House of Commons

Tuesday 13th January 2015 Commons Chamber

Tuesday 13 January 2015

The House met at half-past Eleven o’clock

Prayers

Tuesday 13th January 2015 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Tuesday 13th January 2015 Commons Chamber

The Secretary of State was asked—

[Mr Stewart Jackson (Peterborough) (Con)]

1. What steps he is taking to improve mental health care for pregnant women and new mothers in (a) Peterborough and (b) England; and if he will make a statement.

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

The Government have prioritised improving mental health care and support for pregnant women and new mothers in its mandate to NHS England, with a clear objective to reduce the incidence and impact of post-natal depression. In order to implement the Government’s priority to improve perinatal mental health services, Cambridgeshire and Peterborough NHS Foundation Trust is working closely with local authority commissioners in Peterborough to develop a joint perinatal mental health strategy to improve care for women.

[Mr Jackson]

The Maternal Mental Health Alliance has estimated that the long-term cost of mental health care for new mothers is £8 billion, which is perhaps not unconnected to the fact that only 3% of clinical commissioning groups have a perinatal mental health strategy. Does the Minister think that this is a very serious issue and needs immediate action?

[Dr Poulter]

My hon. Friend is absolutely right to highlight the challenges posed by perinatal mental illness. The damage it does to women’s lives, and indeed to the wider family, was highlighted in the recent independent inquiry into maternal deaths. It is therefore important for the Government to invest, as we are doing, in improved care for the perinatal mental health of women. That is why we have made it a priority for each and every maternity unit to have staff specially trained in perinatal mental health skills by 2017.

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

The Minister will know that I have been part of an all-party group campaigning on post-natal depression, which is the most likely thing to kill a healthy young woman. Is he aware that this area of mental health is under-resourced, and that mental health facilities for children and young people are desperately under-resourced? That is partly because clinical commissioning groups have been commissioning in the wrong way, which has disturbed existing arrangements and demoralised staff.

[Dr Poulter]

The hon. Gentleman makes the important point that there has been an historical disparity between the priorities given to mental health and physical health conditions. That is why we have legislated for parity of esteem between mental and physical health, why we are introducing access targets for patients using mental health services for the first time—that is a big step forward—and why we have increased funding for mental health services by £300 million this year.

[Maria Miller (Basingstoke) (Con)]

In the first few weeks of a child’s life, the mother often visits their general practitioner regularly, so I applaud the Government’s work on recruiting more health visitors and midwives. Does the Minister agree that GPs need to be sharper at identifying post-natal depression in mothers, because it can be so destructive to the lives of both the mother and the child?

[Dr Poulter]

My right hon. Friend is absolutely right. A lot of work is going on with the Royal College of General Practitioners and the Royal College of Psychiatrists to improve GP training and skills in mental health more generally. The specific key to this is providing the right early years work force, which is why it is so important that this Government have invested in additional health visitors to give each and every child the best start in life. The latest figures from NHS England show that the number of health visitors has increased by more than 3,000 under this Government.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

What steps is the Minister taking to make sure that awareness of domestic violence is incorporated in guidance for mental health care? We know that pregnancy can sometimes be the first time there is violence in the home, and we obviously need a strategy to address that.

[Dr Poulter]

The hon. Lady makes very important points. I have certainly seen in my clinical practice that some women present when there are domestic violence issues or other issues in the home, and such issues can be heightened and exacerbated during pregnancy. A lot of work is now going on to improve the awareness of all NHS staff of domestic violence and, more broadly across training, of mental health issues.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

For many people with mental health problems, the first emergency service with which they come into contact at a point of crisis is the police. What steps are the Government taking to ensure that such a crisis is treated as a health crisis, not a criminal incident, and will the Minister undertake to do whatever he can to ensure that no children end up in a police cell as a place of safety?

[Dr Poulter]

My hon. Friend makes an important point. It is absolutely right that we do not want people with mental health problems to be looked after in police cells. A lot of work has been going on. The Government have set up the crisis care concordat to look at exactly that issue, and as a result the number of people with mental illness going to police cells is now falling rapidly.

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

2. What steps he is taking to improve ambulance response times.

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

The Government have provided an extra £50 million of funding to ambulance services as part of our record package of support for the NHS this winter.

[Bridget Phillipson]

Notwithstanding what the Secretary of State has just said, the North East ambulance service has warned that it is under severe pressure caused by delayed ambulance turnaround times at hospitals such as Sunderland Royal. When Ministers embarked on their top-down reorganisation of the NHS, were they warned at any point that chaos would ensue in A and E departments?

[Mr Hunt]

The reforms the hon. Lady mentions mean that we have 9,000 more doctors, 3,000 more nurses and 2,000 more paramedics in the ambulance service. The point is that those reforms are putting money on to the front line, which means that the NHS is better equipped to deal with winter pressures than ever before.

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

In England around 75% of ambulances meet the target response time, as opposed to 60% in Wales. Will the Minister tell the House why ambulance response times are so much better in England than in the area of the United Kingdom run by the Labour party?

[Mr Hunt]

What is so disappointing about the health debate is that Labour Members tour TV studios trying to whip up a sense of crisis in the NHS in England, and then deny that things are even worse in Wales. Services are better in England because we have put more money on to the front line and less into management.

[Helen Jones (Warrington North) (Lab)]

Prior to Christmas, a motorcyclist in my constituency with serious leg injuries was left lying on the ground in the rain for an hour and 40 minutes waiting for an ambulance. Local people had to bring out blankets and hot water bottles to try to keep him warm, but because no ambulance arrived, the police had to commandeer a council minibus to take him to hospital. Is the Secretary of State ashamed to stand at the Dispatch Box and tell the House that the NHS is not in crisis, when that is what is happening on the ground?

[Mr Hunt]

Let me tell the hon. Lady what we are doing—[Interruption.] This is what I think is so shocking: Labour Members are not actually interested in what is happening to avoid precisely the kind of things that the hon. Lady mentioned. We are putting £4.6 million of extra support into the North West ambulance service this winter, and that money is being used to employ more paramedics, to train people so that they can see and treat patients on the spot, and to help more people on the phone so that they do not need an ambulance. The hon. Lady should perhaps have listened to the earlier question, because where Labour is running the ambulance services, results are even worse.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Does the Secretary of State agree that the rules for commissioning ambulance services need to be looked at again to ensure that ambulances serving rural areas such as South Lakeland which do not have an acute centre of their own and therefore export their ambulances further afield need to be compensated with additional ambulances to take account of the fact that so many of our vehicles are out of county most of the time?

[Mr Hunt]

My hon. Friend makes an important point about the way targets are set up. It is possible for ambulance services to hit their targets while not delivering a satisfactory service to the most rural areas, and we have discussed that issue a number of times. Because we are in the middle of a challenging winter, we do not think that now is the right time to review the issue, but he should rest assured that we are keeping it under review.

[Andy Burnham (Leigh) (Lab)]

Although focus has been on A and E, it is becoming clear that the knock-on crisis in the ambulance service is more serious than people realise. Evidence is emerging of services unilaterally abandoning national standards and putting patients at risk. We know of one ambulance service that left patients at the door of A and E without handing them over to A and E staff, and last night East of England ambulance service was forced to release an internal report on the downgrading of thousands of 999 calls, including calls made by terminally ill patients. The report covered only a sample, but it showed that at least 57 of those patients died after a decision was taken not to send an ambulance. Withholding ambulances from terminally ill people is the most cruel form of rationing imaginable. Will the Secretary of State today order a full, independent investigation into how that happened, and into every death or adverse incident?

[Mr Hunt]

We investigate deaths and adverse incidents carefully, and the East of England ambulance service got £3.6 million of extra support to help it this winter. Let us look at what is happening in the ambulance service. Year on year, the number of the most serious category A calls—those that need to be answered within eight minutes—has increased by 26% over one year, and the number of ambulances dispatched within eight minutes has increased by 22%. That is 1,900 extra ambulance journeys arriving within eight minutes, which is a record of an ambulance service doing well under a lot of pressure. The right hon. Gentleman should be getting behind the paramedics and ambulance services, not trying to politicise the issue.

[Andy Burnham]

I raised a very serious issue, which came to light last night, regarding 57 terminally ill patients. As that was only a sample, it is not the whole story. I am surprised that the Secretary of State did not answer the very specific question about a serious failure in the East of England ambulance service. The truth is that this is not confined to the ambulance service in the east of England. Last year, we heard of a 77-year-old great-grandfather from Bolton who waited for more than four hours on a freezing pavement and a 92-year-old grandmother who tragically died after waiting for five hours in agony on the floor of her home in Muswell Hill.

Whatever the Secretary of State says, those are not isolated cases. New figures last week showed that in November a staggering 17,000 critically ill patients who were classified as needing an urgent category A 999 response waited longer than 19 minutes for an ambulance to arrive. Will the Secretary of State agree that this chaos is now putting lives at risk and cannot carry on? Will he tell the House what precise steps the Government are taking to bring responses to 999 calls back up to acceptable standards?

[Mr Hunt]

But we are taking measures. That is why we have 2,000 more doctors and 5,000 more nurses compared with a year ago. Frankly, the last thing those doctors and nurses on the front line want is scaremongering by the right hon. Gentleman—posters saying that the NHS might cease to exist under this Government; and leaflets like the one I have here from Lancaster saying that the local hospital might close. We are backing the NHS with more doctors, more nurses, more resources and a long-term plan. Will he now back the NHS by disowning this kind of scaremongering and stop trying to weaponise the NHS?

[Bill Esterson (Sefton Central) (Lab)]

3. What the average waiting time was for a GP appointment in the most recent period for which figures are available.

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

The latest GP survey results suggest that the majority of patients can get GP appointments at a time convenient to them, but we want to do more. We are offering 7.5 million more people evening and weekend appointments through the Prime Minister’s £100 million challenge fund. NHS England does not directly collect data for GP waiting times.

[Bill Esterson]

I think many people up and down the country will be surprised by the Minister’s answer, including my constituent Lynne Taylor who had a chest infection but was sent to A and E by a locum because of a lack of appointments at her GP surgery. That was done on the phone without seeing her. The A and E doctors told her that she certainly should not have been sent to A and E. Will the guarantee of a GP appointment within 48 hours help patients like Ms Taylor who need to see their own doctor? Would that not also be a big step in reducing the huge pressure on A and Es?

[Dr Poulter]

I hope the hon. Gentleman will be reassured to hear that, according to the latest GP survey, 87% of patients in Southport and Formby clinical commissioning group were able to get an appointment or to see somebody they wanted to see at an appropriate and convenient time. It is important to note that Labour’s 48-hour target did not work. From 2007 to 2010, the percentage of patients who were able to get an appointment within the 48-hour target actually fell.

[Mr Speaker]

Order. Let me explain to the Minister, which I have done several times, that we have a lot of business to get through. We need answers to questions and no more than that.

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

Last month, I contacted one of my excellent GPs in Chesham concerning the waiting time for one of my constituents. In his response, he reminded me that Buckinghamshire patients receive less funding per head than almost anywhere in the country. What can be done to address that inequality, so that my constituents can benefit from the same level of funding for services and treatment enjoyed by other parts of the country?

[Dr Poulter]

As my right hon. Friend will be aware, the funding formula is now reviewed regularly. That is done independently and is free from political interference. Looking at areas such as hers, where there are a lot of frail and elderly patients, is now more paramount in the funding formula. In the future, I am sure that the funding formula will better reflect local health care needs.

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

One in four patients now wait a week or longer to see a GP. Last week’s official NHS survey revealed that almost 1 million people had to turn to A and E because they could not get a GP appointment. Will the Minister accept that his Government have made it harder to see a GP, and have caused the A and E crisis in the process? Will he respond to Labour’s call for GPs to be placed in major A and Es to help ease the pressure?

[Dr Poulter]

I do not think that people wanting to see their GP was at all helped by the previous Labour Government’s disastrous decision to contract out the GP out-of-hours service. Many patients are now struggling to receive appointments in the evenings and at weekends. The previous Government also broke the link with family doctors. To reassure the hon. Lady, the latest GP patient survey results suggest that less than 2% of patients who want GP appointments have to resort to walk-in centres or A and E departments. Under this Government, we have put in place an extra 1,000 GPs.

[Caroline Nokes (Romsey and Southampton North) (Con)]

4. What progress his Department has made on its long-term plans for easing pressures on A and E departments and preparing the NHS for the future.

[Mr Mark Spencer (Sherwood) (Con)]

13. What progress his Department has made on its long-term plans for easing pressures on A and E departments and preparing the NHS for the future.

[Julian Sturdy (York Outer) (Con)]

15. What progress his Department has made on its long-term plans for easing pressures on A and E departments and preparing the NHS for the future.

[Henry Smith (Crawley) (Con)]

16. What progress his Department has made on its long-term plans for easing pressures on A and E departments and preparing the NHS for the future.

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

A strong NHS needs a strong economy, and because this Government have put Britain back on the road to recovery, we are able to invest an additional £2 billion in the NHS front line next year. This is a down payment on NHS England’s “Five Year Forward View”—the NHS’s own plan to transform care in the community and reduce pressure on hospitals.

[Caroline Nokes]

Does my right hon. Friend agree that the NHS 111 service has been unfairly criticised by the Opposition, despite their key role in establishing it, and that it has provided impressive support this winter to our A and E departments by suggesting to patients convenient and effective alternatives to the emergency department?

[Mr Hunt]

My hon. Friend is absolutely right. Part of the solution to the pressure in A and E is providing good alternatives, and in the last year for which we have figures, the 111 service took 12 million calls, which is three times more than the 4 million calls that NHS Direct took in its last year of operation, and 27% of people said that had they not called 111 they would have gone to A and E. That is a huge success.

[Mr Spencer]

The Secretary of State will be aware of the additional pressure on Sherwood Forest hospitals trust as a result of the £40 million a year disastrous private finance initiative deal signed by the last Government. Will he meet me, my hon. Friend the Member for Newark (Robert Jenrick) and representatives from the hospital to discuss how we might move forward and deal with this terrible PFI deal?

[Mr Hunt]

I am aware of the problems with that deal, signed back in 2005, which is now consuming 17% of the trust’s income. It would like to spend that income on more doctors and nurses, but it cannot because of the shockingly bad deal signed. I would be happy to meet my hon. Friend to discuss what is possible in the current circumstances.

[Julian Sturdy]

There are many causes of the pressure on A and E, and in more rural areas direct access to services can be difficult and costly. As such, will the Secretary of State consider investing further money in new technologies that could drive a revolution in health care facilities, and if such opportunities present themselves, may I promote York and north Yorkshire as an ideal testing ground for these technologies, given its ageing population and rurality?

[Mr Hunt]

I remember my hon. Friend’s campaigning on superfast broadband in north Yorkshire from my last portfolio. He is absolutely right that technology has a big role to play. That is why a year and a half ago the Prime Minister announced plans to expand weekend and evening GP appointments through the use of technology, which is already helping 5.5 million people and by March will be helping 7.5 million people. We must absolutely consider this as a solution.

[Henry Smith]

In 2005 under the previous Labour Government, Crawley hospital’s A and E department was closed, but I am pleased to say that in recent years health and other emergency services have been returning to the facility. Will my right hon. Friend consider centring more emergency centres in Crawley, as the natural sub-regional population centre?

[Mr Hunt]

I congratulate my hon. Friend on his campaigning for Crawley hospital and pay tribute to staff at the hospital, which was rated “good” by the Care Quality Commission last year as part of the new inspection regime. He will welcome the fact that since 2010 the number of doctors at the hospital has increased by 97 and the number of nurses by 107. Of course, we will always consider ways to improve services for his constituents.

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

22. The Home Secretary talked about the £2 billion he has put aside for the NHS, some £1.5 billion of which is for clinical commissioning groups and specialised commissioning. Why are more than 50 CCGs in the south of England to receive a 3.6% increase in funding to the detriment of the north, where my own CCG is to receive only 0.24%, which is below inflation and a pittance compared with the south?

[Mr Hunt]

These things are decided independently by NHS England, which made the decision on the basis of which CCGs were most off their target allocation and on social deprivation and the number of older people. I remind the hon. Gentleman that there are many older and vulnerable people in the south, too, and they need a fair settlement from the NHS. That is why the decision was made.

[Valerie Vaz (Walsall South) (Lab)]

The College of Emergency Medicine says that the extra money the Secretary of State has given is not reaching A and E. What steps is he taking to ensure that the money does not stay with the CCGs, but actually goes into A and E?

[Mr Hunt]

I have had a number of discussions with the College of Emergency Medicine and what it actually says is that the system is working pretty well—[Interruption.] Well, that is what the College of Emergency Medicine says. The country’s A and E doctors welcome the fact that with the winter pressures money, there are now 800 more doctors and 4,700 more nurses, but we always want to make sure that the money is getting through as quickly as possible, so if the hon. Lady has any particular examples, I would be happy to look into them.

[Dr William McCrea (South Antrim) (DUP)]

Surely the Secretary of State will accept that quicker appointments with the patient’s local GP will certainly alleviate some of the blockages in A and E.

[Mr Hunt]

I agree with that, and I hope that the hon. Gentleman will campaign to make sure that the Northern Ireland Executive put the extra money they have received as part of the Chancellor’s autumn statement into precisely that—good GP services for the people of Northern Ireland.

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

It is increasingly recognised that the causes of the A and E crisis include the closure of walk-in centres, such as the one in Little Hulton in my constituency and this Government’s savage cuts to council budgets, leading in Salford to 1,000 fewer people getting care packages funded this year. When will the Health Secretary start to take responsibility for his own Government’s policies and do something to ensure investment in social care to ease that pressure on A and E? The better care fund is not the answer.

[Mr Hunt]

I am sorry, but this says it all about the Labour party’s campaign. It talks about savage cuts to social care and then the shadow Chancellor says he is not going to do anything to reverse them. It really has to be consistent. On the walk-in centre, Labour Members were saying earlier today that they want GPs present in every A and E department and that is exactly what has happened at Salford Royal. The walk-in centre was closed so that GP services could be moved closer to the A and E at that hospital. Perhaps the hon. Lady should talk to Sir David Dalton, her local chief executive, who will tell her why this is doing a better job for her constituents.

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

The Secretary of State is absolutely right to highlight the success of the coalition in delivering a better economy, which is allowing us to invest £2 billion from April this year. Will he address the point put to him about the importance of social care, and seriously consider investing some of that £2 billion in social care, not just in our health care system.

[Mr Hunt]

May I reassure my right hon. Friend by saying that I agree with him? I want to pay tribute to him for campaigning on this issue for some time, both in office and out of office. The truth is that there is a strong link between what happens in the social care system and what happens in the NHS. This year, we are putting £1.1 billion of support from the NHS into the social care budget. Next year, that increases by another £2 billion. We need to recognise that these two systems need to be brought together as one system—and with the better care fund, that is what is happening.

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

To attract more senior doctors into emergency medicine—an extraordinarily demanding specialty where doctors work solely for the NHS—should we consider paying them more than they get under the standard consultant pay scale?

[Mr Hunt]

I think we need to look at the emergency medicine contracts. One thing said by the College of Emergency Medicine—I have a lot of sympathy with this view—is that emergency doctors want not more money, but the right to the same holidays that other doctors get. It is the time off that is important to them. They have to work 24/7 and they get extremely tired; they want some compensation for that in being able to spend extra time with their families. We are getting more people into emergency medicine, but we should look at anything we can do to make it better.

[Dr Sarah Wollaston (Totnes) (Con)]

NHS staff are working extraordinarily hard to deal with not only the extra demands, but the increased complexity of patient cases in all parts of the urgent care system. Will the Secretary of State set out what more can be done to make sure that people access the right part of the system and that all parts of the system work together?

[Mr Hunt]

As a former GP, my hon. Friend understands this issue better than most. For me, the single most important thing for patients with the most complex needs, particularly for vulnerable older people, is having a system where the buck stops with a doctor. Someone must be accountable for ensuring that such people get the right care wrapped around them. We have brought back named GPs for all over-75s this year as a first step, but there is much more to do.

[John Healey (Wentworth and Dearne) (Lab)]

The Secretary of State did not answer the question put by my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson). Surely the unprecedented problems we are now seeing in A and E and the wider NHS can be traced back directly to the risks of the huge top-down reorganisation, which were set out for Ministers in November 2010, but ignored. One of the current Ministers and his predecessor said, as reported in the House:

“We have every intention of publishing the risk register in due course, when we think the time is right.”—[Official Report, 10 May 2012; Vol. 545, c. 156.]

Four years on, will the Secretary of State now publish this risk register and let people see for themselves what warnings he was given about current problems and how far he has been hiding the truth on the NHS?

[Mr Hunt]

It was published, because it was leaked. The fact is that there is one part of the United Kingdom that carried out those reforms and has the best A and E performance in the country, and another part of the United Kingdom—Wales—that set its face against those reforms and has one of the worst A and E performances in the country.

[Robert Halfon (Harlow) (Con)]

5. What steps have been taken to help Princess Alexandra hospital in Harlow to deal with extra pressure over the winter.

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

The West Essex system, which includes Princess Alexandra hospital, has received an additional £4 million in winter resilience funding. Of that, £842,000 has been spent on additional community beds, £211,000 on putting GPs into A and E departments, and £205,000 on reducing delays in the discharge of medically fit patients.

[Robert Halfon]

Harlow’s A and E has seen more attendances per bed than some of the biggest hospitals in the country. Although the staff at Princess Alexandra hospital are outstanding, they are still more than 40 nurses short. The chief executive says that recruitment is difficult because pay is better in the neighbouring London hospitals, although they are not far away. I welcome the 6,000 extra nurses, but will the Secretary of State consider what more can be done to help recruitment in Harlow and ease pressure on my local hospital?

[Dr Poulter]

I expect the additional £4 million for winter resilience to be directed towards the recruitment of additional front-line staff when that is appropriate, but there is flexibility in the current “Agenda for Change” pay scales to allow for the provision of recruitment and retention premiums if there are problems with recruitment.

[Charlie Elphicke (Dover) (Con)]

6. What assessment he has made of the level of improvement made by East Kent Hospitals NHS Trust since it was put into special measures.

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

I am pleased to report that East Kent Hospitals NHS Trust has started to make good progress since it was placed in special measures last August. That includes improved incident reporting rates, a revised policy enabling staff to raise concerns, and the creation of a cultural change programme.

[Charlie Elphicke]

Does not the Secretary of State’s answer highlight the fact that the best way of dealing with long-term and deep-set problems is to put patients first and ensure that there is a culture of transparency? Does that not contrast sharply with the denial and cover-ups that we have seen too often in the past?

[Mr Hunt]

Absolutely. I think that what shocks people is Labour trying to make political capital out of winter pressures in the NHS, and then sweeping the poor care that happened on its watch under the carpet. We are making great progress at East Kent Hospitals NHS Trust: there are 82 more nurses, and more than 100 more doctors. That is because we are facing up to the problems, not running away from them.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

7. With reference to his Department’s publication “Transforming care: A national response to Winterbourne View Hospital”, published in December 2012, if he will take steps to ensure that the statutory guidance implementing the adult autism strategy uses clear language and is mandatory.

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

The revised autism statutory guidance will be written in clear and accessible language. It will include existing obligations from the 2010 strategy and recent legislation such as the Care Act 2014. Local authorities and NHS bodies are required to take the guidance into account, or provide a good reason for not doing so.

[Mr Clarke]

The Minister will be aware that, under the Mental Health Act 1983, people with autism can be compulsorily detained for assessment and treatment although there is no evidence of mental illness. Will he join the National Autistic Society and others in endorsing the Justice for LB Bill campaign and seeking to end that wholly unacceptable practice?

[Norman Lamb]

The right hon. Gentleman has raised an incredibly important point. I, too, pay tribute to the campaigning of Justice for LB. We are strengthening the guidance relating to the code of practice under the Mental Health Act, and that strengthened guidance will be published shortly. We are considering whether amendments to the Act are needed, and we are also drafting a Green Paper. I should be happy to discuss the issue further with the right hon. Gentleman, and to have further meetings with campaigners.

[David Tredinnick (Bosworth) (Con)]

Is my right hon. Friend aware that there is clear evidence that homeopathy is effective in treating autism, especially when doctors have not found a solution? Now that the Society of Homeopaths is regulated by the Professional Standards Authority, will he make more use of homeopathy in the health service generally, and in this particular instance?

[Mr Speaker]

The hon. Gentleman’s question is quite a long way from the statutory guidance, but it can be given a brief reply.

[Norman Lamb]

I have to say that I was not aware of the information provided by the hon. Gentleman. I should be happy for him to send me more information, but I make the general point that it is always important for us to base our decisions and expenditure on evidence.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Would the Minister be prepared to discuss with his counterparts in the devolved regions the need to ensure that clear language is considered essential, and that best practice is replicated throughout the United Kingdom?

[Norman Lamb]

I am happy to make sure that we liaise properly with the devolved Administrations and it is important for officials on both sides to ensure that the language is as clear as possible across the United Kingdom.

[Mrs Linda Riordan (Halifax) (Lab/Co-op)]

8. What the clinical reasons are for plans to close Calderdale Royal hospital A and E department.

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

There are no plans for the closure of A and E at Calderdale Royal hospital.

[Mrs Riordan]

Calderdale and Huddersfield NHS Foundation Trust failed to give one clear recommendation for closing a 24-hour A and E service in Halifax in its business plan. Is that simply because there aren’t any?

[Jane Ellison]

The hon. Lady and I have debated this topic before on the Adjournment. This is a locally led process. Nothing has been ruled in or out, no decision has been made, and first and foremost comes the safety and efficacy of local health services. May I commend to the hon. Lady the approach of her constituency neighbour, my hon. Friend the Member for Calder Valley (Craig Whittaker), who at all times has championed the best outcomes for his constituents’ health, rather than seek to make politics out of this?

[Chloe Smith (Norwich North) (Con)]

9. What steps have been taken to support NHS hospitals in meeting increased demand in winter 2014-15.

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

The Government have prepared for this winter earlier than ever before, with a record £700 million to help the NHS through winter, including £3.6 million to help my hon. Friend’s local area.

[Chloe Smith]

The Norfolk and Norwich university hospital has declared a major incident and is also being examined by Monitor for its waiting times. Its medical director stresses that services are safe, but we all know that there is a need to ensure that people can move on from hospitals into other parts of the health care system. Can my right hon. Friend reassure me that he would expect the use of the resources he has provided to be jointly planned out with social care?

[Mr Hunt]

Obviously this is very important, and that is what is happening now for the first time. We are seeing the true integration of health and social care through the better care fund and record working, and in my hon. Friend’s area, despite the pressures they have been feeling this winter, they have made some good progress. They have put an urgent care centre next to the A and E. They are seeing within four hours nearly 12,000 more people every year, and they are doing about 12,000 more operations every year as well.

[Mr Kevan Jones (North Durham) (Lab)]

In the Chancellor’s announcement last year of extra funding for the NHS, my clinical commissioning group got a 0.24% increase, whereas Windsor, Ascot and Maidenhead got 3.7%. The Secretary of State blamed the NHS for this when he responded to my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), but is it not because this Government have taken need out of the formula—a similar thing to what they have done in local government—which means the movement of money from the north to the south?

[Mr Hunt]

No, we have not. The NHS funds were allocated on the basis of a formula and the extra money was given to the places that were most off-target on the basis of the number of older people, the level of social deprivation and a range of other important factors. All I would say to the hon. Gentleman is that we have increased the NHS budget in real terms in his area, whereas those on his own Front Bench wanted to cut it.

[Sir Gerald Howarth (Aldershot) (Con)]

May I take this opportunity to salute the efforts made by Frimley Park hospital, the first hospital in the land to have been awarded outstanding status by the Care Quality Commission? Is it not the case that it has responded well to the pressures and elicited praise from my constituents, which is down in large measure to the leadership of Sir Andrew Morris, who was rightly awarded a knighthood in the new year’s honours?

[Mr Hunt]

I think it is, and my hon. Friend is right that it is a brilliant hospital; it serves my constituents as well. One of the things it is doing is helping to turn around Heatherwood and Wexham Park hospitals trust, which was in special measures, including its A and E department, which is doing much better. Sir Andrew Morris has been running that hospital for 26 years, and that kind of stability in leadership makes a huge difference.

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

On easing winter pressures in NHS hospitals, could the Secretary of State indicate when he last met the chair of emergency medicine and what steps will be taken to ensure greater accessibility to GP practices?

[Mr Hunt]

If the hon. Lady is talking about NHS England head of emergency medicine Professor Keith Willett, I meet him pretty much every week.

[Mark Pawsey (Rugby) (Con)]

10. What steps his Department is taking to ensure support for smaller district hospitals.

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

The NHS “Five Year Forward View” sets out a range of actions to help sustain smaller local hospitals, and we have backed that with almost £2 billion. NHS England is making a £200 million transformation fund available to smaller hospitals looking to develop prototypes.

[Mark Pawsey]

Did the Minister see the recent remarks by Simon Stevens, the chief executive of NHS England, on how smaller local hospitals can play a role in providing care, particularly to older patients, many of whom prefer to be treated close to home? Does she agree that this makes the case for the future within the NHS for smaller hospitals such as St Cross in Rugby?

[Jane Ellison]

It is exactly that kind of flexibility that we so much welcome in the “Five Year Forward View”, recognising the potential of smaller hospitals. My hon. Friend’s local hospital, which he champions so well, can apply to be one of NHS England’s prototypes, and I would encourage it to do so.

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

Does the Minister accept the case made by commissioners and the trust in Morecambe Bay that, notwithstanding all the efficiencies and changes in services, the trust could not close its deficit, due to its near unique geography and health need, without significantly cutting vital services for the area?

[Jane Ellison]

These are clearly difficult local questions that local health leaders need to look at. If there is a particular issue the hon. Gentleman would like to draw to our attention, we will certainly be able to examine it. I recognise that unique geography is involved, but steps are already being taken by NHS England to try to close some of those gaps and to deal with those challenges that smaller hospitals face, working with Monitor and looking at, for example, the tariff regime. I encourage him to look at that, too.

[Robert Jenrick (Newark) (Con)]

11. What proportion of 111 calls resulted in an ambulance being called in the most recent period for which figures are available.

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

There were just short of 882,000 calls triaged by the NHS 111 service in England in November 2014, and 99,808 of the calls—11.3%—had an ambulance dispatched.

[Robert Jenrick]

I thank the Minister for that response, and I am grateful for the earlier response to my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), which is very reassuring. Any Member who has spent time with paramedics, as I have in Newark, knows that this is a hot topic for them. So we would appreciate any extra reassurance the Minister can give that the algorithms that lie behind the 111 service, and the level of clinical involvement in it, can be improved, with experience, to create a sensible number of cases going to accident and emergency.

[Norman Lamb]

I pay enormous tribute to the paramedics, who are working under a lot of pressure. The survey results, which showed that about 27% of people who have used 111 say that they would have gone to A and E had it not been available, are a considerable reassurance. However, we need constantly to seek to improve the service, and the urgent and emergency care review pointed to refining the 111 service so that, ultimately, people could get access through to a GP, doctor or nurse, to ensure that they receive the right guidance at the right time.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The Public Accounts Committee examined this service in Devon and Cornwall and discovered, as it has in other inquiries, a lot of issues associated with cost shunting, because it does not cost 111 when it tells someone they need to go to hospital in an ambulance. So there have been “impressive figures” on the number of people who did not go to A and E as a result of their call, but is the Department monitoring the number of people who are sent to A and E by 111 but should not have been?

[Norman Lamb]

As I said in response to the previous question, there is a real case for constantly seeking to refine the way the service works. The urgent and emergency care review pointed to ways in which we could do that to ensure that, in appropriate cases, people could get through to a doctor or a nurse to give them the right advice. That, in turn, would reduce the number of people turning up at A and E.

[Andrew George (St Ives) (LD)]

Further to the previous question, will the Minister urgently review the operation of NHS 111, as not only did it experience meltdown over the Christmas period in my area, but it is run from a call centre in Newport, 200 miles away, and it uses algorithms that involved staff asking a patient in my constituency, “Are you conscious?”?

[Norman Lamb]

Call volumes doubled over the Christmas period compared with those a year ago, so the system was certainly under enormous pressure. As I say, the survey results show that a lot of people were diverted away from A and E, but there is absolutely a case for seeking to improve 111.

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

The Secretary of State earlier complacently claimed that England has the best A and E service in the United Kingdom, but last week 86 hospital trusts in England operated below the Wales average. Suzanne Mason, professor of emergency medicine at the university of Sheffield, said that ambulance services in some parts of the country have been “brought to their knees” by 111. Does the Minister now think it was a mistake to scrap the nurse-led NHS Direct service? Will he urgently implement Labour’s proposal to get more nurses answering 111 calls, to relieve pressure on our chronically overstretched A and E departments?

[Norman Lamb]

I understand that about 22% of callers do get to speak to a clinician and, as I have already said, we are seeking to develop the service so that there are more referrals to an appropriate clinician. Let me again repeat the fact that the performances of A and E, ambulances and people waiting for hospital are considerably better in England than they are in Wales, and the Opposition need to recognise that.

[Derek Twigg (Halton) (Lab)]

12. What recent assessment he has made of the reasons for increased attendances at A and E departments in 2014.

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

A range of factors is contributing to increased attendances. The ageing population means that, by the end of this Parliament, there will be nearly 1 million more over-65s than at the start. The urgent and emergency care review cited pressure on GP appointments and availability or awareness of alternatives as factors that might affect A and E attendances.

[Derek Twigg]

NHS Providers, which represents 94% of NHS foundation trusts, says that national tariff proposals that have forced hospital trusts to find efficiencies of 3.8% are excessive and, taken with other cost pressures, undeliverable. It will take £1.2 billion out of budgets from front-line NHS services. Do the Secretary of State and his Ministers understand the implications of that proposal, and will they act to stop it given the pressures on the NHS, especially on A and E departments?

[Norman Lamb]

The Nicholson challenge, which was published in the last year of the Labour Government, recognised that the whole system had to deliver efficiency savings, and I think that everyone understands that. But the answer to all of this is a significant shift of emphasis towards preventing ill health and preventing crises from occurring. Under the better care fund the NHS and the care system are for the first time being properly joined together.

[Mr Philip Hollobone (Kettering) (Con)]

The Northamptonshire clinical commissioning groups and Kettering general hospital are agreed that Kettering’s A and E department is too small and outdated and needs to be replaced with an urgent care hub in line with the NHS five-year forward view. Given that the three local MPs on a cross-party basis refused to treat our local A and E as a political football, will the Minister of State encourage his colleague, the hospitals Minister, to consider that proposal seriously when we come to see him this afternoon?

[Norman Lamb]

I understand that a meeting will take place very soon, and I certainly encourage my hon. Friend the hospitals Minister to ensure that he listens to the case being put by the hon. Gentleman and his colleagues this afternoon.

[Liz Kendall (Leicester West) (Lab)]

Ministers have been repeatedly warned about the impact that their social care cuts are having on elderly people and that that is a key cause of pressures on A and E. Today it has been revealed that public health officials have issued an alert about a statistically significant and “sustained” decline in life expectancy in parts of the north-west. They say it is extremely unusual and that

“central government driven reductions in adult social care budgets”

are a possible cause. Will the Minister confirm that alert, say whether life expectancy is declining elsewhere, guarantee that Public Health England will urgently investigate the matter and promise that its findings will be published in full?

[Norman Lamb]

Although there was a fall in life expectancy for those aged 85 in 2012, preliminary analysis shows that there was no further drop in 2013. Incidentally, let me pay tribute to the people who work in social care. The system has performed remarkably well. Statistics on delayed discharges due to social care show that the number of delayed days is almost exactly the same this year as it was in 2010—a remarkable performance.

[Heidi Alexander (Lewisham East) (Lab)]

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

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

The Chancellor agreed in the autumn statement to support NHS England’s five-year forward view with the £1.7 billion of additional funding that the NHS requested. On top of that, the Chancellor allocated £1 billion of funding to transform primary care facilities, and I am pleased to announce today that a letter will shortly be sent to every single GP practice in the country, inviting them to bid for the first tranche of that funding with the aim of supporting more GP appointments and more proactive care for the most vulnerable.

[Heidi Alexander]

Last week, one of my constituents had a fall and fractured her pubic bone. She was taken to Queen Elizabeth hospital in Woolwich because 15 ambulances were stuck in a queue outside Lewisham. She then waited 12 hours on a trolley. If the Secretary of State had got his way and been successful in his attempt to axe services at Lewisham, exactly how much longer would he have expected my constituent to wait? Is it not true that if he had got his way the A and E in Woolwich would have been totally and utterly overwhelmed?

[Mr Hunt]

No, and I can tell the hon. Lady that her constituents would be receiving far worse care had we not tackled the long-standing issues with the South London Healthcare NHS Trust, which the last Government ducked but which we have confronted and dealt with. If she looks at the performance of A and E in her area, she will see that 48,000 more people are being seen within four hours than when Labour was in power.

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

T2. The Secretary of State will be aware that the London borough of Havering has the highest proportion of elderly people of all the London boroughs, but he may not know that the average age of an in-patient at Queen’s hospital is 86. Will he agree to look at the balance of future funding between acute care and community health care, so that elderly people can be supported at home and beds freed up for people waiting for acute operations?

[Mr Hunt]

My hon. Friend makes an important point. It is one of the underlying causes of pressure in A and Es that for an over-75 attending an A and E in winter, there is an 80% chance that, rather than going home, they will be admitted to hospital and probably stay there a long time. That is why improving community care, as she says, is at the heart of this Government’s strategy to reduce pressure on hospitals.

[Mr Jamie Reed (Copeland) (Lab)]

If it is not too late, let me wish you, Mr Speaker, a happy new year.

The care failings uncovered by the Care Quality Commission at Hinchingbrooke hospital are appalling and unacceptable. The inspection

“found poor emotional and physical care which was not safe or caring.”

The response to call bells was so bad that some patients were told to soil themselves; drinks were left out of patients’ reach; and one member of staff was overheard telling a patient,

“don’t misbehave you know what happens when you misbehave.”

Will the Secretary of State tell us when he was first told about the problems at Hinchingbrooke? Given that the CQC inspection happened in September, why was the trust put into special measures only last Friday?

[Mr Hunt]

What I can tell the hon. Gentleman is that what happened at Hinchingbrooke completely destroys what Labour has been saying about privatisation, because it was this Government who introduced an independent inspection regime, which did not exist before, that roots out poor care without fear or favour. That is what we have done in 18 hospitals run by the NHS and it is what we are doing at Hinchingbrooke run by the private sector.

[Duncan Hames (Chippenham) (LD)]

T3. The three GP surgeries in Chippenham were turned down by the Prime Minister’s challenge fund, despite developing imaginative plans to bring together all the town’s acute GP care at a new urgent care centre at Chippenham community hospital. They received no feedback, even from NHS England. Will the Secretary of State be more flexible when receiving further proposals from the doctors, who are, after all, very busy looking after their patients?

[Mr Hunt]

I have met the doctors in Chippenham and been personally lobbied on that plan. I thought it sounded very promising, so I am happy to take it away and look at it again, and hopefully at some stage they can get some of the funding.

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

T4. The Bournbrook Varsity medical centre is about to face a double-whammy financial crisis, as NHS England scraps its minimum practice income guarantee and forces it to switch from a personal medical services contract to a general medical services contract. Why should that excellent practice, which has done all that could be asked of it, and its patients be victimised because a high proportion of the patients are young students? Will the Secretary of State agree to look at this disaster immediately?

[Mr Hunt]

I am very happy to look at that issue.

[Jeremy Lefroy (Stafford) (Con)]

T5. The recent extraordinary pressures on A and E in the north midlands underlined for me and my constituents the importance of returning the A and E at Stafford County hospital from 14 to 24-hour opening. Given that consultant-led maternity is due to transfer from Stafford to Stoke this week and the remaining serious emergency surgery next month, will my right hon. Friend set out what steps have been taken to ensure that the safety of my constituents and other users of the services is the top priority, and advise me whether he is confident in them?

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

I have been in contact with the NHS Trust Development Authority. I have been reassured that the safety of patients in Stafford is the primary concern and that the transfer of services should help to ease pressure on local services and improve patient care.

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

T7. Government-inflicted cuts on local government funding and subsequent reductions in adult social care services have increased the pressures of bed-blocking at University hospital Coventry, with a number of patients unable to be discharged as they wait for a nursing home place or a package of care in their own home. Does the Minister agree that this is a problem, and what steps has his Department taken to remedy it? Will he not do the Pontius Pilate act but take responsibility for his actions?

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

The hon. Gentleman is absolutely right that what happens in social care has an impact on the health service, and the answer has to be to stop seeing them as two separate systems and to look at the whole health and care system. That is why the better care fund is such an incredibly important initiative, pooling a substantial sum of health and care funds, and it must go further so that we end up pooling the entire resource.

[Sir Bob Russell (Colchester) (LD)]

T6. The last Government abolished community health councils, a truly independent health watchdog and voice for patients. Their replacement, the patient advice and liaison service, is not independent. Does the Minister agree that PALS must be made independent?

[Norman Lamb]

PALS was not the direct replacement of community health councils; a different scheme was set up for the patient and public voice independent of hospitals. My hon. Friend raises important concerns about PALS and the Government are intent on looking at the service to ensure that it performs effectively for patients.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

T8. My constituent Mr Offord waited 22 minutes after a 999 call for a double-crewed ambulance, and his death was referred by the South Yorkshire coroner to Ministers because of a concern that he might have survived if he had received medical help sooner. The Yorkshire ambulance service has just settled the case brought by Mr Offord’s family out of court. When will the Secretary of State recognise the growing crisis in ambulance services and support my right hon. Friend the shadow Secretary of State’s call for an investigation?

[Mr Hunt]

I do recognise the pressures on the ambulance service and the hon. Lady’s local area has had £1.6 million extra to help to deal with winter pressures. We have 1,700 more paramedics in the ambulance service and they are doing 2,000 more emergency journeys every day, but none of that is any consolation to the family whom she talks about, and that is why we must always ensure that every lesson is learned.

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

The Secretary of State, the Department of Health and my local hospital trust inform me that there are more doctors and nurses in the local NHS and the NHS nationally than there were in 2010. This weekend, residents in north Lincolnshire received a leaflet from the Labour party saying that there were fewer doctors and nurses and less care. Who is telling the truth?

[Mr Hunt]

It is not the Labour party, because all it wants to do is to turn the NHS into a political weapon. It might just think about the impact on NHS patients and staff when it does this. It does not help anyone and it is bad for the NHS.

[Kevin Barron (Rother Valley) (Lab)]

T9. Does the Under-Secretary of State remember the case that I raised in an Adjournment debate of Mrs Monica Barnes and the inadequate service she received from the health service ombudsman’s office? The ombudsman’s office has today announced a consultation on a new service charter. Does he welcome it and hope for a better service for our constituents?

[Mr Hunt]

There have been a number of problems with the service offered by the ombudsman. There has been a lack of expertise in the ombudsman’s office to investigate the most difficult cases. This is obviously a responsibility of Parliament not of mine, but I have had good discussions with my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), who chairs the Public Administration Committee, about how the services can be improved.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

The last week has been an extremely testing time for Hinchingbrooke hospital in my constituency, for its hard-working staff and for its loyal patients. Will my right hon. Friend please take this opportunity to confirm his Department’s full support for Hinchingbrooke hospital and to give some advice on the way management will be transitioned so as to minimise patient disruption?

[Mr Hunt]

I am happy to do that, and I reassure my hon. Friend that our top priority will be to ensure that there is a smooth transition to the new management of the hospital as Circle moves away. I thank him for the measured tone he has taken and I reassure him that his constituents’ safety and care is our top priority.

[Kerry McCarthy (Bristol East) (Lab)]

T10. At Southmead hospital in Bristol, just 81% of patients are seen within four hours and the number of blocked beds is three times the national average. At Bristol Royal infirmary it is double the national average. What is the Secretary of State doing specifically to help hospitals in the Bristol area?

[Mr Hunt]

We have allocated £8.84 million to South Gloucestershire’s strategic resilience group, and that is employing more doctors, nurses and hospital and community staff, and providing more than 100 beds.

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

All the talk about appointments concentrates on GPs and A and E, but does not seem to focus on pharmacies, which have a hugely important role to play, considering how many years pharmacists train for. My constituent Mr. Dhand of the Headingley pharmacy is undertaking a pilot to see how many people could and should have gone to a pharmacy rather than to a GP. Would Ministers support that?

[Dr Poulter]

I very much welcome what the hon. Gentleman’s constituent is doing locally. For many patients the pharmacy is often the first point of contact with the NHS, so the more we can do as a Government to support local pharmacists in delivering community services, the better.

[Mr David Anderson (Blaydon) (Lab)]

Despite all the warm words we hear every week from the Government about their support for the staff of the NHS, which I welcome, the Government still refuse to pay the award recommended by the independent review body. At the same time the chief executive of the trust in my part of the world has had a 78% salary increase and the people who set the allowances, the board of governors, have had an 88% increase in their allowances. Is this what is meant by “we are all in this together”?

[Mr Hunt]

I believe that NHS managers have a responsibility to be sensible about their own pay. This is not decided centrally, but when we are asking NHS staff to make sacrifices in their own pay to make sure that we can recruit enough staff, NHS managers should set an example.

[Michael Fabricant (Lichfield) (Con)]

The Institute of Translational Medicine at Birmingham university medical school is probably the top place in Europe for genetic research into innovative cancer cures. I have visited it. Will the Secretary of State visit it, and will he ensure that funding continues for that department?

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

My hon. Friend is right to champion that project. The Prime Minister’s 100,000 genomes project is leading the world and has the potential to transform the future of health care. The Institute of Translational Medicine in Birmingham will accelerate access to new diagnostics, new drugs and medical devices and provide a focus for life sciences. My hon. Friend will be pleased to know that my colleague with responsibility for life sciences, my hon. Friend the Member for Mid Norfolk (George Freeman), plans to visit on 3 March.

[Mr Iain Wright (Hartlepool) (Lab)]

The Secretary of State refuses to meet Hartlepool borough council and me on the issue of hospital services in Hartlepool. On Wednesday in this House he said:

“I take responsibility for everything that happens in the NHS.”—[Official Report, 7 January 2015; Vol. 590, c. 277.]

If so, will he respond to the 12,000 people who signed the petition organised by the Hartlepool Mail, the 1,000 people who marched on Saturday morning, Hartlepool borough council and me on this issue? Will he stop snubbing the people of Hartlepool, work with us and make sure that hospital services can return to Hartlepool?

[Mr Hunt]

I do take responsibility, but I hope the hon. Gentleman will be responsible in his campaigning in Hartlepool and welcome the extra doctors, extra nurses, extra operations and extra number of people seen within four hours in his constituency. It is a record of success, of which this Government are proud.

[Steve Baker (Wycombe) (Con)]

As it becomes increasingly obvious that the public insist on receiving urgent care in a hospital setting, will the Government move to incentivise the delivery of a new generation of urgent care centre, as specified in the end of the phase 1 report on the urgent and emergency care review?

[Mr Hunt]

I have visited my hon. Friend’s local hospital. I commend him for his interest and I commend the hospital for the remarkable turnaround. From being a hospital in special measures, it has done extremely well. We want to implement the proposals in that review and we want also to make sure that for the oldest and frailest people there are alternatives that mean that they do not have to visit hospital.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry to disappoint colleagues. Including the main Order Paper questions, we have got through 78 inquiries today. Box office records have been broken. I leave it to Back Benchers and the ministerial and shadow ministerial teams to argue among themselves about who wishes to claim credit for that. We will have to leave it there for today. [Interruption.] The Secretary of State for Energy and Climate Change makes a very generous and loyal remark from a sedentary position that modesty prevents me from repeating.

Petition

Tuesday 13th January 2015 Commons Chamber

Gavin Williamson (South Staffordshire) (Con)

- Hansard - - Excerpts

I have a petition signed by 1,545 of my constituents who share my view that in South Staffordshire, which has more than 130 Gypsy and Traveller pitches, we have more than enough provision.

The petition states:

The Petition of residents of the South Staffordshire constituency and others,

Declares that the Petitioners note that South Staffordshire District Council intends to increase the allowance of pitches for Gypsies and Travellers by 33 pitches over the next 15 years; further that the Petitioners believe that there are already sufficient pitches available for Gypsies and Travellers in the constituency; and further that the Petitioners believe that no more pitches should be allocated.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that no further pitches for Gypsies and Travellers are allocated in South Staffordshire.

And the Petitioners remain, etc.

[P001419]

Nuclear Management Partners (Sellafield)

Tuesday 13th January 2015 Commons Chamber

12:33

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

(Urgent Question): To ask the Secretary of State for Energy and Climate Change if he will make a statement on Nuclear Management Partners and Sellafield.

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

I thank the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) for his question.

As I have informed the House today through a written ministerial statement, the Nuclear Decommissioning Authority has today announced a change to its commercial model at Sellafield, its largest and most complex site.

Dealing safely with the UK’s nuclear legacy is a key priority of my Department. It is important for the communities involved and for the future of nuclear power in this country. We work closely with the Nuclear Decommissioning Authority and its contractors to ensure that decommissioning is undertaken as effectively as possible, but as we are guardians of the public purse, we must also make sure that clean-up is done in a way that delivers the best value for money.

Over the past year, the NDA has been conducting a thorough review of its business model in the unique context of Sellafield to consider what contractual model might best deliver improved performance and value for money. In April last year, we endorsed the Nuclear Decommissioning Authority’s decision to roll the current parent body organisation contract—PBO—forward into the second term to ensure that the progress made in the first five-year term could be built on. The complexity and technical uncertainties at Sellafield are unique and need a management structure best suited to meeting the specific challenges faced by the site. Sellafield is the most complex industrial site in Europe. It is home to some of the oldest nuclear facilities in the world—the legacy ponds and silos that were constructed in the 1940s and ’50s—as well as the UK’s plutonium stockpile.

Because of these unique challenges, Sellafield is less well suited to the transfer of full site-wide responsibility to the private sector via a PBO structure. The NDA has now recommended to Government that management arrangements are simplified. In future, the private sector will be retained as suppliers of Sellafield Ltd rather than as owners of the site. Sellafield Ltd will remain a publicly funded company owned by the NDA. The team will be appointed and governed by a newly constituted board of the site licence company. The new model will, in due course, see a strategic partner appointed by Sellafield Ltd to strengthen the programme management and commercial capability at the site, as well as playing a key role in managing capital projects and contracts. This approach is recognised as best practice in other major projects such as Crossrail and the Olympics.

The NDA and Sellafield Ltd will manage the transition to the new arrangements, which is expected to take about 15 months to complete. This will be done in close co-operation with work force representatives, Nuclear Management Partners, the supply chain, the regulators, and the local community. The continued safe and secure operation of the Sellafield site will remain the overriding focus during the transition, and it will remain so under the new structure. This new structure is the best way to ensure that safety and value for money are pursued in tandem.

[Tom Greatrex]

I thank the Secretary of State for his answer. He will appreciate that this an issue of very serious concern for the 10,000 dedicated, professional and highly valued workers employed at Sellafield and for all of us who, as taxpayers, have just seen a £20 billion public procurement decision partly reversed. I want to ask him a few specific questions on the details of his decision and his statement.

In 2013, just 15 months ago, the right hon. Member for Sevenoaks (Michael Fallon), then a Minister in the Secretary of State’s Department, allowed the Nuclear Decommissioning Authority to continue into a five-year contract extension for Nuclear Management Partners. This was despite a National Audit Office report from November 2012 that concluded that the contract led to

“poor project design and delivery by Sellafield Limited and weaknesses in the”

Nuclear Decommissioning

“Authority’s oversight.”

Why was that advice ignored, and why is this decision now being made today? Is it because, in reality, the situation was getting worse and not better?

The Secretary of State has suggested that in 2013, at the review point, the Government accepted the problems with the NMP contract but did not have an alternative solution prepared. What is the point of a review point if one is unable to consider other options? Will he illuminate for the House what termination fees apply to the cancellation of this contract and whether those fees could have been recovered at any stage? What assessment has his Department made of the risk of legal action from NMP to recover further funds?

Last year, it was revealed under a freedom of information request that in September 2013 KPMG completed a 277-page internal review of the contract for the NDA that was highly critical. To quote the Public Accounts Committee, it found that

“there was a mis-alignment between the objectives of NMP and the…Authority’s commitment to deliver value for money for the taxpayer, and…potential conflicts of interest associated with contracting by Sellafield Limited with NMP’s affiliate companies.”

Will the Secretary of State confirm how much was spent on that advice from KPMG by the NDA, which reports to him—advice that was then ignored and, it seems, is now being adopted?

In February last year, the PAC reported that even after the contract was extended with NMP, it

“has not provided the clear leadership, strong management and improved capabilities needed to deliver the performance required at the site.”

Fifteen months on from having overseen that contract extension, why have the Government come to the conclusion that it was the wrong decision? Will the right hon. Gentleman describe the immediate arrangements for the 10,000 people employed at Sellafield, and tell us what impact today’s decision will have on the running of other sites? Will this create the need for a review of the Nuclear Decommissioning Authority’s other operations, where similar contracts that might give poor value for the taxpayer could still be in place?

Can the Secretary of State clarify why this announcement was extensively trailed in the press last night and this morning, rather than being made in the first instance before the House today? Is it not the case that what we have seen today is a frantic U- turn, an abandonment of the extension of a contract and the reversal of a decision that should probably never have been taken in the first place? Does the Secretary of State not appreciate that such casual disregard for the evidence and conclusions of the National Audit Office and the Public Accounts Committee has resulted in wasted time and public money and may risk a loss of confidence in the important decommissioning work at Sellafield? Does he acknowledge that insufficient care and due regard were taken by the Ministers in his Department who have ultimate responsibility for these matters? Does this not eloquently make the case against part-time, part-time energy Ministers and is it not now time that the Secretary of State got a grip, stopped playing stupid inter-coalition games and got his dysfunctional and misfiring Department into shape?

[Mr Davey]

The hon. Gentleman was doing quite well until his peroration. I will explain why it was a big political mistake for him to go down that route, but first I shall answer his specific questions, because they were important. He began by praising the staff, and I agree that they deserve huge praise because they are tackling one of the most difficult and dangerous jobs in Britain today. I can confirm that their terms and conditions are not affected by this at all. There will be full discussion with work force representatives. At this point, I should like to pay tribute to the hon. Member for Copeland (Mr Reed), who has worked assiduously on this issue.

The hon. Member for Rutherglen and Hamilton West asked why we allowed the contract continuation in 2013, given the findings in the National Audit Office’s report of weaknesses in it. The Nuclear Decommissioning Authority recommended that the contract be continued, and we had to endorse that recommendation. It was not a question of approving it; we endorsed it. At that time, when I looked at the structure that we had inherited from the last Government, I was concerned about the model. It was the model that I started asking questions about, and it is the model that has been reviewed. I have already explained a little about the review process; it is the model that we feel needs changing for the long term.

The hon. Gentleman asked why there was no alternative solution. The contract renewal process looked at the performance, which had not been good enough, but it is worth putting on record the fact that the performance of Nuclear Management Partners since the contract renewal has improved significantly, so this decision has not been taken on account of the performance of NMP. If we look at its performance over the past year, we can see that it has delivered on things that no one has delivered on for years. For example, the sludge-packing plant, which is needed to take out the toxic sludge from B30—a pond that has been there for decades—has now been commissioned and is ready for operation. That is a big achievement and I pay tribute to NMP for that. The decision has not been taken on account of performance; it has been taken because Ministers and the NDA questioned the model that we inherited from the last Government. We then put in place a proper review of that model.

The hon. Gentleman asked about the termination fees, and I can tell him that they are very low. The mechanisms under the current contract allow for termination and appropriate fee awards of less than 1% of the annual fee, and those mechanisms will be adhered to. Of course, during the transition, NMP will earn the fees that it would normally earn under the existing contract while it is still carrying out the work, but the termination fee is very small.

The hon. Gentleman also asked about the cost to the NDA of the KPMG report. I do not have that figure with me but I would be happy to write to him about that. He also mentioned the parent body organisation model that we are getting rid of at Sellafield, and asked whether we should get rid of it elsewhere. Our argument is that we should not. Let me explain why Sellafield is different.

At other nuclear power plants that are being decommissioned, such as Dounreay, the PBO model is working well. At Dounreay and other decommissioning sites, it is easy to specify the performance, the activities and the outcomes that are required. Those requirements are more certain and clear, and therefore easier to contract for. At Sellafield, because it is so complicated and because of the huge uncertainties about some of the materials that they are trying to clear up, it is very difficult to do that. Those huge uncertainties make the risks of contracting much more difficult, which is why the PBO structure needs to go there but not elsewhere.

The hon. Gentleman asked why the announcement was trailed in the press. I am afraid that it was not, and I am pleased that it was not, but there was some sort of leak. I do not know where that came from. He then suggested that this was a frantic U-turn, which is complete rubbish. We have been working on the issue carefully and diligently for some time. The NDA set up a review of the model, which I think was required. It made recommendations to officials who looked at them and made recommendations to Ministers and we have been looking at them for some time. Indeed, I asked questions when I got the initial recommendations to ensure that during the transition any risks were properly mitigated and I was not prepared to take the decision until I saw a proper risk mitigation plan for the transfer.

Ministers have been involved in the process, and given that the hon. Gentleman made a political point at the end of his peroration, let me make a political point back to him. These contracts and this model were drawn up under the previous Labour Government. The contract came into effect when the Leader of the Opposition was doing my job, so the hon. Gentleman should be addressing his questions about the model and the contract to the Leader of the Opposition, his own party leader. Once again, we have had to clear up the mess left by the Labour party.

[Mr Tim Yeo (South Suffolk) (Con)]

I welcome the Secretary of State’s emphasis on safety and value for money in making this decision and his clear explanation of the difference between Sellafield, with its difficult history and unique circumstances, and the other sites where this work takes place. In the light of what he has just said, is it his view that this model was never appropriate for Sellafield, given its unusual situation, whereas it might be working perfectly satisfactorily elsewhere?

[Mr Davey]

I must say that when I first saw the diagram of the model I expressed great surprise and asked why someone had come up with such a model. That is why questions were asked to review it. The NDA and others involved were perplexed about why they had been given the model in the first place as Sellafield is a complicated site. Let us be clear that in the past year NMP has significantly improved its performance, so the model can have some success. The key strategic question is whether, given the lessons we have learned from the operation of that model for Sellafield and given its complexities, this is the right model to ensure effectiveness and value for money. We concluded that it was not and that is why we are changing it.

[Mr Jamie Reed (Copeland) (Lab)]

To give credit where it is due, this decision was actually made by the Department of Trade and Industry some time ago and predates the Department of Energy and Climate Change, so it had nothing to do with the Leader of the Opposition.

I thank the Secretary of State for his announcement today and the shadow Minister for how he has raised these issues. With continued Sellafield operations and the imminent construction of new nuclear reactors, west Cumbria has the potential to become one of the fastest-growing sub-regional economies anywhere in the United Kingdom. Removing NMP from the Sellafield contract and changing the operating model of the site will mean that significant additional financial resource is now made available. This is public money and must be used carefully. Consequently, the terms and conditions of the Sellafield work force must be protected—I welcome the Secretary of State’s commitment on that—and NMP’s socio-economic commitments to my community must as a minimum be honoured. In addition, the 15-month transitional arrangement must be undertaken in a practical and consensual fashion, and changing the operating model should also make it possible better to maximise existing commercial operations and pursue new ones. Will the Secretary of State commit to meet me and work force and community representatives to ensure that today’s announcement contributes towards those ambitions?

