House of Commons

Wednesday 14th January 2015 Commons Chamber

Wednesday 14 January 2015

The House met at half-past Eleven o’clock

Prayers

Wednesday 14th January 2015 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 14th January 2015 Commons Chamber

The Secretary of State was asked—

[Sheila Gilmore (Edinburgh East) (Lab)]

1. If he will make it his policy that responsibility for licensing shale gas extraction should be devolved to the Scottish Parliament.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

That is already Government policy. As the hon. Lady will be aware, the Smith commission heads of agreement stated that the licensing of onshore oil and gas extraction should be devolved to the Scottish Parliament. The Government are committed to publishing draft clauses in that respect by 25 January.

[Sheila Gilmore]

I very much welcome the Secretary of State’s commitment to that part of the Smith agreement, to which my party is also committed, not least because it will put an end to the attempts by some people to suggest that without the devolution of licensing, the Scottish Government are powerless to stop fracking if they want to. They already have powers over planning and regulation, but I hope that this change will close that argument down, to everybody’s benefit.

[Mr Carmichael]

The hon. Lady is right to say that the Scottish Government have planning and environmental regulation powers that would enable them to block any fracking project they wanted to block. It is sensible, in the circumstances, that they should be given responsibility for the licensing of such activities as well. That will be done as part of the Smith process.

[Angus Robertson (Moray) (SNP)]

The Scottish Government and the Scottish National party have been pressing for the devolution of all powers over fracking for some time. Why have the UK Government ruled out devolving power over fracking licences until after the general election?

[Mr Carmichael]

That is part of the timetable to which we are all committed. Until I heard the Deputy First Minister speak at the National museum, I had thought that the hon. Gentleman’s party was committed to it as well. We are proceeding with that speedy and tight process. I will publish the draft clauses before 25 August—sorry, I mean 25 January, which is, incidentally, before 25 August. With 25 January being a Sunday, we might even meet the deadline with a few days to spare.

[Angus Robertson]

Until now, the UK Government’s position has been to remove the right of Scottish householders to object to unconventional gas or oil drilling underneath their homes. What will the position be between now and the full devolution of powers over fracking? Will the Department of Energy and Climate Change give an undertaking that it will not issue any fresh licences?

[Mr Carmichael]

The position will be as it is at the moment, which is that if there is any fracking project in Scotland, the hon. Gentleman’s colleagues in the Scottish Government will have the power, using planning or environmental regulations, to block it. They should not seek to push the blame on to anyone else.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

11. I welcome what the Secretary of State has said. Recently, I wrote to the Minister for Business, Energy and Tourism in the Scottish Government to ask whether it was their policy to block such developments. He wrote back to say that he endorsed the principle of robust regulation, but gave no answer on what their policy was. Will the Secretary of State enlighten us as to whether he has heard anything from the Scottish Government on this matter?

[Mr Carmichael]

No, I am afraid that I cannot assist the hon. Lady in that regard. All I can do is point to the fact that the Scottish Government seem to be desperate to speak about the powers that are held by others, rather than about the way in which they will exercise the powers that they already have. Her constituents and others will doubtless draw their own conclusions.

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

The Secretary of State will be aware that, following the amendments that I moved in the Committee stage of the Infrastructure Bill yesterday, there has been movement from the Government, which we should all welcome. Will he help the House by clarifying the fact that having a licence does not enable somebody to undertake any extraction or exploration activity? It has been suggested that it does, but that is absolutely not the case.

[Mr Carmichael]

I pay tribute to the hon. Gentleman for his efforts on this matter and, in particular, for tabling his amendments. As was made clear to him yesterday in Committee, the Government will return to the matter on Report. We will table an amendment that we believe will achieve the same end, which is the carving out of Scotland from those provisions in the Infrastructure Bill. He is absolutely right that licensing is just one element—it provides no overall entitlement. For fracking to go ahead, the Scottish Government have to give consent on planning and environmental grounds.

[Margaret Curran (Glasgow East) (Lab)]

Labour recently called for immediate devolution in this area, and we welcome the Government’s response, which as the Secretary of State has said is part of the ongoing commitment to the Smith agreement. Where appropriate, the Government should move immediately to devolve the powers agreed by the Smith commission.

Today, the leaders of Scotland’s three largest cities, home to a quarter of Scotland’s population, have joined us in calling for job-creating powers to be devolved too. Will the Secretary of State bring forward a section 106 order so that those powers can go to Scotland as soon as possible and we can start the work to reverse the failure of this Government’s Work programme?

[Mr Carmichael]

The hon. Lady and I discussed a section 106 order when we met recently, but I have to tell her that the route that she has identified—a section 106 order followed by a section 63 order—is not, in our view, the appropriate one to honour the commitments in the Smith programme. That would devolve competence to the Government in Scotland, not the Parliament, which would need a section 30 order. I just do not see how we will achieve that end in the time available to us in this Parliament, but we are determined that where there is a need for joint working between the two Governments to achieve a better transfer of power, my right hon. Friend the Under-Secretary and I will be engaged in that process.

[Ann McKechin (Glasgow North) (Lab)]

2. What change there has been in the level of child poverty in Scotland since 2010; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

Estimates of the number and proportion of children in relative low income are published in the National Statistics households below average income series. Those estimates are available for each financial year up to 2012-13, and they show that since 2010 the number and percentage of children in relative low income in Scotland have remained at 200,000 and 17% respectively.

[Ann McKechin]

It is incredible how complacent the Government are about the fact that child poverty in Scotland is increasing. According to the Institute for Fiscal Studies, it is set to increase by a further 100,000 by 2020 if the current Government’s policies are followed. Is it not about time that both the UK and Scottish Governments, who seem to be relaxed about that increase in poverty, got together and worked out how we can effectively use policy on distribution so that the poorest can benefit?

[David Mundell]

I am somewhat surprised at the hon. Lady taking the nationalist line on the IFS figures. I completely reject those figures about prospective increases in child poverty in Scotland. This Government are not complacent, but what our policies have achieved are a reduction in unemployment, an increase in employment and wage increases outstripping inflation. Work is the best way out of poverty, and that is what this Government’s policy is.

[Mark Menzies (Fylde) (Con)]

Does the Minister agree that with the number of workless households at its lowest level for a generation across the UK as a whole, the best way to help tackle child poverty is to get people back into work?

[David Mundell]

My hon. Friend is absolutely right, and a key figure that demonstrates our ability to deal with the issue is the record number of women in work in Scotland. I would have thought that politicians in all parts of the House would welcome that.

[Katy Clark (North Ayrshire and Arran) (Lab)]

The Child Poverty Action Group says that more than one in five children in Scotland are living in poverty, which is far higher than in many other European countries, and that the number is increasing as the days pass. Can the Minister explain why child poverty is continuing to increase under his Government?

[David Mundell]

I do not accept the premise of an increase. The Scottish Government’s most recent report stated that we should not take a snapshot and should instead look at indications over a longer period. I agree with the hon. Member for Glasgow East (Margaret Curran) on one point, however: we have to see closer working together by the United Kingdom Government, the Scottish Government, local authorities and the third sector. That is the best way to achieve a reduction in child poverty.

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

3. What assessment he has made of the potential effect on businesses in Scotland of the removal of the requirement for employers to pay national insurance contributions in respect of employees under the age of 21 and apprentices under the age of 25.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

Abolishing employer national insurance contributions for under-21s is expected to help Scottish businesses save £45 million and support jobs for 138,000 young people. Extending that to apprentices under 25 will help about 31,000 apprentices in Scotland, and it will be more than £1,000 a year cheaper to employ an apprentice earning £16,000.

[Dame Angela Watkinson]

Is it correct that the employment level in Scotland rose to a record level in the last financial quarter—even higher than the UK average? Does that not demonstrate that the Government’s long-term economic plan is working across the United Kingdom and especially in Scotland?

[Mr Carmichael]

Indeed, my hon. Friend is absolutely right, and that is especially true in areas that are hardest to move, such as youth unemployment, which is down by 5.1% over the past 12 months. Of course it is still too high and of course there is still a great deal to do, but those figures and the ones that she has just mentioned demonstrate that the Government’s plan is right, that it is working and that we should not put it at risk by handing power to those who would just borrow, spend and play games for political ends.

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

When my right hon. Friend next travels down the A9, may I commend to him a stop in Brora to visit Highland Bespoke Furniture? It now employs six people as a direct result of the reduction in national insurance that has helped it to recruit further skilled work. Will the Government consider extending the scheme to workers over 25 who are coming back to work, as that would help further to expand that business and employment in that area?

[Mr Carmichael]

I thank my right hon. Friend for that question. I look forward to joining him in the not-too-distant future, and if Brora is a place in his constituency that he thinks I should see, I will be more than happy to go there with him. He is right to mention the opportunities that have been created as a result of this measure, and businesses the length and breadth of Scotland will tell a story similar to the one he has just related. On his proposal to extend the scheme, he will be aware that a Budget is coming up in March, and he or any hon. Member from across the House who wants to make representations can do so through the Scotland Office.

[Mr Mike Weir (Angus) (SNP)]

4. What steps the Government are taking to maintain existing Scottish rail services on and connected to the east coast main line.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

The new deal the Government have signed for the east coast main line franchise with Virgin and Stagecoach will provide new services, new state-of-the-art trains with more capacity, and reductions in journey times.

[Mr Weir]

I thank the Minister for that answer. He will know that the east coast main line is an important link through my constituency, but it has been reported that the new franchisee intends to drop one station south of Edinburgh from the line, raising fears that other stations may be dropped from the new service. Will he give an absolute assurance that, after the change of franchisee, services on the east coast main line will continue to stop at all the stations currently used?

[David Mundell]

I hoped that the hon. Gentleman and his colleagues would welcome the new franchise with its services to Falkirk and Stirling. There is no suggestion that there will be any reduction in services, but I am happy to make further inquiries for him on that point.

[Sir Malcolm Bruce (Gordon) (LD)]

Will the Minister acknowledge that to increase the reliability, speed and efficiency of the service between Edinburgh and Aberdeen on the east coast main line, we need an upgrade of that line, not least the ending of the single track south of Montrose? What steps can he and/or the Scottish Government, or the two together, take to ensure that investment?

[David Mundell]

My right hon. Friend will be aware that we actively engage in discussions with the Scottish Government on important strategic transport projects that impact the whole United Kingdom, such as the Forth crossing. I am sure that colleagues in the Scottish Government will have heard his points, and I will certainly raise them further with them.

[Fiona O'Donnell (East Lothian) (Lab)]

The Minister said that my constituents can have confidence that there will be no reduction in the service on the east coast main line, but can he explain why the Minister at the Department for Transport who has responsibility for rail franchises said that the service at Dunbar was to be reduced?

[David Mundell]

I think the hon. Lady was not listening to my previous answer. I undertook, on behalf of the hon. Member for Angus (Mr Weir), to investigate what has been said previously about the rail link north of Edinburgh, and I will also take up her point.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

It is important that the train services that are meant to run actually do so. The Minister will know that services on the east coast main line were severely disrupted on 27 December and two days later as well. Will he meet colleagues to try to ensure that when there are disruptions on the line—they were no fault of East Coast, by the way—they are dealt with more effectively, passengers are given real alternative information, and the system is made more resilient to such disruption?

[David Mundell]

As a Member who represents a significant stop on the west coast main line at Lockerbie, I share the hon. Gentleman’s concerns about such disruption. I would be happy to meet him and any other colleagues who share those concerns.

[Mr Alan Reid (Argyll and Bute) (LD)]

5. What assessment he has made of the adequacy of provision of broadband and mobile phone coverage in rural Scotland.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

The Government’s superfast broadband rollout programme has provided over £120 million to the Scottish Government to improve broadband services. More than 160,000 additional Scottish homes and businesses now have access to broadband as a result. The Government have recently achieved a deal with the mobile network operators that will reduce complete not spots in Scotland by about two thirds, and partial not spots by one half.

[Mr Reid]

I very much welcome that investment, but the money to bring superfast broadband to my constituency was handed over to the Scottish Government, who are supposed to be organising the delivery work. However, many of my constituents complain to me that neither the Scottish Government nor BT are able to tell them when, or even if, they will benefit from this project. Will my right hon. Friend please get on to the Scottish Government and tell them to publish a clear timetable for the delivery of this important work?

[Mr Carmichael]

Unfortunately, this is a tale I hear as I travel around Scotland, especially in the highlands and islands. The communities my hon. Friend is talking to—I am sure he represents many of them—are not unreasonable, but they do want to know what to expect, so that they can plan for their services and their businesses. One would not think that it was that difficult.

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

Mobile coverage is an important social utility, as we have seen quite recently. Because of storms and lightning, BT lines have been down for weeks in parts of Lewis and Harris. Special thanks are due to BT and hydro engineers, who have been working hard in very bad weather to repair utilities. What are the right hon. Gentleman’s Government doing to ensure that island and rural areas are not left behind with 90% 4G telephone coverage, especially considering that 2G and 3G have been bad and that, with its high data speeds, 4G coverage is an excellent system for accessing broadband?

[Mr Carmichael]

May I first join the hon. Gentleman in paying tribute to the hydro engineers and telecoms engineers, who are working throughout the highlands and islands even as we speak? They provide an excellent service to our local communities and we should place on record our gratitude towards them. They work in very difficult circumstances.

On 4G coverage, the hon. Gentleman will no doubt be aware of the deal my right hon. Friend the Secretary of State for Culture, Media and Sport made recently with mobile network operators. That offers the opportunity for greater coverage of 3G and 4G. We will need to see, when they come forward with the actual proposals, what that will mean for our communities, but I can assure him that I am keeping an eye on it.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

In echoing and endorsing entirely the points made by my immediate highland constituency neighbour, my hon. Friend the Member for Argyll and Bute (Mr Reid), may I encourage the Secretary of State to stress to the Scottish Government the need in particular to draw BT’s attention to Openreach? It is ironically entitled, as constituents and consumers cannot reach it openly and cannot contact it directly, which is why they cannot get an answer to the legitimate question: when is last year’s £10 million investment of UK Government money actually going to meet their needs and be delivered?

[Mr Carmichael]

It is clear, beyond any doubt, that a substantial amount of money is going in from this Government, the Scottish Government, local authorities and European funds to this most important area of economic development. Responsibility for delivery, at the end of that money, rests with the Scottish Government. I take it, from the comments of my right hon. Friend and others in the House, that the Scottish Government need to be telling our communities more.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

Someone once said:

“We have got to stop thinking of broadband and other connectivity issues as being some sort of luxury. It is as important to the future sustainability of our communities as having a supply of water or electricity.”

Does the Secretary of State still agree with his own words? If so, can he tell communities in Ochil and South Perthshire and elsewhere in Scotland why, when we have running water and electricity, we still do not have superfast broadband?

[Mr Carmichael]

I absolutely stand by my own words. I recognised them as soon as the hon. Gentleman started to quote them. It is a view that I still hold and it is why this Government have made a substantial investment. If he has particular cases relating to delivery, which unfortunately we have passed to the Scottish Government, I am more than happy to help him in any way I can.

[Pamela Nash (Airdrie and Shotts) (Lab)]

6. What discussions he has had with his ministerial colleagues on job losses in Scotland resulting from City Link entering administration.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

It was deeply regrettable that City Link went into administration over the festive period, particularly for its employees and contractors. My right hon. Friend the Business Secretary spoke regularly with the unions to discuss the situation, and our focus now is on supporting those made redundant. The Department for Work and Pensions has been liaising with its counterparts in the Partnership Action for Continuing Employment service to ensure that support is available to those made redundant in Scotland.

[Pamela Nash]

Many people lost their jobs at City Link’s Eurocentral depot in my constituency. I have been struck by the fact that not only direct employees but many so-called self-employed subcontractors lost their jobs. In reality, the latter were solely employed by City Link and had worked there for decades. They have been left not just without redundancy payments but with tens of thousands of pounds of debt. What are the Government doing to ensure that bogus self-employment is tackled and that this never happens again?

[David Mundell]

As the hon. Lady will be aware, the administrators will provide a report to the Insolvency Service on what happened at City Link during the period immediately before the redundancies and administration were announced, and we will obviously reflect on that. I take on board her point about self-employed contractors, and I will raise that directly with DWP colleagues.

[Margaret Curran (Glasgow East) (Lab)]

When I met workers from City Link this week, they told me they found out from the media on Christmas eve that their company was closing, and the redundancies were confirmed on Hogmanay. This is an appalling situation, and no worker should be treated in such a way. It is too late for those workers, but will the Minister ensure that his Government conduct a full and proper inquiry into the circumstances that led to the failure at City Link, so that workers can never be treated in that way again?

