life. Sixty-two per cent of those entering care in 2013 had been subject to abuse and neglect. In March of that year, more than 68,000 children were in care, so it is a very big problem. Five per cent of children have a diagnosable mental health condition, and 15% to 20% of behavioural problems are severe enough to cause concern. This is costing about a quarter of a million pounds per child. Interventions on parenting programmes that cover the period from birth onwards cost less than £2,000 per case. The difference in cost is phenomenal, and it seems almost madness that we have not addressed this issue on economic terms alone.

About 1 million children in the UK are suffering the long-term effects of maltreatment, with all kinds of behavioural disorders, but it is worth noting that the greatest predictor of prenatal depression is that the mother was herself abused. She has a tenfold likelihood of becoming an abuser. A third of abuse occurs when under the influence of alcohol. I urge the Government to get to grips with alcohol policy, particularly pricing and so on, because it may have a huge effect. In families with a history of domestic violence, there is a 23 times greater likelihood of abuse being perpetrated against children under the age of five. I stress the importance of domestic violence as a contributory factor.

It is worth considering briefly why this happens. As the brain develops, areas that are stimulated develop more. Those that do not receive stimulation, as the noble Lord, Lord Winston, has already pointed out, do not develop to the same extent. Therefore, even in the womb the child subject to stress develops a stress reaction, and the brain develops the ability to respond to stress. Children who have not experienced a calm environment do not develop the ability to have empathy and they cannot be expected to feel remorse for later hurting or killing somebody, because that part of their brain is not properly developed. Nor can they develop communication skills. Therefore, the child subject to hyperarousal all through those very early days and weeks will develop a state of permanent hyperarousal and response within the brain. That plasticity of the brain carries on throughout the child’s development until the age of 16, so the other educational interventions referred to by noble Lords all help in developing the areas of the brain that have not developed well.

In my last seconds I would just stress that cutting back on mental health services in the perinatal period may be the most serious adverse disinvestment that the NHS is currently undertaking.

13:16

[Baroness McIntosh of Hudnall (Lab)]

My Lords, my noble friend has stimulated an excellent debate, for which we should all congratulate her. Coming nearly at the end of the speakers list, the temptation is to spend your time saying how much you agree with everybody else. I would like to do that but I shall not, although I would like to say that I was particularly struck by the speech of the noble Lord, Lord Sutherland, which I hope I shall be able to reflect on by implication in some of what I say. The House will not be surprised to know that I want to talk about the arts in early years provision, but I am afraid that I am going to start on a slightly sour note, which I hope the House will forgive.

On 10 November last year, the Secretary of State for Education made a speech at the launch of the Your Life campaign in which she said the following:

“Even a decade ago, young people were told that maths and the sciences were simply the subjects you took if you wanted to go into a mathematical or scientific career, if you wanted to be a doctor, or a pharmacist, or an engineer”.

I am not absolutely sure that that is true but that is what she said. She went on:

“But if you wanted to do something different, or even if you didn’t know what you wanted to do, and let’s be honest—it takes a pretty confident 16-year-old to have their whole life mapped out ahead of them—then the arts and humanities were what you chose. Because they were useful for all kinds of jobs”.

So far, so good, you might think, but then she went on:

“Of course now we know that couldn’t be further from the truth, that the subjects that keep young people’s options open and unlock doors to all sorts of careers are the STEM subjects: science, technology, engineering and maths”.

Those remarks are deeply disappointing and wrong on so many counts and in ways which go directly to the heart of this debate. As we know and as we have heard, children are capable, if they are encouraged, supported and educated thoughtfully from early on, of learning many different things in many different ways. The flexibility of mind that comes from a broadly based education is exactly what employers look for in all fields. I thought that we had left the idea of two cultures far behind but apparently not. It is profoundly unhelpful for such simplistic distinctions to be made.

Many of your Lordships—perhaps most in this House—are parents. Some of us are lucky enough also to be grandparents. Over the past few weeks lots of us will have had the pleasure, albeit occasionally a mixed one, of taking young children to arts events and/or of just sitting on the sofa with them reading, or watching, for example, “Frozen”—a cultural reference for those of your Lordships who have very young daughters or granddaughters in particular. We will have observed their joy and their absorption, and the way in which that kind of experience moves them on. They find new language, new questions to ask and new ways of thinking about the world—even the very little ones do. However, as we have heard, not all children are lucky enough to get this kind of stimulation as a natural part of their family lives, which is why it is so important that we understand and value how it can be incorporated into other areas, particularly school.

I want to mention briefly one organisation which is contributing magnificently to this important work. Artis Education has been in business for 10 years. I stress the word business for it is not a charity. Schools have to pay for its services, which they do. Nearly all its schools are in the maintained sector. I was until recently a director and the noble Lord, Lord Bichard, who is not able to be in his place today, was involved in setting it up. Artis trains specialists from performance backgrounds to deliver inspirational cultural enrichment which can be, and often is, directly related to national curriculum requirements. Its programmes are of particular benefit in raising levels of confidence and self-esteem in young children, and are recognised by head teachers and other educationalists for contributing to increased concentration, improved behaviour and overall eagerness to learn.

I recommend the Artis website to your Lordships and especially to the noble Lord the Minister. It is an inspiring read. On it you will find, for example, a wonderful blog from the noble Lord, Lord Bichard, entitled “I am not an artist”, which gives 10 excellent, evidence-based reasons why arts education is so important for young children, for society and for the economy. You will also find details of Artis’s 10 tools for transforming the new science curriculum, which set out how teachers can use arts-based techniques to address science topics. Artis says:

“This sense of wonder and fascination with the surrounding world is as important in performing arts as it is in science, and the two disciplines have many points in common”.

Well, who knew? How very true and how very obvious, but not, apparently, to the Secretary of State. Perhaps her noble friend the Minister will put her straight after this debate.

13:21

[Lord Ouseley (CB)]

My Lords, I thank the noble Baroness, Lady Massey, for introducing this debate and for the immense work that she has done over many decades for young people and children. It has been inspirational to all of us who have known the noble Baroness and her work for many years. I also thank all those who work with children. Many people across the country do tremendous work for our young people, particularly in their early years. In acknowledging that, it is important to understand the importance of that to the society in which we live.

Listening to this debate, I have been fascinated. I almost think that we are talking about children who are the same and are looking for the same outcomes. Although we have had a wide range of expert, fascinating and very important contributions, the most important contribution that links to what I want to say was made by the noble Lord, Lord Sutherland, who talked about language and communication in the broadest sense. The spoken word is so important in influencing attitudes and behaviour. I would say that if, as has been said in this debate, the predictor in the early years leads to the outcome in later years, when one thinks of someone like Ched Evans and what he is facing now, I should like to know what his early years were like. Upbringing in the early years may help us to understand how men behave towards women later in life.

I want to talk about what we are educating our children for, what the interventions are about and the society in which we live. When we talk about language and communication, in areas such as London where in parts we have 300 languages being spoken, the spoken word is very important in how we influence very fertile minds. Creating a future in which every child really matters, has a realistic prospect of genuine social mobility and well-being, achieves their full potential, and is equipped for a diverse, fair, less prejudiced and hateful society, is the outcome for which we are looking. That is the context in which we need to consider these interventions.

For me, three strands are interlinked. One is the role of the state and everything that has been spoken about in terms of health, education, housing and the environment, and how we achieve free or affordable childcare and support for the involvement and the work of voluntary organisations working with children and families. Support for families is very important and I offer my congratulations to the Government on the programme that they support for troubled families, led by Louise Casey, and the way in which it brings all those contributors together to help families break through the cycle of deprivation.

My primary points are about how we face up to the dangers of bias and prejudice in the home, in early years settings and in the wider society; how we are preparing our children to flourish in a diverse, fair and prejudice-free society; how we identify the extent of prejudice, bias and discrimination in our society and how it affects attitudes at all ages; and how we understand that early on children are adversely affected and influenced by biased opinions, views and attitudes. We know that the only time any of us is free of bias and prejudice is when we are born. Bias and prejudice comes from our parents, family members, friends, nursery and care settings, the media and wider society. All these things must be addressed as part of early interventions in order that in later life we have adults who can contribute to bringing about a fair and just society from which children will benefit in their early years.

All children matter in this context, not just those from deprived backgrounds. We all carry those biases which lead to discrimination. The early years are the most intensive period of learning. We want to influence attitudes most profoundly in the home and in the early years settings to make sure that our children have a beginning that, as far as possible, is influenced by positive attitudes. The opportunity to learn in settings with children from different backgrounds is the opportunity to learn about each other, with each other and from each other, and about oneself. Bearing in mind that I am now at the five-minute point, I will sit down.

13:27

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am grateful to my noble friend Lady Massey for tabling this debate and I add my tribute to her consistent record of championing children’s issues in this House. The issues that she and other noble Lords have raised encompass a wide sweep of social policy. We have heard about some impressive initiatives that are taking place on this issue—but that does not take away from the scale of the challenge that remains ahead.

As the latest Social Mobility and Child Poverty Commission report says, Britain is on the brink of becoming a permanently divided nation, with rising living standards bypassing the poorest in society. It concludes that there is little chance of the Government meeting the current statutory target of eradicating child poverty by 2020, which has clear and damaging consequences. As we have heard in this debate, what starts as a scandal of children being born into poverty, holds them back for a lifetime. Their education will suffer compared to their peers; they will end up in less well paid jobs; they will live in more overcrowded housing; and their health will suffer. Their children will be born into poverty and the cycle will begin again.

Sadly, what is missing is a coherent and ambitious government plan to break this cycle. The truth is that different departments are pulling in different directions, with disadvantaged children losing out. For example, a recent report of the Children’s Commissioner into the tax and social security measures of this Government since 2010 shows that families with children lost out and that the greatest losses were for the poorest 10% of families. It also shows that the most vulnerable children, such as those with a disability or being raised in a single-parent family, lose out the most. This is the result of a deliberate government fiscal policy.

Similarly, the Government’s independent adviser on health reports that the impact of this poverty can already be seen among five year-olds, with those on free school meals lagging behind their peers in being “school ready”. This includes being able to listen to stories, pay attention, use the toilet, dress themselves, and begin to read, write and do sums. As we know, this educational attainment gap widens as these children progress through schools. His report concludes that this disadvantage will be accompanied by poorer health, higher teenage pregnancy, higher numbers out of education, employment and training, and finally lower life expectancy.

Breaking this destructive cycle is not only a challenge for one department or one term of government: it requires a different mindset with a longer-term vision about the kind of society we would like to see in the 21st century. Certainly on these Benches we would argue for a fairer, more equal society where those deep divisions were addressed. We took this approach in the last Government and would do so again.

We would also hope to create a wider political consensus on the measures needed. This is why I join with my noble friends Lady Massey and Lady Warwick in paying particular tribute to my honourable friend Graham Allen, who has not only championed the case for early intervention as a solution to breaking the cycle but has managed to win support from across the political spectrum for his approach.

Crucial to Graham Allen’s approach is a belief that we need evidence-based solutions. We need to collate the very best research about which interventions work, share this best practice and refresh our learning as we progress. Inherent in this approach is the understanding that this is a long game and that policy initiatives cannot be instantly evaluated. This point was eloquently made by the right reverend Prelate the Bishop of St Albans and my noble friends Lord Giddens and Lord Winston. For us, of course, as policymakers, this is incredibly frustrating as we like instant solutions. Nevertheless, we have to face the fact that it is true.

I pay tribute to the Government for funding the Early Intervention Foundation to do just that. It is not as much as we would like but it is a start. I hope that the Minister will be able to confirm his continued support for this programme. After all, we all hope that we can prove the ultimate goal, which is that effective early intervention will not only improve the life chances of young children but will save the state money in the longer term.

Arguably, when we talk about early intervention, we need to talk about the earliest intervention. To make a real difference we need to intervene while the child is still in the womb, or even before conception, to make sure that it is a planned birth. Young people, who may not have had strong role models of their own, need education and support to understand the social and emotional, as well as the practical, challenges of bringing up a child. I very much echo the comments of the noble Lords, Lord Sutherland and Lord Ramsbotham, about investing in speech and language therapy in early years as part of that important development.

Research from Joseph Rowntree and others has confirmed the point—made by a number of noble Lords in this debate—that early interventions which focus on parenting skills are some of the most effective in improving the child’s educational outcomes and thereby their future employment prospects.

This is exactly what the Sure Start programme introduced by the previous Government was intended to do, which is why it is so sad that David Cameron has reneged on his promise to protect the service. A recent local authority survey by 4Children showed that one-third of the remaining children’s centres are at risk of being shut down, on top of the 600 or so that have closed or merged since the coalition came to power. Conservative-run Swindon Council has this year cut the budget to children’s centres by £770,000, leading to the closure of seven out of the 12 centres, despite a promise to local parents that the service would be protected from further cutbacks. This is not only a broken promise to families in Swindon but is incredibly short-sighted and leaves many of the city’s most vulnerable children without a place to go.

This is why our approach will be to renew Sure Start by opening up the centres to other local family services, such as health and childcare, to maximise the use of buildings when money is tight. By collocating family services in the centres we can create family hubs in localities which can focus on effective learning, provide help and outreach and become more responsive to the communities they serve. These family hubs are exactly those proposed by the noble Lord, Lord Farmer, and I pay tribute to his contribution. Perhaps when the Minister replies he can clarify what plans his Government have for revitalising the Sure Start network and give some reassurance to all those families who rely on the service currently or would want to do so in future.

It was interesting to hear from a number of noble Lords who are members of the Affordable Childcare Select Committee, and we look forward to their report. We believe that our policy to expand free childcare for three and four year-olds from 15 to 25 hours a week for working families will help guarantee quality childcare in safe settings while avoiding the risk of driving up childcare prices for parents. This is in contrast to the Government’s childcare policies—some of which, of course, are welcome—which fail to address the fundamental problem of supply.

There has been a reduction of more than 35,000 in early years places since the Government came to office, so it is not surprising that the cost of childcare for those who pay is continuing to ratchet up, to an extent that even the proposals in the Government’s Childcare Payments Act cannot hope to alleviate or match. Perhaps the Minister can explain what steps they are proposing to take to increase the supply of quality trained nursery nurses and quality places to meet this additional demand. Can they make a commitment to implement the Nutbrown recommendations to ensure that that quality and training is underpinned?

Our approach is based on a holistic model that works with families and communities. Our mission is to reform public services, to shift from crisis intervention to early intervention. We believe that our intervention model will reduce inequality, boost social mobility and narrow the gap between the most vulnerable and the rest. I look forward to hearing whether the Minister is able to match our vision and provide a persuasive programme for tackling these issues in the future.

13:36

[The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)]

My Lords, I thank the noble Baroness, Lady Massey, for securing this important debate, and all noble Lords for their speeches. The noble Baroness referred in her eloquent opening speech to the terrible state of relative social mobility in this country—or, rather, our dreadful social immobility—and to the importance of early intervention in that regard. At the end of this Parliament, as at the start, the coalition Government remain fully committed to breaking the cycle of deprivation, promoting social mobility and a more equal society.

Central to this is the goal of ending child poverty in the UK by 2020 and reducing inequalities. Despite the challenging economic circumstances and fiscal restraint imposed on us by the state of the public finances that we inherited, we are making significant progress, with 300,000 fewer children living in relative poverty under this Government. The evidence is clear that work remains the best route out of poverty. We know that children are three times as likely to be in poverty if they live in a workless family. Therefore, at the centre of our child poverty strategy is a commitment to tackling worklessness, and it is clear that our reforms are making a real difference. Thanks to this Government’s jobs miracle, employment is up by nearly 1.75 million since 2010 and there are now nearly 400,000 fewer children in workless households. Both the number and the proportion of children in workless households are at the lowest levels on record.

Through our structural reforms to welfare we are lifting people out of poverty, putting in the right incentives to get people into work and to make work pay. As for action before they reach the workplace, this Government’s commitment to improving educational outcomes has seen poorer children do better than ever at school. Since 2010 the proportion of children on free school meals getting five good GCSEs has increased by more than 20%, from 31% to 38%. These are substantial leaps in educational attainment which will make a real and lasting difference to children’s lives as they develop.

Evidence strongly shows that good-quality early years provision, especially from age two upwards, has benefits for children’s all-round attainment and behaviour, particularly for disadvantaged children, and that these endure all the way through to GCSE and future earnings. Attending preschool has led to young people getting higher total GCSE scores and higher grades. They are more likely to achieve five or more good GCSEs. The benefits of going to a preschool translate into an extra 41 points, which is the difference between getting, for example, seven grade Bs versus seven grade Cs. In addition, the Institute for Fiscal Studies estimates that children who have attended preschool will be substantially financially better off over their lifetimes.

We know that early education matters and we have already increased the free early education entitlement for all three and four year-olds to 15 hours as compared with 12.5 hours under the previous Government. However, we know that the poorest children are less likely to take part and benefit from early years education, and it remains a concern that children from poorer backgrounds continue to start school having achieved less than their richer peers. Our new entitlement to early education for around 40% of the most disadvantaged two year-olds aims to address this gap, and already more than 150,000 children are benefiting from this. We have supported the aim with an investment of £100 million. I have to say that when I first heard about this requirement for a massive increase in places, I thought that it was a very challenging delivery task, so I would like to congratulate both the sector and the officials in my department on managing this increase in provision. The has clearly been a great success, as has been acknowledged by many people, including Alan Milburn.

The gap in participation and achievement between the poorest and others is also why we are encouraging more schools to offer nursery provision, either themselves or in partnership with others. Schools are trusted and convenient, particularly if an older sibling is already attending. Nurseries attached to primaries have higher-qualified staff, which has clearly been shown to improve outcomes, and this kind of provision can improve the transition from nursery to primary because it enables schools to get to know the families earlier.

We are increasing accountability. From 2015, the reception baseline will be introduced, and from 2016 this will be used to hold schools to account for the progress from reception right through to key stage 2. The reception baseline will provide a snapshot of each child’s starting point in reception and means that the progress schools make with all children, including those from a low starting point, will be recognised. However, we cannot and will not be complacent. While the attainment gap is narrowing at the age of 11, data show that a persistent attainment gap of some 19 percentage points remains at the age of five between the poorest children and their better-off peers. Our reforms are intended to tackle that, and the early signs are good, but we must continue to apply every effort.

As the noble Lords, Lord Ramsbotham, Lord Sutherland and Lord Ouseley, and the noble Baroness, Lady Jones, have said, language is extremely important. We know that particularly children from disadvantaged backgrounds can struggle with language and will hear literally millions fewer words during the course of their childhood than their more advantaged peers. Improving the assessment of children’s early language and communication is important. The healthy child programme review and the early years foundation stage progress check at around the age of two provide the means to do this. Through the early language development programme, more than 12,000 practitioners have been helped to support early language development. Moreover, we have reformed the early years curriculum to be more focused on literacy and our phonics programme has been a huge success.

After 12 years of consistently rising prices, the costs of childcare in England have stabilised for the first time. Once inflation is taken into account, costs for some of the most popular types of childcare have actually fallen. This means that more parents are able to access affordable childcare and support their families. However, we are going further. We will provide up to 85% of childcare costs through universal credit. Tax-free childcare, which is being introduced this year, will be accessible to many more families than the current employer-supported childcare scheme, which is offered by only a minority of employers. Tax-free childcare will also be available to self-employed parents.

The Government are also improving children’s outcomes through other key reforms, including additional funding for disadvantaged children through the early years pupil premium, which will help to close the gap between children from disadvantaged backgrounds and their peers. Today, my honourable friend the Parliamentary Under-Secretary of State for Children is announcing the names of seven local authorities that are implementing the new support this term, which will be available throughout England from April.

My noble friends Lord Storey and Lady Tyler and the noble Lord, Lord Sawyer, mentioned issues around the early education workforce. We know that the qualifications of the workforce directly impact on the quality of provision, and it is very pleasing to see that the proportion of staff in early years education with level 3 qualifications continues to increase, as does the proportion qualified to at least degree level. We also recognise that health is closely tied to achievement, and we are working with colleagues across government to ensure that children get effective and joined-up support. There is a significant body of evidence which demonstrates the importance of sensitive, attuned parenting for promoting secure attachment and bonding, especially during pregnancy and the early weeks following childbirth. The earliest experiences shape a baby’s brain development and have a lifelong impact on its mental and emotional health. This is a period of great opportunity, but also of great vulnerability. There is clear cross-party support for early intervention, and the Government have made significant progress in this area through strengthening the health visiting service, delivering the healthy child programme, launching the Early Intervention Foundation, and working with various stakeholders to ensure that all children have the best possible start in life.