[Mr Davey]

I am grateful to the hon. Gentleman for that speech and I agreed with almost every word of it. I am not sure that I agreed with the bit at the beginning, where he was trying to scapegoat the DTI. We will work with the work force, local representatives such as the hon. Gentleman, all key stakeholders and the regulators to bring this plan to fruition. It represents better value for money and will deliver what we need to deliver at Sellafield more quickly.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

This decision will not come as a great surprise to anybody who understands the legacy, complexity and size of Sellafield. The key requirement for any contract is the scoping beforehand, and that is particularly difficult at Sellafield. On the PBO at Dounreay, where considerable scoping was possible prior to laying the contract, will my right hon. Friend assure me and all those who work so well and effectively at Dounreay that, notwithstanding the slight adjustments currently being made, that contract is working well and his Department has full confidence in the NDA, the contract and the workers at Dounreay?

[Mr Davey]

When I visited Dounreay I was incredibly impressed by its work force and management team and I know how much my right hon. Friend has been supporting them over a considerable period. I can give him the reassurances he seeks. The contract with the PBO has worked because it has been easier to specify the scope, as my right hon. Friend rightly pointed out. As a result, significant efficiencies have been made and significant savings to the taxpayer have been accrued, so the PBO model has worked well on that site.

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

May I thank my hon. Friend the Member for Copeland (Mr Reed) for his leadership? He has been calling for this decision for some time. Will the Secretary of State assure us that he will work with my hon. Friend and the community to ensure that the change in management structure properly gives the area an opportunity to use the incredible civil nuclear engineering expertise available in west and south Cumbria to reach out to new markets and create new growth opportunities?

[Mr Davey]

I think the change will help those objectives. Of course, it is not the only measure; a number of other measures need to come together to deliver for the economy of west Cumbria.

[John Stevenson (Carlisle) (Con)]

This is clearly a significant development not just for west Cumbria, but for other parts of Cumbria, including my constituency. Will the Secretary of State confirm that the change will not in any way affect the prospects of a new nuclear build at Sellafield?

[Mr Davey]

I can confirm that.

[Paul Flynn (Newport West) (Lab)]

In 2008, I had an Adjournment debate to point out that the huge costs and risk of the operation would be borne by the taxpayer and not by the private company. It was a mistake to start the operation and a mistake to renew it, but it is also a mistake not to learn the lesson. Have not the Government just risked another £10 billion as a gift to a foreign company at Hinkley Point and agreed a price for electricity that will continue, guaranteed, for 35 years? Again, the public bear the risk and the cost, and private people from abroad—from China and France—will take the profit.

[Mr Davey]

Let me try to agree with something the hon. Gentleman said. The costs of decommissioning are huge. Two thirds of my Department’s budget goes towards decommissioning nuclear power stations from the past and dealing with that legacy, so we need to think about value for money as we do that vital work safely. That is one of the reasons that, with the new nuclear programme, it is vital that the contracts and prices we agree include the costs of decommissioning and waste management, and they do.

[David Mowat (Warrington South) (Con)]

The Secretary of State has made it clear that there will be no redundancies at Sellafield Ltd in Cumbria or Warrington. Does his migration plan identify any redundancies in AMEC, URS or AREVA, and what is the time scale for his appointing a strategic partner to assist the programme?

[Mr Davey]

We, and particularly the NDA on the ground, will be strongly working with the NMP and its consortium bodies. The exact time scale for the appointment of a new supplier organisation is yet to be determined, because this is the beginning of what is likely to be a 15-month transition. My hon. Friend asks me to speculate on issues that have not yet finally been addressed, so I am afraid I am not able to give him the specific answer he requires. I can tell him, however, that the NDA will be working very closely with the NMP to manage the process smoothly.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

I visited the Sellafield site at the end of October to see the scope for storing submarine reactors; obviously, I will seek clarification from the Ministry of Defence about the time scale for that. I was impressed by the calibre of the locally developed management tier, including the head of operations, Andrew Hope. Will the Secretary of State reassure the House that the world-class work force will be supported and enabled, so that nationally important projects can proceed?

[Mr Davey]

Yes, I can give the hon. Gentleman that reassurance. Members from both sides of the House have voiced support for the staff and the need to ensure that they get all the training required and that information about the change is properly conveyed to them. I believe that the staff will support the changes.

[Ian Swales (Redcar) (LD)]

I visited Sellafield with the Public Accounts Committee in 2012 and was struck by the difficulty of challenging those who say that the issues involved require vast expenditure over vast time scales. Recently, there have been a significant number of vacancies on the NDA board. Is the Secretary of State satisfied with the experience and management independence of the NDA, and what is he doing to ensure that it delivers the scrutiny and challenge that it should deliver?

[Mr Davey]

The NDA has approached some of its key decisions incredibly professionally, including the renewal of the contract and the review of the model that led to the recommendation to me for the change under discussion. I pay tribute to the NDA for the work it has done. It will, of course, be taking on a bigger role in the new model, so it will need to skill up, hire more expertise and fill the vacancies referred to by my hon. Friend. That was part of the questioning that I and others undertook to ensure that the transition process and the resulting process are successful.

[Mr Mike Weir (Angus) (SNP)]

Obviously, we need to deal with the cost of legacy waste, but as well as announcing the change in the contract the NDA has announced an increase in the estimated cost of cleaning up the site, which now comes to a staggering £110 billion over 120 years. Given those figures and that time scale, how can the Secretary of State possibly give the assurance he gave to the hon. Member for Newport West (Paul Flynn) that the costs of new nuclear will be met by the companies, which may well not be around in anything like 120 years?

[Mr Davey]

Let us be clear that those costs relate to decommissioning the legacy waste. In answer to the hon. Member for Newport West, I was referring to the negotiations with EDF and its partners on the strike price for the new build at Hinkley Point C. That will include the cost of decommissioning, so that is in the price. Legislation went through this House under the previous Government to set up the nuclear liabilities fund and to ensure that it is independent and ring-fenced so that the moneys that go into it are properly managed. We have done a huge amount of work to ensure that that ring-fenced resource will grow and meet the future decommissioning costs.

[Mr Philip Hollobone (Kettering) (Con)]

Which international comparators of decommissioning governance structures were used before arriving at this decision?

[Mr Davey]

I wish there were some to look at. Sellafield is unique and if my hon. Friend can point me to a similar site, I will visit it.

[Barry Gardiner (Brent North) (Lab)]

The great thing about a National Audit Office report is that it is consensually agreed between the Department and the NAO. I am afraid that rather disproves the points that the Secretary of State has tried to make. He tried to locate the original plan in 2008 under the now Leader of the Opposition, but the report says that the previous plan was designed in 2007. The Secretary of State called this the revised plan, but the NAO report is very clear that, in fact, the

“Authority accepted the revised plan in May 2011”,

so this is a revision of the revision that his predecessor approved. Finally, the report was produced in 2012, when the Secretary of State was in post, and states that there were significant uncertainties back then. Why did he not act on the uncertainties that he agreed with the NAO existed then and work up an improvement for the time break in the contract?

[Mr Speaker]

I think the hon. Gentleman is planning for a future career as a regius professor in which he has an attentive audience, no interruption and can expatiate at a length of his own choice. We shall see what happens.

[Mr Davey]

Mr Speaker, I think I understood what you just said.

I must tell the hon. Member for Brent North (Barry Gardiner) that he possibly should have listened a little more carefully to what I said. The original contract was engaged with and drawn up by the Minister who preceded the Leader of the Opposition, but it came into force when the right hon. Gentleman was doing my job.

The issue we have looked at is that of the model, which was designed under the previous Government and which we inherited. The contract that the hon. Gentleman talked about was looked at and then rolled forward, but the issue at stake is the model. We are changing the model of the management structure for the better, because the one we inherited was complex and expensive.

[Nick Smith (Blaenau Gwent) (Lab)]

The Secretary of State says that the termination fee following his decision was low, so how much was it in cash terms? Again, what was the cost of the important KPMG report?

[Mr Davey]

On the final point, I have said that I will write to the hon. Member for Rutherglen and Hamilton West (Tom Greatrex); I do not have that figure with me. On the cash figure, I will write to the hon. Gentleman with the precise amount. I gave it in percentage terms—it is 1% of the annual fee—but I believe that it is less than £500,000 in cash terms. I put on the record that I will need to clarify that in writing.

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

The Public Accounts Committee characterised the lack of speed in decommissioning at Sellafield in terms of missed targets, escalating costs, slipping deadlines and weak leadership. How confident is the Secretary of State that the new model will accelerate decommissioning, cleaning up the legacy waste and dealing with the ponds that presented problems last year?

[Mr Davey]

The hon. Lady is right that performance at Sellafield has been mixed—we would not have taken the decision if it had all been going terribly well—but I repeat what I have already told the House, which is that performance improved significantly last year. That is why the focus is on the model. She asked whether we believe that the model will improve performance, and we absolutely do: it will reduce costs and improve the effectiveness of management on that complex site.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

What measures is the Secretary of State taking to ensure that the process, particularly for the selection of the strategic partner for Sellafield Ltd, will be proof against a repetition of elements of the fiasco we have heard about today?

[Mr Davey]

The different model will ensure that the involvement of the private sector is far more effective and, indeed, more cost-effective. The NDA is obviously responsible for the selection of the strategic partner. The model is now much simpler and is in line with best practice for procurement for such complex operations. That is why I made the analogy with Crossrail and with the Olympics in my answer to the hon. Member for Rutherglen and Hamilton West. The Olympics was a very complicated project, and Crossrail is a very complicated one, while Sellafield is the most complex industrial site in Europe. Given the complexity of the operations, it does not really make sense to have the complex model set up under the previous Government, and that is why we have taken this decision.

[Nia Griffith (Llanelli) (Lab)]

Given the criticisms of the NAO and the PAC, is the Secretary of State really telling us that he knew there were concerns about the model, but did not think that he could change it? Will he explain what monitoring procedures he and the then Minister with responsibility for energy, the right hon. Member for Sevenoaks (Michael Fallon), put in place to keep a close eye on the company? Will he tell us what meetings they had, what figures they required and what evidence they wanted from the very beginning of the process for renewing the contract?

[Mr Davey]

To be clear, the renewal of the contract was the NDA’s decision, which we endorsed. When we endorsed it, we obviously asked the chief executive, the chairman and the board of the NDA some serious questions, including about the model, and that led to the review of the model and to today’s statement.

In relation to the renewal of the ongoing contract, I of course met executives from the NMP. I cannot give the hon. Lady details of all the meetings that my Ministers or I had. I am happy to write to her about them; there is nothing secret about them. The key thing was to ensure that the contract renewal covered improved performance during the ongoing review of the model, and the facts show that performance has improved.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Three of the world’s top 10 engineering challenges are at Sellafield. As other hon. Members have said, it is a very complex site. Will the Secretary of State ensure that he and his fellow Ministers undertake very complex monitoring to make sure that the value-for-money challenges identified by the National Audit Office and the Public Accounts Committee do not slip again? I mean value for money in not just the cost of the contract but, as my hon. Friend the Member for Barrow and Furness (John Woodcock) said, the impact on the supply chain, because Sellafield should not deaden the local market, but build it and help it to thrive.

[Mr Davey]

I certainly agree with the hon. Lady that the project on the site is hugely complicated. Anyone who visits it can see that for themselves. I should tell her, however, that the prime responsibility for managing it lies with the Nuclear Decommissioning Authority. The NDA was quite rightly set up under the previous Government—with cross-party support—and we believe that it is the right model.

The NDA needs to be involved in all local decisions. It would not be very sensible for that to be managed by Ministers and officials in Whitehall—the NDA is on the front line—but it is the job of Ministers and, indeed, this House to hold the NDA to account. We do that through regular reports and through the officials who regularly work with the NDA, and the House does it through the Energy and Climate Change Committee and the Public Accounts Committee.

[Kerry McCarthy (Bristol East) (Lab)]

As my hon. Friend the Member for Newport West (Paul Flynn) mentioned, the French company AREVA, which is part of the NMP consortium, also has a very big interest in Hinkley Point. I know that the sites are very different, but will the Secretary of State use this opportunity to give assurances that the challenges and risks talked about today have been fully addressed at Hinkley Point?

[Mr Davey]

The risks are very different in all senses of the word. The new build at Hinkley Point C has already undergone huge regulatory processes. There is the time needed for the generic design assessment for a new nuclear reactor—in this case, for the EPR reactor, it took three years—and then regulatory approvals are needed for the site itself. The regulatory oversight of the new build at HPC is therefore of a very different nature. However, it is certainly extremely detailed, and I hope that that gives her the assurance she seeks.

Local Government (Planning Permission and Referendums)

Tuesday 13th January 2015 Commons Chamber

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

13:07

[Martin Vickers (Cleethorpes) (Con)]

I beg to move,

That leave be given to bring in a Bill to allow objectors to appeal against the granting of planning permission in certain circumstances; to make provision about binding local referendums; and for connected purposes.

My Bill contains two main proposals: introducing an element of fairness into the planning system and expanding the use of local referendums to give our local communities a greater say in their future.

First, my proposals for the planning system will bring in an element of greater fairness, which is something we all espouse and want to achieve. I am sure that at some time or other we have all been involved in major campaigns when our constituents, often in very large numbers, opposed planning applications that they felt would change the character of the village or part of town in which they live and to which they feel very attached.

In my 26 years as a councillor, I can think of many such campaigns. Indeed, I regard one of the successes as one of the most satisfying achievements in my time as a councillor. The Scartho Top housing development in my then ward will eventually reach 2,200 dwellings, but the original plans included building right up to the main road at the entrance to the estate. We fought that part of the application, and the entrance to the estate is now through a pleasantly landscaped area. It was previously known as Scartho park, but was recently renamed to commemorate Matthew Telford, a soldier who lived on the estate and gave his life in the service of his country.

The campaign was long and stretched over many years. Ironically, it came to its conclusion during a period when local people had decided that I needed a rest from my council duties, as was often the fate of those who stood under the Conservative banner in the 1990s. Such campaigns often reveal how strongly residents feel about the area in which they live, and lead to people getting more involved with their local communities, sometimes even standing as councillors. However, many campaigns end in failure and people rightly feel aggrieved. Why? Because they know that had the decision gone against the applicant, they would have been able to appeal.

I do not suggest that every planning application that has attracted objections should automatically have the right of appeal. It is possible to argue that case, but the system would be too overloaded to cope with cases that had just a handful of objections, or in some cases only one. An application to extend a conservatory might irritate the neighbour if approved, but it will not change the whole character of an area. If, however, the development of a new housing estate is approved, that could change a semi-rural edge-of-town parish into an extension of the town. I suggest that a hard-copy petition from, I stress, local residents should be able to trigger an appeal to the Planning Inspectorate. What should the threshold be? I suggest 10%, although that is a matter for debate.

Although I favour a petition, another alternative would be to say that if plans are approved contrary to the local plan, objectors would automatically have the right of appeal. That would perhaps be easier to administer, but it would deliver only limited powers to local residents. There should certainly be an automatic right of appeal where no local plan exists. Such a situation exists in North East Lincolnshire where, after pressure from me, Ministers, the local press and public opinion, the council has brought forward the publication date for its new plan from November to February 2017. That is unacceptable and leaves villages such as those in the Humberston and New Waltham ward open to a stream of applications. Some of those applications might be speculative, but they cause endless discontent among local people.

I choose that ward not because it is unique—the villages of Waltham and Laceby have also been affected—but because Humberston has received far more than its fair share of applications. It is not the quality of proposals that is in question, but the fact that local services and infrastructure are inadequate. There is a point when the whole character of an area can be changed and strategic gaps between town and country are set to disappear, and it is only right for local residents to be given an opportunity to appeal.

Parish councils work hard to reflect local opinion, as do councillors who serve at district or unitary level, but their views can often be squeezed out. I do not seek to stop development; we all appreciate that we need new homes, but we need them in locations that carry the full blessing of local people. Of course there must be a balance; the system must not stifle development or become a tool used to promote nimbyism. My proposals are not designed to prevent building, but merely to allow development in locations that carry a broad measure of public support. As I said at the beginning of my remarks, it is a matter of fairness. Of course the appeal may be lost, but both sides will have had the same opportunities to argue their case.

Our citizens are feeling somewhat alienated from the political process, and when they see that obvious lack of fairness in the system they understandably feel yet more alienated. We must do more to involve local people in shaping their communities—indeed, sometimes local people know better than the planners. Consider some of the properties built in high-risk flood areas. Had more notice been taken of those who serve on internal drainage boards or as flood wardens, or members of the farming community, and had they had a second opportunity to contribute, we might have had better decision making. Members across the House will share my aim to make the planning system fairer and increase public confidence.

The second part of my proposals would make it easier for local residents to initiate a local referendum. Powers exist for councils to stage a referendum under section 116 of the Local Government Act 2003—indeed, in 2006 I initiated one to abolish Immingham town council. It is easy to understand why I got a 2:1 majority in favour of abolition when I tell the House that the parish precept exceeded £100 per property. The costs were minimal and the poll coincided with local elections. The question was simple: should Immingham have a town council? Some 1,755 people said no, and 905 thought that it should. That was a clear majority, but the result was not binding and the top-tier authority kicked it into the long grass, and it eventually disappeared. The verdict of the people was ignored. No wonder the political process is seen as out of touch by many of our constituents.

I would like an opportunity for local people to initiate a binding local referendum on significant local issues, not at random but within defined criteria. A significant issue could be the location of a new football stadium or the development of an out-of-town shopping complex. We all, understandably, speak up for our town centres, but what if local residents regard their town centre as run down with little prospect of attracting the big name stores? Perhaps—just perhaps—they would see the traditional centre as better off if it were in effect moved to the edge of town. I do not advocate that and we all know the possible consequences, but a local poll could take place and result in a campaign and a serious debate.

In North East Lincolnshire there is a proposal to demolish six blocks of multi-storey flats, with the risk that the whole area could be derelict for a considerable time. The character of the area will be completely changed, so surely the local community should have a voice and effective consultation in that decision. Councils, like Governments, spend millions on consultations, many of which pass most people by. When complete, the result is delivered, the public are disillusioned, and nothing happens.

The recent Scottish independence referendum showed that people will engage when they understand the relevance of an issue to them and their families, and that they can influence the actual decision. A referendum is democracy in its purest form. In Scotland Alex Salmond’s vote counted as one vote, just like that of every other voter. When the European Union referendum comes—as it surely will—my vote and that of the Prime Minister will each count as one vote, just like those of our constituents. People feel disconnected with the political process. My proposals will give everyone an opportunity to get involved in real decision making, as is right and fair.

Question put and agreed to.

Ordered,

That Martin Vickers, Andrew Percy, Sir Edward Leigh, Zac Goldsmith, Mr David Nuttall, John Stevenson, Austin Mitchell, Nic Dakin, Nigel Mills and Jacob Rees-Mogg present the Bill.

Martin Vickers accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 6 March, and to be printed (Bill 152).

Charter for Budget Responsibility

Tuesday 13th January 2015 Commons Chamber

[Mr Speaker]

I wish to inform the House that I have not selected the amendment on the Order Paper. It is therefore for the Minister to move. I call the Chancellor of the Exchequer.

13:19

[The Chancellor of the Exchequer (Mr George Osborne)]

I beg to move,

That the Charter for Budget Responsibility: Autumn Statement 2014 update, which was laid before this House on 15 December 2014, be approved.

The charter sets out the next steps we take to turn Britain around and ensure that the mistakes of the past are not repeated. People will remember the fiscal crisis facing this country five years ago: a deficit that stood at more than 10% of our national income; a Government borrowing £1 in every £4 they spent; a Treasury whose departing Chief Secretary left a note saying simply that there was no money left; a country described by international bond investors as sitting on the financial equivalent of a bed of nitro-glycerine; and a British economy whose ability to pay its way was questioned in the world. That was the appalling inheritance left to us by the last Labour Government.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The Chancellor mentions a British economy with an ability to pay its way. When did the UK last pay its way? When was it last not in deficit?

[Mr Osborne]

The last time it was not in deficit was when people followed Tory spending plans: there was a surplus at the end of the 1990s and 2000. That is what we advocate again.

At the moment of maximum danger five years ago, as much of the rest of Europe became engulfed in a sovereign debt crisis, Britain faced a choice: did we have the resolve to cut our spending, cut our deficit and set a course for economic stability, or did our country go on borrowing and spending our way to economic ruin?

[Sir Edward Leigh (Gainsborough) (Con)]

But surely we cannot relax for a moment. When we say we have cut the deficit by half that is good, but it gives the impression that the problem is solved and we are still borrowing £90 billion a year. The debt is still at about £1.7 trillion. Therefore, we cannot relax for a moment and we cannot allow there to be any sort of Government who let the anchor off. We therefore have to say no to a Labour Government.

[Mr Osborne]

My hon. Friend is absolutely right. Having brought the deficit down, we have to complete the job. We have to run a surplus and get our national debt down—that is what this debate is about. We remember Opposition Members in this House five years ago urging on us a ruinous course of more borrowing and more spending, the very same people who had presided over the borrowing and spending that had put Britain into such a perilous position.

[Several hon. Members]

rose—

[Mr Osborne]

I will give way in a moment, but I want people to remember that the country knew better than to listen to Labour again. The country supported this Government as we took the difficult decisions required to cut our spending, reduce our borrowing and get our country living within its means. Then, when the problems in the eurozone became acute and the currency union on our doorstep was threatened with collapse, we heard again, as we hear now, the siren voices luring us on to the economic rocks. “Stop the cuts,” they said, “Spend more, borrow more, adopt a plan B”. But Britain stayed the course. We did not spend more. We did not spend less. We worked through our plan. The result, in the verdict of the International Monetary Fund, is that no other major economy has achieved such a substantial and consistent reduction in its structural deficit over recent years.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

The Chancellor told this House that if Britain was to lose its triple A credit rating it would be a disaster for Britain. Can he remind the House when Britain lost its triple A credit rating? Was he the Chancellor at the time? When are we going to get it back?

[Mr Osborne]

We retain our triple A credit rating with some credit rating agencies. I can tell the right hon. Gentleman one thing for sure: the only way we will get back our triple A credit rating is by dealing with our debts, cutting our spending and making sure this country can live within its means. If anyone thinks the answer to Britain’s debt problems is to borrow £170 billion more, which is what the Labour party is proposing, they will be leading Britain back into economic ruin.

We remember what the shadow Chancellor said was going to happen if we pursued this plan. He said we would choke off growth and that there would be a double-dip recession. Britain has grown faster than any other major European economy in the past four years. We have grown faster than any major economy in 2014 and the one recession we had was the one big recession, the great recession, on Labour’s watch.

[Alok Sharma (Reading West) (Con)]

It was of course a Labour Government, led by James Callaghan, who went cap in hand to the IMF, and the Blair-Brown Government left us with a record deficit. Does the Chancellor share my view that it does not matter what that lot say today? History repeats itself and, when it comes to Labour, we cannot trust them with the public finances.

[Mr Osborne]

You cannot trust the Labour party with people’s money. Every Labour Government leads this country into bankruptcy. Every Labour Government left office with unemployment higher than when it came to office. That is what Labour does when it gets into office. People remember that and they will not trust them with the public finances again. We remember what Labour said was going to happen to jobs: they said that 1 million jobs would be lost. Instead, we have 1.7 million more people in work. Unemployment is falling. Youth unemployment is down by more than half. Full employment is in sight. They said that public services would be decimated and crime would rise. Crime has fallen and satisfaction with local government services is up. They said that the north of England would suffer the most, just as it had suffered the most in their great recession. Now, the fastest growing part of our economy is the north of England and we are building that northern powerhouse.

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

I wonder if my right hon. Friend, during his busy schedule, was able to notice the comment of the Labour leader of Leeds city council, who said that he has to hand it to George Osborne because he is doing more in the north of England than a Labour Government ever did.

[Mr Osborne]

There has been a constructive alliance between Labour civic leaders in the north of England and Conservatives to bring an elected mayor to Greater Manchester and deliver High Speed 2. We have done so in the face of the opposition of the Labour shadow Chancellor, who has tried to frustrate all these things all along. Thankfully, Labour civic leaders are not listening to those on their own Front Bench anymore.

Although the deficit has been halved, at 5% of our national income, it is too high. Our national debt, at 80% of our national income, is too high.

[Mr Andrew Tyrie (Chichester) (Con)]

There have probably been about half a dozen attempts to try to buttress fiscal policy with rules in the past 30 years. Most of them have collapsed at some point during the business cycle. To get something that works, does the Chancellor not agree that we need something credible, not just for dealing with the deficit but for reducing the stock of debt, and that that must mean over the cycle running a surplus?

[Mr Osborne]

My hon. Friend is absolutely right. It is not enough to eliminate the deficit. We then have to get our national debt down. It is too high and leaves us exposed to the next economic shock. We do not want to go into the next economic shock with a debt-to-GDP ratio of 80%. That is precisely why, in good economic times, we need to be running an overall budget surplus. That is the only credible and sustained way to get national debt down. That is the way to fix the roof when the sun is shining.

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

Was it not the case that the right hon. Gentleman’s boss, the Prime Minister, said that he would balance the books by 2015?

[Mr Osborne]

What we have done is cut the deficit by a half. We have neither gone faster than we said we were going to go, nor gone slower than we said we were going to go. We have stuck to our spending plans when people were urging us to take either course. To get lectures in managing the public finances from the Labour party is extraordinary.

[Several hon. Members]

rose—

[Mr Osborne]

I will give way in a moment. Labour are in the bizarre situation of complaining that we are borrowing too much, yet they want to borrow even more. Perhaps the shadow Chancellor can help to illuminate this debate and simply confirm that a Labour Government would borrow more than a Conservative Government.

[Ed Balls]

The Chancellor just said to the House that he has not gone slower on the deficit than he intended to in 2010, but the Office for Budget Responsibility says he has borrowed more than £200 billion more than he planned. Can he explain that remark? I have to say that I think everybody in the country will be totally baffled by the Chancellor’s remark.

[Mr Osborne]

We have delivered exactly the spending plans we set out in 2010—we have not gone faster, we have not gone slower. Indeed, spending this year is a little bit lower than I predicted in 2010.

[Several hon. Members]

rose—

[Mr Osborne]

I will give way in a moment.

There is going to be a test in this debate: will Labour confirm it will borrow more? It cannot complain about our spending cuts if it does not confirm that it would borrow more.

[Ed Balls]

rose—

[Mr Osborne]

Would the shadow Chancellor borrow more? Let us have the B word from him.

[Ed Balls]

The Chancellor has told the House that he has not gone any slower on reducing the deficit than he planned in 2010. That is blatantly untrue. Will he clarify or withdraw his remark?

[Mr Osborne]

We have delivered exactly the spending plans that I set out and which the shadow Chancellor opposed. If he is complaining about those spending plans, and if he would like to spend more, he should be honest with the British people and say that a Labour Government would like to borrow more. Why does he not have the courage to tell the truth? The truth is that he does not tell the British people the truth because he knows that when they discover he wants to borrow £170 billion more, they will not let him near Downing street again.

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

Does the Chancellor recall, when the Government outlined their deficit reduction plan, that Opposition Members, including the shadow Chancellor, said we were going “too far, too fast”? Now the right hon. Gentleman criticises us for not cutting the deficit enough. Will he make his mind up?

[Mr Osborne]

It is a totally chaotic and farcical position from the Labour party. It has spent the first two weeks of this year complaining that the Conservative party is cutting too much and promising that it would not cut as much, but now Labour Members are going to troop through the Division Lobby with us in support of a charter that requires £30 billion of fiscal consolidation over the next couple of years. To be fair to the Scottish National party, I think its Members are going to vote against us, as too is the Green party, but Labour Members are sitting there in total silence. They are going to go through the Division Lobby with us to support £30 billion of spending cuts. [Interruption.] Cheer up, it is what the Labour Front-Bench team has asked you to do. It is going to lead the party through the Division Lobby because it does not want to admit to the British people that its plans involve spending more money.

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

rose—

[Mr Osborne]

Will the hon. Gentleman, who has experience at the Treasury, confirm that Labour’s economic policy is to borrow more?

[Mr Robinson]

The Chancellor is asking us to be honest and state our position. Will he tell us what he said today? A few moments ago, he clearly said—we can all check Hansard tomorrow—that he had not gone any slower on reducing the deficit. He said that word for word. We are simply inviting him to clarify his remark—to tell us it is not correct, that we must have misheard, or that he will correct Hansard. Whatever he does, will he clarify his position? He is clearly totally out of order.

[Mr Osborne]

The hon. Gentleman can check Hansard now if he likes. I was clear that we stuck to our spending plans—we did not go faster, we did not go slower—and reduced the deficit by a half, and we are going to carry on with the job.

[Ed Balls]

rose—

[Mr Osborne]

I will give way to the shadow Chancellor in a moment, but I want him to understand what he is asking the Labour party to vote for. To their credit, the SNP and the Green party understand that they do not want to agree with our spending cuts.

The charter sets out that the OBR will continue to monitor our fiscal rules. This is a major innovation. We take it for granted now, but only five years ago we had a Labour Chancellor and the team behind him fiddling the figures and making sure they were marked against their own rules. We then commit in the charter to achieving falling national debt by 2016-17 and a surplus on our cyclically adjusted current budget by 2017-18. That requires £30 billion of consolidation. So for the third time, I ask the shadow Chancellor: will he accept that his plans involve borrowing more? What is wrong with the “borrowing” word? He used to give whole lectures about why the country should have a fiscal stimulus and borrow more. Why does he not get up and say, “Yes, Labour would borrow more”?

[Ed Balls]

We can accept that the Chancellor may have misspoken—we can check Hansard—but will he confirm that he has reduced the deficit much more slowly than he intended and borrowed £200 billion more than he planned? We do not need to debate what he said. Will he just confirm whether he has reduced the deficit much slower than he planned and borrowed a lot more?

[Mr Osborne]

We have halved a record budget deficit to 5% of national income. The shadow Chancellor says we should have borrowed more, and his plans involve £170 billion of more borrowing, yet he finds himself in the extraordinary position of asking the Labour party to vote for a charter that requires £30 billion of more consolidation. Where should that £30 billion of consolidation come from? To be fair to the Liberal Democrats, they say we should increase taxes to help achieve that consolidation. The Conservatives say it can be achieved by bearing down on spending, the welfare budget and tax avoidance—£13 billion of savings from the Departments, £12 billion from welfare and £5 billion from tax avoidance. That is our clear plan. Labour cannot pretend to support the charter while claiming that the £30 billion does not exist. It is a totally chaotic position.

[Julie Hilling (Bolton West) (Lab)]

rose—

[Mr Osborne]

Will the hon. Lady, who will be voting for the charter, tell us where she would find the £30 billion of cuts?

[Julie Hilling]

I have been trying to get in for a while, so I am grateful to the Chancellor for giving way now. I cannot move on from what he said about cutting the deficit at the level he said he would. Unless my memory is false, he said in 2010 that he would get rid of the deficit over the Parliament. Furthermore, did he intend there to be three years of flat-lining growth?

[Mr Osborne]

The British economy has grown faster than any major European economy over the last four years. It has created 1.7 million new jobs and 750,000 new businesses, and today the Governor of the Bank of England described it as being in a “sweet spot”, but Labour opposed every difficult decision we took to do that. It opposed every spending cut and welfare change. It goes around the country pretending it would reverse these things. It has made £20 billion of unfunded spending commitments. Every day in this Chamber, Labour Members ask for more public money to be spent on more things and complain about the difficult decisions we have taken. It is a totally incredible position from the Labour party and it is being exposed today.

[Charlie Elphicke (Dover) (Con)]

Is it not obvious that the Labour party is stuck in the past, talking about things done years ago and frightened to talk about the future? Did the Chancellor hear Paul Johnson from the Institute for Fiscal Studies say on the “Today” programme that borrowing would be higher under a Labour Government and that debt would be higher in the long run? The IFS says it; the Labour party ought to admit it.

[Mr Osborne]

My hon. Friend is absolutely right. The IFS today confirmed that Labour would borrow £170 billion more. This is its published plan. It is extraordinary that Labour Members are totally silent about it. They are not prepared to talk to the British people about what I assume they believe to be the right economic policy for the country.

I want to make sense of this strange journey that the Labour party has taken on fiscal policy over this Parliament. After all the twists and turns, I think it has managed to end up in exactly the same place as it started. In 2010, as part of his pitch for the Labour leadership—we thought at the time he was a worse choice than the current leader, but given all that has happened, perhaps we were wrong—the shadow Chancellor said we should not be cutting spending. He said that more spending would grow the economy and that the economic growth would eliminate the deficit. That was the position he set out in his Bloomberg speech—his so-called plan B. The problem was it was rejected by the British public and eventually by the Labour party. So two years ago, Labour changed its approach and committed to the original phrase of “iron discipline”. The only problem was there was no iron discipline and instead it made all those spending commitments. Last autumn, it moved on to another approach—the Basil Fawlty approach—which was not to mention the deficit at all. I think the House can agree that the Labour leader executed that strategy brilliantly at the Labour party conference.

In December, at the end of last year, Labour tried something else. The shadow Chancellor announced that he would seek to balance the current budget and get debt falling, but he would not say when, saying just as soon as possible. When pressed on specific dates, he dismissed them; he said he would not sign up to some arbitrary timetable. When challenged specifically to match our plans, he said a month ago, on 11 December, that he was not going to set a timetable to balance the current budget by 2017. Here he is, one month later, saying that he is going to vote in favour of a timetable to balance the current budget by 2017-18.

I thought that was the end of Labour’s journey. They had ended up supporting a charter that they had previously rejected, a timetable to which they had previously refused to sign up and £30 billion of cuts they had previously denounced. Then, this weekend, we were treated to the spectacle on “The Andrew Marr Show” of the Labour leader dismissing the charter altogether, rejecting the £30 billion figure and returning full circle to where the Labour party started four years ago. This is what the Labour leader said on Sunday:

“if we just try and cut our way to getting rid of this deficit, it won’t work.”

That is the latest version of the Labour party’s policy. It is exactly where they were four years ago. The Labour leader has gone full circle and gone back to saying that the answer to our debts is simply to grow the economy. That is economically illiterate when we have a structural deficit, and it is based on the fiddle of trying to upgrade the country’s trend growth rates—exactly the mistake made by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) when he was Chancellor and got us into this mess. Labour has gone from plan B to plan A to no plan at all.

[Ed Balls]

The Chancellor is shouting a lot and sounded a bit rattled. Will he clarify where in the charter for budget responsibility it says that we are going to balance the current budget in 2017-18? It actually says that it will be done

“by the end of the third year of the rolling, five-year forecast period.”

A moment ago, the Chancellor said it would be 2017-18, but where is that in the document? I cannot find it.

[Mr Osborne]

It does not augur well for someone who wants to be the Chancellor that he thinks three years from now is 2017-18. [Interruption.] He will have his chance. I have been wondering what he has been up to all this time while Labour has got itself into such a mess. Let me make this observation, and then I will give way to him. This gives us a clue to what he has been up to. He said to The Independent a couple of weeks ago:

“If I am sitting”

at the piano

“and I start thinking about the deficit, it all goes wrong. On the piano, you have to be totally focused”—

and with that set of priorities, I think the British people would agree that he should go on playing the entertainer and I will go on being the Chancellor of the Exchequer.

[Ed Balls]

The document does not say 2017-18, and nor does it say in three years’ time. It says

“by the end of the third year of the rolling, five-year forecast period”.

When does the rolling, five-year forecast period end—in 2017-18, in 2020-21 or in 2029-30? It is totally baffling.

[Mr Osborne]

The third year in the period is three years; that is 2017-18. Perhaps the right hon. Gentleman should use his piano fingers and count one, two, three.

[Ben Gummer (Ipswich) (Con)]

Does my right hon. Friend draw the conclusion from the Chancellor’s recent interventions—[Interruption.] I mean the shadow Chancellor’s interventions—he will wait a long time to become Chancellor. Does my right hon. Friend draw the conclusion from the shadow Chancellor’s interventions that he either does not understand the paper in front of him or is about to go through the Division Lobby to support something he describes as “baffling”?

[Mr Osborne]

I think the shadow Chancellor is trying to perpetrate a grand deceit on the British public. I think he has no intention of delivering the £30 billion of cuts. He does not want to do that: he wants to spend and borrow more, but he does not want to tell the British people the truth about that. We had independent confirmation from the IFS today that Labour would borrow £170 billion more. It confirms what we already know—that the Labour leader and the shadow Chancellor would do it all over again: tax, borrow and spend their way into an economic crisis, letting the British people pay the price in lost jobs, lost incomes and lost futures.

The shadow Chancellor faces a choice. He can either confirm by voting for this charter that he accepts the £30 billion of deficit reduction required to fulfil the objectives, in which case, since he does not approve of our spending plans, he admits that there will be major tax rises under a Labour Government; or he can reject the deficit reduction required, in which case he is confirming that voting for this charter today is nothing other than a grand deceit—pretending to the British people that Labour does not want to borrow more when that is exactly what it plans to do. With the Labour party, it is either a tax bombshell or a borrowing bombshell. The only question is which will it be. Either way, it leads to economic chaos for this country.

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

rose—

[Mr Osborne]

I give way to the Green party Member. We want her and her colleagues in the TV debates. At least the Green party is being straight about the fact that it wants to borrow and spend more money. Why does the Labour party not tell the truth about that?

[Caroline Lucas]

Does the Chancellor agree with me that with the feeble and inconsistent opposition coming from the Labour Front Bench, there is a very good reason for seeing the SNP, the Greens and Plaid as the real opposition on this issue because we are clear and consistent about the fact that austerity is not working?

[Mr Osborne]

That shows why we want the hon. Lady’s party in the TV debates.

What is clear today is that there is only one credible plan to deal with our debts, and that is our long-term economic plan. It binds us into eliminating the deficit, getting debt falling and running a surplus. It delivers economic security. This charter is part of that plan, and I commend it to the House.

13:47

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

We have pledged to balance the books in the next Parliament. I said a year ago that the next Labour Government would get the current budget into surplus and our national debt falling as soon as possible in the next Parliament. This charter is fully consistent with our position, so on that basis we will support the motion today. We are not going to change our view about what is in Britain’s best interests, because of another one of the Chancellor’s silly failing games.

If you do not want to take this from me, Madam Deputy Speaker, an interesting press release was issued this morning by the TaxPayers Alliance—not an organisation I normally quote in the House. This is what its chief executive said just an hour ago about this debate:

“This is a meaningless political gimmick of the most transparent kind, and one that serves only to remind taxpayers”—[Interruption.]

The hon. Member for Dover (Charlie Elphicke) should listen to this. The chief executive said that this gimmick

“serves only to remind taxpayers how dramatically this Chancellor has missed his own original targets.”

We are happy to vote to remind people how much the Chancellor has missed his targets.

[Mr George Osborne]

I have a very simple question. If the right hon. Gentleman thinks it is a gimmick, why is he getting the Labour party to support it? What is his answer to that?

[Ed Balls]

I will explain that in my speech. What we have before us—this so-called trap—is not a trap at all, as I will explain. I will discuss the new fiscal charter in detail in a moment, but let us first be clear about the background to today’s motion and the new charter before us. This is not the first fiscal charter before us in this Parliament, but the second. The first was presented at the beginning of the current Parliament when the Chancellor lay before the House a charter committing the coalition to balance the books in this Parliament, to get the cyclically-adjusted current budget back into balance and the national debt falling by the coming financial year 2015-16.

As I reminded the House on the day of the autumn statement, the Prime Minister actually went further in 2010. He said that he would balance the Budget in 2015. However, just a few weeks ago, in the autumn statement, independent forecasts from the Office for Budget Responsibility confirmed that this Chancellor was not going to balance the books in 2015, or in 2015-16. In fact, public sector net borrowing in 2015-16 is now forecast to be £76 billion, £7.7 billion higher than was forecast even as recently as the Budget.

The figures on page 15 of the OBR’s “Economic and fiscal outlook” show that this Chancellor, in this Parliament, is borrowing—staggeringly—over £200 billion more than he proposed to spend in the 2010 plans. As a consequence, the national debt, compared to the 2010 forecasts, will be much higher in 2015-16 than he suggested. Back in 2010, he said that in 2015-16 the national debt would be 67.2% of GDP. According to the latest figures, it is now forecast to be not 67.2% but 81.1% of GDP, 14 percentage points higher than the Chancellor’s 2010 figure. Worse than that, according to the 2010 fiscal mandate the national debt would be falling, but the OBR figures show that in 2015-16 it will be rising again, from 80.4% to 81.1%. On the deficit, on the current deficit and on the national debt, the Chancellor made promises in 2010, in a clear fiscal charter, and he has broken every one of them.

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

Was my right hon. Friend as surprised as I was that, in all his political bluster, the Chancellor of the Exchequer did not mention once that, while he used to say that he wanted to balance the overall budget, he now wants to commit himself to Labour’s policy of balancing the current budget, excluding capital investment? Moreover, he did not mention the fact that the fiscal mandate had been downgraded from a target to an aim.

[Ed Balls]

I shall provide an analysis of the new charter and why it is different from the old charter in a moment, but my hon. Friend is quite right. The Chancellor did not explain either that he had failed to meet the requirements of his charter in the current Parliament, or that he has now changed it for the next Parliament for reasons that are surprising and a bit confusing.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Does the shadow Chancellor agree that all these fiscal forecasts are based on a forecast of spending reductions and growth in tax revenues and the economy? Does he agree that in 2010, no one on either side of the House, including him and including me, realised just how persistent the global problems were going to be and how grave the banking crisis was, and that therefore the growth that everyone—including him—expected to see was not achieved? The Government stuck to their spending plans, but could not achieve the growth forecast. Is the shadow Chancellor saying that in the middle of that grave crisis, when it was still persisting, a Labour Government would have cut our spending plans more dramatically in order to hit what he is now praising as our target?

[Ed Balls]

As ever, the right hon. and learned Gentleman has got to the heart of the issue. Three factors can bring the deficit down: spending cuts, decisions to raise taxes, and what happens to the underlying growth of the economy and the tax revenues which flow from that. The Chancellor did not talk about the third factor, for understandable reasons.

[Several hon. Members]

rose—

[Ed Balls]

I will give way in a second, but let me first explain this point to the former Chancellor.

Even as recently as the March Budget, the OBR made a forecast for growth and for tax revenues. Between the Budget and the autumn statement it revised the growth forecast up by a little bit, but revised income tax and national insurance substantially down because, owing to this year’s stagnating wages and cost of living crisis, growth has not brought in the revenues that the Chancellor wanted. In comparison with the March Budget, we have actually lost £8.4 billion in this fiscal year, not because spending cuts have not gone ahead or tax cuts have not been delivered, but because the tax revenues have not come in as a result of growth and stagnant wages. Ultimately, the only way of reversing the problem is yes, to cut spending, and yes, to raise taxes—as the Chancellor has done in this Parliament—but also to get the economy growing in a stronger way which will bring in tax revenues. If he does not do that, the Chancellor will carry on failing year after year, as he has in this Parliament.

[Mr MacNeil]

The right hon. Gentleman has said that he supports this motion on austerity. Tonight he will walk through the Lobby hand in hand with the Tories. Will he tell us how the Labour party differs from the Tory party?

[Ed Balls]

I will explain the nature of the fiscal charter and how it works in a moment. I am sure that the hon. Gentleman will then see the stark difference between our position and the position of the Conservatives. He will probably find that he agrees much more with our position than with theirs.

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

The point that my right hon. Friend has made about low pay and tax revenues is crucial, but is it not also the case that since 2010 the Government have spent £25 billion more on social security than they originally planned to spend because of that failure on low pay and the failure to deal with the cost-of-living crisis?

[Ed Balls]

That is true. If we compare the welfare spending plans that the Chancellor set out in 2010 to the actual outturns, we see that he has overspent in this Parliament by £25 billion. He has spent £25 billion more on disability and housing benefits because of what has happened to the economy. The former Chancellor, the right hon. and learned Member for Rushcliffe (Mr Clarke), is right. We have to deal with the big issues rather than playing silly political games.

[Several hon. Members]

rose—

[Ed Balls]

I will give way in a moment, but I want to deal in a bit more detail with the interesting point that has been raised. What is clear not just from the Chancellor’s speech, but from his whole chancellorship, is that—unlike the former Chancellor—he has never really gripped the actual economics of what happens in our economy. He understands slogans, but he does not understand how the economy actually works. Let me explain it.

We all know that the Chancellor flatlined the economy for two or three years after 2010. Now, although the economy has recovered, growth has returned and unemployment has come down, the fact is jobs have been created in low-paid, often insecure work. There is lower productivity in our economy, many people are trapped in part-time employment and zero-hours contracts, and, as a result, tax revenues have not come in.

According to the OBR, income tax receipts are a cumulative £68 billion lower than the Chancellor’s 2010 forecast, and national insurance contributions are a cumulative £27 billion lower than he planned. His fiscal failure in this Parliament—which he could not deny when we asked him about it earlier—has occurred not because he has failed to deliver spending cuts or because he has not raised VAT, but because of the underlying way in which the economy works. Because more people are in low-paid work and wages are stagnating, the tax revenues have not come in. It is clear from the Chancellor’s speech that he does not understand the economics of the matter, but that is the truth. I know that the former Chancellor understands it.

[David Wright (Telford) (Lab)]

Is it not also the case that many people who are in work are receiving benefits, and is that not a symptom of the low-wage economy? Given that we are discussing budget responsibility, is my right hon. Friend as concerned as I am about the fact that the Chancellor promised an unfunded tax cut at the Conservative party conference, but is talking about consolidation today?

[Ed Balls]

My hon. Friend is absolutely right. The Institute for Fiscal Studies said

“Of the main parties, Labour has…been the most cautious of the three”

because ours is the only party that has not made unfunded, uncosted commitments to more spending or lower taxes.

[Several hon. Members]

rose—

[Ed Balls]

I will give way in a second, but I want to develop a point that the former Chancellor has helped me to make, about the relationship between receipts, growth and the deficit. Before the autumn statement, the OBR said that

“weaker-than-expected wage growth so far in 2014-15”

was

“depressing PAYE and NIC receipts.”

Then, in the autumn statement, it said, “We expect earnings growth to remain subdued for longer than in March. This is the key driver in the lower forecast for PAYE and NIC receipts.”

The Chancellor had to revise up borrowing this year because real wage growth has been revised down for this year, next year and the year after. In table 4.10 of its document, the OBR forecasts a cumulative loss even in relation to the Budget, and predicts that lost income tax and national insurance revenues alone will rise to £9 billion a year. The Chancellor does not understand that unless he can bring in receipts from income tax and NICs, from growth and wage growth, he will not succeed in meeting his targets without “colossal”—that is not my word, but the word used by the Institute for Fiscal Studies—cuts in public spending. The Chancellor has never really “got” the economy, and therefore he does not understand that point.

[Mr Kenneth Clarke]

The shadow Chancellor is claiming to have a grip on economic reality which, with great respect, I do not think he had when he was in office, but on the point, which we are getting dangerously near to agreeing on, presumably he is not saying that when we had the growth forecasts not being met in those dark days three or four years ago we should have put up income tax, any more than he is saying we should have done anything other than stick to our spending reductions. Until conditions improve, we have to attack the structural problems. Has the right hon. Gentleman not noticed the banking reform, the banking regulation, the skills training, the education reforms, the support for small business, the introduction of research and development in technology? That is the real job, but fiscal responsibility is the essential precondition before any of those things work.

[Ed Balls]

I agree with the right hon. and learned Gentleman. I am not going to pick over past debates, but when he led his party through the Lobby opposing Bank of England independence, well, that was then; and when he advocated Britain joining the single currency in 2003, well, that was then. We probably agree on other things these days.

Let me take the right hon. and learned Gentleman to the most recent OBR forecasts. He makes an important point about trend, and in 2010 the OBR forecast that the underlying growth in our economy—trend growth—would in this Parliament, in 2014, be 2.1%, but in its most recent document it has revised down the underlying trend in 2014 from 2.1% to 1.7%, so, despite the reforms he talks about, we have been going backwards in terms of trend growth and productivity.

On the other hand, if we can raise through reform—I will come to this in a moment—the underlying trend growth of the economy, we can turn this around. These are not my numbers; they are the OBR numbers. The numbers show that if we were able to increase the underlying trend growth of the economy by just 1%, so it was 1% higher by 2019, which is the equivalent of about 0.2%—

[Guy Opperman (Hexham) (Con)]

Will the shadow Chancellor give way?

[Ed Balls]

In a second; not in the middle of a sentence. That 0.2% a year improvement in the underlying growth of the economy would, by the end of the period, bring in £15 billion a year more in tax revenues. So the trend of growth has gone in the wrong direction under this Chancellor and the key for the next Parliament, as well as spending cuts and tax rises, is to improve the underlying growth of the economy. If we can do that, we can bring in the revenues. If, on the other hand, we fall short in the next Parliament under the same Chancellor in the same way as we have in this Parliament, that would lead to over £110 billion in extra borrowing. If we are going in the wrong direction on growth and wages, the revenues do not come in and the deficit does not come down. We have got to improve the underlying growth potential of the economy. The right hon. and learned Member for Rushcliffe and I agree on that, but I do not think that this Chancellor understands the point.

[Jacob Rees-Mogg (North East Somerset) (Con)]

Is not the shadow Chancellor making the Chancellor’s case for him: that the first thing to do is get fiscal stability, and then we get a growing economy and tax revenues come through? Tax revenues are always a lagging indication of economic performance, and they will come through because of what this Chancellor has been doing.

[Ed Balls]

The problem is that the Chancellor said he would make people better off, and they are actually worse off at the end of this Parliament; he said he would balance the books, but he has not got the deficit down, and the reason is that trend growth and productivity have been weaker than he expected in 2010, which means the tax revenues have not come in. So in fact the opposite is true. It shows that we need a proper plan for jobs and growth to turn around the underlying growth of the economy. On that, he has totally failed to deliver.

[Guy Opperman]

Will the shadow Chancellor give way?

[Ed Balls]

In a second. First, let me turn to the fiscal mandate, because this is where the Chancellor’s position becomes, to be honest, farcical. The current fiscal charter says:

“The Treasury’s mandate for fiscal policy lapses at the dissolution of this Parliament.”

Rather than lapses, I would say that it has totally collapsed in this Parliament. It is totally discredited. Even the TaxPayers Alliance can now see how discredited the Chancellor’s forecasts are for this Parliament, but the Chancellor has a bail-out clause, because in the old charter it says that he has a

“duty to set out a fiscal mandate”

which

“will require the Treasury to set out a revised mandate for fiscal policy as soon as possible in the life of the new Parliament.”

This Chancellor, always alive to trying to find a new gimmick, decided—and has told every Tory commentator going—that this is a new trap for Labour. That is what we are going to get. It is not a stunt; it is not a gimmick; it is a trap for Labour. The problem is that, as we have seen today, this has been an opportunity for us, him and the TaxPayers Alliance to highlight to the country how much he has totally failed in this Parliament on fiscal policy. It is not only a chance to show how extreme his plans are for the next Parliament—and I will come to that—but he has not even managed to deliver the trap he promised.

[Guy Opperman]

Will the shadow Chancellor give way?

[Ed Balls]

In a second. Actually, go on; let’s get it over with.

[Guy Opperman]

I did not want to disrupt the shadow Chancellor’s flow, because I know he is easily distracted. Is it not because of the Chancellor’s support for the north-east by way of city deals, manufacturing and business support that the north-east now has the fastest rate of growth in private sector business in the autumn quarter, and the highest rate of growth in exports? Surely that is evidence that this economy has been turned around by a Chancellor who cares about business and manufacturing?

[Ed Balls]

Maybe we could form a consensus on the way forward on devolution for the regions—I am in favour of that and so is the hon. Gentleman—and that is not the only thing we could form a consensus on, because this is what he told ConservativeHome just recently:

“A bit of extra tax on properties over £2 million seems perfectly fair to me.”

I am with him all the way. Maybe we should get together on that one as well—you shouldn’t have let that one through, George!

Let me come back to the vote and what the Chancellor said at the time of the Budget. He said:

“Britain needs to run an absolute surplus in good years…To lock in our country’s commitment to this path of deficit reduction, we will seek the support of Parliament in a vote, and I will bring forward a new charter for budget responsibility this autumn.”—[Official Report, 19 March 2014; Vol. 577, c. 784.]

The vote was supposed to be on an absolute surplus. That is what the Chancellor was talking about. The Prime Minister on 15 December—the day the new charter was published—attacked Labour for our proposal for two or three years to get the current Budget into surplus. What was surprising about that speech was that the Prime Minister made it, did the Q and A, and got off the stage before the Treasury published the new charter. That was an odd thing to do when he was talking up the charter. Why would they not put it out in advance? It turned out to be because the Prime Minister had just finished a speech attacking Labour and our plan to get the current Budget into surplus, and then the Treasury published a new fiscal charter committing the Government to get the current Budget into surplus. No wonder he got off the stage so quickly.

The Chancellor promised in the last Budget a vote to balance the overall budget. Now the Government have done a U-turn and are proposing a vote on the current Budget excluding capital investment, which is the same measure we have been committed to for three years. Can he confirm that in the last Budget he promised a vote on an absolute Budget surplus and this charter before us is a vote on the current Budget? Is that right?

Also, when we study the fine print of this fiscal mandate, we find that it turns out to be even more different from the old one than I expected. The old fiscal mandate talked about having a target to balance the current Budget in 2015-16 and a target to have the national debt falling. We can see why this Chancellor has got a little worried about setting targets because they have not gone very well. It turns out that in this new document it has been downgraded from a target to an aim. Why have the words changed? Would the Chancellor like to explain?

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

Will the shadow Chancellor give way?

[Ed Balls]

In a second.

As we established a moment ago, even though according to the Chancellor and the Prime Minister the vote is on balancing the current Budget in 2017-18, in fact when we read this charter, we find that there is no mention anywhere of the dates 2017-18. It is baffling that they are not there. Let me read it out. It talks about

“a forward-looking aim to achieve cyclically-adjusted current balance by the end of the third year of the rolling, 5-year forecast period.”

What on earth does that mean?

[Several hon. Members]

rose—

[Ed Balls]

I will give way in a moment. Let me explain what is going on here. It is a three-year rolling target, so in 2015—[Interruption.] Let me explain it to the Deputy Chief Whip or whatever he is—the hon. Member for Croydon Central (Gavin Barwell). In 2015 the three-year target presumably refers to 2017-18, but in 2016 it is rolled forward to 2019 because that is three years later. In 2017, it rolls on to 2020 and in 2018 it rolls on to 2021. It is a three-year rolling target, so it rolls on, which means that the Chancellor could come back to the House in 2020 and say, “It is okay. Consistent with the charter, I am meeting the aim because I am balancing the current budget in 2023.” That is what this says and it is utterly ridiculous. It does not even sign him and his party up to balancing the current budget by the end of the next Parliament. The fact is that for all the boasts, the rhetoric and the talk of traps, in this new charter before the House it is not targets but aims; it is not balancing the overall budget but the current budget; it is not an absolute commitment to deliver a surplus in the next Parliament, but an absolute commitment to a three-year rolling five-year target. The Chancellor has spent all of the past nine months telling everybody what a clever wheeze this is and, once again, it has totally backfired. It is less of a trap and more of a load of complete pony and trap. That is what we have before us today.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Does my right hon. Friend agree that perhaps one problem with a rolling target is that it is very difficult to hit? The point for many people is this: low-paid workers in my constituency do not get to pay tax at all; instead they need the taxman to be giving them money. Is it not because so many people need in-work benefits—they work and yet the taxman gives them money—that the Chancellor is spending £25 billion more than he expected to in 2010?

[Ed Balls]

He is. As my hon. Friend says, not only has the Chancellor overspent in this Parliament, but he is promising £12 billion of further cuts in the next Parliament, and as the IFS made clear in December, his party has been totally unspecific about where any of those will fall, beyond the fact that they will be hitting the tax credits of working people.

[Mr Robinson]

If the Chancellor wanted to say 2017-18, why did he not say 2017-18, instead of using this convoluted third year of a five-year rolling average? By definition, we never get to it—that is probably what his policy really is.

[Ed Balls]

It is either a three-year rolling five-year target to avoid ever getting to be judged on it, or it is because he could not get his quad partners to agree with it before the autumn statement. We know from the letter from the OBR that the quad signed up to the spending cuts, but perhaps the quad did not quite sign up to the fiscal charter the Chancellor wanted.

[Barry Gardiner (Brent North) (Lab)]

Does my right hon. Friend agree that perhaps the reason for the wording is that at any given point when the Chancellor is asked whether he has met the aim—not the target—he can say, “We are going to meet the aim because this is now the five-year rolling period and we aim to meet it in the third year”? But in no specific year will he actually be held to account for whether he has met it.

[Ed Balls]

Of course that is exactly what the Chancellor has done in this Parliament. In 2010, when he set his first mandate, he said that this would be done by the end of the rolling five-year forecast period. In 2010, the Prime Minister clearly thought that that meant 2015 but the Chancellor now thinks it means 2018 or 2019, which is why he still says he is meeting his fiscal target. Everybody else can see it is a completely preposterous claim.

[Richard Fuller (Bedford) (Con)]

The shadow Chancellor has called this proposal a load of “pony and trap”, which I believe is a metaphor for something else. He has also called it a “gimmick”. He knows that many in his own party oppose it, but he has not explained to this House why he is forcing them to vote for it.

[Ed Balls]

The hon. Gentleman did not mention the quote from the TaxPayers Alliance, which also said it was a complete gimmick. That simply exposes the fact that the Chancellor has failed to meet his targets. Now let me come on to our fiscal position—

[Mr Kenneth Clarke]

rose—

[Ed Balls]

I will give way to the former Chancellor one more time.

[Mr Clarke]

The shadow Chancellor is very generous, and I assure him that this is my last intervention. I am afraid I am not quite following this rambling textual analysis, so let me take him back to where I thought we were near to agreeing. He agrees that we were right to stick to our spending reductions and that further fiscal consolidation of the kind the Chancellor is describing is required. The shadow Chancellor’s case appears to be that he has some great plans that will increase our underlying growth rate in future, on top of those the Government already have. Is he going to set out these startling new plans in the remainder of his speech?

[Ed Balls]

I will do so. Let me just say, for the interest of the former Chancellor, because it was not like this in his day or when I was in the Treasury, that our trend rate of growth in 2014—1.17%—puts us 19th out of 34 countries in the OECD. We have a lower underlying trend than Chile, Israel, South Korea, Australia, Mexico and Poland—and the list goes on. The right hon. and learned Gentleman is completely right: we have to find a way to strengthen the underlying growth of the economy.

Let me come on to Labour’s position. We will cut the deficit every year. We will get the current budget into surplus. We will get the national debt falling as soon as possible in the next Parliament, fully consistent with this fiscal charter. How fast we can do this will depend on what happens to growth, wages, the housing benefit bill and events around the world. But our approach will be very different from that of the Conservatives, on the following fronts. We believe, unlike the one-club Chancellor, that three different things need to be done to properly and fairly balance the books in the next Parliament.

First, as we have said, because we will cut the deficit every year, there will be sensible spending cuts in non-protected areas. We will cut the winter allowance, taking it away from the richest 5% of pensioners. We will cap child benefit at 1% for two years, and our zero-based review is examining every pound the Government spend in order to find savings. Secondly, we will make different and fairer choices, including reversing this Government’s £3 billion-a-year top-rate tax cut for people earning more than £150,000. Thirdly, our plan will deliver the rising living standards and stronger—

[Mr MacNeil]

Will the right hon. Gentleman give way?

[Ed Balls]

No. Our plan will deliver the rising living standards and stronger growth needed to balance the books: We will have more free child care, paid for by the bank levy; we will properly capitalise the business investment bank; we will raise the national minimum wage faster than wages; we will repeat the bank bonus tax to get young people back to work; we will devolve full growth in business rates to city and county regions; and we will get the houses built that we need—200,000 a year more by 2020. That is all part of a proper long-term plan for growth and jobs.