[David Mundell]

As the hon. Lady will have heard me say, the administrators will provide a report to the Insolvency Service. The Government have demonstrated, in their action over Comet, that if such a report highlights practices that should be investigated, they will be.

[Lorraine Fullbrook (South Ribble) (Con)]

7. What the next steps are for implementation of the Smith commission proposals.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

The Prime Minister and the Deputy Prime Minister have made it clear that the Government are committed to delivering draft clauses by 25 January.

[Lorraine Fullbrook]

Following the Prime Minister’s meeting with the new First Minister, does the Secretary of State expect full support from the Scottish Government in ensuring a speedy delivery of the proposals in the draft Bill?

[Mr Carmichael]

I have learned over the years not to expect too much when working with the Scottish Government, but I am hopeful that that will be the case. One way or the other, however, we shall deliver on the undertakings that were given.

[Mr Iain McKenzie (Inverclyde) (Lab)]

12. The Smith commission agreement contained a strong desire to see devolution extend to local government. Will the Secretary of State impress upon the SNP Government the need to embrace that desire, release their iron grip on power and devolve to local government?

[Mr Carmichael]

Indeed. This is something we hear from communities across the country in Scotland. Power in Scotland has been sucked up, particularly from local councils, and exercised at the centre by the Scottish Government. That was not how devolution was ever intended to work, and they need to change their approach.

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

The Smith commission is not the only example of parties working together. Yesterday, we saw a fantastic example, when Scottish Labour walked through the Lobby with the Conservatives to support Conservative austerity. Does the Secretary of State envisage any other such “better together” moments coming before the next general election?

[Mr Carmichael]

The only remarkable thing about that is that it tells us absolutely nothing about what the SNP would do to tackle the deficit, if—heaven help us—they were ever in a position to influence it.

[Mike Crockart (Edinburgh West) (LD)]

8. What discussions he has had with the Minister for culture, communications and creative industries on how effectively the Government are protecting vulnerable consumers in Scotland from nuisance calls.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

I commend my hon. Friend on his work in recent years on this serious issue. Tackling this problem is a priority for the Department for Culture, Media and Sport, and I understand that the Minister with responsibility for culture, communications and creative industries will meet him later today to discuss the matter.

[Mike Crockart]

Over the last two years, trials run by councils and trading standards officers have installed call blockers in the homes of 400 older and vulnerable Scots, blocking more than 100,000 nuisance calls, improving their quality of life and protecting them from becoming the victims of scams. Does the Minister agree that the time for pilots is over, as the technology is proven, and that we need to establish a national scheme to protect 300,000 Scots rather than just 300?

[David Mundell]

I agree with my hon. Friend that this is an important issue. The pilots have been necessary to test the technology involved. I am sure he will be able to make that very point to the Minister from the Department for Culture, Media and Sport when he meets him later today.

The Prime Minister was asked—

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

Q1. If he will list his official engagements for Wednesday 14 January.

[The Prime Minister (Mr David Cameron)]

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.

[Gregg McClymont]

Given the damaging uncertainty over future investment in jobs that the Prime Minister’s EU renegotiation strategy is creating in the business community, will the Prime Minister today give a guarantee that he will not support an out vote in any future in/out EU referendum?

[The Prime Minister]

Since I made the announcement that there should be an in/out referendum on Europe, the investment coming into Britain has gone up. There are regularly times when Britain is getting more inward investment than the rest of Europe put together.

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

I am sure the whole House will want to honour the bravery of NHS Ebola volunteers and welcome the news that Nurse Pauline Cafferkey is off the critical list. As the Oxford vaccine group moves to the next stage of its Ebola trial, will the Prime Minister congratulate it on its outstanding work so far and offer all possible support in the race to develop this vital vaccine?

[The Prime Minister]

My hon. Friend is absolutely right to raise this issue. I am sure everyone is thinking of Pauline Cafferkey. It is very good news that she is out of critical care, but there is still a long way to go. What my hon. Friend says about developing a vaccine is vital. The Minister for Government Policy and Chancellor of the Duchy of Lancaster is leading the work on this, ensuring that we do everything to cut through some of the bureaucracy that would otherwise be in place, so that we can develop a vaccine fast.

[Edward Miliband (Doncaster North) (Lab)]

The whole country, across all faiths and communities, felt a sense of solidarity with the people of France following last week’s dreadful attacks. Those who seek to terrorise and divide us should be in no doubt: they will fail. This House of Commons has sent a clear signal on this issue: we are united.

Turning to the actions that need to be taken, does the Prime Minister agree with me that a key objective of our counter-terrorism efforts must be to prevent young people from being drawn into violent extremism in the first place? Does he also agree that the programme designed to tackle the problem, Prevent, needs to be expanded so that it supports, in particular, community-led action and is given the priority it deserves?

[The Prime Minister]

Let me agree with the right hon. Gentleman about how important it is to stand together in favour of free speech, freedom of expression, the rule of law and democracy—the values that we hold dear. I think the demonstration in Paris and the outpouring we have seen both here and around the world against these horrific attacks shows that those values will not be defeated.

On what the right hon. Gentleman says about what must be done, we have to prepare for any attack that could take place. That means making sure that we fund our counter-terrorism policing properly, as we do. It means reaching out to potentially vulnerable groups of people—for instance, I met the Jewish Leadership Council yesterday. But as the right hon. Gentleman says, it also means confronting the poisonous narrative of Islamist extremism. That is what we are doing through putting a duty on every public organisation to confront extremism wherever they find it, whether that is in universities, schools, on campuses, in prisons or elsewhere. That is what the Prevent programme, which we are expanding, is all about.

[Edward Miliband]

Let me associate myself with what the Prime Minister said, and particularly what he said about anti-Semitism and prejudice wherever we find it. On the point about British citizens who travel to Syria to participate in the conflict, does he agree that, with more than half of them having returned, we need to do more? In particular, does he agree that we need a much more rigorous approach, including compulsory engagement with de-radicalisation programmes to turn people away from violent extremism?

[The Prime Minister]

I think it right for us to we do everything we can to stop people travelling to Syria to take part in these activities, and that is what the Counter-Terrorism and Security Bill—which is going through the House of Lords right now—is intended to do; but also, as the right hon. Gentleman says, people coming back to this country should be looked at on a case-by-case basis, and in every case consideration should be given to whether they would benefit from a counter-radicalisation programme.

As for the Prevent programme, it was reviewed by Lord Carlile in 2011, and he said of that existing programme:

“there have been cases where groups whom we would now consider to support an extremist ideology have received funding.”

That is why we changed Prevent. We are now expanding the programme, and, as the right hon. Gentleman says, we need to ensure that everyone who would benefit from counter-radicalisation gets it.

Let me make one final point, in, I hope, a spirit of friendliness across the House. One or two people, referring to our current situation, have said that this is something of a zombie Parliament. Let me point out that the Counter-Terrorism and Security Bill, which is absolutely vital to the defeating of terrorism, is being discussed and debated in the Houses of Parliament right now.

[Edward Miliband]

I am glad that we can work across parties on that issue, and we will endeavour to continue to do so. Let me now turn to an issue on which there is less agreement. In May 2010, speaking about the television debates, a party leader said:

“it would have been feeble to find some excuse to back out so I thought we’ve got to stick at this, we’ve got to do it.”

Will the Prime Minister remind us of who said that?

[The Prime Minister]

I am all for these debates taking place, but you cannot have—[Interruption.]

[Mr Speaker]

Order. The question has been asked, and the answer must be heard.

[The Prime Minister]

I am all for these debates, but you cannot have two minor parties without the third minor party. So I put the question to the right hon. Gentleman: why is he so frightened of debating with the Green party?

[Edward Miliband]

I will debate with anyone whom the broadcasters invite, but the man who said that it would be feeble to back out of the debates was the Prime Minister. Now, we all understand that as long ago as last Thursday his abiding passion was to give the Green party a platform, but it is frankly a pathetic excuse. [Interruption.] It is not for him, it is not for me, it is not for any party leader to decide who is in the debate. It is up to the broadcasters. That is the country that we live in. Is the Prime Minister really telling the people of Britain that he will seek to deny them the television debates if he does not get to choose who is in them?

[The Prime Minister]

We had a set of European elections last year, and UKIP and the Greens both beat the Liberal Democrats, I am afraid to say. It is very simple. You either have both of them, or you have none of them. So let me ask the right hon. Gentleman again: why is he so chicken when it comes to the Greens?

[Edward Miliband]

There is only one person who is running scared of these debates, and that is this Prime Minister. When he says that he does not want to take part because of the Greens, no one, but no one, believes him—not the people behind him, not the person next to him, not the country. However he dresses it up, everyone knows that he is running scared. These debates do not belong to me, and they do not belong to him. They belong to the British people. What does he think gives him the right to run away from these debates?

[The Prime Minister]

There are two credible sets of debates. You can either have a debate with all the national parties who appear in the House, or you can have a debate between two people, one of whom will become Prime Minister—or you can have both. Those are the credible debates. So I ask the right hon. Gentleman again: when he looks at the Green party, why is he so scared?

[Edward Miliband]

I will debate with anyone whom the broadcasters invite to debate. I think the Prime Minister doth protest too much. He has run out of excuses, he is running scared of these debates, and, in the words of his heroine Lady Thatcher, he is frit.

[The Prime Minister]

Is it not interesting, Mr Speaker? With just 10 of these sessions to go, the right hon. Gentleman wants to debate having a debate. He cannot talk about unemployment, because it is coming down; he cannot talk about growth in the economy, because it is going up; he cannot talk about his energy price freeze, because it has turned him into a total joke. I have to say to him that the more time he and I can spend in the television studio and on television, the happier I shall be. But please, if he has any more questions left, will he ask a serious one?

[Sir Roger Gale (North Thanet) (Con)]

The former Prime Minister Mr Blair had to be summoned to the Northern Ireland Affairs Committee yesterday to reluctantly give evidence. We now understand that the director-general of the BBC, Lord Hall, is refusing to give evidence to another Select Committee on the grounds that he is a Member of Parliament. He is also a paid public servant. Is it not time that we reviewed the matter of parliamentary privilege in this place?

[The Prime Minister]

I will look very carefully at what my hon. Friend says. Obviously it is a matter for the Select Committee and the House, but the general rule should be that people involved in the senior management of the BBC who are summoned to appear in front of a Select Committee should come, because the BBC needs to be, and is, publicly accountable. I think Lord Hall does a very good job at the BBC, and I am sure he would give a good account of himself, but I will have a careful look at what my hon. Friend says.

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

Q2. At the Liaison Committee meeting on 16 December the Prime Minister promised to look into the full publication of the extensively redacted DEFRA report on shale gas rural economy impacts. Has he looked into this, and is he now going to insist on full and unredacted publication?

[The Prime Minister]

I did look into the issue, and I do not want to give the hon. Gentleman an inaccurate answer so I will go and check on the action taken after that meeting and see what I can tell him.

[Michael Fabricant (Lichfield) (Con)]

Q3. In a speech last week the director general of MI5 identified a number of important gaps in its surveillance which need to be addressed in law. Some have called that a breach of civil liberties, and others have said that it is just another snoopers charter, but does the Prime Minister agree that public safety must come above everything else and that civil liberty must include not being bombed, shot or beheaded by some deranged jihadist?

[The Prime Minister]

I agree with my hon. Friend that the first duty of every Government is to keep the country safe. We certainly do not do that by trashing our own civil liberties and traditions. When it comes to this vital issue of being able to have proper surveillance of the communications of potential terrorists, up until now this Parliament and British Governments have taken a very clear view: whether it has been about looking at letters, or about fixed telephone communications or mobile communications, we have always believed that, in extremis, on the production of a signed warrant from the Home Secretary, it should be possible to look at someone’s communications to try and stop a terrorist outrage. The decision we have to take is: are we prepared to allow in future, as technology develops, safe spaces for terrorists to communicate? The principle I think we should adopt is that we are not content for that to happen, and as a result we should look to legislate accordingly.

[Mr Tom Harris (Glasgow South) (Lab)]

Raif Badawi faces 1,000 lashes and 10 years in prison because he wrote some articles with which his Government disagreed. Will the Prime Minister join me in condemning the barbaric and mediaeval regime of Saudi Arabia, and does he believe that our international alliances should be founded more on human rights and less on economic muscle?

[The Prime Minister]

We do not approve of these sorts of punishments, and we always raise these cases in the strongest possible way when British citizens are involved, and I know we will on this occasion, too.

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

Q4. Unemployment down 44%, youth unemployment down 45%, long-term unemployment down 44%, business start-ups up 31% and 800 apprenticeship starts—all in the last year in South Basildon and East Thurrock. What does my right hon. Friend think that says about our long-term economic plan?

[The Prime Minister]

I am delighted at the news that my hon. Friend brings. It is remarkable how in almost every constituency in this House the number of people claiming unemployment benefit is down and the number of young people claiming benefit is down. There are 224,000—almost a quarter of a million—more people in work in the east of England as a whole. Those are statistics, but every one of those statistics is about someone who is going out and earning a wage, supporting their family and managing to achieve a better standard of living. That is what we must continue with, and that is why we must stick to the long-term economic plan.

[Nic Dakin (Scunthorpe) (Lab)]

Q5. Eliminating the deficit, net migration down to tens of thousands, no VAT rise, no top-down reorganisation of the NHS —why did the Prime Minister make these promises and why did he break them?

[The Prime Minister]

We said we would get the deficit down and the deficit is down by half as a share of our national economy, from the disgraceful situation left by Labour. I thought the hon. Gentleman would take the opportunity to talk about the vital steel interests in his constituency, which we will be talking about later today. We are working as hard as we can to make sure we keep steel production growing in our country, but as the hon. Gentleman has introduced a political element, so might I. Under this Government steel production is up, whereas it was down under Labour. Under this Government employment in the steel industry is up, whereas it was down under Labour. Why is that? Because we have a car industry that is growing, an aerospace industry that is growing, and construction is growing. We are getting Britain back to work.

[Mr John Whittingdale (Maldon) (Con)]

Q6. Is my right hon. Friend aware that in the past 12 months, more than 60 journalists have been killed in the course of their work, including those at Charlie Hebdo last week? Just five weeks ago, I and several other Members of Parliament attended the signing in Paris of a declaration by representatives of every European country, recognising the vital role of journalists in a free society and pledging to do everything possible to protect their safety. Will my right hon. Friend reaffirm that commitment today?

[The Prime Minister]

I pay tribute to my hon. Friend for the work he does in supporting the freedom of the press and I certainly reiterate what he says today. This most struck me when I visited Jaffna, in northern Sri Lanka, and went to see a newspaper office that had been shot up, bombed and burned. That brings home what journalists in other countries have for years faced in bringing the truth and putting it in front of the people, which is a vital part of a free democratic system. Obviously, the events in Paris are truly horrific, and the duty of everyone in public life is not necessarily to say whether or not we agree with this or that being published—everyone can have their opinion; it is not that that matters. What matters is that we should always defend the right of people to publish whatever is within the law and in their opinion right to publish. That is our job and we must do it properly.

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

Q7. We are seeing a meltdown in emergency care, yet the Prime Minister’s Health Secretary accuses us of whipping up a crisis. Is it not time for some honesty? This Government are simply failing our NHS.

[The Prime Minister]

I am grateful to the hon. Lady for raising the NHS because, absolutely, we do face real challenges this winter with the pressures on A and E. But in her own constituency, the Homerton University Hospital NHS Foundation Trust proved what can be done with the extra resources that we are putting in and the excellent management of that hospital. Last week, 96.6% of people going to A and E in her constituency were seen within four hours.

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

Q8. Last week I met Chloe, a care assistant apprentice who started her apprenticeship after visiting my most recent jobs fair in Halesowen. Will the Prime Minister congratulate all those people who have got jobs and started apprenticeships in my constituency since 2010, where unemployment has fallen by 30% in the last year alone—further evidence that the Government’s long-term economic plan is delivering better quality jobs and opportunities for people across Halesowen and Rowley Regis?

[The Prime Minister]

I certainly join my hon. Friend in congratulating Chloe on starting her apprenticeship. In his constituency, nearly 4,000 people have begun an apprenticeship since 2010 and the claimant count there is down 42% since the election. The long-term youth claimant count—that should be of the greatest concern to us, because that is young people on unemployment benefit month after month—is down by 58% in the last year alone. This recovery is gathering pace and is providing jobs for people, and each one of those jobs is a chance for them to provide a better future for their families. But we must stick to the plan and a key part of the plan is getting the deficit down.