While there is widespread agreement that the activities which take place during the early years are very important, the challenge is working out precisely how to invest money most effectively, thus targeting the right children in the right way in order to get the best outcomes, as the noble Baroness, Lady Jones, mentioned. Stronger evidence is needed to help local authorities make the best funding decisions for the long term in order to complement the work of the Early Intervention Foundation and link closely to other activities such as the healthy child programme, the troubled families programme and family learning provision. That is why the Chancellor announced in the Autumn Statement a zero to two year-old early intervention pilot to be run jointly by the Department for Education and the Department of Health to prevent avoidable problems later in life. The Government will work with pilot local authorities to draw on the success of the troubled families programme, and I am grateful to the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Ouseley, for their kind words about its achievements.

My noble friend Lady Walmsley mentioned the report, The 1001 Critical Days. This sets out the particular importance of perinatal and maternal mental health. The Department of Health is already working on a number of measures in this area. Furthermore, the evidence-based healthy child programme, the key universal public health service for improving the health and well-being of children, aims to prevent problems in child health and development and to contribute to a reduction in health inequalities. In November, the Department for Education and the Department of Health jointly published the findings of a year-long study of pilots run in 10 local authorities looking at ways to get health visitors and early education practitioners working closely together to give parents a coherent and useful assessment of their child’s development at the age of two. This should help to identify as early as possible any areas where a child needs additional support to get them on the right road to success. We expect health and education practitioners to work together to deliver integrated reviews from September this year. Both departments have also been working on the CANparent pilot, which was introduced to offer high-quality, stigma-free, universal parenting classes to enhance the skills and confidence of mothers and fathers, and ultimately to improve outcomes for families. Almost 3,000 parents in total have now taken part in the two CANparent trials across the four trial areas, and a new one-year trial is being set up.

As the noble Lord, Lord Ramsbotham, the noble Baroness, Lady Finlay, and my noble friend Lady Walmsley all mentioned, domestic and child abuse are also important issues. In December, my right honourable friend the Home Secretary announced an intention to create a separate offence of domestic abuse. This demonstrates our commitment to tackling all forms of this terrible crime. Furthermore, we are providing nearly £1.4 million to support young victims of domestic abuse, and have supported health visitors to help them identify and respond to such abuse.

As my noble friend Lord Farmer and the noble Baroness, Lady Massey, both mentioned, children’s centres have an important role in supporting families through accessing universal services and targeting those at risk of poor outcomes. The noble Baroness, Lady Jones, talked about the closure of Sure Start centres, but the important point to make is that an independent survey has shown that a record number of parents, more than 1 million, are now using children’s centres. The noble Baroness also asked about increasing provision from 15 to 25 hours. It is very important to have a balance between childcare and family provision. We understand that this has been costed at £800 million and would be funded by the bank levy—which I am told that the Labour Party has pledged 11 times already. However, we believe that it will actually cost £1.6 billion, and providers tell us that they will struggle to provide this level of extra provision and maintain the quality without increasing costs, which means that the £1.6 billion is likely to increase. If people want more support, this can be provided through the working tax credit, the coming universal credit and tax-free childcare.

The noble Baroness, Lady Massey, referred to a Scottish programme, which I will certainly look at. My noble friend Lord Freeman referred to SkillForce, of which he is chairman, as did the noble Lord, Lord Ramsbotham. I am well aware of this excellent organisation and the very good work that it does. This Government are very keen to engage ex-service personnel in schools through organisations such as SkillForce, Challenger Troop and Commando Joe’s, and we have an active programme of expanding cadet units in schools. My noble friend Lord Freeman asked whether we will get access to a Euro fund on youth unemployment. I will write to him about that. The right reverend Prelate the Bishop of St Albans and my noble friend Lady Tyler talked about the importance of family. Of course, it is a question of balance between childcare and the importance of children forming a close attachment with their parents, or at least with one parent.

The noble Lord, Lord Giddens, made some extremely interesting points about relative social mobility, as did the noble Lord, Lord Winston, about epigenetics and the importance of continuing support throughout a child’s life. I agree entirely with those comments and can assure them that this Government, and this Minister in particular, are heavily focused on relative social mobility. Some 7% of children in this country go to private schools, and they get over 50% of the top jobs, while just under 5% go to grammar schools, and they get over 20% of the top jobs, which leaves the other 90% of students in this country getting, at best, between 20% and 30% of those jobs. That is why this Government have been so focused on improving the quality in particular of what we used to call comprehensive education. The noble Lord, Lord Giddens, referred to what he talked of as an underclass, and I would just mention the success of our troubled families programme in this regard.

The noble Lord, Lord Northbourne, referred to schools having a wider offer of facilities and extra-curricular activities, including cadet programmes. He also talked about weekly boarding, something of which I am a great fan and which, when I finish this job, I intend to introduce at the secondary school I support. The noble Lord, Lord Farmer, made some very interesting points about fathers and absent fathers. I know from my work in schools the damaging effects suffered by so many children who have no male role models. This can be so damaging for both boys and girls, which again is why engagement with organisations such as SkillForce can be so important.

The noble Baronesses, Lady Warwick and Lady Jones, talked about overall funding for early education. We have increased this from £2.6 billion last year to £2.9 billion this year. The Family and Childcare Trust costs survey in 2014 gave an average cost of £4.25 per hour for children aged two and over, which compares favourably with the government funding rate of £4.51 per hour, or £5.09 for two year-olds.

The noble Lord, Lord Ramsbotham, made some interesting points about nutrition, which of course is so important in schools. Good schools focus on it heavily, and it is also about engaging with parents. Quite a lot of advice is available from the Department of Health for new parents on this but I will look at what more we can do in this area.

The noble Lord, Lord Touhig, talked about poverty of ambition. When I was at university—I was only the second person from my school ever to go to university—it was with a lot of Welshmen from whom I learnt a great deal, including some interesting tactics on the rugby field. Sadly, the schools from which those young men came no longer send many, if any, children to that university. We need to turn this round.

The noble Baroness, Lady McIntosh, talked about the importance of the arts. Pupils in this country, on average, take more than 11 GCSEs or equivalents, so there is plenty of scope up to 16 for a very balanced curriculum, with plenty of room for arts subjects. All children should have a broad, balanced and fully rounded education, and I shall certainly look at the website that she referred to. We need to encourage more pupils, particularly girls, to consider taking more STEM subjects.

This Government are committed to tackling deprivation and promoting social mobility. We have introduced a number of key measures to tackle health inequalities, to support parenting and to provide high-quality early education to children from low-income families. We have a strong record of success: relative child poverty is at the lowest level for 30 years, there are 300,000 fewer children in relative poverty since the election and nearly 400,000 fewer grow up in workless families. At the same time, we have had a massive programme of improvements to the education system, particularly for less advantaged children. The quality of education is improving, with more children doing better at school. This is a record of which we can be proud. I again thank all noble Lords, particularly the noble Baroness, Lady Massey, for their contribution to this debate.

13:56

[Baroness Massey of Darwen]

My Lords, this has indeed been a splendid debate, as I thought it would be. I thank all noble Lords for their contributions, which have been well informed and based on research and experience. I also thank the Minister for his very thoughtful response. I may challenge some of his precepts but I thank him for his concerns. Surely all of us, whichever political party we belong to, want to see better and more confident parents, happy and active children, better citizens, and greater prosperity. I just want to comment on four or five points, as I cannot possibly comment on the whole debate,.

First, we should beware the tips of icebergs. I will not sing the song from “Frozen” at this point—I think it is called “Let it Go”, which is what I am about to do. However, we should really get down to the grass roots and, as many noble Lords have said, co-ordinate agencies and initiatives to target children and families so that they do not get a mass of things coming at them without any co-ordination or without key workers. Neither we nor children come in pieces; therefore nor should services. That co-ordination needs leadership and vision. It also needs, as has been said, continuous intervention; this is not just about early intervention but about intervening along the whole children’s pathway. Children do not come either in age-related bits, so we need cohort studies to show how we are doing in a more protracted way.

A lot has been said about the costs of not using early intervention as a tool. We should be dismayed by the costs, certainly of health and education issues. I hope that whichever Government—or Governments—come into power in May, they will take this by the scruff of the neck and say, “We will co-ordinate services, we will provide leadership and vision, and we will get to grips with this issue of children’s achievements and performance”.

Motion agreed.

Ebola

Thursday 8th January 2015 Lords Chamber

Question for Short Debate

13:59

Asked by

[Lord Fowler]

To ask Her Majesty’s Government what lessons they have learnt from the recent Ebola outbreak in West Africa.

[Lord Fowler (Con)]

My Lords, I welcome the opportunity of this short debate. First, I would like to pay tribute to the brave people who have gone from other countries, very much including the United Kingdom, to help tackle the outbreak of Ebola in west Africa. Obviously, I am thinking of Pauline Cafferkey, being treated at the Royal Free Hospital in London, and we all very much pray for her recovery. But I also pay tribute to all the others from different occupations and disciplines who have gone to help, including the 70 volunteers from the National Health Service. They have put their own health at risk and we should remember that, among the 680 healthcare workers who have contracted Ebola since the first outbreak of the disease, no fewer than 400 have died. These men and women have come from other countries in Africa and from around the world and have paid a terrible price for their altruism and selflessness.

Of course, the major casualties of the outbreak have been the 8,000 men, women and children who have died so far in countries such as Sierra Leone, Liberia and Guinea. There is perhaps a failure of imagination by us in the West about what a bare statistic such as that means for families on the ground—the individual tragedies that make up the total, with families torn apart and children left without one or both parents. The epidemic may have now reached a peak, I hope, but whether it has or not, one point is certain: we need to examine what measures should be taken to prevent further epidemics on this scale.

It is also worth remembering that any policy changes that may result from Ebola may also have the effect of helping in the fight against other diseases such as AIDS, TB and malaria, where the death toll is actually even greater. Around the world today there are 1.5 million deaths from AIDS each year, a further 1.5 million from TB and 600,000 from malaria—predominantly of children. The challenge must be to reduce radically this entirely unacceptable total of death.

What are the lessons that we can draw so far from the latest Ebola outbreak? I suggest that there are at least three. The first is that one of the reasons why the Ebola epidemic has spread so widely, so quickly and with such devastating effect is that in many parts of sub-Saharan Africa health systems are inadequate; the staff are under enormous pressure and their working conditions are often far below what any of us would consider acceptable in this country. Again, there is perhaps a failure to recognise the conditions in which medical staff have to struggle to make an impact. A few months ago I went not to west Africa but to Uganda and visited a hospital on the banks of Lake Victoria which had not received a budget increase for 10 years. Inadequate and underfinanced health systems remain the truth in so many African countries.

Sierra Leone is a prime example. The country lies 11th from bottom of the United Nations Human Development Index. The figures for infant, child and maternal mortality are bad even compared with neighbouring Liberia. Up until the crisis, Sierra Leone, with a population of around 6 million, had something like 136 doctors and 1,000 nurses to care for the population. The Health Secretary said in the other place on Monday that the Government,

“have committed more than £230 million to fight the disease in Sierra Leone”.—[Official Report, Commons, 5/1/15; col. 40.]

That is enormously welcome and makes Britain one of the biggest contributors in the world. However, my concern is not just what we are doing now but what we did before to strengthen the health system and what we will do in the future, because the whole need is for consistent policy applied year after year. My concern is that, once emergencies are over, there is a tendency for countries to fall off the agenda. We treat the casualties but we do not do enough to prevent those casualties taking place.

An excellent all-party report by the House of Commons International Development Committee, under the chairmanship of Sir Malcolm Bruce, found a strange lack of interest among the NGOs in even giving evidence on the position prior to the Ebola outbreak. The committee would have expected something like 100 pieces of evidence; it received 10. In passing, I pay tribute to Marie Stopes, Plan and Save the Children for being the exceptions to this trend. Unfortunately, the same view seems to have been taken by DfID. In paragraph 33 of its report, the committee found that bilateral programmes directly managed by DfID for Sierra Leone and Liberia were planned to reduce by £14.5 million in 2014-15 compared to the previous year, a reduction of around 19%. The committee commented that it was “appalled” that the budget was being cut in this way. Since then, policy has changed. Emergency money has been put in. A vast effort is being made to help. I welcome that, but my view remains that the priority of policy should be, above all, to provide consistent support for a country such as Sierra Leone, which is one of the poorest in the whole world.

My second point also concerns consistency. I declare an interest as a non-executive director of the International AIDS Vaccine Initiative, which is a non-profit organisation working to develop a vaccine for AIDS. My point today is a more general one about vaccines. If we can develop them successfully, this can have a dramatic effect, as we have seen in a number of countries in relation to the polio vaccine. But there is one point about vaccine development that is also absolutely certain. They take a long time to develop—sometimes a very long time. For example, the polio vaccine took 47 years to develop and the whooping cough vaccine took 42; with some of the diseases—malaria, for example—the search has been continuing for well over a century. The development time has a number of impacts. It means that the pharmaceutical industry is not always able or willing to invest what could be very substantial sums in development. The result is that, in my view, there is a particular responsibility on Governments to finance development here. The United States does a vast amount in this respect. I fear no one would claim that the United Kingdom proportionately does the same.

The third and final lesson that I believe we should examine is the medical staffing position of some of the poorest countries in Africa to see whether the developed world is taking too many of the doctors and nurses who have been trained in Africa but then come to work and settle in countries of the West and the Middle East, including the United Kingdom, of course. Let me be absolutely clear: the doctors and nurses who have come here have made an invaluable contribution to the health service. There is no doubt about that. But that is not the end of the story. Seen from Africa, the problem is that many of the doctors and nurses who have been trained at some expense have left Africa, which is in vast need of their care, to go abroad. Taking Sierra Leone as an example, around 600 members of National Health Service staff received their primary medical qualification in Sierra Leone. That is small in our terms but absolutely massive in terms of Sierra Leone. Relatively few return.

I do not claim that it is going to be easy to reverse that trend. It is a question not just of salary but of the medical conditions to which doctors and nurses will return. What we should be aiming at is a situation where there is investment in inward migration but also in outward migration—a two-part thing. It is neither desirable nor possible to have a blanket ban on the immigration and emigration of medical staff. Ideally, it should be a two-way process, as an excellent report by VSO makes clear. But what is clear at the moment is that Africa appears to be a very heavy loser from this process and that we in the West would do well to mount an inquiry to see what can be done to correct that position.

These are just three questions that the Ebola crisis raises: whether we are doing enough to develop and produce vaccines; whether our policies in the West are taking away a disproportionate number of doctors and nurses from African countries which badly need them; and, above all, how we can further strengthen the health systems of countries such as Sierra Leone so that further human tragedies can be prevented. My hope is that the tragedy of the Ebola outbreak today may point the way to producing more permanent answers for the future.

14:10

[Baroness Kinnock of Holyhead (Lab)]

My Lords, I thank the noble Lord, Lord Fowler, for initiating this debate and for his extremely thoughtful introduction to the subject, which made many of us think of the complexity of the issue.

After more than a year, the current outbreak of Ebola continues to destroy lives, livelihoods and communities. It impairs national economies and has damaged already fragile basic services. Ebola is a frequently recurring and fatal disease. Since its discovery in 1976, there have been several separate outbreaks with casualty rates as high as 90%. As Kofi Annan has said, it was only when the disease got to Europe and America that the international community really woke up to the crisis. This judgment was echoed by Dr Margaret Chan, the director-general of the World Health Organization. Speaking on the reason for the failure to produce a vaccine or a cure after 40 years, she said:

“Because Ebola has been, historically, geographically confined to poor African nations. The R&D incentive is virtually non-existent. A profit-driven industry does not invest in products for markets that cannot pay”.

She made that sombre statement in a world in which 38% of the population do not have access to essential medicines and 50,000 people die each day from largely avoidable causes. Governments and industries should by now have recognised the need for co-ordinated efforts to make registered medicines available at low cost or no cost. Surely Ebola has reminded everyone that, wherever a health crisis occurs, it affects us all. Professor Peter Piot, who first identified Ebola, has said that it would not have been difficult to contain the outbreak if those on the ground had acted quickly but he said that tragically,

“something that is easy to control got completely out of hand”.

Investments in healthcare as well as in drugs are essential everywhere. The unimaginable suffering endured in poor countries by poor people urgently needs and deserves a response. Liberia has 51 doctors to serve a country of 4.2 million people. Sierra Leone has 136 doctors for a population of more than 6 million, an average of 0.2 doctors per 10,000 people. There are too many similarly pitiful shortages. Clearly, the reason we do not have a vaccine against Ebola is that the likely victims of the disease are not wealthy enough to pay for the full cost of treatments and medicines.

The BBC reported this morning that the current epidemic has taken more than 8,000 lives in the three west African countries most affected. The mortality rate is estimated to be 70%. Around 75% of the sufferers in Liberia, for instance, are women who, obviously, are the primary carers and the ones with the responsibility for caring for sick and dying relatives. All three countries lack functioning health systems and access to clean water. They have poor hygiene practices and, generally, an absence of sanitation. According to the NGO WaterAid, such is the enormity of the current challenge that the costs of the emergency response to this crisis will amount to more than the total health and water and sanitation aid committed to Liberia and Sierra Leone over the past five years. That gives us an idea of the nature of the crisis. Lessons must be learnt from the fact that the effects of the response in Nigeria and Senegal have clearly shown that the virus can be contained with a functioning healthcare system and a rapid administrative response.

There are now signs of some progress, but the epidemic is far from over and experts are urging caution. Infection rates, they advise, could oscillate and reinfection could occur. The WHO assistant director-general has warned against claiming that this very dangerous disease is under control. He said that a few mishandled burials could,

“start a whole new set of transmission chains”,

and the incidence of the disease could increase again.

A report published in last week’s Lancet Global Health by three specialist professors from leading British universities made it clear that IMF conditionalities have required Governments receiving aid to adopt policies that prioritise,

“short-term economic objectives over investment in health and education”.

Using IMF archive detail, they came to a view on the effects on the health systems in Sierra Leone, Guinea and Liberia. IMF economic reform programmes,

“required reductions in government spending, prioritisation of debt service, and bolstering of foreign exchange reserves. Such policies have often been extremely strict, absorbing funds that could be directed to meeting pressing health challenges”,

with the result that all the countries “failed to meet” the very modest IMF “targets for social spending”, and,

“to keep government spending low, the IMF often requires caps on the public-sector wage bill—and … funds to … adequately remunerate doctors, nurses and other health professionals … ‘often … without consideration of the impact on priority areas’”.

Such caps,

“have been linked to emigration of health personnel”,

and massive reductions in community health workers.

The article states that,

“the IMF has long advocated decentralisation of health-care systems”,

which,

“in practice … can make it difficult to mobilise coordinated, central responses to disease outbreaks”,

and led to a deterioration in the quality of health service delivery. The professors concluded that:

“All these effects are cumulative, contributing to the lack of preparedness of health systems to cope with infectious disease outbreaks and other emergencies … Although Lagarde’s comment on prioritising public health instead of fiscal discipline is welcome, similar comments have been made by her predecessors. Will the result be different this time?”.

That is a fundamental question, a matter of life and death. The UK Chancellor and Secretary of State for International Development have governor status in the IMF.

[Lord Bourne of Aberystwyth (Con)]

I remind Members that this is a time-limited debate.

[Baroness Kinnock of Holyhead]

I must ask the Minister, therefore: what is Her Majesty’s Government’s answer to this problem?

14:17

[Lord Chidgey (LD)]

My Lords, I, too, add my congratulations to the noble Lord, Lord Fowler, on bringing this debate to us today and on the eloquent way in which he set it out, for which I am very grateful.

There are clearly some fundamental lessons to be learnt from the Ebola catastrophe in west Africa, which can be summarised in terms of healthcare practice and provision, public health resources and general infrastructure. The year-long epidemic has now claimed more than 8,000 lives and infected more than 20,000 people. While the number of new cases in Liberia is falling, it continues to rise in Sierra Leone. The data from Guinea continue to be inconclusive, underlining the remoteness and inaccessibility of the mountainous forest region through Guéckédou, Macenta and Seredou.

Apparently the Ebola virus was discovered as long ago as 1976. I can vouch for the fact that in the mid-1980s, while I was working in the Guinea interior along the borders with Sierra Leone and Liberia, villagers would speak to me of their terror of a killer disease that they believed was caught by eating bush meat from monkeys, which may well have been Ebola. At the time, we were doubling the water supply of the capital city, Conakry, but nothing was being done for the remote villages scattered throughout the interior of the country.