The OBR figures show that if our economy was not to slow down next year, the year after and the year after that but instead grew 0.5% faster, that cumulatively would bring in £32 billion in the next Parliament. If we could increase the underlying trend rate of growth in the next Parliament by 0.25%, that would mean £19 billion a year more in tax revenues by the end of the Parliament. This is not only about tax rises and spending cuts; it is also about growth, jobs and the underlying trend. This Chancellor has seen growth downgraded—we have got to do a better job. Unless we do that, we will not see the books balanced in the next Parliament. So that is what we mean by an economy that works for working people and a tough, fair and balanced plan to get the deficit down.

[Michael Ellis (Northampton North) (Con)]

We are only 114 days from the general election and the shadow Chancellor has spent the past four years and more criticising and saying what he would object to. Why does he not put before the House and before the people of this country his proposals for increasing taxes, which he has said he will do. Will he say where those are going to come from for the hard-working people of my constituency and other constituencies in this country?

[Ed Balls]

When preparing an intervention it is always dangerous not to listen to the speech being given—I just did exactly what the hon. Gentleman requested. The interesting thing is—

[The Lord Commissioner of Her Majesty's Treasury (Gavin Barwell)]

Which taxes are you going to put up?

[Ed Balls]

We are going to put the top rate of tax back to 50% for people earning over £150,000, and if the hon. Gentleman wanted to win his seat, he would support it.

Instead this Chancellor is taking an increasingly unbalanced and extreme approach. Let us look at what he has failed to put in the charter. He has not included asking those with broader shoulders to make a greater contribution, as I just said. He has not said that we need to strengthen the underlying growth of our economy and improve living standards. Instead, he has made up for all that loss of tax revenue by imposing even bigger spending cuts in the autumn statement than he was planning.

Let me outline the facts to the House. More than 61% of planned departmental spending cuts are still to come in the next Parliament under this Chancellor. There is a further cut for unprotected Departments of 26.3% over the next four years, which is a third bigger than in the previous Parliament. There will be the biggest fall in day-to-day spending on public services in any four-year period since the second world war. That is what is in the Chancellor’s prospectus for his manifesto. We are talking about cuts that the Institute for Fiscal Studies has called “colossal” and that the OBR says will take spending on public services back to the level of the 1930s as a percentage of GDP. That is the Chancellor’s extreme and unbalanced plan, and that is what we are opposing.

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

If Government Members are so dismissive of Labour’s plans, why will they not let the OBR independently audit our plans instead of using civil servants fraudulently to manufacture fictitious dossiers about Labour’s plans? Is it that they are scared?

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Mr McCabe, you need to rephrase the presentation by civil servants from “fraudulent”. [Interruption.] I will deal with it, thank you. I do not need any help.

[Steve McCabe]

I will happily withdraw the term “fraudulent”, but I do think the Government are misusing civil servants.

[Ed Balls]

On the issue of the dossier, to which my hon. Friend just referred, the Conservative peer and former head of the Conservative party think-tank, Lord Finkelstein, described the figures in the Chancellor’s document as “ridiculous”. Mr d’Ancona, the commentator from the Evening Standard, said:

“Indeed, if the Tories are to win…they cannot afford schoolboy errors of the sort that wrecked their dossier this week”.

I will not say that they are fraudulent, but there was a whole series of untruths in that document, which the Chancellor should withdraw so that we can have a proper debate. He could go further than that and agree with the proposal from Labour, the Chair of the Treasury Committee and the Chief Secretary to the Treasury and not have the Chancellor—or supposedly the Treasury—costing Opposition policies based on political assumptions and special advisers. Why not ask the OBR to do that audit? He could have done that at any time in the past 18 months. Many have called for that to happen. [Hon. Members: “Why not?”] I will tell Members why not. It is because he has made £7 billion of unfunded and uncosted commitments to cut taxes, and he cannot say where the money will come from. Rather than having an honest debate, he wants to spread smears about Labour’s plans, which he knows will not stand up to independent scrutiny. That is the reason. He could have joined the cross-party consensus, and we could have been voting today in this new fiscal charter to allow the OBR to play that role. That is what should have happened. It is what we called for and what many others supported last year, but this Chancellor has ducked it because he does not have the courage to have an honest debate. That is the reality.

The Chancellor claims that his policy is working. There is nothing competent about borrowing £200 billion more than was planned. Our plan would cut the deficit every year and balance the books. His extreme plan will take public spending back to the level of the 1930s. This Chancellor should stop spending his time playing silly political games, which time and again backfire as they have backfired on him today. He should sort out the economy and spend a bit more time making his sums add up.

[Several hon. Members]

rose—

[Madam Deputy Speaker]

Order. There will be a six-minute time limit on all Back-Bench contributions starting from now. It may be necessary to reduce it further, so I ask Members to bear that in mind when taking interventions.

14:24

[Mr Kenneth Clarke (Rushcliffe) (Con)]

That last speech clarified the fact that the shadow Chancellor admits that fiscal consolidation of the kind we are describing will be necessary for whoever comes into office after May and that getting back to a balanced economy depends on continuing efforts to improve the underlying growth rate of the economy. He was not able to produce any specific ideas at all. The only things on to which I could latch were that he was going to put up the minimum wage and restore the completely pointless 50% tax rate on the very highest earners. If he thinks that that is an economic growth plan to stimulate our underlying trend in growth to the levels of Chile and Mexico, he is showing the same levels of competence that he displayed when he was the main economic adviser to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in the previous Government.

What we are talking about and what I hope we will get agreement on—I hope that the reality of this will dawn on the Labour party as a whole eventually—is that the essential pre-condition of any economic policy that will get this country back to healthy balanced growth is fiscal consolidation by eliminating the deficit, controlling the overall level of debt and, at the top of the cycle, running a surplus on the budget to get the stock of debt back to a manageable level. That is a message that the present Chancellor has been trying to get across in the four years that it has taken to get us to the position that we are in at the moment, which is much more successful than that of almost every other western democracy in similar troubles. If the Labour party has really taken that on board, at least it is beginning to be fit for office. But as far as I can see, it has no other policy.

[Kelvin Hopkins (Luton North) (Lab)]

The former Chancellor may remember that, in the 1920s, similar policies were followed and that, at the end of the 1920s, the debt was larger and we had a decade of unemployment and poverty. After the second world war precisely the opposite policy was adopted, and we had rapid growth, full employment and the debt came down.

[Mr Clarke]

No two crises are the same. The causes of the problems in the 1920s were quite different. The steps taken to stimulate demand then were too late. We have been running a deficit throughout these difficult times. We are not going into surplus until the next Parliament. As I have said, the circumstances in which the United Kingdom found itself trading are much more difficult than anybody predicted in 2010, but the idea that what we have done so far resembles anything that was done by the less successful Government in the 1930s is absolute nonsense. The idea that we are going back to the 1930s is also nonsense. The Labour Front Bench has just accepted that what has been proposed by the Chancellor is an essential pre-condition to any lasting success for the benefit of our children.

There are all kinds of other things, but I have no time to go into them. The structural changes that we, like many other Europeans with damaged economies, have got to go in for, and that we are going in for, include: bank regulation; skills training; education reform; and stimulating modern technological industry and businesses in this country. All of those are absolutely essential and include sensible infrastructure spending, which we are sustaining. Unless we get the deficit under control, we have no prospect of getting back to the kind of levels of growth to which we used to aspire. In fact, the debts we are running are rather easier to sustain with interest rates down to a 300 year-low. Once we go back to ordinary levels of interest, all those countries that have failed to tackle their underlying problems of fiscal discipline will find themselves in terrible, terrible trouble. This is a challenge for every western democracy, and it is a difficult message to get across in a democracy. The Greeks may be the latest population in danger of being seduced into not doing difficult things and living on other people’s money. That is very dangerous indeed. The next time that we have another crisis will be difficult because, with the present level of debt, we will have so little in reserve to draw upon to help us through.

The last Labour Government completely failed to foresee what happened, and I think that even now they do not quite understand where they went wrong. They ran a massive surplus during the dotcom bubble, because they stuck to my fiscal figures, and found their tax revenues were inflated for a time. Then, when the next South Sea bubble came around and we had the credit bubble and the credit crunch, they were still—at the top of crazy levels of growth—running a fiscal deficit. They borrowed, but claimed they did not have a deficit. Well, they did not have much of one in 2006, but once the crazy tax revenues from the City collapsed, they were left high and dry, with the full extent of their irresponsibility exposed. They had failed to regulate the mad borrowing and lending in the City of London just as the Americans had failed in Wall Street. It was free money, which their last Chancellor indulged in, and when the bubble burst they were caught.

[Mr George Osborne]

The former Chancellor is making a strong speech. He might remember that the Labour Government increased the trend growth rate—a decision that at the time was in the hands of the Treasury, rather than an independent OBR. That led them to spend more money and run a structural deficit—the highest, according to the IMF—during that period. Now, we have come full circle and the shadow Chancellor, who was an economic adviser at the time, is proposing exactly the same assumption to underlie his economic policy, so that he can spend and borrow more.

[Mr Clarke]

I entirely agree. The shadow Chancellor has done just the same today. In his way of looking at things, the future trend rate of growth will be what he says the future trend rate of growth has to be to justify his plans. I used to envy the Ministers in China, who did not have to worry about a national statistical office: what the Minister said the growth rate was now was what the statisticians told him his growth rate was.

[Ed Balls]

Will the right hon. and learned Gentleman give way?

[Mr Clarke]

I really do not have time, but the right hon. Gentleman gave way a lot to me, so I will give way to him.

[Ed Balls]

I am sure the former Chancellor knows that decisions on the trend rate of growth in previous Parliaments were not made by the Treasury; they were audited by the National Audit Office. They are now a matter for the OBR, not for the Treasury, but he agrees with me that that is what we should do.

[Mr Clarke]

A lot of people did not—I did not—foresee the full extent of the catastrophic crash that resulted from the combination of problems in both the regulation of banks and the credit markets and in fiscal policy that occurred under what, with hindsight, were the most irresponsible Government we have had since the war. I will not mention the invasion of Iraq—another matter they presided over.

Everybody has to have their targets and ambitions. My stated target when I was Chancellor was to balance the budget over the cycle, which is really where we are going back to and which I think is essential prudence. I also said we should not spend more than 40% of GDP—Conservatives before me had allowed spending to get above that. The Maastricht criteria were quite useful—the right hon. Member for Kirkcaldy and Cowdenbeath used to agree with them—but we have to have targets, and the new ones, in a more globalised economy, cannot return to where we were. The Chancellor has to respond to events, but I congratulate my right hon. Friend on what he has achieved so far, and what he will achieve if he sticks to the charter.

14:33

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

It is always a great pleasure to follow the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr Clarke), and to see him so loyally supporting the present Chancellor. He does so against all the evidence, because I cannot think of a single target of any significance—apart from on unemployment, which we will come to in a moment—that this Government have achieved from what they set out to do in 2010. I think the shadow Chancellor wanted to set this proposal up—

[Ed Balls]

Chancellor.

[Mr Robinson]

I beg his pardon—the Chancellor, soon to be shadow Chancellor.

It is worth thinking briefly about why we are having this debate at all. Like my right hon. Friend the Member for Morley and Outwood (Ed Balls), I do not often agree with the TaxPayers Alliance, but on this I think the TPA has got it dead right. Mr Jonathan Isaby, the chief executive, says:

“This is a meaningless political gimmick of the most transparent kind, and one that serves only to remind taxpayers”—

of this Government’s failure. We will come to that in a minute, along with what happened under the Labour Government all those years ago. What the Chancellor always fails to mention is what happened on black Friday, when the Prime Minister, no less, was a senior adviser to the Treasury. That was only a few years before the period on which the Chancellor dwells with such delight, thinking it indicative of future events. What he is doing is meaningless.

The TaxPayers Alliance statement continues:

“This…serves only to remind taxpayers how dramatically the Chancellor has missed his own original targets.”

I could not agree more. The TPA says that

“Mr Osborne was right to call this legislative pantomime ‘vacuous’”—

and that is about what it is. Today, the right hon. Gentleman tried to turn this into a political, general election-type of debate—way ahead of the date of course—and to step up the temperature, but, quite simply, it backfired. The shadow Chancellor—and some of the Chancellor’s own Back Benchers—turned the tables on him. Much though the right hon. and learned Member for Rushcliffe, the former Chancellor, might try to make a case for the Government’s policy, the case simply does not stack up.

We will deal with unemployment in a moment, because that is very important. What single major target in the Government’s 2010 plan have they actually met? I know targets or aims—whatever one calls them—are difficult. The bigger the entity one tries to budget for and forecast, the bigger the difficulties get; we all know that. Some are hit and some are missed, but this Chancellor has missed every single target since 2010. Growth—apart from unemployment, which we will come back to—[Interruption.] All right, let us deal with it.

Why is it that, the unemployment target having been hit, tax receipts are so low? It is because all other parts of economic policy have failed and the Chancellor does not want to face up to it. My right hon. Friend the shadow Chancellor gave the figures. Why are tax receipts so below what the Chancellor forecast, despite doing well on employment? It is because we have, despite what he says, a low-skill, low-wage economy. That is why tax receipts are much less than we would expect at this stage in the economic cycle. That is his failure, yet again.

Exports have failed. Growth has failed. The budget deficit has failed. Borrowing has failed. It is staggering: the Chancellor is borrowing £220 billion more than he forecast. He said he would eliminate the deficit, but what has he actually achieved? The deficit is still running at almost £100 billion a year. These are mind-boggling sums and it is a mind-boggling failure by the Chancellor that he has given us the opportunity today to debate. I hope he is regretting it. We are certainly enjoying it.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I agree with much of the hon. Gentleman’s argument, which chimes with my economic critique, but can he explain why this evening Labour Members will be voting with the Tories in favour of the motion and wedding themselves to more Tory austerity?

[Mr Robinson]

I have told the hon. Gentleman exactly why:

“This is a political gimmick of the most transparent kind”.

The Chancellor wants us to fall for his political gimmick. We are voting for it because we are not going to fall into the silly trap that he has tried to lay for us. It is pathetic. He could do much better and has done in the past. Today, he has done very badly and been caught out, and he should regret it.

There is a serious point, to which the right hon. and learned Gentleman the former Chancellor alluded when he talked about the underlying rate of growth of the economy. That has been with us for as long as I have been in the House, and indeed way before, when I was a researcher with the Labour party back in the 1960s. [Interruption.] We are not going there; the Chancellor can relax. The whole ill-fated national plan was based on the idea of upping the underlying rate of growth—the productive rate of growth—of the economy. That is still with us, even now, and this Chancellor has done nothing, but nothing, about it. That is what we are debating today: his failure as Chancellor, not that of any past failure of any previous Government. If he wants to go back, let us go back to his own Prime Minister and the black Friday disaster on which his own Prime Minister advised.

For us, this is about the future. We are fighting the next election and we will fight it on our plans. Why will the Chancellor not have them costed by the OBR? We do not need him to cost them at the Treasury. We have an independent body, which we set up and we supported, as we support the charter motion today. Why will the Chancellor not have our plans vetted? Why is he scared? It is because he knows they will be proven to be well costed, as the Institute for Fiscal Studies has already said.

14:39

[Paul Uppal (Wolverhampton South West) (Con)]

I welcome the proposals today that enshrine into law sustainable public finances and aim for public sector net debt as a percentage of GDP to be falling in 2016-17. The argument today revolves around not whether we need to deal with the deficit but how to deal with it. Within that, we must remember that we live in a global market where capital, companies and people can choose where to live and where to be taxed, something that the Government are acutely aware of and have acted upon.

If we are to continue to reduce the deficit in line with the fiscal rules laid out today, aiming for public sector net debt to be falling in 2016-17, and the current budget to be balanced by 2017-18, we need to ensure that our tax system remains competitive. Tax competition and competitive tax rates need not be viewed as dirty words; they are an end to a stronger economy, higher employment and better public services. The problem is that the Labour party believes in two things: first, that higher taxes, corporate or personal, lead automatically to higher revenues; and, more worryingly, that taxation is not just a tool for raising money, but a punishment to be levied on success.

Instead of trying to tax more and more out of people and businesses already sitting around the table, we should be trying to attract more to the table itself, and subsequently ensure that they pay their taxes to the Treasury. Large multinationals choose where to pay tax. This is not the 1930s, where capital was difficult to relocate, although I secretly think that Opposition Members would like to take us back there.

On Sunday, the Leader of the Opposition said that there would be tax rises under a Labour Government. I hope that Labour will come clean about what tax rises it will impose on Britain. My fear, and, I suspect, the fear among Britain’s businesses, is that its first target will be corporation tax, undoing the hard work that we have done in the past four years and turning away companies that wish to be based here.

[Mrs Anne Main (St Albans) (Con)]

The other tax that my hon. Friend might like to mention is the redistributive mansion tax being proposed to send money north of the border to shore up the Labour party’s support there.

[Paul Uppal]

My hon. Friend makes a valuable point. In the current modern economy we need to encourage success. As Abraham Lincoln always said, no one is given a hand up by others being pushed down.

[Steve McCabe]

In the interests of coming clean, does the hon. Gentleman think that the Chancellor should come clean about VAT this time?

[Paul Uppal]

Everyone who is watching the debate today knows exactly where both parties stand on this. Come the May general election, most people will make a judgment on who has been clean about where we are on the country’s finances and where the future of its finances lie. That is the important thing.

We are starting to see the fruits of the UK’s low corporate tax economy. I read before Christmas that Ferrari is considering moving its headquarters to the UK to escape Italy’s high corporate taxes. Who would ever have envisaged the prancing horse fleeing Italy? That is a strong sign for the UK economy. I would rather companies locate to the UK, essentially importing tax, than threaten to leave, as we saw under the last Labour Government. Just to be clear, competitive taxes do not mean allowing or turning a blind eye to tax avoidance. The Government are tackling that with a target to raise at least £5 billion a year in the next Parliament from tax avoidance and evasion, with all the money used to help to reduce the deficit.

Focusing on corporation tax in this speech starkly illustrates the broader political chasm in the Chamber today and the short-sightedness of the Labour party. The top 100 companies in the UK employ nearly 10% of the UK’s work force and generate nearly a sixth of the tax take. By creating financial stability we have managed to achieve growth while still reining in Government spending, which the Leader of the Opposition said was impossible, then thought was possible, because it was happening in front of him, and apparently now thinks is impossible because we are months away from a general election.

Please do not take my word for it. Writing in The Times today, Paul Johnson, the director of the Institute for Fiscal Studies, says:

“If Labour is spending more—and if it doesn’t raise taxes—it will be borrowing more and, perhaps more important, presiding over a greater burden of debt.

The effect of this might be relatively modest in the short term, but borrowing as much as their rule would allow beyond 2020 would mean national debt about £170 billion higher (in today’s terms) by the end of the 2020s than would be achieved through a balanced budget.”

I would like to highlight one more important matter, and that is the impact that small businesses have on reducing the deficit and lowering the national debt. A competitive tax system does not just help large firms; it allows smaller companies to survive and grow. I am proud that more than a third of the country’s 1.2 million employers—around 450,000 firms—will no longer pay national insurance. This makes a huge difference to them, allowing them to take on more staff, lowering the unemployment rate and lowering welfare payments. I am proud that this has happened under this Government, and that exactly the same would happen again under a future Conservative Government.

14:39

[Stewart Hosie (Dundee East) (SNP)]

I was struck by the shadow Chancellor’s contribution. His criticism of the charter appeared to be that it was not particularly clear when some of the Government’s targets or aims might be met—not an unreasonable criticism, although I was reminded that the last Labour Government used to try to balance the books over the economic cycle and then change the start time of the economic cycle to make the numbers fit. However, that is ancient history.

What is also history is that five years ago this month on 5 January, the then Labour Government debated their Fiscal Responsibility Bill. It set out the framework that they would work within to halve the deficit in a four-year time frame. This Government went further and announced that they would eradicate the entire structural deficit within a single five-year Parliament, and the following year the first charter for budget responsibility was introduced. To meet the provisions of that charter, the Government said that debt would begin to fall as a share of GDP by this year, 2014-15, the current account would be in balance next year, 2015-16, and public sector net borrowing then would be reduced to £20 billion. We know now from the autumn statement, given one month ago, that debt will not now fall as a share of GDP until 2016-17 at the earliest, the current account will not be in the black until the following year, and borrowing in 2015-16 will not be the £20 billion promised, but nearly four times that at £75 billion. The new targets are the essence of the new charter.

The Chancellor and the Government have failed to meet a single one of the targets that they set for themselves. The policy of a fixed-term approach to deficit reduction strangled recovery in the early years of this Parliament, and with £75 billion of cuts and tax rises to come, the inescapable conclusion is that austerity has failed. So today’s measure is less about the purported updating of the charter for budget responsibility and more about providing cover for a failed policy of fixed-term deficit reduction; cover for a plan for further attacks on the welfare budget, which are in the charter; and cover for a plan to balance the books on the back of the poor when public spending goes back to 1930s’ levels.

[Jonathan Edwards]

Is it not the case that we are living in very uncertain times in terms of the global economy? As the right hon. and learned Member for Rushcliffe (Mr Clarke) said, we could have a Greek exit from the eurozone in a matter of weeks, with all the turmoil that would create for the eurozone, and the direct impact that would have on the wider UK economy. With that in mind, would it not be more advisable and wiser to have a more flexible approach to fiscal policy?

[Stewart Hosie]

That is absolutely right. I will answer that question directly. Instead of the provisions in the charter, we should be tackling the deficit reduction and the debt reduction in a different way. It should not be a fixed-term approach; it should be a principles-based approach based on the medium term. It has been proven to work in New Zealand, and I want to refer to the way in which it goes about that. It says that the first principle should be about reducing debt to a prudent level, where the Government of the day specify what is or is not prudent, depending on the circumstances that they face—precisely the point that my hon. Friend made. The second principle should be that once debt is reduced, the Government should maintain a balanced budget over the medium to long term. That would not prevent any Government from implementing the steps they believe are necessary to achieve the long-term objective of having a prudent level of deficit, but it would mean that it would happen, on average, over the medium to long term, rather than arbitrarily specifying one cycle or one Parliament.

The third principle says that the Government should achieve and maintain a level of net worth that provides a buffer against unforeseen future factors. The fourth principle calls on the Government to manage fiscal risks prudently, and the fifth is that the Government must pursue policies consistent with a reasonable degree of predictability about the level and stability of tax rates. That is incredibly important, because the tax system, tax rates and tax certainty, which have not yet been mentioned today, are a vital component of fiscal stability and fiscal responsibility. In the sense that we have seen tax yields reduce, it is all the more important to get that bit right.

[Charlie Elphicke (Dover) (Con)]

The hon. Gentleman talks about fiscal stability and fiscal responsibility, but let me take him to task on the plans the SNP made, based on the price of oil, and what has happened to the price of oil. Does that not show that what the SNP has to say on these matters is not worth listening to?

[Stewart Hosie]

That is a ridiculous argument. If one thinks that those oil revenues, which are most certainly falling, are causing a big hit to the UK tax yield, all the more reason, one would have thought, to allow a degree of flexibility in the economic plan so that the overall strategy of deficit consolidation and debt reduction is achieved, rather than the facile political comment from the hon. Member for Dover (Charlie Elphicke).

Before I move to the second and third criticisms of the plan, on the overall plan for deficit consolidation and our opposition to it being on a fixed-term basis, when the New Zealand finance committee looked at alternative models—rigid, straitjacketed models—it made a number of interesting observations. The committee said that there was no solid theoretical justification for any particular fiscal target to be maintained over a period of time, and that judgments on the appropriate level of fiscal aggregates vary over time and depend on the prevailing economic circumstances. A fixed-term target with a fixed objective cannot do that.

Having looked at other countries, the committee said that their experience of legislated targets suggests that there are substantial risks attached to their use. In particular, rigid adherence can seriously distort decision making and, unless carefully handled, minor variations from target can result in significant but unnecessary damage to credibility. The committee went on to observe, in the context of the inherent inflexibility of a fixed target system, that it

“makes it difficult for fiscal policy to respond appropriately to the inevitable volatility of economic circumstances.”

Given that we have seen, and hon. Members have commented on, the eurozone crisis, the Cyprus banking crisis, the Irish bank bail-out and other issues, to put this country back into a straitjacket of a policy which has failed so far, ignoring the possibility that similar shocks could occur in the near and medium-term future, is silly and wilful. It is most certainly a political dividing line which we will not support.

Apart from its inherent inflexibility, our second criticism of the measure is that it sets in concrete a further attack on welfare budgets. With 22% of Scottish children, 11% of Scottish pensioners and 21% of working age adults in poverty, to launch a further attack on welfare at this time under the guise of amending the charter for budget responsibility is simply wrong. Thirdly, to set out a plan for future discretionary consolidation, on which the charter is predicated, which changes the ratio of cuts to tax rises from 4:1 to 9:1 to try, in effect, to balance the books on the backs of the poor is completely wrong.

We do not believe that anyone genuinely opposed to austerity could support the measure tonight. We do not believe that anyone who is genuinely opposed to the draconian changes to welfare can support this Government tonight. We do not believe that anyone who is opposed to trying to balance the books on the backs of the poor and take public spending levels back to those of the 1930s can support this Government tonight. My right hon. and hon. Friends and I will oppose the measure tonight.

14:53

[Mr David Ruffley (Bury St Edmunds) (Con)]

I am rather excited by this debate on fiscal responsibility. This is not to say that I am an anorak who should get out more. My happiness resides more in the fact that those who support the motion will be committing to balanced budget economics. Anyone voting for the motion will not just be saying that they believe in balanced budgets; they will be voting for that.

In the new world of transparency the public will be watching who votes for what, and they will rightly hold everyone who votes for the motion to account for the two propositions contained in the charter. The first is the fiscal mandate. As the Chancellor spelled out—there is no confusion—we will balance the current budget by 2017-18. The second is the supplementary debt target, which means falling debt as a share of GDP by 2016-17.

How will we do this? The Conservatives are clear. It means that for the first full two years of the Parliament we will continue the public spending reductions, so that total managed expenditure will fall at roughly the rate that it has been falling in this Parliament—about 1% overall in real terms. That is equivalent to about an extra cut of £1 in every £100 being found in the next forecast period. Any business in my constituency asked to find a cut of £1 out of £100 would do it standing on its head, especially if it knew that that was vital to the survival of the business.

Specifically, we know that £30 billion of fiscal consolidation is required to deliver the fiscal mandate. So Members who vote for the motion tonight are absolutely committed to finding £30 billion. The Conservative party thinks it can be done as follows: £13 billion of that £30 billion by cuts to departmental expenditure limits, excluding the protected budgets for schools, the Department for International Development and health, and a further £12 billion from annually managed expenditure—the welfare budget. I shall not speculate, as I am not in the Government, but we might be looking to find those £12 billion-worth of cuts by, yes, restricting child benefit, maybe to two children; yes, perhaps restricting the top-heavy housing benefit budget and consider saying that those under 21 or under 25 should have their housing benefit curtailed. Finally—one of the biggest exemplifications of social justice that the current Treasury has come up with—yes, tough anti-avoidance rules. The Labour party in 13 years never dared introduce a general anti-avoidance rule. We are saying that those who have the broadest backs cannot be allowed aggressively to exploit tax loopholes. That will find £5 billion.

Our numbers add up. After those first full two years of consolidation, we would have flat real-terms settlements—flat, not further cuts. The result of all this, as we know, is that we would run an overall surplus, not just a surplus in the third year on current budget. Why is that important? Why did the Chancellor say it? The Chancellor said it because he understands that we have to start paying down debt. If we do not pay down debt, it will mean further tax increases and inevitably spending cuts further down the road for the next generation.

This is an ethical proposition, not an ideological one, as the Chief Secretary—I hate to say it—has branded these Conservative plans, and the Labour party as well. We need not waste any time on the Orwellian invocations of “The Road to Wigan Pier”. That is childish point-scoring. This is not ideology. It is about paying down debt.

[Steve Baker (Wycombe) (Con)]

In the Red Book there is a chart showing debt interest in 2015-16 overtaking the education budget. Does my hon. Friend agree that there is an extremely practical problem of making sure that debt interest does not consume all the tax revenue that we might otherwise spend on services?

[Mr Ruffley]

My hon. Friend makes a trenchant point. Do we want burgeoning debt interest under the policies of the Opposition parties to eat away at front-line services? The money, as we know, has to come from somewhere.

I am not clear where the major Opposition party stands on this. The £30 billion is what anyone who votes for the motion today must account for. It was not clear whether the Leader of the Opposition acknowledged that figure on Sunday, but he made a stab at how the Labour party might fiscally consolidate. There was the reintroduction of the 50p tax rate for high earners; we know that that raises less than £1 billion. There has been reference today to restricting pensioner benefits to very well-off pensioners; we know that that raises less than £0.5 billion. Labour Members are not even remotely in the ballpark in coming up with a £30 billion consolidation in anything they have said today inside or outside the House.

This leaves us with two possibilities in relation to Labour Members who are going to vote for this proposition today. The first is that they are voting for it in the full knowledge that they have no intention of balancing the current budget in year 3. I am a kind and generous individual, and I do not think they would do anything as dishonourable as to vote for something they had no intention of honouring. They are not going to get the money from spending cuts most of which they admit they will not pursue, and they will not guarantee our spending reductions. That leaves us, I am afraid, to conclude that the iron law of modern British politics still obtains: dogs bark, cats miaow, and Labour puts up taxes.

15:00

[Barry Gardiner (Brent North) (Lab)]

The Chancellor said that he was not going to balance the budget on the backs of the poor. Yet since 2010 there have been 24 tax rises that have meant that ordinary families are paying £450 a year more in VAT. Households will be £974 a year worse off by the time of the next general election because of tax and benefit changes alone since 2010. The Chancellor cut the 50p rate to 45p, which gave an extra £3 billion not to the poorest but to the richest 1% in the country, meaning that someone earning £1 million will receive a tax cut of over £42,000 a year. The Chancellor has opposed a mansion tax to improve the NHS, but he has hit the poorest and the most vulnerable in our society with the bedroom tax. Not on the backs of the poor? I think not. All in this together? I think not.

In fact, the Conservatives have pencilled in spending cuts to public services in the next period that are 30% greater than those they have already introduced. The hon. Member for Wolverhampton South West (Paul Uppal) said that Labour wanted to take the country back to the 1930s. He should check the figures. In fact, it is his own party that will see the level of public spending as a proportion of GDP reduced precisely to the level it last was during the great depression, the way out of which was not to cut more taxes but to make sure that the economy grew. The Government have now announced £7 billion of unfunded tax cuts. We would like all our parties’ manifesto commitments to be scrutinised by the Office for Budget Responsibility, but the Chancellor has set his face against that. That is hardly surprising, because his failure is significant.

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

Will my hon. Friend give way on that point?

[Barry Gardiner]

I am sorry, but I cannot because of the time limit. I am conscious that other Members want to speak.

In 2010, the Prime Minister told the CBI:

“In five years’ time, we will have balanced the books.”

Some might say, “Surely that was before the general election—before he saw the books”, but it was not: it was on 25 October of that year, well after the general election. The Conservatives have broken that promise, and borrowing in 2015 is set to be over £75 billion. The Chancellor is now borrowing £200 billion more than was planned in 2010.

This failure to deliver on the central goal is fundamentally linked to the Government’s failure to tackle the cost of living crisis. Wages continue to stagnate for very many workers. Too many of the jobs that are being created are low paid and insecure; they are not jobs in high-paid, high-productivity sectors. As a result, our public finances have been weakened. Low and stagnant pay means that tax receipts are £68 billion lower, while receipts from national insurance contributions are £27.3 billion lower across the same period. Low pay combines with higher housing costs and failure to deliver benefit reform to drive social security costs higher. This Government are now set to spend £25 billion more on social security than they planned five years ago. The Government who came in to reform social security because it cost too much are spending £25 billion more than they said they would.

In the 2014 Budget statement, the Chancellor said that he wanted a vote on an absolute surplus. The country understands that there are few, but significant, levers that one can use to sort out the deficit: one can vary spending, vary taxes, and vary borrowing. However, varying spending and taxes can vary the level of tax receipts the Treasury gets in, and that level determines how much one needs to borrow to balance the books. The Chancellor said that

“in this Budget all decisions are paid for. Taxes are lower but so, too, is spending”.—[Official Report, 19 March 2014; Vol. 577, c. 784.]

He should have gone on to say: “But so too are tax receipts, and social security spending is up.”

The Government have failed on their fiscal mandate, but we should look at not just the Red Book but the green book, because growth cannot be built by eroding our natural environment—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Time is up. I am reducing the time limit to five minutes per Back Bencher with effect from the next speaker.

15:07

[Ben Gummer (Ipswich) (Con)]

I am absolutely delighted that this motion is being put before the House today, not just for the reasons I will come to about the direction of Government policy, but because since I came to this place I have advocated stronger fiscal rules such as those which this charter seeks to introduce. This is part of a direction of travel that I hope will find us in a position whereby we can introduce proper legislation on fiscal rules in much the same way as the Swedish did some 15 years ago.

The hon. Member for Dundee East (Stewart Hosie), who is no longer in his seat, made a good analysis of the problems with fiscal rules, and I completely concur. If they are not drawn up properly, they can cause more problems than they help solve, not least because they allow some parties and politicians to pretend that they are doing things that are prudent when in fact they are not doing so. However, in a few circumstances they have been successful. The important thing about the rules that are being developed by the Treasury, the Chief Secretary and the Chancellor is that they are building a consistent basis on which we can create a decent fiscal framework for the future.

The history of fiscal rules in this country is not good. That is because of the mendacity of the golden rules dreamt up by the former Prime Minister and Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), and by his adviser at the time, now the shadow Chancellor. Those rules were mendacious because they pretended to the British public that prudence was being pursued, when in fact it was not. The right hon. Member for Kirkcaldy and Cowdenbeath spoke all the time of current budget balances, yet from 2002 onwards, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) pointed out so eloquently, a large and increasing deficit was being built up. What is so troubling about this debate is that it has proved that the right hon. Gentleman’s adviser at the time is now planning to do precisely the same thing again—to imagine a trend rate that is informed by his own desires and not by actuality, and informed by a mode of economics that suggests that if one somehow creates different living standards through the force of Government, one can create the economic weather that one wishes to see. That argument is pursued only in Venezuela and nowhere else in any developed country. It fails because it goes against all the economic laws that have been found to be consistent through this crisis and which proved the previous economic policy so very wrong.

This debate is so important—fiscal rules matter, even if they are not perfect—because it forces us to have this discussion. Here I differ, which I rarely do, from my hon. Friend the Member for Bury St Edmunds (Mr Ruffley). He is a kind and generous soul, but on this I am not. I am afraid that the Opposition are introducing us not to some different policy agenda, but to a fraud. I do not think that they have any intention of consolidating the fiscal situation of this nation if they come to power. They are not promising to introduce a real surplus by the end of the next Parliament; they speak only of the current budget, and that is why we failed so magnificently last time. We were left high and dry when the water went out, leaving us in a position where we had no ability to fight the greatest threat to our economy since the second world war.

This is an important day, because it reaffirms the Government’s commitment to securing the future of the economy for our communities and our nations and because it exposes the fraud being put to the British people by the Opposition in advance of the next election. We can see today that the British people have a clear choice between chaos and competence. I am glad that it is such a clear choice that even the Opposition in their heart of hearts know they have to vote with the Government and with competence.

15:12

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

Her Majesty’s Opposition bear a heavy responsibility, because they set the dividing line in this debate. They chose to attack the coalition Government for cutting too far, too fast and to set up the Chancellor as if he were the author of austerity. The reality is four years—it is coming up to five years—of fiscal incontinence and a borrowing binge greater than any this country has seen in peacetime. In the run-up to the last election, a number of Conservative voices drew attention to the Labour Government having borrowed in three or four years more than the country had borrowed in the previous 300. Since then, however, the coalition Government have borrowed even more.

Both Labour and the Conservatives seek to reduce our deficit with at least one hand tied behind their back. Their excuse is crisis in the eurozone, yet they failed to explain, despite the claims, particularly from Conservative Members, that the economy is supposedly doing so well, why we are borrowing so much. Why are we borrowing so much more than France, Italy, Spain and Greece? The answer is that the Government have failed to keep their promise to deal with the deficit, let alone to pay down our debts. They have tied their hands behind their back in the way that every other party in the Chamber has, except my own. There is a consensus commitment across the House—it is not in the country and it is not shared by my party—to spend between £10 billion and £20 billion each year on a budget contribution to the European Union, to spend a sum rising to £13 billion on a net transfer of overseas aid, and to spend a sum rising from £2.3 billion in 2012 to £9.8 billion in 2020, partly classified as spending, through the levy control framework. There is also the vow the party leaders made in Scotland to carry on the commitment to the Barnett formula for as far as the eye can see. With those spending commitments, the Government are enormously handicapped in reducing the deficit.

[Guy Opperman]

Given his policy on Europe, what would the hon. Gentleman say to my farmers in Northumberland? Is it his proposal that on withdrawal from Europe, there will be a reduction in support to the farmers?

[Mark Reckless]

The common agricultural policy operates with such fantastical inefficiency that there is enormous scope for treating farmers better while spending less money. The problem is that the Government and the country are spending money that we do not have. The problem is not just the level of the commitments I described, which my party does not endorse and would make savings from, but that the spending has been allocated on the basis of forecasts by the Office for Budget Responsibility. When this Parliament started, the OBR was essentially one man: Professor Sir Alan Budd. Instead of relying on the electoral mandate and authority of the Government—or the institutional ability of the Treasury, as the right hon. and learned Member for Rushcliffe (Mr Clarke) did—the Chancellor based his whole economic and fiscal strategy on the forecast of one man, Professor Sir Alan Budd.

The right hon. and learned Gentleman rightly said that GDP evolved in a way that was worse than almost anyone predicted, but he did not say that the OBR’s forecast was far more optimistic than that of most economists at the time. That forecast was made even more optimistic in October 2010, and we are paying the price for that. The Chancellor has come to realise that he needs to restrict benefits growth to 1% a year for at least two years—it is perhaps now three years or more—in the same way that public sector pay has been restricted, but back in 2010, 2011 and 2012, he raised benefits by inflation when at times it was more than 5% and wage growth was only 2%.

It is those fiscal commitments—to the EU, to overseas aid, to energy and to Scotland—combined with putting so much trust in the one individual and the three men and a dog in the OBR and its approach to economic forecasting that has led the country into this terrible fiscal position. The OBR forecasts that the fiscal position will go back into balance, with more than £20 billion of surplus in 2019-20, but that reduction in Government borrowing must be predicated on a combination of an increase in private sector borrowing and a reduction in the current account deficit.

The OBR tells us that there will be an explosion in household debt and at the same time a big fall in the current account deficit. It made that forecast on a risible analysis. It looks at what has happened to our investment balance. For 300 years, the country has earned its way through a surplus on investment income. That has disappeared because of the combination of the fiscal incontinence of both the Labour party and the Conservative party, which have borrowed such enormous amounts of money, and what the banking crisis has done to impair the quality and quantity of our net asset base. The OBR simply assumes that that investment income will magically come back. If it does not, things will be a lot worse. If we are to carry on giving 0.7% of GDP to overseas aid, £10 billion to £20 billion to the EU—perhaps 2% net of Government transfers—then unless the Government run a surplus to pay that, the private sector has to borrow more. These two parties have left us in a fiscal mess.

15:18

[Ian Swales (Redcar) (LD)]

I rise to support the Chancellor and in particular to draw attention to the second line of objective 3.1, which talks about “intergenerational fairness”. That is incredibly important when we discuss these issues. There is a moral aspect to balancing the books and not relying on our children and our grandchildren to pay for the deficit. I would find it particularly galling to draw a pension that my five grandchildren—they are still at school—were paying for. We have a moral duty to get a grip on this issue and ensure that we get things balanced. In its draft manifesto, my party mentions 2017-18 as the year we get the current budget into balance, and I expect that to be the platform on which we fight the election.

When we are talking about moral issues, it is also perfectly valid to talk about investment for my children and grandchildren from which they will benefit. I do not see any problem investing in the schools, roads, universities and so on that they will use, particularly when those assets are productive and help the infrastructure and economy of the country. Balancing the current budget is the right way to go, but we also need to address paying down the debt in the years after 2017-18.

The document includes extensive clauses on the welfare cap, which was widely supported in this House. I am not surprised that it was supported by the Labour party since, to quote the shadow Work and Pensions Secretary, it is going to be tougher on welfare than the Tories. I would love to hear how it is going to be tougher on welfare, because it is not selling that to the electorate. Having said that, I note that paragraphs 3.26 and 3.28 allow a future Government to change the amount of the welfare cap and items included in it simply through a vote in this House, which I guess means that it could well change in the future.

The role of the OBR features heavily in the document and the Liberal Democrats have been the only party in the past few elections to present a balanced budget to the country going into a general election. I am proud of that, but I do not believe that the OBR should be the organisation to certify and test that. It has a particular job to do and a level of impartiality that means that it should not get involved in party politics. The Institute for Fiscal Studies is already more than capable of doing that. It has been heavily quoted in today’s debate and already receives more than half its funds from the public purse, so we should rely on it to sense check the various budgets. It is in the interests of the IFS to maintain its independence in doing that.

One item not mentioned in the charter that I would like to see a lot more of is the whole of Government accounts. There is a move behind the scenes in Government to start doing proper accountancy in the public sector. As an accountant, I am stunned by how the Government account for their affairs. For example, the Government have accounted for the sale of 3G licences in a similar way to that which got the Tesco management into huge trouble. We do not account properly for our pensions liabilities and the way we do our accounting has led to the huge scandal of the sleight of hand in the private finance initiative that has cost taxpayers dearly. I hope that in future charter updates the whole of Government accounts will be a key plank of the Government’s strategy for fiscal responsibility.

We are living in difficult times. We had a huge economic crash and it is amazing that the people who crashed the economy are now seriously suggesting that they should have the keys back. We had chronic neglect of the north of England and of manufacturing in particular under the previous Government while they added 1 million people to the public sector payroll. All that was disastrous for my constituency of Redcar. The Liberal Democrats have a clear plan. We want to cut less than the Tory party and borrow less than the Labour party. We think that that is the right way forward to a stronger economy and a fairer society.

15:23

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

Nothing says more about why we need change in 16 weeks’ time than the Government’s cynical attempt in this debate to divide Parliament and the country by tactical tricks and wheezes as a cover for their failure on the deficit and their inaction on the other big challenges that face our country: wages, productivity, inequality and banking reform.

This is a debate that the Chancellor has been plotting for months as his election battleground, but just last week we saw his attack on the fiscal policies of the Labour party collapse within hours. In 2010, he pledged to eliminate the deficit within five years, but now, having borrowed £200 billion more than he planned, he presents a watered-down charter for budget responsibility in a desperate attempt to ensnare the Opposition on tactics. This is a Chancellor who makes billions of pounds of unfunded tax commitments but refuses to allow the impartial OBR to cost all parties’ election spending promises. Today, his guile has deserted him and his economic failure has rebounded on him. From iron Chancellor to boomerang Chancellor in just five years: Britain surely deserves better than this.

When the OBR slashes its forecasts for receipts from income tax and national insurance contributions as comprehensively as it did in December, we have the proof that the Government are taking the country down the wrong path. In December, the OBR downgraded its forecasts for income tax receipts and national insurance contribution receipts for this and the next four fiscal years by a staggering £39 billion and £53 billion respectively, compared with its forecasts from March 2014. The bulk of that shift was down to much lower than predicted wage growth. That shows that our economy under this Government is simply not generating the scale and number of higher wage, higher skilled jobs that modern Britain needs to succeed in the world. That failure on skills and prosperity is led by a Chancellor who has been the worst for the nation’s pay packets since the 1870s.

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

When we look at the general trend over the past five years, we can see that the Chancellor thought that the problem was confined to Britain. He has consistently made excuses every time his targets have not been met because the Tories cannot face up to the fact that the crisis started internationally, particularly in America, but unless they face up to that, they will never get the economy right. They will tinker with it, but they will not get it right and as a consequence the cost of living has gone up and wage values have gone down by 6%.

[Mr Bain]

My hon. Friend makes an incredibly powerful point. The historic weakness of wage growth under this Government, the disastrous levels of productivity, the growth of insecure work, the failure of the Government to meet their targets on export-led growth and the fact this is a country in which the number of apprenticeships fell, rather than rose, in 2013-14 are not factors that any Chancellor who wants to get the deficit down should ignore. Tackling them will be central to any credible plan to get our deficit down and to move forward the living standards of millions of ordinary people in this country.

The reason for this Government’s failure on wages and tax receipts was explained to me by a constituent I met on her doorstep in Ruchazie last Saturday morning. It is important that the voices and experiences of ordinary people are brought into this debate. Her husband works as a security guard and earns barely above the minimum wage. He does not earn a living wage. She told me that life is tougher for her family than it was five years ago. They are working harder, but they have less to show for it. They do the right thing and get up early and go to work, but they have never felt so insecure. They keep going, but they speak for millions of people in this country who have suffered the same fate. In just 16 weeks, they will have the opportunity for change.

Like the Prime Minister chickening out of televised debates, the Chancellor is ducking out of an independent evaluation of our spending proposals because, like the Prime Minister, he knows that he would be the loser. All the Government have left are weeks of cynical tactics rather than a vision of hope for our country, but political stunts are no substitute for a national strategy for increasing our nation’s productivity, increasing the minimum wage over the next few years, restoring the promise of our young people with a credible plan for skills and rising apprenticeships, and making a plan for a fairer economy with rising living standards. If the Government find that task beyond them, they should get ready to move aside because others are ready to offer hope in place of fear in just 16 weeks’ time.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. We are under quite a lot of time pressure now. In order to make sure that every Member who wants to speak gets in, I am taking the time limit down to four minutes for each Back-Bench contribution. I think we will be able to make sure that everybody gets in on that basis. The time limit is now four minutes and I warned Steve Baker about that beforehand.

15:29

[Steve Baker (Wycombe) (Con)]

This has been a fascinating debate in which we have learned a great deal. The Government have been accused variously of making savage cuts and of making no cuts at all. We have learned that the Labour party is a party of fiscal discipline; indeed, the shadow Chancellor could not have been any clearer that he intends to balance the books and cut the deficit in every year. I think, therefore, that something that has happened in Greece is beginning to happen here. As the mainstream left-wing party shows its fiscal credentials, talks tough and prepares to fight the election, it creates a hole on the left. Who fills that hole? The hard-left parties: the parties of nationalism and the green parties—parties that live in a fantasy world where it is possible to keep on borrowing and taxing and where the rich will pay. We have heard all that nonsense before. It is not too much to say, as my hon. Friend the Member for Ipswich (Ben Gummer) did, that down that path lies a situation similar to that in Venezuela.

The hon. Member for Rochester and Strood (Mark Reckless) suggested that we have not done anything like enough. Of course, not that long ago he was on the Conservative Benches, strongly supporting the Government.

We ought to consider what would happen if there was a change of Government. The Labour party would find that there was no low-hanging fruit. Labour would not cancel HS2, I think we can rely on it not to scrap the international aid budget, and it would not leave the European Union. Labour has suggested that it was reckless of us to protect the NHS, so perhaps it would cut the NHS. It might reduce the number of nuclear submarines in our deterrent. It would find that it is extremely difficult to cut spending.

There are, of course, three big taxes: income tax, national insurance and VAT. No one should want to put up VAT, because it is too high already.

[Graeme Morrice (Livingston) (Lab)]

You did!

[Steve Baker]

I am well aware of that, but it was necessary in the context of the hideous mess left by the hon. Gentleman’s party. It is always the same and this is the essence of the problem: there is no kindness whatsoever in making to those in need attractive promises that subsequently cannot be kept. That is not kind; it is cruel.

[Mark Garnier (Wyre Forest) (Con)]

My hon. Friend is making a powerful speech. Does he agree that the chaos that could be brought about by a lack of fiscal discipline would result in huge uncertainty for public sector workers, who will not be able to rely on their jobs if balanced books are not maintained, because they will lose them? More importantly, for the thousands—possibly millions—of households across the country who were encouraged to pick up an extra £1 trillion-worth of household debt in the Brown bubble in the lead-up to the financial crisis, the uncertainty of unbalanced books could result in much higher interest rates and imported inflation as a result of reduced currency. An enormous amount of pressure would be put on those households as a result of chaos through ill-discipline.

[Steve Baker]

My hon. Friend is, of course, right. He and I sit on the Treasury Committee and we have heard from the Debt Management Office about the factors propping up the current level of borrowing. Not only has borrowing been back-stopped by the Bank of England, but bond market traders are aware of the Chancellor’s and the Government’s intention to balance the books, have confidence in it and, therefore, will keep lending to us. The situation, however, is precarious and the Labour party would put it in danger.

VAT cannot really go up. If it went up further, it would hit the poorest hardest and that would be wrong. On income tax, perhaps Labour would reduce the personal allowance. The truth is that the top 1% already pay a quarter of income tax. How much further can we go? My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) said that the 50p rate was pointless, I think—I will have to check whether that is what he said, but it is pointless. It is an act of spite to pretend that the rich will pay through their income tax; all they will do is adjust their behaviour. We put up capital gains tax and the revenues from it went down. My right hon. Friend the Member for Wokingham (Mr Redwood) has explained that in detail on his blog.

The truth is that the evidence shows that in this country there is a hard limit to how much the public will pay in taxation. Depending on how we measure GDP, it is somewhere between 35% and 40% of GDP. If we are committed to balancing the books, we have to take overall Government spending down to the level that people will pay in tax, and there is a historical limit.

Labour Members have been rather hysterical about the Government consumption chart, which shows us going back to the 1930s. This is about balancing the books. I believe that Labour Members want to put up capital spending, and debt interest is already forecast to overtake education spending. There is a really tough problem here. The truth is that hysterics on either side of the argument will not do. For example, wealth taxes will not work. Opposition Members seem to think we will get the rich to pay, but Denis Healey said of a wealth tax:

“I found it impossible to draft one which would yield enough revenue to be worth the administrative cost and political hassle.”

The truth is that there is very little chance of getting out of the mess we are in without taking extremely difficult decisions. Unlike turning around a commercial company, we cannot cut to the bone once and then build back up; reducing the deficit has to be taken gently, and we have done it at an appropriate pace. The Chancellor has the right plan, and I shall certainly back him tonight.

15:34

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

I welcome the motion, which is another step on the path to long-term responsibility in Government fiscal policy and, indeed, debt management. It is useful to look at the position that this Government inherited to see why the charter for budget responsibility is absolutely necessary.

Before the Government came into office, the deficit was 10.2% of GDP, the highest in the EU and one of the very highest in the developed world. The independent Office for Budget Responsibility expects the deficit to be reduced by half this year: it will finish at 5% of GDP, and then fall to 4% of GDP next year. The Government have achieved that by reining in public spending and creating the conditions in which our GDP growth could outstrip that in virtually every other country in the developed world.

All that was done with policies that, in the overwhelming majority of cases, were opposed by the Labour party. It has opposed virtually every one of our necessary spending reductions. At the same time, Labour doom-mongers predicted mass unemployment and often repeated their mantra that we were going too far, too fast on deficit reduction. They sound like a nervous passenger in the back seat of a car, which is a useful analogy because I believe that Labour Members are completely unfit to be given the car keys, given that this Government have only just got the economic wheels back on the car after the last time they took it out for a joyride when they were in government.

Let us again remind ourselves of where we were in 2010, when Government spending represented almost 50% of GDP, which is a completely and totally unsustainable level.

[Margot James (Stourbridge) (Con)]

Does my hon. Friend recall that the previous Government also presided over a record increase in public spending, which was 50% higher in 2010 than it was 10 years earlier?

[Andrew Bridgen]

Yes, of course. As the previous Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), had ended boom and bust, the whole country embarked on a Government-inspired orgy of credit, safe in the knowledge that there would be no day of reckoning, but such a day came in 2008, as we all recall; that is history.

The Labour party opposed our reductions in public sector work force numbers. Rather than those people returning to the productive part of the economy—the private sector—they would have stayed in the public sector and the deficit would have grown even further. In fact, five private sector jobs have been created for every one of those that had to be lost in the public sector. That tells us all we need to know about the Labour party’s view of deficit reduction.

Let us consider the announcements at the Labour party conference. The shadow Chancellor announced paltry measures that would save only £400 million, and he failed to rein in shadow Ministers who promised an extra £20 billion of spending. As we all recall, the Leader of the Opposition famously forgot even to mention the deficit—he did not recall it—in his conference speech, which shows where it ranks on his list of priorities for the country.

The truth is that Labour has not learned the lessons of the past. It still believes that it can tax and spend its way to prosperity. We know that the Leader of the Opposition admires the economic model currently pursued by President Hollande in France, which is delivering double-digit unemployment and anaemic rates of economic growth.

There is much for my constituents to fear from a Labour Government. North West Leicestershire is delivering one of the highest growth rates outside London and the south-east, thanks to a strong private sector. As with the national economy under this Government, the economy of my constituency has been rebalanced and strengthened. That has resulted in a 60% fall in unemployment and a 70% fall in youth unemployment since 2010, meaning that hundreds of extra people are in work, paying taxes and looking after their families, without Government support.

In conclusion, it is essential that we continue to reduce our deficit. We must have a plan to ensure that public sector net debt continues to fall consistently as a percentage of GDP. By contrast, the Opposition clearly intend to run deficits indefinitely for our children to pay for. They have not learned the lessons of the past, and their plan is for more borrowing, more taxes and more debt. That will lead to higher interest rate payments, meaning less money for schools, hospitals and infrastructure, as well as lower economic growth. By looking across the channel to France, we can see where the socialist economic policies of the Labour party will lead our country. Labour’s plan B always stood for bankruptcy. That shows how essential it is that we win the next election, stick with our long-term economic plan to deal with the deficit, and keep on the road to economic recovery and prosperity.

15:40

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

When I was elected, one of my first actions was to visit local schools because I felt that I should do my bit to pass on our proud British democratic tradition. Far from finding those schools filled with apathy and ignorance, I found classrooms filled with young people who were alive with anger and who believed, as the hon. Member for Redcar (Ian Swales) said, that their futures had been sold down the river by fiscally irresponsible government. At that point it was hard to reassure them. Fiscal tightening and public sector reforms are difficult to sell to young people who are making decisions about GCSEs, apprenticeships and UCAS applications. They felt that they were bearing the brunt of economically incompetent decisions in which they had no say. Today when I visit the very same schools, I can tell pupils of a falling deficit and record employment. Where they live, youth unemployment has fallen by 76%, more than 3,000 new businesses have started up, and 2,240 new apprentices have started since 2010.

[Mr John Redwood (Wokingham) (Con)]

Does my hon. Friend remember Labour’s gloomy predictions that our economic policies would deliver mass and rising unemployment? Instead, they have delivered record levels of new jobs for young people in her constituency.

[Nicola Blackwood]

I do indeed. I can also tell those young people that we are investing in their future through the Oxfordshire city deal and growth deal—not through centrally mandated planning committees, but through universities, local further education colleges, and future employers—and that local authorities of all stripes are working together to develop our own long-term local economic plan. We are targeting that funding exactly where it will stimulate growth and jobs—infrastructure, skills training, local business support, and urgently needed housing and flood defences. That twin message of more jobs and growth alongside targeted local investment is possible only because of the essential precondition mentioned by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke). Incredibly difficult decisions on spending cuts across Government have been made with one end in sight: reducing our deficit while reforming our public services and protecting front-line services. That is why I support the motion.

If we do not commit to continuing along that path and maintaining fiscal consolidation and the public sector reforms necessary to bring our public finances back to health, and to boosting growth and wages in a sustainable way, rather than the chaotic manner outlined by the shadow Chancellor, our economic recovery will falter and we will lose the hard-won gains we have already made. Already, thanks to Labour’s billions of pounds of undisclosed tax rises and unfunded spending commitments, the single biggest risk factor facing markets is political instability, as economists consider the chaotic consequences of a Labour Government with the shadow Chancellor at the helm once again, free to borrow and tax us back into recession and rising unemployment. I for one am not prepared to go back to those schools and explain how we got halfway through the work of restoring our national finances, only to fail to complete the job.

15:43

[Guy Opperman (Hexham) (Con)]

I support the charter for budget responsibility. I think it is a good thing and a vital part of the long-term economic plan. For four and a half years we have been faced with a Labour Opposition who have opposed every single budget reduction, and I have no faith in Labour choosing fiscal discipline in future years. As various Members have eloquently explained, the Labour party is effectively France in all but name. It wishes to have a socialist Government with higher taxes, and all the financial and economic consequences that that would bring.

This coalition Government have turned around manufacturing—we have seen tremendous increases in manufacturing, particularly in the north-east. We have infrastructure support, city deals, regional devolution on a scale not seen before, support for apprenticeships, fuel duty frozen, increases to the fairer funding formula on education, and reductions in unemployment in every constituency across the north-east, including by 50% in my constituency. We should be proud of that genuinely good record.

The consequences need to be addressed, too. The shadow Chancellor, as usual, did not answer my question. I put it to him that the north-east has the fastest rate of growth of private sector business in the autumn quarter and the highest growth in the value of exports, and it is the No. 1 exporter, with a positive balance of payments.

[Gordon Birtwistle (Burnley) (LD)]

My hon. Friend mentions manufacturing. Has he heard anything from the Opposition about how they intend to expand manufacturing? He will remember that they managed to reduce it from 22% of GDP to 11%. Has he heard anything about how they plan to reverse that trend, if they come to power?

[Guy Opperman]

Absolutely nothing whatever. My hon. Friend and I are leading lights in the all-party apprenticeships group, which has seen fantastic work. I should probably make a declaration that I am the first MP to hire, train and then retain an apprentice as an office manager—not as an MP, I hasten to add—because she was doing a fantastic job.

On what the Opposition intend to do, we have to address the deficit. The Chancellor eloquently put it that the Leader of the Opposition is practising Basil Fawlty politics by not mentioning the deficit at every opportunity. We also have to look at fiscal consolidation. We all heard what the shadow Chancellor said today, but what did the Leader of the Opposition say only on Sunday on “The Andrew Marr Show”? He said that

“if we…cut our way to getting rid of this deficit, it won’t work”.

So there goes fiscal tightening in any way whatever. To the clarification put to him that

“that requires a £30 billion fiscal tightening”,

he replied, “I don’t accept that.” Whatever the Opposition say today, the reality will always be that the Labour party will introduce greater taxes and greater borrowing, and greater difficulties for our children.

On attempts to address the deficit, other Members have made the point, including my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), that raising the tax rate to 50% will not increase the tax take by any margin and will actually decrease investment. On the minimum wage, tax credits from the coalition have already addressed that in a very successful form and we intend to raise it. I heard on the BBC “Daily Politics” today the hon. Member for Nottingham East (Chris Leslie) proposing that his plan for addressing the deficit was an increase in gun licences. That may be laudable, I do not know, and I am sure he has fiscally costed this matter in great detail, but if that is his plan to address the entirety of the deficit, we really are in more trouble than we thought.

We were indeed fortunate to hear from the hon. Member for Rochester and Strood (Mark Reckless). It is always a pleasure to comment on his speech. I will not cast aspersions on his honour, but I will attack his memory and grasp of economics. He supported the coalition as we did the tough work from 2010.

[Steve Baker]

Will my hon. Friend give way?

[Guy Opperman]

I will not. I am so sorry, but I have zero time. The hon. Gentleman supported us then, but he does not support us now.

15:47

[David Rutley (Macclesfield) (Con)]

I am grateful for the opportunity to participate in this debate, which is vital. It goes to the heart of the views of this Government and the next Government on fiscal policy. It is about much more, however. It is about the job prospects of people in Macclesfield and the north-west, and millions of people across the country. It is about the prospects of young people getting on to the property ladder. It is about the financial future and how we secure it for people who are planning for retirement or are already in retirement. It also deals with the issue, which many Members have touched on, of who will be tackling the mountain of debt we have faced since the recession. Are we going to pass the buck to the next generation, or is this generation going to do the right thing and tackle the debt burden in the years ahead?