[Toby Perkins (Chesterfield) (Lab)]

Q9. Ambulance trusts are under such pressure that they are downgrading calls from some of the sickest people in the country. In the East of England area, 57 people are believed to have died while waiting for an ambulance that never arrived. Is not the Prime Minister ashamed that this is what happens when the Tories run the NHS?

[The Prime Minister]

Clearly, what happened in East Anglia was wrong, and the change was made without the knowledge of the trust’s board. As soon as it was found out, the chief executive reversed the decision and ordered that an independent investigation be carried out by someone outside the trust. That investigation found that there had been no harm to patients, and I think it is important to put this in context. The hon. Gentleman quite rightly says that it is important that we conduct this debate in a good and civilised way. At the weekend, the Leader of the Opposition was asked seven times whether he had used the phrase that he wanted to “weaponise the NHS”. Seven times he refused to answer the question. Everybody knows that he said those words, and if he had a shred of decency in him, he would get up and explain that he should not have said those words, and apologise.

[Stephen Lloyd (Eastbourne) (LD)]

A few weeks ago, a tragic event occurred in my constituency when a five-year-old girl, Andrea Gada, was killed in a traffic accident. Since then, Eastbourne and her school, Shinewater primary, have rallied round to support her parents and the rest of her family. They have raised money to try to bring her grandparents and her aunt over from Zimbabwe to Eastbourne to join the family at the funeral, but the Home Office has refused those relatives entry, saying that they would abscond. The parents have given me an undertaking that this will not happen, and I have gone a step further and said that I will act as a guarantor that the relatives will return to Zimbabwe. The Home Office’s decision is cruel and unkind. Prime Minister, will you intervene?

[The Prime Minister]

It is absolutely horrific when children are killed in accidents like this, and we all know of individual cases in our own constituencies. It is heartbreaking when it happens. I will certainly look at the case—I was just discussing it with the Home Secretary—and make sure that the Home Office has a careful look to see what can be done.

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

Q10. The Prime Minister will be aware that members of the public and small businesses across the UK have had to endure very high fuel bills in recent years when oil prices were averaging more than $100 a barrel. In recent weeks, that price has dropped steadily and now stands at less that half that level. However, fuel prices at the pump have not been reduced by anything like that amount. Last week, the Chancellor indicated that some action would be taken against the fuel companies. Will the Prime Minister outline what action that will be?

[The Prime Minister]

First, we should welcome this fall in oil prices. We are beginning to see prices fall quite substantially at the pumps, but I agree with the hon. Gentleman that we want to see them go down further and faster. Some of this will depend on the buying strategies that the fuel companies had, but we will ensure that the competition authorities and the Government do everything they can to ensure that those fuel prices are passed on.

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

On 30 January, I shall be holding a dementia summit in my constituency to bring together some of the fantastic work that voluntary sector organisations such as Wetherby in Support of the Elderly—WiSE—and Peter Smith in Rothwell have done on dementia. Does my right hon. Friend agree that dementia is one of the biggest challenges that this country faces in the coming century? Does he also agree that we need a strong economy if we are to be able to invest in dementia research?

[The Prime Minister]

My hon. Friend is absolutely right. This is a crisis for our country. It has been creeping up like a sort of silent crisis, because the diagnosis rate has not been high enough and I do not think there has been enough action across our communities to join up and deal with it. That is now happening, however, and we have a clear dementia strategy. We are doubling the amount of money going into research and we are training many more people in our NHS and our care homes to deal with people with dementia better. Also, we are ensuring that more people in the community become dementia friends, with a target of more than 1 million people doing so. We had a session in Cabinet the other day at which every member of the Cabinet became a dementia friend. I commend what my hon. Friend is doing in his constituency—I did the same in mine—getting together all the organisations that can help people with dementia so that we can spread the word about good practice. People with dementia need not only great health care but help when they are at the post office, the bank and the building society, and when they are on the bus or at the train station. They need help in every part of their life and we all have a role to play.

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

Q11. According to the Royal College of Nursing, the number of nurses in London has fallen by 4,500. The Prime Minister says that the number is rising. Who is right?

[The Prime Minister]

The fact is that nation wide we have 3,300 more nurses, and I can give the hon. Gentleman some figures for his own constituency. The NHS Redbridge clinical commissioning group is this year getting an increase in funding of 4.79% and the numbers of staff in it are up. If we look at Barts hospital, we see that last week over 6,630 people were seen within four hours, and performance across the London area has been very good. I make one further point to him, which he might want to bring home to his own local authorities—this is important when we consider what is happening in social care. He has two local authorities: Redbridge, which has seen its reserves go up by £65 million since 2010; and Waltham Forest, whose reserves have gone up by £26 million since 2010. That is what is happening and that actually would fill the gap. Finally, let me give him the information on Tower Hamlets, Waltham Forest and Newham as a whole in terms of the winter funding money: that has provided 22 more doctors, 27 more nurses and 146 more beds.

[Mr Adrian Sanders (Torbay) (LD)]

Q12. There are over 3 million people with diabetes in this country, and today Diabetes UK has published its state of the nation report. It calls for education to help people prevent type 2 diabetes; education so that people know when to approach their general practitioner with symptoms of type 1 or type 2; and education of people with the condition so that they can self-manage and take pressure off the NHS. Will the Prime Minister look at the report and act on its findings?

[The Prime Minister]

I will certainly look at this report, because, of all the health care conditions, diabetes is one of the ones where, if we act on it fast, we could have a huge knock-on effect on the NHS. If we look at the costs of things such as amputations and other treatments because people are getting diabetes, we see that we could make an enormous impact. The hon. Gentleman raises the issue of people being able to self-regulate. An enormous amount of exciting new technology is coming forward on diabetes, and I want to make sure that that technology is rapidly adopted by the NHS.

[Helen Goodman (Bishop Auckland) (Lab)]

The independent Office for Budget Responsibility says that the Government’s long-term spending plans mean cutting 1 million public service workers. Could the Prime Minister tell the country which million he is planning to cut?

[The Prime Minister]

The OBR says exactly what the Treasury says, which is that everyone who last night voted for the fiscal mandate is committed to £30 billion of adjustment in the next two years. My party has set out exactly how we meet that: it is £13 billion of departmental cuts and £12 billion of welfare cuts and £5 billion from tax evasion and avoidance. So far the Labour party has told us absolutely diddly-squat about how it would raise a single penny of that money, so the challenge for the Labour party is: if you are going to sign up to £30 billion of adjustment, is it not time you told us which taxes are going to go up, what you are going to do about debt and how you are going to wreck this country’s economy?

[Robert Halfon (Harlow) (Con)]

Q13. Has my right hon. Friend seen the story of White Van Alison in The Sun, on page 6, today? Is he aware that under this Government white van women are flourishing? Over 20% of businesses are run by women and over 53% of apprenticeships are started by females. Does he agree that white van women, especially those from Essex, are the wheels of our long-term economic plan?

[The Prime Minister]

Absolutely, and those wheels must keep turning. The point my hon. Friend makes is important. Of course I look at The Sun every morning, and I was fascinated to see this article. The fact is that under Labour, female unemployment went up by 24%. Under this Government the number of women in work is at its highest since records began. The proportion of women-led businesses in our country is up by a third, but it is still true that if we could get the same level of female entrepreneurship in Britain as there is in America, we would virtually wipe out the remaining unemployment.

[Mr David Anderson (Blaydon) (Lab)]

At 1 o’clock this afternoon a petition will be laid at No. 10 Downing street by parents and children who are suffering from Duchenne muscular dystrophy. It calls on the Prime Minister personally to get involved to get NHS England to stop a bureaucratic internal debate which is preventing the licensing of the drug Translarna, which can have an effect on young boys that means they do not have to go into a wheelchair before it is absolutely necessary. At the moment most of them are in a wheelchair before they reach their teens. Will the Prime Minister personally get involved and get this resolved as a matter of urgency?

[The Prime Minister]

I will try to find time to see those parents today. I was looking at this issue last night and there was a child, who was about the same age as my son, pictured with his local football team, just as my son was. It made me think how vital it is to get these drugs through as quickly as we can. I know that there has been a debate on whether these drugs should be licensed quickly and on all the issues and problems. I will meet those parents, look at their petition and see what can be done.

[David Rutley (Macclesfield) (Con)]

Q14. Will my right hon. Friend tell the House what is worse: to deny the deficit, forget that it exists or have no plan to bring it back into balance?

[The Prime Minister]

I think that in the three stages of man—or at least the three stages of Miliband—we are now at the final part. Labour Members have, I think, finally accepted that there is a deficit. They have now voted for £30 billion of adjustment, but they cannot manage to tell us how much they will raise in taxes and what they will do with spending. They have had four and a half years to come up with an economic policy and they have absolutely no plan for our country.

[Mr Andy Slaughter (Hammersmith) (Lab)]

My 94-year-old constituent was taken by ambulance from her GP to A and E at Charing Cross hospital where she waited six hours in a corridor before being admitted. The next morning, she was moved to another hospital because there were no beds available. Does the Prime Minister think that axing A and E and all but 24 of 360 inpatient beds at Charing Cross, as he proposes, will make such appalling incidents more or less likely in the future?

[The Prime Minister]

The truth is that, nation wide, 94% of people have so far this year been seeing a doctor within four hours at A and E. But everybody in this House knows, and everybody who is a neighbouring Member of Parliament of the hon. Gentleman knows, that he is absolutely instrumental in spreading disinformation campaign after disinformation campaign about his local hospitals. For once, he should take the truth and put it in a leaflet.

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

Q15. Some people are quick to criticise the NHS when it faces challenges. It must also then be right to celebrate its successes, so will the Prime Minister congratulate Milton Keynes hospital and the university of Buckingham on establishing a new medical school that will not only train the next generation of clinicians but raise standards at our hospital?

[The Prime Minister]

I am very happy to join my hon. Friend in doing that. Making sure that we educate the next generation of doctors, nurses and clinicians is vital. Under this Government, we have 9,000 more doctors and 3,300 more nurses. We are treating 1.3 million more people in A and E, and there are 6 million more out-patient appointments. That is what is happening in our NHS, and all credit to the hard-working staff who are carrying out that vital work.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

Welfare benefit recipients are often demonised as a burden on our taxpayers, but does the Prime Minister agree that the real burden on taxpayers are those employers who can afford to pay well above the minimum wage, but do not, thereby leaving hard-working families to state dependency and food banks.

[The Prime Minister]

I am in favour of the living wage. Those organisations that can pay the living wage should pay the living wage. It is something that should happen. But in addition to that, what we can help with—[Interruption.] I hear the Leader of the Opposition. Doncaster council does not pay the living wage, so perhaps he should start with his own backyard. That shut him up. In addition to that and to seeing the minimum wage rise, we should be taking the lowest-paid people out of tax. Under this Government, we have taken 3 million of the lowest paid people out of tax.

[Mr Slaughter]

On a point of order, Mr Speaker.

[Mr Speaker]

Order. The hon. Gentleman is a very experienced Member. He must know by now that points of order come after statements. In any case, I always enjoy saving up the hon. Gentleman for later.

Persecution of Christians in Pakistan

Wednesday 14th January 2015 Commons Chamber

Andrew Stephenson (Pendle) (Con)

- Hansard - - Excerpts

I should like to present a petition on behalf of the Nelson Asian Christian Fellowship regarding the plight of minorities living in Pakistan. I was presented with the petition, signed by more than 200 of my constituents, when I joined them for worship in the run-up to Christmas and I said I would bring it to the attention of the House.

The petition states:

The Petition of residents of Pendle,

Declares that the Petitioners believe that the laws of Pakistan systematically discriminate against non-Muslims and leads to the persecution of Christians such as Shahzad Masih and Shama Bibi, who were beaten, tortured and burned alive on 4th November 2014.

The Petitioners therefore request that the House of Commons urges the Government to use its influence to encourage the Pakistani authorities to ensure that perpetrators of hate attacks against minorities are convicted; the Blasphemy Laws are abrogated; modern day slavery in Pakistan is ended; Asia Bibi is released; and that aid to Pakistan is terminated until its human rights record is improved.

And the Petitioners remain, etc.

[P001421]

Terrorist Attacks (Paris)

Wednesday 14th January 2015 Commons Chamber

12:34

[The Secretary of State for the Home Department (Mrs Theresa May)]

With permission, Mr Speaker, I would like to make a statement about the terrorist attacks in Paris, and the threat we face from terrorism in the United Kingdom.

It will take some time for us to learn the full details of the attacks last week, but the basic facts are now clear. Seventeen innocent people were murdered in cold blood, and a number of others were injured. Amedy Coulibaly, the terrorist who attacked the Jewish supermarket, claimed his actions were carried out in the name of ISIL. Unconfirmed reports suggest that Cherif and Said Kouachi—the two brothers who attacked the office of Charlie Hebdo—were associated with al-Qaeda in the Arabian Peninsula in Yemen, the same al-Qaeda affiliate that had been in contact with the men who murdered Fusilier Lee Rigby in 2013.

As the appalling events in Paris were unfolding, this House was debating the Government's Counter-Terrorism and Security Bill, and the threat level in the United Kingdom—which is set by the independent Joint Terrorism Analysis Centre—remains at severe. This means that a terrorist attack in our country is highly likely and could occur without warning.

Three serious terrorist plots have been disrupted in recent months alone. Nearly 600 people from this country have travelled to Syria and Iraq to fight, around half of them have returned, and there are thousands of people from across Europe who have done the same. As I said during the passage of the Counter-Terrorism and Security Bill and have said on many, repeated occasions, the Government will do everything they can to keep the public safe.

As soon as the attacks in France took place, the Government increased security at the UK border. Officers from Border Force, the police and other organisations intensified checks on passengers, vehicles and goods entering the UK, and we offered the French Government all assistance necessary, including the full co-operation of our police and security and intelligence agencies.

On Sunday, before I attended the peace rally in Paris, I held talks with my counterparts from Europe, the United States and Canada to discuss what action we can take together. There was firm support from all the countries present for new action to share intelligence, track the movement of terrorists and defeat the ideology that lies behind the threat. It is important that we now deliver on those talks, and my officials, the Security Minister and I will keep up the pace—in particular when it comes to passenger name records—with other European member states.

On Monday, the Prime Minister, the Defence Secretary and I held a security meeting with senior officials to review the Paris attacks and the risks to the UK of a similar attack. Of course, we have long had detailed plans for dealing with these kinds of attacks. The House will recall the attacks in Mumbai in 2008 when terrorists armed with assault weapons and explosives took the lives of more than 150 people. Since 2010, and learning the lessons of that attack, we have improved our police firearms capability and the speed of our military response, and we have enhanced protective security where possible through a range of other measures. We have improved joint working between the emergency services to deal specifically with marauding gun attacks. Specialist joint police, ambulance and fire teams are now in place in key areas across England, with equivalents in Scotland and Wales, and they are trained and equipped to manage casualties in the event of that kind of an attack.

The police and other agencies regularly carry out exercises to test the response to a terrorist attack, and these exercises include scenarios that are similar to the events in Paris. We will ensure that future exercises reflect specific elements of the Paris attacks, so we can learn from them and be ready for them should they ever occur in the United Kingdom. In addition, I should tell the House that the police can call on appropriate military assistance when required across the country.

The attacks in Paris were enabled by the availability of assault weapons. Although there are obviously a number of illegal weapons in the UK, we have some of the toughest gun laws in the world, and as a result firearms offences make up only a small proportion of overall recorded crime. The types of firearms used in the attacks in Paris are not unknown in the UK, but they are extremely uncommon. However, as the Prime Minister has said, we must step up our efforts with other countries to crack down on the illegal smuggling of weapons across borders. In particular, the member states of the European Union need to work together to put beyond use the vast numbers of weapons in the countries of the former Yugoslavia and disrupt the supply of weapons from other parts of the world, especially north Africa.

The measures we have taken following events in Paris are in addition to the substantial work that the Government have undertaken, and continue to undertake, to counter the threat from terrorism. Last summer, Parliament approved emergency legislation to prevent the sudden and rapid loss of access to communications data and to provide for the ability to intercept communications where it is necessary and proportionate to do so. Parliament is of course scrutinising the proposals in the Counter-Terrorism and Security Bill as we speak. This important legislation will strengthen our powers to disrupt the ability of people to travel abroad to fight, and control their ability to return here. It will also enhance our ability to deal with those in the UK who pose a risk. In particular, it will allow the relocation of people subject to terrorism prevention and investigation measures to other parts of the country. In addition, the Prime Minister has announced funding of £130 million over the next two years for the agencies, police and others, on top of the more than £500 million spent on counter-terrorism policing every year.