A primary lesson is that by not developing a vaccine to tackle Ebola in the intervening 40-odd years, the pharmaceutical establishment bears witness to the eventual deaths of probably tens of thousands and the infection of many more. The reasoning is unclear, but seems to be associated with concerns over cost recovery from desperately poor communities. However, the cost to the regional economies of decimated and crippled communities does not seem to have been taken into account.

The decision by the board of Gavi, the Vaccine Alliance to support large-scale vaccination efforts with $300 million procurement funding as soon as a safe and effective vaccine is recommended by the World Health Organisation is very welcome. However, the WHO has been strongly criticised for its slow response to the Ebola outbreak, which to date has affected more than 20,000 people and caused more than 8,000 deaths. There are clearly lessons to be learnt on the effectiveness of the mobilisation, distribution and administration of global health relief.

The Ebola outbreak has underlined the need for a fresh approach to strengthening health systems in Africa. Strengthening must be community led. Donors need to prioritise and support community ownership of health systems. The top-down approach does not fully appreciate the spiritual, cultural and political undertones to health that exist among many communities and groups.

The NEPAD organisation of African countries has agreed that each should allocate 15% of GNI to the provision of state-funded universal healthcare, but, so far, there has been little progress. In this context, it seems bizarre that some donors are promoting USA-style healthcare models, based on the principle of private healthcare being purchased by the user, in communities where abject poverty is the norm.

There is now a thing called “Ebolanomics”, or the role of the pharmaceutical sector, which raises many questions about the interaction between market economies and the pharmaceutical sector. That needs to be analysed, understood and reworked into a modern model that responds to the needs of the global population. Barriers that have prevented earlier development of treatment need to be overcome, with more support being focused on the growth of the African pharmaceutical industry. The current business model needs to be redesigned. What would that model look like? Should there be a legally binding framework to guarantee funds to research and to produce and stockpile vaccines for diseases that would otherwise be neglected?

An unforeseen effect of the Ebola epidemic is its impact on programmes to tackle other pandemics, in particular malaria. The Ebola virus is distracting attention from other diseases that still ravage west Africa. Malaria patients in Sierra Leone, Liberia and Guinea—the countries worst effected by Ebola—are now so terrified of the impact of the virus that they will not attend their local hospitals where their malaria could be easily treated with a package of available drugs. Fatoumata Nafo-Traoré, head of the UN’s Roll Back Malaria Partnership, says that without the necessary treatment, malaria patients are going to die.

The economic impact of Ebola on the sub-Saharan region as a whole will be significant, according to Roger Nord, deputy director for Africa at the IMF, who spoke at an Africa All-Party Group meeting recently. He reported that if it takes another nine months to get the outbreak under control, it is expected to reduce growth in Guinea by 1.5% and by around 3.5% in Liberia and Sierra Leone. Neighbouring countries such as Senegal and the Gambia are also starting to see tourism activities decline.

Margaret Chan of the WHO, while recognising the delayed international response and the need for increased international funds, has said that more important than anything else is the need for community funding and support. In this regard, community-level media and radio have an essential role to play, and I pay tribute to the work of the BBC World Service and BBC Media Action, which work with local FM stations that are trusted by their communities. In particular, I pay tribute to BBC reporters in the field who have overcome formidable physical obstacles to reach the most isolated communities in the grip of the Ebola virus.

Much of the work to defeat Ebola is being done by local people. Nigeria and Uganda have sent hundreds of health workers and South Africa has contributed significant funds. The media have a responsibility also to report what African people and Governments are doing to fight Ebola.

14:23

[Lord Patel (CB)]

My Lords, I, too, thank the noble Lord, Lord Fowler, for initiating this debate. I thank him also for his brilliant speech and for his great concern for those who volunteer to do this work. I associate myself with the comments that he made about Pauline Cafferkey and I wish her a speedy and complete recovery.

I want to speak on four issues as far as the lessons learnt are concerned. Could the crisis have been spotted earlier? Was the UK’s response timely and appropriate both in scale and support? What needs to happen to cope with future pandemics? Did the UK have appropriate safeguards for NHS and other volunteers who went to Sierra Leone, including on their return?

Peter Piot, in his book No Time to Lose, described the dramatic effects of Ebola infection since its outbreak in 1976 and warned us to be prepared. Previous outbreaks were controlled by prompt notification, deployment of specialist teams, quarantining of exposed individuals and isolation of patients, but the lessons were not learnt. The current outbreak started in Guinea at the end of 2013. Despite hundreds of deaths, neighbouring countries did not take any notice. Surveillance systems were not effective and warnings from organisations such as Médecins Sans Frontières were ignored. Official agencies were either complacent or did not have the resources or personnel in place to monitor the outbreak. Hundreds died. Worse, in countries where health workers were in poor supply, several hundred health workers died.

Did the WHO botch its response to the developing crisis in Sierra Leone and Liberia? The answer is most likely yes, but the question is why. Africa office representatives were not filing Ebola reports to the head office. There are lessons here as to how the WHO, the only global health agency, should operate in the future and how its performance could be improved. There is no doubt that its effectiveness was weakened by decades of policy failures and budget cuts by wealthy nations trying to fund their deficits. Wealthy nations need to restore their funding of the WHO. The Ebola crisis has confirmed a new reality: that we live in a shrinking world. To cope with future pandemics—which are sure to come and might be worse than the current pandemic—strong international organisations working with national organisations is absolutely necessary.

My second point relates to the UK response. Here I can do nothing but congratulate the UK Government on the speed with which they responded, with both personnel and finances—the second-highest donor nation after to the United States—and commend the continuing effort that DfID and WHO are making to bring this crisis to an end. We need to learn lessons as to whether we could have done better—it is always possible to have done better—but, hitherto, I have nothing but praise for our Government.

This leads to my third, and important, point—already mentioned by the noble Lord, Lord Fowler, and other noble Lords: what should we do about future pandemics? Why were countries such as Guinea, Sierra Leone and Liberia not able to cope with the crisis, when countries such as Nigeria curtailed it very quickly? The answer is very poor health systems, as has been mentioned: lack of facilities or equipment, deficit of a health workforce, lack of appropriate public health measures, and lack of surveillance and controls. Both Larry Summers, the previous Treasury Secretary of the US, and Bill Gates, when he spoke in the Robing Room, asked for help in developing health systems in those countries.

Larry Summers’s report, Global Health 2035, published in the Lancet, identifies that we will need some $30 billion a year for the next decade. Building health systems requires time and money, and the richer nations of the world need to come up to the plate to develop that. Otherwise, we will continue to have such crises, which will begin to affect us even more than they do now. The UK can take a lead in building health systems. We are the right country to do so because we have demonstrated that we can have effective influence.

My fourth point relates to whether the UK’s support for our NHS volunteers has been appropriate. It is important that we make sure that people who volunteer to go to affected countries are in a safe environment, are able to work safely and can return home safely afterwards. Comments that we have seen in some of the media, particularly social media, demonising those who return from such work, are unacceptable. Sarah Wollaston, MP for Totnes and chair of the Health Select Committee wrote a very good article about this in the Telegraph. I was disappointed to learn—if accurate—that some BBC staff feel that they can no longer interview in person people who come back from west Africa, and therefore that a telephone interview would be more appropriate. Brave BBC workers have reported from there, but such comments from the media—if correct—are also inappropriate.

14:30

[Lord Giddens (Lab)]

My Lords, I also thank the noble Lord, Lord Fowler, for securing this debate and introducing it in such compelling fashion. I join noble Lords in paying tribute to Pauline Cafferkey as she struggles for life in a hospital not far from where we are today. The latest report on healthcare workers who have died from Ebola puts the number at 500 rather than 400, which shows the awful toll it is taking in so many different areas.

I will concentrate on the economic consequences of the epidemic, to which the noble Lord, Lord Fowler, alluded. There is another tragedy unfolding alongside those of a medical and humanitarian kind. Prior to the Ebola episode, all three main states involved experienced strong economic growth following years of war and inept or tyrannical rule. Growth rates have already halved in Sierra Leone and Liberia and could even turn negative in Guinea. Tourism has come to a halt, as the noble Lord mentioned. Restrictions on mobility severely hamper trade. Agricultural production—a key area in all three countries—is way down. Rising food prices have helped create steep inflation—a very unpleasant economic scenario—which was running at more than 13% in Liberia in 2014. That situation could quite easily get completely out of hand. Meanwhile, investors are running scared and there is a serious risk of capital flight from these countries. Economically, this has the makings of a truly tragic situation.

The emancipation of women is a key aspect of economic development in emerging economies. Many women in the labour market have turned instead to the care of sick family members or others in the community. In Sierra Leone, for example, women were heavily represented in cash crop production, local trade and microenterprises. Many had to quit and most are highly unlikely to re-enter the labour force at any time soon.

As a result of this, I have three basic questions for the Minister to comment on. Like the noble Lord, Lord Fowler, and other noble Lords, my great fear is that if and when Ebola is effectively contained in west Africa, the international community will lose interest in the countries affected. Can we avoid them sinking back into despair and perhaps fragmentation? The possibility is very real that these countries could be worse than back to the point zero of some years ago when they were racked by war. These are, as every noble Lord knows, among the poorest societies on the face of the Earth. We must ensure that the international community does not lose interest if it appears that the epidemic can be contained—although some medical specialists now say that it could become endemic, which is an additional worry.

Secondly, how will the Government assess the success or otherwise of the World Bank in the budget support it pledged to facilitate trade, investment and employment in the three countries involved? The World Bank promised substantial sums of money. Does the Minister have any information about whether any of that money has been forthcoming? As we know, promises are easy to make. The sums involved were very large and it would be good to be updated on that if the Minister has that information.

Thirdly, it is clear that regional aid and investment will be crucial, coming from surrounding African states. How much progress has been made with the fund for renewal set up by the Economic Community of West African States? Any western intervention concentrated on the three principal countries must also seek to involve other African countries, and perhaps fund them in addition so that they can help the three countries most affected.

14:35

[Baroness Hayman (CB)]

My Lords, like other speakers I congratulate the noble Lord, Lord Fowler, on introducing this debate and his consistent commitment to health in the developing world. I am delighted to be able to take part in the debate but fear my contribution would probably be more useful in five weeks’ time, when I will have returned—I hope—from a visit to Sierra Leone to see for myself the work of some of the agencies with which I am associated. I declare my interests in those, recorded in the register.

Many lessons of the Ebola outbreak are already emerging. The speed of response is one that others referred to. The need for the international community to have a plan that is both flexible—because not every emergency is the same—and already funded is tremendously important. We all have a responsibility to look at how the international community could prepare for further outbreaks. As others said, not only will they occur but we cannot consider them to be someone else’s problem. Ebola is not an airborne disease, for which we all throughout the world must be extremely grateful, but other diseases are airborne. The interconnectedness of health in our global world is a lesson we must learn.

Another lesson that no one will quarrel with is that, however much international aid and however many volunteers—I, too, pay tribute to them—we parachute into a situation such as the one we have seen in west Africa, there can never be enough to replicate a basic health system that reaches into every village and community and is the absolute foundation not only of public health in normal times but of dealing with disease outbreaks. What we as a world do post-2015 in terms of the objectives for health and providing support for health systems will be tremendously important.

That will be shown in Sierra Leone because, as others pointed out, once Ebola is, we hope, no longer rampant—the noble Lord, Lord Giddens, rightly pointed out there is a possibility of it becoming endemic in the country—there will still be a tremendous specific health need left behind by the effects of the crisis. There will be the patients with malaria. We have seen a terrible spike in malaria deaths. There will be the women who died in childbirth because they were not able to get to attended facilities. There will be the health of the orphans left behind. There will be the vaccination programmes that have been interrupted. There will be a tremendous health need. As the noble Lord, Lord Giddens, said, it will be a test of us all that we do not walk away from that at the end of this process.

The other lesson that we can learn is that we can rightly be proud of the response of professionals in this country who have volunteered, of the British public, who have given more than £30 million to the Disasters Emergency Committee, of which I am a trustee, and the work of the agencies funded by that money, which goes far beyond medical treatment to provision of food and latrines for people who are in isolation, the care of Ebola orphans and safe burials. That is a tremendously important contribution.

We should also pay tribute to those in the affected countries in Africa. I will also be considering the work of Restless Development, the charity that my husband chairs, which has about 2,000 community volunteers in the field working on social mobilisation. The trust and behaviour change of communities that is needed is on a tremendous scale and does not come from lecturing by people from outside; it comes from the mobilisation of community leaders, religious leaders and individuals who are connected to their communities, who are trusted and who give the right messages and support people to change behaviours to protect themselves.

An understanding of the need to marry the command and control and international response with the grass-roots, culturally sensitive response of those on the ground, is something that we hope we can learn from this outbreak. I cannot finish without endorsing what the noble Lord, Lord Fowler, said about vaccines, to which the noble Baroness, Lady Kinnock, also referred. We have a market failure in vaccines and medicines for the poor. We cannot simply shrug our shoulders and say that the pharmaceutical industry as currently constructed cannot and will never produce the goods. We need to ensure, through government, philanthropy and voluntary organisations, that those goods are produced for the poor.

14:42

[Lord Collins of Highbury (Lab)]

My Lords, I, too, thank the noble Lord, Lord Fowler, for ensuring that this vital issue remains high on the political agenda. Last November, my noble friend Lady Kinnock initiated a similar debate, and many of the concerns raised then remain relevant today. The Government’s response on the ground has been positive, so far providing more than £200 million for treatment, facilities, expediting NHS staff who heroically volunteer and helping to finance trials and develop new treatments and vaccines for Ebola.

The UK medical workers who have volunteered in their hundreds to join the fight against Ebola in Sierra Leone are playing a critical role in the front-line response. The tragic case of nurse Pauline Cafferkey highlights their exceptional bravery and compassion. My thoughts—and, I know, those of everyone here and all noble Lords—are very much with Pauline and her family during this very difficult time.

As we heard from the Statement in the other place on Monday, Save the Children is conducting an urgent review, which I understand will involve representatives from Public Health England. Clearly, the sooner we know the results, the better. Can the Minister update the House on the review? When are the results likely to be published? As the next group of NHS volunteers leave for west Africa in the coming weeks, they will want to know whether procedures and guidance will be changed in the light of that case. Will the noble Baroness also liaise with the Department of Health to ensure that the employment and careers of volunteers who show their compassion are not adversely affected by any further quarantine restrictions that may be introduced following the review?

The role of British volunteers has been significant in the campaign against Ebola. What plans do the UK Government have to establish a standing roster of medical workers for possible deployment in future health emergencies? As we have heard in this debate, this crisis underscores the importance of investing in a strong system of research and development for global health. In Justine Greening’s own words, new technologies are,

“vital if we are to improve the health of the poorest people through better treatment and prevention”.

The UK Government have shown leadership in supporting solutions, including product development partnerships. PDPs have been instrumental in bringing through 37 new therapeutic products for poverty-related diseases registered over the past decade. Will the Minister commit to prioritising within DfID, and promoting among other key donors, the need properly to fund and support R&D for global health?

The three countries facing the largest burden of Ebola are among the poorest countries in the world and, as we have heard, have some of the most fragile health systems. They have had insufficient investment in infrastructure, the healthcare workforce, health information systems and medical supplies and equipment over decades. What is the Minister’s assessment of the state of preparedness for Ebola in neighbouring countries? What plans do the Government have to provide specific support to the high-risk countries on the WHO watch list to reduce the risk of further outbreaks? What is the Minister’s assessment of the factors contributing to the decline of cases in Liberia? What lessons from Liberia are being applied to the UK response to Ebola in Sierra Leone?

As we have heard in this debate, the main issue has been health systems not being resourced or strong enough to deal with the issue. That is a key factor. Universal health coverage, whereby there is access for all without people having to suffer financial hardship when accessing it, is a key way that we can make countries more resilient to health concerns such as Ebola before they become widespread emergencies. Universal health coverage is a clear and quantifiable goal, and 2015 is the year when international development will be high on the international agenda. On 19 January, negotiations start in New York on the replacement of the millennium development goals. I know that I have asked this before, but I ask the noble Baroness to support universal health coverage in the language of the health goal in the successor to the MDGs, the SDGs. I ask her to back that strongly because, as we have heard in this debate, universal health coverage is the key to avoiding such catastrophes in the future.

14:48

[Baroness Northover (LD)]

My Lords, I start by thanking my noble friend Lord Fowler for securing this important debate and all noble Lords who have contributed for their considered responses. As my noble friend Lord Fowler and others have made clear, this epidemic has terrible individual consequences, as well as wider social and economic consequences.

I join noble Lords in my extremely deep concern for Pauline Cafferkey. The Royal Free has just issued a statement, and I understand that her condition remains critical and is unchanged. The bravery and compassion shown by Pauline and her colleagues have helped to save thousands of lives in Africa. Like my noble friend Lord Fowler, I pay tribute to all those who have volunteered to help in that dreadful crisis. I here commend the son of the noble Lord, Lord Patel, Dr Neil Patel, as he undertakes his own challenging tasks in Sierra Leone, leaving shortly. It is vital that we never compromise the safety of such extremely brave volunteers and I can give the Government’s unequivocal commitment on that. Clearly, Save the Children and Public Health England keep this under constant review. They are reviewing the situation at the moment and we will update noble Lords as soon as possible.

I note what the noble Lord, Lord Collins, said on that and what he said about standing rosters. We have taken forward quite considerable amounts of development to ensure that those who wish to volunteer are properly trained before such a crisis and are able to be deployed in humanitarian disasters. There is new training offered by the Royal College of Surgeons to ensure that those who volunteer are safe and effective in dealing with the need in question, so I hope that the noble Lord will be encouraged to hear that. Guidelines on this particular crisis are kept under review all the time.

Noble Lords will appreciate that DfID is still focused on containing and eliminating the Ebola virus in Sierra Leone, where the UK has the leading international response. I thank the noble Lord, Lord Patel, for his tribute and I will pass it on to my outstanding colleagues in DfID. So far, we have committed more than £230 million to combat Ebola in Sierra Leone, and have already delivered more than 1,200 treatment and isolation beds and three new Ebola testing laboratories. We are also working closely with the Government of Sierra Leone to train and equip burial teams to ensure safe burial practices.

The noble Lord, Lord Collins, mentioned differences in Liberia. I am sure he will know that there are all sorts of cultural differences between the two countries—different social norms and so on—which underpin what has happened in them in this epidemic. I am quite happy to go into further detail outside as to why there have been differences here.

As the noble Baronesses, Lady Kinnock and Lady Hayman, indicated, there are tentative signs that we may have reached the peak of the disease in Sierra Leone. But as both were saying, we should not be complacent; the response is far from over. Like my noble friend Lord Chidgey, I pay tribute to the response that has come from African countries.

The economic impact of this should not be underestimated. Various noble Lords, including the noble Lord, Lord Giddens, made reference to that but I think we are all aware of it. The noble Lord also flagged the financial commitments of the World Bank. We are acutely aware that promises do not necessarily get delivered and we are working very hard to ensure that, where promises have been made, they are duly delivered.

We agree that a long-term interest in affected countries is essential to ensure recovery. The EU is convening a meeting in early March to look at resources for this and the WHO has a special session in late January to agree reforms, so a number of things are under way.

While our principal focus must continue to be on the ongoing response, it is essential, as my noble friend Lord Fowler pointed out, that we learn lessons from these actions both here in the United Kingdom and internationally. This Ebola outbreak has been unprecedented. More than 8,000 people have died and it is crucial that we make changes to ensure that this never happens again—and that lessons are carried over for other potential epidemics, as was pointed out by noble Lords, in particular my noble friends Lord Fowler and Lord Chidgey.

It is evident that international reform is required. The World Health Organization and the wider international system did not respond quickly enough to this threat before it got out of control. While progress has been made in efforts to strengthen global health security following SARS and avian flu outbreaks, the Ebola outbreak demonstrates that there is still much to do in responding efficiently to public health emergencies. As I have mentioned, the WHO executive board is convening a special session later this month to examine some of these issues, and I am sure that the points made by noble Lords, including the noble Lord, Lord Patel, must be considered. In particular, we need to look at surveillance, stronger early warning and response mechanisms, and how the global community identifies and responds to potential crises in the future. Like the noble Baroness, Lady Kinnock, I noted that Nigeria managed to check cases in the initial stages and it should be commended for that. Lessons needs to be learnt from how that was achieved, even though, again, we cannot be complacent.