We want to see action now and continue to see public finances getting back under control. The charter for budget responsibility will help the country to achieve that ambition. I support the Government’s aims to see debt fall as a share of GDP by 2016-17, and to return the cyclically adjusted current budget to balance by 2017-18. Those objectives do not, I admit, roll off the tongue, but the impact of turning the deficit into surplus and reducing the burden of debt is vital to bringing our country’s public finances back under control. That is where they need to be. Furthermore, the charter will help people decide which party is serious about getting our public finances under control. There will be a clear choice for voters on 7 May. There is only one party serious about tackling the deficit, getting our house in order and delivering the sustainable economic growth that is so important, and that is the Conservative party.

[Mr Redwood]

Did my hon. Friend hear the shadow Chancellor make it clear that not only does Labour not think that the current debt is excessive, but it would carry on increasing the debt every year of the next Parliament if it was leading it?

[David Rutley]

It always does. It is as if there is a drug that Labour is addicted to called “debt”; they cannot get away from it.

I was fortunate to serve on the Treasury Committee in 2010 when the OBR and the charter for budget responsibility were established, and I spoke in a debate in May 2011 that brought greater insight into Government policy, greater transparency and more trust. I was pleased to participate in it and highlight how the OBR had very quickly become—it still is—an important reference point. Since those early days of the Parliament, which seem a long time ago now, the Government have made clear progress on their long-term economic plan: on economic growth; job creation—1.8 million jobs over this Parliament; unemployment; deficit reduction—down by 50%; and reducing the rate at which the debt is growing. Their ambition and achievement are unprecedented.

Those were important tasks, but the progress has not been without challenges. The OBR, which has been much referenced by Members on both sides of the House, has highlighted how deep the recession was—much deeper than originally anticipated—and how the challenges in the eurozone contributed to the challenges faced by the Government. However, positive progress has been made, and it is vital that the charter be renewed, because further consolidation is required. We need to finish the job of getting public spending firmly under control, as was spelled out by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) and my hon. Friend the Member for Bury St Edmunds (Mr Ruffley). I support that view. Lower spending will lower the deficit and enable us to lower taxes for working people, which is something that Conservative Members feel passionate about.

Paul Johnson, the director of the Institute for Fiscal Studies, who has been broadly quoted, highlighted in The Times today something that has not been pointed out, which is that this approach is also vital to get the country’s finances better prepared for any future economic crises or recessions. We have to learn the lessons of the economic crisis we are emerging from. This Government have, but the Labour party clearly has not. I will be supporting the charter today because it is critical that we get our finances under control. The Government have found a way forward, and the long-term economic plan is delivering. The charter will take us a step closer to achieving our important ambitions for businesses and the public of this great country, and I will be supporting it.

15:52

[David Mowat (Warrington South) (Con)]

Like my hon. Friend the Member for Macclesfield (David Rutley), I will be supporting the charter.

This has been an interesting debate. We have heard principled speeches from the hon. Members for Glasgow North East (Mr Bain) and for Brent North (Barry Gardiner) and the right hon. Member for Morley and Outwood (Ed Balls) explaining the travesty of Government economic policy and saying how bad the economy will get and how the country needs a Labour Government to sort it out. The odd thing is that about half an hour from now those three Members, who spoke in so principled a way about why Government policy is wrong, will go through the Lobby on the same side as me in support of this “gimmick”, this “cheap stunt”, this “travesty”, as it has been called. At least the SNP, the Green party and the Welsh nationalists have taken a principled position. The hon. Member for Dundee East (Stewart Hosie) made an eloquent and reasoned speech about why targets are wrong. We used to say in business: “The great thing about not knowing where you’re going is that you can’t get lost.” That would be a summary of the SNP’s position.

Why is the Labour party going to troop through the Lobby to support the Government? I have only one explanation. I may be wrong, and it is possibly above my pay grade to get involved, but I think that Labour’s decision to support the Government tonight is the start of overtures around a grand coalition. I think Labour has realised that the polls are changing and it is not looking too good out there for it. It has few options left other than to start this dialogue. That is why the hon. Member for Brent North, who spoke so eloquently about the unprincipled Government position, is going to support the Government today. If he did not, Labour would not be signing up to our fiscal compact, and it would be difficult for them to join us in a coalition in May.

As I said, it is not for me to take this decision, as it is way above my pay grade. I would, however, say one thing to those on the Government Front Bench: if we decide to go into a grand coalition with the Labour party on the basis of its support today, could they please not give the right hon. Member for Morley and Outwood (Ed Balls) a job in the Treasury?

It is worth reminding Labour Members of the three components of the charter. First, in three years from now, the current spending round will be balanced. That is part one. Then, the supplementary target is that debt will be falling by 2017. Of course, it has not been talked about, but there is also the concept of the welfare cap, which Labour Members will be supporting when they go through the Lobby.

It behoves all of us to say how we are going to meet these targets. The Conservatives are talking about a mixture of continued spending, welfare reforms and tax evasion. The Liberal Democrats have their own plans. Thus far, Labour has no plans, but let us be clear that the implication of tonight’s vote is that there will be a £30 billion consolidation or the equivalent in tax rates. In the remaining 14 seconds, I reiterate the point that if there is to be a grand coalition, we should not allow the shadow Chancellor into the Treasury.

15:56

[Chris Leslie (Nottingham East) (Lab/Co-op)]

It is worth recapping at the end of this debate why we are here and why we are having this debate at all. We are still talking about the deficit because the Chancellor of the Exchequer has failed to fulfil his promise to get rid of that level of borrowing—the difference between our expenditure and our income as a nation. This charter, of course, is a device designed to distract from the Chancellor’s failure, making out as though the Tories still have a plan as they originally set out. As my hon. Friend the Member for Glasgow North East (Mr Bain) correctly pointed out, this debate was also supposed to provide a party political opportunity to smear the Opposition and to set up the Conservatives’ election tactics.

[Pete Wishart (Perth and North Perthshire) (SNP)]

Will the hon. Gentleman give way?

[Chris Leslie]

No, I will not give way to the hon. Gentleman.

The trouble for the Chancellor is that this debate gives us an opportunity to draw attention to his colossal failure to fulfil his promise to tackle the deficit. In his eagerness to trip up the Opposition, he has caught himself in a series of contradictions and entangled himself in his own spin.

We should remember that it was only nine months ago that this charter was changed. It keeps changing because the Government desperately have to pretend that they have a grip on things and that they are somehow on top of the deficit issue. The deficit after the next general election, however, is predicted to be a massive £76 billion. Revenues have collapsed over the lifetime of this Parliament, and we have seen rising tax credits and rising levels of housing benefit to subsidise low pay and the high-rent economy that the Chancellor has been fashioning. The Government now find themselves with an extra £200 billion-worth of borrowing over what they originally set out.

The Tories love to talk tough. They publish their documents—[Interruption.] I am delighted to see the Chancellor back in his place. He loves to bang that Dispatch Box and was getting very shouty and loud in his earlier contributions, but the reality is that his strategy has failed. The Chancellor and the Chief Secretary do not have a clue about what they are doing.

The debate was revealing, however, and I would like to ask the Chancellor about it. He said in his opening remarks that his deficit plan had not gone any slower than he had planned. I have taken the opportunity to look at the Hansard record of what the Chancellor said. He said:

“What we have done is cut the deficit by a half. We have neither gone faster than we said we were going to go, nor gone slower than we said we were going to go.”

The Chancellor has got himself into a terrible muddle if he thinks that he did not promise to eradicate the deficit back in 2010. The Prime Minister himself said:

“In five years’ time, we will have balanced the books.”

That was the Prime Minister’s solemn promise to the country.

The Chancellor did become a little bit over-excited. Perhaps he found this rather a difficult occasion, given that the situation was blowing up in his face. Not only did he get into a tangle thinking that he had not changed his deficit reduction plan, but he got into a terrible muddle with the charter. That is quite embarrassing for the Prime Minister in particular. At 3.30 pm on 15 December, the Prime Minister said in a speech that targeting the current budget deficit would be

“a great, black, ominous cloud”

—that it would be a total disaster—but by 4.30 pm, the Chancellor had tabled a Charter for Budget Responsibility that actually supports a current budget process, which is, of course, the correct strategy.

Perhaps the Chancellor needs to be reminded what he said originally, in his 2010 Budget speech. He said that the mandate was current—[Interruption.] Does the Chancellor want to deny that he said, back in 2010, that the mandate was

“current, to protect… productive public investment”?—[Official Report, 22 June 2010; Vol. 512, c. 167.]

If so, let him correct the record now from the Dispatch Box. He will not do that, however, because he knows that targeting the current budget is the right thing to do.

At no point does the Charter for Budget Responsibility commit itself to a fixed deadline for 2017-18. The Treasury would like to pretend that it does, but it does not. Instead, it goes for a “rolling horizon” and year 3 of a five-year rolling forecast. The Chancellor needs to understand properly what that means; he did not quite get it earlier. It means that the target moves forward by a year each year. Perhaps the Chancellor does know that. Perhaps he did this because he wanted to wriggle out of any responsibility to which he might be held now, ahead of the approaching general election. However, if he feels that this is somehow a firm commitment to 2017-18, he is wrong. Labour Members believe that we shall need to get the current budget into surplus as soon as possible in the next Parliament, and nothing in the charter is inconsistent with that view. The Chancellor, incidentally, did not really talk about the charter at all.

[Steve Baker]

Will the hon. Gentleman give way?

[Chris Leslie]

No, I will not. We have only a few minutes left, and I must give the current Chief Secretary to the Treasury a chance to reply to some of my questions.

The Chancellor referred to an “aim” rather than a “target”. I should be grateful if the Chief Secretary could explain why he chose to allow the language in the charter to move away from the idea of a target and towards the idea of an aim.

It is not enough for the Government to explain in the charter how they will measure progress. They need to explain how they will make progress, and that requires a balanced and fair plan. Ministers simply do not understand that the health of the economy and rising living standards are a vital pillar in the process of tackling the deficit and securing healthier public finances. If only wages and living standards rose at the historic average level during the next Parliament, there would be an additional £12 billion in tax revenues.

Cuts alone do not cut it. We have seen where that road leads: it leads to failure. We need a balanced approach across the three routes to improvement in public finances. Yes, we need sensible reductions in public spending, but we also need fairer tax choices—which means not giving away £3 billion to the richest 1% in society—and, crucially, we need rising living standards and sustained growth. The Government have lost revenues of nearly £100 billion over the current Parliament, and if we repeat that, we will lose £100 billion again. Any proposals in our manifesto will be fully funded, and the IFS has said that we are taking “the most cautious approach”.

Before I end my speech, I want to ask the Chief Secretary two more questions.

[Steve Baker]

Will the hon. Gentleman give way?

[Chris Leslie]

No, I will not, because I do not have time.

First, I want to ask the Chief Secretary about whether we can have an elevated level of debate and discourse ahead of the general election. Does he agree that it would be preferable for the OBR to audit and validate the costings of the manifesto proposals of the main political parties properly? My understanding is that the Chief Secretary agrees with that, but I want to get on the record and make clear his view on that.

My second question for the Chief Secretary is about what happens after deficit eradication and the Chancellor’s lurch to the right—his wish to return to what the OBR has called the public expenditure situation of the late 1930s, when we did not have a national health service, there were only 1 million cars on the road and children left school at 14. We know that the Conservatives want to wage war on the public services, but the Chief Secretary signed off the spending assumptions in the official projections. We know from Robert Chote, chairman of the OBR, that these projections, all the way to 2020, were

“signed off by the quad”,

and so far as I understand it the Chief Secretary is a member of the quad, so why did he agree to allow the official projections to take that lurch to the right—to go down that particularly ideological route? [Interruption.] The Chancellor might give him some clues, but I want him to answer for himself. If it was a genuine mistake and he did not spot it, he should just say so and we will accept that; or did he for some reason actually think that, yes, he does want to go down that far right-wing position? If that is the case, did he get scared when he saw the public reaction to it? I want to get a sense from him of what is happening.

Going down to that consistent 35% of GDP or national income has severe consequences for our public services. The Government must realise that we need a sensible, moderate approach to tackling the deficit. The focus must be on eradicating the current budget deficit. That is what the charter says, but we will take a fairer and more balanced approach to clearing the deficit. Where the Government have failed during this Parliament, we will succeed in the next.

16:07

[The Chief Secretary to the Treasury (Danny Alexander)]

This has been a very good debate. I am sorry that neither the Chancellor nor the shadow Chancellor were present to hear the remarks of the hon. Member for Warrington South (David Mowat), the last Back-Bench contribution. He made an excellent speech, proposing a grand coalition between their two parties as a consequence of this debate. They can both reflect on that helpful suggestion.

After the defence of the realm, a Government have no greater responsibility than creating the conditions for a strong economy. To do that, we have to be responsible with the people’s money. The Charter for Budget Responsibility is a major stepping stone in embedding the fiscal discipline that we have shown in this Parliament at the heart of our politics for the next Parliament. It highlights the very real and pressing need to finish the job we started in 2010 to get rid of the structural deficit, get our national debt under control and create a fairer and stronger society. Our plan has made sure that in this Parliament the deficit is falling by half, and the measures we have taken to do that have been fair and balanced. Looking around Europe, we have seen what happens when Governments lose control of the public finances: the economy starts to fail, and people suffer, and the least well-off in society suffer most.

I am proud of the progress we have made in this Parliament and welcome the widespread support this Charter for Budget Responsibility has received across the House, but it is important to be clear what this charter does and does not do. It sets out that the Government of the day must have a plan to eliminate the structural deficit within three years and get our national debt falling as a percentage of GDP by 2016-17. Of course it does not prescribe what specific steps various parties would actually take to meet the commitments that the charter imposes. I note the contributions of Opposition Members, and I suppose in one way we have to welcome their Johnny-come-lately admission that the deficit needs to be tackled, albeit with fingers firmly crossed behind their backs.

The shadow Chancellor’s speech was extraordinary, based, as it was, on an assumption that neither he nor anyone else can count to three. It illustrates why the Labour party always runs out of other people’s money. It is a good job he was not there at the start of creation. It would be, “On the third day the lord lost count and forgot to create the land and the vegetation.” It would be a wasteland, which I suppose is what Labour tried to leave at the end of the last Parliament.

[Several hon. Members]

rose—

[Danny Alexander]

I am going to make some progress. The shadow Chancellor should be aware, because this is a very serious business, that if his party has a majority his first Budget will be judged by the OBR against achieving this goal in the financial year 2017-18. So unless he is telling us now that it is his deliberate intention to fail this test, he will have to set out between now and the election how he will find some £30 billion of deficit reduction. This is immensely serious and every Opposition Member should weigh that up before deciding which Lobby to vote in.

[Jonathan Edwards]

Following today’s vote these targets will be set in stone for the next Parliament, so does the Chief Secretary think that if they are missed in the next Parliament there should be ministerial resignations?

[Danny Alexander]

Each Government have to account for their own economic policy in their own way. I am proud that we have put in place a plan that has got the deficit down by half and, more importantly, got us the best economic growth in the European Union and the strongest record of job creation—Opposition parties are notoriously silent about that.

Let us put this matter into some sort of context. While we have been busy cutting the deficit, the shadow Chancellor and the Leader of the Opposition have spent their time marching their troops up and down the hill of deficit denial. If their votes today are to have any credibility, they will have to march them down that hill again. We have still not heard one word of acknowledgement for their role in the crash of 2008, let alone a word of apology.

By the end of this Parliament the Government will have halved the deficit as a percentage of GDP. That has meant facing up to reality and taking difficult decisions. This has been a process during which Labour voted against every measure that we have had to introduce to rescue the economy. There have been scores of votes on deficit reduction and, you guessed it, the Opposition voted against every one. So I say this to Labour: “Supporting this motion does not restore your credibility on the deficit. You have said your aim is to push out the time scale as far as possible. You are perfectly happy to borrow tens of billions of pounds more. That will mean more debt, more interest payments and the pain of rebalancing the books dragging on for years to come.”

Numerous contributions have been made to this debate, and I thank those who have spoken from the Conservative and Liberal Democrat Benches. We heard a wise contribution from the right hon. and learned Member for Rushcliffe (Mr Clarke), and excellent contributions from my hon. Friend the Member for Redcar (Ian Swales) and from the hon. Members for Hexham (Guy Opperman) and for Ipswich (Ben Gummer), in particular.

However, some Conservative Members have criticised me in this debate for the views I have taken on Conservative plans beyond 2017-18—the shadow Chief Secretary asked me about this, too. Let me send a note of warning to some of my Conservative colleagues. We formed the coalition to tackle the deficit in a timely manner. That is why we agree that the structural deficit must be eliminated by the end of 2017-18 and debt must fall as a share of GDP. Hitting that 2017-18 target will require further consolidation to the tune of some £30 billion, and to say that we can reach that figure by spending reductions alone, with some £12 billion coming from cuts to welfare, would be grossly unfair. It would hurt millions of families who are trying hard to make a success of their lives. Tax on the wealthy should and must play a significant part in how we finish the job in the next Parliament. But our real concern, and where we differ, is on what happens after that mandate is met. As a country we should not be wedded to austerity for austerity’s sake. People in this country supported our coalition approach because it has been necessary and successful in turning the economy around, but they will not support an ideological drive for an ever smaller state.

[Chris Leslie]

rose—

[Danny Alexander]

I will give way if the hon. Gentleman speaks very quickly.

[Chris Leslie]

I will. Why then did Robert Chote say that these assumptions were

“signed off by the ‘quad’”?

Did the Chief Secretary sign them off? Was it a mistake or is he now trying to “reverse ferret” out of it? Which is it?

[Danny Alexander]

It is a neutral assumption about the public finances that does not reflect the policies of the Liberal Democrats. I was just in the middle of describing those things, because people want to see some light at the end of the tunnel. They do not want a Dickensian world of decimated public services. I do not see any need for tens of billions of pounds of further cuts beyond 2017-18. If it happens, the reality for many people would be grim. Going too far or too slowly will not offer that light at the end of the tunnel.

[Pete Wishart (Perth and North Perthshire) (SNP)]

rose—

[Danny Alexander]

No, I will make some progress because there are only a couple of minutes left of the debate. For our part, we Liberal Democrats are very proud to support this charter. Indeed, this is Liberal Democrat fiscal policy being voted on in Parliament. As my hon. Friend the Member for Redcar said, we will eliminate the structural deficit by 2017-18, but do so fairly, so we will ask those with the broadest financial shoulders to bear the heaviest burden by paying a little more in tax. When we have the national debt falling as a share of our national output and have eliminated the deficit, we will then balance the books, allowing borrowing only for productive capital investment or for financial stability. That means that we will finish the job and then be able to invest in our public services so that the people of the country can enjoy the world-class public services that they expect. That is the common-sense approach to keeping our national finances under control and to ensuring that our stronger economy also delivers a fairer society.

We should not delay the time by which we seek to finish the job, as the Opposition wish. Putting our nation’s finances back in order is the responsible thing to do, and that is what this charter does. It sets out two clear, simple, coherent targets for the public finances in the next Parliament. The first is to balance the structural deficit by the third year of a rolling five-year forecast, which, to correct the Labour Front-Bench team, does mean meeting that target by the financial year 2017-18. Should Labour win a majority at the election, it will be judged on that three-year target, so it should be straight with its own Back Benchers about what it is asking them to vote for. The second target is to be judged on those goals twice a year by the independent OBR, and also to be judged by the British people as they scrutinise the plans that each party puts forward at the general election against what we are voting for today.

This vote is deeply serious. These rules are a wise, sensible and balanced framework for the public finances in the next Parliament. The British people will expect us to stick to it, so I commend this charter to the House.

Question put.

16:17

Division 129

Ayes: 515

---

Conservative: 261
Labour: 197
Liberal Democrat: 47
Democratic Unionist Party: 5
UK Independence Party: 2
Independent: 1

Noes: 18

---

Labour: 8
Scottish National Party: 5
Social Democratic & Labour Party: 3
Plaid Cymru: 2
Alliance: 1
Green Party: 1
Democratic Unionist Party: 1

Resolved,

That the Charter for Budget Responsibility: Autumn Statement 2014 update, which was laid before this House on 15 December 2014, be approved.

National Policy Statement (National Networks)

Tuesday 13th January 2015 Commons Chamber

[Relevant document: Sixteenth Report from the Transport Committee, Session 2013-14, National Policy Statement on National Networks, HC1135.]

16:35

[The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)]

I beg to move,

That this House approves the National Policy Statement for National Networks, which was laid before this House on 17 December 2014.

The draft national policy statement was published and laid before Parliament on 4 December 2013. Following public consultation on the report and recommendations from the Transport Committee, the final NPS has now been prepared for designation. I thank the members of the Transport Committee and their Chair, the hon. Member for Liverpool, Riverside (Mrs Ellman), for the important work that they undertook in scrutinising the draft NPS and publishing a report on their findings. I also give thanks for the scrutiny that was undertaken in the other place, which made an important contribution to the final document.

It may be helpful if I begin by clarifying the role and purpose of the NPS, as it is a specific document with a specific purpose. It is a technical planning policy statement that will comprise the decision-making framework for nationally significant road, rail and strategic rail freight interchange projects, as set out in the Planning Act 2008. First, the NPS establishes the need for the development of our national networks at a strategic level. Secondly, it provides the policy framework by which proposals will be decided. It includes, for example, policies on safety, environmental projections and design quality. The NPS sets out a compelling case for development of our national road and rail networks to sustain and drive economic growth, improve quality of life and safety, and deliver better environmental performance.

According to central forecasts, road traffic is set to increase by 30% and rail journeys by 40% by 2030. Rail freight has the potential to nearly double by 2032. The strategic road network makes up only 2% of roads in England but carries a third of all road traffic and two thirds of freight traffic. Under the Government’s 2014 estimates, we forecast that a quarter of travel time will be spent delayed in traffic by 2040 if we do nothing. Our national networks are already under considerable pressure, which is expected to increase as the long-term drivers of demand for travel—economic and population growth—are forecast to increase substantially over the coming years.

Without action, congestion on our roads and crowding on our trains will affect the economy and reduce the quality of life. Congestion has a significant economic cost. In 2010, the direct costs of congestion on the strategic road network in England were estimated at £1.9 billion per annum. Developments are also needed to achieve our broader environment, safety and accessibility goals. There is a need to tackle safety issues, improve the environment, and enhance accessibility for pedestrians and cyclists—an issue very close to my own heart.

The NPS sets out high-level policies and a general requirement on the need for better infrastructure. It does not set out specific locations where development of the national networks will take place. Although the NPS is not spatially specific, it recognises the need for a high-performing road and rail network that connects our cities, regions and international gateways to support economic growth and regeneration, and to improve the user experience. For strategic rail freight interchanges, the NPS identifies a need for an expanded network located near the business markets they serve and linked to key supply chain routes, especially in poorly served areas.

[Kelvin Hopkins (Luton North) (Lab)]

The Minister talked about rail freight interchanges. Is not the problem with our railways that the gauge is too small for trains to accommodate lorry trailers and the large containers in use today? We need large-gauge special rail freight systems to deliver that kind of freight.

[Mr Goodwill]

The hon. Gentleman has a long history of campaigning for freight cars that will carry semi-trailers such as the type used on our roads. It is not the Government’s policy to move to that type of gauge. The High Speed 2 network and the improvements to electrification will free up capacity on the existing network for container freight. There might not be lorry trailers on the trains, but capacity will be released for more container freight on the railways. That will mean that motorways are less congested, which will be good news for everyone else who uses them.

[Kelvin Hopkins]

Sure, some containers can go on the existing rail network on low-loading and flatbed trucks, but the containers that are now becoming common are too large to go through, even on those low-level, flat trucks.

[Mr Goodwill]

We are slightly digressing from the NPS. I well understand the hon. Gentleman’s long-held belief that we should move that way, but I gently remind him that to improve the gauge of our existing Victorian network would mean extensive work on tunnels and bridges and other work. We only have to look at the disruption that the west coast main line improvements caused to realise that such work does not come without a cost.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The Minister mentioned HS2. Does the NPS clearly set out that if there are England-only infrastructure developments, that should result in full consequentials for the devolved Administrations?

[Mr Goodwill]

The NPS applies only to England, but we are aware of the need for better connectivity between the devolved parts of our country and in particular to the European networks we are working with. I spoke recently with one of the hon. Gentleman’s colleagues about the need for better connectivity between Wales and England.

The Government take the need to invest in transport infrastructure seriously. In December 2014, we published the first ever road investment strategy, which outlines how £15.2 billion will be invested in our strategic roads between 2015 and 2021. That is the biggest upgrade to our strategic roads in a generation, building on the £9 billion-worth of schemes under construction in this Parliament. Equally, more than £35 billion will be spent on operating and expanding the railways in England and Wales between 2014 and 2019, including more than £9 billion of infrastructure investment. That includes delivering an extra 140,000 commuter journeys into our major cities during the morning peak to improve commuter travel into the major urban areas. That is in addition to the investment committed for HS2, which is outside the scope of the NPS.

[Bob Stewart (Beckenham) (Con)]

Do we have any estimate of how much additional land will be required for new railways and so on?

[Mr Goodwill]

The first point to make on that is that the HS2 network is not within the scope of the NPS; it has its own separate hybrid Bill process. The vast majority of the schemes we are investing in are upgrading existing networks. Indeed, in the smart motorways scheme, we are using existing carriageway for hard-shoulder running. Some specific schemes will need land, such as—off the top of my head—the A14 Huntingdon bypass, which will be on new land, and one of the options for the lower Thames crossing would also require the procurement of land.

On the specifics of the NPS, the Select Committee raised some issues with the forecasts in its scrutiny of the draft NPS. The Government use a number of forecasts to allow us to understand the potential for a range of outcomes for road demand. The range of forecasts predict growth on the strategic road network of between 27% and 57% from 2013 to 2040. Rail passenger demand is predicted to continue to grow significantly. Total average growth in passenger kilometres is predicted to be just over 50% from 2011 to 2033, including phase 1 of HS2.

Long-term forecasting is challenging and we acknowledge that in the past we have over and under-forecast traffic. That mainly reflects inaccurate projections for the key drivers of traffic growth: population, GDP and oil prices, which are themselves uncertain, as anyone who is waiting to buy their first litre of petrol for £1 will no doubt agree. To reflect the uncertainty in these key drivers, we have presented a range of forecasting scenarios. It is notable that on this basis we expect greater divergence between traffic in different locations, but even on the lowest national traffic forecasts we will still see strong growth on the strategic road network that will increase congestion and crowding.

There is a similar picture for rail, where even low forecasts show more crowding, more congestion on rail lines and problems with reliability. It is important to understand that the forecasts in the NPS will not be used as the sole means to justify new developments. Individual schemes will also be required to use local models to justify schemes and to understand local impacts. Local modelling will remain an important part of the transport business case, which all road schemes funded by the Government will continue to be required to complete.

The NPS supports a significant and balanced package of improvements across the road and rail networks. Those improvements are accompanied by policies to support sustainable transport.

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

Before the Minister moves off the subject of forecasting, may I press him a little on resilience? I know that this is an issue that my hon. Friend the Member for Nottingham South (Lilian Greenwood) pushed in Committee, but of course it is not just about passenger or traffic growth but about the resilience of the transport network into the future, particularly given some of the problems we saw last year with flooding. What is the Government’s assessment of the future resilience of the national network?

[Mr Goodwill]

The first point to be made is that even during the bad weather and flooding we had last winter the strategic road network proved particularly resilient, as was High Speed 1, which, being built to a high specification, was able to cope with the weather. The hon. Gentleman is right that we must consider the resilience of our network, particularly the rail network, and that is why we commissioned one of the Department’s non-executive directors, Richard Brown, to look specifically at resilience, and particularly at what happened at Dawlish and the need for alternative routes. That is very important and the hon. Gentleman is absolutely right that we should focus on it.

The appraisal of sustainability in the NPS shows that overall its environmental impact will be neutral. Yes, there might be some localised environmental impacts but they have been shown not to be significant, and the targeted measures to reduce pollution in areas of poor air quality, the commitment to tackle areas of the network that are vulnerable to flooding and noise and the huge support for ultra-low emission vehicles show how the NPS supports a sustainable package of measures.

The NPS is clear that road improvements must be delivered in an environmentally sensitive way and must look to improve environmental performance wherever possible. Much environmental good can be done as part of the investment programme, including introducing noise-reducing surfaces and sustainable drainage and eliminating bottlenecks in the system that push up emissions and worsen air quality.

As a result of the consultation and the debates in the other place, we have further strengthened environmental protections. For example, we now have a presumption against road widening or new roads in national parks and areas of outstanding natural beauty. We have also made a number of other changes, including strengthening the text on biodiversity, landscape, land use and noise.

Reducing carbon is very important and that is why the Government have already set stretching and legally binding carbon budgets that will see a 50% reduction in emissions in 2025 compared with 1990 levels, on the path towards an 80% reduction by 2050.

[David Wright (Telford) (Lab)]

What work is being done on increased demand for bus use and the development of road infrastructure in England? It is very important in towns such as Telford, which are car-reliant because of their new-town nature, that bus transport is promoted hard.

[Mr Goodwill]

Buses are increasingly environmentally friendly. Indeed, the Government have put £106.5 million into cleaning up buses both by supporting the purchase of new low-emission buses and by funding the cleaning-up of older buses. Many people rely on the bus to get to work, particularly at the start of their careers. Bus priority lanes are also part of the process, which is why I and many others were surprised when Labour-run Liverpool decided to abandon the majority of its bus lanes.

Carbon impacts will continue to form a key part of the transport appraisal and decision-making process for road schemes. We also make it clear that any new schemes that would have a material impact on the ability of Government to meet their carbon reduction targets should not go ahead.

At the same time, the Government are committed to decarbonising roads. Investment of more than £900 million in ultra-low emission vehicles—December’s registration figures for such vehicles are very encouraging—and fuel efficiency regulations mean that we expect greenhouse gas emissions from motoring to drop in 2030 by about 20% from present day levels.

The Government take air quality seriously, and substantial weight will be given to air quality considerations where a project would lead to a significant air quality impact or to a deterioration in air quality. Not all new road schemes will present an air quality challenge. Air quality implications are complex, depending on a number of criteria relating to both the new road scheme itself and the wider area. It is important to take an holistic approach to improving air quality. That is why this Government are committed to large investment in a package of measures to support cleaner and more sustainable transport, which will also help to improve air quality.

Consent for a scheme will be refused if the air quality impacts result in a currently compliant zone becoming non-compliant, or affect the time scale of a zone becoming compliant. The Government have recently announced various initiatives to reduce local air pollution, including more than £900 million to support the uptake of ultra-low and zero-emission vehicle technologies between 2010 and 2020; £100 million for the road investment strategy specifically for air quality improvement; £2 billion for the electrification of the rail network, replacing dirty diesel trains with cleaner electric trains; and £600 million for the local sustainable transport fund, as well as the money for cleaning up older buses, which I have mentioned.

[Andrew Gwynne]

I am grateful to the Minister for giving way again. Is there anything in the new national networks policy that commits the Government to improving air quality on the existing strategic road network when it is in an air quality management area that exceeds EU safe standards?

[Mr Goodwill]

It is important to note that we have all agreed those EU standards at a European level. They are not being dictated to us by Europe; we agreed to them. It is important that we look at the reasons why air quality is deteriorating in some areas. The work that has been done on cleaning up buses has certainly helped in urban areas.

It is disappointing that, because of the economic problems under the previous Government, the car fleet was not renewed as quickly as we had predicted. Therefore, the older cars that produced more nitrogen oxides and other pollutants were not replaced as rapidly as they should have been. As we return to economic growth, with near record levels of vehicle registrations, more old dirty cars are going to the scrap heap and more new cars are getting on our roads, which will help. We can also use a number of mitigating factors on the strategic road network. For example, we are considering trialling barriers to try to channel pollution away from communities that are close to roads.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

I am very disappointed to hear the Minister blame the economic woes of the world economy, which affected the previous Government, for air pollution and the deterioration of air quality. Does he not agree that his first answer, which was, “We’re not quite sure what’s causing it, but we’re going to look at it”, was a much better answer?

[Mr Goodwill]

I was very careful not to blame the previous Government, but to state the fact that, because people were not buying as many new cars—for a variety of reasons, which I will not go into because we have just had a debate on that—we were not getting as many clean vehicles on to our roads. Moreover, it is always disappointing to see how the published fuel consumption figures at the bottom of an advert compare with use in practice. I have had discussions with the motor industry to see how we can make the test cycle, which is meant to give a clear indication of a car’s performance, more relevant to normal operating conditions.

Although we have made tremendous progress in reducing sulphur dioxide emissions by cleaning up fuel—we have taken lead out of petrol—we still have the problem of “knocks”. That is due not to the fuel but to the atmosphere, and is produced in the engine by the combustion process. However, it is linked to fuel consumption, so as we have more fuel-efficient cars, we will have fewer nitrogen oxides, which cause air pollution and health problems.

[Kelvin Hopkins]

Would not a scheme to take 5 million lorry journeys off the roads and on to rail every year contribute enormously to improving air quality?

[Mr Goodwill]

We do have a scheme to take a lot of lorries and freight off the roads and on to rail—it is called High Speed 2—and it will deliver that. We are committed to investing in High Speed 2, to creating capacity on the existing rail network, which is currently blocked up with commuter and inter-city trains, and to getting more freight off the roads and on to rail. Indeed, the interchanges that are part of the NPS will also help to increase rail connectivity.

[Mr Dominic Raab (Esher and Walton) (Con)]

I welcome what the NPS says and acknowledges about the need for redevelopment and further development of rail infrastructure, and particularly its emphasis on London and the south-east. In my constituency, South West Trains pays the largest premium to central Government for the right to run the service, but there is a high level of overcrowding and passengers therefore feel that they do not get value for money. When the policy is fleshed out further, will there be a link between the operating companies paying a very high premium to central Government and the provision of a minimum level of service for passengers? They cannot keep paying more and more to get less and less back.

[Mr Goodwill]

My hon. Friend is absolutely right. For too long, we have not invested sufficiently in our rail network. When privatisation took place, many people thought that railway travel in this country would be a case of managed decline. As it is, the number of people using trains has doubled since privatisation, and many commuters in the south-east and elsewhere are to some extent paying a price for that. That is why we are committed to investing in better rolling stock. We have a £38 billion investment programme in rail, which is not only for the capital, but for the wider country.

In a nutshell, the NPS provides clarity and certainty in Government policy on the need for nationally significant infrastructure projects. It allows planners to focus on important local considerations at planning inquiries, rather than being drawn into wider discussions about the matters resolved in the NPS. As such, it is a vital tool in delivering the infrastructure investment that is so central to our long-term economic plan.

16:57

[Lilian Greenwood (Nottingham South) (Lab)]

I am sure that Members on both sides of the House are glad finally to debate the national policy statement on national networks, which is a direct consequence of the Planning Act 2008. Its introduction should ensure that decisions on major infrastructure projects are faster, fairer and more transparent, and it will be judged against those criteria.

When the Planning Bill was introduced, the then Government said that it would ensure

“more timely and predictable decisions on infrastructure projects which are key to economic growth”

and international competitiveness. Although this Government’s response may be predictable, it is, unfortunately, anything but timely. The Rail Freight Group told the Transport Committee that the national policy statement

“has been overdue since the Planning Act, and that has caused particular concerns for the people who are developing rail freight interchanges.”

Other policy statements came and went, but the Government’s guidance for our transport networks remained stuck in the sidings. The initial draft of the statement received criticism from many quarters; I will return to that point. The final version was published on 17 December, the last day before Parliament broke up for Christmas, and the text of today’s motion was only published last Thursday.

What is the significance of the document we are being asked to approve? Even on that, the Government cannot get their line straight. The Treasury has described it as a national transport policy, but the Department for Transport insists, on the contrary, that it is not a policy document, but a compilation of technical planning guidance. The national policy statement is delayed and over-spun. In that respect, it is a reflection of this Government’s transport policies as a whole.

The Government would have us believe that the NPS builds on a careful synthesis of the rail investment strategy and the road investment strategy, but their commitment to integration seems to extend only as far as giving road and rail the same acronym. It could be worse—the Transport Secretary initially wanted to call this paper the “rail investment programme”, until an official pointed out that that would become RIP. As passengers are hit by stealth fare rises and season ticket cost increases of more than 30% since 2010, and as the Government’s flagship electrification programme comes off the rails, perhaps the Transport Secretary’s initial suggestion was the more accurate description.

The text of the NPS reveals a total absence of co- ordinated thinking. As the Chartered Institution of Highways and Transportation told the Transport Committee:

“The needs case…appears not to consider integration of modes, other than in very simplistic terms.”

Let us look at those claims in detail. Several critics have described the Government’s roads policy as outlined in the national policy statement as a return to “predict and provide”. Well, the Government are failing to provide, having scrapped £3.9 billion of planned capital investment in the strategic roads network. I suggest that the decision to axe roads investment is the true significance of the Prime Minister’s ill-fated “road to nowhere”.

A view shared by many is that the Department for Transport is not effective in predicting demand. The Campaign For Better Transport, among many other organisations and experts, has argued that the Department has historically overestimated road traffic demand, but those criticisms have not been adequately addressed by Ministers. On the other side of the coin, rail received the opposite treatment in the NPS. Network Rail has said that there was a “significant difference” between the Government’s initial estimates for rail demand, and industry projections. Incredibly, the Department used more conservative estimates for future rail demand in the NPS than it did for Network Rail’s 2012 high-level output specification, and the consequences of that are potentially very serious. Network Rail has warned:

“If it meant that investment did not get consent because of overly conservative forecasts, we would have more crowding and punctuality issues than might otherwise be the case”.

The Minister may say that the NPS has been revised in light of those criticisms, but central forecasts for rail demand growth remain unchanged. In addition, the separate network modelling framework estimates have undergone a suspicious evolution. An original estimate of 36% to 46% growth by 2030 has been replaced by a 50.1% growth estimate by 2033. How does the Minister explain that change? Was the uncertainty in the original estimate removed and the date range simply extended by three years to reach 50.1%? Has a new method been used, or has the Department moved the goalposts?

[Mr Goodwill]

When the Blair Government came to power in 1997 they announced a moratorium on new road building. Will the hon. Lady tell the House which projections they based that on?

[Lilian Greenwood]

The Minister asks about road building, and clearly the intention of the new ’97 Government was to have a multimodal approach to dealing with demand for transport. That was why under the previous Labour Government there was real-terms record investment in our rail network, including building High Speed 1 and committing to Crossrail.

It is unclear whether any significant revision has taken place in response to criticisms by the Transport Committee, as outlined by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman)—I am sure she will return to that point—as well as other groups. Another question that required urgent attention was the lack of focus on the transport network’s resilience—that issue has already been mentioned today, and I raised it in the House last February. Jeremy Evans, a member of the transport policy panel at the Institution of Engineering and Technology, told MPs that

“resilience is hardly mentioned at all in the NPS”.

The draft was produced just one month before the collapse of the Dawlish sea wall, and that event and other disruptions to the national transport network, including the Christmas chaos on the railways, has thrown light on the need to ensure the resilience of new and existing transport networks.

The final NPS was amended to state:

“In some cases there may be a need for development to improve resilience on the networks to adapt to climate change and extreme weather events rather than just tackling a congestion problem.”

We must recognise progress, however limited or belated it may be. I would, however, like to register the disappointment of those on the Labour Front Bench, especially in the light of recent events, that there is only a single specific reference to ensuring the resilience of the rail network in the revised documents.

Concerns have also been raised by those who pointed out that HS2 was not included in the NPS. I understand the Government’s argument that HS2 is subject to a separate planning process, but it is vital that the objective of integrating HS2 with existing transport networks is maintained. That is why we amended the High Speed Rail (Preparation) Act 2013 to ensure that HS2 is integrated with existing railways, roads, airports, light railways, footpaths and cycleways. That amendment stood in my name and that of the Minister, and received cross-party support. Will he assure the House, when he sums up, that this important principle is being respected as the Department develops its proposals for phase 2 of the project?

We have listened to industry groups who argued that, although the document may be imperfect, it is better than having no policy statement at all. We have already seen the compelling need to reform the way decisions are made on strategic infrastructure. These decisions are often controversial and all parties in the planning disputes that follow should know the process for developing and submitting a planning application, the impact that application will have on the environment and the local communities, and the time scale for reaching a decision.

We have heard that having a national policy statement available in draft form has helped some cases reach an earlier conclusion than under the old system. The document is not, as I am sure the Minister would say, the appropriate means for introducing new policy, and that is one reason why we will not be seeking to defeat the motion. We strongly support the objective of sustainable, long-term and co-ordinated spending settlements for our roads and railways as a way of ending the cycle of stop-start investment, and spending public money more effectively. However, I would like to say a few words about what could and should have been in the NPS if the Government had taken a more constructive approach to long-term infrastructure planning, which would ensure better value for taxpayers’ money.

It should be a source of national embarrassment that Britain has fallen to 28th in the World Economic Forum’s ranking for infrastructure investment. Too many projects are announced before an election and then quietly dropped when the votes have been counted. Decisions are made about the same areas by Network Rail and the Highways Agency without reference to each other’s plans. Changes are approved to the strategic roads network without due regard to the impact on local roads that make up 98% of the total. Indeed, this is a subject on which the NPS is silent, even though this is where problems such as potholes are most acutely felt.

Some 89% of businesses surveyed by the CBI supported the creation of an independent national infrastructure commission, as recommended by Sir John Armitt. The proposal is also supported by the Institute of Civil Engineers, the Manufacturers’ Organisation and many other bodies. However, the Government voted against creating such a body through the Infrastructure Bill.

When it comes to investing in our national transport networks and identifying our long-term infrastructure needs, I am afraid that the Government cannot look back and say the job is done. Having a national policy statement in place for our transport networks will be a step forward, but there is so much more left to do.

17:08

[Mr Simon Burns (Chelmsford) (Con)]

I listened to the hon. Member for Nottingham South (Lilian Greenwood) and was slightly incredulous when she talked about investment in both road and rail as if the Government had done nothing in the past five years. She seemed to forget completely that in control period 5—just to remind her, that is between 2014 and 2019—£38.5 billion is being invested in our railways. Some £15 billion is being invested, between now and 2021, on improving our road infrastructure. On top of that, there is the £33 billion that is going to be spent on investing in High Speed 2. Either she has become over-enthusiastic because we are 115 days away from a general election, or she has been badly briefed. It must be one or the other. I will be charitable and suggest it is the former, not the latter.

I welcome this debate, the Transport Select Committee’s report and the Government’s policy statement. For far too long under successive Governments, we have suffered from short-termism in relation to infrastructure investment. I remember, as a young man, working in this place during what most hon. Members would consider the nightmare of the 1974-79 Labour Government. Every time there was an economic crisis—at one point, the noble Lord Healey had to turn away from getting on a plane at Heathrow to go and beg the IMF for money to bail us out—one of the first areas to suffer from the ensuing Government cuts was transport infrastructure. Of course, this stop-go approach is in no one’s interest.

A wise man not only repairs the roof when the sun is shining, but in difficult times will not make the false economy of cutting investment in infrastructure; instead he will actually increase infrastructure, not only to improve the transport system that this country desperately needs, but to create the jobs and everything else that flows from significant infrastructure investment. As the Select Committee highlights, the document, which, to be fair to the hon. Member for Nottingham South, builds on the Planning Act 2008, represents long-termism —looking to the future by investing in infrastructure—and I welcome that.

I also welcome the fact that, as the blurb says, and as my hon. Friend the Minister and the shadow Minister said, the aim is to overcome problems with the planning regime to ensure the infrastructure plan comes to fruition. I like that aim, but in one way it is inadequate. Notwithstanding the improvements in the document, the planning procedure for major infrastructure projects is antiquated and contrary to the ethos of getting ahead with infrastructure, because it takes too long. It was ludicrous that terminal 5 at Heathrow took 10 years to build, and it will be ludicrous if, once the Davies commission reports next summer, whatever recommendations it makes to maintain our airline hub status in western Europe, it still takes years of public inquiries and environmental impact assessments—important as those are—before any ground is prepared for the new buildings that are so badly needed.

The policy statement rightly excludes HS2 because of the separate planning procedures for high-speed rail, but those are also antiquated. It is ludicrous. The basis of the parliamentary procedures for HS2 was laid down in Victorian times when the railways were being developed. To do that, the Victorians used the law responsible for granting permissions to erect toll booths. One major project, the London-Birmingham railway, from the moment it was devised to the moment it was up and running, took five years—between about 1833 and 1838—to establish. Victorian MPs would spend an evening in the Chamber discussing a project and then grant the planning permission. By comparison, HS2 is moving at less than a snail’s pace—and that is just for phase 1. We will have to repeat it all over again from 2017 on phase 2. In a modern, highly competitive world, where we have to be ahead of our competitors, we cannot continue with such an antiquated system.

Although the statement does not apply to HS2, it is a step in the right direction for other major road and rail projects. There has to be a consensus between the main, if not all, parties—after the general election, I suspect—to get more common sense into the procedures, enabling us to deliver the necessary permissions, along with all the safeguards such as the environmental impact assessment and so forth. Then we will not be held back as a nation—in a way that the French, for example, are not —and we can ensure that these projects move forward. The national policy statement makes an important contribution to the debate.

The document comes up with a number of important statements. It would be fair to say that, by and large, the Select Committee chaired by the hon. Member for Liverpool, Riverside (Mrs Ellman) has welcomed it, although it highlighted a number of concerns. These are not major concerns, and they can easily be addressed by the Government, where appropriate.

Let me highlight two concerns, one in passing, as I have already mentioned it. The first point in the report’s summary is about having better road and rail connections to ports, airports and parts of the country not currently well served by those networks. That is a very good point, and it is close to my heart, because the main road into the hinterland of East Anglia goes through my constituency—the A12 from the centre of London, bisecting the M25 and going up to the ports at Felixstowe and Harwich and into Suffolk and Norfolk. I am delighted to say that, following significant lobbying by Essex county council, me and others over the years, the Secretary of State and the Chancellor announced in their statements before we went into the summer recess that the A12 from the M25 up to Colchester is going to be transformed from a two-lane into a three-lane road. That shows the significant Government investment in our infrastructure that is so badly needed to get Britain and East Anglia moving again, so I warmly welcome it.

The Select Committee report—and, to be fair, the hon. Member for Nottingham South in her comments—also deals with the connection of HS2 to the conventional rail network just north of Leigh and north of Manchester and from Crewe and beyond towards Liverpool, which must be an issue close to the heart of the hon. Member for Liverpool, Riverside. That is crucial, and we must get it right.

When I was a Minister in the Department for Transport —I do not think it has changed—I always viewed phase 2 of the project as simply a spine for high-speed rail in this country. My right hon. Friend the Secretary of State for Transport has already announced that the Department is looking at the feasibility of a phase 3, running north of Manchester, up to Glasgow and then across to Edinburgh. That is excellent. Providing a business case and a feasibility study justify it, I would like to see other branches developing off that spine—for example, not simply to the north of Crewe but, in time, all the way into Liverpool. If a case can be made, it could go down into south Wales or even into the south-west of England. That shows the opportunities we have to move forward with this exciting project.

If this document and Governments of all political persuasions have the foresight to develop major infrastructure projects on a long-term basis rather than a chop-and-change, go-and-stop basis, I believe that the initiative that flowed from the 2008 Act will be of considerable benefit not just to this Government but to future Governments, and will contribute to the improvement of this country’s infrastructure.

17:19

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

I welcome the publication of the statement. It is unfortunate that there has been so much delay, but it is important that we have reached this point. Major strategic infrastructure matters, and this statement matters, because it is about ensuring that decisions are made in the right way and in a timely manner. I hope that it will be effective in securing that end.

The Transport Committee scrutinised the draft version of the statement, and made a number of recommendations for change. I am pleased that many of those recommendations were accepted, some in full and some partially, but there are still some important omissions.

The Committee wanted the statement to include examples of projects that the Government would like to see, and the Government responded to that. I welcome the reference to projects promoting integration between national road and rail networks and access to airports and ports, and to the way in which national networks can promote local economic growth, because those are important aspects of strategic investment. The Committee was concerned about the safety of all road users, including cyclists and pedestrians. The statement now refers to the issue, and that is another important improvement.

The Committee was also concerned about the need to recognise the possibly adverse local consequences of development that might be required nationally. The revised statement recognises that, and emphasises that there should be a presumption against road widening or the building of new roads in national parks and areas of outstanding natural beauty. That does not mean that such developments could not take place, but a very strong case must be made for them, which I think strikes the right balance. I also welcome the references to the importance of diversity and noise abatement.

The Committee called for recognition of the impact of road building on carbon emissions. The statement partly accepted that recommendation in recognising that road building decisions should not be based solely on predictions of traffic growth, and that other factors, including environmental impacts, should be taken into account.

I welcome all those changes, but problems remain, and some of the omissions from the statement are serious. The need for integrated planning for passenger and freight transport across routes or regions has still not been recognised, and that is, perhaps, the most important omission. Road and rail strategies are still separate, which has led to problems that are raised with the Committee regularly, most recently in relation to cross-Pennine transport and transport in the south-west. That is a glaring omission.

Problems relating to traffic forecasting have not been fully addressed. The Minister said earlier that there was a range of forecasts, but this is an important matter. We should bear in mind the fact that rail franchises in the north have been let twice on the basis of predictions of no growth. That turned out to be dramatically wrong, which is a key reason for the fact that so many people travelling in the north face so many problems such as overcrowding.

I am also concerned about an issue that has already been raised during the debate, namely the absence from the statement of any reference to the importance of linking investment in the existing classic line with High Speed 2 to improve and, indeed, maximise connectivity, and the benefits of a major investment in high-speed rail. I know that the Department in its response—and this was repeated by the Minister today—stated that that did not fall within the scope of the statement and that it was being addressed separately, but this is about the fundamental principle of connectivity and maximising the benefits of strategic investment. I therefore reinforce that point and state that this is an important omission.

All the points raised need to be addressed. I welcome the substantial changes that have been made in this statement, but I emphasise again that the omissions are important ones. They need to be addressed. Strategic investment is of vital importance for future prosperity, and the decisions that are taken must be the right ones.

17:25

[Kelvin Hopkins (Luton North) (Lab)]

I will not speak for long, but I have a helpful suggestion, and I hope Ministers will at least give some consideration to it, and perhaps even ask their officials to look into its feasibility. I suggest that we develop an existing route, which would not be difficult or expensive but would be an enormous advantage as a transport route.

My proposal is that we electrify the route from Birmingham Snow Hill to London, which goes through Leamington Spa and Banbury. At present, a small number of trains use that route mainly to go to Marylebone, but it is also linked to Paddington. More significantly, that route is physically linked to what will be Crossrail and could easily be linked without much expense to Crossrail going in both directions. If it were electrified, it could accommodate 125 mph trains from Snow Hill, which is in the middle of the Birmingham business district and would link it directly to the City of London and Canary Wharf and other stations on Crossrail. Business people could literally walk from their offices to Snow Hill and walk from the destination station into an office in the City of London or Canary Wharf.

We have a simple rule-of-thumb costing of the scheme. We have not done any detailed work yet, but my engineer friends suggest that the cost of electrifying that route and making the necessary links would be in the order of £1 billion. There are 125 mph electric trains already available, but obviously new rolling stock might be needed.

Not only would that route be enormously useful and tremendously beneficial, but there would be no need to change trains or get taxis from mainline stations into the city as there would be a direct route into the city where the offices are, so business people could work on the train and walk straight to their offices at both ends.

Moreover, this could easily be linked from Leamington Spa through to Birmingham airport, the Birmingham national exhibition centre and the Birmingham New Street line, so direct 125 mph electrified trains could come from the north of England on to this line and go straight into the City of London, and also to Heathrow. As a result, there could be a link between Birmingham airport and Heathrow—those airports could serve each other—perhaps, at this speed, with a service of no more than an hour’s duration. One could almost be seen as a hub for the other, and, certainly, linking those airports would be beneficial to the midlands economy, and I think possibly to Heathrow as well.

As for points north, the ability to get on a train in the middle of Manchester or Liverpool and be taken direct to Heathrow without having to change would be an enormous advantage. That route is already there. It is under-utilised, it is capable of 125 mph working, and it could easily be electrified.

This is so obvious that I am surprised it has not been suggested already. These views are not only mine; they are the views of experienced railway engineers, who tell me what can be done and the likely costs.

I think there is a compelling case for this, and I hope the Minister will at least give it some consideration and take it back to his Department for further thought. I am happy to provide further details if he wishes, but I hope this speech has at least provided a taster.

17:29

[Mr Goodwill]

With the leave of the House, I would like to make a few concluding remarks.

I will make sure that my colleague the Minister with responsibility for rail is aware of and will examine carefully the points made by the hon. Member for Luton North (Kelvin Hopkins). Let me repeat our thanks to the Select Committee for the contribution it has made. As a former member of it, I know how assiduous it is at doing its work, and I am pleased that the Government are able to accept some of its suggestions, in whole or in part. The hon. Member for Liverpool, Riverside (Mrs Ellman) talked about predictions, and I have to say that many people probably think predictions about future transport demand, like economic predictions, serve the purpose of giving astrology a good name. The fact is that when colleagues come to me to talk about overcrowding on their railway or the congestion on their roads, they are not talking about something that is going to happen in 10 years’ time; they are talking about congestion that is happening now and we need to address now. That is why I am so proud that this Government have addressed those real shortfalls in investment we saw under the previous Administration.

I understand that we are getting close to the election, so I will forgive the hon. Member for Nottingham South (Lilian Greenwood) some of the points she made from the Front Bench. Indeed, I will forgive her the amnesia she seems to be suffering from, which has blocked out the period between 1997 and 2010. Many of her points were demolished with aplomb by my right hon. Friend the Member for Chelmsford (Mr Burns), so I will not go into them at all. I will just pick her up on her comment that our electrification programme is “coming off the rails”. May I gently remind her that the previous Government put in place less than 10 miles of electrification and we are committed to electrifying more than 850 miles? I suspect Hornby electrified more railways than the previous Labour Government did in their time in office.

[Lilian Greenwood]

I welcome the tone in which the Minister is responding, but may I ask him to confirm two things? The first is that it was the last Labour Government who built HS1—67 miles of brand new, fully electrified railway. The second is that only 2% of the Government’s fabled 850 miles has actually been completed under this Government.

[Mr Goodwill]

I shall give the hon. Lady credit for High Speed 1—what a shame we did not start 20 years before, like many of our European and far-eastern competitors. We are finally getting on top of electrification and we have announced major projects—and the money to go with them. I always used to get amused when the previous Government talked about investing in things, because investment is something that is there in 10 years’ time. We are investing in infrastructure, because that is real investment. Many of the previous Government’s spending commitments could not be described as investment because we can no longer see where that money was spent.

I will conclude this debate by highlighting, again, how vital the national networks are, both to our way of life and our economic growth. We have fallen behind our international competitors through years of under -investment. That must be remedied, but it must be done in a balanced, safe and sustainable way, as outlined in the national policy statement. We have taken seriously the environmental concerns raised during the consultation and scrutiny process, and we are committed to improving resilience and safety, and encouraging cycling and walking, wherever possible. I ask therefore that the House approve the NPS.

Question put and agreed to.

Resolved,

That this House approves the National Policy Statement for National Networks, which was laid before this House on 17 December 2014.

Criminal Justice and Courts Bill

Tuesday 13th January 2015 Commons Chamber

Consideration of Lords message

Clause 29

Secure colleges and other places of detention for young offenders etc

17:34

[The Lord Chancellor and Secretary of State for Justice (Chris Grayling)]

I beg to move,

That this House insists on its disagreement with Lords amendment 74 and proposes amendment (a) in lieu.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to consider: Government motion to disagree with Lords amendment 102B, and amendments (a) to (k) in lieu.

Government motion to insist on its disagreement with Lords amendments 103 to 106, and amendments (a) and (b) in lieu.

[Chris Grayling]

We need to focus on two areas of the Government’s programme of reform: secure colleges and judicial review. This House has divided on both matters on several occasions, and backed the Government each time. I have listened carefully to all the arguments made in this and the other place, and I have introduced amendments, which I am confident will provide a practical approach in each area sufficient to reassure hon. Members.

On secure colleges, the provisions reflect our ambition to improve the education and reoffending outcomes for young people in custody. Secure colleges represent a step change in youth custodial provision, putting education and training at the forefront, and moving away from the traditional environment of iron bars on windows. Almost all of the provisions that related to the introduction of secure colleges have now been approved by both Houses of Parliament. There is one matter that remains for this House today, which is whether girls and under-15s should be detained in secure colleges.

Members will recall that, at the beginning of December, this House overturned an amendment made by the House of Lords to prevent the accommodation of boys aged under 15 and girls in secure colleges. I am disappointed that we are discussing that same amendment, but I have considered carefully the concerns raised. Since the last time the matter was debated in the House, my noble colleague Lord Foulkes has committed to publish and lay before Parliament a report before any of those two groups are introduced to the first secure college. The report will explain the arrangements to be made for girls and under-15s, including how those groups will be safeguarded. Despite that commitment, the House of Lords nevertheless insisted on its earlier amendment to exclude them from secure colleges.

I have been clear throughout the passage of the Bill that we do not want to prevent in law girls and under-15s from in future being able to benefit from this pioneering approach and enhanced provision. We do not intend to put them in a secure college from day one and we do not intend to include them unless it is a project that is clearly demonstrating benefits. Therefore, I am entirely relaxed about the idea of Parliament considering this issue fully, because if it works, we will all support the idea of allowing those two groups to benefit from the change.

However, there is still some concern about the accommodation of those two groups, particularly alongside older boys. It is worth saying that girls and boys are accommodated alongside each other in secure training centres at the moment. I propose that we amend the Bill to make the commencement of the power to provide secure colleges for the detention of girls and under-15s subject to a resolution of both Houses of Parliament. That seems a simple solution. None of us will want to put them in the accommodation if the system is not working. If it is working, I cannot believe that any Government of whatever persuasion will want to deny those two groups access to what I believe will be a positive environment that will help them both to develop their skills and to fulfil the terms of a sentence of the court.

I hope that hon. Members welcome the significant steps that we are taking to address concerns while protecting the opportunity for girls and under-15s to benefit from the transformed provision secure colleges will deliver. Our measure will require the approval of this House but not the lengthy time frame that new primary legislation entails. I therefore ask the House to accept this amendment in lieu of Lords amendment 74.

Most of the Government’s proposals for judicial review reform have now been approved by both Houses of Parliament and two issues remain. Let me start with financial information. Our intent on this is entirely sensible. It is to ensure that there is less chance for those who fund and control a judicial review to escape their proper measure of costs liability, but the amendment is not about costs; it is purely about information. Let me stress to the House that this particular amendment, and the debate between us and the House of Lords, is about information and not costs. Concerns have been raised that requiring applicants to give the court information on how a judicial review is funded might discourage people from making a small contribution to help fund the litigation. That was never my intention. My intention is to avoid a situation in which people can shelter in anonymity, behind someone else, while funding all or most of a judicial review process.

We have explained before that we would take a “light touch” approach when specifying what information would be required. We now intend to address the concerns by ensuring that there will be a limit on the level of contributions that trigger the requirement to identify those who have provided funding. This amendment was introduced in the other place the last time it considered the Bill and was narrowly rejected, but I am confident that our approach is sound and will provide the protection we desire for smaller contributors, without allowing those with a larger interest who control litigation to avoid their due level of risk.

The debate in the other place was about how we could give comfort regarding the level at which the threshold will be set and how we will arrive at that number. I propose to set out the answer to that question today. I am content to say that the Government will commit to a consultation on where and how the threshold will be set. I am also content to inform the House that we will approach the consultation with a suggested figure of £1,500 in mind, and we are minded additionally to test a figure of 5% of the available funds.