This Government have done more to confront the ideology that lies behind the threat we face. I have excluded more foreign hate preachers than any Home Secretary before me; we have deported Abu Qatada and extradited Abu Hamza; we have reformed the Prevent strategy so that it tackles non-violent extremism as well as violent extremism; and we have invested more time, resources and money in counter-narrative operations.

We have always been clear that the police and the security agencies must have the capabilities and powers they need to do their job, and following the attacks in Paris the Prime Minister has reiterated that commitment. Unfortunately, when it comes to communications data and the intercept of communications, there is no cross-party consensus and therefore no Parliamentary majority to pass the legislation to give the police and security services the capabilities they need. Let me be absolutely clear: every day that passes without the proposals in the draft Communications Data Bill, the capabilities of the people who keep us safe diminish; and as those capabilities diminish, more people find themselves in danger and—yes—crimes will go unpunished and innocent lives will be put at risk.

This is not, as I have heard it said, “letting the Government snoop on your e-mails”. It is allowing the police and the security services, under a tightly regulated and controlled regime, to find out the who, where, when and how of a communication but not its content, so that they can prove and disprove alibis, identify associations between suspects, and tie suspects and victims to specific locations. It is too soon to say for certain, but it is highly probable that communications data were used in the Paris attacks to locate the suspects and establish the links between the two attacks. Quite simply, if we want the police and the security services to protect the public and save lives, they need this capability.

Last weekend people of all nationalities, faiths and backgrounds came out on to the streets of France and other countries to demonstrate their opposition to terror, and to stand for democracy and freedom. We must stand in solidarity with them, and do all that we can to confront extremism and terrorism in all its forms.

12:43

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The attacks last week in Paris demonstrated the savagery with which terrorists seek to divide us. The murderous intolerance and the bigotry that they pursue aim to spread fear and also to sow division, which they believe exists—us against them. Paris has not let the terrorists win and we must not do so either.

The French police have been praised for the actions that they took. Charlie Hebdo is being published today. Faiths have united, abhorring the anti-Semitism and grieving for the victims of the attack on the kosher supermarket. Muslims across the world have condemned an attack which is not Islamic and is not in the name of their religion, and the brother of the French Muslim police officer, Ahmed Merabet, said, “My brother was killed by people who pretend to be Muslims. They are terrorists. That’s it.” The Leader of the Opposition rightly attended the unity rally in Paris along with the Prime Minister, and on Saturday I joined people in Trafalgar square raising pens in solidarity with the “Je suis Charlie” cause.

In the attack, the terrorists targeted other peaceful religions, they targeted writers, and they targeted those whose job it is to keep us safe. In other words, they targeted both liberty and security, and the response of democratic Governments everywhere to these sorts of attacks must be to defend both. Governments need to keep our people safe so that we can enjoy the very freedoms that our democracy depends on.

Let me turn to the specific issues in the Home Secretary’s statement. I am concerned about the rushed way that she has made this statement today; I did not see it before coming into the House. I hope that she can set out what the reasons were and what has changed in the Home Office’s position this morning that meant that the statement was changed at late notice.

I welcome the action taken by the intelligence agencies and police to support their counterparts in Paris. I think the whole House will want to pay tribute to the work of our security and intelligence services and the counter-terror police, who do so much to keep us safe. It is important that they have the resources they need, and I welcome the resources that the Home Secretary mentioned.

As the Home Secretary said, the Government have going through Parliament right now the Counter-Terrorism and Security Bill, which we have supported and continue to support, and which includes restoring the relocation powers for serious terror suspects that she abolished four years ago and for whose reinstatement we have called. She will know that the agencies have pointed to the ongoing threat in this country posed by the estimated 300 people returning from the conflict in Syria. Have any of those estimated 300 been prosecuted? Can she confirm that none of them is currently subject to terrorism prevention and investigation measures, even though these powers are supposed to be for dangerous suspects whose activity needs to be restricted to keep us safe? Are the Security Service and the police now reviewing all those cases to see whether TPIMs could help, especially with relocation powers restored, or whether there needs to be any further change to the TPIMs powers, which are different from the previous control orders? How many of the estimated 300 have engaged with the Channel programme? Does she agree that we should now make that compulsory for those returning, for which the Bill does not yet provide?

On access to dangerous weapons, the Home Secretary will know that there has been concern about reduced customs and border checks. What action is she taking to increase border checks for dangerous weapons?

The Home Secretary raised the issue of communications data. Technology is changing all the time, and that means that the law needs to keep up, in the capabilities of the agencies to get the vital intelligence we need and in the oversight that we need. In July, Parliament supported emergency legislation to ensure that the agencies and police could maintain vital capabilities. This month, the Commons supported extending those powers to ensure that IP addresses are covered in the same way as telephone numbers. In July, all parties agreed to support a review by David Anderson, the independent reviewer of terrorism, of the powers and the oversight needed to keep up with changing technology.

The Home Secretary referred to the draft Communications Data Bill. That was rejected three years ago by the Joint Committee that the Government established to scrutinise it because, the Committee said, it was too vague, too widely drawn, and put too much power directly in the hands of the Home Secretary. The Committee recommended that the new legislation needed should be drawn up in a far more limited way, and that the Government should provide more evidence and clarity about what they wanted to achieve. Since then, the Home Secretary has not come forward with any revised proposals. She has not come to me to discuss such proposals or put them to Parliament, even though we have said that we were happy to discuss details with her. Given the urgency she says there now is, why did she not come forward with revised proposals after the conclusions of the Joint Committee three years ago?

In July, the Home Secretary was happy to agree to the statutory review by David Anderson, which is due to report before the election. Today she has not mentioned that review. Has she now discarded it, or will she be waiting for its conclusions?

This is an extremely important issue, and the detail—about the powers and capabilities that our intelligence agencies need, as well as about the safeguards and oversight that are also needed—matters. We agree that the police and the agencies need to get the intelligence to keep us safe and that they need updated legislation, and we also need safeguards and stronger oversight to make sure that powers are effectively and appropriately used.

I strongly caution the Home Secretary and the Liberal Democrats against setting up a caricatured argument between them about security on the one hand and liberty on the other, because we need to protect both in our democracy and we need a responsible debate on getting the detail right. The terrorists targeted both writers and police officers on that first day. The editor of Charlie Hebdo had police protection to protect his freedom of speech. That shows the strong link between our security and our liberty in any democracy.

We know that the most important thing to keep us safe in any democracy is making sure that we have the cohesive communities that can prevent hatred from spreading. We have supported extending Prevent by putting it on a statutory footing. I hope that the Home Secretary will now listen to the concerns we have expressed over some years about more needing to be done to have community-led programmes to tackle the hatred and to challenge the spread of extremism, including through social media, as well as in local communities and organisations. I hope that she will work with local government to that effect. Is she working with the Community Security Trust on tackling anti-Semitism, because we need to tackle all forms of extremism?

Terrorists try to silence us, to cow us and to divide us. Paris has shown, as millions marched and as we stood in solidarity with them, that we will not be silenced, and that we will not give into fear and into division as we defend our democracy. Although some were targeted in Paris, we know that this is about all of us: “Je suis juif”, “Je suis flic”, “Je suis Ahmed” and “Je suis Charlie”.

[Mrs May]

First, I apologise to the shadow Home Secretary for her late receipt of the statement. I apologised to her privately when we came into the Chamber, but I am happy to reiterate that apology on the Floor of the House.

I join the right hon. Lady in paying tribute to our counter-terrorist police—and, indeed, all our police—and our security and intelligence agencies. We cannot say often enough that these people are working day and night to keep us safe and to protect us. For obvious reasons, as members of our security and intelligence agencies, many of them are unseen and unknown. We are grateful to them for the work they do, and we should publicly recognise their important role.

The right hon. Lady asked a number of questions covering a number of issues. On reviews, there is no suggestion, simply because a review was not mentioned in my statement, that we have in any way side-tracked it. David Anderson is doing his work. As far as I am aware, he is undertaking discussions with relevant parties about the issues that he is looking at. Alongside that, our own Intelligence and Security Committee is conducting its work on questions of privacy, civil liberties and security. I think that those key reviews will be brought before the House in time to enable it to take account of them when it does the necessary job of looking at least at the Data Retention and Investigatory Powers Act 2014, which is under a sunset clause to 2016. The House will obviously want to take account of all aspects of those two reviews.

The Government publish the number of people under TPIMs every quarter. On the question of whether somebody should be put on a TPIM, it is for the Security Service to initiate a request to me as Home Secretary. I of course look at the request, and if I agree to it, a court process is then gone through to ensure that such a decision is reasonable. As I say, it is for the Security Service to come forward with any such proposals.

The right hon. Lady asked about making Channel compulsory, and the Leader of the Opposition raised that during Prime Minister’s questions. We believe that Channel does important work, as does Prevent, which works with community groups. Decisions about whether individuals are put on a Channel programme should be taken case by case. We are very clear, as we have been in discussions on the Counter-Terrorism and Security Bill in relation to temporary exclusion orders—they will ensure that people return from Syria on our terms, where that is appropriate—that we may seek to take action of various sorts in relation to individuals in the UK, but that what is appropriate for the individual concerned has to be decided on a case-by-case basis.

On the question of firearms, it is for us to work with others in the European Union to consider the spread of firearms across European Union. As I said, the United Kingdom has some of the toughest gun laws, but major exercises have already been undertaken, primarily led by the National Crime Agency, to look at the availability of firearms in the UK. That process started before the terrible attacks took place in Paris.

On the draft Communications Data Bill, there is a difference of opinion among parties in the House about what powers should be taken by Government. We did in fact respond to the proposals from the Joint Committee, and we did in fact provide revised proposals in relation to the measures. I am clear, as is the Prime Minister, that we need to return to that issue. I believe that it is important to have the right powers available to deal with such matters.

Finally, the right hon. Lady asked whether we speak to those at the CST. Of course we do so regularly. I have had a number of meetings with them, and the police of course have meetings with them to discuss the whole question of what protective security is available. Protective security was stepped up when the threat level was raised, but it has now been stepped up further.

[Sir Malcolm Rifkind (Kensington) (Con)]

Various press reports have stated that the director general of MI5 called in his speech of 8 January for wide new powers of surveillance for the agencies. Will the Home Secretary confirm that that is not correct? In the speech, which my right hon. Friend and I attended in person, the director general expressed his main concern:

“Changes in the technology that people are using to communicate are making it harder for the Agencies to maintain the capability to intercept the communications of terrorists.”

Is not the prime requirement at present to ensure that the agencies can continue to exercise the capability they have enjoyed for a number of years but which, because of new technology, is increasingly denied them?

[Mrs May]

My right hon. and learned Friend is absolutely correct in his description of what the director general of MI5 said in the speech. It is unfortunate that people very often mix up some of the aspects of communications data and intercepts, and sometimes believe that the Government were trying, in the draft Communications Data Bill, to expand the powers of the agencies, which was not the case. Indeed, the director general of MI5 said:

“The ability to access communications data is likewise vital to our ability to protect our national security”,

and that

“unless we maintain this capability, our ability to protect the country will be eroded.”

The Bill was about maintaining that capability, and we and others, as evidenced by the quote, see that as so important.

[Mr Jack Straw (Blackburn) (Lab)]

As there has been a revolution in communications in the 16 years since I introduced the proposals that became the Regulation of Investigatory Powers Act 2000, it seems to me to be beyond argument that the legislation, including in respect of communications data, has to be revised. Does the Home Secretary agree that a serious debate about the extent of the powers is not remotely helped by the parody that states that the powers sought are “some kind of snoopers charter”? Since I believe that the distance between the two main parties in the House on this issue is actually very narrow, may we have the kind of close collaboration that my right hon. Friend the shadow Home Secretary spoke in favour of so that we can resolve this issue as soon as possible, and ensure that the intelligence and security agencies and the police have the capabilities today and tomorrow that they had in the past under legislation freely agreed by this House?

[Mrs May]

The right hon. Gentleman is absolutely right that it is important, in the debate on this issue, that the facts and arguments are presented properly. Sadly, the terminology that has been used about the communications data Bill, such as its being a snoopers charter, has set all sorts of hares running that are not accurate and that do not reflect what was proposed. He is right that it is important for all of us in this House to look at this matter calmly and carefully, and to consider the powers that our agencies need if they are to maintain their capabilities. Otherwise, as those capabilities degrade, it makes it harder for our agencies to keep us safe.

[Dr Julian Huppert (Cambridge) (LD)]

The Prime Minister made a proposal not to allow any online communications that could not be intercepted. That would cause huge problems for anyone who relies on secure online transactions for banking, shopping or anything else, and would jeopardise Britain’s reputation as a good and safe place to do business. Is that genuinely what the Home Secretary wants to do? Does she really want to join the small group of countries that includes Iran, Belarus, Moldova and Kazakhstan in trying to ban encryption?

[Mrs May]

I say to my hon. Friend that we are determined that, as far as is possible, there should be no safe spaces for terrorists to communicate. The Prime Minister reiterated that principle in Prime Minister’s questions today. I would have hoped that that principle was held by everybody across all parties in the House of Commons. As far as I and the Conservative party are concerned, our manifesto will make it clear that we will introduce the legislation that is needed to restore our declining communications data capability, and that we will use all the legal powers that are available to ensure that, where appropriate, the police and the security and intelligence agencies have the maximum ability to intercept the communications of suspects, while ensuring that such intrusive techniques are, of course, properly overseen.

[Mr Peter Hain (Neath) (Lab)]

Of course the security services must have the necessary tools for the job. However, does the Home Secretary accept that the priority now is to speak up against, stand up against and, where necessary, confront Islamophobia, anti-Semitism, racism and the fascist groups, such as the British National party and its derivatives, that spread such poison, as well as the vile prejudices of far too many representatives and members of UKIP?

[Mrs May]

The right hon. Gentleman is absolutely right that everybody in this House needs to send a very clear message that we stand for freedom, including the freedom of the press, and democracy, and that we oppose the vile views that lead to the behaviour and incidents we saw in Paris. We must recognise that we have seen a number of terrorist attacks in this country over the years, the most recent of which was in 2013, when we saw not only Fusilier Lee Rigby’s murder, but the murder of Mohammed Saleem and the attempt to plant a number of bombs at mosques in the west midlands, which were undertaken by a far-right extremist. We must stand against terrorism and extremism in all their forms.

[Sir Edward Leigh (Gainsborough) (Con)]

If one good thing has come out of the horrible events of recent days, it is the evidence of the British people’s affection for France in her hour of trial. Speaking as the chairman of the amitié group between the two Parliaments and on behalf of our Back Benchers, I would like to extend the warmest fraternal greetings to our French colleagues in the Assemblée Nationale, express our support for them and say that, as has been the case for the last 100 years, our two nations stand shoulder to shoulder against tyranny and terror.

[Mrs May]

I absolutely agree with my hon. Friend’s comments. We stand alongside France against terror and for freedom and democracy. It was a very moving experience to be part of the march in Paris on Sunday not only because it involved so many people—nearly 4 million across France and an estimated 2 million in Paris—but because of the reaction of the people alongside the march, who constantly expressed their support for all those who were standing for freedom of the press and the freedoms of our democracy.

[Angus Robertson (Moray) (SNP)]

On behalf of the Scottish National party, I join the Home Secretary, the shadow Home Secretary and Members from all parts of the House in their condemnation of the terrorist attacks in Paris. I also want to put on the record our appreciation for those who work so hard on our behalf to keep our society safe.

The Home Secretary went into great detail in her statement about the co-operation with European Union partners and other countries, which was very welcome. She did not have the opportunity to update the House on the co-operation with the other jurisdictions within the United Kingdoms on policing and safety, which is very important for all of us. No doubt she has spoken to the Scottish Cabinet Secretary for Justice, Michael Matheson, since last week. Will she update the House on what was discussed and on how the UK Government plan to co-operate with the Scottish Government, the Northern Irish Government and the Welsh Administration?

[Mrs May]

Discussions have taken place at official level with the devolved Administrations about the preparedness for an attack similar to that in Paris. Obviously we work very closely with the devolved Administrations. We worked particularly closely with the Scottish Government last year in preparation for the Commonwealth games, when we had some joint exercises. The co-operation and interaction between Police Scotland and the police forces in England and Wales are very good across a wide range of matters. Co-operation on the matters that we are discussing is obviously very important. We will continue to talk with the devolved Administrations at every level—ministerial and official—about these matters.