The international community needs to be ready to respond rapidly and deploy public health experts immediately. The noble Baroness, Lady Hayman, had a number of important perceptions here as to changes that might be needed and the way in which the international system needs to link to what happens within a particular country and be sensitive to the arrangements and the views, beliefs and practices within those countries. This was a point which my noble friend Lord Chidgey also made.

In linking to national systems, a number of noble Lords emphasised the importance of strengthening health systems. We have been investing heavily in strengthening health systems in Sierra Leone through our bilateral aid programme but, barely 10 years after the end of a devastating civil war, health systems are still fragile and unable to cope with a crisis of this scale. My noble friend Lord Fowler made it crystal clear that the weakness of health systems is fundamental in this case. International support from DfID, but also from the World Bank, IMF and UN, will be critical in supporting Sierra Leone and the wider region to recover from this devastating crisis. Supporting the health sector ravaged by Ebola will be a priority, as well as supporting vulnerable groups such as orphans, children, women and girls.

I heard what my noble friend Lord Fowler said about consistency in support. That seemed to me to be an argument for the 0.7% Bill, which will come before this House on 23 January. I hope that noble Lords will support it. The aid budget has often been subject to easy battering in the past. Consistency and predictability are vital, which is why it is important to legislate for that level of aid. I welcome the support of the party opposite on this. Investment in human development is vital to the elimination of poverty and the growth of developing countries. I can assure noble Lords that we fully recognise that. In DfID, 20% of our budget in Sierra Leone has been spent on health programmes, and that will continue to be the case when this crisis is over as well. We agree that weak health systems in the affected countries have contributed to the rapid spread of Ebola.

We also agree that there has been a significant drop in the utilisation of health services, a point made by my noble friend Lord Chidgey and others, including the noble Baroness, Lady Hayman. We are therefore working with experts to determine strategies to decrease malaria deaths, including using new drugs and making sure that there are adequate stocks in Sierra Leone to try to address this. We recognise that it is vital to prepare the health sector for future shocks and have started to consider this challenge. National institutions are crucial but we also recognise that it will take time to build up health systems capable of dealing with major epidemics. That is why we focus on poorer developing countries; that is where the need is greatest.

To improve response to infectious disease outbreaks we need to ensure that, as far as possible, we have proactively identified potential diseases and developed technologies such as vaccines and treatments to address them. A number of noble Lords made this point. We need to be able to deliver rapidly clinical trials of promising candidates, resolve intellectual property disputes over them, scale up production, put in place adequate delivery capacity and manage the increased liability risks, while securing financing for all this.

I would dispute what my noble friend Lord Fowler said about reducing our aid spend in Sierra Leone. In 2010-11, we spent £51 million; in 2013-14, it was £69 million.

Our support for vaccines has been a major move by DfID under this Government. My right honourable friend Stephen O’Brien was quite remarkable in the way that he brought forward the proposals on support for what were called neglected tropical diseases, and I think that people will pay tribute to him and DfID for the work that was done. I think that we have a strong record in this regard, and that is something that we will continue to focus on and to regard as very important.

Our focus remains on ridding Sierra Leone and the surrounding region of Ebola. It is critical that we learn the lessons from this crisis to ensure that it never happens again. We realise how a crisis like this affects us all and how it has devastating consequences, both individually and more widely on societies and economies. We understand that, and we all need to see what lessons need to be learnt and then—most importantly, as the noble Lord, Lord Giddens, indicated—acted upon.

National Health Service

Thursday 8th January 2015 Lords Chamber

Motion to Take Note

15:00

Moved by

[Lord Turnberg]

That this House takes note of the future of the National Health Service.

[Lord Turnberg (Lab)]

My Lords, it is a privilege to be able to open this debate on the future of the NHS. It comes at a time when we are gearing up for the election and when it seems entirely possible that the NHS will be of some interest to the electorate. I will try to set the scene with a broad brush and leave it to other noble Lords to focus on various specific aspects.

We are going through a time when the media are full of one NHS disaster after another; with reports of cancelled operations, GPs and A&E departments being overwhelmed and waiting lists rising. We have not been short of media analysis in the past few days. That this is not simply the usual media hype is pretty obvious. We have had a number of careful reports from the Nuffield Trust and the King’s Fund, for example, that make sobering reading, with titles such as Into the Red? The State of the NHS Finances and Is General Practice in Crisis? suggesting that all is not well and that we cannot continue as we are.

The Government have woken up rather belatedly, with a sudden rash of activities. We have had NHS England’s Five Year Forward View, full of interesting aspirations; the Dalton review, with some ideas about how to go about achieving some of them; a number of crisis funding rescue efforts; and the Prime Minister reportedly sending in his pre-election “hit squad” to try to sort things out. However, it is pretty clear that quick fixes are not the answer and that the nature of the difficulties we face requires much longer-term solutions. It is good to hear that my own party is making some realistic proposals that might make a difference.

The causes of the problems are pretty widely understood. A service designed largely around acute hospital care has ignored for too long the needs of people with multiple long-term illnesses, especially those of the growing band of elderly patients whose needs are much better met in the community than in hospitals. This demand is certainly rising. The number of over 80 year-olds is set to double over the next few years and, for example, the number of people on more than three different pills for their multiple illnesses is growing by the day. I dare say that there will hardly be a Member of your Lordships’ House who is not on at least two pills keeping them in the fine trim that we see today, and I fear that I am no exception.

However, it is not only the growing proportion of the elderly and the worrying rise in the number of people with dementia that is causing difficulties; it is also the pressing demand placed on acute services. We can do so much more for patients than we ever could, and the population increasingly expect that they will be given the most effective treatments available. Many of those treatments are now very expensive. Complex scanners and investigations, coupled with the development of designer drugs produced specifically in response to an understanding of the genetic make-up of smaller and smaller subsets of patients, pose severe problems for a service working within rigid financial constraints.

It is in that financial squeeze where the nub of the problem lies. The fact is that the rate of inflation in health service costs is running way ahead of general inflation rates and certainly ahead of the growth in GDP. So every year the gap between demand and the funds available is widening, and this is what is responsible for the idea so often trotted out that the NHS is a “black hole” into which money just disappears. I do not believe that for a moment, and I will explain why shortly.

You might think that a Government would try to keep pace, if not with inflation then at least with the rise in GDP, small though that might be. In fact, the slice of the national cake devoted to health has gone down from about 8.5% when Labour left office in 2010 to 7% now—that is a fall of 17% in our share of the nation’s wealth. Even worse, predictions by the King’s Fund point to a further fall to 6% of GDP by 2021, on the current Government’s projections. That, I suppose, is all part of their plan to reduce overall public expenditure to pre-1940s levels, despite their protestations about a desire to protect the NHS.

It might be asked why these problems seem to have become much more acute in the past few years. After all, we have not all suddenly become older and sicker. The fact is that when Labour left office five years ago we had managed to get rid of waiting lists, patients were seen on the same day by their GP and patient satisfaction levels were high. It is no coincidence that we had appointed some 130,000 more front-line staff to cope with demand. So what has happened that left us with our current difficulties? Certainly, the distractions of the Lansley reforms did not help, with all the redundancies and re-employment of senior managers and the loss of continuity in leadership that followed. As Maynard Keynes said:

“It is not sufficient that the state of affairs which we seek to promote should be better than the state of affairs which preceded it; it must be sufficiently better to make up for the evils of the transition”.

I fear that we are still suffering from the evils of transition.

Then we have had the Nicholson challenge and the so-called efficiency savings of no less than £20 billion over the past five years. Of course anyone working in the service knows that it is always possible to improve efficiency, but now it is clear that the pips are being made to squeak too loudly as we run out of such short-term measures as wage freezes and the like. The inevitable result is that we are failing to keep up. GPs are overwhelmed, waiting times in A&E departments are rising, waiting lists are growing, social service departments are failing to cope and many such departments are now able to deal only with those in most serious need.

So what is to be done? I shall focus on four specific areas: disease prevention by public health measures; bringing hospital and community services much closer together; focusing on some specific aspects of care where we are clearly failing, namely A&E services, general practice and mental illness; and stimulating much more research and innovation where the potential dividends in health and well-being, as well as economically, are considerable. Of course none of these sounds entirely novel, but the fact is that we have failed miserably to achieve them so far. I want to examine why that is the case and what we should do now to ensure that we do not fail again.

First, with regard to prevention with the aim of reducing demand, no one can argue with the need to try to prevent the many illnesses caused by smoking, drinking too much alcohol and eating too much food. That is why I believe that the Government must get on with the plain packaging legislation, for example. We also know that the most effective measure to reduce alcohol consumption is to increase the duty on alcohol. It is pretty clear that whenever the price of alcohol goes above the rise in the general cost of living, the incidence of death from liver disease goes down—and, let’s face it, the increased revenue generated could make a useful contribution to the Exchequer and the NHS. I will leave it to other noble Lords to go into why the Government are reluctant to use this most effective measure, but the problem here is not that these are not vitally important things to be doing—they clearly are—it is the expectation that we will see financial savings from doing them in any reasonable timespan. Any impact on costs will inevitably take time.

Secondly, I turn to the need to see much greater co-operation and collaboration—what we used to call “integration”—between community-based and hospital services. The report from Sir David Dalton provides some very helpful ideas about how this might be achieved. He, of course, has managed to show how it is possible to integrate services extremely successfully in Salford and his report describes a number of other potential models for collaboration that fit in with different local circumstances. Clearly, the removal of the barriers between hospital and community is highly desirable and the idea of pooling health and social care budgets could be a very supportive measure. However, we have to be sure that current competition laws do not get in the way, and even more importantly, we have to be clear that the funds are available to facilitate this transition. It would be naive to believe that it could be done within existing budgets, even though in the longer term that sort of joined-up service will be more efficient, and of course it will suit patients’ needs much better. But in the short to medium term, it will need transitional funding.

The idea behind the Government’s better care fund was to try to bolster community services at the expense of the NHS, which itself is pretty cash-strapped. Robbing Peter to pay Paul is never going to be popular with Peter, and we now have the lowest number of beds per head of population than anywhere in the western world. If we are to see this vitally important change in the way services are delivered, we have to accept that fresh money will have to be found from somewhere.

Thirdly, I turn to three of the biggest challenges facing the NHS at the moment: problems in general practice, gaps in mental health services, and the troubles in A&E departments. The problems in general practice have been well rehearsed. I had a letter from a young general practitioner the other day in which she encapsulated the difficulties she faced. She said she was increasingly exhausted as her workload just seemed to grow and grow. She pointed to the shortages of practice nurses and care workers, the difficulty in recruiting to those posts, the fact that many of her colleagues were retiring early and that general practice was becoming a very unpopular option for young medical graduates. It seems likely that that is the reason why it has proved difficult for the Government to encourage medical schools to get 50% of their graduates into general practice. It is striking, too, that she said that she had to spend up to 50% of her time in administration. What a waste of her valuable time, which could be much better spent in dealing with her patients.

So there is much to do there. We need to recruit and train more support staff, especially practice and district nurses, who are in such short supply; we should bring together bigger groupings of general practices into multipractices or the like so that there are economies of scale; we need to recruit and train more GPs by making the job much more attractive; and we definitely need to reduce the horrendous bureaucratic burden under which they labour. I am afraid that once again your Lordships will have noticed that none of that can be done without some additional funding.

On accident and emergency departments, which have been in the news so much of late, there is this somewhat optimistic view that once we have stopped people smoking, drinking and eating too much and once primary and community care is up to scratch, the pressures on A&E departments will disappear. But that, of course, is some considerable way off and it denies the evidence from everywhere else in the civilised world that there is a universal rise in A&E visits. So, once again, moving the deckchairs here will not solve the problem and it seems inevitable that more funds will be needed to recruit and fill posts, both medical and paramedical, in these desperate departments. We are clearly wasting far too much money on expensive locums when that money should be directed to permanent posts.

Mental illness, despite much rhetoric about parity of esteem between physical and mental illness, remains a Cinderella service. I suspect that other noble Lords will expand on this, but there can be little doubt that more resources are needed there, too.

Finally, I will say a few words about research and innovation in the NHS. The UK has been pretty successful in supporting medical research through both public funds and the research charities—and here I should express my interest as scientific adviser to the Association of Medical Research Charities. Some good things are happening here: for example, with the National Institute for Health Research, under the direction of Dame Sally Davies with the strong support of the noble Earl; the Health Research Authority is streamlining ethical approval; and the MHRA is providing quicker routes for licensing new medicines. However, there are many problems, too, because while we may be good at research, we are too often sluggish in taking up innovations. There are concerns that future funding for NIHR and its invaluable academic health science networks and centres remains uncertain, and there are also worries about the willingness of CCGs to support the Charity Research Support Fund. We are also failing to encourage and support those entering a clinical research career while their conditions of service are being neglected.

A tortuous funding approval process also gets in the way. It may come as some surprise to learn that to get the approval of NHS England for a new medicine to treat a rare disease there are no fewer than eight committees through which it has to go. It has been said that if you want to avoid making a decision, set up a committee. If you want never to make a decision, set up eight committees. That is a case where NHS England needs to look at its own efficiency, and if it is just an example of its committee structures, it has some way to go.

In the pressure for ever more efficiencies, we must avoid being so short-sighted as to leave research and innovation to wither away. The dividends we will lose are just too great. I believe we know what should be done—there is a growing consensus on that. However, it is increasingly clear that without an input of more resources we will not be able to rescue the NHS from this downward spiral. Even Simon Stevens, the chief executive of NHS England, has said as much. The next Government will have to face up to this issue and square with the public about how they intend to protect an NHS and a social service system that is so precious to them and to focus on the sources of the increased funds that are needed. I look forward to the speeches of other noble Lords and to the Minister’s response.

[Baroness Jolly (LD)]

I remind the House that time is very tight, so I ask noble Lords to keep their remarks to six minutes. When the clock shows six, your time is up.

15:16

[Lord Horam (Con)]

My Lords, I think we are all very grateful to the noble Lord, Lord Turnberg, for initiating this debate. Obviously, it could not be more timely. He may recall that he and I first met when he was president of the Royal College of Physicians and I was a Minister at the Department of Health. Even then, we had the same post-Christmas problems—we may also be taking the same pills, for all I know, but I will not speculate on that.

I will put forward two particularly positive points as we review the situation, which is obviously worrying, and the longer term situation, which the noble Lord wants us to address. The first is that the NHS remains a good and a tried and trusted model for the delivery of healthcare. If you look around the world, it is very difficult to find one that is better as regards value for money and quality—although we know that there are gaps. It is also, as my noble friend Lord Howe pointed out in his Statement yesterday on the winter problems, remarkably flexible when it needs to be. We see that a number of hospital trusts are coping with these sudden increases in demand in a very innovative and sensible way.

The second positive point I will make is that there is wide consensus—although one would not think so in the political debate that is going on—over the way the NHS should evolve. I will concentrate in my short remarks on the Five Year Forward View, which was produced by Simon Stevens, the chief executive of the National Health Service England, in October last year. That has received general support from all sides of politics, and it was both realistic and sensible. However, the conclusions it reached have been underplayed. The central conclusions Simon Stevens points out in his report’s final two paragraphs are that even if funds remain broadly flat in real-terms increases—and in fact, despite what the noble Lord, Lord Turnberg, said, spending on the National Health Service and on health in this country as a whole has more than doubled in real terms since I was a Minister back in 1997—and if the service continues its annual increases in efficiency of 0.8% a year, which is not a huge annual increase, the £30 billion gap which he envisages by 2020 would reduce to £21 billion. If the increase in efficiency was doubled to 1.5% every year—again, not a huge increase—it would reduce that £30 billion gap to £16 billion. If efficiency could be increased to 2% to 3%, which is quite normal in other industries and services, the funding gap would be almost wholly eliminated and we would be able to reach the nirvana of a continuingly progressive and successful health service.

In that context, I make one suggestion to my noble friend Lord Howe. We know that many hospital beds are occupied by people who do not need to be there, who do not need acute care any longer, and who could be in a recovery situation or intermediate care elsewhere. It is the fact that many housing associations and mental health trusts have been lobbying hospital trusts up and down the country, asking to provide intermediate and recovery units for them, so they can transfer patients from acute services into those intermediate or recovery services. I noticed on the BBC last night that a trawl had been done of where the problems were; a spokesman for Addenbrooke’s Hospital in Cambridge said that 20% of its beds were occupied at this moment by people who could be cared for in a recovery unit or in another form of intermediate care. But the housing associations and mental health trusts are finding that, although very often the chairman and CEOs of hospital trusts are glad to have this support, it is simply impossible to get decisions. The noble Lord, Lord Turnberg, pointed out that among other things it is very difficult and slow to get decisions through the bureaucracy of even the trusts themselves, let alone the overall NHS, and this is causing a real problem.

I hope that my noble friend Lord Howe will look at this issue, where there could be an immediate improvement, within a matter of months, in the number of facilities being taken up by people who do not need to be in hospitals. It would save the capital costs, because housing associations would pay for them out of their own capital funds. It would also save current costs, because an NHS bed costs £2,000 a week to maintain. The housing associations tell me that they could do it for less than £1,000 a week, halving the current costs as well as providing capital money for the NHS. So there is an example of where efficiency savings could be made in a very short space of time. We are talking about months or even a year or two.

Simon Stevens’s conclusion, following the final two paragraphs of his report, was that,

“nothing in the analysis above suggests continuing with a comprehensive tax-funded NHS is intrinsically undoable”.

I believe that to be correct and right, but we will achieve that only if the trusts up and down the country stop being just administered and manage the resources, using the funds available to them properly.

15:23

[Baroness Jay of Paddington (Lab)]

My Lords, I congratulate my noble friend on his timely debate, which has become even more relevant in the face of the tsunami of so-called special incidents which are apparently swamping the NHS at the moment. On the face of it, the A&E tsunami is rather unlike the other winter crises that we have experienced. After all, the weather is not particularly severe and we are not experiencing a threat from a new infectious illness, such as SARS, or even a normal seasonal flu epidemic. Indeed, as was rightly asserted in this House yesterday, much of the primary cause of the present situation is government policy—and, specifically, the reduction in social care and the fragmentation of health services to which the noble Lord, Lord Horam, referred.

The only possible political silver lining that I can see is that the Secretary of State Mr Hunt seems to recognise that he is accountable and responsible for what is happening. I was surprised and somewhat relieved to hear him say yesterday in Commons Hansard:

“I take responsibility for everything that happens in the NHS”.—[Official Report, Commons, 7/1/15; col. 277.]

That is in sharp contrast to his attitude last autumn when the Secretary of State received the Five Year Forward View as though it was a rather interesting contribution from an independent think tank. In exasperation in response to that, the shadow Secretary of State, my right honourable friend Andy Burnham, commented:

“I do not know who runs the NHS these days, but I do know that it is certainly not him”.—[Official Report, Commons, 23/10/14; col. 1045.]

He also said that this was a clear illustration,

“of the serious loss of public accountability”,

following the 2012 reorganisation Act.

Those of your Lordships who took part in the long drawn-out proceedings on that Act in this House will remember the battles that we had to retain the central responsibilities of the Secretary of State in the legislation, responsibilities that had after all been there since 1948. We eventually succeeded so that the Act now reads:

“The Secretary of State retains ministerial responsibility to Parliament for the provision of the health service in England”.

The noble Lord, Lord Mawhinney, a previous Conservative Health Minister, said in our debate that everyone now knew that the,

“Secretary of State is the boss and is held accountable”.—[Official Report, 8/2/12; col. 303.]

I certainly hoped that this meant that in spite of the determination to transform the NHS into a regulated but independent competitive industry, the personal statutory accountability would prevent the most harmful results that we feared from the Act. I was wrong. Now I can only hope that the present damaging crisis may suggest to Ministers that they should exercise greater responsibility and accountability, not just for expenditure but for at least some of the policies proposed in the forward view.

I want to focus in my remarks on paragraph 3 of that report, which says:

“The future health of millions of children, the sustainability of the NHS, and the economic prosperity of Britain all now depend on a radical upgrade in prevention and public health”.

I certainly accept that clarion call; my concern is that the 2012 Act has made it difficult to fulfil. Noble Lords will be aware that public health programmes are often rooted in community-based, sometimes voluntary organisations. These can be very useful, particularly when informal outreach schemes dealing, for example, with problems such as drug or alcohol abuse, can be much more successful than statutory services. but today the competitive reorganisation has led to a hugely expanded pool of non-NHS community providers—a staggering 69% of the new contracts agreed. In my estimation, that must lead to enormous fragmentation and great difficulty in achieving national goals.