Let me reiterate that the clause does not alter the courts’ existing powers to consider these types of situations and to make or to not make costs orders against third parties, if they consider it appropriate. Also, there is nothing in the clause that would cause an otherwise meritorious claim to be refused permission simply because the claimant was of modest financial means. The provision is about ensuring that a judge, in exercising their discretion on making a costs order, has all the information they could reasonably expect to have in front of them. I trust I have further reassured hon. Members that we will work to ensure that those who provide small amounts of funding do not need to be identified as providing financial support and are not likely to face costs liabilities.

The second judicial review topic—procedural defects—has prompted greater debate. I should start by apologising to the House for my confusion the last time we debated this issue in mixing up my highly likelies and my exceptional circumstances. Although I note that Opposition Members did not notice at the time, let us be clear this evening that I made that mistake and apologise to the House for it.

I think that our proposal on procedural defects is an equally common-sense reform as the one on financial information. We are trying to ensure that where a judicial review concerns a slight error—so slight that it is highly unlikely to have made a difference to the applicant and where the decision would have been the same regardless of that procedural defect—it will be deemed not to be a good use of court time for that judicial review to continue. It is not sensible to use tens of thousands of pounds of taxpayers’ money fighting judicial reviews when that money could be used to better effect in supporting our public services.

[Dr Julian Huppert (Cambridge) (LD)]

The Secretary of State talks about the outcome for the applicant, but it has been put to me by a number of organisations, particularly environmental organisations, that when they bring a judicial review, they do not do so on their own behalf. Is there a standing test, or does he not expect this to be a problem—that they will be able to go ahead if there is likely to be a substantial difference to the outcome overall?

[Chris Grayling]

I hope I can reassure the hon. Gentleman by saying that the legal advice I have received is that if an applicant passes the standing test, they would not be adversely affected by the provision.

We have tabled an amendment providing for an exception such that the challenge can continue or a remedy can be awarded where the court considers it appropriate because the matters at hand are of exceptional public interest. I have listened carefully to the debates and want to be clear that it needs to be an exceptional public interest and it must be quite clear to the court that the issues in question are exceptional. We think it right that a high public interest test should be passed before the exception is activated and taxpayer-funded resources are used on a judicial review that might be academic in relation to the applicant.

Equally, we think it is right for the judges to define how that exception will operate in practice and to decide in which cases it is right to certify, but if they are to do that, they should certify formally and explain their reasons. It should not simply be a matter of a judge deciding to do it; there should be a requirement to certify that the test has been met and to state why it has been met. I think that offering a judge the flexibility to certify that a matter is of exceptional public interest and to allow, therefore, the case to proceed, while leaving the remaining safeguards in the Bill, finds an appropriate balance. It is a way of addressing some of the concerns raised in the other place but leaves intact the core purpose of the provision, which is to stop unnecessary, spurious, delaying-tactic, campaigning judicial reviews being brought on technicalities—cases the taxpayer ends up defending at tens of thousands of pounds of expense each time—to no good purpose, often with a view of delaying necessary reforms at a time when necessary reforms and difficult decisions are a regular part of Government life.

[Valerie Vaz (Walsall South) (Lab)]

Will the Secretary of State give an example of the kind of mischief that he is trying to stop?

17:45

[Chris Grayling]

I have set out a number of examples. On Second Reading I referred to cases where essential infrastructure projects have been delayed by judicial reviews that have been brought for reasons that we do not regard as acceptable. I have experienced in the Department attempts by third parties to delay necessary reforms through judicial reviews brought on technicalities. This is a reform that is needed. Comments made over the years by Ministers in the last Government also underlined that they themselves believed that reform was necessary.

[Mr Geoffrey Cox (Torridge and West Devon) (Con)]

I am grateful to my right hon. Friend for listening most carefully to some of the matters that were raised in this House and the other place in relation to the clause. I can see the way in which he is considering alleviating some of those problems, but is there any particular precedent for the phrase “exceptional public interest”? I cannot find it in any previous statute, nor am I familiar with it as an example in any other legislation. I am not quite certain what it means. I can understand that there might be exceptional circumstances, which might lead a judge to find that those in the public interest meant that the matter should be allowed leave to proceed, but the phrase “exceptional public interest” has caused me some difficulty. What is the model on which he has founded this approach?

[Chris Grayling]

My judgment was that a conventional level of judgment against public interest was not sufficient in this circumstance. We have discussed it extensively in the Department among my ministerial team and with our advisers. I have no qualms about setting a higher test. It will be a matter for the judges to decide how and when that test should apply. As my hon. and learned Friend would expect, rightly, the judges should have the discretion to do that. But I do not think it is unreasonable for this place to say that it wants a test that is a bar higher than the conventional public interest test and that this should be used only in exceptional circumstances.

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

I speak from memory, so forgive me if I do not have this exactly right. My understanding was that my right hon. Friend wanted effectively to strike out judicial reviews that were almost procedural, in which the outcome would have been the same whether the organisation had obeyed the rules or not. Could he see procedural issues being an exceptional public interest? I think that they are an important public interest: that we make our agencies and our Governments obey the law. It is after all the point of judicial review.

[Chris Grayling]

That is absolutely the case, but on more than one occasion in my ministerial time, and the same applies to Ministers in other Departments, I have faced cases that were brought on matters of public policy but were based on relatively minor procedural defects in a process of consultation, for example. Minor breaches should not automatically lead to a case being brought, with the taxpayer facing a bill of tens of thousands of pounds, when it was highly likely that the decision taken would have been completely unaffected by that procedural defect. That is what these proposals are all about.

[Karl Turner (Kingston upon Hull East) (Lab)]

Will the Lord Chancellor give us an example of one of those minor cases to which he refers?

[Chris Grayling]

I have experienced at least two examples of third-party groups seeking to argue that a form of consultation was not absolutely accurate and that it should have been done slightly differently, when it made no difference to the eventual decision. In one case, it was clearly a delaying tactic to avoid a necessary change. A judicial review should be brought when it is a matter of genuine material error or failure by the Department concerned, not a minor technicality. That is what this measure is all about. I believe that it is necessary. Ministers in the last Government regularly argued for change because judicial review was being used inappropriately. This reform will bring a degree of common sense to the system without undermining the core purpose of allowing people who are wronged by public bodies to challenge the decisions taken about them in the courts. That is why I commend our amendments to the House.

[Mr Andy Slaughter (Hammersmith) (Lab)]

On 1 December last, in our previous session of ping-pong on this troubled Bill, I started my comments by referring to the latter stages of the Legal Aid, Sentencing and Punishment of Offenders Bill in April 2012, and the parallels continue. After the Lords defeats on Report on that Bill were overturned in this Chamber by the enthusiasm of the Lib Dems to support their coalition partners in hobbling access to justice, their lordships inflicted three further substantial defeats on the Government and, just like today, this Chamber had the opportunity to consider again the wisdom of the Government’s insistence on getting their legislation through unrevised.

I say “unrevised”, but we do have amendments to consider, as the Lord Chancellor set out in his speech—amendments not freely given, but wrung out in the forensic unravelling of the Bill in the other place, and by the requirement, following their lordships’ double insistence, to make some concession if the Bill is to make progress. On the basis of our LASPO experience, I urge caution in accepting any assurance from this Government that they have made genuine concessions. In 2012 they promised a review of the no win, no fee cost regime as it applied to mesothelioma claims, but three months ago and at a cost to the taxpayer of £50,000 the High Court found that that purported review had not been carried out.

In 2012 the Government claimed to have broadened the evidential criteria for accessing legal aid in domestic violence cases, but the hurdles have proved too high for many victims, and that concession, too, is now subject to litigation. So the Lord Chancellor will forgive my scepticism when I say that the proposals today look like the bare minimum that he thinks he can get away with and, if they are approved by both Houses, they are likely to provoke not a working compromise, but more bad-tempered litigation.

Let me begin with Lords reason 74B and the amendment in lieu that the Government have proposed. First, I shall set out the context. The Prime Minister said yesterday that his priority was “a Britain living within its means”. If Ministers were serious about living up to that, they would not be wasting £85 million on a flawed plan for a secure college which does not have the support of a single independent expert. I remind the House, as my hon. Friend the Member for Barnsley Central (Dan Jarvis) has done before, that the National Society for the Prevention of Cruelty to Children, the Royal College of Psychiatrists and nearly 30 other leading children’s charities have publicly condemned these plans as “expensive and dangerous”.

Even the Government’s own impact assessment accepts that the idea is untried and untested. Throwing girls and the youngest children into this mix, when they would be in the overwhelming minority, would make for an incredibly intimidating atmosphere and be an accident waiting to happen. We agree that improvements need to be made in youth custody. Reoffending is still too high, and education can and should play an important role in the rehabilitation of young offenders. The chief inspector of prisons has today published another concerning report highlighting conditions at Feltham young offenders institution, where 48 separate gangs are said to operate. Not enough good training is being delivered, and too many offenders there are spending all day locked up with nothing to do, a quarter of them in conditions that amount to solitary confinement.

The Government should be focusing on that problem, on improving standards in existing institutions, rather than on this vanity project dreamed up by the Secretary of State, so it is disappointing that the Government have insisted on ploughing on regardless. Ministers are still unable to offer any concrete plans or assurances about how their very lofty ambitions for the secure college will be achieved in reality. It has not gone unnoticed that whenever anyone has raised a reasonable and substantial objection to these plans, the Minister’s only answer has been to retreat to repeating the fact that 68% of offenders released from youth custody reoffend within 12 months, and that something must be done—the secure college is something, therefore it must be done. The whole House will see that for what it is: a very weak argument with very little evidence behind it.

We on the Opposition Benches are clear. We remain opposed to the secure college in principle. If we are elected, we will not wish to go ahead with it if at all possible, and we agree with the common-sense conclusion that the other place has reached twice now, that the secure college would be unsuitable for girls and children under the age of 15.

The Minister made a rather confused argument when the House last debated this point. On the one hand, he argued that the plans will deliver “substantial benefits” to these groups and that they should not be denied access to the secure college, but on the other he said it was not his intention to introduce girls and children under 15 into the college from the start. Why not? Which is it? He cannot have it both ways. If the Government still feel that there are problems with incorporating these groups, that would first need to be worked out in a pilot. This rather confirms the fears that many independent experts have expressed.

Even the noble Lord McNally, until recently a Minister and now chair of the Youth Justice Board, has warned against the approach that the Government are pursuing. He told the Justice Committee:

“I would want to advise the Secretary of State to think very hard about whether young females should be there”—

that is, in the secure college. He went on:

“Of course, co-education has its attractions, but I would not want the scheme to fail because of difficulties in trying to accommodate mixed groups.”

We hope that the Government will see the sense of their own former Justice Minister’s comments and not pursue this poorly thought-out idea any further.

Having said that, we note that the amendment provides that girls and 12 to 14-year-olds could not be placed in secure colleges without further parliamentary approval by way of affirmative statutory instrument. Although I suspect that this solution has an eye to the convention that the other place does not pass fatal motions on secondary legislation, I will give the Lord Chancellor the benefit of the doubt and postpone this discussion until another day. We will not vote against the amendment to reason 74B.

Turning to judicial review, the proposed amendments are even less satisfactory. I think that the Lord Chancellor will concede that he has not acquitted himself well in explaining the purpose and effect of this part of the Bill to the House. Lords amendment 102B provides that the court “may”, instead of the Bill’s original “must”, refuse judicial review if it concludes that it is “highly likely” that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred. The court will retain its discretion to decide whether to refuse the judicial review on the basis of the “highly likely” test. The amendment was carried with a majority of 69 votes in the Lords—an increase in the majority for the original vote.

The Government’s proposed compromise is to give the courts discretion to hear the judicial review, but limited to circumstances where this is

“for reasons of exceptional public interest.”

There is an echo here of what the Lord Chancellor wrongly told this House last time the Bill was debated, when he said:

“The ‘exceptional circumstances’ provisions would allow a judge to say, ‘This is a flagrant case and must be heard.’”—[Official Report, 1 December 2014; Vol. 589, c. 82.]

Much has been made of the Lord Chancellor’s inadvertent misleading of both this House and the other place on this important issue. I say magnanimously that we all make mistakes and I do not make a point on the fact of the error. However, I did raise a point of order on 10 December because I thought that the Lord Chancellor should have done more than reply to the Member on whom he was intervening when he made the comments I have quoted: first, because he repeated the error elsewhere in his speech; and secondly, because had he simply corrected the record, as I believe he should have done, Members of both Houses would not have remained under a misapprehension.

There is a wider point that goes to the heart of both sets of Lords amendments. Their lordships set out to restore discretion to the courts. The Bill as originally drafted is the enemy of judicial discretion; it relies on “must”, not “may”. So what are we to make of the Lord Chancellor apparently thinking that there was, albeit limited, discretion in clause 64, when there was not? In trying to answer that question and square this circle, the Government have come up with their amendment to the Lords position, but it refers not to “exceptional circumstances” but to “exceptional public interest”. Exceptional circumstances are one thing and public interest is another, but what is exceptional public interest?

I fear that this does nothing to address the criticisms of the original wording of the Bill. It will still encourage the rehearsal of substantive issues at permission hearings. It will still lure judges into second-guessing how decision makers might have approached the substantive decision if taken lawfully. It will increase costs and delay at permission stage. It will lead to more satellite litigation on what constitutes “exceptional public interest”. It is a concession on the point of principle, albeit one the Lord Chancellor thought he had already made, but in practice it will make little difference to the restriction on the fundamental operation of judicial review as an administrative remedy. For that reason, we will vote against the Government’s proposal.

Turning to Lords reason 106D, we accept that there is an attempt by the Government to compromise, albeit only because of the double defeat at the hands of the other place—but again, it is more plastic than real. The Government’s proposed concession is that the means of third party funders would have to be disclosed only if the financial support to be provided exceeds or is likely to exceed a sum set out in the rules of court or the tribunal procedure rules. The tribunal procedure rules are made by independent committees, but the rules they propose can be allowed or disallowed by the Lord Chancellor. That gives us little comfort.

18:00

Public authorities can fall into error in ways that have a huge impact on the lives of whole communities. That can mean hospital closures, unsuitable developments or poor decisions on school places. Community groups acting legitimately and in good faith that challenge unlawful decision making often need to pool their resources to foot their legal bills, but the Bill says that anyone who contributes to such a fund might find themselves or believe themselves to be liable for costs.

Introducing a minimum sum that would not be covered by the rules on disclosure and would put the funder at risk is tinkering with a bad law, not reforming it. While some funders in some cases may find that they escape the chilling effects of clause 65, many will not or will not feel confident in supporting an application. Contrary to the Lord Chancellor’s purported view that judicial reviews are started at the drop of a hat for political or public relations reasons, they are often complex and fragile claims carefully constructed by inexperienced litigants who have to navigate the intricacies of permission, legal aid applications, protective costs orders and fundraising from family, community or charitable sources. The object of clause 65 is to discourage applications, irrespective of merit. The concession does little to mitigate that undemocratic aim, and we will vote against that, too.

I am genuinely sorry that for ideological reasons rather than logical or financial ones the Lord Chancellor has marshalled his forces against the right of the citizen to challenge the state. It is a worrying trend that becomes more explicit the longer the Government remain in power. The Liberal Democrats do nothing to alleviate it. A Labour Government after May will restore judicial review to its rightful place in the constitution and as an effective weapon against bad governance. In the meantime, we will vote to retain their lordships’ position and we will vote against the Government’s nugatory amendments. I hope that their lordships will feel emboldened to renew their opposition when the Bill returns to their House.

[Mr Geoffrey Cox (Torridge and West Devon) (Con)]

I will, I hope, be very brief. As the Secretary of State knows, it was in response to me that he made the mistake for which he has graciously and fully apologised to the House. I, for one, accept that it was entirely inadvertent.

However, I have two real points on the original clause 64 and amendment 102B in lieu. First, when my right hon. Friend wrote to me on 4 December 2014, he said in his concluding paragraph:

“I would like to make it clear that the clause as introduced strikes an appropriate balance, and where there is any real doubt that there could have been a substantial difference for the applicant, the court will be able to find that the threshold had not been met and can grant permission to proceed with judicial review.”

What that arouses in me is this reflection: the current rule developed by the courts is that where the outcome was “inevitable”, the court is enabled under the current authorities to decline a remedy. I ask my right hon. Friend, when he concludes this debate, to point out where there is a difference. If he is correct in saying that where there is any real doubt, the court will still be able to grant leave, how does that differ from the current situation? If the position is inevitable, the court will not grant a remedy now. Where there is any real doubt, it will grant a remedy. It is therefore difficult to see whether the common law test on whether the outcome is “inevitable”, despite the procedural defect, is affected very much by being changed from “inevitable” to “highly likely”. I am therefore puzzled about why we need this particular change.

I am relieved to have heard the tone of the speech of the hon. Member for Hammersmith (Mr Slaughter) from the Opposition Front Bench, because I am able much more easily to agree with him that there are substantial problems with the clause as drafted, specifically the one I have pointed out previously: it places judges in the invidious position of effectively having to take the decision themselves. They go from being reviewers of a decision to being decision makers. If we are asking somebody to say what would have happened had the facts not been as they are and how a decision is likely to have been taken, the judge is inevitably going to have to ask, “What would I have done, based on the evidence that is being put before me? What would a reasonable person have done?” That places the judge in the invidious position of being much closer to a decision maker.

The courts studiously avoid doing that. They adopt the position of being reviewers of a decision and they are enabled at the moment to decline a remedy when a matter is utterly obvious and inevitable because that does not put them in the position of having to second-guess the decision of the proper constitutional authority that has made the decision they are reviewing. When it is obvious and inevitable and when no reasonable person could come to any other conclusion but that the decision would have been the same, the courts are not in the position of having to speculate about how a reasonable person—how they, the judge—would have approached the problem in the same circumstances based on the evidence.

That is why I think the provisions represent a fundamental change constitutionally. It is one that Conservatives should lament, because instead of the courts allowing the proper body—the Executive—to take the decision, the Executive are inviting the court to place itself in the position of taking that decision. As a result of frustration with procedural defects that seem to the Executive not to be particularly meritorious and to hold up Executive decisions, they are saying to the judge, “Well, you take the decision. You can take the decision and you can say that it would have been the same anyway.” That is constitutionally wrong and it is something that the courts have avoided—in my submission, rightly. That is why I voted against the Government on the last occasion and why I am afraid that unless my right hon. Friend the Lord Chancellor can persuade me today I shall vote against the Government again. This is a point of principle and an important one and it is not affected by the Government’s amendment in lieu, which I otherwise welcome.

As for amendment (a) in lieu, I have never come across the expression “exceptional public interest” and I do not understand what it means. Every public interest is exceptional and the only public interest that is likely to be at stake is the public interest in fair and decent governance. Fair, consistent, rational administration is the public interest at stake in allowing somebody or an Executive authority simply to avoid the consequences of an unfair procedure. What other public interest would there be but that? It would simply be a case of someone saying, “I think this is so unfair that even though I think I probably would have decided it in the same way had the procedural defect not taken place, I still think leave should be granted.” That seems nonsense with which to confront a court, and my regretful submission —regretful, because I find it extremely difficult to diverge from the Government, particularly as I believe that my right hon. Friend ought to be commended for rethinking this and considering his new amendment—is that I would like him to consider whether it might not be better drafted. For example, I really do not understand why it could not have said something like, “There are exceptional circumstances that make it in the public interest for the application for permission to be granted.” I do not understand what is meant by “exceptional public interest”. Although I applaud the sentiment behind the amendment, I am not able to support it as drafted.

In the previous debate I adumbrated my concern about the proposal to put judges in the position of decision maker and to make applications for permission cumbersome and evidence-heavy. Public authorities will be induced to bombard the judge with all the reasons, even if they are wrong about the defect in procedure, that the decision would inevitably have been taken or, in this case, highly likely to have been taken. The judge will then have to embark on an inquiry at permission stage into whether or not it is highly likely that the decision would have been taken. That will induce evidence to be submitted by the other side, and so permission hearings will be unwieldy.

For all those reasons, I shall listen attentively to what my right hon. Friend the Secretary of State says in concluding the debate, but I regret to say that it will take considerable persuading to induce me to vote with the Government on this occasion.

[Chris Grayling]

With the leave of the House, I shall say some brief words in response to the two contributions.

First, the shadow Minister, the hon. Member for Hammersmith (Mr Slaughter), argued that the reforms are wrong. I simply remind him that, time after time when Labour was in government, we heard Ministers arguing about the impact of judicial review on Government and the need for change. It is interesting that Labour takes a very different view now that it is in opposition.

What Labour is actually arguing for is anonymity for people who provide financial backing to a judicial review. That anonymity would apply not just to a small backer, but, for instance, to a tobacco company using a third party to judicially review the Government’s public health policy. I simply do not understand why Labour would oppose the idea of a court knowing who is funding a judicial review to a major degree. We will simply have to disagree on that.

It was interesting to hear the shadow Minister say that if, heaven help this country, Labour finds itself in government in May, it would restore judicial review to its current position. I did not hear him commit to introducing primary legislation to reverse our measure. I would wage the usual fiver that, in the unhappy event of the Labour party being in government again, it will not seek to reverse our reforms.

My hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) and I are clearly not going to agree. The point about the amendment on procedural defects is that it ensures that a public authority cannot commit a major breach of procedure. It also ensures that a public body that commits a minor and unimportant breach of procedure cannot then face a substantial bill as a result of someone using that breach to bring a case when there is little likelihood of a different decision being taken. That simply ties up the costs and staff time of public bodies for weeks on end on a matter that is only really ever brought for campaigning or delaying purposes. I assure my hon. and learned Friend that the Government see regular examples of cases being threatened or brought on precisely that premise.

My hon. and learned Friend mentioned the stipulation of exceptional public interest. Put simply, there are many matters that are of general public interest and we are seeking to set the bar higher. It seems to me to be a simple proposition to say that a court must certify that a matter is of exceptional public interest—which might relate to a major, fundamental and worrying breach of procedure by a public body—rather than of general public interest. As a Government and, I hope, a Parliament, we are consciously setting the bar one notch higher. That is what the measure is designed to do.

I am afraid that I do not agree with my hon. and learned Friend’s point about judges being forced to make or evaluate a decision themselves. If a judge is able to decide whether a ministerial decision is irrational, quash a Government decision and send a major policy matter back to the drawing board, surely they can also decide that a matter is so minor that it would not have led to a different decision being taken. That is the purpose of the measure.

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

The judge can assess rationality and reasonableness, but my particular concern is about legality. Will what the Minister is doing allow public bodies to delegate things that Parliament determines they should do themselves, and will a decision made by such a body be allowed to stand under the reforms even though Parliament has not said that that body should make that decision? Can he give me any reassurance?

18:15

[Chris Grayling]

The whole purpose of the reforms is to protect public bodies against cases brought on a technicality. One of my concerns that has not been addressed is about secondary legislation. I have severe doubts about whether secondary legislation should be subject to judicial review, but it is; Parliament itself can be judicially reviewed.

The reforms are not designed to undermine the core purpose of judicial review. They will ensure that we apply common sense to the process, and that decisions are taken by the courts only when appropriate. They will ensure that public bodies cannot be in effect blackmailed by a judicial review, and that campaign groups cannot use judicial review to string out a process or to delay change to make a political point.

[Mr Cox]

I would be most grateful if my right hon. Friend addressed the point I raised. What is the difference between the current common law test, which enables courts to allow leave or a remedy in a case of inevitability —in other words, if it is obvious and inevitable that the decision will be the same, the courts already have the power to say, “No, you can’t have leave or a remedy”—and his proposed test, in clause 64, about whether it is “highly likely” that the decision will be the same?

[Chris Grayling]

My hon. and learned Friend mentions the common law approach. When it was introduced in 1974, judicial review was a limited remedy for individuals who felt they had been badly wronged by a decision made by a public body, central Government or local government. Over the years since, it has become very different, and it is now overtly used by campaign groups and third parties to seek to disrupt the process of government. He is absolutely right to say that the common law approach exists, but our judgment as a Government—I hope and believe that, at the end of the debate tonight and of the one to follow in the House of Lords, it will also be the judgment of Parliament—is that Parliament needs to set in place some tramlines within which the courts can operate. We do not want to undermine, remove or destroy judicial review; we want it to be used in the right and proper way for which it was originally intended, and that is what the reforms are designed to achieve.

[Sir Edward Garnier (Harborough) (Con)]

I have some sympathy with what my right hon. Friend is trying to do, because I witnessed at first hand the judicial review of the reburial of Richard III in Leicester cathedral. If I may say so, however, it would be very well worth while paying attention to what our hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) has said. I urge the Secretary of State and his fellow Ministers to try to work out a form of words that will avoid the trap he pointed out, but that deals with the practical problem of our courts being overburdened with footling judicial review cases. That can be done in a sensible way that does not attract the derision of the courts, and I urge my right hon. Friend to have another think.

[Chris Grayling]

We thought carefully about how best to address that issue, and the original clause was straightforwardly designed to set out the position when a case is brought on a technicality—a procedural defect. For example, in a number of cases people have argued that the format of the consultation was not handled appropriately, or perhaps a Minister or official indicated that the consultation would take place in a particular form, and that was used as the basis for a judicial review. If the official promise was to hold a four-week consultation but the Government chose to hold a three-week consultation, and a judicial review was brought on the basis that we did not fulfil our promise about the format of the consultation, the frustration is that that would have made no difference to the final decision, yet the case was brought none the less. Often, the case will be struck out, but not before taxpayers’ money and huge amounts of the time of Government officials and lawyers have been spent on bringing, defending and dealing with it.

[Sir Edward Garnier]

I agree with what my right hon. Friend is attempting to do, but I suspect he is trying to pot the wrong ball. Suppose he allowed himself to step back a bit from “exceptional public interest”—a moderately nonsensical expression, if I may say so—and consider the issue from a different angle. He will come at the right answer, which is the political answer that he and I want to achieve, and the Treasury answer that he has been invited to achieve, and we can then adjust the system of judicial review so that footling, silly cases that for some reason may have slipped through the net—

[Mr Speaker]

Order. I say to the hon. and learned Gentleman with great respect that the intellectualism and erudition of his intervention are equalled only by its length.

[Sir Edward Garnier]

What a most unusual admonition. I think the Lord Chancellor understands my point, and I hope I am not ruining the point that my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) has already made. However, I encourage the Lord Chancellor to have one more think about this issue, because at the moment I am not prepared to vote for the Government on it. I will abstain rather than vote against the Government, but I urge him to think about some way of bringing me into the Lobby.

[Chris Grayling]

Let me give an example of one consultation response that we received when we put forward our thoughts about the changes that are needed. A group of local residents who were challenging a planning decision formed a limited company, with a small number of directors each paying £1 to the company funds. The respondent considered that by doing that the directors aimed to avoid any adverse cost consequences if the challenge was unsuccessful, and that could have meant significant costs to the taxpayer in terms of defendant legal costs that might otherwise have been recovered from a losing claimant. The respondent also said that other local residents were horrified that that small group could hold up democratically agreed development at such small financial risk to themselves.

There are two parts to that example. First, there is the financial element, and one thing I would expect us to do in the consultation is consider the use of shell companies—a shell company was used in the much discussed Richard III case. There is also the point about exceptional public circumstances. I listened carefully to and talked after the last debate to my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), who suggested possible forms of words to use. We looked at that option and discussed others, and decided that the exceptional public interest threshold best achieved the goal. It may not have existed in legislation until now, but that is no reason for it not to exist henceforth. These are straightforward terms in the English language, and we are simply setting the bar one step higher than public interest. A routine matter can generally be deemed to be of public interest, and we are discussing introducing an exceptional level to that.

[Mr Cox]

Does the Secretary of State mean what he said a few minutes ago, which is that cases of really egregious unfairness might afford a basis for declining to dismiss the case, even when the outcome is likely to have been the same? Is that what he is thinking of, because a few moments ago he mentioned something that is a serious or grave departure from fair process. If that is what he means, there is a better way of encapsulating it than the current drafting.

[Chris Grayling]

We will probably beg to differ on that, but my hon. and learned Friend is absolutely right. One of the circumstances in which I could envisage the amended clause being used is if a public body has blatantly flouted the way in which consultations should be managed and procedure handled, but it is likely that the ultimate decision would have been the same. It is reasonable for a court to then say that that is simply unacceptable—that it is a matter of exceptional public interest that a public body of this kind should be able to behave in such a completely cavalier way—and it will therefore allow the case to go forward. The amendment gives the judge the freedom to take that decision. It was our judgment that it accorded that freedom, but it also achieves our goal of ensuring that permission is not given for technicalities, which is particularly important.

[Mark Reckless]

On transparency, I think I am inclined to support the Justice Secretary, but if there is a shell company without material resources, surely the solution is just to apply for costs against it?

[Chris Grayling]

That may indeed be an option in the courts. I go back to the Richard III case which, the hon. Gentleman may remember, was brought by Plantagenet Alliance Ltd. It is still to this day not clear to me who the Plantagenet Alliance were and who was behind it. It was launched on the basis of it being the family of King Richard III—his descendants—demanding a right to a say in where he was buried. I suspect that most of us in this Chamber are, in some way, shape or form, descendants of King Richard III given the way the generations have spread out. The Department was subject to a case and won that case. The court ruled that I had fulfilled my statutory duties appropriately. None the less, as a result of that case the taxpayer faced a bill, if I recall correctly, in excess of £100,000. To my mind, that is not good use of public money.

My view, therefore, is that at the very least we should know—as I say, I do not know to this day—who the backers of the Plantagenet Alliance are. It is my full intention to put forward a proposal to set a £1,500 threshold, but I will also be considering how to prevent the use of shell companies to provide a shelter for those bringing judicial reviews. I hope that will command the support of the House. I still do not understand why the Labour party is so opposed to it, because I cannot see how it is in anybody’s interest for public bodies to be subject to court cases by bodies that are unknown. We do not know who is behind them, who has set them up, and whether they are a front for an interest group that we would find utterly distasteful.

[Mr Dominic Grieve (Beaconsfield) (Con)]

The process of ping-pong has narrowed the issues. I am grateful to my right hon. Friend that on the other two amendments he has made an effort to restrict matters, but I have to say that I remain unpersuaded that this amendment will not excessively fetter judicial discretion. I also have to say that the concession made in the Lords, when they tabled a fresh amendment, is difficult to criticise. Obviously, it leaves a measure of discretion to the judiciary, but one that is in my view nevertheless correct. I will need a lot of persuading that the route he is currently taking is not excessively restrictive. For that reason, I cannot support it at the moment.

[Chris Grayling]

The key issue is that it is very easy to define a public interest around public authorities fulfilling absolutely the legal terms of their requirements, but if we accept that that is the case there is often very little justification for a case not being brought. Simply having a public interest test without the exceptional qualification would leave open the opportunity for all of these cases continuing. Where a case is brought for reasons of intentional delay, the case will be argued that this is a matter of public interest. The exceptional level, which deliberately raises the bar, ensures that this part of the Bill achieves its objectives.

18:30

[Sir Edward Garnier]

One of my problems is that the Secretary of State is trying to prove the general from the particular. We both lived through the Richard III case, and we can all learn from that, but it is not the case to build his case upon. I happen to think that the Richard III case permission hearing—it was all on paper—was wrongly decided, but that is by the way, because the eventual divisional court decision was in favour of the Government. However, I urge him not to be persuaded by the facts of that case, which could persuade someone to reach a conclusion similar to his, but to look at the wider picture and to think about what our hon. and learned Friend the Member for Torridge and West Devon said about exceptional circumstances. He should try to get at the problem that way, rather than banging his head against the wall, as he currently seems to be doing.

[Chris Grayling]

I do not accept that I am banging my head against the wall. I think we have struck a sensible balance. We have seen important development projects delayed by judicial reviews brought on technicalities. It is important that judicial review not be used as a tool for delay, rather than a genuine way of holding public bodies to account.

I want to tackle head-on what the hon. Member for Hammersmith said about the secure college. The youth detention system is not delivering the results the country needs. In the small units in secure children’s homes, in the larger units in secure training centres—where teenage boys and girls sit side by side in the same classroom, let alone the same institution—and in youth offender institutions, the performance in terms of reoffending is unacceptable: about 70% in each of those three institutions. That is not the way forward.

We are seeking, simply and straightforwardly, to create an environment that strikes a balance: a critical mass of curriculum and skills development—we cannot, in a small unit, deliver a building skills workshop alongside a literacy, numeracy and computers skills centre—and an environment that recognises that the people who end up in detention are often troubled, challenged and from the most difficult circumstances. I am seeking, simply and straightforwardly, to take away the iron bars from the windows and create an environment that is more supportive, more educational and more likely to turn their lives around. I want to create a system that is run by educationists, not simply prison officers, and that has every chance of delivering a better outcome.

I have been deeply disappointed by the lack of imagination from the Opposition, who have opposed these proposals but said nothing about what they would do—not an unusual feature of their behaviour. We have heard no fresh ideas on how to deal with this very real challenge. All they do is oppose, oppose, oppose. Given the exorbitant cost of these small units, our proposals would save several million pounds a year, although they would require a big capital investment. The Opposition have not said how they would cover the savings we will generate by harmonising the estate to deliver that critical mass of education at an affordable price, and in a way that will be more nurturing and supportive of young people.

From the Labour party, we have heard no answers, only opposition, opposition, opposition. It is not fit to govern. It is a party without ideas and without direction. It wrecked the country before, and it would wreck it again. That is why our reforms are so important and why we need to progress the Bill and our other measures.

18:33

One hour having elapsed since the commencement of proceedings on the Lords message, the debate was interrupted (Programme Order, 1 December 2014).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83G),

That this House insists on its disagreement with Lords amendment 74 and agrees with amendment (a) in lieu.

Question agreed to.

Amendment (a) accordingly agreed to.

Motion made, and Question put,

That this House disagrees with Lords amendment 102B and agrees with amendments (a) to (k) in lieu.—(Chris Grayling.)

18:34

Division 130

Ayes: 300

---

Conservative: 251
Liberal Democrat: 47
Independent: 1

Noes: 232

---

Labour: 212
Conservative: 5
Democratic Unionist Party: 4
Social Democratic & Labour Party: 3
Plaid Cymru: 3
UK Independence Party: 2
Independent: 1
Alliance: 1
Green Party: 1

Amendments (a) to (k) agreed to.

Motion made, and Question put,

That this House insists on its disagreement to Lords amendments 103, 104, 105 and 106, and proposes its amendments (a) and (b) in lieu.—(Chris Grayling.)

18:48

Division 131

Ayes: 301

---

Conservative: 252
Liberal Democrat: 46
Independent: 1
UK Independence Party: 1

Noes: 227

---

Labour: 213
Democratic Unionist Party: 4
Social Democratic & Labour Party: 3
Plaid Cymru: 3
Conservative: 2
Independent: 1
Alliance: 1
Green Party: 1

Amendments (a) and (b) agreed to.

Criminal Justice and Courts Bill: Carry-over Extension

Tuesday 13th January 2015 Commons Chamber

19:01

[The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)]

I beg to move,

That the period on the expiry of which proceedings on the Criminal Justice and Courts Bill shall lapse in pursuance of paragraph (13) of Standing Order No. 80A shall be extended by 54 days until 30 March 2015.

As we have just concluded a debate on the Criminal Justice and Courts Bill, I shall keep my remarks brief. This carry-over Bill was introduced on 5 February 2014, and as set out in Standing Order No. 80A, proceedings on such a Bill will lapse 12 months from the date of its First Reading. That date is fast approaching, and although I am confident that the sensible package of amendments that the Government have offered and the House has today accepted will meet the reservations of the other place, now seems to be a sensible juncture to extend the time that we have available, as a precaution.

As hon. Members are aware, the Bill makes wide-ranging reforms to the justice system and contains targeted provisions designed to protect the public better and to reduce reoffending. The Bill has at its heart a vision of a more robust and fair justice system. With proper progress in both Houses, I am confident that we can reach Royal Assent in the coming weeks, not least by 30 March, so that the important provisions in the Bill make it on to the statute book.

19:03

[Mr Andy Slaughter (Hammersmith) (Lab)]

This is a significant Bill; there are even parts of it with which we agree. We are pleased that both Houses have had an extended opportunity to debate its controversial parts and have made clear on numerous occasions their opposition to part 4, particularly the provisions on judicial review, and those on secure colleges.

There is a slight irony in the fact that when the carry-over motion to bring the Bill into this Session was first proposed, we thought the reason the Government were doing that with this and some other Bills was that there was so little legislation in this Session and they were trying to pack it out. Well, this Bill has certainly fulfilled its role. It has had such a chequered existence, ping-ponged between the Houses because of the appalling proposals in part 4 in particular, that the Minister can be satisfied that it has at least made this zombie Parliament look slightly less sleepy.

Like the Minister, I do not intend to detain the House. We have made our arguments. I of course hope that the carry-over motion is necessary because the Members of the other place will be batting the Bill back here for a third attempt. Obviously the Government fear that, too, or they would not be looking so anxiously at the time running out on the Bill. We will not oppose the motion.

19:04

[Mr John Spellar (Warley) (Lab)]

Thank you for the opportunity to speak, Mr Deputy Speaker. I do not intend to engage in the same badinage that I did with Madam Deputy Speaker last night.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Yes, you have not been to Washington with me.

[Mr Spellar]

We wait ages for a carry-over extension and then three of them come along at once. The questions we need to ask ourselves were asked last night by my hon. Friend the Member for North Durham (Mr Jones) and by me. However, I do not intend to detain the House for as long tonight because Members can read our contributions in yesterday’s Hansard.

I have been chided for being a little charitable to the Government Chief Whip in the litany of those who are responsible for this. Basically, there are two driving forces behind these carry-overs. One is that the Government will not accept the sensible, reasonable and just amendments made in the other place. We saw that last night when they sided with the ticket touts against the fans of sport and music. The Minister of State, Ministry of Justice, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) looks up. He will be accountable to the football and music fans in his constituency in May for siding with their exploiters rather then with them. The Government did not accept those amendments and that again seems to be the case tonight. As my hon. Friend the Member for Hammersmith (Mr Slaughter) said, we hope that they finally see reason in the intervening period.

The second reason is that we have an almost unique collection of people who do not understand the business of this House and the other place. Therefore, we see a series of difficulties resulting from the failure to deal properly with procedure. For example, I understand that the next carry-over resolution that is due was passed some 10 months ago in the House, and one has to ask what the Government have been doing since then. It has been patently obvious during the last few months that there is very little serious Government business, but they do not seem to be able to pull it together. It may be the result of all the internal tensions and difficulties of this ill-starred coalition coming together as the election approaches, or perhaps they do not have much of a programme and do not know what to do about it. But it is clear to the House, and it will become increasingly clear to the public, that they do not have a clue, and these carry-over motions are part of that. They have not run the business properly up to now, but it is probably as well to let them through because at least we will have something to do during the next couple of months.

Question put and agreed to.

Deregulation Bill: Carry-over Extension

Tuesday 13th January 2015 Commons Chamber

19:08

[The Deputy Leader of the House of Commons (Tom Brake)]

I beg to move,

That the period on the expiry of which proceedings on the Deregulation Bill shall lapse in pursuance of paragraph (13) of Standing Order No. 80A shall be extended by 67 days until 30 March 2015.

The Deregulation Bill, the Report stage of which in the other place is expected to begin shortly, was introduced in the House on 23 January 2014. As set out in Standing Order No. 80A, as a carry-over Bill it will fall if it does not receive Royal Assent within 12 months of its First Reading. That date is now approaching. Given the strong interest in and support for the Bill in both Houses, it is only right for us to guard against that, particularly in light of the emergency legislation that my right hon. Friend the Home Secretary has introduced following the Christmas break.

The motion is intended to ensure that the life of the Bill—an important Bill that has spent some time in both Houses already—will continue until the end of this Parliament. The Bill covers many policy areas and departmental remits, all with the shared goal of reducing or improving the regulatory burden on individuals, businesses and organisations, and as such has properly received a great deal of scrutiny in this House and in the other place.

I can confirm to the House that the motion in no way undermines the Government’s intention to secure Royal Assent prior to the Dissolution of Parliament. Indeed, the Bill constitutes one of the many measures that this Government have pursued relentlessly in order to restore Britain’s economic growth to one of the highest in the developed world, and it makes common-sense reductions to irrelevant and often outdated regulations. I commend the motion to the House.

19:10

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I have some brief comments, but I will not detain the House for long. We will support the motion to extend the life of this rag-bag of a Bill, despite significant reservations about some of the measures in it.

On Second Reading I described the Bill as

“the Christmas tree Bill to end all Christmas tree Bills”—[Official Report, 14 May 2014; Vol. 580, c. 781.].

Since then the festive season has come and gone, but the Bill remains, with some significant baubles added to it. In fact, the Bill is a microcosm of the coalition and its programme of government—some dogmatic and ideological clauses, obligatory attacks on working people and their rights, but mainly a lot of bluster and window-dressing, with some last-minute ill thought-through proposals thrown in as well. It is no wonder that the Bill is coming apart at the seams in the other place.

Given the extended time it is taking the Bill to progress, why did the House not have more time on Report to consider some of the controversial clauses and late additions to it? It is not as though the House has been pressed for time. We are at the dog-end of a Parliament with very little Government business—a zombie Parliament —and it is nevertheless likely that this Bill will end up in the wash-up, thanks to the mismanagement of Ministers. I would not take odds on it receiving Royal Assent before Dissolution.

I wonder why, if the measures in the Bill are so very important, it has taken so long to get it through Parliament. My noble Friends in the other place tell me that the Bill is having a tough time there, as I am sure the Minister is aware. The Government have been u-turning on all sorts of things, from pulling dangerous clauses on taxi licensing to dog regulation. I know that Ministers have serious work to do in the Lords, as they are facing pressure from peers on a range of issues including short-term lets, health and safety, parking and their ill thought-out plans to impose an economic growth duty on regulators. I look forward to the improvements made in the other place and to debating them with Ministers in the coming months.

19:12

[Mr John Spellar (Warley) (Lab)]

It was telling that in his introduction, the Minister rightly and properly drew our attention to the fact that the Bill first saw the light of day here on 23 January 2014. In the previous Parliament, when I was in the Government Whips Office, like one or two colleagues present in the Chamber, I would have been appalled and ashamed if we had taken so long to get legislation through. It is a sign of indolence or a dilatory attitude, or of gross incompetence.

I found it extraordinary that on the day that we saw a collapse of the national rail system, the Prime Minister should pose the choice for the next election as competence or chaos, and here we have three Bills for which we have to vote through extensions to time precisely because they have failed the test that the Government set themselves of competence or chaos. They are an absolute shower.

19:14

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

In the previous Parliament I had the privilege of chairing the Regulatory Reform Committee, so I have been following the proceedings on this Bill with some interest, albeit from afar as, in this Parliament, the Chair of a different Select Committee. My right hon. Friend the Member for Warley (Mr Spellar) has made an important point. During the previous Parliament, the Labour Government drove through more deregulatory measures than have been achieved by this Government, who have failed abysmally in using the Regulatory Reform Committee and the legislative reform orders that are available to them. They should be ashamed of the progress that they have made given the flying start that we gave them with the procedures that they inherited.

My right hon. Friend is absolutely right about the time that is being spent on the early stages of Bills. We are not being given sufficient time to deal with Bills properly during their passage through this House and the other place. I can see the right hon. Member for South Holland and The Deepings (Mr Hayes) leaving his place, which is a great pity. I am currently serving on the Infrastructure Bill Committee—my valedictory Bill and the last Bill Committee I will ever serve on, I guess. That is important in the context of what is happening in the generality of this process, because we are seeing, even today, things being added to Bills at the very last minute.

[Derek Twigg (Halton) (Lab)]

As usual, my hon. Friend is making some powerful and interesting comments. It is odd that the Government have struggled for such a long time in the past few years to find legislation to put through the House, and we have had a number of days that we have had to fill with other business. Given that record, is it not even more strange that they are having to move these motions tonight?

[Andrew Miller]

My hon. Friend is absolutely right. We have faced day after day when the House has risen early because of the appalling management of business by the Government Whips. That has meant that we have not spent the time that was available to us to deal properly and thoughtfully with Bills during their proceedings.

[David Wright (Telford) (Lab)]

One of the messages that this Government tried to give out at the start of this Parliament was that they would try to bring forward less legislation and deal with it comprehensively and carefully. They have clearly failed in that process because we have these motions before us tonight. When I was in the Whips Office under the previous Government, we moved a large number of Bills through this House very efficiently, and managed to get most of them through before the wash-up period. The Government are in real danger of losing this legislation if they are not careful.

[Andrew Miller]

My hon. Friend is absolutely right. His experience in the Whips Office was incredibly valuable, and he illustrates the point I am making.

My right hon. Friend the Member for Warley observed that this Bill started its proceedings on 23 January—almost a year ago—and it seems quite extraordinary that we are where we are today. The Government ought to wake up. If they are going to serve democracy properly, Bills ought to have the proper amount of time made available to them.

[Derek Twigg]

We heard from my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) about the problems with the Bills in the Lords. Is not that because the Government are trying to rush legislation through here and not giving it proper time for debate? That is why it gets into trouble in the Lords?

[Andrew Miller]

It not only gets into trouble in the Lords but ends up as a shambolic piece of legislation, as we have seen with the Infrastructure Bill, which started its passage in the Lords and is now being amended in Committee two or three days before it reaches its Report stage on the Floor of the House. I have no doubt that next week the Government will be asking for a carry-over of that legislation, but I will not stray too much down the road of the Infrastructure Bill, Mr Deputy Speaker, because you will call me to order.

I re-emphasise that the simple reality is that the process of deregulation—the removal of superfluous and unnecessary regulations and the tidying up of regulations through legislative reform orders, which the Opposition brought in when we were in government—was working, but it has failed to work for the whole of this Parliament. If someone needs deregulating, it is the Minister. I look forward to that outcome at the general election.

Question put and agreed to.

Gypsy and Traveller sites in South Staffordshire

Tuesday 13th January 2015 Commons Chamber

19:20

[Gavin Williamson (South Staffordshire) (Con)]

I have a petition signed by 1,545 of my constituents who share my view that in South Staffordshire, which has more than 130 Gypsy and Traveller pitches, we have more than enough provision.

The petition states:

The Petition of residents of the South Staffordshire constituency and others,

Declares that the Petitioners note that South Staffordshire District Council intends to increase the allowance of pitches for Gypsies and Travellers by 33 pitches over the next 15 years; further that the Petitioners believe that there are already sufficient pitches available for Gypsies and Travellers in the constituency; and further that the Petitioners believe that no more pitches should be allocated.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that no further pitches for Gypsies and Travellers are allocated in South Staffordshire.

And the Petitioners remain, etc.

[P001419]

Deaf Students (Educational Achievement)

Tuesday 13th January 2015 Commons Chamber

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

19:22

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

I am very pleased to have been given an opportunity to raise an issue that is of importance not only to my constituents, but to many other families and young people across the country. Deafness is a disability and although that does not mean that children who are deaf are categorised as having learning difficulties, it most definitely means that learning can be difficult. There remains a wide attainment gap between deaf children and their peers. There are a variety of reasons why that is the case, but it need not be that way. It is clear that more could be done across the country to ensure that deaf children receive the support they need to close the gap. It is important to emphasise that while this debate falls under the Department for Education’s brief, it is also clearly a health issue, so unsurprisingly I will touch on health matters in my comments.

Deafness affects more than 45,000 children in the UK, the majority of whom are born to hearing parents with no background in deafness. More than three quarters of them attend mainstream schools with little specialist provision, where they are often the only deaf child in attendance. Most of those deaf children—85%, in fact—do not have a statement of special educational needs, but when they reach working age, just over 50% of them are in employment, compared with 80% of the non-disabled population. We are clearly not assisting them in achieving their full potential.

It is important at this stage to establish who I am talking about when I refer to “deaf children”. When the National Deaf Children’s Society talks about deaf children, it means any child with hearing loss from mild to profound, whether temporary or permanent and whether in one ear or both. Even a mild hearing loss can have a negative impact on deaf children’s achievement. Recent Government figures show that just 43% of deaf children achieve five GCSEs, including English and maths, at grades A* to C, compared with 70% of children with no identified special educational need. It is the Government’s main benchmark for GCSE success, and there is no reason why we should not have the same educational benchmarks for deaf children as for their peers. Clearly more can be done to support these children throughout their school life and to best prepare them for the working world.

I say this as someone with deafness myself. I am, as many in the House are aware, completely deaf in one ear and have been since the age of 16 when I contracted mumps. The damage to my nerve endings meant that nothing could be done to enhance my hearing. It poses problems when there is ambient noise, in a room with poor acoustics and in the Chamber, Mr Deputy Speaker—quite frankly, if you were to speak to me, there is a good chance that I would not hear you unless I was looking at you. I would not be aware that you were talking to me. That happened at one of my early forays at the Dispatch Box. The only way I knew that something was amiss was that I could see the faces of the Members on the Benches opposite, who looked somewhat puzzled that I had not responded to the fact that the Speaker was standing and trying to attract my attention. That can clearly pose problems in a classroom and throughout the education process for many young people, and for teachers who have to consider the physical placement of those students within the class and the eye lines and the background noise during the lesson.

In September I met a young woman called Renée, a lovely and bright 17-year-old girl who is profoundly deaf in both ears and has two cochlear implants. To communicate, Renée uses a combination of speech and British sign language and can lip-read. She told me how hard it could be for her and many of her deaf friends to concentrate and focus on their work in school or college. Especially at the age of 17, when friends are finding their own way in the world, she found it hard to become truly independent like many of her peers, but she has not let any of these obstacles affect her, as they can so many. She sits on the National Deaf Children’s Society’s young people’s advisory board, is a peer buddy at her school, is a member of the National Portrait Gallery youth forum and wants to become an art therapist when she finishes her education. I am sure that she will excel, yet sadly many who experience similar obstacles do not.

Addressing the issue does not simply lie in the classroom. It starts with providing the best possible care and services we can for deaf children. The National Deaf Children’s Society believes that one third of audiology services are failing to provide for deaf children. It has NHS figures that it believes show that those services are failing to see children within Government time frames, failing to use the most up-to-date tests, incorrectly setting up hearing aids, seeing too many children during school hours when they should be learning, and even lacking deaf awareness. The suggestion that the Government are planning to stop assessing the quality of children’s audiology services is therefore very worrying. I realise that this is not a matter for the Minister, but I hope that he will pass my concerns on to his colleagues in the Department of Health. That decision has clearly had a knock-on effect on the educational development of these young people.

Why are audiology services so important? As we know, children learn and socialise through hearing, so it is unsurprising that hearing loss can present considerable challenges to a child’s progress at school and their ability to make friends and develop socially. Good audiology services make a critical contribution to a deaf child’s success in life, as they are responsible for ensuring that a deaf child can use their remaining hearing to the fullest possible extent.

The Government recommend that newborn babies should receive an audiology appointment within four weeks of referral. Older children should be seen within six weeks, and rightly so, as hearing is critical to a child’s development of language and learning, and early diagnosis is vital as it will reduce the risk of delays in language, educational and social development.

The problem is that when asked by NDCS about the length of time it took to get their child an audiology appointment, 44% of parents said that they had to wait five weeks or longer, and 20% said they had to wait for more than eight weeks. At such a young age, that length of time without diagnosis can be seriously detrimental and will certainly put those children behind others of their age when it comes to starting school.

Obviously, effective hearing aids are an integral way of mitigating the effect of deafness, and making sure that they are correctly set up and fit for purpose is essential. Children grow out of the ear moulds for their hearing aids as often as they grow out of their shoes, and any parent will be well aware that that can happen every few months. If a child experiences a delay every time they need an ear mould replaced or if a new one does not fit correctly, they lose out on significant listening and therefore learning time. Sadly, almost 80% of the parents who spoke to NDCS said that they had waited longer than the target time for their ear mould impression appointment. Those are all health issues, but they obviously have an educational impact in the classroom. Almost three quarters of deaf children fail to achieve a good level of development in the early years foundation stage assessment. If deaf children are struggling to attain the same educational outcomes as their non-disabled peers, consider how challenging it must be for deafblind children.

[Jim Shannon (Strangford) (DUP)]

In 2011 a school was built in Belfast specifically to cater for deaf and blind children who needed the level of educational standard it delivered. The school gave those people an academic standard and achievement that prepared them for jobs in future life, but it was done through private finance. Does the hon. Lady agree that the Government could follow that example from Northern Ireland, and that the Education and Health Departments could work with the private sector to look after those who are deaf and blind?

[Alison Seabeck]

The hon. Gentleman has always brought interesting examples and ideas to my previous debates on health-related issues. I am sure the Minister has listened to him. We should seek to learn from any example of good practice, whether it be in the public or the private sector, but whether we would support rolling out the private element more widely is a different issue. That said, if the practice is good and the children are achieving, clearly we should look at it.

Although there are fewer deafblind children than deaf children in the UK, they face a unique set of challenges —of which the hon. Gentleman is clearly aware—when accessing education, and they therefore require specialist support. To be able to get that support, they first need to be identified as deafblind, which is their local authority’s responsibility. Every two years, the charity Sense conducts a survey of local authorities and their identification rates. It estimates that local authorities should be identifying 31 deafblind children per 100,000 of the population. In 2014, they were identifying on average just 14 per 100,000, which is a 7% drop from the figures reported in 2012. The low identification rates are attributed by Sense to poor professional awareness of deafblindness and to inadequate information sharing between agencies. Although this is a crossover issue for health and education, I am concerned that identification of deafblindness is proving to be more difficult and that fewer young people are being identified early enough in the process.

In Plymouth, as in the rest of the country, the number of deaf children has risen. In 2012 there were 171 deaf children in Plymouth and by 2013 there were 175. In the south-west as a whole, 49% of deaf children managed to achieve five GCSEs at grades A* to C in 2011, which is more than the current national average, but way below the average for children without a special educational need. In 2013, however, the attainment levels dropped, with just 40% of deaf children achieving the target of five GCSEs.

Clearly there is an issue. I welcome statements by local authorities that specialist education services are increasing, despite the cuts in the system, and that a review of the specialist educational service for deaf children will go ahead in 2014-15. However, there is a shortfall in specialist teachers nationally and that is having an impact on Plymouth. In England, the national average ratio for visiting teachers of the deaf to children is 1:44. In Plymouth, with just two visiting teachers of the deaf, the ratio is 1:72. I am told that those two specialist teachers are being stretched by unrealistic and unmanageable caseloads. What is being done to recruit, train and, importantly, retain teachers across England with that level of expertise?

The impact on education of being deaf is not only felt at a young age. Many young people continue to experience problems when in higher education. When I met NDCS at the Labour party conference in September, I was told about a young man who relied on note-taking support at university, but when he started his first term he found that no support had been organised, despite the fact that the university had been given plenty of notice of his needs. Unsurprisingly, that made his first couple of months very stressful and unproductive. The issue affects the whole of the education spectrum—from nursery right the way to young people seeking to move from secondary education to university—and it needs to be addressed.

Deaf students will certainly be impacted by the changes to disabled students allowance, in relation to which there has been no mention of non-medical help, such as using British sign language interpreters. I wonder whether the Minister has discussed that issue with his colleagues in the Department for Business, Innovation and Skills. As I have said, young people coming out of mainstream education and seeking to progress to university may find that that journey is not possible because of the new barriers that are being erected. Randstad student and worker support has told me that 27.7% of the students it surveyed said they would not have attended university without DSA. I am sure the Minister is as anxious as I am not to close off any option to pupils who wish to progress their education.

What needs to be done? Obviously, budgets are tight, and everyone is being asked to do more for less. Charities such as the Plymouth Deaf Children’s Society are working with partners, including the Plymouth YMCA, which has provided admin space in its premises and is incredibly supportive. I have some wonderful people working with various organisations, such as something called CHSWG—the Plymouth Children’s Hearing Services Working Group—and the Plymouth Deaf Children’s Society, including its chair, Yvette Beer, who is fabulous. They are doing a lot of good work, but they were very anxious for me to come to the House to raise some of the concerns that they had raised directly with me.

From my remarks, the Minister will understand not only that we risk making the educational pathway of many young people more difficult, but that there are still gaps in the existing provision. I look forward to hearing his comments.

19:36

[The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson)]

I congratulate the hon. Member for Plymouth, Moor View (Alison Seabeck)on securing this very important debate. I want to take the opportunity to thank her not only for her personal insight into deafness, but for the work she has undertaken in her local area to support parents and carers of children with disability through the Make a Difference Plymouth parent support group. As she said, through her role as president of the Plymouth YMCA, she was instrumental in helping Yvette Beer and the Plymouth Deaf Children’s Society to secure new premises, which I understand she opened in December. One of the principal reasons for being so encouraged by hearing about such initiatives is that they are very much in the spirit of the special educational needs and disability reforms that came into force last September. I am sure I speak for the whole House when I express my appreciation to her for all she is doing to improve support for deaf children in her constituency.

As ever, I will do my best in the time available to respond to the points made by the hon. Lady, but if I run out of time, I will as usual write to her to pick up any outstanding issues.

The Children and Families Act 2014 sets out a range of measures to reform the special educational needs system so that it extends from birth to 25, giving children, young people and their parents greater control and choice in decisions about their support and ensuring that their needs are properly met. The reforms drew support from all parties and should work to the benefit of all children and young people, regardless of the type of need or impairment.

In addition, under the Equalities Act 2010, schools and other education providers must make reasonable adjustments for disabled children and young people to help alleviate any substantial disadvantage they experience because of their disability, and they must not discriminate against them. If children and young people need special educational provision or specialist services, the duties on schools, local authorities and others in relation to special educational needs then come into play. That ensures that strong legal protections and safeguards are in place.

To support deaf children in particular, the Department is funding many voluntary organisations to enable local areas to benchmark the support that they provide to them, and to access many of the tools and pieces of information on the most effective approaches. Much of the good practice that we know exists can then be used by many more people. We are keen to build on our understanding of the evidence about what works, and we will continue to work with organisations with expertise in this particular area. Our national voluntary and community sector grants programme is an important opportunity for us to continue to support good proposals. From my own involvement with charities supporting deaf people—including Signature, whose conference I spoke at in 2013—I know that there is a huge amount of knowledge and understanding that we can help to harness and bring to bear. We have provided £1.1 million to the National Sensory Impairment Partnership to carry out a benchmarking exercise and develop an outcomes framework for local authorities to assess how well they are supporting deaf pupils.

[Stephen Lloyd (Eastbourne) (LD)]

On that note, does the Minister agree that it is terribly important for deaf children that the local authority is flexible? My constituent has a young son who is within a few days of the switchover and being enrolled in a school for this September. He is profoundly deaf with cochlear implants. The local authority says that he must join that school, but I think it should be flexible. Does the Minister agree that local authorities must be flexible to ensure the best outcomes for deaf children?

[Mr Timpson]

My hon. Friend will appreciate that I do not know the details of that case and it would be wrong for me to comment on it, but the whole thrust of our reforms to the special educational needs system is to ensure that it focuses relentlessly on the individual needs of each child, and on the support that they and their family need, in order for the child to reach their academic potential. We must have high aspirations and remove any barriers that prevent them from reaching their goal, and I expect that to happen in every local authority, irrespective of where it is.

The Government have funded the production of an early support guide for parents of deaf children, and the I-Sign project to develop a family sign language programme is available from the National Deaf Children’s Society. That is particularly important in the first few years when children are learning to communicate, especially for 90% of deaf children who are born to hearing parents.

The most important service for all children and young people is high-quality teaching—the hon. Lady touched on that. We have set clear guidance in the new code of practice on the process for identifying and assessing children’s special educational needs, putting support in place, monitoring the progress made by each child, and securing further support where necessary. Narrowing the gap between deaf children and their peers is a key barometer for whether deaf children are getting access to high-quality teaching. Although we must endeavour to make further progress in that area, we should also recognise the enormous improvements that have been made.