[Mr Henry Bellingham (North West Norfolk) (Con)]

Is the Home Secretary aware that when the Prophet Mohammed moved from Mecca to Medina all those years ago to establish the first Islamic state, he did not set up a sectarian caliphate, such as that demanded by the Paris murderers, but rather, under the charter of Medina, he created a multi-faith society, where Jews and Christians had the right to worship and were able to proclaim their faiths?

[Mrs May]

I am grateful to my hon. Friend for elucidating that fact for the House. It is very clear—everybody is very clear—that the attacks were not about Islam. The voices of Muslim communities and Muslim leaders in the United Kingdom, France and across the world have made it very clear that the attacks were not undertaken in their name. We should reiterate that very clear message.

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

Is the Home Secretary satisfied with the capacity of the London fire and rescue service to respond to any terrorist outrages that may occur, in view of the current fire station closure programme, which includes the fire station at Clerkenwell, which serves an area that includes major hospitals, major railway stations and major tourist attractions that may very well be the premier targets of terrorism?

[Mrs May]

A great deal of work has been undertaken in recent years to look at the operation of the emergency services in the event of a terrorist attack. Work has been done, as I indicated in my statement, to bring together specialist teams from fire services, ambulance services and the police across England and their equivalents in Scotland and Wales. We have also introduced the joint emergency services interoperability programme, or JESIP, which is about ensuring that it is easier for the three emergency services to work together in such circumstances. Obviously, we continue to update and revise, where necessary, the protocols and the way in which such operations are conducted to ensure that our emergency services are able to do the job we all want them to do, should an attack take place.

[Michael Ellis (Northampton North) (Con)]

I sat on the Joint Committee on the draft Communications Data Bill three years ago, which lasted for six months. We heard extensive evidence from numerous sources that made it abundantly clear that having the communications data is crucial and will save lives. It will save those who threaten suicide, it will save children at risk and it will prevent other incidents, dramas, accidents and crimes, as well as helping us to catch terrorists. Sir Bernard Hogan-Howe, the Metropolitan Police Commissioner, has said that it will save lives. The director of Europol said at the Home Affairs Committee yesterday that there was a gap. Is the—

[Mr Speaker]

Order. I do not wish to be unkind to the hon. Gentleman, but he is a trained barrister. Come on, cut to the chase. A lot of colleagues want to get in and I want to accommodate everybody. Ask a short question and then sit down.

[Michael Ellis]

Thank you very much, Mr Speaker. Is the Home Secretary concerned that the Labour party has not made it clear that it would support the collection of communications data?

[Mrs May]

I am grateful to my hon. Friend for pointing out that a significant number of people who are in positions where they are aware of the impact of communications data have made the necessity of communications data well known and public. As I indicated earlier, I hope that everybody in the House understands and appreciates the importance of ensuring that, as far as is possible, there are no safe spaces for terrorists to communicate.

[Mr George Howarth (Knowsley) (Lab)]

The Home Secretary will be aware that in the cases of the London bombings, the brutal murder of Fusilier Lee Rigby and, according to early reports, what happened in Paris last week, those involved were on the periphery of investigations that had already been undertaken. Will she give a commitment that she will have urgent talks with the Security Service and the leadership of counter-terrorism police about how we can get smarter in reviewing the previous investigations and cases in which those individuals and networks, who clearly pose a threat, have appeared on the periphery?

[Mrs May]

The right hon. Gentleman is correct about those who appear on the periphery of investigations. The Intelligence and Security Committee referred to that in its report on the murder of Fusilier Lee Rigby in Woolwich, and I have already had discussions about it with counter-terrorism police and the security services and continue to talk to them about it. We need to continue to look at a number of issues involving those who appear at the periphery of various groups, and at the links between potential terrorists and criminal activity of various sorts.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

May I add my voice to those supporting the updating of our communications data capability merely to keep pace with changes in technology, so that we maintain the capabilities that we have? May I also invite the Home Secretary to use this latest incident as a case study to establish what the journey is that a good Islamic person may take that finishes with them being a terrorist—what is the psychological journey, what are the stimulants that create that terrorist, and how do we get inside that process to prevent it from happening?

[Mrs May]

It is of course important that in our work to prevent people from moving down the road to terrorist activity and from being radicalised we look at the factors in play when somebody becomes a terrorist or is radicalised. Those issues are already examined, and every opportunity is taken to learn lessons and identify what the journey is for individuals, so that we can better ensure that we are able to prevent radicalisation and prevent people from moving into terrorism. However, that will be complex, and many factors will be involved, which will vary from individual to individual.

[Keith Vaz (Leicester East) (Lab)]

In his evidence at Westminster yesterday, the director of Europol spoke of a security gap among police forces across Europe in trying to track down online terrorists. Terrorism has no national boundaries. Is the Home Secretary confident about the structures that currently exist for the sharing of information across Europe, and indeed across the Atlantic? What further action can the internet companies take? Should we not now consider having an organisation similar to the Internet Watch Foundation to deal specifically with counter-terrorism?

[Mrs May]

We discussed sharing intelligence and information between countries when it is appropriate to do so, and particularly across Europe, at the meeting convened by Monsieur Cazeneuve, the French Interior Minister, on Sunday. People have looked to Europol to play a role in that, and of course we will work not only with other countries but with organisations such as Europol to ensure that we get the maximum benefit from the information sharing that takes place. That will mean that we have the maximum possible ability to identify terrorists in advance and ensure that attacks do not take place.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am very keen to accommodate colleagues, but I remind the House that this is an Opposition day, with two well-subscribed debates to come, so what I am looking for now is Members who will ask a short question without preamble. I feel sure that the Home Secretary will provide us with her characteristically pithy replies.

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

The unwise response of previous Governments to outrages such as 9/11 and 7/7 led to the Iraq war and the introduction of the failed identity cards scheme. Does the Home Secretary agree that our response to this outrage must be one of sober wisdom, not a rush to squander British liberties because of those who wish so violently to take them away from us anyway?

[Mrs May]

It is entirely right that we should respond in a careful and sober way, and that is precisely what I and the Prime Minister have done in the comments that we have made.

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

I am sure the whole House was pleased to hear the Home Secretary say that real Islam had absolutely nothing to do with the attacks in Paris. Will she take the opportunity to decry the statement that Rupert Murdoch made at the weekend that all Muslims were to blame, and to ask him to get a grip of Fox News and its so-called terrorism experts, who set about insulting Birmingham, London and everywhere else with their silly comments?

[Mrs May]

I agree with the hon. Lady that it is important that we reiterate the message that this is not about Islam; it is about a perversion of Islam. There are Muslims in this country and other countries around the world who condemn these acts of violence and terrorism, and their voices are being heard in increasing numbers. As I said, they are sending a clear message that this is not in their name. I also say to the hon. Lady that freedom of the press means freedom of the press.

[Dr Phillip Lee (Bracknell) (Con)]

Purveyors of extremism find fertile ground in communities that are not properly assimilated into the mainstream of society. Bearing that in mind, will the Home Secretary consider supporting the introduction of parts on compulsory written and spoken English into the British citizenship test? I believe that shared values and a shared language underpin a strong society, and particularly that if women in such communities were emancipated, they would help pacify young men who might be tempted to copy the extremist behaviour seen so graphically in Paris last week.

[Mrs May]

The Government have of course increased the requirements for those coming into the United Kingdom to be able to speak and understand English. My hon. Friend mentions the role of women, and I share his view that it is important that we hear female voices from the Muslim community. I commend Sara Khan, who has once again stood up and spoken about that issue. In the latter part of last year I attended an inspirational event that she held as part of the #MakingAStand campaign that she was running with Muslim women around the country, saying that they wished to take a stand against those who were trying to radicalise young people in the Muslim community.

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

Will the Home Secretary join me in rejecting the new imperialism that we hear after incidents such as this, which seeks to condemn the killings but somehow excuse the actions by blaming ourselves—in this case by saying that the cartoons in Charlie Hebdo were somehow unnecessarily provocative? Does she not agree that we cannot continue to absolve those engaged in terrorism of their responsibility, and that we must agree that responsibility for those actions lies squarely with those who kill innocent people?

[Mrs May]

The only people responsible for a terrorist attack are the terrorists themselves. They are criminals, and we should never let anybody forget that.

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

I welcome my right hon. Friend’s statement, particularly the words about tackling extreme ideology. May I ask her and the security services to be mindful of places of worship where mainstream, tolerant and open opinion can often be marginalised, creating a vacuum in which extremism thrives and creates the roots of so much poisonous ideology?

[Mrs May]

I share my hon. Friend’s concern to ensure that we deal with extremism in all its forms and wherever it appears, and we are mindful of the issue that he raises. Of course, the Government will in due course publish a new extremism strategy, which will go beyond the counter-terrorism strategy that we have already published.

[Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)]

The acts in Paris were carried out by terrorists, not in my name or that of the religion that I follow. I want to put the record straight on that. These people are totally and unreservedly condemned for the attacks.

After the Joint Committee on the draft Data Communications Bill objected to the original Bill, the Home Secretary said that she would make proposals. What are they, where are they, and when will we see them?

[Mrs May]

I commend the hon. Gentleman for his comments. It is important that someone such as him stands up in this Chamber and gives a clear message about terrorism, and says that none of us supports terrorism and that we condemn it absolutely. At the time we indicated the areas of the Communications Data Bill where we were willing to make changes in response to the views from the Joint Committee—indeed, we said that we were taking on board virtually all the comments made by that Committee.

[Charlie Elphicke (Dover) (Con)]

Does the Home Secretary agree that if we are to be serious about our internal security and the safety and security of our borders, including at Dover, we must promote the unity of integration over the division of multiculturalism? It is important to ensure that our borders are properly strengthened and that security is maintained, including at Calais.

[Mrs May]

My hon. Friend is right, and as I indicated in my statement in immediate response to the attacks in Paris, the Border Force and others at our borders took appropriate steps to increase security and intensify the checks taking place. It is right that we maintain an appropriate level of security at our borders, both in the UK but also at juxtaposed controls elsewhere. It is also important to recognise that within the United Kingdom there are people of a variety of faiths and of no faith. We must all accept people of different faiths, and recognise that people have different beliefs. If we disagree with them, the way to deal with that is through discussion. It is important to allow people the freedom to worship as they wish and follow the faith they wish to follow.

[Anas Sarwar (Glasgow Central) (Lab)]

The unjustifiable and horrific scenes in Paris were not just an attack on France, but an attack on peace, freedom and Islam. This is not a clash of civilisations: it is a straight fight between right and wrong, and between humanity and insanity. On that basis, I urge caution from the Home Secretary because the worst time to react is when things are raw, and we cannot defeat extremism with extreme reactions. Finally, the true Muslim on that day was the policeman, Ahmed, who lost his life protecting the freedom of a publication to ridicule his faith. In his tragic story we see the obvious truth: freedom is the right to be wrong; it is never the right to do wrong.

[Mrs May]

I commend the hon. Gentleman’s comments. As the shadow Home Secretary pointed out, the brother of the policeman who was murdered gave a very dignified response that we can all recognise and support. It is important to recognise that the people who carry out these attacks are criminals and terrorists, and are not acting in the name of any religion. We should be very clear about the message we give.

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

On intelligence data gaps, will the Home Secretary confirm that she will be inspired by the patriotism of Lord Evans and people such as the head of MI5, and avoid any consultation on such issues with the Deputy Prime Minister, who during his “Today” programme interview put party so disgracefully over national security?

[Mrs May]

It is no surprise to anyone in the House that the Deputy Prime Minister and I have a different opinion on communications data and the Communications Data Bill. I believe it is important that we maintain those capabilities, and I reiterate that the Bill is not a snoopers charter.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

Does the Home Secretary agree that while there cannot be a scintilla of an excuse for the psychopathic slaughter that we saw in Paris last week, and that security measures must be paramount, in the long run one thing that will make us safe is to reach out to marginalised communities in this country that mirror those from which the killers came? We must ensure, whether by addressing education or employment, that those communities cannot become fishing grounds for people who pedal violence, hatred, and nihilism.

[Mrs May]

As I indicated earlier, the reasons why people become radicalised are various and often complex, and it is important that we try to understand those reasons. It is also important that in any community in our country we look at the issues that matter to people. For everybody around the country, those are things such as the availability of jobs and the education and public services they receive, and we consider those matters for everybody.

[Mr Robin Walker (Worcester) (Con)]

As well as a substantial Muslim community, which has been quick to condemn the atrocities in Paris, Worcester hosts the longest continuously running newspaper in the English language, and the tomb of King John, whose unwilling but lasting legacy of the Magna Carta will be commemorated this year. Does the Home Secretary agree that the survival of that charter over 800 years, and recent events, demonstrates that the pen, if properly defended, can be mightier than the sword?

[Mrs May]

I pay tribute to my hon. Friend, and to his constituency and its links with the Magna Carta. That was an important document, and it is right to celebrate its anniversary this year. We all recognise the importance of the words in that document, and the fact that it and its principles have survived over the centuries is testament to that. In response to the attacks and murders of the cartoonists and journalists at Charlie Hebdo, everybody must make it clear that the pen is mightier than the sword.

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

Will the Secretary of State agree that the lessons of Paris are that our real strength is in unity and fraternity? We should keep together on this; there is no big political divide. We must keep together across the parties, and have a dialogue and conversation with the vast majority of Muslim people in this country who are law abiding and want to help us to defeat terrorism.

[Mrs May]

The hon. Gentleman is right to say that the majority of Muslims living in this country want to defeat terrorism and ensure that they play their full part in our society, and it is right that we make every link we can with them in doing that.

[Robert Jenrick (Newark) (Con)]

News organisations must use their independent professional judgment as to whether they reprint the cartoons of Charlie Hebdo. Although in their own eyes, many were avoiding the risk of offending some of their readers, in the eyes of the jihadis, some were undoubtedly viewed as being intimidated into censorship, which to me was reason enough to reprint. Does my right hon. Friend agree that true free speech, not just the illusion of it, includes the right to insult and offend? We do not defend free speech, if that is truly what we want to do, by casting aside those who push at its boundaries.

[Mrs May]

I absolutely agree. Freedom of the press means that the press should be free to publish what it chooses within the law. As the Prime Minister reiterated earlier, freedom of the press, which we all believe in, means that we should accept that it can publish what it wishes to publish within the law, and we should not set artificial boundaries on that.

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

Will the Home Secretary update the House on how well the Prevent strategy is working in reaching people at the grass roots who work with young people? Whatever the House does, quite rightly, to protect people’s primary civil liberty—that of life and limb—through new legislation, the security services cannot be everywhere and that network on the ground is most important.

[Mrs May]

I am happy to give the hon. Lady some figures on Prevent. Thirty local authority areas are currently classified as Prevent priority areas, and 14 more supported areas are eligible for funding for Prevent projects. Since early 2012, local projects have reached more than 45,000 people. This is an extensive piece of work, and we continually look at Prevent and consider how we can help it to do its job better, hence the statutory duty in the Counter-Terrorism and Security Bill.

[Dr Matthew Offord (Hendon) (Con)]

On Monday, the Leader of the House and I met parents and governors at the Mathilda Marks-Kennedy and Beit Shvidler schools in my constituency, and during our discussion the attacks in Paris were raised. Will the Home Secretary take the opportunity to allay the fears of some of those parents, and indeed many other people who were not at the meeting, about the rise in anti-Semitic attacks, and say how we can keep those children safe while in school?

[Mrs May]

This is very important. As I indicated earlier, I have met the CST and other Jewish community leaders on a number of occasions. My last meeting with them was shortly before the Christmas recess. We are committed to ensuring that the work of the trust and others, in keeping Jewish communities safe, is supported. As I also indicated earlier, the police talk with the CST and others, and indeed with individual institutions, about what protective security can be provided. As I understand it, they have been providing extra patrols in certain areas to ensure that greater support is given. I am very clear that nobody should feel that they are likely to be subject to the sort of anti-Semitic attacks that, sadly, we have seen too many of in the United Kingdom in the past year. It is very important that people are able to live in this country, follow their faith and live a life free from fear.

[Sammy Wilson (East Antrim) (DUP)]

Last week, while gunmen were rampaging through the streets of Paris, a leading Muslim spokesman in Northern Ireland, Dr Al-Wazzan, was telling the BBC that the west had brought this on itself through its foreign policy. He later withdrew those remarks under pressure. Will the Home Secretary join me in calling for all those who have leadership in the Muslim community to say and do nothing that would give any justification for people to believe that terrorism in the name of their faith is ever justified, and to realise that such words only breed and create division?