In particular, I draw noble Lords’ attention to very real problems in delivering good sexual health and HIV prevention and treatment services under this new system. In recent months, as the noble Lord, Lord Fowler, has just done, we have rightly focused on the Ebola virus, but the latest figures for HIV in this country are a cause for a new concern. In the past 12 months, the numbers of gay men newly diagnosed are the highest since the figures were first collected 20 years ago. During the intervening years, of course, we have developed world-leading clinical care in this complex field and created much-admired prevention programmes, but those are now threatened. Part of the problem is that the public health commissioners in local authorities simply do not have the relevant specialist knowledge and experience. I have learnt, for example, of a particularly stark case in Chester, where the hospital-based specialty services created and led by a very senior consultant are to be replaced by a consortium of GPs. There the Countess Of Chester Hospital put forward a comprehensive tender for an integrated sexual health service led by five consultant doctors costing £2.4 million. This has been rejected in favour of an exclusively GP service with no hospital specialist input, costing £2.8 million. It is very hard to see any financial or clinical logic behind this. I wish it was just one example, but it is not.

I want also to explain my concern about the particularly bad situation in relation to HIV prevention. The Government have now said that the programme for national HIV health education will be cut by a staggering 50% in the next financial year. We cannot afford complacently to allow the prevention and treatment of infectious, dangerous diseases to slip from the effective grasp of a national health service. I fear that that is likely to happen.

Overall, I would like to be optimistic about the future. I agree with many of the ambitions in the Five Year Forward View and respect Simon Stevens, who was a special adviser when I was a Minister in the Department of Health. However, he is far too complacent about the encroachment of independent advisers and the resulting fragmentation of important services. Overall, we must retain the national leadership of the NHS not only through the executive managers but essentially through the Secretary of State. His accountability to Parliament and responsibility for the provision of health services should always be the keystone of the health service.

15:29

[Baroness Barker (LD)]

My Lords, I, too, thank the noble Lord, Lord Turnberg, for giving us the opportunity to discuss these matters today. He, like a number of other noble Lords, is a veteran of such discussions. While I pray in aid documents such as that produced by the Royal Commission on Long-Term Care, the Wanless report, Wanless II, the Darzi report and now the Five Year Forward View by Simon Stevens, he will perhaps agree with me that, over the time that he and I have been Members of this House, the issues facing the National Health Service have not changed but have remained the same. We have had report after report telling us in varying degrees of detail what the shortcomings of the National Health Service are, how it does not integrate with a sufficiently unbroken social care system and what it needs to do to put that right.

My right honourable friends in another place, Norman Lamb and Paul Burstow, have similarly followed those discussions. I am pleased to say that, in their time in government, they have enacted quite a number of the recommendations put forward, not least the return of public health to local government. Back in the time of Derek Wanless, the observation was made that if our tax-funded National Health Service was to endure, it would have to do so in the context of a population that was informed and engaged about its own health, and that the NHS could not tackle that on its own. I hope that any future Government, tempted as they no doubt will be to rearrange the service—let us call it not a top-down reorganisation but a rearrangement—will resist the temptation to take public health back from local government and will leave it where it is, with the health and well-being boards, to give them the chance to build on the work they have done on prevention in the past two years. Some 70% of the health service is now about enabling people to manage long-term conditions.

It occurred to me—particularly in the past week, when we have been inundated with stories about how the NHS is failing to deal with emergencies—that much of the literature on the NHS is directed at how we deal with an ageing population. At the same time, we have rather lost sight of how young people engage with the NHS. The most interesting findings over the past month or so concerning the problems in A&E were not about lots of older people who are no longer being supported by social care turning up inappropriately in accident and emergency units but rather the number of young people who turn to accident and emergency units as opposed to their GPs. That is a very worrying issue to which we should give great thought, because GPs continue to be the linchpin in terms of most people’s ability to manage their own healthcare and their health and well-being in the longer term. If young people are engaging only with A&E on an episodic basis, that will store up problems for the NHS in the longer term.

Finally, one of the most laudable things that has happened in the past two years is the increased attention that this Government have given to mental health, which is supported by the Opposition. We are finally beginning to understand the importance of mental health and the problems that we cause the country in the longer term if we ignore it. Some interesting work has been done by new organisations which have not previously taken any part in our health debate, such as Mumsnet, which has talked for the first time about the incidence of mental health problems in very young people aged under 11. It also talks about the high incidence of perinatal mental health problems beginning to challenge orthodox providers in the National Health Service and the voluntary sector. I sincerely hope that the next Government will continue to work with organisations, perhaps new and emerging voluntary providers, to take a completely fresh look at some of the long-standing problems that we know have challenged the NHS.

We as a party have said that we will aim to increase NHS funding by £8 billion. We will do so on the basis of continuing challenge and reform. It is possible for there to be a 25% reduction in preventable mortality by 2025, but only if we continue to change the way in which the NHS interacts with the population, the voluntary sector and the people who are capable of addressing the problems upstream that present as emergencies to the NHS.

15:35

[Baroness Masham of Ilton (CB)]

My Lords, I thank the noble Lord, Lord Turnberg, for securing this very timely debate. The National Health Service is so important that it should not become a political football. Patients need accurate, safe healthcare to enable them to get better quickly. If that is not possible, they should have compassionate care. All services need to co-operate and communicate with patients. Integration should be the aim, not working in silos.

I give myself as an example. I had been coughing for months and had an X-ray on 21 November but have never had the result. Having had three antibiotics, I decided to come off the statin that I was taking as I became frustrated with the cough. It seems to have worked. So much of patient care seems to be trial and error.

I take this opportunity to stress some of the difficulties surrounding rural health. Our surgery at Masham is open only every other Saturday for half an hour, for a half day on Thursday and is closed every day between 12.30 pm and 2 pm. The surgery needs to be improved but no one will pay, so my doctor went to Canada.

Next door to the surgery is the Marsden pharmacy, which has a four-inch step with no handrail or ramp, making it inaccessible for people using wheelchairs unless they are super-fit, and for those using walking frames. It is frustrating that this building has just been renovated and disabled peopled, who perhaps need the pharmacy more than most, have not been considered.

On Sunday, I spoke with a member of the Army from Catterick, which has the largest military camp in Europe. I was told that the Catterick Medical Centre has been given a bad report and has to close every day at 3.30 pm, leaving the A&E department at the Friarage Hospital as the only alternative. More military personnel are coming back from Afghanistan and Germany. Therefore, urgent improvements are needed if the future of the NHS is to improve.

I was very pleased to be invited to give the awards to the Yorkshire Ambulance Service last autumn. I found the staff to be dedicated and enthusiastic. In rural areas, where the countryside can be challenging and public transport in some areas is non-existent, the ambulance service can be vital. Without doubt, the Air Ambulance is the most popular charity in north Yorkshire. The impact on the ambulance services in England is very great. There continues to be a year-on-year increase in demand. The major increase has been seen in top-level emergency calls.

There is a worrying situation in that there is a shortage of district nurses, with many having retired or gone off sick. They are so important in helping with ill and disabled people in the community. What plans are there to increase the numbers in the future? I have a cousin married to a registrar surgeon. The surgeon tells me that there is concern about the modern shape of training for surgeons. She tells me that hospitals with poor records should not be training and that sometimes deaneries come round and find poor standards but do nothing about it. She also tells me that the European working time directive has not helped with the training of surgeons. Surgical training should be a priority. I ask the Minister: should we not be aiming for the highest standards of surgery and safety, and stop the worrying increase in negligence claims that is draining the NHS?

I am so pleased to see my colleague, the noble Baroness, Lady Wilkins, back in her place. As president of the Spinal Injuries Association, I ask the Minister to look into the worrying situation where so many excellent doctors and surgeons working in spinal injuries have retired and new young doctors are not coming forward to take their place. Also, the cutting of physiotherapists and occupational therapists is detrimental to rehabilitation. High-lesion tetraplegics on respirators are often kept in intensive care beds in general hospitals because of the lack of beds in spinal units. Therefore, there is a blockage in intensive beds in general hospitals, causing huge problems.

Because of paralysis, the “three Bs”—bowels, bladders and bedsores—become very important to these patients. One of the distressing problems for spinal patients being in general hospitals is the difficulty of having their bowels evacuated, as nurses seem to shun this essential part of care. I hope that in future the NHS will recognise the importance of specialised spinal units with trained specialist staff.

I end by saying that there are many complicated conditions that need to be researched, but of concern is the increase in people with liver disease and hepatitis C. I hope that in future they will get the new, crucial drugs that are available but not yet approved by NICE.

15:42

[Lord Rea (Lab)]

My Lords, I am sorry that we are missing a contribution from the noble Lord, Lord Ribeiro. He is always worth listening to. I hope that being scratched from the debate does not mean that he is unwell.

I thank my noble friend for bringing up this wide but highly topical subject, given the daily headlines about one NHS crisis or another, including today. The issue is also high on the agenda of all parties in the run-up to the election. What is becoming increasingly clear—my noble friend Lord Turnberg referred to this—is that the NHS and social care are underfunded and that this is the main reason for longer waiting times and deteriorating services. To call for greater efficiency in a health service that is recognised internationally as highly cost-effective can only mean staff reductions or lower salaries, and worse care. Some say that this is deliberate to encourage more people to move to private medicine.

I want to focus on prevention, which is highly relevant to today’s pressures, as described in the Five Year Forward View, to which several noble Lords have referred. It is better written than the average document from the Department of Health and freer of jargon and acronyms, although I noticed one or two lapses—for example,

“the need to transition to a more sustainable model of care”.

The report puts prevention of disease high on the agenda in the section headed, “Getting serious about prevention”. This phrase is taken from the health review written by Derek Wanless 14 years ago. At this point, I should declare an interest as trustee of the UK Health Forum, formerly the National Heart Forum, which advised Wanless when he was writing his report. He suggested, as the noble Baroness, Lady Barker, said, “a fully engaged scenario”, in which all sections of society should become aware of the health implications of their activities and products. He warned that unless the country took prevention seriously, we would be faced with a sharply rising burden of avoidable illness. As the Forward View put it,

“that warning has not been heeded—and the NHS is on the hook for the consequences”.

Instead, one in five adults still smokes, a third of people drink too much alcohol or do not take enough exercise and almost two-thirds are overweight or obese. This has had consequences in increasing the flow of costly treatments.

Our expectation of life, however, continues to go up. Part of this is due to the success achieved in reducing cigarette consumption, partly due to the measures introduced by the last Government, including banning tobacco advertising. This Government have also brought in some tobacco control measures but, rather worryingly, they seem to be dragging their feet on the important issue of plain packaging. It is important to get this legislation on to the statute book before the election and to do that it must be laid before Parliament before the end of this month or sooner. I think that the noble Earl is aware of the widespread desire from across the health professions and elsewhere for this to be done. I hope that he will be able to assure the House, perhaps today, that this legislation will reach the statute book before the election. If not, the Government and the Conservative Party will lose even more credibility when they claim to safeguard the nation’s health.

The NHS should also take some credit for the continuing increase in life expectancy, but the increasing incidence and prevalence of avoidable non-communicable disease is a major cause of the heavy pressure that the NHS is now under. One example of this is the avoidable burden that heavy drinking places on A&E departments at weekends. The Government have not taken the first step in reducing alcohol consumption that minimum pricing would provide. There is little doubt that the drinks industry is putting pressure on the Government to avoid this simple measure. It would have most impact on cut-price off-sales, which many young people indulge in, “preloading” to avoid higher bar prices when having a night out. In the past few days, the alcohol health association has said that there should be more information on alcohol products, giving not only the strength but the calories and other health implications.

The Five Year Forward View puts it rather admirably:

“We do not have to accept this rising burden of ill health driven by our lifestyles, patterned by deprivation and other social and economic influences. Public Health England’s new strategy sets out priorities for tackling obesity, smoking and harmful drinking; ensuring that children get the best start in life; and that we reduce the risk of dementia through tackling lifestyle risks, amongst other national health goals ... While the health service certainly can’t do everything that’s needed by itself, it can and should … become a more activist agent of health-related social change”.

15:48

[Baroness Thomas of Winchester (LD)]

My Lords, belatedly all political parties are waking up to the fact that the future of the NHS is top of most people’s agendas in this country, which is why it is going to be prominent in all manifestos for the coming election. The country is also recognising that not only is the population getting older, needier and more disabled but disabled people like me are living longer than we probably would have done some time ago. Boys and young men with Duchenne muscular dystrophy only 15 years ago were dying in their teens, yet today, thanks largely to night-time ventilation, they are living into their 30s and 40s.

The lessons in the field of rare neuromuscular conditions—the field that I know best—are clear. Money spent wisely now by commissioners on access to specialist support and better care in the community for people with these conditions will save a significant sum later in unplanned emergency hospital admissions. That was the finding of a 2011 audit by Professor Michael Hanna of the National Hospital for Neurology and Neurosurgery in Queen Square, yet it appears that commissioners are not prepared to invest in this way to save in the future. I count myself lucky that I live in the capital, near a centre of excellence in this field, but there are significant gaps around the country in specialist care. The ideal is the development of managed clinical neuromuscular networks that bring together consultants, physiotherapists and family care advisers. An example is the one in the south-west, which co-ordinates service provision and the sharing of skills and expertise.

I now turn to research, which was a hugely important but largely unrecognised part of the Health and Social Care Act: the Act places a duty on the NHS, for the first time in statute, to promote research. A future NHS must do more to promote research and ensure that the UK has the clinical trials infrastructure to attract investment from pharmaceutical companies wishing to conduct trials. That was mentioned also by the noble Lord, Lord Turnberg. With the right support, the UK could become a world leader in this field—for example, through support for patient registries and databases for rare diseases. At present, the Muscular Dystrophy Campaign funds the NorthStar database and the national neuromuscular database, but this arrangement does not guarantee long-term security. Does my noble friend agree that if the NHS is to promote research, it should provide support to databases and registries for rare diseases?

I now turn briefly to funding for new treatments. The NHS will face an increasing challenge to deliver innovative but high-cost treatments with advances in genetic medicine. Will increased competition for funds mean that treatments for rare diseases lose out? To avoid that situation, will the Government introduce a ring-fenced fund for rare disease drugs, as has been done in Scotland?

That brings me to my last point, which is that the NHS must have a clear and transparent means of approving new treatments. I am sorry to say that the experience of the Duchenne treatment Translarna does not bode well, with one of the final stages of the process being held up. I know that my noble friend’s colleague, the Minister for Life Sciences, has been closely involved in helping to find a solution. Will my noble friend encourage his colleague to redouble his efforts to help steer through an interim solution that would allow patients access to this drug, which is available in Europe, by April of this year? It is effective only in boys who can still walk. There are many parents who watch in despair while the days pass, knowing that without a drug such as Translarna eventually their young sons will take their last steps.

15:53

[Baroness Cumberlege (Con)]

My Lords, my interests are in the House of Lords register but I should declare that I am executive director of Cumberlege Connections and of Cumberlege Eden & Partners.

I, too, congratulate the noble Lord, Lord Turnberg, on initiating this debate. He is a truly remarkable man and is probably one of the most qualified and experienced of your Lordships when it comes to analysing the health service, as was evidenced today in his remarkable speech. I did not agree with it all, but it was remarkable. If one looks further, it is really interesting and fascinating to read his book, Forks in the Road. Does not that title really sum up the views of the nation? The NHS is hugely valued. We are at one in wanting to ensure its future. We are journeying on the same road, but there are many choices to be made on the way.

The ethic is inalienable. Whether we are rich, poor, young, old, black or white, we want a service that is largely funded by the taxpayer. I say largely because successive Governments, including the Labour Party when it was in government, have largely eroded the ethic by stealth—introducing prescription charges and other charges. The general public do not want to produce a credit card for services rendered but they are ambivalent as to who provides the service. If the service is compassionate, kind, professional, efficient and provides value for money, albeit that it is provided independently, the public are largely satisfied.

I endorse the views of my noble friend Lord Horam. Worldwide the NHS is recognised as a winner. We have been ranked as the top health system in the world by the Commonwealth Fund. We also know that when it comes to asking the British what makes them proud to be British, the NHS is top of the list, before the Armed Forces and even the Royal Family. We also know that there is always room for improvement. Lest we get complacent, we only have to think of North Staffordshire, Winterbourne View and so on.

The noble Lord rightly highlighted the challenges that we face and they are beyond dispute, but we should not ignore the progress that we have made. At a time of austerity, we have increased the NHS budget by £12.7 billion. “Not enough”, is the cry but it will never be enough. In the past five years, the number of clinical staff has increased by 12,500, and 850,000 more operations are being delivered each year compared with 2010. The number of patients looked after in mixed-sex wards is down by 98%, which is a subject I know is very close to the heart of the noble Baroness, Lady Jay, from when she was in opposition and when she was in government. Listening to her speech today, I was deeply worried when she quoted the shadow Health Minister as saying that he did not understand how the current system works. I respectfully suggest that he looks at pages 88 and 89 of the book by the noble Lord, Lord Turnberg, which clearly sets that out in a diagram.

Looking at the next five years, as has been said, NHS England’s priority is to engineer a radical upgrade in prevention and public health. It goes on to say that the NHS will,

“back hard-hitting national action on obesity, smoking, alcohol and other … health risks”,

which I welcome. I share the view of my noble friend Lady Barker that we should stay with the health and well-being boards, and not be tempted for another reorganisation.

In Britain, we attempt to run a fair society, a society which protects citizens from abuse by those unwilling to respect others. We have cracked down on drunken or reckless drivers and on faulty cars. People who abuse our roads are prosecuted and our roads are safer for it. The problems of the NHS are in some measure due to people abusing the system. Resources are spent on dealing with drunks, time-wasters and drug misusers, leaving the system in danger of being overwhelmed so that those in real need are deprived of life-saving treatment. The NHS constitution is very strong on rules for staff but is ineffective and weak when dealing with users. The contrast with drivers who have to learn and adhere to the law is very stark.

Looking to the future, we have to introduce rules to protect and enhance the treatment of people who are ill. Without known rules, any organisation, including this House, can descend into chaos. With a strong economy, we can afford to pay for its use but we should not fund its abuse. Does my noble friend agree?

15:59

[Lord Liddle (Lab)]

My Lords, I, too, congratulate the noble Lord, Lord Turnberg, on the way in which he introduced this debate. It has been a civilised and, in many respects, expert debate. I am worried that I may lower the tone because I want to make a couple of more political comments. However, I shall try to do so in a civilised way.

The basic reason I wanted to speak in this debate is that I fear for the future of the National Health Service given the implications of the emerging Conservative approach to public finance in the next Parliament. I do not in any way doubt the sincerity of Members opposite—my friend the noble Lord, Lord Horam, the noble Baroness, Lady Cumberlege, who has just spoken, and the Minister—the Secretary of State for Health or the Prime Minister, or their commitment to the principle of the National Health Service. However, I doubt the sustainability of that commitment given the approach to public finance set out in the pre-Budget report at the beginning of December, particularly the prioritisation of tax cuts when resources become available and the intention to reduce by the end of the next Parliament the share of public expenditure in GDP to 35%.

The Government have done their best in this Parliament, in their way—I congratulate them on that—to maintain NHS spending in real terms, which, given the financial pressures on the country, was a good thing to do. That has worked for a while. The previous Government increased spending on the NHS a great deal. There were productivity gains to be made from that increase in spending and we have continued to see outcomes improving in the present Parliament.

However, the strains are now beginning to show. We know that, because of the increase in population, NHS spending per head is falling. Simon Stevens’s five-year analysis—I confess to being an admirer and friend, having worked with him—is brilliant. It demonstrates that there is a large potential funding gap unless, as the noble Lord, Lord Horam, pointed out, it can be closed by a more rapid rate of efficiency gain. With respect to the noble Lord, that will be difficult to achieve in a highly labour-intensive service. It is not like private sector manufacturing. This is a highly labour-intensive activity and 3% efficiency gains will be very difficult to achieve. So we will need additional investment.

As to what will happen to the rest of the public sector under this public spending outlook in the next few years, we will see severe austerity in welfare and public services, as set out in the pre-Budget report; more strain on poor families; a continuation of inadequate supply of social housing; weaker children’s services unable to protect children at risk; a narrower school curriculum because schools cannot afford to teach more broadly; and local authorities unable to meet the needs of all but very needy people in adult social care.

What will be the consequence of all this? Every academic and expert in public health tells us that if there is an increase in poverty, ignorance, bad housing and social neglect, what we will get is more pressure and problems for the National Health Service. On a holistic view of public spending, the Government’s plans are flawed and we need a more sustainable position. So I congratulate my party on at least indicating what it will do in the first year of the next Parliament in terms of extra spending and how it will be paid for.