More deaf children are leaving school with good GCSEs, and we want them to aspire to reach their full potential. In 2012-13—the latest year for which data are available—73.5% of deaf children achieved five or more A to C grades in GCSE, compared with 50% in 2008-09. For pupils without SEN, those figures were 89% and 80% respectively. Over that period, deaf pupils progressed at approximately twice the rate of their peers. The attainment gap has closed significantly, and that must be a testament to the hard work of pupils themselves, as well as to the work of sensory support services across the country. I hear what the hon. Lady says about recent figures from her constituency, and that is disappointing when so much progress has been made. However, I hope that with our reforms and the renewed appetite to ensure that health care, social care and education work more closely around a family, those improvements will come back on track.

Improvements in teaching practice and technological advances mean that deaf children are now far more likely to achieve their full potential than they were five years ago, and we want that progress to continue. We are working to improve the training of teachers and school leaders to help them identify where pupils with hearing loss face barriers to learning, and offer appropriate support. The hon. Lady rightly asked how we are seeking to do that. Through the national scholarship fund, teachers and support staff can apply for funding to undertake high-level qualifications to improve their knowledge and enhance their ability to support the teaching and learning of pupils with SEN and disabilities. Importantly, that fund can be used for qualifications relating to sensory impairment, and more than 1,300 staff have gained such qualifications since 2010.

In April 2014, the National College for Teaching and Leadership launched a new funding round with up to £1 million to support up to 50% of course fees for qualified teachers and SEN support staff, and 648 awards were offered from last September. We need to ensure we have provision to meet demand, and that is an area we need to continue to keep our attention on.

The hon. Lady asked a specific question about the issuing of hearing aids. She acknowledged and appreciates that that falls within the remit of another ministerial portfolio, but I understand that the Under-Secretary of State for Health, my hon. Friend the Member for Battersea (Jane Ellison) addressed this issue in a previous debate and that Health Ministers are handling and monitoring the matter closely. I will of course re-emphasise the concerns the hon. Lady has expressed this evening to my colleagues in the Department of Health. Every intervention by health professionals should be based on clinical need and the legislation is clear that reasonable adjustments legislation applies to all young people.

On funding, it is for local authorities to decide which SEN services to provide for children and young people, including services for deaf children and how much to spend on them based on the duties we have placed on them in the new Children and Families Act 2014 and the accompanying code of practice. The services typically provided by local authorities, either directly or by commissioning others in the public or the private sector, include: services for visual, hearing and physical impairment; specific learning difficulties; speech, language and communication; profound and severe learning difficulties; and autism.

Councils are reporting that they are spending no less this year on their SEN services than they spent last year. Through their local funding formula, they also include a clear amount of funding intended to meet the needs of pupils with additional needs. The majority of children who are deaf and have a hearing impairment fall outside the category of educational health and care assessments. They will benefit from that funding through the delegated schools budgets, which have been protected. Special schools and other schools with special units often use their budgets to develop particular specialist services, including those for pupils with hearing impairment. Where necessary, schools receive extra top-up funding from the local authority for the additional support costs for pupils with the highest needs. We are committed to making sure that the requirements of children with special educational needs are met, and we have been clear to local authorities that they should prioritise vital front-line services to vulnerable children.

Nationally, more than £5 billion is being made available to councils for children and young people with special educational needs, disabilities and other high needs, as part of their dedicated schools grant. Allocations for the year beginning April 2015, notified to local authorities in December, indicated that more than £50 million more was being allocated to local authorities in the high needs element of their grant. The hon. Lady may wish to know that Devon’s dedicated school grant is increasing by more than £16 million next year and that the high needs element of its grant, which this year amounts to £59.6 million, is increasing by £0.2 million.

Just as important is how that money is spent—the way we measure improvement and outcomes for children and how we hold services to account for the quality of service they provide. Most deaf children attend mainstream schools, some of which have additional specialist units offering support on site. Assessments on how well schools perform will be made as part of Ofsted’s school inspection regime. The Ofsted inspection framework places a clear emphasis on meeting the needs of disabled pupils and pupils with SEN, and on considering the quality of teaching and the progress made by those pupils. Where a school has a specialist resource for deaf children, or for other forms of SEN, it is specifically covered by the inspection report.

One of the central tenets of the SEN reforms is to provide clear opportunities for families to influence and shape the development of local services, and to maintain legal rights to challenge individual decisions at the first-tier tribunal for SEN and disability. Last year, I asked Ofsted to carry out a study of local authorities’ planning in preparation for implementation of the special educational needs reforms, and to advise me on whether there was a need for an inspection framework to drive improvements. Ofsted’s findings and key recommendations were published in December. I have invited Ofsted formally to inspect local areas on their effectiveness in fulfilling their duties.

The hon. Lady talked about the key role of health in delivering support for deaf children. Ofsted will inspect along with the Care Quality Commission, and inspections will also involve a local authority officer. Inspections will form part of a wider accountability framework we are putting in place that has strong local accountability at its heart and which should provide assurance to families. Ofsted is now working up the details of the new arrangements, after which I hope to be in a position to provide further details.

With a significant number of children in England having been identified as having a hearing impairment and requiring extra support, it is imperative we ensure that they all benefit from the new SEN reforms. Not only do the SEN and disability reforms in the Children and Families Act provide legal protections, but they establish a better system for identifying needs and commissioning services across education, health and social care. The hon. Lady rightly spoke about the need to improve identification at the earliest opportunity so that the best support can be put in place to ensure that progress is made as soon as possible and that we do not delay ensuring that every child progresses, not just in their education but in the other development goals we know they are capable of.

The reforms should help ensure that services are responsive to local needs and that families do not feel they have to battle to find out what support is available or to access services. The evidence from the pathfinder areas and the early implementation of the reforms indicates that many parents are starting to see a different approach from the different agencies involved with them and their child. The new education and health and care plan will clearly set out in one place all the support across services that a child will receive, and crucially will focus on the outcomes, in education, work and other areas, that the child and their family want to achieve now and in the future.

This has been a thought-provoking debate, and I am sorry that we do not have more time to elucidate many of the important matters the hon. Lady has raised, but I again thank her for bringing this matter to the House and raising awareness of the importance of ensuring that all deaf children are given the best possible chance of succeeding, both educationally and more widely in their lives, as they move into adulthood. Our SEN reforms will help to deliver that well placed aspiration, and I look forward to continuing to work with her and the professionals who work day in, day out to provide the best possible support to help achieve the goals we have set, not just for ourselves, but more importantly for the children we are all there for.

19:52

House adjourned without Question put (Standing Order No. 9(7)).

Petitions

Tuesday 13th January 2015 Petitions

Tuesday 13 January 2015

Acocks Green Post Office (Birmingham)

Tuesday 13th January 2015 Petitions

The Petition of residents of Acocks Green and customers of the Post Office in Acocks Green and others,

Declares that the Petitioners oppose the proposed move of Acocks Green's Post Office branch from 1100 Warwick Road to 1131 Warwick Road; further that the proposed new location has fewer serving hatches, a significantly narrower pavement and, unlike the current location, no canopy above the pavement for when customers have to queue; and further that the Petitioners are concerned about the viability of the new host company and its store, and therefore the long term security of the branch.

The Petitioners therefore request that the House of Commons urges the Government to listen to calls for the Post Office to reject the current proposals for the movement of the Acocks Green Post Office and seek alternative, more appropriate proposals.

And the Petitioners remain, etc.—[Presented by John Hemming, Official Report, 3 November 2014; Vol. 587, c. 628.]

[P001394]

Observations from the Secretary of State for Business, Innovation and Skills:

The Government note the views of residents who access Post Office services at Acocks Green Post Office, 1100 Warwick Road, which is currently directly operated by Post Office Ltd and is known as a Crown branch.

The Government note that the implementation of the Post Office’s Crown Transformation Programme is an operational matter which is the responsibility of senior management at Post Office Ltd. The Government, as shareholders, do not play any role in decisions relating to individual post office branches. In considering the future provision of Post Office services at Acocks Green, it is important to note the wider context of Post Office Ltd’s proposals to franchise 58 Crown post offices and to merge or relocate a small number of other Crown branches.

The Government note that the 2010 spending review contained a clear commitment to modernising the Post Office network and safeguarding its future, and the Government have allocated £2 billion of funding since 2010 to provide for significant investment across the Post Office network. A condition of this funding package requires Post Office Ltd to continue to maintain a network of at least 11,500 branches, to comply fully with the access criteria, and with no programme of branch closures.

The Government note that the branches of the Crown network have incurred heavy and historic losses, totalling £26 million in the company’s last reported full financial year. Eliminating these Crown losses is a key element of Post Office Ltd’s strategy to provide for the long-term sustainable future of the network, and the Government support the business in delivering that strategy.

The Government note that the current losses incurred by the Crown network contribute heavily to the losses sustained by the network as a whole and this is not sustainable. No business, including the Post Office, can continue with a situation where some of its high street branches cost substantially more to run than they generate in revenues. In the case of the Acocks Green branch it costs £1.70 for every £1 of income it generates.

The Government note that within its broader strategy for eliminating these unsustainable losses and achieving break even for the Crown network by 2015, Post Office Ltd has identified a group of branches where it sees no prospect of eliminating the losses at a local level under the current operating and cost structure. The precise reasons will vary from location to location but commonly include factors such as high property costs and sub-optimal location to attract the necessary increase in custom and business to make them profitable.

The Government note that Post Office Ltd has however made it clear that, under each franchise proposal, the full range of post office services would continue to be available in close proximity to the existing Crown branch; and, in the event that a suitable new retail partner cannot be found, Post Office Ltd has given a commitment that post office services will be retained within the area. Furthermore, before any changes are made to the existing service provision, Post Office Ltd undertakes a local public consultation under the terms of a code of practice agreed between the Post Office Ltd and Citizens Advice. The public consultation process focuses on specific and detailed proposals for relocating the service provision, including such matters as ease of access, and responses are carefully considered by Post Office Ltd before a final decision is reached. It is noted that Post Office Ltd held a local consultation on its proposals regarding Acocks Green post office, which was open for comment between 24 September and 5 November, in accordance with the code of practice. Post Office Ltd is considering the responses received before making a decision.

The Government note that Post Office Ltd’s proposals for Acocks Green post office would see opening hours extended by over 20 hours a week providing greater accessibility and enhanced convenience for customers in a fully modernised retail environment.

Railway line adjacent to North Werrington (Peterborough)

Tuesday 13th January 2015 Petitions

The Petition of residents of Peterborough constituency,

Declares that Network Rail have upgraded the continuous railway line adjacent to North Werrington; further that Network Rail estimate that there will be substantial increases in freight traffic through the village of up to 23,360 additional trains per year; further that no mitigating measures have been offered to reduce the significant increases in noise, vibration and pollution created by the increase in freight traffic; and further that a local petition on this matter was signed by 582 residents of North Werrington.

The Petitioners therefore request that the House of Commons urges the Government to enter into discussion with Network Rail to discuss and agree plans to introduce noise mitigation measures such as the erection of acoustic timber fencing and plans to fit secondary glazing and/or acoustic trickle vents where required for properties adjacent to the train line which runs through North Werrington; further request that the House urges the Government to encourage Network Rail to put in place plans to plant an evergreen tree belt to help absorb particulates emitted by diesel locomotives; and further request that the House urges the Government to ask Peterborough City Council to consider a reduction in council tax for those properties which will be directly affected by increases in freight traffic through North Werrington.

And the Petitioners remain, etc.—[Presented by Mr Stewart Jackson, Official Report, 9 December 2014; Vol. 589, c. 840.]

[P001408]

Observations from the Secretary of State for Transport:

I recognise the concerns that local residents may have about the prospect of increased rail freight traffic through North Werrington. However, the developments that Network Rail is undertaking on the Great Northern/Great Eastern Joint Line through Lincoln will benefit both freight and passenger services, by reducing the need for rail freight services between Peterborough and Doncaster to use the East Coast Main Line. This will provide scope for increased, and more reliable, passenger services on the East Coast Main Line while retaining the ability of the rail freight sector to compete effectively with road haulage—in turn reducing congestion and pollution on the road network.

The Joint Line is, of course, already in daily use for both passenger and freight rail services and there is therefore no automatic obligation upon Network Rail to introduce noise or particulate mitigation measures for increases in service levels. Nonetheless, if, over time, the development of the line leads to a demonstrable increase in noise, vibration and pollution for local residents, there is guidance available on Network Rail’s website at http://www.networkrail.co.uk/aspx/1030.aspx on how to raise concerns. The Department will, however, write to Network Rail to ensure that the company is aware of local residents’ worries about the possible impacts.

I am afraid that the responsibilities of the Department for Transport do not run to the determination of council tax levels. This is a matter for Peterborough City Council. In line with the Coalition Government’s commitment to localism, Ministers and officials have no remit to intervene in the day-to-day affairs of local authorities except where specific provision has been made in legislation.

Railway line adjacent to Peakirk (Peterborough)

Tuesday 13th January 2015 Petitions

The Petition of residents of Peterborough constituency,

Declares that Network Rail have upgraded the continuous railway line adjacent to Peakirk; further that Network Rail estimate that there will be substantial increases in freight traffic through the village of up to 23,360 additional trains per year; further that no mitigating measures have been offered to reduce the significant increases in noise, vibration and pollution created by the increase in freight traffic; and further that a local petition on this matter was signed by 170 residents of Peakirk.

The Petitioners therefore request that the House of Commons urges the Government to enter into discussion with Network Rail to discuss and agree plans to introduce noise mitigation measures such as the erection of acoustic timber fencing and plans to fit secondary glazing and/or acoustic trickle vents where required for properties adjacent to the train line which runs adjacent to Peakirk; further request that the House urges the Government to encourage Network Rail to put in place plans to plant an evergreen tree belt to help absorb particulates emitted by diesel locomotives; and further request that the House urges the Government to ask Peterborough City Council to consider a reduction in council tax for those properties which will be directly affected by increases in freight traffic through Peakirk.

And the Petitioners remain, etc.—[Presented by Mr Stewart Jackson, Official Report, 9 December 2014; Vol. 589, c. 840.]

[P001409]

Observations from the Secretary of State for Transport:

I recognise the concerns that local residents may have about the prospect of increased rail freight traffic through Peakirk. However, the developments that Network Rail is undertaking on the Great Northern/Great Eastern Joint Line through Lincoln will benefit both freight and passenger services, by reducing the need for rail freight services between Peterborough and Doncaster to use the East Coast Main Line. This will provide scope for increased, and more reliable, passenger services on the East Coast Main Line while retaining the ability of the rail freight sector to compete effectively with road haulage—in turn reducing congestion and pollution on the road network.

The Joint Line is, of course, already in daily use for both passenger and freight rail services and there is therefore no automatic obligation upon Network Rail to introduce noise or particulate mitigation measures for increases in service levels. Nonetheless, if, over time, the development of the line leads to a demonstrable increase in noise, vibration and pollution for local residents, there is guidance available on Network Rail’s website at http://www.networkrail.co.uk/aspx/1030.aspx on how to raise concerns. The Department will, however, write to Network Rail to ensure that the company is aware of local residents’ worries about the possible impacts.

I am afraid that the responsibilities of the Department for Transport do not run to the determination of council tax levels. This is a matter for Peterborough City Council. In line with the Coalition Government’s commitment to localism, Ministers and officials have no remit to intervene in the day-to-day affairs of local authorities except where specific provision has been made in legislation.

Westminster Hall

Tuesday 13th January 2015 Westminster Hall

Tuesday 13 January 2015

[Mr Philip Hollobone in the Chair]

Grammar School Funding

Tuesday 13th January 2015 Westminster Hall

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

09:30

[Mr Philip Hollobone (in the Chair)]

What better way to start a parliamentary Tuesday than with a debate on grammar school funding, in the name of Sir Edward Leigh?

[Sir Edward Leigh (Gainsborough) (Con)]

Thank you, Mr Hollobone. It is a convention to say what a pleasure it is to serve under your chairmanship, but in this case it is heartfelt.

This debate is about the funding not only of grammar schools, but of successful, well performing comprehensives with good sixth forms. I am proud to declare that one of my children attends a grammar school, and I am proud to have two excellent grammar schools in my constituency: Caistor grammar school and Queen Elizabeth’s high school. They are centres of excellence, and I salute the Lincolnshire county councillors who have always kept in mind the importance of our grammar schools and saved them.

The phasing out of grammar schools in most of the country was one of the greatest policy disasters of the post-war era. By the 1960s, grammar schools were so successful that we achieved an unqualified and unprecedented level of social mobility—it was greater than anything this country has achieved in its long history, before or since. Many of the nation’s poorest, most deprived people were given their first great chance to move up. Those schools were so successful that the independent sector feared that it would fade and decline into irrelevance, barring the odd Eton or Harrow. Across the country, we need to nurture those centres of excellence and learn lessons from them that we can apply across the state sector as beacons.

The purpose of this debate is not to honour grammar schools, but to ensure that they are not buried by stealth. A growing concern has emerged recently about the disparity of per-pupil funding for grammar schools, which also affects high-performing comprehensives with large sixth forms. Changes in the past three years have adversely affected grammar schools disproportionately in comparison with other state schools. The minimum funding guarantee of minus 1.5% gives the appearance of preserving per-pupil funding. However, as Mr David Allsop, the headmaster of Queen Elizabeth’s high school in Gainsborough, notes:

“Sixth form funding has been dropping much more significantly and we have managed to maintain our funding as flat by increasing the number of students in the sixth form.”

In 2013, Mr Allsop analysed Lincolnshire schools that were not academies, and looked at per-pupil funding. The grammar school that he heads was the least well funded school per pupil in the county. It receives £4,474 per pupil on average, while a similar sized comprehensive school in Lincolnshire receives £6,481 per pupil. Those figures are from the Government’s consistent financial reporting data. If we are to promote educational excellence, it is not a good idea to give the best school in Lincolnshire, which everybody tries to get into, only £4,000 per pupil per year, while giving the worst performing comprehensive in Lincoln, which nobody wants to go to, £7,000 per head per year. That is a daft way to run our education system.

We are asking only for fairness. Back in the 1960s, one of the criticisms of grammar schools was that they were treated unfairly well by county councillors. It is ironic that the reverse is now happening. Grammar schools are in a uniquely bad position, in terms of state funding.

[Steve Baker (Wycombe) (Con)]

My hon. Friend makes a compelling case. Is not the reason why grammar schools are so badly funded comparatively that they have disproportionately high numbers of pupils at sixth forms? Is not the real issue the way in which the Government have dealt with sixth-form funding, rather than with grammar schools funding per se?

[Sir Edward Leigh]

That is exactly right, and I will come to that point in a moment. Mr Roger Hale, who runs the successful Caistor grammar school, wrote a heartfelt plea to me. Of course, he will struggle on and do his job—that is what teachers do—but he said:

“We were one of many schools who answered the call from Michael Gove to set off on our own as an Academy so that we would have better control over our resources. In the first few years, this worked very well. However in the last 18 months, the funding we receive to be an Academy has been sharply reduced.”

I have read letters from grammar schools from all over the country that say the same thing.

On the face of it, it seems fair that the Government equalised post-16 per-pupil funding between schools with sixth forms and further education colleges. A lot of the problems are due to the law of unintended consequences. I do not think for a moment that Ministers intended to hit grammar school funding adversely, but their laudable aims had unintended consequences. The funding for FE colleges and schools was equalised, which was fair enough. However, that ignored the significant further pastoral support and enrichment programmes for pupils in sixth forms. Sixth formers take on a broader programme of AS and A-levels, in addition to supervised study, sport and other programmes, in contrast to FE students. Per-pupil costs for sixth forms are in many cases higher than they are for further education colleges. Sixth formers, on the whole, have between 20 and 25 taught hours per week, while the figure for those in further education colleges is closer to 17. Furthermore, that equalisation was achieved not by choosing a figure in the middle of the previous levels of sixth-form and FE funding, but by brining sixth-form funding down to the same level as further education.

I am grateful for the argument made to me by Mr Önaç, the headmaster of St Olave’s school in Orpington. He said that the scale of the reduction that the change has brought has been huge, and that it often amounts to a whole fifth of the per-pupil budget. Although it has applied across schools, it has affected grammar schools, because almost all of them have sixth forms that comprise a much larger proportion of their total school population than other schools. That is why we have this problem. I am not sure that it was envisaged at the start of the changes.

[Kevin Brennan (Cardiff West) (Lab)]

It is a shame that the hon. Gentleman did not make the debate about 16-to-19 funding as a whole, because the same would equally apply to sixth-form colleges, which also have to pay VAT.

[Sir Edward Leigh]

Although I wanted to talk about the problem affecting grammar schools—one should be absolutely honest—as I said at the beginning of my speech, the problem affects not only grammar schools, but successful comprehensives with large sixth forms. The hon. Gentleman is right to make that point. I hope we can look at this issue in a bipartisan way. It should not be about grammar schools versus other schools, but about fairness. All sixth-form pupils, whatever school they are in, should be funded as equally as possible.

Supplemental funding for the disadvantaged is widely welcomed, and we all accept it. Part of the reason why I and others are such passionate advocates for grammar schools is that they provide a superb helping hand for pupils from less-advantaged backgrounds.

[Fiona Mactaggart (Slough) (Lab)]

I have a number of brilliant grammar schools in my constituency, but one of the reasons why they are comparatively underfunded is that, compared with the other schools in my constituency, they do not attract the pupil premium because they have fewer pupils from disadvantaged backgrounds. The funding system, which is skewed towards disadvantage, has disadvantaged grammar schools, so the claim that grammar schools help disadvantaged pupils is belied by the statistics.

[Sir Edward Leigh]

Grammar schools can help people, in particular those from ethnic minorities. In the school that my son attends, 60% of the pupils are from an ethnic minority background, which is high. I believe that, if there were more grammar schools, we could do more to help people from disadvantaged backgrounds. One of the problems is that there are not enough grammar schools. We are not going to get into this debate now, but I wish county councils had the freedom to set up more grammar schools if they want to do so. That is what localism is all about.

The way that the funding is worked out—there is an over-emphasis on pupils who qualify for free school meals—is not adequately grounded in the hard evidence of the additional costs associated with disadvantaged pupils. The Government have injected additional funding into four sections: pupil premium; special needs; pupils who have failed GCSE English; and pupils who have failed GCSE maths. As I have said, that intention is laudable, but unfortunately, in many cases, it means that the Government have perhaps unwittingly pumped four different funding streams into the same child.

We also need to recognise that that funding increase has a converse effect on the opposite end of the spectrum in grammar schools and sixth forms more generally. It would be counter-productive to unbalance the funding of education so much towards disadvantaged pupils that we undermine centres of excellence in the state sector that we want to protect. This is not a zero-sum game: we can help disadvantaged pupils and promote centres of excellence. Surely that is the right way to proceed.

The number of young people over the age of 16 educated on a full or part-time basis has increased in recent years as a result of raising the participation age to 17 in 2013 and 18 in 2015. Schools and further education colleges have come under pressure to expand to accommodate such increased numbers. That is fair enough, but at the same time, the funding pot for post-16 education has become fixed, and the method of distribution has changed from a model that included higher levels of funding for courses with large practical elements, and incentives for institutions with high levels of success and retention.

The simplification of the funding system—funding is attached to the student rather than the course—is welcome, but the impact on high-achieving academic schools with large sixth forms, including the grammar schools in my constituency and others, has become considerable. The funding system means that, in some local authorities, students receive more funding for education from 11 to 16 than from 16 to 18—can that be right?—even though it is widely recognised, and obvious common sense, that the cost of delivering the curriculum increases as a student gets older. That is why many universities feel justified in charging fees of £9,000 a year.

As students move through the school system, they can exercise an increasing level of choice over the subjects they study, which tends to reduce financial efficiency. More broadly, there is a bigger perspective, which I want to end on. We need to think about that point, which I want to emphasise. The world is becoming more and more globalised. As the Prime Minister keeps telling us, Great Britain is competing in a global race for excellence. For us to compete successfully, we need more scientists, more engineers, more mathematicians, more doctors and more innovators.

[Kevin Brennan]

What evidence can the hon. Gentleman give to show that areas with selection at 11 produce more people in those professions than areas that do not have selection at 11?

[Sir Edward Leigh]

I think I can establish that grammar schools provide real add-on value and are, in themselves, centres for excellence. I do not want to get into a wider debate about whether there should be more or fewer grammar schools in Lincolnshire, but the Government have decided that the existing grammar schools should survive. Nobody in the Government, or the Labour party, suggests that grammar schools should be phased out. Presumably, they accept that those schools have a contribution to make. All we are asking for is fairness. I am not saying to the Government that there should be more grammar schools, although I might well believe that. I am simply saying that I want fairness. The Government have decided that the schools should exist, so they should be funded fairly. The removal of additional programme weighting for sciences, technology and mathematics is particularly unwelcome.

[David Simpson (Upper Bann) (DUP)]

I had thought that the grammar schools system controversy was found only in Northern Ireland, but it would seem to happen in England as well. The research notes we have received show that the Government gave a commitment as far back as 2010 that the disparity in funding would be addressed by 2015. Does the hon. Gentleman see any sign of that? Why the disparity?

[Sir Edward Leigh]

The disparity exists for the reasons I have described, but we have a quite excellent Minister who has committed his whole life to education. We are all waiting for his response.

It is vital that our young people are equipped with the knowledge, understanding and skills that will enable them as individuals, and the United Kingdom as a nation, to compete successfully in a global marketplace. That is so obvious and we all agree with it. Changes to post-16 educational funding were examined in isolation from funding for 11-to-16 education, and therefore little is understood about the cumulative effects of decision making on particular schools.

Different types of school are affected in very different ways. Schools for 11 to 18-year-olds with large academically successful sixth forms—I cannot make the point too often that that category includes both grammar schools and high-performing comprehensives—have lost large chunks of money. Whatever one’s view on the grammar school debate, and whether one thinks they are good or bad, that is undoubtedly true. It is rooted in fact. Those are often the very same schools that are unfairly funded pre-16.

The sacrifices demanded of those schools compared with schools for 11 to 16-year-olds, in which levels of income have remained relatively stable, have been significant. As a consequence, the curriculum for students is narrowing, class sizes are increasing, teaching time is reducing and support staff are being withdrawn.

We are sleepwalking towards a future in which some of the country’s best performing schools—centres of excellence—will no longer be able to offer a broad and balanced curriculum to their students. Music and modern foreign languages will join Latin and Greek A-level to become largely the preserve of those whose parents can afford to pay for their education. Our nation’s brightest students will have access to fewer opportunities and resources than their peers. Is it fair that bright students whose parents cannot afford to pay are disadvantaged? Where is the fairness in that?

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

Christ the King College, the best school in my constituency for providing quality work for children—others schools are improving but that one is the best—is not a grammar school, but a good comprehensive.

[Sir Edward Leigh]

The debate is about not just grammar schools, but good comprehensives. By the way, my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) wanted to be here to make some of the points I am making, but she has to serve on a Committee elsewhere. I am grateful to all my colleagues who have turned up this morning. There is a lot of concern throughout Parliament about grammar school funding.

What we need is not 80% or 90% of funding allocated on pupil-led factors, but simply funding per pupil fairness between pupils. To that end, we need to achieve a meaningful, basic entitlement, and genuinely fair and transparent funding. That would ensure that all of our children, whatever background they come from and whichever kind of school they attend, can enjoy a broad, balanced education that will equip them for life in the 21st century.

[Several hon. Members]

rose—

[Mr Philip Hollobone (in the Chair)]

Order. The debate will finish at 11 am and I do not want to call the Front-Bench Members later than 10.40 am. We have just under an hour and six Members are seeking to speak, so we are looking at nine or 10 minutes each. Please do not exceed that time, because that will mean that someone at the end will have less. We have just had an eloquent plea for fairness from Sir Edward and I would like you to apply that to yourselves. We will be led by Damian Green, an exemplar.

09:48

[Damian Green (Ashford) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am delighted that my hon. Friend the Member for Gainsborough (Sir Edward Leigh) not only secured the debate, but set it out in the way he did. Sixth-form funding is a real issue and I hope that even those across the educational ideological spectrum who oppose the existence of grammar schools can be, as he said, united on that, because children’s chances are being affected. That is at the root of what we seek to bring to the Minister’s attention.

As it happens, I attended a grammar school and I support them in my constituency, more widely in Kent and throughout the country because they provide a route for disadvantaged children to reach the top of the academic ladder. Providing that opportunity is one of the core objectives of any sensible education system.

[Kevin Brennan]

Given the right hon. Gentleman’s opening remarks, does he regret that the debate is limited in scope by its title to only 160 or so schools? The issue that he seems to want to highlight affects many more institutions throughout the country.

[Damian Green]

The hon. Gentleman may have a discussion offline with my hon. Friend the Member for Gainsborough about the title of the debate, but my hon. Friend and I have made it clear that we are not talking only about grammar schools. There are comprehensive schools in my constituency, including one extremely good one, and there are others around the country—the hon. Gentleman mentioned sixth-form colleges. This is a wider debate but, clearly, among the schools most appallingly affected by the unfairnesses in the funding system are grammar schools.

[Neil Carmichael (Stroud) (Con)]

Is this debate about grammar schools in fact about the fundamental unfairness of the whole funding formula? That is what we are actually talking about, that is what the F40 campaign is all about and that is why we need to see fair funding for pupils wherever they are.

[Damian Green]

We all agree that we want fair funding. It is not an easy issue and Ministers in this and previous Governments have grappled with it. The principle that we all start from is that allowing all children to reach the full extent of their potential must be the aim of every school.

When the rhetoric and emotion that have begun to enter this debate, and which have gone on for decades, are stripped away, all grammar schools are is specialist academic schools. Under successive Governments, we have thought it a good thing to allow schools to specialise in music, sport, science, maths or languages, but the one thing that the education establishment has never allowed schools to specialise in is academic excellence. That has always seemed completely perverse: we allow schools to specialise, but not at being good in schoolwork.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The right hon. Gentleman is discussing specialising in academic excellence. In Northern Ireland we have attempted to do that. Does he agree that grammar schools in England, as in Northern Ireland, need to continue to do more to dispel the perception of elitism that continues to dog the sector?

[Damian Green]

Absolutely. There is a different debate to be had about how grammar schools can attract children from across the economic and social spectrum. They are particularly successful at attracting students from minority communities in the UK, which is hugely welcome—and, I suspect, illustrates how committed to the education of their children such communities are. As I say, however, that is a separate debate. The point of this one is that grammar schools and other schools with large sixth forms deserve a fair funding regime, along with all other schools.

A number of complex interactions have led to the unfairness. The Minister needs to address two basic issues: first, that post-16 funding is not protected in the way that the rest of the schools budget is, so that any school with a large and growing sixth form is in a financial straitjacket—grammar schools in particular are disadvantaged, but not only them. Secondly, there is the wide amount of local variation that has arisen, again from perfectly good motives. That can be illustrated in a number of ways.

Some of us attended a meeting of grammar school heads and I was struck by one of the illustrations, which comes from Buckinghamshire, although I am sure the same would apply in Lincolnshire, Kent or other areas in which there are many grammar schools. We were shown what would happen if a Buckinghamshire school moved next door: if it moved to Oxfordshire, it would gain 6% in funding and if it moved to West Berkshire, it would gain 8%. If it moved to nearby urban areas, it would gain even more—in Reading, it would gain a 10% uplift and in Luton it would gain 18%. One can understand all the reasons why such disparities might have arisen, but it is not unreasonable for the heads of successful schools to observe the situation as an unfairness from which they suffer in their daily lives.

One of the reasons why I wanted to contribute to the debate was the effect of unfairness on the day-to-day teaching at the two grammar schools in my constituency, Highworth and Norton Knatchbull. Mr Paul Danielsen, the head teacher of Highworth, told me that, despite being oversubscribed, having full classes and having made staffing reductions and other economies, the school can no longer offer the full range of provision. He thought that some schools, at the extreme, might not be able to operate at all—I think that that is unlikely, but it is a possibility. We are talking about the cumulative effect of funding decisions.

[Mr Graham Brady (Altrincham and Sale West) (Con)]

Is there not a further irony? At a time when we want a broader curriculum taught post-16, it is often grammar school sixth forms that teach the most challenging A-levels, such as single sciences, which are among the things that lead to more scientists and engineers. Is there not a terrible danger that the squeeze on funding might reduce that breadth, rather than increase it?

[Damian Green]

My hon. Friend is not only right, but uncannily anticipates my next point.

The practical effect on day-to-day education is a smaller offer in the sixth form for many pupils. Highworth school does a lot of challenging A-levels. Languages are a particular problem, unfortunately, because they have become a less attractive subject for many pupils. German A-level classes are being run with class sizes of 11 and French and Spanish ones with class sizes of seven. With the financial squeeze, they might no longer be viable, which would be appalling. Already in that school, the number of A-levels offered has gone down from 40 to 32, which is completely perverse. I know that the Minister agrees. It is a nonsense that good pupils at good schools are being penalised. They are losing opportunity, and levels of attainment that could be reached are not being reached.

What has happened has not been because of Government intention. Much hugely beneficial education reform under this Government has massively improved the life chances of millions of young people in the country, and I applaud that wholeheartedly. The one perversity in the system, however, is damaging the life chances of children—of some of our most academic children at some of our best schools. I fervently hope that the Minister and the Government can address that in the months head.

09:57

[Gareth Johnson (Dartford) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, as always. I echo congratulations to my hon. Friend the Member for Gainsborough (Sir Edward Leigh) on securing this important debate.

I want to take the opportunity to highlight some of the work achieved by the four grammar schools in my constituency: Dartford grammar school for boys, Dartford grammar school for girls, Wilmington grammar school for boys and Wilmington grammar school for girls. Like my hon. Friend, I should declare an interest, in that I went to Dartford grammar school, I am a governor at Dartford grammar school for girls, where my daughter goes, and my son has, fortunately, just passed his 11-plus and is hoping to go to Wilmington grammar school. Grammar school education therefore runs through my DNA. It is essential that we enable it to continue to be successful.

Grammar school education plays a crucial role in providing a diverse range of educational opportunities for children and helps to prevent there being a one-size- fits-all system. Children are different—we all know that—so we should not have an educational system in which every school tries to be the same. Grammar schools also provide social mobility for aspirational people and their children. I accept and concede entirely that grammar schools are not for all children, but many thrive in the academic environment of such schools.

It is essential that we allow grammar schools to thrive financially—that is the substance of this debate. Like all schools, grammar schools need to be adequately funded. I urge the Department for Education to be as flexible as it can with any grammar school approaching it with funding issues—something I know schools are able to do.

The Government have maintained funding for schools. I welcome some of the changes that have been made but, as my hon. Friend the Member for Gainsborough pointed out, we must ensure that there are no unintended consequences. There clearly have been—that has been part of the problem with funding grammar schools—and they have impacted disproportionately on grammar schools. That situation must change.

The change in funding for A-level pupils from a per-A-level structure to a per-pupil structure has tackled an issue of concern to some people: that pupils were simply being asked to take more and more A-levels when universities were looking only at the top three that pupils were able to pass. I understand why the Department for Education wanted to recognise that issue in the funding structure, but the changes have had a disproportionate impact on grammar schools, particularly those that relied on the extra funding that the previous system provided.

I will keep my comments short as many people want to speak, but I want to establish a thread to run through the debate—that grammar schools are simply good schools and that we need good schools to flourish. I am grateful for the Government’s support for existing grammar schools, which has enabled all four grammar schools in my constituency to expand and encourage and enable more pupils to attend and enjoy the benefits that they provide for the local community.

The Department for Education has recognised the importance of allowing specialisms in schools. My right hon. Friend the Member for Ashford (Damian Green) made the important point that we need to allow the specialism of being good at academic work. That has been recognised by the Department through the university technology colleges being built around the country. I was proud to see the first UTC in Kent open in my constituency. That college specifically encourages pupils to specialise in maths, engineering and science, providing a block or cork for the gap in skills that we had. Having organisations that allow specialisms to flourish can be highly successful. Grammar schools can also provide specialism in academic work, enabling some children to obtain the benefits of that specialism.

In addition, there is now a general recognition that it is perfectly right and effective to allow streaming within schools, so as to have children taught according to their academic abilities. I fail to understand why some people feel that it is perfectly fine to stream within schools but not between them. That argument against grammar schools is illogical.

Grammar schools also help the schools that surround them. There is a myth that they somehow bring other schools down—that they cream off the pupils with the top abilities in a particular area, and as a result of having a grammar school as a neighbour other schools collapse and fall down. In my experience, that is simply not the case. Next to one grammar school in my constituency is the Leigh academy, which is the most over-subscribed school in the county of Kent. It leads a trust that is, perhaps, one of the best in the country. It is a non-selective school in a constituency that has four grammar schools, yet is the most popular school in the whole county.

It is often said, quite rightly, that education is about maximising each child’s abilities and ensuring that they reach their full potential. All children are different, and we must enable the existence of an education system that reflects that fact if we are going to achieve that goal. Only a diverse system of education will be able to cater for the needs of all of our children, and grammar schools provide a crucial part of that diversity.

10:05

[Mark Pawsey (Rugby) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I add to the congratulations given to my hon. Friend the Member for Gainsborough (Sir Edward Leigh) on bringing this important issue forward at this time, when there a great deal of interest in the role of and proposals for grammar schools.

I am fortunate to have grammar schools in my constituency, and they remain extremely popular. One measure of that popularity is the distances from which parents apply to them because of the high quality of education pupils receive there. Like other Members who have spoken, I should declare an interest, as I am going to give some examples from the grammar school in Rugby where my own daughter is a pupil.

As with other grammar schools, a feature of grammar schools in Rugby is that their sixth forms are very large. They provide post-16 education for many feeder schools across the town, and those who start their secondary education in one of our—very good quality—comprehensive schools very much aspire to have the opportunity to move to a grammar school sixth form, so sixth-form funding is particularly important.

We had a previous debate about funding for education in this Parliament, and the cross-party F40 campaign—a very effective campaign organised in this place by my hon. Friend the Member for Worcester (Mr Walker)—has drawn attention to the differences in education funding per head. The Government have, appropriately, provided an extra £390 million for the 69 worst-funded authorities, of which Warwickshire is one. That is a welcome attempt to address the problem, but it is not a cure, as substantial differences remain in per-pupil funding.

To give a local example, the average student is allocated £917 less funding in Warwickshire than the self-same student would be allocated in Birmingham, a difference of 21%. There is no dispute today that the impact of deprivation needs to be addressed and that additional resources should be targeted at it. However, that should not affect the majority of schools nor those schools with larger proportions of brighter children or children who do not attract additional funding. In Warwickshire, a student with no characteristics attracting additional funding is allocated just £3,569 of funding—£381 less than the DFE’s minimum funding level of £3,950 for a key stage 3 student.

[Neil Carmichael]

Does my hon. Friend agree that his points effectively prove the need for floor funding, so that funding is fair and decent for all forms of education, including grammar schools and other good schools, and that that is the way forward, certainly when we bear in mind additional funding from the pupil premium and other such funding streams?

[Mark Pawsey]

My hon. Friend is entirely right. In this debate, we are calling for a fairer funding formula for schools across the board. I am concerned that pupils in Warwickshire are receiving less than the DFE’s own minimum.

I turn now to the effect on sixth forms. They are at an additional disadvantage as a consequence of the good intention to equalise post-16 funding between sixth forms and further education colleges. That decision did not allow for the fact that schools provide supervised study, teach additional elective subjects and provide sport and other enrichment programmes, so there is more teaching time in schools than at further education colleges, where students often have a proportion of free time. In some instances, that has led to a loss of £1,000 per student.

This has had a particularly adverse effect on Rugby high school. If it had been an 11-to-16 school and its numbers had remained the same each year, its funding would have been static at £2,042,000. Unfortunately, the changes in post-16 funding have resulted in a 15% reduction in the school’s sixth-form funding—the equivalent of the salaries of 6.7 teachers paid at point 6 on the main professional scale. Schools such as Rugby high school, whose academic sixth forms are large in relation to the remainder of the school, have been particularly affected, although, of course, the issue also affects high-performing comprehensives.

The result is that Rugby high school receives less funding for post-16 students than for students aged 11 to 16. The figure is £4,080 for students post-16 and £4,350 for students aged 11 to 16, so there is £270 less per pupil when students transfer from GCSE courses to A-level courses, despite general agreement that the curriculum becomes more expensive to deliver as students pass through secondary school. We are perhaps getting to a situation where funding for 11 to 16-year-olds is having to subsidise sixth-form students because of a lack of sixth-form funding. That £4,080 represents just 45% of the £9,000 a top university would charge in tuition fees when students move on from sixth form. That massive difference cannot possibly be the best way to ensure that those studying for A-levels and preparing for entry into university get a top-quality education.

The funding issue has meant that schools such as Rugby high school have had to be very creative in balancing their books. The school has a particular problem because it is the only secondary school in Rugby without a sports hall and cannot provide sport. In addition, it has had to increase class sizes, reduce teaching time and, most significantly, drop some subjects. Particularly vulnerable subjects, which may disappear from the curriculum altogether in coming years, include modern foreign languages, music and Latin.

The solution to the problem is twofold. First, we need to speed the move towards a national formula that will provide agreed national minimum funding per pupil at each key stage. Secondly, we particularly call for an end to the anomaly of post-16 students being funded at a lower level than pupils aged 11 to 16.

I have a great interest in supporting the excellent education provided by grammar schools and good comprehensives, and I very much look forward to the Minister’s response to the points that have been raised.

10:12

[John Glen (Salisbury) (Con)]

It is a great pleasure to serve under your chairmanship, Mr Hollobone. Unfortunately, public grammar schools are all too often dismissed in public debate as a mode of education supported by an out-of-touch elite interested only in the education of a privileged few. Indeed, last August, the hon. Member for Stoke-on-Trent Central (Tristram Hunt) accused the Secretary of State for Education of pursuing education policies based on “1950s Grammar School nostalgia”. I disagree. Such comments, which seek to make grammar schools a tool of ideological division, do not serve well those pupils who attend our grammar schools up and down the country and get so much out of them. It is not nostalgic to want our children to benefit from a rigorous education that inspires them to aim high, achieve excellent results and lay the foundations for success. I want those principles embedded in all schools, and we should embrace that approach to education generally. That has been at the heart of the Government’s policies, and it needs to remain so.

Some people may wish to talk about increasing the number of grammar school places, but we are here to discuss the challenges facing the 164 grammar schools in our country today. As a number of colleagues have said, there is a real concern that we are putting our grammar schools at risk—not, perhaps, because of a wilful desire to eliminate them, but as an unintentional consequence of some of the funding reforms that have taken place.

I have two outstanding grammar schools in my constituency: South Wilts and Bishop Wordsworth’s. They have faced similar, increasingly challenging financial settlements, primarily because of the decision to ring-fence the education budget for five to 16-year-olds, while the 16-to-18 budget has no such protection. That has had a significant impact, particularly on Bishop Wordsworth’s, which faces a deficit of more than £300,000 in its sixth-form budget this year. In the past three years, it has seen a 7% reduction in its per sixth-form pupil funding. Next year, it faces a budget deficit of more than £150,000.

I am not here to advocate special treatment for grammar schools, because this issue affects all 16-to-18 providers. However, there is a case for arguing that the problem needs to be re-examined and that we need to look at the principle of ring-fencing. It is illogical that a school can run healthy surpluses in its 11-to-16 budget, but that they are immediately absorbed by a growing deficit in its sixth form.

If we are honestly to discuss the financial difficulties facing grammar schools, in particular, we need to acknowledge the wider social mobility issues. Grammar schools must remain focused on doing more in that respect. It is true that, although 16% of pupils are eligible for free school meals in an average school, the figure is considerably lower in a large proportion of grammar schools. However, that is because the pool is smaller in the first place, and those figures do not tell the whole story because they are so small.

Importantly, we need grammar school heads to focus on extending the benefits of a grammar school education to as many as possible in the community, as Stuart Smallwood is doing at Bishop Wordsworth’s. I welcome the steps Salisbury grammars have taken to reach out to local primaries by running 11-plus coaching sessions in schools that have traditionally sent fewer pupils to grammars at 11. However, I ask the Minister how that can be sustained when budgets are in the position I have outlined. If we are to advocate more funding, we must unambiguously acknowledge the value of grammar schools—the transformational impact they have on children’s life chances and ability fully to achieve their aspirations.

I am a governor, not of one of the grammar schools, but of Wyvern college, which is very much on the up under a new headmaster. I can attest to the thoughtful partnerships that exist between grammar schools and schools such as Wyvern. Grammar schools act as beacons of excellence, and they raise standards across the board by working constructively with other local schools.

In welcoming today’s debate, I want to highlight the particular challenge facing grammars whose sixth forms are in dire need of cash injections. Many children in my constituency and nearby commute to Salisbury to attend sixth form, because many schools in the area do not have sixth-form provision. That demonstrates how grammars are perceived as the means of completing a high-quality education in south Wiltshire, providing opportunities not afforded to those educated from 11 to 16 at other schools nearby.

When I visited the Minister for Schools, all he really wanted to focus on was the percentage of pupils on free school meals. His logic was, essentially, that unless schools raise that percentage, they will encounter difficulties. It is quite obvious that they cannot sort out the problem overnight, and the Minister’s argument is an empty one when it comes to dealing with the realities schools have been faced with overnight.

[Richard Graham (Gloucester) (Con)]

On funding and particularly the pupil premium for some of our poorer children, does my hon. Friend agree that there are occasions when the excellent grammar schools in cities such as his and mine lose some contact with the community by taking a majority of pupils from some of the richer rural areas further away? Does he agree that, if the DFE gave grammar schools a bit more flexibility on entrance qualifications so that people who have great potential but who are not necessarily well coached beforehand could come in, that might increase the number of pupils getting the pupil premium?

[John Glen]

I am grateful to my hon. Friend for his characteristically constructive and thoughtful intervention. There is a debate about how the 11-plus exam works and how it could be improved so that it brings in more people. Grammar schools in Salisbury are looking carefully at that issue. However, I repeat that that reform—that enhancement of the journey of moving to grammar school—will not happen overnight. There are some issues to do with the flexibilities, such as discretion over the catchment area, and so on; but let us not be ashamed of the fact that grammar schools are about academic excellence. There is an exam for entry to the school at 11, and we should not be ashamed of the academic criteria.

I urge the Minister to acknowledge the vital role that grammar schools play in social mobility and to allow them to do more of what they do. Let us celebrate the excellent outcomes that they achieve, and not be inhibited about talking about excellent grammar schools. We would do well to have a model of and approach to education that celebrates their achievements and acknowledges the desire that we all have for excellence in all secondary schools, whatever form they take and wherever they are. I believe that that is the motivation of all of us who are here for this morning’s debate.

10:20

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

It is a delight to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Gainsborough (Sir Edward Leigh), who secured the debate.

I do not particularly want to enter into the “grammar schools or not” debate. I declare an interest as a product of that social mobility of the 1950s, related to grammar school education, that my hon. Friend mentioned. However, I also spent 38 years of my teaching career in very large comprehensives, and want to mention, as he did, the fact that large, successful comprehensives with large sixth forms face some of the same issues as grammars.

Call me a conservative, Mr Hollobone, but I start from the principle that I do not want any child’s education today to be sacrificed for a possible nirvana in 20 years’ time or for something that our education system has constantly failed to bring about since 1945. We are where we are, however.

I am in the great position, for a Member of Parliament, of representing a constituency with no particularly bad school, secondary or primary. There is a mix, which includes two large grammar schools—Lancaster royal grammar school for boys and Lancaster girls’ grammar—and, also in Lancaster, an extremely large Church of England comprehensive, Ripley St. Thomas, which has a large sixth form. I am beholden to their heads, who have raised the problems, including the decision in 2013 to bring payment for sixth forms on to a level with that for further education colleges, without taking into account the cost of the extras provided by school-based sixth forms. That reduction, by about £1,000 per pupil, has a massive impact, as other hon. Members have said, on schools that have large sixth forms.

In addition, the sum in question is the maximum. I am told by Mrs Nicholls, the head teacher of Ripley St Thomas, that per sixth form pupil

“£3700 is the maximum we can receive but it is almost unattainable as it reduces depending on attendance, hours of study, completion and success factors.”

The grammar schools I mentioned raised similar issues. Mrs Nicholls reports that, as other hon. Members have said:

“A level classes, once typically 10-15, are now increasingly over 20 with sets of 25+ not uncommon. Sadly, subjects which do not recruit in large numbers are, out of financial necessity, being dropped”.

The head teacher of Lancaster girls’ grammar school, Mrs Cahalin, says:

“Traditionally we have always looked to allow external students to join our sixth form so that they can benefit from an outstanding sixth form education and very few girls leave, so our sixth form has been very large and so we will be hit far more.”

So schools must now take into account the people who want to join. Mrs Cahalin added:

“We also offer a large number of science courses which are more expensive to teach”,

as other hon. Members have mentioned. Dr Pyle, the head teacher of Lancaster royal grammar school, says:

“Class sizes are increasing, and we share some teaching with the girls’ grammar school”—

to allow for that—

“but the real threat is to the breadth of the curriculum. At the moment we are practically the only state school in the north of England to offer Latin and Greek A-level. We still offer German and Music to A-level—but we know that all of those subjects have been cut elsewhere.”

Those problems are in the system because of the decisions made in 2013. However, I want to consider the future, too, because costs are coming down the line. As to the teachers’ pension scheme, the Government have confirmed that they are introducing changes to the employer’s pension contributions for teaching staff from September. Making up the difference for that change alone will increase the employer’s contribution that schools need to make for their teaching staff to 16.48%, from 14.1%. That is a 2.47% increase. Salaries are the biggest cost that schools have, and that change will come down the line in September. Teaching staff have received a 1% pay award for 2015-16. Support staff have recently agreed a pay increase of 2.2%. All those things are at present unfunded in the grant system to schools. On top of that, the introduction of the single-tier state pension from April 2016 has implications for the employer’s national insurance contribution.

What that means, I am told by Mrs Cahalin in particular, is another increased cost—of 3.4%, for salaries and pensions. She says that in her budget for 2015-16 she expects a drop in income of at least £100,000, with increased costs of £100,000. That means taking £200,000 out of the school’s budget—and the prospect of many subjects disappearing. As Dr Pyle and Mrs Nicholls say, there is now the prospect that grammar schools, which were, as hon. Members have said, looked to as centres of excellence, will provide just the minimum. They will provide the minimum three A-levels, whereas they used to provide courses with four A-levels, and they will restrict entry by other people to their sixth forms, because of cost.

That serious issue affects children’s education today. I have mentioned my professional life in education, trying to turn around state comprehensives, and have also described the incredible institutions that are to be found in my constituency, alongside successful comprehensives. Dr Pyle says:

“Our proudest boast has been that pupils from exceptional state schools like ours can take on the independent sector and win!”

It seems to me ironic that under a coalition Government with a Conservative majority, we may lose that. I hope that the Minister will address the problems raised by my hon. Friend the Member for Gainsborough, and the serious concerns expressed by head teachers about funding problems coming down the line for the future, because of salary and pension decisions taken by the Government.

10:27

[Fiona Mactaggart (Slough) (Lab)]

I am proud to represent a town that has some of the best schools in the country and is in the top 10 for GCSE achievement; I am talking about both grammar and non-selective schools in Slough. I am very concerned about the consequences of the sixth-form funding situation for all schools in Slough. When I was first elected, not all the schools in my constituency had sixth forms, but they now do. Some sixth form pupils transfer from their secondary school to a grammar school, to do the A-levels that they want, but there is a thriving set of schools in the town. I am concerned that despite claims about protection of a balanced school budget, several Government decisions are harming those schools, particularly for children who want to stay on to do A-levels.

Targeting funding towards children with particular characteristics, measured by deprivation and low attainment, penalises schools that have low numbers of such students, as we have heard. That equally affects academic comprehensive schools in relatively prosperous areas, as many Conservative Members have said. Also, recent changes to the way the relevant characteristics are measured and funded through the local formula have resulted in some of Slough’s successful non-selective schools losing funding; Slough and Eton school in my constituency is an example. Our modelling for Slough for next year’s budget indicates that that suffering might be more widespread, largely because of the reduction in post-16 funding.

I am very concerned because I am with the parents of my constituency who recognise that although East Berkshire college is the right setting for some 16-year-olds—the adventurous kids who like the mix of vocational and academic subjects available there—there are other kids who need the closer pastoral network that exists in a school or want to carry on the sporting history and so on that they have developed in school. It is wrong that the Government’s funding arrangements for 16-plus are removing that choice for parents; one of my concerns about grammar schools is that the people who do the choosing are not the parents but the schools.

I wish that we had a range of schools that did not exclude children out but included them in, but that is beside the point in a debate about funding—at the heart of it, funding at sixth-form level. Funding for all post-16 providers is being reduced to the level associated with further education colleges, but school sixth forms just do not have the economies of scale associated with large college provision, so are disproportionately affected. Grammar schools with large sixth forms are the most seriously affected by the changes.

I have looked at the plans for schools in my constituency. Upton Court grammar school, which, I profoundly regret, changed its name from Slough grammar school, has given me a list of some of the ways in which it is affected:

“Cuts to the curriculum—we have already had to reduce the number of subjects that we can offer to students at GCSE and A level. We have collaborated with a nearby school to retain some subjects…Increased class sizes—to avoid operating at a loss we have comprehensively reviewed our work force needs and increased class sizes.”

It goes on to state that

“at a time when costs such as salaries (costs of living) and pensions (government reform) are rising our income is being reduced. The only thing we can do to counter this is reduce the breadth of the curriculum even further and reduce the level of pastoral support we offer to students.”

Frankly, that is not a record of which any Government should be proud. We must help all our schools with successful sixth forms to provide pastoral care and the range of options that kids are capable of following.

10:32

[Sir David Amess (Southend West) (Con)]

I congratulate my hon. Friend the Member for Gainsborough (Sir Edward Leigh) on his speech and the way in which he introduced the subject. He was entirely right to concentrate on the overall objective of fairness. The tone of the debate has been excellent in every respect. I went to St Bonaventure grammar school in Newham in the east end of London—for a time, its headmaster was the current chief inspector of schools, Sir Michael Wilshaw. I am pleased to have noted during the debate that three colleagues present contributed to a pamphlet on working class Conservative Members of Parliament, which says everything about how colleagues see grammar schools as a focus for opportunity.

In Southend, we have the following grammar schools: Westcliff high school for girls, Westcliff high school for boys, Southend high school for girls and Southend high school for boys. I am delighted to tell the House that those schools have produced a number of Members of Parliament; I am not so pleased to tell the House that they have produced more Labour than Conservative ones. A number of those Members now sit in the House of Lords, but my hon. Friend the Member for Wellingborough (Mr Bone) also went to one of our excellent local grammar schools.

I would like to mention just a few of those schools’ achievements. Four pupils from Westcliff high school for boys competed in the UK Bebras Computational Thinking Challenge, a national competition sponsored by the university of Oxford and ARM Holding plc. They will appear in the Bebras hall of fame for 2014. Recently, Southend high school for boys and Southend high school for girls qualified to represent England at the World School Championships Athletic in China in June this year.

To return to the remarks made by my hon. Friend the Member for Gainsborough, this debate is very much about fairness. The idea that any political party is going to abolish grammar schools is, frankly, for the fairies. That argument is over. I have my own views on grammar schools. When my right hon. Friend the Home Secretary was the shadow Secretary of State for Education, she had in mind the expansion of the number of grammar schools. It is a shame that my party abandoned that policy, but I will not revisit that argument. The issue is entirely a matter of unfairness in funding per pupil.

We have with us an excellent Minister, for whom I have the highest regard. He has visited a number of schools in my constituency. I have met the heads of the grammar schools in Southend, and the meeting was attended by the gentleman in charge of their funding. That was very positive, but I have now been waiting six weeks to hear what the outcome of that meeting is. I say gently to my hon. Friend the Minister that officials need to be geed up on this matter. The House will rise at the end of March; this Member of Parliament will not wait until the end of March for a firm assurance that the four grammar schools in Southend are going to be funded fairly.

At Southend high school for boys, the deprivation rate is 5%, yet it receives £4,503 per pupil; at Southend high school for girls, the deprivation rate is 6%, and it receives £4,540 per pupil; at Westcliff high school for boys, the deprivation rate is 5%, and it gets £4,503 per pupil; and at Westcliff high school for girls, the deprivation rate is 4%, and it gets £4,449 per pupil. Those are among the lowest funding figures in Essex, in both absolute and relative terms. That is an absolute disgrace.

[Neil Carmichael]

Does my hon. Friend agree that it is absolutely illogical to have a post-16 funding system that penalises the very schools that are producing the results in STEM subjects that we so desperately need? That is clearly one of the driving issues in this debate.

[Sir David Amess]

I absolutely agree. The funding for the four grammar schools in Southend is totally unfair compared with others in Essex.

Another indicator is free school meals. Between 1.4% and 2.2% of pupils at the four grammar schools in my constituency are eligible for free school meals; Colchester County high school for girls has only 1.3% of pupils eligible for free meals and a record low deprivation rate of 1%, but it receives a lot more money—about £450 more per pupil—than my local schools.

Head teachers have voiced concerns about the 10% reduction in their budgets between 2012 and 2017. Such reductions are obviously understandable in the case of services that fail to manage their budgets efficiently, but that is not true of the four grammar schools in Southend, which do an excellent job. Importantly, the Government have announced that those studying four A-levels will receive about £400 more a year, and that those studying five or more A-levels will receive around £800 more. I just cannot understand how those amounts have been calculated. It costs around £1,000 per student per year for each successfully completed A-level.

Supporting underperforming schools in disadvantaged areas is a commendable aim, but it cannot be achieved at the expense of grammar schools, which are some of the best-performing schools in England. The Government should do their utmost to invest in the talented young people who want to work hard and take up extra A-level subjects. Their aspirations must be backed by sufficient funding calculated appropriately in collaboration with education professionals, rather than pulled out of thin air, as currently seems to be the case.

10:39

[Kevin Brennan (Cardiff West) (Lab)]

Perhaps at the outset I should say that I was educated at a comprehensive school, I taught at a comprehensive school, and my daughter attended a comprehensive school. The hon. Member for Gainsborough (Sir Edward Leigh) very deftly tried to change the terms of the debate away from the title on the Order Paper. He opened his speech by saying that the debate also applies to comprehensive schools. It is a pity that he did not actually put that in the title of the debate and say that it would be about sixth-form funding. I understand why he might have put it in the terms he did—the juxtaposition of the terms “grammar” and “school” is catnip to his Conservative colleagues. Had he said that the debate was about 16-to-19 funding, many other colleagues from areas of the country that do not have one of the 164 remaining grammar schools might have liked to attend and raise with the Government their concerns about 16-to-19 education funding in schools and sixth-form colleges in their constituencies. It may well be that another debate is needed to enable a broader cross-section of the House to participate.

In introducing the debate—I thank the hon. Gentleman for the advance copy of his speech, which he supplied to me prior to the debate, and wish I was that well organised—he said:

“Supplemental funding for the disadvantaged is widely welcomed”.

He then went off script and said “we all accept that”, and yet, towards the end of his speech, he said:

“What we need is not 80% or 90% of funding allocated on pupil-led factors”,

but simply “funding per pupil”. I do not know how the hon. Gentleman squares those two statements, and how he can achieve that without reducing funding to the other schools in his Lincolnshire constituency. He might want to explain to the head teachers of the other schools in his constituency how much of their budget he thinks should be cut to accommodate what he said in his speech.

The right hon. Member for Ashford (Damian Green) went as far as saying that the current 16-to-19 funding system introduced by the Government is

“damaging the life chances of children.”

That is very serious, and I hope the Minister will respond to that charge in his summing up.

The hon. Member for Dartford (Gareth Johnson) talked about grammar schools in Kent, but he did not talk about the overall impact of a selective system and how Kent overall gets poorer results than many comparable non-selective counties. That feature in defence of grammar schools was not entered into during the debate. The hon. Member for Rugby (Mark Pawsey) also criticised the effects of the Government’s policy on 16-to-19 funding.