[Mrs May]

It is absolutely right that it is important for those in leadership roles in the Muslim community to make it very clear, as many have been doing, that these terrorist attacks are not about their religion and their faith and are not in their name. It is very important to send a very clear message that the only people responsible for terrorist attacks are the terrorists themselves.

[Richard Graham (Gloucester) (Con)]

Interception of communications data is critical to successful counter-terrorism. If the Liberal Democrats will not support what is needed for the defence of our nation, will my right hon. Friend confirm that necessary legislation to fill capabilities gaps will feature in the Conservative manifesto and will be taken forward as soon as possible in the next Parliament?

[Mrs May]

I am very happy to give that confirmation to my hon. Friend. We are very clear that we will take that legislation forward.

[Jim Shannon (Strangford) (DUP)]

There has been a significant rise in co-ordinated anti-Semitic attacks in London, Glasgow, Belfast and Cardiff. Will the Home Secretary indicate what steps have been taken to co-ordinate action to stop attacks on Israeli and Jewish people and property across the whole of the United Kingdom of Great Britain and Northern Ireland?

[Mrs May]

As I have indicated, I have had a number of meetings and the police have been meeting Jewish communities, representative groups and the CST, in view of the role it plays in providing protective security for synagogues, Jewish schools and so on. We have also looked at a number of other aspects. I had a meeting recently, involving the Director of Public Prosecutions and the chief executive of the College of Policing, to look at the advice and guidance available to ensure that the police and the prosecution service respond properly when anti-Semitic attacks are undertaken and that, where prosecution is possible, it is taken forward.

[Stephen Barclay (North East Cambridgeshire) (Con)]

The Government’s taskforce on tackling radicalism and extremism, chaired by the Prime Minister, recommended in 2013 a new banning order for groups that fall short of being legally termed “terrorist” but which undermine democracy, and a new civil power to target those who radicalise others. Will the Home Secretary confirm whether those measures are excluded from the Counter-Terrorism and Security Bill and whether that is because they have been blocked by the Liberal Democrats? If so, given the comments of the shadow Home Secretary and the right hon. Member for Blackburn (Mr Straw), and in the light of recent events in Paris, is there scope to revisit the recommendations made by the Prime Minister’s taskforce, as that would be most welcome?

[Mrs May]

My hon. Friend raises these issues. I have been very clear that it has not been possible to take those particular proposals forward on a Government basis, but I was also very clear—indeed, I said it in the speech I gave at our party conference last year—that it is the Conservative party’s intention to take them forward.

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

The Prevent strategy is key to preventing radicalisation. Given the new roles and responsibilities of schools, colleges and universities, will the Home Secretary state what proportion of the 2015-16 budget will be allocated to those organisations to implement that? What training and support is being provided to principals?

[Mrs May]

The Home Office funding for Prevent has increased in recent years, but further money will be made available, as part of the £130 million that the Prime Minister announced in November, in 2014-15 and 2015-16. The majority of that will be for agencies, but other funding will be for the Home Office, including funding for Prevent. It will also include funding for counter-terrorism policing. Discussions are taking place on how it will be most appropriately spent.

[Stephen Mosley (City of Chester) (Con)]

Like a couple of earlier speakers, in 2012 I was a member of the Joint Committee considering the draft Communications Data Bill. The Committee supported the need for new legislation, but proposed a number of safeguards that we thought would improve the Bill. Will my right hon. Friend confirm that in any future legislation those safeguards would be considered and, hopefully, included?

[Mrs May]

I am very happy to confirm that. The Joint Committee came back with a very well-considered and detailed response, and the Government were clear that we would take on board most of its recommendations. That continues to be my view as Home Secretary and as a Conservative politician looking at the prospect of a Conservative Government introducing that legislation.

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

The Home Secretary referred to the capabilities of the people keeping us safe diminishing. In the context of the security of the people of the entirety of the United Kingdom, how central does she think the National Crime Agency is and how important it is that it is fully operational in all of the United Kingdom, particularly in Northern Ireland?

[Mrs May]

I believe that the NCA does play an important role. Obviously, its clear focus is on serious and organised crime, but it is also focused on economic crime, border crime, child exploitation and online protection. It is a valuable agency. In the operations it has undertaken, it has already shown the benefit of having set it up. I consider that it would be appropriate and beneficial if it were possible for the agency to operate in Northern Ireland, as it does in other parts of the United Kingdom.

[Bob Blackman (Harrow East) (Con)]

Not only is the number of anti-Semitic incidents on the rise, but surveys demonstrate a greater public acceptance of anti-Semitic attitudes. What further reassurance can my right hon. Friend offer to the Jewish community in particular that we will have zero tolerance of anti-Semitism? We need to educate the public that such attitudes should not exist in this country.

[Mrs May]

My hon. Friend is absolutely right. We should be very clear that we will not tolerate anti-Semitism. We can deal with this in a number of ways. First, it is important that we provide support and advice on protective security for those who maybe under the threat of anti-Semitic incidents. It is also very important for us to give a clear message, as a Government and from this House, that we will not accept anti-Semitic incidents. The work led by the Department for Communities and Local Government in the taskforce it has brought together on anti-Semitism plays an important role in that.

[Robert Halfon (Harlow) (Con)]

I was previously on the civil libertarian side of these arguments, but given recent events—not just in France, but elsewhere—I have come to the conclusion that the Home Secretary is absolutely right.

Returning to the subject of the Jewish community, the Home Secretary will have seen the front page of The Independent today, which shows that a huge number of Jewish people have real apprehension of living in the United Kingdom. I welcome her words in response to other Members, but will she make a statement not just on anti-Semitism but about the positive contribution Jewish people bring to this country to ensure that they feel proud of living here?

[Mrs May]

I share my hon. Friend’s concerns. It should be a matter of deep concern to us all in this House when people from the Jewish community, as surveys suggest, are feeling that it is less easy to live in the United Kingdom. We have seen over the years people leaving other countries in the European Union as a result of anti-Semitic incidents. I never thought we would see the day when surveys showed this sort of feeling by Jewish people here in the United Kingdom. It is absolutely right not only that we are clear in our condemnation of anti-Semitism and that we give the protective security and other support I have referred to, but that we send a very clear message that members of the Jewish community play an important and significant role in our communities in their contributions to our society. We should welcome them here. We should applaud the contributions they make. We should ensure that they all feel able to stay living in the United Kingdom and make their important contribution to our society.

Points of Order

Wednesday 14th January 2015 Commons Chamber

13:40

[Mr Andy Slaughter (Hammersmith) (Lab)]

On a point of order, Madam Deputy Speaker. In Question Time earlier, I put some figures to the Prime Minister. I said that under the Government-endorsed “Shaping a Healthier Future” programme, the number of in-patient beds at Charing Cross hospital would fall from 360 to 24. In response, the Prime Minister said that I was “spreading disinformation”, that this was known to my neighbouring Members of Parliament and that I should “take the truth and put it in a leaflet”. I have checked last July’s clinical strategy for Imperial College healthcare trust. In that strategy, and in other places, my figures are confirmed. Other papers also confirm that, as I stated, the A and E department would move from Charing Cross to St Mary’s, Paddington. Seven of my neighbouring MPs and I have written to the Secretary of State on these matters. The Prime Minister is entitled not to answer my question, but he stated that my figures were false. I wanted to put it on the record that they were not false, but I also seek your advice, Madam Deputy Speaker, on how I can get him to correct the record.

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Mr Slaughter, as I am sure you realise, the points you make are a continuation of the debate that started in Prime Minister’s Question Time, and you have now put on the record the clear point you wanted to get across. I am sure there is no advice I can give you that, being an experienced parliamentarian, you have not already thought of and will not be deploying in this Chamber to the best of your considerable abilities over the coming months.

[Dr Matthew Offord (Hendon) (Con)]

On a point of order, Madam Deputy Speaker. It is a tradition and a courtesy of the House that when one Member visits another Member’s constituency, they give them prior notice. I anticipate a visit to my constituency early next week. When should that Member advise me that they will be visiting my constituency?

[Madam Deputy Speaker]

The convention is that the Member should be notified before the visit. Speaking from experience, sometimes it will be on the morning of the visit, although I think Members need a little more notice than that. However, it has to be before, and that is the convention. By the sound of it, the hon. Gentleman has some time to go yet, but I wish him luck in getting enough notice of what I am sure will be a splendid visit from whomever it is—I have no idea who it is.

Voting (Civic Obligation)

Wednesday 14th January 2015 Commons Chamber

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

13:43

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

I beg to move,

That leave be given to bring in a Bill to provide for a civic obligation either to vote or to state an intention to abstain from voting; and for connected purposes.

It is appropriate that I should be asking permission to introduce this measure following the exchanges on terrorism, because our democracy will flourish long after the terrorists and their objectives have been decisively defeated.

Despite what I am going to say, my proposed measure will inevitably be described as compulsory voting. As I shall point out, it is not my intention to force anyone to vote in an election; if there was such a proposal, I would vote against it. I have, however, long advocated, with others, legislation for a civic obligation—a duty, if you like—to vote at least in a general election. However, if my Bill became law, if anyone had no wish to vote, so be it—all they would need do is let the electoral authorities know beforehand, and provide information about where they live, proof and so on, or turn up on the day and tell the clerk at the polling station that they do not intend to vote, and that would be the end of it. There would be no martyrs, and no one would need to go to prison because they do not want to vote—of course, many people sadly went to prison in this country and elsewhere because they wanted the right to vote.

The excellent report from the Political and Constitutional Reform Committee, chaired by my hon. Friend the Member for Nottingham North (Mr Allen), outlines the decline in voting over the years. I shall provide one or two facts about the last election. More people did not vote then than voted for any one political party contesting the election. If we add that figure to the number not correctly registered, it adds up to more than voted for the two main parties in the election, and certainly more than voted for the two parties forming the coalition. That should be a matter of serious concern to the House, whether or not my proposal is accepted.

The decline in voting should be a matter of concern to politicians and the country as a whole. If we want our democracy to flourish and strengthen, surely common sense dictates that we should do what we can to get far more people participating in elections. I have been speaking about general elections, but far fewer people of course vote in local elections. The turnout in the 2001 general election was just over 59%. Four years later, it rose to 61%, and last time, it increased to 65%, meaning that a large one third did not vote. In 2001, there were 66 constituencies in which turnout was under 50%. Four years later, that figure was 37. As we know, there is a gap between older people and 18 to 24-year-olds. At the last election, when the total turnout was 65%, only 44% of 18 to 24-year-olds voted. There has also been a decline in the number of women voting.

I notice reports that the Conservative party wants to change the law on union elections to ensure that at least 40% of those eligible have to vote for industrial action in order for that action to be valid. One might ask how many Conservative MPs were elected by less than 40% of the electorate. I will tell hon. Members: 86%. So no lectures please from the Tories about people voting in union elections!

It is sometimes argued that such a proposal as mine would be an infringement of civil liberties, but why? Do we not all have obligations? We all have to pay—fortunately—national and local taxes and, if we drive, road tax. We cannot opt out, and we do not want anyone to opt out. Is that an infringement of civil liberties? Children must be sent to school. They may be educated at home, if it satisfies the local authorities, but in the main children must go to school, and if parents do not send their children to school, they will be rightly fined. We cannot drive a vehicle without taking a test. Is that an infringement of civil liberties? I am pleased to say—because I voted for it—that smoking is now banned in public places, including pubs and clubs. Is that an infringement of civil liberties? As the Home Secretary said in exchanges a few moments ago, we cannot possess weapons without authorisation from the police. Why should a civic obligation to vote, with the option to abstain, be attacked on the grounds that our liberties are somehow being undermined?

In a number of democratic countries—not many, but they include Belgium and Luxembourg—there is a duty to vote. I leave aside dictatorships, of course. In Australia, turnout in elections for the House of Representatives is 95%. Many years ago, in the last election there before the law was changed where everyone had a duty to vote—there is a small fine if people do not vote—that turnout was under 60%. However, in the first contest under the law that I would like to see applied in Britain, the turnout was 91%— and it has never gone below 90%. I am not aware that Amnesty International or any other human rights group has put Australia on its list of authoritarian states. There are many aspects of Australian politics today that I and my hon. Friends do not like, but the fact of the matter is that it is a democracy, just like ours. Why should anyone take the view that my suggestion is unnecessary and arbitrary?

Would it work here? I accept that if the law were changed, it is possible that many people might say, “No, we are not interested; we will not obey the law”. I think it unlikely, and if it happened, we would obviously have to change the law again, but why not give it a try? Why not use every opportunity to ensure that when we sit in this place, we have the satisfaction of knowing that the overwhelming majority of the people, whichever way they voted, did vote in the general election. I strongly believe that the House of Commons should give serious consideration to what I am proposing. I hope that in due course—I hope I will live long enough to see it—such a change in the law will happen.

Question put and agreed to.

Ordered,

That Mr David Winnick, Mr Graham Allen, Mr Ronnie Campbell, Mr Jim Cunningham, Geraint Davies, Mr Brian H. Donohoe, Mike Gapes, Meg Hillier, Jim McGovern, Grahame M. Morris and Mr Dave Watts present the Bill.

Mr David Winnick accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 6 March, and to be printed (Bill 153).

Opposition Day

Wednesday 14th January 2015 Commons Chamber

[12th Allotted Day]

Energy Prices

Wednesday 14th January 2015 Commons Chamber

[Madam Deputy Speaker (Dame Dawn Primarolo)]

I inform the House that Mr Speaker has not selected the amendment.

13:53

[Caroline Flint (Don Valley) (Lab)]

I beg to move,

That this House notes the policy of the Opposition to freeze energy prices until 2017, ensuring that prices can fall but not rise; and calls on the Government to bring forward fast-track legislation immediately to put a statutory duty on the energy regulator for Great Britain to ensure that energy suppliers pass on price cuts to consumers when wholesale costs fall, if suppliers fail to act.

Last week, in a remarkable U-turn, the Chancellor complained that energy companies were not passing on falling wholesale costs. Of course, he did not say that he would actually do anything about it, but for the first time in nearly five years, he at least accepted there was a problem. Now, it is time for him and all Government Members to put their money where their mouths are, because today’s motion is a very simple one.

Wholesale prices have fallen substantially and over a sustained period. With the exception of those for people with E.ON, which reduced its gas price by 3.5% yesterday, consumer bills have not fallen. We think they should, and we want all consumers to see the full benefits of reductions in wholesale costs. Today’s motion thus proposes that if energy companies refuse to cut their prices, the Government should act by giving the regulator the power and a legal duty to force energy suppliers to cut their prices when wholesale costs fall.

[Charlie Elphicke (Dover) (Con)]

rose—

[Robert Halfon (Harlow) (Con)]

rose—

[Caroline Flint]

I will give way shortly.

Before I set out my case, let me deal head-on with one issue raised by the Minister for Business and Enterprise, the right hon. Member for West Suffolk (Matthew Hancock). He claims that the energy companies are refusing to pass on reductions in wholesale costs because of the prospect of an energy price freeze. Let me first thank him for the vote of confidence in our prospects at the election and tell him he is right about one thing. I absolutely believe there will be a Labour Government in May and we will freeze energy prices until 2017.

The substance of what that Minister says, like so much he comes out with, bears no connection to reality for one simple reason. From the day we announced our price freeze, which, as I have said many times, would stop suppliers increasing their prices without preventing them from cutting them, we have been clear that the price freeze—[Interruption.] If Conservative Back Benchers wait and listen to what I have to say, I will provide the evidence of my words as they appeared in Hansard.

From the day we announced the price freeze, we have been clear that it goes hand in hand with our reforms of the energy market and the creation of a tough new regulator with the power to cut prices when costs fall. That is what the Green Paper we published in November 2013 says—at paragraph 2.25, for those hon. Members who have not yet found the time to read it. Let me remind Members of my exact words in a debate on energy prices in April last year, when I said that

“the Government should…intervene to require all suppliers to freeze their prices. As we have said many times before, that would not prevent companies from cutting prices, but it would stop them from increasing them.”—[Official Report, 2 April 2014; Vol. 578, c. 892.]

What could be clearer than that? I said the same in June last year, too, when I urged the House to back a motion to give the regulator the power to cut prices when costs fall, which Government Members defeated. Therefore, none of the energy companies and no hon. Members should be in any doubt about what we will do.

Yes, we will freeze prices until 2017, so that bills can fall, not rise, and we will also give the regulator the power to cut prices. Let me remind the House that the purpose of our price freeze is not just to give us time to reform the energy market for the future, but—crucially—to compensate consumers for the fall in wholesale prices in 2009, which was never passed back to them. If anyone is labouring under the illusion that the price freeze is, or will be, an excuse for not cutting prices to reflect falls in wholesale costs, let me disabuse them of that idea today.