Finally, we need cross-party debate and consensus on a long-term funding model for the NHS. I firmly support Frank Field’s ideas for a broadly based hypothecated tax that would take the funding issue out of politics and enable managers in the NHS to plan ahead for a more efficient service.

16:06

[Lord Kakkar (CB)]

My Lords, I join in thanking the noble Lord, Lord Turnberg, for securing this important debate, and in so doing I declare my own interests as professor of surgery at University College London, consultant surgeon at University College London Hospitals NHS Foundation Trust, and chairman of University College London Partners, our academic health science centre and network.

It is striking that in 1948, some 48% of the population failed to reach the age of 65. Recently it was calculated that only 18% of the population would fail to do so. That is a remarkable manifestation of how important universal access to free healthcare has been in securing the health prospects of our fellow citizens. It is also striking that by 2025, it is estimated that 18 million of our fellow citizens will be living with a long-term chronic condition. With an ageing population and all that chronic disease, it is inevitable that there will be increasing demands on the facilities and resources available for the provision of healthcare. Indeed, we have seen in recent weeks increasing demands being made on accident and emergency services. The Nuffield Trust recently published a report which estimates that by 2022, if the current changes in demographics with an ageing population and the present growth in demand is maintained on a similar trajectory, we will need to provide 6.2 million extra bed days a year, which equates to some 17,000 extra hospital beds, the equivalent of 22 new 800-bed hospitals. It is therefore important that the noble Lord has tabled this debate about the future of the NHS because we must ask how we will address this increase in demand.

We have also heard that it is not only about an increase in demand. Quite rightly, it is about an increase in expectation. That is because in the United Kingdom we pride ourselves on having invested substantially in a strong science and research base and in biomedical research. Much of that investment is taxpayer-funded, and it is therefore absolutely right that our fellow citizens expect to see the benefits of that research applied to improvements in healthcare and the provision of better long-term prospects for a healthy life long into old age.

The noble Baroness, Lady Cumberlege, mentioned the recent US Commonwealth Fund report grading 11 different healthcare systems. Ten healthcare systems from around the world are compared to the United States system, and once again, for 2013, the NHS ranks number one for the quality of care—that is, the efficiency of care, the safety of care, patient-centred care and the co-ordination of care. Interestingly, however, we rank 10th out of the 11 nations in providing healthy lives for our citizens. So there is more to do to deliver effective healthcare and, in this regard, as has been noted in the debate, it is important to pay attention to the NHS England Five Year Forward View. Quite clearly, the funding models described in that Five Year Forward View expect some degree of efficiency gain further to the substantial gains that have been achieved during the lifetime of this Parliament. What assessment have Her Majesty’s Government made of how much of that additional gain in efficiency will be derived through the application of innovative therapies and interventions as well as innovative models for the delivery of care?

In this regard, it is particularly important to take note of the announcement made yesterday by NHS England of the national Innovation Accelerator programme and of the appointment of the new national director of new models of care. In this regard, I emphasise my declaration of interest as chairman of UCL Partners, as UCL Partners is the host for the national Innovation Accelerator programme, which is being supported by NHS England and the Health Foundation.

There is no doubt that innovation plays, and has played in recent years, an important role in the delivery of healthcare. What assessment has been made of the emphasis on the adoption of innovation, for instance the approach towards telemedicine? What progress has been made in providing telemedicine solutions to the management of chronic long-term conditions for the 3 million people living with long-term conditions that it is anticipated would be covered through these new strategies by 2017?

In addition, of course, there has been great emphasis on the whole area of personalised medicine, and the announcement of the 100,000 genome mapping programme. Again, I wonder whether the noble Earl could comment on how much progress has been made in that regard. How much progress also has been made in respect of the UK Biobank and the development of a national health and informatics strategy combining data from all of those to provide a very strong basis for improving health outcomes and driving improved healthcare for our fellow citizens?

The challenge for improved workforce planning will also need to be addressed. As part of changes introduced in the Health and Social Care Act 2012, Health Education England was to take an important role in ensuring that local needs for the provision of healthcare—understanding the local needs of local populations—would better drive workforce planning. Is the noble Earl content that that journey has begun and that Health Education England is able to perform in that way?

Finally, great emphasis was put on the need to develop clinical leadership. In this regard, I wonder what assessment has been made of the NHS Leadership Academy and when we might see the report of the noble Lord, Lord Rose of Monewden, and his assessment of how leadership in the NHS might be improved to ensure a greater chance of our achieving the goals that we all share.

16:13

[Baroness Wilkins (Lab)]

My Lords, I thank my noble friend Lord Turnberg for securing this debate. I want to concentrate on the future of the spinal cord injuries unit. I declare an interest, having been spinal cord injured at university in the 1960s. Last year, I returned to the national spinal injuries centre at Stoke Mandeville Hospital to do four months of unsolicited in-patient research, having broken both my legs. The scene is depressing. I found that the speciality in which we led the world is pinched and demoralised. The result is a pointless waste of NHS money as well as of precious lives. Even in this sorry state, the relief to have been found a bed there after 10 days in a general hospital was overwhelming. I cannot thank the noble Earl and my noble friends enough for all their appeals to secure me that bed. Such help should not be necessary, but I will be undyingly grateful.

It is tragic that the demand for the spinal injury service far outstrips the supply, yet bed numbers have been and continue to be cut, leaving newly injured people in district general hospitals. Twelve spinal beds at Stoke have been changed to general use since September 2013 and, despite continual assurances, have still not been returned. Nationally, as of 6 January, 151 newly injured people that we know of are being treated in general hospitals by non-specialist staff, at the risk of developing complications such as urinary tract infections, pressure sores and psychological difficulties. The most vulnerable patients are those high-level tetraplegics who need ventilation to assist with their breathing. Currently, 19 ventilated patients are waiting to be admitted to specialist care, with an average waiting time of six weeks. Their intensive care beds cost around £1,500 per night, 50% more than a ventilated bed in a spinal unit.

Delayed discharges badly frustrate the optimal use of spinal units. The situation at the Salisbury Odstock spinal unit is not unusual. One patient has been awaiting discharge for more than two years, and another for more than a year. They are occupying spinal beds that cost £500 to £600 a night. We know that the drastic cuts to social care and the appalling lack of accessible housing have caused bed-blocking but, as I found, so has the intransigence of the CCGs. To protect their own budgets, CCGs refuse to accept the spinal centres’ advice and insist on their own assessments when the patient is almost ready for discharge. A completely unnecessary delay then ensues in organising care packages and essential equipment. In some parts of the country the local CCG will not even take the unit’s advice on providing the appropriate wheelchair. Instead, a patient has to be transported, with an escort, to their local wheelchair centre, with all the costs that that involves. As a result, there are considerable delays and in some cases rehabilitated patients have even been discharged home on stretchers to wait for a wheelchair at home—what a waste.

The situation with delayed discharges has now reached such a critical level that the All-Party Group on Spinal Cord Injury is about to conduct an inquiry into the causes and to make recommendations. I ask the Minister, first, to support that inquiry and, secondly, who now is in a position to be able to do something about this? The spinal centres have no power to compel the CCGs to address these issues; neither, it appears, does NHS England.

NHS England directly finances spinal injury as a specialism but the money is not ring-fenced. The centres will tell you that up to half their budget is absorbed by their host trust before it reaches them. Would it not be better if the NHS funding went direct to the spinal centre, which could then pay the host hospital for the services it uses?

Underlying all these issues is a general downgrading of spinal cord injury as a specialism in its own right, which must have Ludwig Guttmann turning in his grave. Currently there are consultant vacancies right across the service due to the lack of suitable candidates. Sadly, once we aligned our specialist medical training with Europe, spinal cord injury became part of the medical specialism of rehabilitation rather than a specialism in its own right. There appears to be no clear mechanism to ensure sufficient numbers of spinal consultants or adequate nursing staff and therapists to meet the need. Is anything being done to change this?

At Stoke Mandeville the trust has merged the spinal unit into a specialised services directorate along with haematology, pathology, sexual health and miscellaneous others. As a result, the spinal unit is managed by senior managers who have no knowledge or experience of working with spinal cord injury. I found that the staff feel neither valued nor supported. As a result, key staff have left, with the loss of their invaluable specialist knowledge, skills and expertise. When we have such a shortage of staff, surely it is vital to retain the ones we have.

Finally, whichever party wins the general election, will the new Government recognise that our world leadership role in this area of specialist medicine is now being sacrificed because the management of the service is driven by concern with local issues? Will they develop a strategic vision once again to keep the UK in the forefront of the care, treatment and rehabilitation of people with spinal cord injuries?

16:19

[Lord Cormack (Con)]

My Lords, it is a pleasure to follow the noble Baroness. How good it is to have her back among us. She is a testimony to the care that she has received. It is good for her to remind us of some of the problems that are faced by those who have to undergo spinal surgery.

I begin my remarks by referring to the noble Lord, Lord Liddle, because he ended with a plea for consensus and for taking the NHS out of party politics, and I endorse that entirely. He also made clear how important and central funding is. That is the issue.

Let us remind ourselves that the health service is, in effect, via Beveridge, the product of a grand coalition. Whether we will ever have a grand coalition like that again, I do not know; I certainly hope that we will never have the war that created it. However, it may be that the strange results in June could make that an infinitely preferable solution to the SNP holding the balance of power—but I must not digress because I wish to say that we are not serving the interests of the country or the health service by bandying about words such as “privatisation” and “weaponisation”. We have to focus on the service, what it needs and the funding it needs, and there has to be—I have said this many times in this House and in another place—a plurality of funding.

When I entered the other place in 1970, I did not have a single constituent with an artificial hip or an artificial knee, let alone a transplanted heart. By the time I left, 40 years later, the situation was very different. When I first entered the other place, I used to write a letter to every 18 year-old coming of age, and I used to write a letter to every 80 year-old, because it was quite an achievement in those days to reach the age of 80. I could not have done that in 2010. That is really the underlying problem. We are living longer, we have far better medical techniques, drugs and cures, and we are still relying on a single funding base.

I would like to see a commission set up after the election—Frank Field would be an ideal chairman—to look at funding and to rule nothing out. We have charges at the moment for prescriptions for certain people. Many GPs of my acquaintance say that it would cut down the absent rate—people who do not turn up for their appointments—if we charged for them. We could have a charge for those who are in hospital if they are in full-time employment. I quite like the Field idea of a hypothecated tax. We could have £1 on every bottle of alcohol and 50p on every packet of cigarettes devoted specifically, absolutely and totally to the NHS. We could have a system, as other countries do, of obligatory insurance. I am not particularly commending any individual one of these remedies, but I am saying that there are many alternatives.

The noble Lord, Lord Turnberg, who introduced this debate very splendidly, made the point that there has to be—he did not use the words—a plurality of funding, and there does. We should have a commission under a respected figure—and I believe that it would be entirely right that that respected figure should come from the left of the political spectrum. I do not believe that the Labour Party can for a moment claim entire credit for the National Health Service—of course it cannot—and I am proud of what Conservative Governments have done, but it was brought into being under a Labour Government and I see no reason why a respected figure whom we could all trust could not chair such a body, which would be broadly representative, to look at these alternatives, ruling absolutely nothing out.

Another thing that we should look at is what treatments are properly available under the National Health Service. If somebody is smashed up in a car crash, of course plastic surgery should be available on the NHS without any charge—but should a man or woman be allowed to change their shape through plastic surgery on the NHS? No. We have to look at a whole range of things, and we have to say what is appropriate for a world-class National Health Service to deliver to all people and how we contribute best to it.

After all, we all do contribute to it through our taxes—those of us who pay taxes, and the vast majority of us do. If there are additional charges here or there, and if there is a hypothecated tax such as Mr Field has recommended and the noble Lord, Lord Liddle, has endorsed, that is fine, but let us get this out of the petty party-political arena. Health is of supreme importance to all of us. There is no politician in any party who is not sincerely dedicated to the health of the people—of course there is not. Let us accept, as the noble Lord, Lord Liddle, said, the absolute integrity and sincerity of those on all sides of the political spectrum. Let us say that funding is the fundamental issue and let us try to get a consensual answer to the problems to which I have alluded.

16:25

[Lord Desai (Lab)]

My Lords, it is a great pleasure to follow the noble Lord, because he has taken the discussion in the direction that I wanted to take it. I start by saying that the NHS is a miracle; it has a great staff. It works by consensus, but, as Lord Bauer, who was here some years ago, used to say, the more we are similar, the more we exaggerate our differences. The differences that we have over the NHS are actually very small, but it pays us politically to exaggerate how large they are. For as long as I have lived here and taken part in debates on the NHS, it has always been in crisis. I do not remember a single debate in which everybody said, “Isn’t it great? Things are fine. Everybody is happy. Nurses’ and GPs’ morale is no longer shattered”. It never works like that. We can live with this miracle only by being dissatisfied with it constantly.

There will always be the cliff-hanger idea that there is not enough money. There is absolutely no way of having enough money in a zero-price service which will not generate excess demand. That is not even elementary economics. If you do not know it, you should not be allowed even to enter a course of economics.

But we have still managed. We have managed to finance the NHS by and large from a single source of funds—although there are peripheral aspects. One problem will be—and this is not a matter of who wins the next election—that there will no longer be the kind of money there was. As I have said in other contexts, we are about to enter a low-growth period for the next 10 or 15 years, and the good times are over. They are not going to come back—this is nothing to do with me, nothing to do with the Labour Party and nothing to do with the Conservative Party—so we will have to think of smart ways of meeting the needs that we will have. Not only is the NHS a zero-price service but the types of demand that it faces are proliferating. People are not only living longer but they want a better quality of life, a better shape and things like that—and then we have to address new problems, for example in mental health.

Let me concentrate on one big lacuna that I see in the system. The system does not ask consumers to do enough. We provide them with a zero-price service, but, in return, the consumer does nothing. The consumer is not asked to look after his or her health, to cultivate good habits of not drinking too much or not smoking too much, or whatever it is. The consumer expects, upon presenting himself or herself, to be treated. In any zero-price industry and with any zero-price commodity, if you are not going to allocate resources by price, there has to be something else to ration, and the rationing that we use is time. Waiting time is one rationing device that we use. As we have seen from recent coverage of the A&E crisis, people feel that if they are asked to wait for hours, it is the end of the world. They should have gone to their GP, as the noble Baroness, Lady Barker, said, but going to their GP is too much of a hassle, so they suddenly present themselves at the cheap option, A&E. But if you have to wait, you should accept the price because you did not invest the time in going to your GP. You think this is cheaper? It is not. You have to pay in extra time.

One thing I have advocated off and on is that patients ought to be made aware of how much things cost. They should not be charged but they should be made aware of the shadow price of the things they get, especially the things they waste. If they do not turn up for an appointment, they should be told what it costs. For a long time, I have advocated that we should give each person a shadow budget per head of NHS spend—perhaps £1,500 or 1,500 points. Every time you go to a GP or anywhere, you have a little Oyster card and it deducts so many points from that amount. You do not have to pay but you will be made aware at the end of the year by getting an account of how you spent your 1,500 points.

People ought to be made aware that these things have different prices. If we can make them at all aware of this, it might change their behaviour. We will need not only more productivity but better behaviour from consumers. We will all have to economise. We cannot let the consumer out of the need to economise to get a better health service. I do not have time to say much more than that, but I hope that if we can change behaviour with shadow pricing in the National Health Service, we will have taken a great step forward.

16:31

[Lord Morris of Handsworth (Lab)]

My Lords, I, too, commend the noble Lord, Lord Turnberg, for securing this important and timely debate. Like other noble Lords, I also come to the debate as a long-term user of the NHS, but one who fears for its future as I see the most tried and trusted institution disappearing almost daily in terms of its ethics, values and what it stood for.

In 2006, the current Prime Minister told us that the NHS would be safe in his hands. He promised that there would be no more pointless, top-down, disruptive reorganisation and that changes would be driven by the wishes and needs of NHS professionals and patients. As a matter of fact, this Prime Minister has presided over the biggest, most costly and I would say pointless reorganisation in the entire history of the NHS. Patients and professionals alike have personally experienced the results of this destructive reorganisation which the majority neither wanted nor needed. No Conservative or Liberal Democrat manifesto contained any mention of this approach, nor was it mentioned in the coalition agreement.

Last October, the CQC report described some A&E departments and maternity units as so short of doctors and nurses that they posed a danger to patients. NHS staff are leaving the profession feeling undervalued, underpaid, overworked and not consulted. The result of this mass exodus means that last year the NHS spent £1.3 billion on agency and contract staff.

Let’s face it. This has been one of the worst weeks in the history of the NHS. Day after day we have heard that one health authority after another is unable to cope with patient numbers, with waiting times increasing, operations postponed, staff demoralised, ambulance services under pressure and many operating below mandatory levels. People are urged to use A&E departments for genuine emergencies only, yet many have been unable to get a GP appointment. As a nation, we are of course living longer. The official statistics show that over the course of the past few years more than 700,000 elderly people have blocked hospital beds because a care home or a support home could not be found to accommodate them.

Throughout the world, the NHS has been admired and even envied for its record in providing healthcare to people when they need it most—publicly owned, publicly funded, publicly respected and publicly accountable. However, the NHS is becoming unrecognisable. I am not alone in fearing for its future. The British people want an NHS dedicated to making a difference rather than a profit; a service which belongs to the people and which is not for sale. I want the workers to be properly represented in the decision-making process, properly remunerated and consulted about how the service is run and delivered.

I, for one, look forward to the British people having the opportunity to rescue the National Health Service and hand it back to those who need it, those who use it and those who care for it.

16:36

[Lord Balfe (Con)]

My Lords, I congratulate the noble Lord, Lord Turnberg, on securing this debate. My first point is that we may have differences, but the National Health Service is basically safe in the hands of all the parties represented in this Chamber. We disagree about how we do it, but we do not disagree about the fundamental aim: to provide a health service free at the point of demand. I was very interested in what the noble Lord, Lord Desai, said. I have known him since I was at the LSE many years ago. The points that he made about a zero-price service are absolutely spot on.

I am interested, even pleased, to hear that we are top of the world rankings. I am also surprised, having had experience for 35 years of the Belgian and French health service, that we have outranked them, because that has not been my personal experience with those two health services. None the less, I will believe it: the survey is obviously right.

Why do I speak today? When I was at the LSE 45 years ago, I wrote my dissertation on out-of-hours GP services. Although my career moved me to a distinctly different area, that is a subject that has continued to interest me. Today, I want to speak particularly about the problems—note that I say “problems”, because I think that the word “crisis” should be used sparingly—facing the out-of-hours medical service. First, many people do not find the out-of-hours medical service easy to access. That is in part caused by the lack of GP cover. The previous Government negotiated a GP contract which, I am told, gives the average GP the highest pay and the lowest hours in the European Union.

Evidence suggests that about 30% of patients who self-present at A&E would be better advised if they had called NHS 111 first. However, using A&E may be preferable, particularly for young working people, to trying to get an appointment with a GP. Some young and generally healthy migrant workers do not understand our medical system and do not register, so recourse to A&E is a natural consequence of unexpected illness. The out-of-hours service which exists to provide medical cover when doctors are not on duty is not widely understood.

In Cambridge, where I live, we remember Dr Ubani, the doctor with imperfect English who, after a full week’s work, flew in from Germany to do a session of weekend cover and killed a patient through overprescription. Few people are, however, aware of the considerable steps taken to prevent such a tragedy recurring.

Doctors’ surgeries are, for much of the time, dark and closed. A&E services have the lights on and, whatever the figures say, you will be seen swiftly if there is a life-threatening condition. If not, frankly, there is an option of settling down with a book and waiting one’s turn. This is not necessarily an unwelcome scenario, especially if the alternative is taking time off work, sometimes from a zero-hours contract, to see a GP.

We also know that the present system of dealing with calls through the 111 service can lead to additional referrals to A&E. The 111 service is staffed by trained advisers but their training is in operating the system, not in medicine. The system has a fail-safe and evidence would seem to suggest that this can lead to more referrals. However, imagine the outcry if the system allowed discretion without knowledge. We would soon have an outcry, and rightly so, if there were unnecessary deaths.

Finally, there is considerable evidence that in nursing homes and for other carers of the elderly the first manifestation of a medical issue will lead to the calling of an ambulance. This has rightly followed a lot of inquiries about failings in homes but, as a consequence, it adds to the pressure.