The hon. Member for Salisbury (John Glen), along with many others, said that what was happening was due to the unintended consequences of what the Government have done on 16-to-19 funding. He called for a re-examination of the policy of ring-fencing the schools budget for five to 16-year-olds because of the impact it is having on the 16-to-19 budget. I would be interested to know the Minister’s response to that suggestion. By the way, if it is an unintended consequence, that calls into question the competence of the decision in the first place, because if funding at 16 to 19 was going to be levelled down while protecting the five-to-16 budget, it was obvious that that would have significant impacts. Presumably Ministers, and the submissions they received from civil servants—we do not get to see those—went through fully and in detail the consequences of taking the decision and the impact it would have on sixth forms and sixth-form colleges.

The hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), who, like me, is a former school teacher, pointed out all the other additional costs that are coming down the pipeline for schools. Again, the Minister should respond to that point. I recall from an earlier debate that the hon. Member for Lancaster and Fleetwood taught in comprehensive and secondary modern schools, so he has a full experience of both sides of that equation.

My hon. Friend the Member for Slough (Fiona Mactaggart) pointed out the impact of 16-to-19 funding on all post-16 providers, not just the selective ones—although all post-16 providers are selective in some ways, because that is the very point at which selection is permitted within our system overall. The hon. Member for Southend West (Sir David Amess) agreed that 16-to-19 funding was unfair and gave examples from his constituency.

I should say something about grammar schools, as that is the advertised title on the Order Paper. Overall, it is the Opposition’s view that a system of selection at 11 is not the way to raise school standards or to promote social mobility. In fact, that is currently the Government’s position. Instead, we should focus relentlessly on supporting schools to raise standards for all pupils regardless of their backgrounds. The most effective way to do that is through promoting great teaching and leadership in our schools. The evidence for that is absolutely clear internationally. Andreas Schleicher, who is often quoted by the Government and who oversees the OECD programme for international student assessment scores, has made it absolutely clear that the international evidence shows that systems with selection for children at the tender age of 11, and all that that entails, perform less well than non-selective school systems.

Far from promoting social mobility, selective systems entrench social division. The difference in the domestic average wages between the top 10% and the bottom 10% of earners is much wider in selective areas than in non-selective areas. Schools that select at age 11 are also highly socially selective institutions overall. Almost all the remaining 164 grammar schools in this country have fewer than 10% of pupils eligible for free school meals. In 2010, 96,680 year 7 pupils received free school meals from a total of 549,725 pupils in state schools. Of the 22,070 grammar school pupils in that age bracket, only 610 were receiving free school meals. It is undeniable that the poorest children are losing out, in part because in some areas almost everyone who passes the 11-plus has had private tuition of one sort or another.

I will not go into great detail about the evidence from the past—it is probably not where we should go in today’s debate—but suffice to say, the rose-tinted view of the selective system of the past is not true. At its height at the beginning of the 1960s, a third of grammar school pupils got only three O-levels, and only 0.3% of grammar school pupils at that time with two A-levels were working class. It is therefore a myth that grammar schools were great engines of social mobility. There are many reasons for the great surge in social mobility, but selection at 11 is not one of them.

That is why the current Prime Minister was absolutely right in 2007 when he said that those who wanted to expand the number of grammar schools were

“splashing around in the shallow end of the educational debate”.

He went to say that his party was in danger of becoming “a right-wing debating society” rather than

“an aspiring party of government”.

That is why the current Government have held on, largely, to the policy of not allowing more schools that select at age 11, although they have permitted a loophole to those that he said were

“clinging on to outdated mantras that bear no relation to the reality of life”—

they have created a loophole to allow the expansion of selective provision by stealth to locations many miles away from existing grammar schools.

[Sir Edward Leigh]

Let us agree to disagree on grammar schools. In the last couple of minutes of his speech, will the hon. Gentleman focus on the fact that the Labour party presumably is committed to a fair funding formula for all schools with successful sixth forms?

[Kevin Brennan]

Yes, I can do that, and I can confirm that. Labour policy remains that the remaining selective schools should be a matter for local parental choice. Our policy has not changed on that since it was introduced in 1998, and it has been reconfirmed by the current Government. In the course of the hon. Gentleman’s speech, he was right to point out that sixth-form or 16-to-19 funding is causing a great problem for many schools across the country. Of course, there is no different formula for grammar schools—I would like to make that point, so there is no myth about it. The difference in funding between grammar schools and others is largely because of the difference in their pupil intakes, because of all the factors we have heard about. However, he is right that many schools, including grammar schools, have been hit very hard by the severe cuts in sixth-form and college funding that the Government have imposed. As I said, it might have been more fruitful to have a debate under that broader title to allow others to introduce that subject.

Finally, there are a few questions that the Minister needs to address. Was the decision to slash 16-to-19 funding intended to impact hardest on sixth forms, colleges and, indeed, selective schools? What was the rationale for that decision? Was the result deliberate, or is it, as many hon. Members have suggested, an unintended consequence, in which case there would be an issue of incompetence in relation to the decision?

Since 2006, the Conservative party has said that it is against more selection at 11. Is that still the case? Will the Minister tell us what is happening with the decision about the satellite grammar school in Kent? Will he pledge to include financial data in performance data relating to academies, so that we can debate them?

10:50

[The Minister of State, Department for Education (Mr Nick Gibb)]

The issue of competence relates to a budget deficit left to the current Government by the Government whom the hon. Member for Cardiff West (Kevin Brennan) supported and served in. That is the basis behind everything that we are discussing this morning.

I congratulate my hon. Friend the Member for Gainsborough (Sir Edward Leigh) on securing this important debate, and other hon. Members on their thoughtful and principled speeches, on which I will continue to reflect. Creating a world-class education system that enables parents to send their children to good or outstanding schools is central to the Government’s plan for education. As my right hon. Friend the Member for Ashford (Damian Green) said, the Government’s education reforms have massively improved the life chances of millions of children in this country, and they will continue to do that. Grammar schools, with their focus on the highest standards of teaching, play an important role in delivering on that goal. There is no ambiguity about the Government’s views on grammar schools.

My hon. Friend the Member for Rugby (Mark Pawsey), my right hon. Friend the Member for Ashford and other hon. Friends referred to unfairnesses in the funding system. That is inherent in the way local authorities historically have been funded for their school budgets. In 2014, we announced the introduction of minimum funding levels, which will allocate, as has been pointed out, an additional £390 million to the least fairly funded local authorities for 2015-16. That includes Warwickshire, which received £15.4 million, and North Yorkshire, which received £9.8 million. That increase in funding represents a huge step towards removing that historical unfairness in the schools funding system. The Government have made more progress in that area than any recent Government. That puts us in a much better position to implement a national funding formula when the time is right.

As my hon. Friends will know, faced with the historically high budget deficit when we came into office in 2010, the Government needed to identify savings from across Whitehall and the public sector. Despite that, we have consistently prioritised funding for schools, ensuring that spending has been maintained in real terms. The schools budget for five to 16-year-olds has been protected since 2011, in addition to which the pupil premium to support disadvantaged pupils is worth some £2.5 billion this year. Those commitments have been possible only because the Government have found savings elsewhere, including other parts of the education budget, but I understand the concerns that the burden of those savings in education has fallen disproportionately on grammar schools or successful comprehensive schools with large academic sixth forms.

Two concerns have been particularly prominent in today’s debate. First, as my hon. Friend the Member for Wycombe (Steve Baker) pointed out, grammar schools are more likely to have large sixth forms, which may have seen reductions to funding as we have reformed the 16-to-19 funding formulas. Secondly, grammar schools are less likely to be eligible for funding made available on the basis of low prior attainment and deprivation, as the hon. Member for Slough (Fiona Mactaggart) and other hon. Members pointed out.

As the hon. Member for Cardiff West pointed out, funding for grammar schools is allocated in precisely the same way as funding for all other schools, whether academies, local authority maintained schools or non-selective schools, but I recognise that some features of the funding system will have resulted in grammar schools receiving less funding than many non-grammar schools in similar areas.

I will deal with those concerns in a moment, but I should first like to pay tribute to the exceptional results achieved over the last five years by some of the schools mentioned by my hon. Friend the Member for Gainsborough in his opening remarks. Since 2010, 100% of students attending Caistor grammar school have achieved at least five GCSEs at grades A* to C, including English and maths, and in 2014, 96.8% of students received 10 A* to C grades. Also at Caistor grammar school, 76.4% of A-levels were at grades A* to B, and at Queen Elizabeth’s high school, 61.5% of A-level grades were A* to B. Those schools are achieving remarkable high-quality, high-standard academic education results.

My hon. Friends are right that grammar schools are less likely to be eligible for funding made available on the basis of, for example, low prior attainment or deprivation. Local authorities set their own funding formulas to decide how to distribute funding for pupils aged five to 16. Low prior attainment is a common factor used in those local formulas. Given that grammar schools select their intake on the basis of ability, they are by definition unlikely to have pupils who have attained poorly in the past, so they are unlikely to qualify for that element of the local funding formulas. The purpose of low prior attainment funding is to ensure that as many young people as possible leave school with the right knowledge and skills to be able to succeed in adult life and in modern Britain. For a strong economy and society, it is important that we continue to target funding towards pupils who are not on track to do that.

Equally, grammar schools are less likely than other schools to have large numbers of pupils from poorer backgrounds, including pupils eligible for free school meals. Local authorities have to use a deprivation factor in their local formulas, meaning that schools with higher numbers of such pupils will receive additional funding. The evidence is clear that economic disadvantage remains strongly associated with poor academic performance.

My hon. Friend the Member for Salisbury (John Glen) will be aware that all grammar schools can adopt a pupil premium admissions priority for children eligible for free school meals, provided that they meet the entry criteria. Currently, of the 164 grammar schools, 32 have done so and 65 are consulting on adopting that priority in their admissions criteria from September 2016. The Government have encouraged greater collaboration between grammar schools and local primaries specifically to identify those disadvantaged children with potential at key stage 4, and to encourage them to take the 11-plus and apply to enter a grammar school.

Closing the attainment gap between those from poorer and wealthier backgrounds has been the central objective underlying all the education reforms in our plan for education, but of course the pupil premium is in addition to the main dedicated schools grant, which means that no schools are losing out as a result of the pupil premium, regardless of their pupil demographic.

As my hon. Friend the Member for Gainsborough pointed out, grammar schools tend to have a greater proportion of their students in the sixth form than other 11-to-18 secondary schools. That means that any reduction in funding for pupils aged 16 to 19 will have a greater impact.

My hon. Friends are right that we have ended the disparity between school sixth forms and colleges. By August 2015, schools and colleges will be funded at the same level for similar programmes. However, there has been some mitigation—transition funding so that schools do not suffer abrupt changes to their funding straight away. We fund all 16-to-19 providers for study programmes of 600 hours per year for full-time students. That is sufficient for a study programme of three A-levels plus one AS-level, and up to 150 hours of enrichment activities, over a two-year study programme. There should be no need to cut those extra-curricular activities, which are such an important part of a rounded school education. In addition, as has been mentioned, we have, in 2013-14, increased the rate for larger programmes of study. For students who are studying four A-levels, the school will receive an extra £400 per pupil, and for those who are studying five A-levels, the school will receive an extra £800.

Tackling a £150 billion budget deficit has had to be a priority for a Government with a clear long-term economic plan to return our economy to one of strong growth and increasing employment and opportunity. Despite that, the schools budget has been protected in real terms, but I acknowledge that difficult decisions have had to be taken and I accept that some of those decisions have impacted on funding.

[Mr Philip Hollobone (in the Chair)]

Order. I thank all hon. Members who took part in that interesting and important debate. I ask all those not staying for the next debate to leave quickly and quietly.

Care Sector

Tuesday 13th January 2015 Westminster Hall

11:00

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

I am grateful for the opportunity to open a debate on the important subject of the future of our care sector and the contribution that the Department for Business, Innovation and Skills must play to ensure that the sector thrives.

I will start by providing some facts, after which I will set out the challenges, the opportunities and the actions that BIS can take. According to research undertaken for Skills for Care, adult social care in England is worth an estimated £43 billion to the economy, both directly and indirectly, and it supports 2.8 million full-time equivalent jobs.

The care sector is not a small adjunct to the NHS; it employs some 1.5 million people in 1.3 million full-time equivalent jobs, or about 6.4% of the entire work force. The sector is bigger in employment terms than the construction industry or the transportation, storage and postal services industries combined. Women make up 82% of the care sector work force. Despite the squeeze on public spending over the past few years, the sector has grown and added more than 210,000 jobs.

The challenges are clear. Our population is changing. We are living longer—a good thing, not a bad thing. The age structure is changing, and the fastest-growing section of the population is the over-85s. By 2030, it is estimated that there will be 2.3 million people aged over 85. Other things are also changing. Many people are having children later, and families are living further apart. There are more family break-ups and divorces, and there are more single people in later life who may not have family support structures.

On present trends, the care work force will need to grow by some 1 million workers by 2025. If the trends are to be addressed, 40% of the projected increase in the working-age population will need to enter the care sector, so a huge proportion of our work force potentially has a part to play in the sector. To put it another way, England could face a shortfall of 718,000 care workers over the next 10 years. If those challenges are not addressed, the care sector will act as a brake on growth and a threat to the hard-won gains in labour market participation by women.

I sought to have this debate with colleagues from BIS, because I believe that the Department has a crucial part to play in addressing the care sector, in the same way as it works with any other part of our economy. As long as the sector continues to be sponsored in Government solely by the Department of Health, I do not believe that the blinkers will come off in terms of addressing the opportunities and the threats that the sector poses for our economy. All too often, the Treasury views the care sector as a dead-weight cost to the economy, but I believe that it must be viewed as a vital part of the nation’s economic infrastructure and a key enabler of labour market participation in later life and by women.

The Government have recognised that issue when it comes to investment in child care, and I believe that the same value and recognition must be given to adult care. A study by the Institute of Education, published in autumn 2014, found that 50-somethings feel sandwiched between child raising, caring for elderly parents and the expectation, which is rightly growing, that they will work longer because life spans are increasing.

The first six weeks of an informal caring role by a family member can be decisive in determining whether that person will remain in work. The triggers are well documented, many and varied. When someone is caught in the middle of a care crisis as a result of an accident or a fall, and they have to juggle working responsibilities with child-raising responsibilities and uncertainty about the quality and reliability of care, that often becomes the trigger—the final straw—for them to decide that they cannot carry on working.

Even when employers accept that they should offer the option of flexible working—many more employers are now doing so—it is not always sufficient to enable such people to stay in the work place. One in six carers reports quitting work to care full time, and the factors that I have described drive them to make that important, life-changing decision, which affects their health and probably also their long-term wealth. Of course, it should be a choice, but for many people it turns out to be a necessity because no alternative is available for them.

Many such employees are businesses’ most important and valuable staff. Companies have invested in them over years. They are people in their 40s, 50s and 60s who hold the corporate memories of the businesses for which they work, and employers cannot afford to lose them lightly. Strategies that enable those employees to make real choices rather than finding themselves forced out of the work force are, therefore, very important. The situation will get worse unless the contribution of the care sector, and that of the wider personal and household services sectors, is recognised.

In 2012, during the period for which I had the privilege of serving as Minister with responsibility for care, one thing that I did was to convene a summit involving Carers UK, Employers for Carers and a range of academics and others from around Europe to look at different approaches to addressing some of the issues that I have outlined. As a result of that summit, a task and finish group was set up to look at the economic case for investing in and developing the sector, particularly the personal and household services sector. That group involved six Departments, including BIS and Her Majesty’s Treasury, as well as leading academics, charities and employers. It reported in 2013, setting out a compelling business case for the multiplier effect that can be triggered by increasing the demand for personal and household services and, as a result, supporting labour market participation.

Employees become carers, and 2.3 million people move in and out of caring responsibilities every year. The number of carers is rising because of the demographic trends that I have mentioned. Carers seek services that enable them to make a choice; 41% of carers would like to work if suitable care and support services were available.

One of the conclusions of the task and finish group was that barriers to work, and to remaining in work, are not so much about employer support as about access to good services. Carers want to work; eight out of 10 are of working age, and about 3 million are currently working. That means, however, that some 1.4 million are not working, and many of them would like to be able to do so. If we want more people to work longer, and if we want more women to be able to work, there has to be more help for carers.

What can BIS do about the situation? It is important to stress that employers are becoming increasingly aware of the risks to their businesses of a labour market that becomes less flexible over the next 10, 15 or 20 years as demographic changes work through and the labour market tightens. Employers recognise the increasing demand for care, support and personal and household services, but they also recognise the danger of market failure if that demand is not met, and if the problems that I have described become much more serious and constrain the growth of our economy as a consequence. I am not suggesting that BIS currently does nothing about the matter; it has a good record, particularly on carers.

I hope, however, that we can widen and deepen the Department’s engagement and understanding of the risks and opportunities. Notwithstanding the constraints on the Government’s time, I wonder whether there might be an opportunity to open that dialogue. Many people in the sector would welcome the opportunity to have a dialogue with the Department for Business, Innovation and Skills.

The Department can also play a part in encouraging local enterprise partnerships to do more. I have conducted a fairly ropey survey of LEPs to ascertain which are engaging seriously with care sector issues, and only a very small number have any reference to the care and personal and household services sectors in their strategies, plans and actions. Those sectors do not appear to be on their radar. One rare example of an LEP that is doing something is, I am sorry to say, not in my constituency or in London but in Greater Lincolnshire, where the LEP is working with Skills for Care and doing some really good work. That may be a model, or at least a starting place, for other LEPs to follow.

Another area in which the Department can help immensely is in addressing the low pay, low status culture that pervades the sector. The National Audit Office estimated in a recent report that as many as 220,000 carers are paid less than the national minimum wage. Surely, it is time that we ensured that that is properly and vigorously pursued. It is not sufficient for Her Majesty’s Revenue and Customs to say, as it often does, that it is unable to mount prosecutions because of inadequacies in employers’ documentation. We pursue those who defraud our benefits system and those who fail to pay the tax that they should be paying. We have invested large sums in strengthening HMRC’s capacity to pursue those who cheat the tax system, and we need to ensure that exploitative employers who cheat their employees—there are good employers in the sector who do not cheat their employees—are prosecuted, thereby setting an example. The Low Pay Commission and, indeed, the HMRC say that the problem is getting worse, not better, so we need action to ensure that those who are exploiting their workers are properly pursued.

In the past 18 months, I have led two independent commissions examining the future of residential care and the future of home care, and both commissions, with experts, academics and people from the sector, have concluded that the sector’s long-term sustainability requires better terms and conditions and that the sector’s goal must be a living wage if it is to attract and retain the staff it needs. Indeed, the sector has among the highest staff turnover rates of any part of our economy. As a consequence, at its worst, those in receipt of care services report seeing as many as 50 different care workers a year. How can someone develop a relationship and have an understanding of the needs of the person for whom they are caring if the next thing they are likely to be doing is moving to Tesco to stack shelves, rather than seeing care as a long-term career? In recognition of that, I hope the Department, either by itself or with others, will consider commissioning work to understand the extent of the hidden subsidies in the sector. Low-paid workers often receive top-up payments through the working tax credits system, rather than from resources directed to ensure that people are paid a proper wage in the first place—in other words, rather than investing money in the service.

We need to work with Skills for Care and the sector to bridge the work force gap by increasing the number of men working in the sector. Some 94% of young people agree that care work is a suitable profession for a man, which is certainly right. A quarter of 16 to 25-year-olds say that they would never consider care as an occupation, and a third of young men say that they do not know enough about care as an occupation. Changing the status of care jobs, giving care jobs key worker status and improving training, pay and conditions could all make a significant difference in shifting the dial on the sector’s credibility as a place to work and build a career and a life.

The care sector’s contribution to the UK economy is all too often overlooked; it is seen as a cost, not as the huge contributor that it is to our economy. As our population ages, the care sector will be critical to our economic success. It will be critical to delivering the Government’s agenda, which successive Governments will now need to have, of promoting later and longer working lives. The care sector will be vital if we are to maintain this Government’s successes in increasing female participation in the labour market. I hope that, through this debate, we can kick-start more work, more thought and more action to ensure that we recognise the sector’s contribution and to ensure that that is properly reflected in Government policy and Government spending decisions in the next and subsequent Parliaments.

11:15

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

It is a great pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my right hon. Friend the Member for Sutton and Cheam (Paul Burstow) on securing this debate and on his many years of intensive, dedicated work on these issues. Although I am the Minister responding to the debate, I do so with a degree of trepidation because there are probably few people who have a greater understanding or are able to speak with more eloquence about care and carers than him, particularly with his ministerial experience but also with his interest in the issue going back many years. Since leaving ministerial office, his interest has continued through his chairing of the commission on residential care—of course, the Demos report came out of that—and he continues to take up such issues at every opportunity. It is unsurprising that he will have a key role in speaking on care as the election approaches.

I am sure the care sector will be a key issue that is discussed in great detail during the election period because, as my right hon. Friend said, it has an impact on so many different parts of our lives. It is about quality of life for people as they age or, indeed, for people with disabilities who require care. It is also about the role of women in the workplace and how they can combine that role with their caring responsibilities. As he rightly pointed out, care is an issue for men, too, not only in terms of their own caring responsibilities—although the majority of caring responsibilities in our society still fall to women—but in terms of the economic and employment opportunities for men within these sectors.

In a short debate, it is difficult to do justice to every issue, but my right hon. Friend rightly recognises that this debate is part of an ongoing dialogue. He made the helpful point that this is not only a debate and dialogue to be had with the Department of Health. The Department for Business, Innovation and Skills also has a crucial involvement, as indeed do many other Departments, including the Department for Work and Pensions and the Government Equalities Office, which is the other Department for which I wear a hat. The Government Equalities Office is hugely interested in these issues, and it is already working with other Departments on some of the thorny problems about how we can help carers who are in employment to continue working, if that is what they wish to do—and, as he said, many do—alongside their caring responsibilities.

My right hon. Friend clearly set out the care sector’s significant contribution to the economy. The sector brings in billions of pounds to the UK and creates millions of jobs, with mix of private provision and public and voluntary sector jobs. Care will become more salient as our population continues to age. I am sure he agrees that it is a cause for celebration that people are living longer and that medical advances mean that we are able to cure more diseases and prolong life, but, of course, that creates significant challenges on how we can age well and how we can have quality and dignity throughout longer lives, which will often mean that people work longer, particularly given the economics. We must recognise the important role of older people in our economy. Ros Altmann, whom the Government appointed as the champion for older workers, is doing a sterling job, and she will produce a report in the not-too-distant future setting out how we can better value the role that older people play within the work force. It is quite right that that is happening.

My right hon. Friend discussed the sandwich generation, which is a particularly resonant issue. That group of people—mainly women, but not exclusively—are feeling pressure from both sides. They have responsibilities to children or even grandchildren; equally, they have caring responsibilities for elderly parents or other relatives. Although a huge amount of love and joy comes from caring responsibilities, at the same time, the pressure of fulfilling them often also creates a huge amount of stress. Often carers must battle with public services to get what they need to provide those individuals with quality of life, while trying to hold down a full-time job. The pressures certainly mount up; carers are some of the most pressured people in our society.

In those circumstances, it is perhaps not surprising to hear the statistic that my right hon. Friend quoted: one in six carers quit work to care full-time. That is a huge loss to the economy. Some of those people wish to do so, which is absolutely fine, but when people are forced to do so, we lose the contribution that they could be making. As my right hon. Friend rightly says, the businesses and organisations for which they work suddenly have a gap in experience, knowledge and skills, which they must try to fill. In many cases, it takes significant time before a new person can fulfil that role in the same way. There is an economic opportunity cost.

My right hon. Friend is right that many employers now recognise some of those risks. There are many enlightened employers out there; I engage across my employment relations role with companies that recognise that equality in terms of gender, race, religion and sexuality is an important business issue in recruiting and retaining the right talent. They recognise that a more agile work force can not only help the business to respond to emerging challenges but give individual employees much more flexibility. That attracts a wider pool, which includes people with caring responsibilities. Many of those companies—often, but not exclusively, larger companies—are starting to see the business risks and huge potential advantages of getting it right and putting in place policies that allow people’s working lives to fit in with their responsibilities outside work.

My right hon. Friend is also right that as the trend of decreasing unemployment continues—it is still too high, particularly for young people, but it is certainly moving in the right direction, and its rise in the past few years has been a great success story—it places more pressure on employers trying to find the right people and the right mix of skills within their organisation, making it even more important for them to be able to hold on to the talented people that they have.

The Government clearly have a role to play in that. As I said, we engage with employers to encourage best practice on a regular basis, but we have also made legislative change. For example, as my right hon. Friend will know, last June, the right to request flexible working was extended to all employees. That will be helpful in changing views on flexible working, which had been stigmatised in some corners as being only for a particular group of people and as creating unhelpful divisions within workplaces. Instead, it is becoming much more the norm: the modern way of doing business is that, where flexibility is possible, it will be accepted by default. Clearly, there will sometimes be business reasons why an employer cannot agree to a flexible working request, and that is built into the system. That kind of change can help drive the difference that we need.

My right hon. Friend discussed the quality of the caring work force, which is hugely important. As he said, it is about who the elderly person sees coming in to support them. He said that some people see up to 50 different care workers in a year. That is clearly not a situation that any of us would wish in our older years, and we should not encourage it. Staff turnover is hugely important, and a range of things can be done to help address it.

My right hon. Friend rightly mentioned the status of caring as a profession. Training and qualifications are one way to signpost that, which is why the Department of Health is supporting the social care sector through the social care work force programme, which focuses on improving quality, and introducing the care certificate in April this year for new health care assistants and social care support workers. Apprenticeships also have a role to play in ensuring that employers have proper standards and are training people appropriately.

My right hon. Friend mentioned the hugely relevant issue of the need for more men in the care sector. If there is a shortage of workers in a particular field, it makes sense to consider who is going into that line of work, in the exact same way that when considering the huge shortage of engineering skills that our country faces and how we can bridge that gap, we look at the fact that only 7% of engineers are women. Clearly, the biggest pool of people we are not currently tapping into is girls and young women, whom we must encourage to study science, technology, engineering and maths and to open their horizons, rather than being led by dated stereotypes about what girls can do.

Similarly, if we need to expand the number of care workers and there is a huge shortage of men in the care profession, the biggest pool available for expansion is boys and young men, and we need to get them to consider caring as a profession. Again, stereotyping is important, as are the messages we send children about the roles of men and women, and whether boys can be nurturing and caring and—yes, dare I say it?—play with dolls. We should see habits of care and nurture as being just as appropriate for boys and men as for girls and women. It is important, and it will help us plug the skills gap.

I want to address the national minimum wage, because it is hugely relevant to the care sector, perhaps unfortunately. In an ideal world, we would all want people to be paid significantly more than the national minimum wage, but the present economics of the sector mean that many care workers rely on the national minimum wage for wage protection. There have been a number of well-documented cases involving people not being paid what they are due, particularly in the care sector, which, as my right hon. Friend said, has traditionally been a low-wage sector.

The law is crystal clear. Care workers, like any other workers, are legally entitled to receive at least the national minimum wage. If they travel between care appointments, the time spent travelling is working time, so they must also be paid the national minimum wage then. If they must pay for their uniforms, any money deducted for that cannot count towards national minimum wage calculations; they must be paid the national minimum on top of that.

The law is absolutely clear. Many employers comply—that is fine, it is appropriate and it is what should happen—but some do not, and failure to pay is a serious issue. That is why there are tough consequences for employers who break the law. If anyone is concerned about whether they are being properly paid the national minimum wage, they should contact the pay and work rights helpline on 0800 917 2368. Every complaint will be investigated.

[Paul Burstow]

It is important that people know that number, but it is also important for third parties to be able to make referrals about abuses of national minimum wage rules, so that they can be investigated. Is that a change that could happen?

[Jo Swinson]

I do not think that there is anything preventing that from happening at the moment. Every complaint is investigated, and it is important to stress that all complaints are made in confidence. Her Majesty’s Revenue and Customs will not just go and say, “Is Mr Joe Bloggs being paid appropriately?”; it will investigate the entire work force if necessary. Many of the care investigations that have taken place have found arrears for tens and, in some cases involving very large companies, for hundreds or thousands of workers. Those are obviously complex investigations.

Proactive investigations happen. There was a particular period of targeted enforcement in the care sector, from 2011 to 2013. We recognise that the issue is important and are returning to the care sector for proactive work. That process is now under way, so more will happen. Currently, 94 employers in the care sector are being investigated for national minimum wage issues, and when those investigations conclude, we will see whether they have broken the law. If so, there are tough penalties, including naming and shaming, and we have taken steps to increase the resources available to HMRC for that vital work.

11:30

Sitting suspended.

Probation Service

Tuesday 13th January 2015 Westminster Hall

[Mr David Crausby in the Chair]

14:30

[Kate Green (Stretford and Urmston) (Lab)]

It is a great pleasure to have secured this debate and to serve under your chairmanship, Mr Crausby.

If the Minister has looked at my many previous interventions on this subject, he will know that I have had concerns about the Government’s Transforming Rehabilitation plans right from the start. Those concerns have been borne out by my recent conversations with probation officers and offenders in my constituency and reinforced by the recent report from the chief inspector of probation into the early implementation of Transforming Rehabilitation.

Today I will talk about those implementation issues, but I will also question the Minister about the underlying rationale for, and risks associated with, Transforming Rehabilitation. The Probation Service was a well-performing service. Every single probation trust in the country was assessed as being “good” or “excellent” under the Ministry of Justice’s own measures—indeed, my own probation service in Greater Manchester had a reputation for innovative and effective work. It makes no sense at all to tear all that up and arbitrarily divide up the work of the probation service without there being any evidence of the effectiveness of the new model. That places public safety at risk.

Ministers said that change was needed to address the high level of reoffending among those serving short custodial sentences, and they proposed introducing supervision, for the first time, of those offenders on their release from prison. Everyone agrees that that is entirely right and welcome. However, the probation service never had responsibility for supervising those offenders, so high rates of reoffending among them cannot be characterised as a probation service failure. Indeed, probation trusts, such as my own local trust, were keen to have the chance to work with this challenging group.

Yet in June last year the Government embarked on a radical restructuring, abolishing all probation trusts and replacing them with 21 privately owned community rehabilitation companies and a diminished National Probation Service, which has responsibility for high-risk offenders. Contracts were signed just before Christmas, on 18 December. This massive restructuring has been rushed through by the Lord Chancellor and Secretary of State for Justice without any piloting or testing of the new approach. The Government were warned by experts, probation staff and the Opposition, as well as in the House of Lords, that their timetable was reckless. In 2013, the chairs of probation trusts wrote to the Lord Chancellor and Secretary of State for Justice, describing the plans as risky, unreasonable and unrealistic.

As soon as the changeover began last summer, problems began to emerge. There have been reports of staff shortages, IT problems, records going missing, staff supervising offenders “blind”—with no information about offenders’ offending history or personal circumstances, because staff lack access to records—and administration staff being unable to access records to manage supervision appointments.

[Alex Cunningham (Stockton North) (Lab)]

My hon. Friend paints quite a dire picture as things are developing under this new-look service. Does she agree that it is rather sad that those high-performing probation trusts never got the opportunity to consider taking on an expanded work load? They were, after all, the experts and they, too, could have delivered this expanded service.

[Kate Green]

My hon. Friend is right. It is highly regrettable that the expertise and commitment that we all see in our probation service was not taken advantage of and that probation staff were not given the opportunity to deliver these new programmes of post-release supervision.

Indeed, in Greater Manchester we had piloted such a programme—the Choose Change programme—and learned many valuable lessons about the challenges of working with this particular group. Since Greater Manchester Probation Trust obviously no longer exists, and so cannot take forward the lessons from Choose Change, perhaps the Minister will say how that learning will be transferred across to the new structures, so that what we now know after that experiment is not lost.

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

I congratulate my hon. Friend on securing this debate. I hope that she agrees that we had a perfectly good service before the Government tinkered with it. For ideological reasons, the Government made changes and used a private sector model. However, everyone knows that in the private sector—I know, because I worked in it—before any changes are made, a pilot scheme is introduced so that companies learn from their mistakes. Does she agree?

[Kate Green]

I agree with every word that my hon. Friend said. Indeed, it is surprising to me that one of the first acts of the Lord Chancellor and Secretary of State for Justice was to cancel some of the pilots in relation to these new structures, rather than adopting the sensible approach of continuing with them and evaluating the lessons learned before proceeding with the new model—if there was evidence that it was the right model to follow.

In the aftermath of the changeover, probation officers have talked to me about an overwhelming work load, about IT systems that do not speak to each other and require the same information to be inputted over and over, and about random allocation of staff to the new community rehabilitation companies or the new NPS. Morale has suffered, staff are stressed and the human resources support in the new NPS in particular has been inadequate throughout this period of major change, given that the MoJ closed down the shared support service and that communication to staff has been haphazard and often delayed.

Offenders have also noticed problems. I met offenders in my constituency late last summer and they told me that they were constantly finding themselves seeing different offender managers who did not know anything about them or their circumstances. Now the chief inspector of probation has produced a highly critical report of the early implementation of the changes and the problems that have been experienced, and it bears out much of what I and other MPs have been told.

The report specifically recognises that the speed of the implementation caused problems that could have been avoided or mitigated. It makes a number of suggestions about how those problems can be addressed. The Minister may argue that these problems are teething problems and that the recommendations in the report will be followed, but in fact the problems run deeper. They are a reflection of a model that fragments the management of offenders, adding bureaucracy, damaging effective communication and increasing risk. I have genuine concerns about the implications of Transforming Rehabilitation for public safety, and indeed for the safety of officers supervising offenders.

My first concern is that there are clearly issues about access to the full and timely information necessary for the initial risk assessment to be made. It was worrying to read in the chief inspector’s report of delays in obtaining information about an offender after they had been sentenced, because that information is needed to enable a full risk assessment to be carried out.

The MoJ claims that that situation is not different from what happened previously, when an offender could be allocated to an offender manager who would not necessarily have the full information at the first appointment. I appreciate that Ministers want the allocation process to be speedier, with an expectation that cases will be assessed on the Offender Assessment System, or OASys, within two working days of sentencing, rather than five weeks, as can be the case now. However, that would represent a huge step change in service standards. How confident is the Minister that such an improvement can be achieved?

Moreover, even if the assessment can be done speedily, there is increased risk from the fragmentation that arises from having two entirely separate services. If the initial risk assessment and allocation are wrong, there will inevitably be a delay in getting the offender to the right place and therefore a delay in the offender’s building a relationship with his or her supervisor, as well as in beginning the appropriate programme of support to address their offending behaviour.

It also seems that the information for forming an assessment, even if timely, may not be sufficient. I was pretty shocked that the inspector identified a failure to address diversity issues in the assessment and allocation process. Ethnic, religious and cultural background may have a bearing, for example, on the language needs of an offender or on appropriate sentence planning, such as what unpaid work might be suitable.

There is a high prevalence of mental health problems and learning disability among offenders, and those need to be identified at the outset; the offender manager must be made aware, so that tailor-made sentence planning and effective communication with the offender takes place. Understanding the offender’s family circumstances is relevant. Child care responsibilities may impact on sentence planning and information about family members and relationships is especially important in relation to risk and safeguarding.

Clearly, these all-important matters go to the heart of successful intervention to address offending behaviours and to protect the public. What steps will the Minister take to address the concerns raised by the inspector in relation to reflecting diverse circumstances in reports and in the allocation process?

The Minister may not be surprised to hear that I am particularly concerned about the need for specific, tailor-made approaches for women offenders. The weaknesses in preparing assessment reports, identified by the inspector, are of real concern in this context, but there is also concern about the nature of the interventions that women will receive. As far as I can see, none of the community rehabilitation companies or the organisations that they are working with appear to be specialists in managing women offenders.

In recent years, there has been some good learning and recognition of the specific needs of women offenders and of what works. Specialist women’s centres are effective and positively regarded by offenders. I recently met a group of female offenders in Manchester—Women Moving Forward—who told me how important the support they received from the women’s centre was and who expressed anxiety about future provision, as well they might when women’s centres lack any certainty about their funding after March.

[Alex Cunningham]

This morning, I met some people from Barnardo’s, who told me about their concerns for children affected by people who may be in prison or on some probation regime, or something of that nature. Does my hon. Friend agree that more must be done by the Minister and others to ensure that we get the correct approach from Government, so that offenders with children are identified and these factors are properly taken into consideration, so that the whole family can be looked at properly, rather than a prisoner or offender being looked at entirely in isolation?

[Kate Green]

My hon. Friend is right on many levels. First, it is important that family circumstances—particularly the presence of children and other vulnerable family members—are properly understood, so that safeguarding issues can be addressed properly. Secondly, what he said relates to my point about the need to understand particularly the circumstances of women offenders. Many women offenders are mothers: that impacts on the kind of responses and programmes that will work for them and what sentence planning will be appropriate. Mothers in particular will have to balance child care responsibilities with the demands of the sentencing plan.

Thirdly, my hon. Friend makes a good point about the whole-family approach. A stable, comfortable and happy family life helps an offender to overcome offending behaviour, so the ability to take that holistic view of family circumstances would be a real opportunity to address the offending behaviour of many offenders who could be supervised in the community. Indeed, the Minister may want to say how this might be taken forward in the context of his expectation that the community rehabilitation companies will be more innovative than the old probation service. I have not yet seen any evidence of that, but he and the CRCs might like to turn their attention to that area.

I am concerned about specialist provision through women’s centres for women offenders and women at risk from offending. The Prison Reform Trust points out that CRCs will be “expected to fund” ongoing provision after March. Can the Minister therefore assure us that specialist provision will be guaranteed? Given the concerns about this small, often highly vulnerable group of offenders, will he undertake to carry out an annual audit under section 10 of the Offender Rehabilitation Act 2014, to confirm that Transforming Rehabilitation is meeting the needs of women offenders?

As I have said, one important change in Transforming Rehabilitation is that, for the first time, offenders who have served short custodial sentences of less than 12 months will receive supervision on release. That has been universally welcomed, although there is little sign yet of when it will actually happen. Of course, it is vital that the CRCs and the National Probation Service have the resources to do the job. Again, there are some serious worries. The report from the inspector specifically raises concerns about staffing in the new NPS. Can the Minister say what expectation there is about the proportion of those leaving custody who will be deemed to be high risk and under NPS supervision? The inspector recommends a full evaluation of staff resources and this surely must be undertaken as a matter of urgency, so that we can be sure there is adequate provision for the supervision of high-risk offenders. Will the Minister say how he intends to respond to that recommendation?

Of course, the NPS needs adequate contingent resource to address the fact that risk is not static. Categorising offenders as low, medium or high risk is massively to oversimplify. Transforming Rehabilitation recognises this: if there is a concern that an offender who has been categorised as low or medium risk becomes high risk, a fresh assessment will be carried out and he or she will transfer from the community rehabilitation company to the NPS. That is hardly likely to be an infrequent situation.

An offender who is identified as low or medium risk can quickly become high risk if circumstances change. Many offenders are volatile or vulnerable and prone to erratic and potentially dangerous behaviours in response to difficult or unexpected life experiences, such as loss of a job or the ending of a relationship, bereavement or the arrival of a new member of the household. Many come from relatively chaotic backgrounds, where such changes in their circumstances happen fairly frequently. We may see a substantial proportion of offenders move at some time in their sentence from medium or low to high risk, which will necessitate their transfer to the NPS. Has the Minister an assessment of the likelihood of a transition and can he assure us that the NPS will have the resources it needs to deal with it?

[Alex Cunningham]

I wonder who will be carrying out the assessments at different levels, when people are allocated to various parts of this new-look probation service, and how confident we can feel. Probation officers tell me that they are not perfectly sure yet who is going to do what in the system. Yet here we are, hurtling along on this great change programme that is under way.

[Kate Green]

It is worrying that those working in the system are still not clear about who is doing what. This is symptomatic of an approach that seems both unnecessarily complicated and fraught with difficulty.

I understand that the system depends on the CRC identifying and escalating a case where there is a perception that risk is increasing—someone in the CRC will have to make that judgment—and then the determination of the risk level will be made by an officer in the NPS. Will the Minister say how the NPS will carry out effective risk assessments of offenders with whom it has not previously had any contact because they have hitherto been managed entirely in the CRC? How can those assessments be objective, given that the NPS has a stake in the outcome, as it will become responsible for any offender that it assesses as high risk? Equally, how will we know whether the CRCs are escalating risk appropriately when they, too, have a stake in the outcome of the risk assessment? I understand—perhaps the Minister can confirm this—that the CRCs will continue to collect outcome payments, even after offenders transfer to the NPS, if the reoffending targets are met.

How will the payment-by-results element work, and what incentives will the NPS and the CRCs have to ensure that we get the crucial risk identification assessment and identification process absolutely right? Although low and medium-risk offenders can become high risk, conversely high-risk offenders can become lower risk over time. I would have thought that we hope rehabilitation programmes have that outcome, but the system does not seem to make provision for it. Once an offender is with the NPS, they stay there, even if their risk subsequently reduces. Will the Minister tell us why high-risk offenders who are subsequently reassessed as low or medium risk will not be transferred back to the CRCs? What are the resource implications of that structure?

What monitoring will be undertaken of when cases are escalated? For example, if there is a pattern of cases escalated very soon after the initial allocation, that might suggest delays in the provision of information or poor data at the time of sentence. A pattern of escalation later in the sentence might offer an early warning of weak intervention in the CRC.

[Alex Cunningham]

Might it not also reveal that the personnel in the new organisations do not have the appropriate range of skills and understanding and that they are washing their hands of difficult problems as quickly as possible and dealing with only the easy ones?

[Kate Green]

We have seen that kind of parking approach in other privatised programmes. In the Work programme, for example, the most difficult clients, for whom it was difficult to produce effective outcomes, were parked by the providers. My hon. Friend is right to highlight that risk.

What will happen if an offender is wrongly allocated to the NPS? Can he or she challenge the assessment of the risk if they think it is wrong? That is important, given that it appears that once an offender is allocated to the NPS, they are stuck there. It is important that we know whether the Minister has thought about the effect that that will have on the relevance of the interventions that the NPS receives and the expectations and preconceptions surrounding the offender, which might feed into their chances of resettlement.

Finally, I want to say something about transparency. The public has a right to know whether an upheaval on this scale has been worth it. They must be able to find out whether the contracts are working effectively, whether we are being more effectively protected, whether reoffending has been reduced as a result of the changes and whether public money has been well spent. A Labour Government would extend freedom of information legislation to ensure that the community rehabilitation companies are covered, but the Government opposed that during the passage of the Offender Rehabilitation Act 2014. Shamefully, they made it impossible for a future Government to reverse the contracts, except at great cost to the taxpayer. Can the Minister assure us that the contracts include strong break clauses to ensure that the public does not end up paying for failure if they do not deliver the reduction in reoffending, which we are told is the goal of Transforming Rehabilitation?

All the concerns I have highlighted today should have been addressed before this wholesale, high-risk, evidence-free reorganisation of the probation service went ahead. It seems that ideology, not evidence, characterised the Government’s approach. Perhaps the Minister will reassure us with his answers today. I look forward to his response.

[Several hon. Members]

rose—

[Mr David Crausby (in the Chair)]

Order. I intend to call the first Front Bencher at 3.40 pm. If the three Members who wish to speak keep their remarks to not much above 10 minutes, everyone can be accommodated.

14:55

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Stretford and Urmston (Kate Green) on securing this important debate, which allows us to discuss the changes in great detail. I thank her for her speech, which accords with my thoughts. Policing and the probation service is a devolved matter, so the Minister is not directly responsible for what happens in Northern Ireland.

This debate is about probation changes. I want to make some brief comments about Northern Ireland, and then I will make some observations about what the hon. Lady said and raise my concerns. Often, when something happens on the UK mainland, it becomes a line of thought for Northern Ireland, and I would be concerned if that happened with probation services.

The changes to the probation service in Northern Ireland are all monetary. Budgets have been reduced, which has had the effect of increasing reoffending. The budget for the Probation Board for Northern Ireland has been reduced to approximately £18 million, which, it has said, is likely to increase reoffending. I, like probably everybody else here, believe that investing in probation saves money in the long term. It saves money in the criminal justice system and ensures that offenders do not reoffend. The 12% cut to the budget of the Probation Board for Northern Ireland has put the service under more pressure and will lead to more reoffending. That, in a nutshell, is where we are in Northern Ireland. Changes have been made to the Probation Board to cut costs. The hon. Lady outlined the potential changes in England and Wales, and I want to make a couple of observations about that.

I am concerned about what is being discussed here because we in Northern Ireland look to the mainland for policy direction. We look to the mainland for what is right so we can consider it when we make policy in the future. I am conscious that the difficulties in the Government’s proposals might affect us. Under the new plans, in England and Wales private companies and charities will be offered payment by results for supervising people released from jail. Every offender who leaves jail, including those who have spent only a few days in prison, will have to complete a year-long supervision period, and they will return to custody if they reoffend.

People have expressed concerns that the plans to privatise 70% of the probation service will lead to more criminals reoffending while on parole or probation while the changes are being put in place. The hon. Lady outlined that issue clearly. She put myriad questions to the Minister, for whom I have great respect. He is deeply interested in this subject, and I look forward to his response.

Some 400 serious crimes are committed by people on probation or parole each year. The National Association of Probation Officers, the probation union, claimed that that figure could rise, as there will not be enough staff in the private sector to recognise the risks properly. My concern is that restricting staff and changing criminals’ supervising officers will increase the chance that criminals will reoffend. The hon. Lady outlined that problem clearly. Under the Government’s plans, public sector probation will focus purely on public protection, and the winners of the rehabilitation services contracts will deliver reductions in reoffending. The statutory probation agency could continue to sit on boards, but, crucially, unless it manages the contracts for rehabilitation, it will have little authority and no budget to influence reconviction rates. There is a clear need for tougher reoffending targets. Perhaps the Minister in his response can indicate whether the Government’s intention is to set targets. If such targets are met by the companies, will they be rewarded in some way to encourage them to do more?

Undoubtedly, the system needs changes and the aims are admirable, but how effective the changes will be is another question altogether. More than half a million crimes are committed each year by those who have broken the law before. The reforms will finally address the gap that sees 50,000 short-sentence prisoners released on to the streets each year with no support or incentive not to reoffend.

Although the reforms are a welcome step in the right direction if done correctly, people have concerns. Payment by results is a frightening possibility, because for many of the people released from prison, the results can be a long time arriving. There is also a risk that that might mean that companies target those who will likely get them good results. I am sure that that is not the Government’s intention, but that is a potential result that we need to keep in mind and consider putting safeguards in place to prevent.

[Jenny Chapman (Darlington) (Lab)]

The hon. Gentleman is making some considered points about how the programme may or may not apply in Northern Ireland. My advice would be that he could gain the benefits that the Government aspire to achieve from very different means that would have far fewer risks to public safety. We care about what happens in Northern Ireland, just as he cares about what happens on the mainland, so I urge him to consider alternative approaches that may be safer.

[Jim Shannon]

I thank the shadow Minister for that valuable assistance to my line of thought. Westminster Hall debates provide an opportunity to discuss these matters and see what we can do. We all believe in the United Kingdom of Great Britain and Northern Ireland altogether and I hope to see that retained.

One of the changes that perturbs me greatly—there are public safety concerns—relates to the access of all staff to detailed case records. Some cases contain details of victims, including rape victims. Access could mean that their names become known outside the system. What precautions will the Minister put in place to ensure that that does not happen?

The hon. Member for Coventry South (Mr Cunningham), who just left, mentioned a pilot scheme. In many cases, pilot schemes are an opportunity to get it right, which goes back to what the shadow Minister said. I wonder why such a scheme was not considered to bed the programme in, allow us to learn from what was wrong and improve on that. We in Northern Ireland could have taken from that the best way of operating, because, no doubt, we will consider such a programme in the future.

Undoubtedly, any work that supports offenders is welcome. We want to help to make staying out of trouble a reality. However, that needs to be achievable. This programme will certainly help in that process, but we need to be wary of cutting or changing the probation service so much that it can no longer function efficiently.

We want to keep our services working as well as they possibly can. That may mean encouraging private companies to work alongside them, but let us be mindful that it is just that—our services and private services working alongside one another in harmony for the benefit of the community—and not a replacement for the great probation service we already have. I thank the hon. Member for Stretford and Urmston for giving me the chance to speak on this matter.

15:03

[John McDonnell (Hayes and Harlington) (Lab)]

I welcome the Minister to his post; I felt that he should have been appointed to a job much earlier. I caution him, however, that he has been given a bed of nails and predecessors who have raised issues about the development of this policy have been short-lived in post. I hope that today we can at least take some of the issues raised by the inspector’s report and, as the hon. Member for Strangford (Jim Shannon) said, by NAPO—from the front line—on what is happening at the moment and see how they can be addressed. For an initial report on such a change, the inspector’s report is damning.

As an aside, with regard to the inspector’s post, we have seen coverage in the press about potential conflicts of interest. I welcome the report, which I think demonstrates that the inspector has gone about his job well. I must say, however—the Select Committee on Justice has been in correspondence with the Secretary of State on this—that justice needs not only to be done, but to be seen to be done. The same can be said for probity, transparency and governance.

The Secretary of State needs to give a clear response at some stage on how an appointment has been made without a full, wider declaration of interests that covers potential conflicts of interest. In no way do I question or impugn the independence of the inspector, but that process issue must be addressed.

I identified about 29 or 30 worrying points in the inspector’s report about how the process has operated over the past few months. My hon. Friend the Member for Stretford and Urmston (Kate Green) mentioned the allocation of cases, which was fundamental to the restructuring process. The report makes clear in its first paragraphs that the key issue in allocation is the associated assessment and documentation. It says not only that the processes were time-consuming with regard to allocation, but that the documentary evidence did not support a full and clear reading of all the factors. That is surprising. It says:

“our view is that the new processes linked to allocation should be completed by the member of staff preparing any report for court.”

At this first stage in establishing how a case is allocated, there is a lack of clarity about who undertakes the process. Not even the documentation is clear or appropriate.

On timeliness, the inspector argues:

“The majority of cases were allocated…within one working day”.

However, he then demonstrates that a number of cases were allocated wrongly: they went to the NPS instead of the CRC. He says:

“These cases had to be reallocated from the Community Rehabilitation Company back to the National Probation Service with all the work and disruption that this involved.”

More than work and disruption is involved; there is anxiety about the safety and security of prisoner supervision.

The report is even more worrying on the risk of serious harm screenings. Proper screenings for risk of serious harm are fundamental, but, what do we find? It says:

“Staff were not clear about whether the new risk of serious harm screening replaced the previous one or was additional to it.”

One element of that was deportation—this is an issue that Government Members have raised recently—but there is nowhere in the new form and paperwork to record those issues. That is quite remarkable, because deportation is usually associated with criminals who have undertaken serious acts.

The inspector argued for a fuller serious harm analysis than provided at the moment. He says:

“We found that in many cases a full risk of serious harm analysis had not been completed by the National Probation Service, or if it had been done, the Community Rehabilitation Company had not received it.”

Therefore, the analysis is often not being done properly, the paperwork does not cover all the critical aspects and, even if it is done, the CRC does not receive it in sufficient time. He says that, as a result, offenders

“could be assigned to the wrong grade of staff and subsequently need to be reassigned.”

A junior member of staff could therefore supervise a serious offender and be out of their depth. That puts not just the general public, but that member of staff at risk.

[Kate Green]

On that point, my hon. Friend will be as concerned as I am—the Minister will be, too—to hear about a report passed to me by a member of staff who had heard of a colleague who had not been informed that she was supervising a sex offender. During that supervision, she was subject to a sexual assault. Had that information been provided, first, she might not have supervised that offender, given her grade, and secondly, she certainly would not have seen him on her own.

[John McDonnell]

Some shocking examples are emerging. They are, admittedly, anecdotal, but we also have the inspector’s report, which says this is about more than just individual problems.

On the supply of information to the CRCs, I was interested to see that the report’s authors interviewed two offenders, who said:

“staff who had seen them did not know anything about them”.

As they said, it was not a particularly “good start” when even the probation officer they were supposed to be supervised by did not know them.

We raised the issue of IT before the reorganisation started, and we have done so since. All the evidence we have had from staff completely confirms what the inspector says, which is that the IT system is “slow running” and has “an unreliable search facility”. However, there is one issue I found extraordinary—indeed, it is almost farcical. When does the probation officer most need the IT system? Usually, when they are in court. However, under the current system, they cannot connect their laptops to the network when they are in court—there is no remote connection. That is farcical—or it would be if it were not so dangerous and we were not talking about the supervision of people who have offended and who put the community at risk.

On electronic records, the report says:

“Not all staff understood the system had the ability to upload and store a range of documents electronically”.

On the IT change process, the report says:

“the perception amongst staff we interviewed was that many of these changes were introduced at short notice and with little opportunity for formal training,”

which is exactly what we have said in several debates in this Chamber over the past six months. The management then introduced workarounds to try to get people up to speed, but the inspector says they

“were cumbersome and were not fully understood or, therefore, used by staff.”

On the links between individual IT systems, the report says:

“We found most operational staff and managers were completely unaware that the two existing systems could be linked so that each system updated the other whenever a new assessment was completed.”

What is most worrying, however, is the issue of warning flags, which are meant to go on the system to warn staff about threats relating to the behaviour of individuals being supervised by probation officers. The report says:

“We found these flags were often either not used, or carried out of date or misleading information.”

That is absolutely shocking, to be frank.

All through, the report confirms what we have heard from staff. We have heard consistently that there are not enough staff. Speaking about staff grades and allocations, the inspector—I think he is being diplomatic at this stage—says:

“Not all areas had the ideal balance of probation officers and probation services officers to cover courts”.

We now have evidence from NAPO and staff on the front line that some probation officers are being allocated cases and work beyond their training and pay grade. Again, that puts the service and officers at risk.

On resources overall, the inspector says:

“We found National Probation Service teams struggling to complete all the new tasks required”.

Why? Because of the Transforming Rehabilitation changes themselves, which were putting staff under pressure. The report also says:

“Most areas had kept staff numbers in court teams static, but new processes meant that more resources were needed in courts.”

In evidence from the front line, we are finding that staff are focused on trying to keep up with the pattern of change, rather than on dealing with the serious issues raised by their work. That is a real worry.

Let me give an example. On domestic violence, my hon. Friend the Member for Stretford and Urmston referred to women, and domestic violence and child protection are largely about women. We are now finding that there are insufficient staff to ensure the supervision of courses, particularly building better relationships courses. The Warwickshire and West Mercia community rehabilitation company sent out a letter advising staff that there are insufficient staff to enable courses to be completed properly. It says:

“Due to these exceptional circumstances”—

that is, the lack of qualified staff—

“CRC staff will be returning some cases to court due to insufficient time left on the orders to complete the BBR programme. Where possible, we will suggest the domestic Violence Work book module”.

Staff are therefore offered a manual, rather than an actual course to tackle building relationships, which is core to domestic violence cases. The letter basically says that it has not been possible to recruit sufficient staff and sessional tutors.

Also on staffing, real concerns have been raised with us about diversity. There needs to be an independent assessment of the allocation of staff with regard to ethnicity and diversity. A couple of surveys done with regard to at least two probation trusts support the view that black and ethnic minority staff are over-represented among the CRCs, as opposed to the NPS. That is not only unfair with regard to the staff, but it impacts on diversity issues in service delivery. Again, that issue must be addressed and it goes beyond what the inspector has said.

A whole range of the staffing issues set out in the inspector’s report reflect what front-line staff have told us, even to the point of managers saying:

“Several senior probation officers were not clear what appropriate tasks could be allocated to them.”

There is also a lack of overall management of some issues in the CRCs and the NPS because management have been diverted to dealing with the change process, rather than the day-to-day management of staff and casework.

It is no wonder, therefore, that the inspector comments that, in some CRCs in particular, staff morale is extremely low. The feedback we get from NAPO and its members on the front line is that staff morale is still at rock bottom, and it has not lifted, despite the Secretary of State’s decisions, which he assured us would at least give staff some security about their long-term future. That certainly has not happened.

Staff are doing a good job as best they can under intense strain, and I pay tribute to their loyalty, commitment and dedication to the service. It is a tragedy that the Secretary of State has embarked on this venture—this adventure—which will continue to have a negative impact on staff and the service. I hope that the report will lead the Government to give some thought to addressing the issues that the inspector sets out. Perhaps the system needs much more detailed long-term consideration.

I argue again that the service should never have been privatised. However, it is totally unacceptable to include in the contracts a poison pill clause to try to prevent a future Government from introducing their own reforms. When the next Government are elected in May, I hope that those clauses will be totally disregarded.

15:17

[Jeremy Corbyn (Islington North) (Lab)]

I will be brief so that the two Front Benchers can respond in good time. I thank my hon. Friend the Member for Stretford and Urmston (Kate Green) for getting this debate, which is necessary and important.

I am a member of the Justice Committee, and we have listened to a great deal of evidence about the operation of the probation service. We have heard some very serious, deep concerns from long-standing, committed, professional people who want to deliver a good probation service. They now find themselves being hawked around to the lowest bidder, as the tendering process gathers pace. It is quite shocking that, by May, 80% of rehabilitation services of all kinds will be in the private sector, not the public sector. Whoever is elected to form the next Government in May will have to preside over a system over which they have quite limited control and where there is a real problem with communication between the different sectors of the service.

Our duty as Members of Parliament is to hold the Government to account, and the duty of members of the Justice Committee is specifically to hold the Ministry of Justice, including the Lord Chancellor and the other Ministers, to account. They have three roles that apply to this debate. The first, obviously, is ensuring the safety of the judicial system, so that those who are convicted are genuinely convicted. Secondly, there is the role of the prisons and what happens in them. Do people come out of prison more or less likely to offend and more or less well equipped to deal with the challenges of society? From that stems the problem of reoffending. I am far from convinced, however, that dividing up a service and attacking the professionals in it all the time, as well as the current Lord Chancellor’s obsession with privatising every conceivable aspect of the judicial process, helps to achieve any of that, and does not make the situation considerably worse.

We have had evidence from NAPO, which has provided briefings to the Committee and to many hon. Members, and I want to mention some of its concerns:

“Same day reports (SDRs) and oral reports at Court do not allow sufficient time to carry out checks with police and children’s services”.

That must be a matter of concern. Staff shortages have led to cancellations of sex offender programmes and domestic violence programmes, and obviously extreme danger goes with that. Because of a

“lack of fully qualified probation officers…domestic violence cases are being allocated to Probation Service Officers who are not experienced or qualified to work with these complex cases”.

Apparently, the

“National Probation Service (NPS) in some regions is no longer sending representatives to Multi Agency Risk Assessment Conferences”

because there are not enough staff.

The whole point of a rehabilitation process is to link all the agencies. What is happening is the opposite of that—the break-up of the link between them. Instead of meetings of a group of professionals from different public sector organisations, there are meetings of competing private companies—some of which are inhibited by data protection law from sharing information with each other. We have reached an absurd situation and I hope that the Minister will tell us that everything is well, that things are going to get better and that he will halt the privatisation process that is going ahead with such speed.

At the Justice Committee before December, we were informed of potential conflicts of interest with the new chief inspector of probation. The Secretary of State promised us an answer by today. Today is not yet finished; there are still nearly nine hours to go, in which an answer can be given. Perhaps the Minister will tell us what action has been taken on that issue, which is of great concern to the public.

The debate is about the probation service, and it is also about the kind of society that we want to live in. I had the good fortune to go with the Justice Committee on a visit to young offenders institutions in Denmark and Norway. I have also visited quite a lot in this country. I pay tribute to the people who work in YOIs. It is not an easy job. One of the most interesting times I had was a long session with a group of young offenders in Feltham, where I went with my hon. Friend the Member for Feltham and Heston (Seema Malhotra). It was just us and the group of young offenders. Listening to their stories was very sad, and so was listening to what they had done. Listening to their lack of ambition for when they came out was even worse.