[Robert Halfon]

Under this Government, fuel duty was not just frozen but cut, and the fuel escalator was got rid of. That means that in tax terms, the average motorist is better off by 20p every time they fill up the family car, amounting to hundreds of pounds a year. Given that this debate is about energy prices, why did the right hon. Lady and her party vote against all those measures?

[Caroline Flint]

On the average energy bill, gas and electricity have gone up by about £260 since 2010. I shall say a little more about who has been hardest hit by that. If we look at the poorest people in our communities, we find that their price rises have gone up substantially more. On every occasion since I was given this job by my right hon. Friend the Leader of the Opposition, I have consistently raised concerns, as I think the hon. Gentleman will appreciate, not only about wholesale cost falls not being passed on, but about the sharp practices going on in the sector, which need to be attended to.

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

My right hon. Friend will know that, like all regulators, the energy regulator, Ofgem, has its functions set out in statute—originally, I think, in the Gas Act 1986 and the Electricity Act 1989, as amended by subsequent legislation. Its primary purpose is to protect the interests of the consumer. Consumers’ interests are not being protected because that legislation does not allow the passing on of the cost cuts that my right hon. Friend has highlighted. Is that not precisely why we need to change the law?

[Caroline Flint]

I agree with my hon. Friend. Every time we have debated the powers of Ofgem, the regulator, we have been told that it has the powers, but is not using them in a practical way to deal with the challenges and problems that consumers face. I believe that, if we make laws in this place, it is essential for us to make laws that make sense and are clear—what is on the tin should be what is in the tin—and to ensure that those laws are enforced.

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

What my right hon. Friend is saying about the energy companies is absolutely right. We need to intervene, as we do in the case of the fuel companies. Notwithstanding what was said by the hon. Member for Harlow (Robert Halfon), not only are the fuel companies not passing on price cuts at the pumps, but there is a growing disparity between diesel and petrol costs, which is harming many motorists all over the country, and also harming the haulage sector. Why is that happening? We need an inquiry urgently, and we need a regulator to intervene with the fuel companies as well as the gas and electricity companies.

[Caroline Flint]

My hon. Friend has made an important point. My hon. Friend the Member for Barnsley East (Michael Dugher), the shadow Transport Secretary, has suggested that we should compare what happens in the energy markets that I cover and what happens when it comes to ensuring that our cars and buses can run, along with all other forms of transport that rely on diesel and petrol. At the heart of debates such as this is the issue of how markets work and whether they are competitive enough. I hope we all agree that, in a truly competitive market of any kind, when wholesale costs come down those reductions are passed on to the consumer, but—as others have pointed out—that is clearly not happening now, at least in the markets that I cover.

[Sir Alan Duncan (Rutland and Melton) (Con)]

Will the right hon. Lady explain what she thinks a wholesale price actually is, and how she thinks supply contracts are priced?

[Caroline Flint]

I shall be happy to do so later in my speech.

[Susan Elan Jones (Clwyd South) (Lab)]

Does my hon. Friend agree that one of the Government’s total betrayals has been their failure even to consider requiring Ofgem to regulate oil prices in the first place? When they speak of rural communities they talk about bringing back fox hunting, but what most people in rural communities want are lower energy costs and lower oil prices.

[Caroline Flint]

I think that in a number of policy areas, the Government are—to put it in a not very academic way—all over the shop. When it comes to energy, they contradict themselves daily, and I can provide the House with evidence of that.

Our motion raises four questions. First, have wholesale costs fallen, and are they continuing to fall? The answer to both parts of that question is clearly yes. Ofgem—the independent regulator with access to market data—confirms that that is the case. Its most recent estimate suggests that contract prices for the delivery of gas and electricity this winter are, respectively, 17% and 7% lower than they were this time last year. The Government’s own figures also show a fall. In a written parliamentary answer that I was given on 26 November 2014, the Minister for Business and Enterprise revealed that wholesale gas prices had fallen by 20% between November 2013 and November last year, and that wholesale electricity prices had fallen by 9%. Those figures relate to the day-ahead market. Platts, one of the price reporting agencies, thinks that the fall has been even more substantial: its estimates suggest that gas prices fell by 26% last year. On the forward market, in which energy companies are buying and selling energy ahead of time, the fall has been bigger still, with gas prices falling by as much as 30%.

There can be no doubt that the wholesale prices of both gas and electricity have fallen—not just a little, but quite a lot, and not just in the past few days or weeks, but for a sustained period of more than a year.

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

rose—

[Charlie Elphicke]

rose—

[Caroline Flint]

I will give way shortly.

That brings us to the second question that the House needs to consider today. Have those savings been passed on to consumers? Yesterday, E.ON announced a price cut of 3.5%. Of course, any cut to anyone’s energy bill is to be welcomed, but E.ON is just one company, and it has cut the price of only one fuel—gas. Electricity prices remain unchanged, and it just so happens that E.ON has more electricity customers than gas customers. Moreover, it has cut its gas price by only 3.5%, which must be set against falls of between 20% and 30% in wholesale gas prices. Even if we allow for the fact that wholesale costs make up only half the energy bill, that suggests that, after cutting its price, E.ON has still pocketed most of the savings from falling wholesale prices. The idea that we are

“winning the war on energy bills”,

as the Secretary of State told The Northern Echo last week, is about as far from reality as the right hon. Gentleman’s chances of becoming leader of his party—much though some of us relish the prospect.

Some of the energy companies collude with the Government in perpetuating the idea that bills are falling. According to a press release issued on Sunday by Energy UK, the trade association for the energy companies,

“Energy suppliers are already passing on price cuts to customers.”

Apart from E.ON, none of the suppliers—notably the big six, which have millions of “sticky” customers on expensive tariffs—have cut the price of their standard variable tariff, which is the tariff that most people are on. What they are doing is offering cheaper tariffs in order to acquire new customers, but offering cheaper deals to a small number of new customers is completely different from passing on savings to existing customers. The obvious question to be asked is this: if companies can afford to offer cheaper deals—often hundreds of pounds cheaper—to acquire new customers, what is preventing them from reducing bills for the rest of their customers? That is the second fact that we have established this afternoon: wholesale costs have fallen, and the savings have not been passed on to consumers.

[Mr Davey]

On Sunday, on “The Andrew Marr Show”, the Leader of the Opposition told us that Labour wanted “fast track legislation” to ensure that Labour’s idea was implemented before the election. Can the right hon. Lady tell us which wholesale price Labour would use for its regulation? Would it be the daily price, the weekly price or the monthly price?

[Caroline Flint]

As I have said in the House before, we will give the regulator a power and a duty to ensure that when wholesale costs fall, it will make the decision—as is only right—to ensure that those reductions are passed on to consumers. I should have thought that the Secretary of State would welcome that. As was pointed out by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), Ofgem—which I understand the Secretary of State supports—has a duty and a responsibility to protect consumers, and one way of protecting consumers is to ensure that they are paying a fair price for their energy. I see absolute clarity in our policy, but no clarity on the Government Benches.

That brings me to the third question. This is where things really begin to get interesting. Why have suppliers failed to pass on these savings? A number of different explanations—although they might more accurately be called excuses—have been provided, both by energy companies themselves and by their friends in the Government.

The first excuse that we have been given is that, because there is a gap between the point at which an energy company buys its energy and the point at which that energy is actually delivered, a company might be buying energy 18 months or a year ahead of time. That is true, but wholesale energy costs have been falling for over a year, so even if companies bought their energy a year or more in advance, bills should still be coming down by now. That explanation simply does not hold.

[Albert Owen (Ynys Môn) (Lab)]

I was very disappointed by what the Secretary of State said a moment ago. Whenever I raise this issue in interventions with him, he hides behind the regulator and says, “We need a strong, independent regulator to ensure that consumers’ interests are protected.” I suggest that a review in the hands of a strong regulator is the way to protect their interests. I am sure that the Secretary of State agrees with that. He should not try to score silly party political points.

[Caroline Flint]

Labour Members certainly agree with that, as do others, including the CBI. Energy should be a managed market. It is different from other things that we may buy, because it is essential to life. It keeps our homes warm, it keeps the lights on, and it keeps our hospitals and our businesses going. In this area it is absolutely clear, and I would have thought there would be some agreement from those on the Government Benches about this, because they have welcomed the CMA review. Why would they welcome a review if they thought everything was hunky-dory? Clearly there is something wrong in the way this market has been working, and that is why we have risen to the challenge to do something about it.

[Robert Halfon]

The right hon. Lady is being extraordinarily generous in giving way to me. She said that the energy companies are only reducing prices to new customers, but under the Government’s regulations they have to offer the cheapest tariff. I know that because I regularly get letters from EDF, my energy provider, not only offering me a cheaper tariff but informing me of the cheaper tariffs on offer from other companies.

[Caroline Flint]

The hon. Gentleman has on a number of occasions stood up for consumers where he has concerns about how the energy sector is working. I say this to him: the energy companies have been asked to inform their customers of the cheapest tariff, which is okay, but the truth is that we have the enormous problem of the inherited legacy post-privatisation of a very sticky customer base. That is demonstrated by the fact that the number of people switching is falling, not increasing.

Let me give the hon. Gentleman an example of another practice that is happening at the moment. It is called white labels, and it is where an energy company—one of the big six—offers through another organisation, maybe a supermarket or another company, a cheaper tariff to people who decide to be customers of that organisation, when it is the energy company providing the staff in the call centres and doing the training behind it, but they do not let their existing customers know what is going on. That is a good example of how they get around the offer they should be making to their existing customers to reflect wholesale cost falls for everyone, not just those whose business they want to acquire.

[Robert Flello]

Is my right hon. Friend as astonished as I am, and I am sure almost all my constituents will be, that the Government are trying to defend the energy companies and not trying to defend the poor consumer?

[Caroline Flint]

I do find that incredible, given that the Chancellor issued a stern warning to the energy companies only last week about their not passing on falls in wholesale cost. I do find it unbelievable that we cannot get a consensus in the House on this issue.

[Mr Weir]

I have been listening carefully to what the right hon. Lady has been saying and I agree with most of it, but she mentioned the CMA, and one of the things that slightly concerns me is the length of time the investigations often take. What assurance can she give us that if this were to happen, it would be a prompt investigation with action taken on prices? The last thing we need is for this to be kicked into the long grass so that we get an answer only 18 months down the line when things may have changed completely.

[Caroline Flint]

I welcome the hon. Gentleman’s support for Labour’s policies in this area, and I hope we can persuade the Scottish National party that the price freeze is a good policy as well and that it should get behind it.

To inform the hon. Gentleman, the timetable is that the CMA report is due to be completed in December of this year, but an interim report should be forthcoming in June. Our view all along has been that when Labour is in government, we will freeze prices and introduce measures to make sure that the regulator can ensure that wholesale cost reductions are passed on. Also, in tandem with the CMA, we will be issuing further detail of our reforms, which I have to say in some respects the CMA has taken on board, which I welcome.

The second excuse we have been given is that wholesale costs are only one part of an energy bill. I heard a spokesman for E.ON yesterday refer to “non-energy costs” preventing reductions being passed on, but let us remember that even though there are other costs, wholesale costs are still, as we would expect, the single biggest component of a household energy bill. When the cost of the single biggest component falls by 20% or even 30%, I think the bill should come down, too.

Let us also not forget that one part of a typical energy bill has been increasing sharply: the profits of these companies. Ofgem’s latest supply market indicators suggest that profit just on the supply of energy—and there is another even bigger profit on generation—has more than doubled from £49 per household in 2013 to over £100 per household today. Energy companies do control that, so that argument does not stand up to scrutiny either.

[Mark Tami (Alyn and Deeside) (Lab)]

Does my right hon. Friend agree that the energy companies are also very quick to increase customers’ direct debit payments, but seem to be very slow to pay back money when people have over-paid?

[Caroline Flint]

I agree. I constantly hear complaints about roll-overs as well, when people suddenly find their tariffs have increased. There is a huge amount that still needs to be done, and in a number of areas I only wish we had had more of a consensus in this House.

So, what is happening? Why are our energy companies not passing on the benefits of falling wholesale costs? I think the answer is pretty simple. They are not passing on the savings for the same reason that they have never passed them on: they do not believe they will be made to. In part, that is because the normal competitive pressures we would expect to see in a functioning market do not exist in our energy market. If they did, we would all see bills falling, because in a competitive market there is no reason—none whatsoever—why falls in wholesale costs should not be passed on as quickly or fully as increases. However, it is also because they know that this Government will never make them—will never challenge them, never stand up to them, and never put ordinary families first. That is the single most important thing that the Chancellor’s letter and the Minister’s so-called summit tell us. Yes, of course, they are empty gestures. We know that, and the public know it, too, and if today’s Financial Times is right, the Secretary of State knows it as well—in his defence he did not even know about this so-called investigation until after it had been announced, which speaks volumes about his grip on energy policy in government. That is probably why the Minister for Business and Enterprise is not taking part in this debate. He does not need to, because all he has to do is pop over to the Treasury for a quick chat with his old boss to determine the Government’s energy policy.

None the less, this does reveal something fundamental about this Government’s refusal to tackle energy bills. We now have Government Ministers saying that wholesale costs are falling and pointing out that these have not been passed on to consumers, but nevertheless still saying that to actually force energy companies to cut their prices would spell disaster. What clearer message could there be to energy companies that they are free to do whatever they like, charge whatever they like, and treat their customers however they like? If the Government will not step in now, when Ministers themselves are admitting that customers are being ripped off—and that is what is happening if wholesale costs are falling and household bills are not—then they never will. That is what the Minister’s letter really is: it is a get-out-of-jail-free card—“Pass go, don’t pay £100 and don’t pass on savings to your customers.” [Interruption.] Don’t pay £200 then. So wholesale costs have fallen but consumers have not seen the benefit, and the reason is that competition is weak and the companies know that this Government will never do anything about it.

That brings me on to my fourth and final question for the House to consider: what should we do about it? We have had a few suggestions from the Government, and I want to deal with each of them in turn. The first idea we have had is another investigation. To be fair, it is not just an investigation: there is a strongly—strongly—worded letter too, and an invitation to a summit, which brings to mind that notoriously successful summit the Government held with the energy companies soon after I entered this job in 2011! I think it was dubbed “Click, switch and insulate to save”. Unfortunately, the energy companies put their prices up anyway. Indeed, such is the utter confusion within Government on energy policy that it looks as though we have come full circle and are back to the policies that they themselves know failed in the past.

And what could there possibly be to investigate? We know what the problem is. We have known about it since 2011 when Ofgem first identified it, and we can all see for ourselves that wholesale costs have fallen and consumers’ bills have not. What more is there to it than that? Why do we need another investigation, in addition to the one that the CMA is running? And what good will it do? How will it help a single family with their energy bills now?

The second idea is that we just have to wait. The argument goes that at some point some time in the future some of the companies might eventually cut their prices—or should we wait until the CMA reports in December? But why should we wait? Why should households wait a single day longer? Wholesale costs have been falling for more than a year; how much longer must people wait before their bills fall too? [Interruption.] The Secretary of State might be interested to hear that, as figures I published today show, the average family’s energy bill is £260 a year higher than it was in 2010. Behind those figures, however, is the fact that it is the poorest households who have been hit hardest. With electricity up by nearly 40%, gas bills having risen by more than 50% in the last three years alone, and for the first time on record more than 1 million families with children in England in fuel poverty, they cannot afford to wait.

The third idea we have been offered is to make the energy market more competitive—I am sure that is what the Secretary of State will argue in his speech today. No one would disagree that consumers would be better served if companies were hungrier and competed more to win, and retain, their customers by cutting prices and improving customer service. Indeed, we have set out and debated a number of our proposals which are designed to do exactly that. However, the fact remains that competition is not working; if it were, bills would have fallen and we would not be having this debate. Indeed, it is not merely not working, but the situation is getting worse. That is not just my view but that of the regulator, Ofgem, in last year’s state of the market assessment:

“There are indications that things are getting worse for consumers.”

On the question of companies not passing on falling costs, it said:

“We found that suppliers pass on cost increases more fully and more quickly than cost decreases. The asymmetry we found was greater than when Ofgem performed a similar exercise in 2011.”

So the idea that we should simply leave it to the market to correct itself perhaps some years down the road, when things have been getting worse, is not one we should seriously entertain.

If that is not the answer, that leaves us with one option. The Government must ensure that if consumers do not enjoy the benefits of competition, they are afforded the protection of regulation, and that is what today’s motion proposes.