It will be evident from what I have said that a stronger and earlier medical input is a crucial part of dealing with this problem. I would like the Minister to look into the following suggestions and, in due course, come back with a response. First, in Cambridgeshire the clinical commissioning group is in the process of establishing a joint emergency team that will provide integrated care covering community and hospital care, for a fixed price per person per year. This project, which begins on 1 April, will provide a round-the-clock emergency service that will work alongside ambulances and out-of-hours GPs. Will the Minister take a close look at this initiative with a view to promoting its use elsewhere? I notice that it is mentioned in the report.

Secondly, I ask that consideration be given to integrating the 111 and out-of-hours service. Thirdly, I suggest that the introduction of a GP input into the A&E front of house or reception areas could deal quickly and effectively with some of the less serious cases. Finally, I ask the Minister to continue to look at ways to extend the hours that GP services are available. We are no longer in an economy nor do we follow lifestyles where a visit to the doctor is easy to fit in. We need to build an element of consumer choice into the provision of medicine.

I have lived partially in Belgium for the last 35 years. It has a fully socialised medical system, not a private system, but the patient can shop around. There is patient power there at GP level, much more than in the United Kingdom. Maybe this is another European practice that is worth studying with a reference to importing more patient power into the National Health Service.

16:42

[Lord Warner (Lab)]

My Lords, I, too, congratulate my noble friend on securing this debate at such an appropriate time. I share his analysis, particularly around what I see as the decline in the effectiveness of general practice. However, I want to focus on just two strategic issues: the Five Year Forward View and the funding issues; and the problem of social care and the role of local government.

First, on the forward view, everybody should be extremely grateful to Simon Stevens for the leadership that he has shown in bringing forward this document and securing such a large measure of agreement for many of the ideas in it. I very much support his approach of pointing people in a direction of travel but without what I would regard as an overcentralised, detailed game plan or a further reorganisation. The emphasis on local solutions is a big step forward but I want to draw attention to the key funding assumptions underpinning the forward view vision.

The document acknowledges what many of us have been saying for some time: that the NHS faces a £30 billion funding gap by the end of the decade. It says clearly that this can be closed only by a combination of reducing demand, increasing NHS efficiency and more generous “staged funding increases”, in its words. That is absolutely right, but whether you close that gap depends a great deal on what combination of those assumptions actually takes place. You need everything to work in order to close the funding gap entirely.

Underpinning all that is a set of assumptions about the efficiency gains that we have talked a bit about today. Under this vision, the NHS is required to achieve an annual efficiency gain of at least 2%, possibly even 3%, for five years on the trot. Its long-run performance is 0.8%, rising recently to about 1.5%, with a big chunk of that 1.5% being achieved by pay restraint—not a card that you can keep on playing year after year. Some would say, “The assumptions on efficiency in this document are heroic, Minister”. As someone who has been in this field a long time, I have to say that I cannot see the NHS sustaining that level of efficiency gain over a five-year period.

My second point concerns one of the provisos that the Five Year Forward View assumes will actually take place—that is, and this is the document’s term, “sustaining social care”. The reality is that the huge reduction in adult social care funding over the past five years has been a disaster for the NHS. The hospital “bed-blocking” that we so glibly talk about today is in large part a direct result of the draconian cuts in social care funding over that period, which, as the Dilnot commission’s report pointed out in 2011, was in any case underfunded in relation to demography even before the 2010 election. Here I should declare my interest as a member of that committee.

The continuing tightening of the eligibility criteria for social care has produced an extremely efficient pipeline of frail, elderly people for A&E departments, many of whom then seamlessly become acute hospital bed-blockers. The Better Care Fund is a belated attempt to stop the situation getting worse, but it does little to repair the damage already done and has itself been criticised for its highly bureaucratic approach by one of the Government’s own Ministers, Mr Francis Maude. I have real concerns that unless something is done to tackle the continuing shrinking of the resources for adult social care, the NHS can only get into a worse set of troubles, and many of its patients will receive a poorer service. Acute hospital medical wards are about the last place you want to leave frail elderly people who are confused.

I close by drawing attention to the issue of local government. Successive Governments have neglected local government; too often they have seen it as the problem rather than part of the solution. I hope that my party will pay attention to this problem. Attention needs to be given to the excellent report for the Labour Party by Sir John Oldham’s independent committee on treating the whole person and integrating care, and not seeing medicine as a collection of professionals attending to various body parts of the individual. Unless we can actually get real about funding and about repairing the damage done to adult social care funding and services, we are not going to make much progress in sustaining our NHS.

16:49

[Baroness Wall of New Barnet (Lab)]

My Lords, I, too, thank my noble friend Lord Turnberg for securing this debate; almost every other speaker has referred to the appropriateness of its timing. I declare an interest as the chairman of Milton Keynes Hospital NHS Foundation Trust, as I will refer to it considerably.

This debate is about the future of the NHS. I was fortunate as the chairman of Milton Keynes Hospital NHS Foundation Trust to meet a group of young students who have just started their medical training at Milton Keynes Hospital through a partnership that we have just sealed with the University of Buckingham. They were bright, enthusiastic and committed people who are looking forward to their future and, I suggest, to the future of the NHS.

It perhaps seems appropriate to look back, as other noble Lords have done, at where we are now and what we are learning from where we are, alongside debating and sharing what future this magnificent service can have—a service of which we are proud and which offers care from cradle to grave. My noble friend Lord Turnberg referred to medical and technological interventions and developments, as did other noble Lords in their speeches. As other speakers have said, although these have clearly made a huge difference to people’s lives—and we welcome that—I do not think that any of us realises the strain that has fallen on the hospitals as a result, in particular on acute hospitals that provide these services.

I will share things that I know happen in my hospital and elsewhere. It is now almost taken for granted that, if a baby is delivered at 22 weeks, it will survive and flourish, which is an admirable thing to achieve. However, to do that, the service required from the NHS is huge as regards the care that that baby needs—in some instances it involves one-to-one specific nursing requirements. The same applies, as other noble Lords have said, at the opposite end of the service. Milton Keynes is a community that includes people of all ages, from the very young to the very old, so it has the same problems as many other hospitals. The interventions and developments that we have had in treating cancer and other medications for improving health, to which noble Lords have referred, have made immense improvements and breakthroughs in people’s lives. However, I am not sure that, as the noble Lord, Lord Desai, rightly said, although in very different terms, we—patients, communities or any of us—understand just what the effect of that is. We all welcome the improvements made in our lives—any of us would want our relations to have all that—but the implications for an acute trust of funding and service provision are extensive.

Over the last few weeks and even days, my trust, like many others, has been seeing very poorly patients, mostly old men and women, brought in with chest pains, breathing difficulties and even with pneumonia, and others are heading that way. We, like other hospitals, have dedicated staff, from consultants and nurses to healthcare assistants and, importantly, porters, who are often not mentioned but who make the wheels of the organisation move—porters moving trolleys in and out of A&E can make a big difference to the facility that we have to look after patients, and that support is absolutely crucial, particularly at this time. The staff have a huddle every morning or at every shift change and look at what is going on. If you come in, morning after morning, and find that not a single bed is available for anyone who comes through your doors that day, that is a big challenge to start the day with. However, every member of staff works in high spirits and with complete dedication. They care—as I think we all do—about the type of service that they are going to give. They worry, as we all do, when the stress goes on for as long as it has, that they are not able to give the care that they want each and every patient to have who goes through their hands.

The reasons for that are multiple and we have discussed many of them today in this debate. I will pick up on one thing that my noble friend Lord Warner just talked about, which is our relationship with local authorities. As my noble friend Lord Warner and other noble Lords said, many of the bed-blockers—it is a most unfortunate phrase; these are wonderful people who have had interesting and dedicated lives—are there because there is nowhere else for them to go. The ability of local authorities to purchase places in nursing homes and care homes, not just in Milton Keynes but elsewhere, has been reduced because of the cuts, so there is nowhere for people to go.

In addition—and I shall say this quickly, because I am running out of time—what has accelerated the process and caused the overwhelming concern over the past few days is that we have just experienced what in hospital terms is called a “double weekend”. Christmas Day was on Thursday, Boxing Day was on Friday and there followed Saturday and Sunday. The consequences are that we already have challenged services but we also have consultants and nurses who are not working over those days, which means that we cannot provide the usual service.

The Front Bench is getting anxious that I am not finishing in time, so I will finish there. All that I would seriously ask on behalf of my staff in the hospital is that we should not have massive change. Please let us not have a whole new look at what we are doing, with someone coming out with something entirely different. Everybody is weary with that, so let us just look at what we have and make sure that we can make it work better.

16:55

[Lord Mawson (CB)]

My Lords, I thank the House for allowing me to speak briefly in the gap. In the debate led by the noble Lord, Lord Kakkar, in November, on health and innovation, I described a piece of health innovation that I am leading in Tower Hamlets, bringing a health centre, a school, housing and a whole range of enterprise projects together in an integrated health and education project. Professor Brian Cox and I are embedding a science summer school in this project, focused on how Britain becomes the best place in the world to do science. It has taken us seven years to create the health centre; we have lived through three different Governments. I have to thank the noble Earl, Lord Howe, for helping us to resolve this issue; it is very good news indeed.

What lessons have we learnt from a real project on the ground over the past seven years? My first point is that we need consistency. The message and the people constantly change. Secondly, there needs to be accountability. No one seems able to take a decision; there are layers and layers of approval processes, requiring business case after business case, then point one comes in—I refer to my point about consistency—and you are back to square one.

Thirdly, we need clarity. To the outside world, the NHS is the NHS is the NHS. Unfortunately, within the NHS there are so many silos that only the NHS can understand and which all have to have their say, and they all have different approval mechanisms. Then, because of the accountability processes, nobody can take a decision, so it becomes a game of “We will agree if they will agree”, with no one willing to make a final call.

Fourthly, there must be local empowerment. The centre has to make all the decisions but it is the people on the ground at a local level who should be leading. Locally, things are either done to you from the centre or not done at all.

Fifthly, there needs to be partnership and trust. We are not all the evil private sector, all out to screw the NHS. Partnership can achieve so much and has done so to date. The NHS has got to learn to trust and work with others, and it may just find that it can benefit enormously. The best local authorities have made real progress here, but the NHS by and large has not. Our project is bringing large amounts of money, which are coming from outside the NHS budget, into health initiatives on a housing estate. That is what partnership does.

Sixthly, on primary care premises development, the Secretary of State is continually talking about moving to a more preventive and proactive approach, and he is right to do so. To do this, you need to do all that I have mentioned above. However, NHS estates have been given a very narrow, financially driven brief. They need fresh instruction and leadership with a specific brief to foster partnership and opportunities for GP practice developments that will then deliver a preventive and cost-effective, proactive approach. They need to be the solution, not the problem—because not despite.

Most importantly, it must be about patients, patients, patients. Some parts of the NHS seem to have forgotten all about that.

16:59

[Lord Hunt of Kings Heath (Lab)]

My Lords, as this is a general debate on the NHS, I remind the House of my interests as a consultant trainer with Cumberlege Connections and president of GS1. As I am going to raise the Cancer Drugs Fund, I also declare that a relative of mine, Joe Wildy, is an employee in the government affairs department of Sanofi.

I, too, congratulate my noble friend Lord Turnberg on securing the debate and on the quality and breadth of his opening speech. It is clearly timely; never has the health and social care system been under so much pressure.

As many noble Lords have suggested, this pressure can only grow with technological and medical advances, and the sheer fact that the number of those aged over 80 will double by 2037. Implicit in the Motion of the noble Lord, Lord Turnberg, is the question of whether a comprehensive service is still feasible and affordable. I have no doubt that it is but nor do I doubt the scale of the change that the NHS must effect to ensure that sustainability. I have identified seven key areas of change. First, we have to undo the damage caused by the Government’s 2012 Act without undergoing a huge restructuring, as my noble friend Lady Wall said. Secondly, we have to ensure a sustainable funding regime for the NHS and social care. Thirdly, we have to integrate health, mental health and social care. Fourthly, we have to invest in and re-energise primary care. Fifthly, we need a much more assertive public health programme. Sixthly, we need more personalised care and innovation and, seventhly, we have to invest in and support a workforce to help us transform services.

It is a truth universally acknowledged that the 2012 Act has been pretty much a disaster. Despite all the protestations of Ministers, a huge amount of money has been spent and services have been fragmented, and too much energy is spent by all the players simply trying to keep the new system’s head above water. At a time of real crisis in emergency services, it is palpably clear that no one is in charge locally or nationally. My noble friends Lady Jay and Lady Wilkins, and the noble Lord, Lord Mawson, identified the buck-passing of responsibility between a mishmash of clinical commissioning groups, commissioning support units, local area teams and health and well-being boards, which are all quite unable to show the required leadership.

It is the same at national level. Ministers, the Department of Health, NHS England, the NHS Trust Development Authority, Monitor and the CQC vie with each other, often conflict and certainly provide no clear leadership. No wonder the National Audit Office commented in November that it is not at all clear where responsibility for strategic change lies. Quite! It is not surprising that performance is problematic. The Government inherited an NHS that was meeting the then 98% four-hour A&E target. They reduced that to 95% but hospital A&Es have missed that target for 76 weeks, with many hospitals in the last two weeks declaring major incidents. It is clear that the service is under extreme pressure.

On resources, never has the NHS had to cope with a flat-line budget—which is essentially what it is—for such a long time in its history. The recent NAO report on the financial sustainability of the NHS makes for sober reading, as does NHS England’s Five Year Forward View. My noble friend Lord Liddle pointed out that the Chancellor’s intention to reduce public expenditure to 35% of GDP by the end of the Parliament means that the actual resources going to the NHS will be bleak indeed.

I want to ask the noble Earl about an aspect of the immediate funding problem, which concerns the Cancer Drugs Fund. In August last year, the Government announced additional funds for the CDF to ensure that as many people as possible could access these pioneering, life-enhancing drugs. However, I understand that six months later NHS England is poised to remove that access for unknown thousands of patients. What is the Government’s policy on the CDF?

I ask the noble Earl yet again about the money now being paid back by the pharmaceutical industry to underpin the cost of certain drugs, subject to a modest inflation figure every year. Where is this money being spent? Why is it not being spent on new medicines and new treatments, where surely it ought to go? Is it a fact that NHS England does not accept the agreement that the department reached, and that is why it is not playing ball in ensuring that the money is invested where surely it ought to be invested?

On funding, my party has committed itself to a £2.5 billion Time to Care fund. We also want to remove some of the wasteful costs of the current restructuring. However, we should listen to my noble friend Lord Warner on the gap identified by NHS England. The fact is that the 3% efficiency target is formidable, or heroic, as he said. We will have to tackle this one way or another.

We also have to tackle the integration of physical health, mental health and social services. We need personal care plans and a single point of contact. We can see the current problems, which my noble friend Lady Wall identified. We see the fruits of a lack of integration. First, adult care has been impossibly squeezed. This has forced frail older people to rely on the NHS as the provider of last resort. It also means much less support for people when they are ready for discharge from hospital. Delays then happen, with longer lengths of stay. That is the problem we face. Without a properly resourced social care system, and without integration, we are not going to be able to move away from it.

Then there is primary care. Is it any wonder that A&Es throughout the country—recently the Great Western trust in the south-west, the Walsall trust in the Midlands and the Royal Surrey County Hospital in Guildford—are having to warn patients to stay away? It is no wonder when people find it so difficult to see their GP. In the east Midlands, the CCG in Erewash reported that one in five patients had to wait a week for a doctor’s appointment. Barnsley Hospital in South Yorkshire recently surveyed patients, many of whom complained about difficulties in getting a local GP appointment. This has to be tackled. I remind the Minister that whatever one says about the contract, the fact is that this was not a problem in 2010, even though the period between 1997 and 2010 had seen a steady increase in the number of patients coming through the door.

Investment in primary care has definitely fallen behind, and a workforce crisis is emerging. One good start would be for the Secretary of State to desist from his thoughtless attacks on GPs. We have pledged to use part of our £2.5 billion Time to Care fund to recruit more GPs, but we need to do much more to bring GPs into the core of the system. I remind the noble Earl, Lord Howe, that when Andrew Lansley proposed the 2012 reforms, he said that the reason was that, “GPs spend all the money and we want to give them the levers because that will effect change”. However, the huge gap in the system is that clinical commissioning groups seem to have no impact whatever on the performance and behaviour of GPs. I thought that that was the whole purpose of delegating budgets to CCGs. The reason, of course, is that the contract is held with NHS England, which has been quite unable to impact on the performance of GPs.

My noble friend Lord Rea talked about public health. I certainly agree with him and NHS England on its five-year plan. It says that we need a radical upgrade in prevention and public health. It says that it will back hard-hitting national action on obesity, smoking, alcohol and other major health risks. That is very welcome. The question I would ask the noble Earl, Lord Howe, is whether the Government will let NHS England do that—because I have to say that the Government’s record on public health has been very disappointing indeed.

There is one other area that I have time to mention: the adoption of innovation in the National Health Service. The noble Earl knows that he and I share the concern about the slowness of the NHS to adopt new treatments and new medicines. Surely, given our fantastic life sciences, and the strength of our pharma and medical devices industries, we have to find a way to encourage the NHS to move to adoption much more quickly than heretofore. I certainly hope that in his winding-up speech he can say a little more about how we are going to do that.

17:08

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)]

My Lords, I start by congratulating the noble Lord, Lord Turnberg, on securing this debate and thanking those noble Lords who have contributed to it.

As noble Lords will know, having covered the health portfolio continuously since 1997, I still find myself continuously in awe of the NHS and the principles that underpin it, as well as of the people within our health service who live out these principles, not least at the moment.

The NHS is currently facing challenges that it has never faced before. Even though the Government have protected the NHS with real-terms funding increases, we do not underestimate how challenging it has been to continue to deliver high-quality care in the current climate. Demand for healthcare is rising and changing as the population ages and different diseases come to the fore. We are faced with an ageing population, as has been said, and one where increasing numbers of people are living with multiple chronic conditions. The big issues that the NHS must deal with now, such as dementia and lifestyle conditions such as obesity, cannot be addressed by the traditional model of a healthcare system which is focused on the acute sector.

I want to spend most of my speech considering the future of the NHS following the recent publication of the Five Year Forward View. This document, which was published jointly by NHS England and five other arm’s-length bodies, sets out a vision for how our health system will evolve over the next five years. It is a vision which the Government share. The Secretary of State and I have previously set out the four pillars of our response, which are worth recapping.

The first pillar is to ensure that we have an economy that is able to pay for the growing costs of our NHS and social care system. A strong NHS needs a strong economy. The success of our economy means that we were able to provide additional funding in the Autumn Statement, including £1.7 billion to support and modernise the delivery of front-line care, and £1 billion of funding over four years for investment in new primary care infrastructure. In all, NHS funding will be about £3 billion more next year compared with this year, and all that extra funding will be baselined for future years.

The NHS itself contributes to that strong economy in a number of ways, and we want to help it to develop its role. It is helping people with mental health conditions to get back to work by offering talking therapies to 100,000 more people every year than four years ago. The NHS can also attract jobs to the UK by playing a pivotal role in our emerging life sciences industries. In the past three years, we have attracted £3.5 billion of investment and 11,000 jobs. This Government have set out our ambition to be the first country in the world to decode 100,000 research-ready whole genomes.

The second pillar of our plan is to change the models of care to be more suited for an ageing population. As I said earlier, we need to accommodate growing numbers of vulnerable older people who need support to live better at home with long-term conditions such as dementia, diabetes and arthritis. To do that, we need a greater focus on prevention, which will help people to stay healthy and not allow illnesses to deteriorate to the point where they need expensive hospital treatment.

This Government have already made good progress in improving out-of-hospital care. Last year, all those aged 75 and over were given a named GP responsible for their care—something that was abolished by the previous Government. From April, everyone will have a named GP. Already 3.5 million people benefit from our introduction of evening and weekend GP appointments, which will progressively become available to the whole population by 2020. The better care fund is integrating the health and social care systems to provide joined-up care for our most vulnerable patients. Alongside that, the Government have legislated, for the first time ever, on parity of esteem between physical and mental health.

However, I recognise that there is more to do. NHS England has already invited applications from local areas for the £200 million of funding which has been made available to pilot the new models of care set out in the Five Year Forward View. To deliver these new models, we will need to support the new clinical commissioning groups in taking responsibility, with their local partners, for the entire health and care needs of people in their area.