Surely, the criminal justice system must be based on the idea that, although those who have committed crimes must face a judicial process and there are occasions when it is right to send someone to prison or give them community service—there is a range of options—the primary objective is to bring them out as better people, with personal ambitions and a personal network, rather than as people facing the same issues they faced before with a high likelihood of reoffending. We all pay the price for their reoffending, in the lost skills of those who go to prison and the damage to communities.

We talked to people at the MultifunC institutions in Denmark and Norway, and the system is expensive to operate; I do not doubt that. It is much more intensive and professionally supported than our services, but the level of reoffending is below 20%. Ours is well above 50% for pretty well all categories, and well above 70% for others. Something is going badly wrong.

There is no evidence to suggest that privatising the probation service, Prison Service and all other forms of rehabilitation and support does anything but create competition in the private sector and a miasma of bureaucracy. The losers are the ex-offenders, the community, and those of us—all of us—who must pay the costs in reoffending, more prisons and more sentencing. Surely, there is a better way to go about this—one that would show some respect for those who have given their lives to the probation service and who in a decent and professional way try to improve people’s lives, rather than working solely for private sector companies whose main interest is making money out of the system.

15:25

[Jenny Chapman (Darlington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Crausby. I congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on securing the debate this afternoon. We have had to contrive ways to obtain every debate that has ever been held on probation reform, since the idea was first proposed. We have had Opposition day debates, and we had to table amendments to the Offender Rehabilitation Act 2014. The Government provided no opportunity to hon. Members to debate this important issue. I therefore pay tribute to my hon. Friend, and thank the hon. Member for Strangford (Jim Shannon) and my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Islington North (Jeremy Corbyn) for their speeches, and my hon. Friend the Member for Stockton North (Alex Cunningham) for the interventions he has made.

It may seem that the horse has bolted, because the Government have signed the contracts. I know that the Minister is new to his job, and came to the post after the Act was passed, but I assure him that the concern felt by the Opposition—and, I suspect, by some Conservative Back Benchers—has not gone away. We are probably more concerned than we were previously. When the Act was going through Parliament, our concerns were hypothetical. We were told that we were scare- mongering, and not getting on the bus and showing the enthusiasm that we should, but we were proved right. It gives me no pleasure to say it, but the concerns that we raised, and that the Government were warned about, are by and large starting to come true. The Government need to take that seriously. The Minister needs to act. He needs to do something about the situation, not just sit and shake his head. What is happening is serious, and involves public safety and the morale of an organisation, or many organisations, with an important job in communities.

My colleagues have spoken clearly about the catalogue of errors that has characterised the Government’s probation policy. We could have filled a much longer time, if we had been allowed to, and could have got under the skin of the issues. I am saddened that Members of Parliament have not been given a proper opportunity to debate the detail, except in debates such as this one, when we make speeches cataloguing our concerns. The Government have never given us the opportunity for proper line-by-line consideration of the proposals. If they could have got away with it, we would have had no debate on probation.

It is worth repeating that the probation service does highly skilled and challenging work, which receives little attention when it is done well, but which is crucial to keeping communities safe. Reoffending rates are still far too high, and much more needs to be done to break the cycle of repeat offending. We know that. If the Minister intends to tell us that the Government had to do something because reoffending rates were far too high, my reply is that they are still too high. I venture to suggest that they will still be too high in a year.

Probation undertakes a very difficult task. Should the Minister’s predecessor have considered asking far more of the trusts, which were without exception graded good or excellent? They were not dysfunctional, failing organisations. I would argue that their staff were some of the most entrepreneurial—probably too much so for some of my colleagues’ tastes—go-getting, ambitious people to be found anywhere in the public or perhaps even the private sector. They were very prepared to innovate, and were not doing the nine-to-five. Those people lived and breathed their job, and many, I am sad to say, are now lost to public service. That is a great shame. We should have demanded far more of those trusts and raised the bar. Last year’s “good” should have become this year’s “excellent”, and last year’s “inadequate” should have become “good”. We should have raised the bar. That has not happened and those organisations no longer exist, which is a great shame.

The Secretary of State rushed the changes. Many of us will never forgive him for that. The speed at which they were rushed through was appalling. He did not even manage to test the policy to check that it worked. I was amazed to hear the Minister of State, Ministry of Justice, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), say on the “Today” programme that the proposals and changes had been thoroughly tested and piloted. Nothing of the sort happened. There were pilots, which the Labour party backed—we supported piloting the idea, because we were not ideologically opposed to it and thought that there could be some learning—but the Secretary of State cancelled them. There was no opportunity to learn or to make mistakes on a relatively small scale.

Everything was completely rushed and the Secretary of State cancelled the pilots. It would be good to hear Ministers acknowledge that that is what happened, rather than misinterpreting events and saying that the changes had been piloted. There were pilots, but they were cancelled and never got under way. Even though much time, energy and thought had gone into preparing for them, they never happened. We warned at the time that that was scrapping any opportunity for the Government to test or improve the model, or to learn from mistakes on a small scale. Instead, every single teething problem—as predicted—every dodgy bit of IT and every failure in communication is now being experienced in all areas and by all staff members on a national scale. That cannot be a sensible way in which to implement any such change.

We have heard what a shambles the transfer has been, with probation officers in some cases—Ministers have denied this, but I know for a fact that it happened—having their names picked out of a hat to decide whether they would be working for the National Probation Service or a CRC. That is a disgraceful way in which to treat members of staff in any organisation.

The problems that we are talking about, however, cannot be called teething problems any more. This is not the odd unsent e-mail; this is widespread, high-risk problems with staffing, communications and IT. An hour and a half debate is simply not sufficient to deal with those problems. I want to drive the point home about the lack of opportunity that the Government have allowed in the House for Members to contribute to and improve the proposals. Today, however, we have had a flavour of the problems.

The inspectorate found that the IT systems were a “barrier” to staff using time effectively; that new tasks had not been integrated with old systems; and that significant amounts of work were being duplicated by different programmes and processes. The new processes

“take longer and are more complex than previous arrangements”.

Inspectors reported meeting offenders who had been seen by probation staff who knew nothing about them, while other offenders were juggled between many different members of staff before finally meeting the officer who in theory was to manage their case. Whatever the inadequacies of the previous system, at least we knew who was responsible. It is frightening that that is not happening any more.

Things are not running as the Justice Secretary had guessed they might—it was a guess—and the allocation of staff and resources to the NPS and the CRCs is not working out as expected. There are staff shortages across the system, with many people having left. A greater number of cases are being transferred to the NPS than was originally expected, and NPS teams are struggling to manage the high-risk case load alongside the other new duties demanded by the fragmented service.

As we have heard from colleagues, there are now perverse incentives in the system around risk allocation. On top of everything else, the new risk assessment tools are taking time to bed in, as everyone said they would. We know it takes time for practitioners to understand how to use new risk management tools effectively and get used to them, but no time was allowed. Why introduce a new risk management tool at the very time that so much turmoil is being inflicted on the system? It seems to be the worst possible way in which to implement even a good idea—not that it was a good idea.

Extremely worryingly, officers are reporting that lower-grade staff are working with cases way beyond their training, experience and even pay grade, including complex domestic violence cases, life-sentence prisoners and cases involving child protection. That is a huge safeguarding problem. Will the Minister commit at least to investigate those cases urgently, because they will be of huge concern to the public? I am realistic: probation and management of offenders is not the No. 1 concern of voters in any of our constituencies, but they get completely exercised about domestic violence and child protection not being dealt with properly by the right people—by people who are trained and qualified appropriately. The Minister needs to commit to investigating that as a priority. The Minister has a responsibility to verify and reassure us on that.

Staff are telling me that they are having to replace one-to-one supervision with group supervision, or to cancel or postpone offending behaviour programmes, which includes treatment for sex offenders. When I worked in the Prison Service, such programmes were very special and considered to be most effective. They were rigorously validated and academically robust, which I think is probably still the case, but if those programmes, which we know are effective, are being cancelled or delayed due to a lack of facilitators, that is most concerning to Opposition Members. Is the Minister investigating the extent of that problem? He might not be able to answer today, but perhaps he can commit to writing to the Members present in the Chamber to let them know the answer to some of our questions, although he has been asked rather a lot.

What is troubling is that most of the issues are not short-term problems that one might expect with a new system or process, so it is not good enough to say, “Okay, we realise that there are difficulties. These will be ironed out. Please be reassured.” In this case, the problems have been built into the service by the Government’s reforms. The Government have created a host of problems that they will have to live with if they persist with their model. In essence, the problems have been created by the service being split needlessly in two. At the end of the day, when we look back on the reforms, that will be identified as the key mistake. Changes took place because the Justice Secretary had a gut feeling that it was the right way to proceed. That will be regretted.

The fragmentation of the service has, unfortunately, done the harm that many Members of the House saw coming. The inspectorate put it like this: it said that

“splitting one organisation into two…has created process, communication and information-sharing challenges that did not previously exist. Many of those issues will remain a challenge for some time to come”.

The inspector puts that very clearly. I have a huge amount of respect for Paul McDowell. Whatever the circumstances of his appointment and whether the Justice Secretary knew about them and informed the Select Committee—he clearly did not inform the Committee, but he has to answer to the Committee for that—the inspector, to his credit, has done a very good job with his report.

In reality, fragmentation means that work is being duplicated and information is not being shared on time, which makes supervision less responsive and puts public safety at risk. Not only are there problems with information sharing between probation organisations, but staff are reporting poorer communication with partner organisations, which includes the police and child protection agencies. When things go wrong we take time to look at why, and inevitably there are recommendations. Almost every serious case review I have read has highlighted problems with information sharing, especially with partner organisations. It is deeply concerning that staff are raising concerns that information is not being shared with the police and with child protection agencies.

We know what helps probation to work better: we need partnership working and good relationships with other agencies—we know how important those are. A good relationship between the offender and the probation officer is crucial. Quick response times matter, as do seamless communications. Those things are not luxuries but a basic necessity, and they have been put at risk by the reforms.

Reoffending rates are far too high, and we would have gladly worked with the Government—indeed, we still would—to test ideas and find ways to bring. out the best in public, private and voluntary expertise. All three sectors have a role to play in reducing reoffending. I would have put a lot more pressure on trusts not only to work with a greater number of agencies and to commission more, but to hold the ring and be accountable for performance. That would have been a far better and safer way to proceed, but the Justice Secretary had no interest in evidence or in testing his ideas, and the service is now paying the price of this hurried upheaval.

A recent survey of probation staff showed that 98% had no confidence in the Government’s plans, 97% had no confidence in the Justice Secretary and 55% were looking to change job. The expertise of those staff is the one thing holding the whole flipping experiment together! They deserve absolute credit for that, but the Government and the public should be exceptionally worried if experienced senior officers continue to leave the service. We heard on the radio this morning about the concerns that prison officers have about their safety at work. I do not want to think of probation workers having the same kind of anxieties as their colleagues in the prison service.

The Minister has an awful lot of questions to answer. I feel for him in many ways—this problem has been landed on him and is not, I know, one of his making. However, he is the one in the job now so it falls to him to answer the questions. How much does he think the reforms will cost? In Committee on the 2014 Act, his predecessor, the current Attorney-General, resisted every opportunity we gave him to provide us with numbers on what he intended to spend on the programme.

What will the Minister do about staff morale? Morale is very important in this line of work—it really matters. Staff need to be supported to understand the new processes, particularly given the findings of the inspectorate. Many staff do not even understand the rationale behind the changes, and I can understand that. He needs to do something about that, so I want to hear from him what he intends to do.

I also want to know about payment by results. It has been used as a bit of a fig leaf, with Ministers saying that all will be well because we will pay only for outstanding results. That is not true, but we have not been told how much of the payment will be dependent on the results and how much will simply be paid anyway. It is important that we know the answer.

What is the Minister going to do about the communications and IT failures? Is this an issue with resources, with management or with training? Is it an issue with all three? We need to understand that.

Will the Minister guarantee funding for women’s centres? That is an issue of massive concern. Women’s centres can do a lot to reduce reoffending, as they are very effective at cutting it.

We know that the contracts contain clauses promising companies millions of pounds of taxpayers’ money if they are terminated early, and that we are unlikely to be able to afford to buy ourselves out of them, as we might wish to do. Will the Minister outline what break clauses exist in the contracts, so that we can at least be assured that we will not have to pay those companies for failure? What plans does he have in place should a company fail? We have seen health care companies such as Southern Cross fail; what will happen if companies in the probation sector fail?

We are committed to extending freedom of information so that we can find out exactly what is happening in the companies. Does the Minister have any thoughts on that? Do the Government have any intention of allowing FOI to apply to community rehabilitation companies?

Lastly, I pay tribute to the loyalty of the staff, who work so hard and are dedicated to rehabilitation, in both the NPS and the community rehabilitation companies. It is not true that the most experienced and the brightest and best went to the NPS, and everyone else went to the CRCs. There are outstanding, long-serving staff in both organisations who do a tremendous job in very difficult circumstances. I want to make it clear that the Opposition opposed the reforms from start to finish and we will be crawling all over the contracts to ensure that whatever break clauses there are will be applied, and quickly, in the interests of public safety.

15:45

[The Parliamentary Under-Secretary of State for Justice (Andrew Selous)]

It is a pleasure to serve under your chairmanship, Mr Crausby. I congratulate the hon. Member for Stretford and Urmston (Kate Green) on securing this important debate. I have known her for a long time. I have a great deal of respect for her and know she takes a serious interest in these issues.

I am going to prioritise answering the various points raised by Members during the debate and come to my prepared remarks afterwards. I will deal as quickly as I can with all the matters put to me.

All the existing expertise of our fantastic public sector probation staff is still there in the system. Most people are working at the same desk, doing the same job as before. That is highly valuable. I should point out that the report of Her Majesty’s inspectorate of probation goes up to September last year, and there have been significant improvements since then on a lot of the issues that Members have quite properly raised. To give just one example, the rate for completion of the risk of serious recidivism report within two days is now at 80%, which is a significant increase. We have every confidence that that figure will carry on increasing, and I hope that that reassures Members. [Official Report, 21 January 2015, Vol. 591, c. 1MC.]

We were accused of bringing in the reforms on the basis of ideology, not evidence, but given that we have all agreed that reoffending rates are too high—it is a serious problem, as every Member who has spoken has said—I gently say to the Opposition that it would be wrong not to take the best expertise within our brilliant public probation service, the fantastic expertise in the voluntary and community sectors, of which no mention has been made by Opposition Members this afternoon, and the expertise that exists in some private companies. We want to have the best of all three working to tackle these issues.

[Jenny Chapman]

Will the Minister give way?

[Andrew Selous]

I will make some progress. I will not succeed in answering the questions already put to me unless the shadow Minister allows me the little time I have left to do so.

The hon. Member for Stretford and Urmston asked why we did not simply get probation companies to deal with the under-12-month group. Frankly, on the financial model we were operating on before, that would not have been affordable. The previous Government tried to do it under their “custody plus” plans but had to scrap the attempt before implementation. We believe that the reduction in reoffending that we expect to see will enable us to extend provision by the companies to that important group.

The hon. Lady and one or two other Members mentioned the random allocation of staff to the National Probation Service and to CRCs.

[Alex Cunningham]

Will the Minister give way?

[Andrew Selous]

If the hon. Gentleman will allow me, I want particularly to respond to the people who made speeches in the debate.

Random allocation of staff happened in a very small number of circumstances when other objective methods of allocation were not available, and was used specifically to choose between staff who were otherwise similarly qualified to be assigned to the relevant organisation.

The hon. Member for Stretford and Urmston quite properly raised the important issue of how we will deal with diversity. We believe it is most appropriate for a detailed diversity assessment to be carried out after allocation, as that can then inform the detailed sentence plans compiled by the offender manager. That fits with the sentencing approach introduced by the Offender Rehabilitation Act 2014.

The hon. Lady also—again, quite properly—raised the issue of what we are going to do as far as the specific needs of women offenders are concerned. I visited Peterborough prison last Thursday and saw the excellent work there—not least in the mother and baby unit; she is absolutely right to raise the issue, as is the shadow Minister. More than 1,000 organisations have registered to play a part as either tier 2 or tier 3 providers in the supply chain, many of them with specific expertise in delivering specialist support to women offenders.

To go further on that point, we are including three gender-specific outputs in contracts with the community rehabilitation companies, meaning that, where practical, providers will have to give female offenders the option of a female supervisor or responsible officer, of attending meetings or appointments in a female-only environment, and of not being placed in a male-only environment for unpaid work or attendance requirements. I could go into more detail on that, but I hope that I have given some reassurance that we have thought seriously about the issues that the hon. Lady was quite right to raise.

The hon. Lady also raised the escalation of low and medium-risk offenders. We are keeping escalation rates under close review, but so far the indications are that the numbers are relatively small. The decision on escalation is always one for the National Probation Service, which, of course, remains wholly within the public sector. We supported both the NPS and CRCs to bed in the new processes so that they are working effectively.

On the issue of freedom of information requests to community rehabilitation companies, the CRC contracts set requirements on providers to give information to the Ministry of Justice if it receives relevant requests under the Freedom of Information Act. That is not completely as hon. Members suggested.

[Jenny Chapman]

Will the Minister give way on that point?

[Andrew Selous]

In the nine minutes that I have left, I want to move on to the speech made by my hon. Friend the Member for Strangford (Jim Shannon). He was generous enough to say that he thought that the reforms could be worth while if done correctly—I may be paraphrasing him slightly, but I think that he made remarks along those lines. He asked, as did one or two other hon. Members, why we did not pilot the reforms. I refer him to the pilots undertaken at both Peterborough and Doncaster, which the shadow Minister mentioned.

It is worth putting on the record that in Peterborough there was a reduction of 8.4% and in Doncaster a reduction of 5.7%. I fully recognise that that is not the same as the Transforming Rehabilitation programme, because we are bringing to bear further measures that will help with the under-12-month group and so on, but those two pilots show that where we have allowed innovation and new initiative, and where investment has come in from outside the public sector, we have brought reoffending down.

[Jenny Chapman]

Will the Minister give way?

[Andrew Selous]

No. The hon. Lady will want to hear this because she made allegations about safety and so on. I know she will be reassured that the number of serious further offence notifications between 1 June and 30 September 2014 was 151. That was a reduction compared with same period of the previous two years, when the figure was 181 for both 2013 and 2012.

All hon. Members will know—not least the two distinguished members of the Justice Committee who are present, the hon. Members for Hayes and Harlington (John McDonnell) and for Islington North (Jeremy Corbyn)—that the level of serious further offences is an important indication of how well a probation service is doing. I hope that that reassures hon. Members.

[John McDonnell]

Will the Minister give way?

[Andrew Selous]

I give way to the distinguished member of the Justice Committee.

[John McDonnell]

I am not sure that I am distinguished.

Safety was absolutely key to the legal action taken by the National Association of Probation Officers before Christmas. The Secretary of State gave assurances in court that action would be taken by 1 February to address a whole range of issues of which we are unaware because the union is subject to a gagging clause. Will the Minister give us an indication—now, because the time is here—of the actions that have been taken, on a point-by-point basis, to address the concerns raised in court, therefore showing that there is no need for the gagging order to be in place at this stage?

[Andrew Selous]

In the six minutes that I now have left, I will try to put as much information on the record as possible. There is certainly no gagging going on here because I want to inform hon. Members as much as I can.

I move on to the speech made by the hon. Member for Hayes and Harlington. First, I thank him for his very kind remarks about me. Along with one or two other Members, he mentioned the position of the chief inspector of probation. First, as the CRCs are within the public sector, there is currently no conflict of interest. Secondly, I refer back to what the Secretary of State said in the Chamber not so long ago: the issue is under discussion and must be addressed. I cannot say more at this moment, but I reiterate the assurance given by the Secretary of State.

I was pleased to hear the hon. Gentleman praise probation staff. I, too, will take the opportunity to do that now. As the shadow Minister rightly said, they are a group of public sector workers who are often forgotten. They are not the first group of public sector workers who come to mind, but they do an absolutely vital job in the criminal justice system. I pay huge tribute to the important work that they do in keeping us all safe. The hon. Gentleman was also absolutely right to discuss the need to raise offenders’ ambition. We will not succeed unless we manage to do that; the issue is very close to my heart.

On the issue of voluntary termination clauses, raised by both the hon. Gentleman and the shadow Minister, I should say that they are standard Government clauses. When the Labour Government were introducing the flexible new deal, they used exactly the same clauses. We would not have had the healthy level of interest and attracted the expertise and commitment that has come in to bring down reoffending had we not used those clauses.

The hon. Member for Islington North talked about a race to the bottom on price. I make no apologies for the fact that value for money is an important consideration in the spending of taxpayers’ money, but I can absolutely assure the hon. Gentleman that we were highly rigorous about the quality of the bids. Every organisation that has bid has previous experience in the service area; that was extremely important to us.

The shadow Minister asked why we had not piloted the reforms. I say to her that the problem across the UK is so significant that we were determined to address it across the country. Conducting a number of small pilots would not have given us the opportunity to do that. She referred to a staff survey; unfortunately, in one of the staff surveys undertaken by NAPO, only about 10% of the eligible staff participated. We are dealing successfully with those issues as they come forward.

It is a good thing to have opened up the market to a diverse range of new rehabilitation providers. We are determined to continue to get the very best out of our public sector workers. We are extremely grateful for the expertise that has been introduced by the voluntary and private sector providers.

Hon. Members asked about the new payment incentives for market providers. They will be there so that we can focus relentlessly on reforming offenders, giving providers freedom from bureaucracy and the flexibility to do what works, but paying them in full only for real and significant reductions in reoffending. For the first time in recent history, virtually every offender released from custody will receive statutory supervision and rehabilitation in the community. We are legislating to extend statutory supervision and rehabilitation to all 45,000 of the most prolific group of offenders.

It is important to realise the cost of crime caused by reoffenders, which the National Audit Office estimates at between £9 billion and £13 billion across society. That is why it has been right to take forward these significant reforms to deal with the very serious issue of reoffending.

Network Rail

Tuesday 13th January 2015 Westminster Hall

16:00

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

Network Rail has a quite extraordinary governance structure. It was set up in that way, as I think almost all parties would agree, with the primary aim of keeping its debt off the Government’s books. However, since a ruling from Eurostat, implemented by the Office for National Statistics here, that debt is now on the Government’s balance sheets, with that decision having been taken finally in December 2013, with the reclassification of the entity taking effect on 1 September 2014.

Last week, when I asked the Secretary of State for Transport whether it was not therefore time to reform Network Rail’s labyrinthine governance structure to make it more accountable, he replied that he would take my question as a representation to cancel the building of a new railway station in my constituency. I fear that exchange probably told us more about the Secretary of State’s character than it did about the governance of Network Rail, hence today’s debate, which follows yesterday’s publication of Network Rail’s report on the post-Christmas disruption. I will focus on two issues—pay and governance—before finally making one or two remarks about Rochester and the applicability of these issues to my constituency.

Yesterday, a report was published by Dr Francis Paonessa, who is the managing director of infrastructure projects at Network Rail. He is paid an annual salary of £425,000 with a further bonus opportunity of 20% of salary. I intend no personal criticism to Dr Francis Paonessa, who is clearly a manager of stature. Before taking his current role with Network Rail, he was the UK managing director of Bombardier, which, under his leadership, secured the important Crossrail contract for building trains, having previously lost out on the Thameslink contract to Siemens. Clearly, running leading infrastructure projects requires a different set of skills, given their complexity, but he replaced Simon Kirby, who moved on to head up HS2 Ltd as chief executive—clearly a huge job, at least potentially. However, the excessive cost structure in the rail industry, led by Network Rail, underlines my party’s belief that HS2 is unaffordable. Half a dozen people at Network Rail, at least, earn similar sums to Dr Francis Paonessa. Mark Carne, the chief executive, earns substantially more. Why has their pay not been cut to reflect the transfer of Network Rail as an organisation from the private to the public sector?

We talk often, as a comparator, about how much the Prime Minister earns, but the numbers of people earning in excess of the Prime Minister’s salary are legion within Network Rail. It has moved from being a private sector to a public sector organisation, and surely we should be told what new standards are being applied in Network Rail following that move.

In March 2012, the Department for Transport wrote:

“As a private sector company, Network Rail sets performance pay levels for its senior staff”—

but it no longer is a private sector company, so who is setting those pay and performance-related pay numbers now? Who are those senior managers accountable to for their pay? Is it the Secretary of State? Is it the so-called members of Network Rail, about which more in a moment, or is it themselves? Mark Carne has announced that he intends to limit his bonus to just 5% of his salary—of course, that bonus will still be more than average earnings across the country and in my constituency.

In particular, we have seen the failures over the post-Christmas period and the disruption that caused to many people across the country seeking to use the network, the extent to which it has become standard to have long-running periods of shutdown over Christmas and new year, the length of some of these infrastructure projects and the closures involved and the lack of predictability about them. In my constituency, we greatly welcomed the new railway station in Rochester, but one point I have from my constituents is why people cannot be warned further in advance about closures, so that they can plan around them.

[Jim Dowd (Lewisham West and Penge) (Lab)]

On the point about the disruption and giving notice in advance, Network Rail had years to prepare for the shutdown of London Bridge station over the recent Christmas period as part of the admirable Thameslink programme. However, they made a huge blunder in organising that, the effects of which have still not been concluded and people’s journeys are still being disrupted. It is not bonuses that the managers should be looking at, but fines.

[Mark Reckless]

The hon. Gentleman makes a good point, which comes back to how these people are held accountable and whether that is through the withholding of a bonus or some other form of discipline, such as a reduction in salary. I do not know whether we are talking about fines, perhaps on a regulatory basis, or whether he is suggesting that it should be on a criminal basis—that would be very strong for such a management role. What I think my constituents and his want is accountability, and we simply do not have that with the current structure.

From 1 September 2014, we have had a new agreement between the Department and Network Rail, but there is, I believe at least, a lack of clarity about what difference that agreement is making in how Network Rail is held to account. Why do we still have these 46 public members and a similar number of industry members, ostensibly playing a part akin to shareholders in this organisation? There was a vote back in, I believe, November 2009. Thirty-six of those members—I do not know whether turkeys voting for Christmas is a fair comparison here—voted to decrease their numbers, but 36 voted against that, and that has remained the situation ever since, despite the Government saying again in March 2012:

“We therefore welcome the governance proposals that Network Rail is announcing, including: reducing the number of members to a more sensible level, thereby improving the quality of decision-making.”

Has that happened?

In the same report, “Reforming our Railways: Putting the Customer First”, the Government said:

“Network Rail is a private-sector, not-for-dividend company, limited by guarantee…we believe the existing structure is capable of delivering the outcomes and the savings we need without disruptive and unnecessary organisational change... equity is a strong driver of efficiency and value for money.”

How in this unique, convoluted, labyrinthine governance structure does equity operate as a driver of efficiency? We have these industry members that the board reports to, to a degree. One might think it is useful perhaps to have that reporting line to the customer, but whenever those customers’ interests are involved, that member steps aside on the basis of there being a conflict of interest, so how can that governance structure work and is it really a sensible way for us to proceed?

In my constituency of Rochester and Strood, we have had the impact of the London Bridge changes. The disruption has affected some people. The sheer length of the closure of London Bridge station for Charing Cross-bound trains that we are currently dealing with is an enormous issue. We have to hold Network Rail to account for the costs that it applies, which are largely passed on in fares to the customer, but also for the length of time that these projects take. I would be interested to hear the Minister’s view. Could she tell us what she has done to ensure that that closure period is as short as possible and the costs are as low as possible? I just have an innate suspicion of an organisation that is not accountable, or at least not in a way that I can understand or in the way in which other organisations are.

The Minister will no doubt refer to the report, published yesterday by Dr Francis Paonessa, explaining away, defending and, to an extent, putting Network Rail’s side of the story in terms of the disruption that we saw immediately after Christmas, but that report is not addressed to anyone. I do not know: is it for the board of Network Rail, for its members, for the Secretary of State or for Parliament? It does not say. There is a foreword by Mark Carne and a whole series of explanations and, to some extent, excuses, but who ultimately holds Network Rail to account for that? Why is it being paid so much money? Why is that disruption allowed, and do we really believe that this labyrinthine governance structure and the costs that we see in this industry are the best we can do? I believe that this country can do it better, and it is time we got on with that and dealt with some of the governance issues at Network Rail and ensured that it works better.

[Douglas Carswell (Clacton) (UKIP)]

rose—

[Mr David Crausby (in the Chair)]

Mr Carswell, it is not in order for an additional Member to speak in a half-hour debate unless they have secured the agreement of both the sponsoring Member and the Minister. Has that advance agreement been secured?

[Mark Reckless]

My hon. Friend the Member for Clacton (Douglas Carswell) spoke to me yesterday, and I spoke to the Minister. I understand that agreement is forthcoming from her as well as myself.

[The Parliamentary Under-Secretary of State for Transport (Claire Perry)]

That is correct, Mr Crausby.

[Mr David Crausby (in the Chair)]

It has been agreed. I call Douglas Carswell.

16:12

[Douglas Carswell (Clacton) (UKIP)]

I am most grateful, Mr Crausby. I think that we have a serious problem with Network Rail. Certainly, on the Clacton line, which affects my constituency, weekend works have overrun several times, which has been very disruptive to commuters trying to get to work on Monday mornings. We routinely have problems and failures on the line and we have seen a lot of weekend closures. That is not very helpful to a seaside town that depends on a lot of weekend seaside tourists coming to visit it. We have seen the problems affecting London stations over Christmas.

My main concern is not so much the rail operators, although I think that in the case of Abellio, they have been insufficiently robust in dealing with their supplier, Network Rail. My main concern is with Network Rail. It is to all intents and purposes a public body, which has recourse to public funds and socialised costs, yet it does not seem to be accountable to the public. It seems to have the structure of a public quango, but the bonuses of a bank. What is fundamentally missing is accountability.

Before Christmas, I wrote a letter to the Secretary of State for Transport, asking whether there were any plans to revisit the Network Rail’s governance structure, because it is not working the way it should and, when errors happen, they are not corrected the way they should be. I got a response that I think was probably drafted, if I can put this kindly, by a private secretary who did not understand the question. I then raised the issue on the Floor of the House last week, and I got a response from the Secretary of State that was perhaps dismissive, perhaps contemptuous, but he is not running a Whips Office any more; these are grown-up questions that demand proper, considered, grown-up answers.

There needs to be a rethink of this organisation’s governance structure. I would be interested to hear whether the Minister has given serious thought to how we might change the governance structure of Network Rail. My suggestion is that it should have greater accountability to Parliament. We could perhaps give a role to the Select Committee on Transport, which could confirm the appointment of senior management to this body. Perhaps this body might appear annually before the Select Committee to appeal for its budget. I do not claim to have all the answers. What I know is that the status quo is not working. There is a lack of accountability, and we need real reform. I would love to hear from the Minister how we can do that. How can we ensure that there is real accountability?

[Mark Reckless]

The Government said in March 2012 that Network Rail would invite other companies to compete against its core business. That contestability is perhaps one way to bring market disciplines to the operator. In the same document, the Government said that we could have vertical integration between operators. Perhaps in an area such as Kent, where Southeastern is the main operator, they could work more closely together or even become an alliance or a single body. I just wonder why that is not taken forward. Has my hon. Friend any insights?

[Douglas Carswell]

My hon. Friend’s suggestion is a good one. There are all sorts of models of accountability. There is the proposal for parliamentary accountability. There is the proposal for restructuring in the way that he suggests, which would provide greater accountability. My fear is that we may have spent longer this afternoon discussing new models of corporate governance in this Chamber than the Minister may have done in the Department over the years. I would like to hear from the Minister what specific thoughts she has about changes to Network Rail’s accountability and governance structure.

Network Rail is a corporatist organisation. It lacks accountability. People who try to do the right thing but who have to travel by rail, who have to buy season tickets and travel on the railway to get to work find that the fares go up but the level of service remains poor. Ordinary people feel an incredible sense of frustration that, for all that they do and all that they are forced to do, the people at the top of Network Rail do not seem to be held accountable for mistakes that their organisation makes. We often hear Ministers talking in this place about accountability to Parliament through the Minister. I suggest that that model of accountability is not working and we need a fundamentally different way to ensure that Network Rail is properly publicly accountable. I would love to hear what that is.

16:16

[The Parliamentary Under-Secretary of State for Transport (Claire Perry)]

It is a pleasure to serve under your chairmanship, Mr Crausby. I am delighted to have the opportunity to respond to this debate. I congratulate the hon. Member for Rochester and Strood (Mark Reckless) on securing it. This is a really important issue, and he and his colleague, the hon. Member for Clacton (Douglas Carswell), were right to raise it on the Floor of the House last week. I am sure that the constituents of the hon. Member for Rochester and Strood will be delighted with his new-found interest in the railways. It did strike me, in doing some digging, that before last week he had made only two mentions of his local trains in this Parliament. One was to express his profound support for HS2 and what it would do for his constituency, and one was to talk, quite rightly, about the inexcusable fact that constituents on his local franchise were paying RPI plus 3%—a policy that this Government have ended.

[Mark Reckless]

The Government’s ending of RPI plus 3%, for which my constituents were used as guinea pigs, and going to RPI plus 1% and now RPI is a positive thing that I very strongly welcome. Did the Minister consult her right hon. Friend the Member for Chipping Barnet (Mrs Villiers) on the many discussions that I had with her about the railways when she was the Minister responsible?

[Claire Perry]

No, I relied on the public record, which I think it is important to do. In fact, the hon. Member for Clacton has spoken more in the last week on the railways than he has done in the entirety of this Parliament, because I can find no record in the public discourse—

16:18

Sitting suspended for a Division in the House.

16:31

On resuming—

[Claire Perry]

I am sure the constituents of the hon. Member for Clacton are delighted that he has finally spoken up on railways, because my little trawl suggests that he has not mentioned railways in this Parliament.

[Douglas Carswell]

When I was a Conservative Member of Parliament, I was bound by the Whip, and of course the Minister and her boss in the Department for Transport were then running the Whips Office. It was therefore much more difficult for me to speak freely in the interest of my constituents, and I am grateful that I am now at liberty to do so.

[Claire Perry]

The hon. Gentleman suggests that he could not have asked questions about fares, services and station refurbishments, but he managed 42 mentions of the EU. It is rather depressing that his last comment on the railways dates from seven and a half years ago. Presumably, he could have spoken in that Parliament—no matter. I am delighted to welcome his nascent and new-found interest in the railways, which raises several questions. What is his party’s policy? The UK Independence party’s 2010 manifesto, of course, called for three high-speed lines, not two, with no mention of cost control. We will leave that point and move on.

I propose to make three sets of remarks this afternoon. I will first canter through Network Rail’s current governance structure and correct the hon. Member for Rochester and Strood, or at least answer some of his questions. Secondly, I will ask whether there is any evidence of governance failure. Lastly, I will review recent events, on which there are valid questions that we all need to ask.

In December 2013, as the hon. Gentleman knows, the Office for National Statistics made an independent decision to reclassify the Network Rail balance sheet from the private sector to the public sector, which changed nothing in terms of operational performance; it was an attempt to put public debt on the public balance sheet, which I strongly support. The reclassification does not change the industry structure or the day-to-day operations of the rail network, and it has no effect on fares, performance, punctuality, safety or timetables.

[Douglas Carswell]

Will the Minister give way?

[Claire Perry]

It would be helpful if I could make a little progress.

The reclassification rightly raises the question what the governance should look like, which is why the framework agreement was published in September 2014. The agreement specifically sets out what the relationship between Network Rail and the DFT looks like, and it tries to achieve two things. First, it tries to achieve a level of operational independence. All political parties, including the hon. Gentleman’s party I am sure, would say that Ministers should not be running trains and that there should be an element of independence and control. [Interruption.] The hon. Member for Clacton is chuntering away from a sedentary position, and I am trying to answer some of the questions. He is not particularly interested in railways, but perhaps he might be after today.

For many people, including the UK Independence party, it is not appropriate to have Ministers and, indeed, officials running the railway network; it is appropriate that Network Rail operates as an arm’s length body. However, it is important to deliver accountability and correct governance and structure. Under the new framework agreement, the Secretary of State for Transport, as a special board member, has levers by which to steer Network Rail, including the right to agree business plans and to approve Network Rail’s remuneration envelope.

[Mark Reckless]

Did the Secretary of State not previously have those powers as a special board member? Are those powers not due to him under Network Rail’s articles of association, rather than under the framework agreement?

[Claire Perry]

The issue is whether they have been exercised, and since this new structure was introduced, they have indeed been exercised. The Department, representing the Secretary of State, has started to do appropriate things such as attending annual general meetings and being involved in board meetings.

[Mark Reckless]

Will the Minister give way?

[Claire Perry]

I will make a little more progress, because the hon. Gentleman has asked a lot of questions.

In extreme cases, the Secretary of State has the power to remove the chair or, indeed, to become the sole member of Network Rail. So what is the role? The Secretary of State determines the rail investment strategy and the statements of funding available, and he works with the Office of Rail Regulation to monitor the timely delivery of major projects. Ministers effectively set the high-level strategic and spending approach to the railways and, ultimately, are accountable for the model of delivery and the operation of rail works for the country and for passengers.

Interesting suggestions have been proposed for improving governance. Crucially—this perhaps has not been conveyed clearly, so let me make it very clear—the Department is completely focused on maintaining and reviewing the appropriate role for governance. If governance needs to change to deliver improvements, it will change but based on the work done up until September 2014, and on the analysis of Network Rail’s board and the role of its public members, the current diagnosis is that it does not need to change to deliver the railway improvements that we all want to see.

The hon. Gentleman asked about the number of public members. As I am sure he knows, the number has been cut from 90 to 45. There was an independent external review of whether those members were carrying out their functions effectively, and it was found that they were performing their duties. On whether there is evidence that Network Rail’s governance is currently failing, it is right to raise those important issues, but I think the diagnosis is that Network Rail’s governance arrangements are working appropriately. We must carefully consider the role of the public members. It could have been said in the past that public members did not have the specific relevant experience to carry out that governance role, but they have now been appointed from relevant sectors and have experience and understanding of corporate governance.

The hon. Gentleman referred to some of the compensation arrangements for senior managers. I am sure, like me, he welcomes the fact that the bonuses paid in this year of Network Rail’s operation will be one tenth of those paid in the last year of the previous Administration. Given that the company’s role in carrying out its business has not changed—as a reminder, it is a company of 35,000 individuals with an income statement of some £7 billion a year, and it has £38 billion of investment proposals to deliver over the next five years— the question for the hon. Gentleman is: how much compensation is appropriate to deliver such highly important investment for the country?

[Mark Reckless]

What has changed, now that Network Rail has become a public sector body and its debt is on the Government’s balance sheet, is that it does not face the market risk of going bust, being insolvent or falling back on itself when its bond obligations cannot be satisfied.

[Claire Perry]

Like me, the hon. Gentleman has a background in finance. He should therefore know that investors will always have considered that debt to have been effectively underwritten by the public sector, so the reclassification is simply a formalisation of what I suspect savvy investors have known for many a year.

There is no evidence that Network Rail’s governance structure is inappropriate or failing. However, I suspect that the hon. Gentleman’s new-found interest in its governance may be a result of the disruption after Christmas at several mainline stations and, more recently, at London Bridge station, which many people living in his constituency use on a daily basis. I am incredibly grateful to him for giving me the opportunity once again to state very clearly what passengers should expect.

The Secretary of State made it clear at the time that the disruption at King’s Cross and Paddington immediately after Christmas was totally unacceptable. In my view, the situation was inexcusable. Passengers deserve a reliable rail service, clear information and rapid help if things go wrong. I am sorry that, in this case, they did not get those things.

Across the industry, we have to be able to trust Network Rail’s ability to complete vital engineering works on time, and it is essential that the lessons that started to be spelled out in the report, which the hon. Gentleman slightly traduced, are learned. Work continues on finding the most appropriate time of year to do engineering works. I say again—this was said last week—that Network Rail carried out its busiest engineering programme ever over this holiday period. There were 2,000 work sites.

[Douglas Carswell]

The Minister says that the failures were inexcusable, but she is now excusing the failure. She says that she is sorry for what happened, so what is she actually going to change about Network Rail’s governance to ensure that it does not happen again?

[Claire Perry]

I appreciate the hon. Gentleman’s enthusiasm for railways, which marks a rapid change from his former portfolio of interests.

[Mark Reckless]

Answer the questions.

[Claire Perry]

I am keen to answer the questions, if the hon. Gentleman will allow me to proceed.

As I was saying, an unprecedented amount of engineering work went on over the holiday period, because the main driver of problems on the railways is twofold. First, passenger growth is unprecedented. About 1.6 billion passenger journeys are now made every year, twice as many as before privatisation. Secondly, successive Governments have underinvested in the railways for many a long year.

The hon. Gentleman asked about London Bridge station, as did the hon. Member for Lewisham West and Penge (Jim Dowd). That station is 176 years old, and frankly, it has been ignored, although it is one of the busiest pinch points into London. That work is finally being done, so that residents across the south and south-east can transit in and out of London much more effectively.

[Jim Dowd]

I congratulate the Minister on organising a meeting next week with the principal train operating companies running into London Bridge—Southern and Southeastern. Can she confirm that we will also have an opportunity to consider the position regarding London Bridge itself and the colossal debacle that my constituents and many others have had to experience for 10 days now, with little sign of the problems abating?

[Claire Perry]

I agree with the hon. Gentleman; I think that he uses a good adjective. I have visited the station, and my officials have been there. The Secretary of State himself went there during rush hour. We are extremely concerned that the engineering works, which are fantastically overdue, are delivered in a way that does not inconvenience passengers. That gets to the crux of the matter.

This is not a governance problem; it is a failure to work across industry, with passenger benefit front and central. Enormous operational improvements will clearly be delivered by this Government’s unprecedented £38 billion investment in the railways, which is long overdue and will benefit all Members in this room, but it must be delivered by thinking first and foremost about how passengers will use the network and about the benefits for them.

As we saw in the McNulty report published several years ago, the challenge for British railways is to do what we suggested then and join up the objectives of Network Rail and the train operating companies to carry on this unprecedented amount of investment, as we know can be done across the network. I am happy to reassure Members that the Government are committed across the board not only to ensuring operational independence, but, clearly, to delivering better services for passengers in the running of the railways. I am also happy to reassure Members that we remain committed to our huge programme of planned improvements, including the entire rebuild of Rochester station by the end of this year and £120 million of signalling works in east Kent, which I am sure the hon. Member for Rochester and Strood is rising to congratulate the Government on providing.

[Mark Reckless]

I am indeed. I rise to congratulate the Government and Network Rail on the new station in Rochester, which will be fantastic. The Minister talks about working together with the operators. The new station is half a mile or so closer to London, and significant investment has been put into signalling changes. It would be useful to know how many minutes that is likely to knock off train times from Rochester into London. Can Network Rail and Southeastern work together more closely on planning that for the new timetable?

[Claire Perry]

I do not know the answer, but I am happy to find out and write to the hon. Gentleman.

Direct Selling Industry

Tuesday 13th January 2015 Westminster Hall

16:43

[Chris Heaton-Harris (Daventry) (Con)]

It is a pleasure to serve under your chairmanship, Mr Crausby. As you know, my constituency takes the name of Daventry, but it also has a couple of nicknames. Some call it logistics central because of the number of jobs in the logistics sector there; others call it direct selling central, which is extremely relevant to the debate.

My constituency is a hub for the direct selling industry. On my southern doorstep is Avon. Its former boss, Paul Southworth OBE, is one of the most active people in Northamptonshire business politics I have ever met, and until recently he was chairman of the Northamptonshire enterprise partnership. Andy Smith, a constituent of mine, also happens to be the general manager of Amway UK and Ireland, and there a number of big direct selling businesses just down the road in Corby. For example, Cambridge Weight Plan has more than 100 jobs and exports to more than 25 other countries, and Herbalife UK is based in Middlesex, along with dozens of other companies.

I therefore try to keep a watchful eye on what is happening in the direct selling industry. I wanted to take this opportunity to remind the Minister how important the direct selling industry is to the British economy. The industry has an association—the appropriately named Direct Selling Association—and its member companies contribute about £1.6 billion a year to UK GDP. Some 400,000 people work in the industry, making it one of the largest providers of part-time working opportunities nationwide.

The industry is open to everyone. There are absolutely no barriers to entry, which is why so many mums coming back into the jobs market choose to do so by setting up their own direct selling businesses. In fact, stay-at-home mums account for 29% of direct sellers—many are attracted by the flexibility and social aspects of direct selling—and for a 20% increase in numbers between 2012-2013 and now.

If hon. Members will forgive me for being slightly political for one moment, the Opposition regularly talk down part-time job opportunities as not being proper jobs. I see things very differently. I view every part-time job provided as a massive positive. For many, the flexibility of part-time work allows them the opportunity to earn some extra money when it suits them. For some, it facilitates re-entry into the jobs market. As I said before, there are no barriers to entry in direct selling. It does not matter what age or gender people are or what culture they are from; pretty much everyone can succeed in the industry if they put their mind to it.

One need only look at the recent survey by the Direct Selling Association of its 60 member companies, which discovered that 38% of direct sellers are over 50 years old, yet the number of those under 25 entering the market has increased by 29%. It highlights the breadth of people to whom direct selling reaches out and whom it enables to work. The industry has gone from strength to strength: revenue in the sector last year increased by 7%.

That makes the direct selling industry invaluable to UK plc. Think about it: when the Opposition had some issues with how they ran the economy, jobs in some parts of the country were few and far between. Which industry was still recruiting new blood in those areas? The direct selling industry was. Female unemployment rose more than male joblessness after the recession. Given that 79% of direct sellers are women, the continued growth of the industry has been invaluable in aiding women back on to the employment ladder, thus helping our economic recovery. I am sure that the Chancellor would not forgive me if I did not add that such entrepreneurship is key to our long-term economic plan.

In my constituency, the unemployment claimant rate has fallen to just 1.1%, with just 600 people claiming. Youth unemployment has fallen more than 40% since 2010, and long-term unemployment has fallen by nearly half as well. That is all excellent local news for Daventry, but I am aware that not every part of the country is as fortunate as my constituency. However, I do know the direct selling industry is giving those who are harder to place in employment the chance to start their own business, no matter where they are based. Direct selling is like the Heineken of industries, operating in every part of the country no matter what the economic circumstances or social demographic. It is a phenomenal industry that, in my opinion, does not get the credit it deserves from Government or in our national press, which is why I thought this debate was needed.

In the time remaining, I will say a bit about the benefits of self-employment, and specifically about the opportunities in direct selling, including opportunities for female entrepreneurship. With the help and sponsorship of Amway, one of the biggest direct sellers, I have hosted a lunch and an afternoon tea in Parliament on the subject with some of the great and good of politics from the House of Lords, the House of Commons and local government, and business representatives and some amazing female entrepreneurs and their advocates.

Amway is the world’s No. 1 direct selling company, established in 1959, and Amway business owners operate in more than 100 markets around the world. There are more than 40,000 Amway business owners in the UK alone, selling products across a wide range of industries including skin care, cosmetics, hair care and so on. One good example of an Amway business owner is Brenda Wills. She and her daughter Sally Brinner have been working as distributors for Amway for more than 30 years. Sally was introduced to the business by her parents, who started their Amway business together in the mid-80s, and they have worked together in the industry ever since.

Sally’s parents were drawn to the prospect of owning a business that offered independence, flexibility and a chance to earn a living on their own terms. Some 30 years later, Brenda is still working from home and enjoying an income aged 81, and Sally and her own 27-year-old daughter Victoria, who has been an Amway business-owner since the age of 18, are now driving the business forward. That means three generations of the same family are part of this entrepreneurial industry, which sells products globally.

The Direct Selling Association has had a close relationship with my local university, the university of Northampton, for a number of years. Indeed, DSA representatives regularly visit the university to give talks to students about the direct selling industry, including on how to start up their own business. The DSA provides advice on how students can combine a direct selling business with their studies. One benefit of such a business is that it provides students with something concrete and interesting to put on their CV for life after university; it shows that they have held a position of responsibility and gained some experience in a number of areas by running their own business. Of course, it also encourages something that is almost impossible to teach—the wish, or urge, to be an entrepreneur and run a business. That is the direct selling industry’s strongest suit. Direct selling is the first and easiest of all steps on the ladder to becoming an entrepreneur.

The DSA’s experience is that many young people want to run their own business but do not know how to go about it. The direct selling industry provides a safe environment for them to take their first steps as an entrepreneur. Some stay in the industry, while others use it as a stepping stone. When I was researching material for this speech, I asked how many younger direct sellers there are in the UK and was told that there are around 75,000 direct sellers under the age of 25, 75% of whom are women. That is an amazing statistic.

As a Conservative who has set up and run businesses of my own, I hope I know how important self-employment is, but just in case the Government do not get it, let me read out part of an interview conducted last summer with the Minister for Employment, my right hon. Friend the Member for Wirral West (Esther McVey). The headline was: “‘Young people should think about starting their own business instead of university,’ says employment minister.” She said that, for many teenagers, being their own boss would be better than embarking on a career with a large firm, and she wanted to encourage people who had the “seed” of an idea to pursue it, instead of feeling pressured to follow friends or family into taking a degree. She said that the choices made by people to become apprentices or self-employed are

“equal and good and worthwhile”

when compared with those made by people who go to university. I wholeheartedly agree.

As I am sure my hon. Friend the Minister knows, the direct selling industry can help to deliver the opportunities for people to do exactly what our right hon. Friend the Minister for Employment was talking about. As I have already said, one of the industry’s biggest players is Amway and it regularly commissions a study on how different countries view entrepreneurship. The findings of the latest study were fascinating. Denmark is considered to be one of the top countries within the EU for having the most positive attitude towards entrepreneurship. Perhaps an explanation for that is that the Danish Government encourage the teaching of enterprise skills at school from the age of 16. Whether or not that is a good idea is a discussion for another day. However, the study also highlighted that fear of failure was one of the main reasons given by women, young people and pretty much everyone in the UK for not setting up their own businesses. The direct selling industry contains many excellent people who help people such as that—we know from the statistics I mentioned earlier that this group especially includes women—over the hurdles that help to perpetuate that fear.

In conclusion, I wanted this debate to ensure that the direct selling industry is not forgotten by the Minister or his Department when they are deciding policies in future. I also wanted to explain that the industry provides fertile training ground for entrepreneurs, from people who want to provide a little extra for their families to those who aim big and want to employ others themselves. It gives people the chance to make their lives better, to build self-confidence and business confidence, and to succeed. Thus, I would like to receive one simple assurance from the Minister today: that he and his Department recognise and understand the importance of that industry, and will continue to work with it in future to ensure that it continues to play such a positive part in our country’s economic development.

16:54

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

It is a pleasure to serve under your chairmanship, Mr Crausby. I congratulate my hon. Friend the Member for Daventry (Chris Heaton-Harris) on securing this debate on an industry that is not only important to his constituency—although, as he rightly pointed out, it could easily claim to be the centre of direct selling in the UK—but to communities across the whole country.

We in our profession should have a particular affinity with anyone in the direct selling industry, because what are we politicians ourselves other than direct sellers, going—particularly in the next few months—from door to door and trying to persuade people to buy a product from us? We do not do so for profit, but we often have to use many of the same skills and methods as those who succeed in the direct selling industry. We all know that, simple though it sounds, summoning up the persuasive powers and reserves of charm necessary to persuade a sceptical person on the doorstep that they should give us a little time so that they can listen to our message and understand what we are proposing is not the easiest thing in the world.

It is a huge credit to the people engaged in direct selling that they are as successful as they are and that they are able to build sustainable incomes for their families. My hon. Friend told the wonderful story of Brenda, Sally and Victoria, three generations of one family, all of whom—including Brenda, who is now 81 but still active—are direct sellers; I believe it is for Amway, which is obviously the most famous direct selling company in the world.

Those three formidable ladies provide particular lessons for us. The first lesson is that the income is sustainable. Direct selling is not just something that people do perhaps for a year or two at the start of their careers, although it could be that. It can provide a sustainable income and be a business that provides a livelihood for a family—not just for decades, but across generations.

The second lesson is that, as my hon. Friend pointed out, this is an area of business and entrepreneurial activity that is perhaps particularly attractive to young women, especially those trying to combine work and enterprise with bringing up children. That is because it has a key, innate flexibility. A direct selling business is one that they can run from home, devoting whatever hours in whatever days of the week suit them. What matters is their results, not how they achieve them.

That is why it has been so important that the Government have been focused, and remain focused, on making it easier for people to set up and run businesses from their homes. Of course, not all businesses run from homes are direct selling businesses, but a great number of them are. Previously, there were some pettifogging bureaucratic rules that made it harder for people to set up and run businesses from home—rules on tenancy agreements, meaning that people required a specific change to them, with the agreement of their landlord, before they could set up a business to run from home. We have changed the law so that landlords can agree to home business use without in any way affecting or undermining their residential tenancy agreement.

In addition, there were rules relating to business rates and planning conditions that also militated against people setting up businesses to run from home. Consequently, we have made sure that, in the majority of circumstances, home-based businesses will not attract business rates. We have published revised business rates guidance to clarify that point. That is important, because if someone is setting up a home business they probably do not have a great deal of capital to set it up; perhaps one of the attractions of the direct selling industry is that it does not require a huge amount of start-up capital. However, if they face the prospect of being charged business rates instead of council tax, that could be very off-putting. The change that we have made will help to make the prospect of setting up a home-based business more attractive to people.

Finally, we have published a guide for anyone who wants to set up a home-based business, so that they can find in one place all the information they need to ensure that they are acting properly within the law and to understand what support they get from Government as start-up businesses, as well as what opportunities there are for start-up loans and other financial support from the British Business Bank.

We believe, as a Government, that we have a good record of supporting anybody who wants to set up a business—particularly a business from home. I am sure that that record has played a role in the substantial increase in home-based businesses. The number of home businesses has increased to 2.9 million, a 500,000 increase since 2010. That increase is enabling people who previously either did not have any work or had a job that was not satisfying to them and was incompatible with their other responsibilities to take charge of their lives and provide for their families in a way that suits them.

My hon. Friend made an important point in saying that this way of working enables people to have independence and to run their lives in a way that suits them and their families. It can also suit their broader responsibilities, providing them with an opportunity to develop a business and earn an income that is flexible and fits with the pattern of their lives. I am happy to give my hon. Friend an assurance that we will continue to take into account home-based businesses—particularly direct selling businesses—in the formulation of policy.

My hon. Friend mentioned an interesting study of attitudes towards home-based businesses and direct selling businesses in different countries. He singled out Denmark as a place where attitudes were most positive. He conjectured that that might be a result of the fact that Denmark requires every young person to be offered enterprise education from the age of 16.

I hope that my hon. Friend welcomes—I am sure that he does—the work by the noble Lord Young, who has held a central and distinguished position in a series of Conservative Governments going back over many decades and who is passionate about enterprise education. Lord Young recently produced a report for the Prime Minister called “Enterprise for all”. He proposes specifically to establish a network of enterprise advisers—current or former executives with local businesses—attached to schools, whose job it would be to co-ordinate bringing people into schools who could inspire young people with the possibilities of enterprise and of setting up their own businesses.

That policy is welcome and has now been given over to the new careers company that Christine Hodgson is setting up and leading, to which the Government are committing £20 million. We hope that within a couple of years we will have a network of enterprise advisers across the country and that every school will have somebody with real business experience, embedded and implanted in the local business community, who can bring into schools speakers, programmes and work experience offers that will enable young people who think they might be interested in setting up a business to get some experience and talk to people who have done it.

I say to my hon. Friend’s constituents who are senior executives in the direct selling businesses, and to individuals running direct selling businesses and members of the Direct Selling Association, that they could make contact with their old school, go back as alumni and talk to young people about what direct selling and setting up their own business from home has done for their lives. They could say how it has enabled them to fulfil their dreams and establish financial independence for their families. That would be as powerful a message as any.

I thank my hon. Friend for bringing this subject to the attention of the House. It is certainly one that the Department for Business, Innovation and Skills is focused on.

Question put and agreed to.

17:04

Sitting adjourned.

Written Statements

Tuesday 13th January 2015 Written Statements

Tuesday 13 January 2015

Equipment Plan and Major Projects Report

Tuesday 13th January 2015 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

I am today placing in the Library of the House the third annual summary of the Defence equipment plan. The equipment plan represents the position at the end of March 2014 and sets out our plans to spend around £163 billion on new equipment and equipment support over the next 10 years. For the third successive year, this plan is realistic and affordable over the whole of the decade. It includes a central contingency provision of £4.6 billion over and above the provisions for risk within individual project budgets, and around £8 billion of additional headroom in the later years of the decade. Together these provide flexibility to address any cost growth within the core equipment plan while allowing us to fund, incrementally and flexibly, a number of additional programmes that are a high priority for Defence, as soon as we can be sure that they are affordable.

Today, the National Audit Office (NAO) will publish its third assessment of the affordability of the Ministry of Defence (MOD) equipment plan, which this year has been merged into one document with the MOD’s Major Projects Report for the first time. The report recognises the progress we are continuing to make, including the relative stability of forecast project costs, as well as highlighting areas where we must continue to improve and refine our processes.

Of the 11 projects within the MPR sample of 17 projects that have passed the main investment decision point, we have delivered 99% of requirements, the forecast cost of the projects has reduced by £397 million and the in-service dates have had a small increase of 14 months. This is the MOD’s best cost performance since 2005 and the best time performance since at least 2001, with delivery of military requirements routinely good over the period.

[HCWS184]

Nuclear Decommissioning Agency

Tuesday 13th January 2015 Written Statements

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

I would like to inform the House that the Nuclear Decommissioning Authority (NDA) is today announcing a change to its commercial model at Sellafield, its largest and most complex site.

The Government closely monitor the work of the Nuclear Decommissioning Authority (NDA) and its contractors. Our goal is to ensure that the nuclear legacy is made safe, decommissioned and cleaned up, and in a way that best delivers value for money.

The Government agreed last year with the Public Accounts Committee’s conclusion that it was a priority to consider what contractual model might best deliver improved performance and value for money at Sellafield. In the meantime, we endorsed the Nuclear Decommissioning Authority’s decision to roll the current parent body organisation (PBO) contract forward into the second term (from 1 April 2014) to ensure that the progress made in the first five year term could be built upon. Sellafield Ltd (the site licence company which operates the site under the ownership of the PBO) continues to make progress and is currently on track to deliver against its key performance measures and milestones in 2014/15.

Despite this progress, the NDA has concluded that a change in model is now the best way forward. The current arrangements brought stability to the site from 2009, have allowed for effective planning and delivered important progress on key projects in the last six years. However, it is now clear that Sellafield’s complexity and technical uncertainties present significantly greater challenges than other NDA sites, and it is therefore less well suited to the transfer of full site-wide responsibility to the private sector via a PBO structure.

Under the new arrangement, Sellafield Ltd will become a subsidiary of the NDA and will continue to be led by a world class team, who will be appointed and governed by a newly constituted board of the site licence company. Engagement with the supply chain at all levels remains central to this new approach. The new model will, in due course, see a strategic partner appointed by Sellafield Ltd, to strengthen the programme management and commercial capability at the site as well as playing a key role in managing capital projects and contracts. This approach is recognised as best practice in other major projects, such as Crossrail and the Olympics.

NDA and Sellafield Ltd will manage the transition to the new arrangements, expected to take around 15 months to complete, in close co-operation with workforce representatives, Nuclear Management Partners (NMP), the supply chain, the regulators and the local community. The continued safe and secure operation of the Sellafield site will remain the over-riding focus during the transition and under the new structure.

We recognise the achievements of the site in the last six years and thank NMP for their support in stewarding Sellafield through a crucial phase of delivery and planning. We anticipate their constructive and supportive position on this change.

[HCWS183]