A strong economy and a focus on prevention are the first two pillars of our plan. The third pillar is to be much better at embracing innovation and eliminating waste. Previously, the NHS has often been too slow to adopt and spread innovation. Sometimes this has been because the people buying healthcare have not had the information to see how much smart purchasing can contain costs. From this year, CCGs will have access to improved financial information, including per-patient costings. The best way to encourage investment in innovation is a stable financial environment. Following the next spending review, local authorities and CCGs will receive multi-year budgets. The NHS also needs to be better at controlling costs in areas such as procurement and agency staff as well as reducing litigation and other costs associated with poor care. We are working with NHS England and partner organisations to agree the level of savings in each area, which will allow more resources to be directed to patient care.

The final pillar of our plan is to continue to develop a culture of care in all parts of the NHS. We have made good progress since the Francis report. We have introduced a greater focus on patient care. There are 5,000 more nurses on our wards and 4.2 million NHS patients have been asked, for the first time, if they would recommend to others the care they received. We plan to go further over the next few months. We will set out how we will improve training and safety for new doctors and nurses, launch a national campaign to reduce sepsis, and, responding to recommendations made in the follow-up Francis report, tackle issues of whistleblowing and the ability to speak out easily about poor care.

Noble Lords have raised a number of other important issues in this debate. I shall endeavour to respond to as many as I have time to do. First, I shall talk about funding, a subject covered very thoughtfully by the noble Lord, Lord Turnberg, my noble friends Lord Horam and Lord Cormack, and the noble Lord, Lord Liddle, among others. The Five Year Forward View argued that a combination of growing demand and no further efficiencies would bring about a funding gap for the NHS of nearly £30 billion by 2020-21 against a flat real baseline. A 2% efficiency growth, rising to 3% over time, produces a remaining gap of £8 billion. But if the NHS can achieve 3% efficiency gains, the remaining challenge would reduce to around £4.4 billion in 2020-21. I will talk about the scope for efficiencies in a moment, but this is broadly the same real-terms funding increase that the Government have committed to the NHS over this Parliament.

The funding announced in the Autumn Statement fully delivers the investment required to make the Five Year Forward View a reality in 2015-16 and provides funding to start delivering the changes required by the Five Year Forward View to deliver a sustainable NHS in future years. As I have said, this new funding will be baselined for future years. As has happened over this Parliament, real increases in funding will be required to complete this transformation and ensure a sustainable NHS in the future but the NHS will also be required to make significant efficiencies. Of course, I cannot go further than that at the moment because the detailed funding package for 2016-17 onwards will be announced at the next spending review, whichever party is in government. It is worth pointing out that all the £1.5 billion of investment in NHS front-line patient care in 2015, stemming from the Autumn Statement, will go to improving local NHS services and will help the NHS to meet rising demand. On top of that, we are introducing a £200 million transformation fund. The fund will kick-start the work needed to develop new ways of caring for patients which do a better job of joining up GPs, community services and hospitals.

In part of her speech, the noble Baroness, Lady Jay, focused on competition. I am sure she will remember that greater competition in the NHS was introduced through deliberate policies from 2003, such as the independent sector treatment centres and choice of any willing provider. Rules were put in place in 2007 to manage this competition. We as a government continued that approach of managed competition, overseen, however, by an expert health regulator in the shape of Monitor. I would just say that this has hardly led to a giant expansion of private provision. Commissioner spending on healthcare from private sector providers equates to about 6.1% of total NHS revenue expenditure, which is only 1.2% more of the NHS budget than in 2010. Much of the increase is accounted for by social enterprises and charities, which I know the party opposite supports.

The key here is that it is not politicians who take these commissioning decisions but clinicians. As the noble Baroness conceded, there has not been a change in the Secretary of State’s core duty. He is responsible for promoting a comprehensive health service. This remains consistent with the wording of the original 1946 Act. At the same time, what the Act also did was right. The Health and Social Care Act puts clinicians in charge of decision-making about patients rather than politicians or administrators. That involves a strengthening of local accountability and decision-making through clinical commissioning groups and local health and well-being boards. Local authorities are once again responsible for public health, as my noble friend Lady Barker reminded us. We have also restored a culture of care to the health service so that doctors are primarily accountable to their patients, not top-down- targets or bureaucrats. I simply say to the noble Baroness, Lady Jay, and the noble Lords, Lord Morris and Lord Hunt, that any future Government would reverse those measures at their peril.

The noble Lord, Lord Turnberg, said that the NHS should become a much more preventive service and we fully agree with that. Action is needed to address the common risk factors for the big killer diseases. To give one example, the NHS health check provides an opportunity to review an individual’s health against some of the risk factors that he listed. Last year, more people than ever before received a free NHS health check. Since it was introduced, 7.5 million offers have been made and more than 3.7 million NHS health checks have been received, offering a real opportunity to reduce avoidable deaths and disability and to tackle health inequalities.

My noble friend Lord Balfe spoke about GPs and, in particular, GP access. We are introducing a number of measures to ensure that people who need to see a GP do so at a time to suit them. We have invested through the Prime Minister’s Challenge Fund £50 million this year to help more than 1,100 practices to develop new ways of improving GP access. We have committed to invest another £100 million into the scheme next year and we will extend seven-day opening to every patient in the country by 2020. From January, practices will also be allowed to register people outside their local area, making it easier for hard-working people to register near their place of work or somewhere else that is convenient to them. Despite a decrease in head count, there has been a 1.2% increase in full-time equivalent GPs since 2012 and the number of practice nurses and other practice staff has also grown, representing in total a real capacity increase.

The noble Lord, Lord Rea, focused on alcohol, an important issue. We are committed to reducing alcohol-related harm and have already banned alcohol sales below the level of duty plus VAT, meaning that it will no longer be legal to sell a can of ordinary lager for less than around 40p. Alcohol consumption per head has fallen, I am pleased to say, in recent years. Reduced affordability of alcohol, influenced by tax rises up to 2013, has been a factor in this. Alcohol minimum unit pricing is still being considered as a possible way forward but no decision has been taken.

The noble Baronesses, Lady Masham and Lady Wilkins, turned our attention to spinal injury services. The NHS England spinal cord injuries service specification clearly sets out what providers must have in place to offer evidence-based safe and effective services. It sets a core requirement that each specialised SCI centre can demonstrate that it has a minimum of 20 beds dedicated exclusively for the treatment and rehabilitation of SCI patients. The overall bed complement for England is being reviewed through a demand and capacity project led by the Spinal Cord Injury Clinical Reference Group. That group aims to produce a report in 2015-16.

The noble Baroness, Lady Wilkins, argued for a strategic view of spinal injury services. As she knows, NHS England commissions specialised rehabilitation services as defined by the service specification, which sets out what providers must have in place to offer safe and effective specialised rehabilitation services. The clinical reference group is currently completing a review of those services. It will involve establishing nationally what the current demand is for rehabilitation services, which must be the first point of reference.

My noble friend Lord Horam spoke about bed blocking and asked whether some of the delayed discharges could be resolved by discharge to mental health trusts or housing associations, and whether local areas could do more than they are doing. I would simply say to him that these things have to be dealt with locally; we cannot hope to do it centrally. The Health and Social Care Act 2012 gives local clinicians more power and responsibility to develop the right solutions for their local areas. Hospital trusts are already forming effective partnerships to ensure that patients get the support they need to be discharged from hospital quickly, and I can tell him that NHS England and others are supporting them to do this.

My noble friend Lady Barker focused part of her speech on mental health. I fully agree with her that public services should reflect the importance of mental health, putting it on a par with physical health, as we have argued so often. Parity of esteem between mental and physical health is now enshrined in legislation. For the first time, we have introduced waiting time standards for mental health, ensuring that NHS England and local partners properly prioritise access to mental health services, and we have made mental health part of the new national measure of well-being so that it is more likely to be taken into account when government departments are developing and implementing policy.

The noble Lord, Lord Kakkar, in his wide-ranging speech, covered a number of key issues. I turn first to efficiency savings. There is no doubt that the NHS needs to be better at controlling costs in areas such as the procurement of medicines and clinical equipment, and indeed non-clinical equipment, energy and fuel, agency staff, the collection of fees from international visitors, and reducing litigation and other costs associated with poor care. Gains can also be made in ways of working, such as by getting paramedic teams to treat more patients at home rather than bringing them to hospital; creating more regional centres of excellence for specialist treatments such as stroke and heart disease; bringing more services out of hospital and into the community by, for instance, having specialist consultants in GP surgeries; offering more patients better access to GPs, including evening and weekend appointments and Skype consultations; and joining up health and social care services such as through the Better Care Fund. Working with NHS England, the department has announced plans in all these areas. We will agree the precise level of savings to be achieved through consultation with NHS partner organisations over the next six months. That will lead to a compact signed up to by the department, its arm’s-length bodies and local NHS organisations with agreed plans to eliminate waste, thus allowing more resources to be directed to patient care.

The noble Lord, Lord Hunt, asked me about the cancer drugs fund. Of course, the policy behind this is to give patients access to the drugs they need, but I would qualify that by saying that those drugs need to be clinically effective. That is the reason why NHS England is doing the sifting process that is currently in train. The payments from industry that he referred to were never going to be hypothecated; they form part of NHS England’s general budget. Having said that, NHS England does have the freedom to apply the money as it sees fit, whether that is for drugs, radiotherapy, or indeed any other investment that it deems to be clinically effective.

Moving back to the noble Lord, Lord Kakkar, who asked me about innovation, the appropriate use of technology-enabled care services such as telehealth and telecare can support patients in managing their long-term conditions more effectively and enable people with social care needs to live independently for longer. We are making progress in this area, and I will be happy to bring him up to date by letter on that. As regards the new NHS Innovation Accelerator programme announced yesterday, I agree with him that that is very good news. It invites leading healthcare pioneers from around the world to bring their tried and tested innovations to the NHS. Again, I can expand on that by letter.

Where are we with the personalised medicine agenda, informatics and the UK Biobank? I can say to him, as I can to my noble friend Lady Thomas, that we are determined to make Britain the best place in the world to discover and develop 21st century medicines. By harnessing the UK’s unique strengths in research, the NHS, medical charities and a vibrant life sciences cluster of innovative companies, we are sure that we can accelerate access to new treatments and attract major new investment and growth.

I will need to leave the other questions to the letter that I have promised to send round to all noble Lords who have spoken. However, suffice it to say for now that in recognising that the NHS faces some definite challenges as we strive to increase both the efficiency and quality of care, we also have a clear plan for how we are going to tackle this. The progress that we want to make will only be made possible by people: those who work in the NHS and those who rely on it. We need to free people up to make decisions about the NHS, creating models of care that suit local needs while upholding a world-class standard. I am confident that we can do that together.

17:30

[Lord Turnberg]

My Lords, I thank all noble Lords for their wide-ranging and well informed contributions. I have learnt a lot. I clearly cannot comment on every noble Lord’s contribution, but I particularly wanted to say how pleased I was to hear from the noble Baroness, Lady Wilkins, who is back in her place and in fine voice.

Clearly, we were never going to solve all the problems of the NHS today, but I believe that this debate has been a useful contribution as we ease our way into the next election. The next Government will have to level with the public, who are very supportive of the NHS, and grapple with the issue of how we might cope with the conundrum of paying for a service that becomes more complex as every day goes by.

Of course we should become more efficient, but I am reminded that Aneurin Bevan, when the NHS began, thought that as we cured and prevented more diseases the service would get cheaper. However, every year it seems to have got more expensive, and as we cure one disease, another disease pops up. It is an unfortunate fact that the mortality rate among humans is almost 100%—exactly 100%. On that happy note, once again I thank all noble Lords for their contributions and look forward to the next Government’s actions as a result.

Motion agreed.

Insurance Bill [HL]

Thursday 8th January 2015 Lords Chamber

Report

17:31

Clause 4: Knowledge of insured

Amendment 1

Moved by

[Lord Newby]

1: Clause 4, page 3, line 16, leave out from “(whether” to “the” in line 17

[Lord Newby (LD)]

My Lords, in moving Amendment 1, I shall also speak to Amendment 2. In the amended Bill, Clause 4(6) provides that, for the purposes of the duty of fair presentation of the risk, the insured “ought to know” what should have been revealed by a “reasonable search of information” available to it.

Some of the evidence we heard in Committee made the case for the Bill explicitly confirming that the “reasonable” search may extend to persons covered by the insurance contract but who are not the insured in the sense of being a contracting party. Noble Lords will recall that my noble friend Lady Noakes and the noble and learned Lord, Lord Woolf, put forward amendments to this clause in Committee stating that the reasonable search may extend to persons who could benefit from the contract. The Government were unable to agree with the specific wording of those amendments, and they were subsequently withdrawn.

However, we agreed to take the issue away and consider whether amendments needed to be made to ensure that the intended scope of the clause is clear. The Government consider that such clarification would benefit the Bill, and Amendments 1 and 2 seek to address this issue. As we discussed in Committee, what is a reasonable search of information will depend on the type of cover an insured seeks and the type of entity it is. It is important that Clause 4(6) expresses a broad principle that is flexible enough to take account of the wide variety of insurance policies and types of cover which are bought in the non-consumer context.

Amendment 2 clarifies that “information” which an insured ought to know may include information held by a person other than the insured, specifically mentioning that this may include,

“a person for whom cover is provided by the contract of insurance”.

This makes clear that persons benefiting from the contract could come within the scope of the insured’s reasonable search. I believe that this was at the heart of the amendments put forward by my noble friend Lady Noakes and the noble and learned Lord, Lord Woolf, and I hope that they are content with the drafting we have produced on this in Amendment 2. These amendments will improve the Bill, and I hope that the House can support them. I beg to move.

[Lord Woolf (CB)]

My Lords, in accord with the approach adopted by the Minister throughout the discussions on this Bill, I would like to acknowledge the help that he gave, which was something that I and the noble Baroness, Lady Noakes, were looking for.

Amendment 1 agreed.

Amendment 2

Moved by

[Lord Newby]

2: Clause 4, page 3, line 18, at end insert—
“( ) In subsection (6) “information” includes information held within the insured’s organisation or by any other person (such as the insured’s agent or a person for whom cover is provided by the contract of insurance).”

Amendment 2 agreed.

Amendment 3

Moved by

[Lord Newby]

3: After Clause 10, insert the following new Clause—
“Terms not relevant to the actual loss
(1) This section applies to a term (express or implied) of a contract of insurance, other than a term defining the risk as a whole, if compliance with it would tend to reduce the risk of one or more of the following—
(a) loss of a particular kind,(b) loss at a particular location,(c) loss at a particular time.(2) If a loss occurs, and the term has not been complied with, the insurer may not rely on the non-compliance to exclude, limit or discharge its liability under the contract for the loss if the insured satisfies subsection (3).
(3) The insured satisfies this subsection if it shows that the non-compliance with the term could not have increased the risk of the loss which actually occurred in the circumstances in which it occurred.
(4) This section may apply in addition to section 10.”

[Lord Newby]

My Lords, Amendment 3 is, with a few slight amendments, the text which the noble and learned Lord, Lord Woolf, put forward in Committee concerning terms not relevant to the actual loss. It is intended to prevent an insurer from relying on a policyholder’s non-compliance with a warranty or other contract term in order to avoid liability for an insurance claim for loss of an entirely different kind.

From the outset, the policy aim behind this amendment has been generally well supported. There were some concerns about the drafting of the clause, which meant that it did not achieve a sufficient consensus of support such that it could be introduced as part of an uncontroversial Bill. The text of this amendment was proposed and consulted on by the Law Commission after the introduction of the Bill as a drafting solution which, it was hoped, would be suitable for this non-controversial parliamentary procedure.

I am very pleased that the written and oral evidence put to the committee, together with the backing of the committee members themselves, has demonstrated a strong body of support for this formulation. As such, the Government consider it suitable to be included in this Bill. It complements the existing Clause 10, which makes changes to an insurer’s remedy for breach of warranty. I beg to move.

Amendment 3 agreed.

Clause 12: Remedies for fraudulent claims: group insurance

Amendment 4

Moved by

[Lord Newby]

4: Clause 12, page 6, line 32, leave out subsection (1) and insert—
“(1) This section applies where—
(a) a contract of insurance is entered into with an insurer by a person (“A”),(b) the contract provides cover for one or more other persons who are not parties to the contract (“the Cs”), whether or not it also provides cover of any kind for A or another insured party, and(c) a fraudulent claim is made under the contract by or on behalf of one of the Cs (“CF”).”

[Lord Newby]

My Lords, I shall speak also to Amendments 5 to 9 and manuscript Amendment 10A, which has been tabled in substitution for Amendment 10. The amendments respond to representations made to the committee that Clause 12 on fraudulent claims in consumer group insurance should be extended to group insurance contracts in the non-consumer context. My noble friend Lady Noakes tabled amendments on this point in Committee. The Government supported this change in principle but were unable to support the specific amendments suggested by my noble friend. As such, her amendments were withdrawn on the basis that the issue would be taken away and considered further.

We have now had the opportunity to consider the amendments needed to the Bill in order to effect this change. Clause 12 currently provides that where a member of a group consumer insurance contract makes a fraudulent claim, the insurer has a remedy against the fraudulent group member but the remaining members of the group policy are protected. Amendments 4 and 5 extend the application of Clause 12 to the non-consumer context, and indeed in respect of contracts that cover both consumers and non-consumers as group members under the same policy. Amendments 6 and 7 correct a small error in Clause 12(3) that was spotted when drafting the main amendment to the clause.

Amendments 8, 9 and 10A deal with contracting out. In the consumer context, an insurer will not be able to put a consumer group member in a worse position than they would be in under Clause 12. In the non-consumer context, an insurer will have to comply with the transparency requirements if they wish to put a group member in a worse position. These provisions are consistent with the contracting-out provisions generally, and are a necessary consequence of extending Clause 12 to non-consumers. I should explain that the only difference between Amendment 10A and Amendment 10, which it replaces, is that the various cross-references to other sections have been corrected.

I believe that these amendments fully address the desire of the committee, particularly my noble friend Lady Noakes, and a number of the committee’s witnesses to extend the application of Clause 12 to the non-consumer context. These are uncontroversial amendments and I hope therefore that noble Lords can support them. I beg to move.

[Lord Young of Norwood Green (Lab)]

My Lords, I thought it would be appropriate for us to say that we support these amendments. It is a good example of Parliament working to improve a valuable service industry, enhancing its position globally. That is important because the UK is a world leader in this. It is not a subject that I profess a great deal of knowledge about but I cannot help having a slight ironic feeling. My late father, who was a very successful insurance agent, would have been pleased to hear my contribution, brief though it is.

Amendment 4 agreed.

Amendments 5 to 7

Moved by

[Lord Newby]

5: Clause 12, page 6, line 42, leave out “consumer”

6: Clause 12, page 7, line 7, after first “the” insert “first”

7: Clause 12, page 7, line 10, at end insert—
“( ) the second reference to “the insured” in subsection (1)(b) is to A or CF,”

Amendments 5 to 7 agreed.

Clause 14: Contracting out: consumer insurance contracts

Amendment 8

Moved by

[Lord Newby]

8: Clause 14, page 8, line 3, leave out paragraph (b)

Amendment 8 agreed.

Clause 15: Contracting out: non-consumer insurance contracts

Amendment 9

Moved by

[Lord Newby]

9: Clause 15, page 8, line 18, leave out subsection (3)

Amendment 9 agreed.

Amendment 10A (in substitution for Amendment 10)

Moved by

[Lord Newby]

10A:After Clause 16, insert the following new Clause—
“Contracting out: group insurance contracts
(1) This section applies to a contract of insurance referred to in section 12(1)(a); and in this section—
“A” and “the Cs” have the same meaning as in section 12,
“consumer C” means an individual who is one of the Cs, where the cover provided by the contract for that individual would have been a consumer insurance contract if entered into by that person rather than by A, and
“non-consumer C” means any of the Cs who is not a consumer C.
(2) A term of the contract of insurance, or any other contract, which puts a consumer C in a worse position as respects any matter dealt with in section 12 than that individual would be in by virtue of that section is to that extent of no effect.
(3) A term of the contract of insurance, or any other contract, which puts a non-consumer C in a worse position as respects any matter dealt with in section 12 than that person would be in by virtue of that section is to that extent of no effect, unless the requirements of section 16 have been met in relation to the term.
(4) Section 16 applies in relation to such a term as it applies to a term mentioned in section 15(2), with references to the insured being read as references to A rather than the non-consumer C.
(5) In this section references to a contract include a variation.
(6) This section does not apply in relation to a contract for the settlement of a claim arising under a contract of insurance to which this section applies.”

Amendment 10A agreed.

House adjourned at 5.42 pm.