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

The shadow Secretary of State is outlining some serious statistics and I agree with the points she is making. However, does she not agree one of the most effective ways of addressing fuel poverty is to sharply increase infrastructure investment in home energy efficiency? That would create green jobs, boost economic growth, cut carbon emissions and address pressures on the NHS such as respiratory diseases. Why is the Labour party not making the case for sharply increasing infrastructure investment in Wales?

[Caroline Flint]

We are making the case, and I refer the hon. Gentleman to the Green Paper we published just before Christmas, in which we made three points in that regard. First, we would make sure that the money levied from the energy companies to help with insulation went to the fuel-poor, taking a bottom-up rather than top-down approach to delivering energy efficiency in our communities. We have said that we should have higher ambitions for the private rented sector in order to make such homes fit for purpose, and that we should get a better deal for those who can afford to pay something, by providing 1 million zero-interest loans during the next Parliament. We have also said that energy efficiency should be a national infrastructure priority. I hope that that clarifies the position for the hon. Gentleman.

This is about ensuring that we have a policy that is fit for purpose: not just a new power for the regulator, but a new duty to ensure that bills are fair and that reductions in wholesale costs are passed on to consumers. There should also be a price freeze until 2017, so that energy companies cannot simply whack their prices back up after being forced to cut them. We know that wholesale costs have fallen, and that energy companies will not pass on the full saving to all consumers unless they are forced to, so let us give the regulator that power. Let it do the job that people expect it to do, and let us put in place a framework that can begin the process of restoring trust in the broken energy market.

That is the choice before the House today. Do we carry on with business as usual, with more families with children than ever before unable to afford to heat their homes, and just let the energy companies get away with their usual tactics; or do we call time on the sharp practices and rip-off prices? Do we draw a line in the sand and say “No more”? That is the decision Members will have to make, and account for to their constituents.

Government Members have had the chance before to take action on energy bills—and have refused to do so. They will not be able to vote against action to make energy companies cut their bills today, and then complain tomorrow that falls in wholesale costs are not being passed on. Let me warn them: much though they might wish it, this debate is not going away. I have it on good authority that the Prime Minister does not want to talk about energy between now and the election, but let me say to him and to the House that that is exactly what this election is about. It is about more than energy prices; it is about how our country is run and whom it is run for. The first, last and most important test to judge any Government by is the level of success for working people in our country—for the many, not the few.

14:25

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

I thank the right hon. Member for Don Valley (Caroline Flint) for bringing her policy ideas to the House again. Some colleagues will remember the last time we debated a similar motion, on 18 June last year, and it was not a happy experience for the Opposition. Since then, the evidence that our policies are working has increased, and the Opposition have still failed to explain how their policies would work.

People out there—from pensioners to families—need our help with energy bills, and whether it is competition or regulation, energy efficiency or direct payments such as the warm home discount, I am determined that they get it. Indeed, I am open to any policy that genuinely helps people to pay their energy bills. However, the Labour party’s proposal would actually make things worse. My argument to the House today is as follows. First, when it comes to delivering lower gas and electricity prices for consumers, competitive markets are more effective than Government price fixing and heavy-handed regulation. Moreover, I will show not only that this Government have successfully acted to make these markets more competitive, but that we are not complacent—that we know more needs to be done for consumers—and that we will continue to work to improve competition further. Above all, I will show that, thanks to our policies on competition, consumers can now get the benefits of lower energy bills.

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

How can the Government justify not passing on the fall in oil prices to customers? Some 8,000 households in my constituency are in fuel poverty, and nearly 3,000 people are accessing food banks. People are choosing between heating and eating. How can the Secretary of State justify not doing anything?

[Mr Davey]

The hon. Lady refers to oil prices but we are talking about gas and electricity prices. Oil prices relate mainly to transport—to petrol and diesel. However, assuming that she meant gas and electricity prices, thanks to competition, some of these price falls are coming through, and I want to give the House more detail about that.

Consumers can get the benefits not just of lower wholesale prices; many can get even greater savings, often more than double the savings from lower wholesale prices. Again, however, we need to do more to help consumers know that they can cut their energy bills today.

[Robert Halfon]

I am grateful to my right hon. Friend for what he is saying, and for the fact that the Government have taken £50 off energy bills. Further to the point that was made earlier, will he look at the issue of direct debits? The millions of people who do not pay by direct debit face a premium on their energy bills. I know the Government are looking at this, but it seems incredibly unjust and they could address it in order to help keep bills down.

[Mr Davey]

We have indeed looked at this issue, as my hon. Friend says, and tried to make sure that any differences relate only to the costs associated with the payment method, and that there is no exploitation.

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

Will the Secretary of State give way?

[Mr Davey]

No, I want to make some progress; I will give way later.

Secondly, I will demonstrate that the Opposition’s proposed new regulations would be bad regulations, resulting in higher prices for consumers, not lower. I am not against regulations where they work better than competition, but Labour’s proposed regulations, involving wholesale-retail price links, would produce yo-yo pricing and higher pricing, and consumers do not want either.

The first part of my argument is that consumers benefit most from increasing competition in energy markets, and not from introducing bad regulation. It is interesting to note that Labour used to agree with competitive energy markets. Back in 2002, under Labour, all gas and electricity price controls were abolished. The argument supported by the Labour Government at the time was that the gas and electricity markets had become more competitive and that regulation was no longer needed. When the present Leader of the Opposition became Energy Secretary of State in 2008, he continued to back a policy of no additional price regulation, even though it was already becoming clear that the big six energy firms created under Labour were not producing the competitive outcomes that Labour had said it wanted. So clear were the problems in the market that there were calls for an investigation of that market by the independent competition authorities. Those calls for an inquiry were rejected by Labour—specifically by the present Leader of the Opposition. Worse still, not only did he reject a competition inquiry, but he took no significant action to improve competition for consumers. Interestingly, he also took no action to reintroduce price regulation. He just did nothing.

[Charlie Elphicke]

It is important that we should test the credibility of the Opposition’s arguments against their record in government. To that end, will my right hon. Friend tell us what happened to gas prices and to fuel poverty under the last Labour Government?

[Mr Davey]

My hon. Friend is right to suggest that gas and electricity prices rose faster in the last Parliament than they have done in this one. Similarly, fuel poverty went up dramatically under the last Labour Government, so he is right to make those points.

[Mr MacNeil]

The right hon. Gentleman talked about problems in the market. May I draw to his attention a problem that I have already raised with his Department, when the right hon. Member for Sevenoaks (Michael Fallon) was a Minister there? In the islands of Scotland, we pay a higher price per unit of electricity than people on the mainland and in London. We are also penalised by the locational charging for renewable energy. The right hon. Member for Sevenoaks was going to look into whether renewable energy produced in the islands could be considered as consumption in the local domestic market, and into the possibility of reducing the charging either way.

[Mr Davey]

I am aware of some of the problems that the hon. Gentleman has raised. He knows that the rest of Great Britain helps with some of those prices, through subsidy schemes paid for by every consumer in the rest of the United Kingdom. We have helped to support those schemes. He might be interested to know that I am going to Edinburgh tomorrow to talk about how we can help with wind power on the islands. We have to get the power there first, before we can take up the policy that he is proposing.

As I was saying, when the right hon. Member for Doncaster North (Edward Miliband) was doing my job, he did nothing. That is in sharp contrast with what has happened since the coalition came to power. We have been hyperactive in reforming our retail energy markets with a whole host of initiatives from deregulation to Ofgem’s retail review, from making energy bills simpler to making switching faster, from the MyData initiative to regulating for quick response codes on bills, and from collective switching to the Big Energy Saving Network. The result of our reforming actions is that competition has improved. Indeed, it has increased quite dramatically and I shall give the House the figures.

[Ben Gummer (Ipswich) (Con)]

Is my right hon. Friend aware that, even in opposition, the right hon. Member for Doncaster North is managing to increase bills for our constituents? The chief executive of E.ON has commented that the reason that prices have not fallen faster across the market is the threat of an energy price freeze from the incompetents on the Benches opposite.

[Mr Davey]

My hon. Friend is absolutely right. I shall come to that point and quote the chief executive, Tony Cocker, in a moment.

I was about to give the figures to show that competition had increased dramatically since 2010. Back then, there were just seven small energy suppliers, with a total market share of less than 1%. That is what we inherited from the right hon. Member for Doncaster North. Today, there are 20 energy independents taking on Labour’s big six. They have a market share of more than 10%, and that share is growing fast. In other words, millions of consumers have switched from Labour’s big six to the coalition’s small independents, and many have cut their energy bills as a result.

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

In the Secretary of State’s paean to the coalition’s activities to reduce prices and increase competition, he appears to have forgotten what he has just done in regard to capacity auctions. Will he confirm that the capacity auction that he has just carried out will give £1 billion a year mostly to the big six, and will raise prices to consumers by about 11p? Is he proud of that, in the light of the undertaking to reduce prices that he has given today?

[Mr Davey]

I am surprised by the hon. Gentleman’s question, because he is an real expert in this area. He sits on the Select Committee and he also served on the Bill that became the Energy Act 2013, so he will know that the capacity market that we created in that legislation had the support of the Opposition. It was needed because the objectives of energy policy are not confined to lowering prices; they also involve energy security. That is where the capacity market plays a role. He will also know that the results of the capacity auctions were far better than we had predicted. The closing price—the clearing price—was significantly lower than we predicted, so there will be a lower impact on consumer bills. That is good news for consumers, because it means that energy security has been achieved at a lower cost. He is wrong to say that all that money is going to the big six; a plethora of energy generators will benefit from it.

Let me be frank with the House. It has taken some time to turn around the mess in the energy markets that we inherited. We cannot switch competition on and off like a light bulb. We know that, until recently, energy bills have been rising over the course of this Parliament. The fact that they have risen more slowly during this Parliament, compared with the last Parliament, is frankly irrelevant to the consumer who still has to pay a higher bill. So, although we have increased competition and although that is working, I am determined to go further still. That is why, back in 2013, I commissioned the first annual competition assessment of our energy markets and why I strongly backed Ofgem’s referral last year of our gas and electricity markets to the Competition and Markets Authority.

The past 12 months have seen the first big test of the extra competition that we have introduced. Have consumers been able to benefit as wholesale prices have fallen? The answer is yes. Not all consumers have benefited, of course, but several million have switched to new suppliers and to new deals in which the fall in wholesale prices has been passed on. They have seen the benefit of our extra competition. Indeed, many people who have switched have seen savings far bigger than the fall in wholesale prices alone would produce. Our latest estimate suggests that many people could save about £300 a year by switching.

[Caroline Flint]

Would the Secretary of State admit that Ofgem believes the situation to be getting worse? Even if people are switching, which is welcome, their numbers are falling. Does he agree that it is only those who switch who are getting the benefit of new tariffs? What does he say to the many more customers who are on tariffs that provide no benefit as a result of the fall in wholesale prices?

[Mr Davey]

I think I counted three questions in there, and I shall try to answer all three, if I can remember them. The right hon. Lady said that Ofgem believed the situation to be getting worse. Certainly, its 2013 report compared the situation with the one outlined in its previous report and said that there were reasons for concern. That is why we supported its referral to the Competition and Markets Authority of our gas and electricity markets. She then talked about switching, and she was right to say that switching rates fell a little bit in recent years. The reason for that is that we have got rid of doorstep mis-selling. Doorstep mis-selling was responsible for a big boost in switching figures, but people were switching from one big six supplier to another, and often getting a very bad deal as a result. I am delighted that it has now been got rid of, even if that means that overall switching figures are down. Now, because we have made switching easier and faster—through collective switching and so on—we are seeing that situation turn around. This time, people are not switching between big six companies and getting a poor deal; they are switching away from the big six into the small suppliers and getting a much better deal. That is something that never happened under Labour.

[Charlie Elphicke]

To underline that point, I switched from SSE and British Gas to a new dual-fuel supplier a couple of years ago and saved 25%. The Opposition should not sneer at switching, because it can make a dramatic difference to people’s bills.

[Mr Davey]

Indeed. I was going on to respond to the right hon. Lady’s third question, because a host of deals are available across the country. I would have thought Labour Front Benchers wanted to support these deals and tell people about them and how people can switch and save money—if they really cared. For example, a year ago in London there was not a single deal in the market where the average household could get its annual supply of electricity and gas for less than £1,000, whereas today, because prices have been coming down, 13 deals offer the average household an annual dual fuel bill of less than £1,000.

I still want to do more. I am going to continue to fight for consumers every day that I hold this office, in stark contrast to the record of the Leader of the Opposition when he was Energy and Climate Change Secretary. The exciting news is that our competition from the smaller suppliers, which is taking huge numbers of customers from the big six, is now forcing the big six to act, too. Last autumn, the time when energy prices are normally put up, the big six froze them—without any regulation and without Labour’s price freeze. Yesterday, E.ON went further, cutting its variable gas tariff by 3.5%. Some have dismissed that cut as being only 3.5%, noting that gas wholesale prices fell by nearly 18% across 2014 and saying that the cut is too small. Let us look at what E.ON said. First, it notes that wholesale costs are 46% of the bill, so of course retail costs will not go down as fast as wholesale costs in any case, unless all costs, such as network and administration costs also fell by the same as wholesale costs—this observation is called arithmetic. Secondly, Tony Cocker, E.ON’s chief executive officer, has said:

“Given the possibility of a price freeze, we are undoubtedly taking a risk today”.

So we have to ask: if E.ON did not face the risk of Labour’s price freeze, would it have cut its prices even more?

Perhaps the Labour party does not want to listen to industry leaders, even the ones who are cutting prices, but the same point is being made by consumer champions. For example, Martin Lewis of MoneySavingExpert.com has warned that energy firms are not cutting their prices, even though they would like to, because they fear being locked in by a Labour price freeze that would make them suffer losses. Consumer champion—[Interruption.] Not a vested interest. Consumer champion Ann Robinson of uSwitch has speculated that the prospect of Labour’s price freeze could be to blame for the big six delaying cuts in standard prices.

Of course, there may be other explanations for the delay in the big six passing on the costs. When the Leader of the Opposition was doing my job, he explained that it was about energy companies buying their electricity and gas forward—hedging—to protect consumers. After a summit with energy firms—he was very good at having summits, after which no policy changes were announced—he said:

“We have recently seen big falls in wholesale gas and electricity prices, but I understand that because energy companies tend to buy in advance they won't be passed on immediately.”

One is tempted to ask: what has changed? Why did he do nothing when he could but now, months before an election, claim he has found an answer?

Whatever the cause, I welcome the fact that E.ON has not only cut its standard variable gas tariff, but is offering a fixed-price deal at just £923 for the average household. I want the other big energy firms to follow suit, but we will not need a regulation for that to happen. I confidently predict that competition will force the other large energy firms to cut prices, or they will continue to lose customers in droves to competitors—that is competition. Indeed, I am very confident that we will soon see more energy firms cutting their prices and offering even better deals.

[Mr MacNeil]

rose—

[Mr Davey]

I will give way to the hon. Gentleman for a second time.

[Mr MacNeil]

I am grateful to the Secretary of State for being very generous. He has talked about fighting for consumers. What will he do for consumers in rural and island areas, who are paying more per unit of electricity than those in big cities and doing so in areas that also have higher fuel poverty? He is in power at the moment, so what can he do?

[Mr Davey]

The hon. Gentleman rightly says that it is clear that there is a lot more fuel poverty in rural areas than was previously known about. When we redid the way we analyse fuel poverty figures, because the measures we inherited from the previous Government were not measuring fuel poverty very well—the Queen was in fuel poverty under their approach—we discovered that those in rural areas were suffering some of the worst fuel poverty. That is why we are changing some of our policies. I have some good news for him, because the falling oil prices have meant heating oil prices have dropped, too. That is good news for some people in rural areas who depend on heating oil, as it is at prices last seen in 2009. I know that that is not the full answer, but I hope it at least shows some welcome signs.

Let us just examine why our extra competition appears to be resulting in better deals and lower prices from the new entrants. There is now greater diversity in how firms buy forward, and with many different firms we are seeing different hedging strategies, new business models, new purchasing strategies and innovation. It looks like that is enabling many people to benefit from lower wholesale prices now. But despite that progress, the Opposition have turned their back on successful competition.

[Debbie Abrahams]

rose—

[Mr Davey]

I shall give way to the hon. Lady for a second time, too.

[Debbie Abrahams]

Given what the Secretary of State is saying now, can he explain what the Chancellor meant when he said it was “vital” that falls in wholesale prices are passed on to families through utility bills?

[Mr Davey]

There is no difference between me and the Chancellor here: of course we want to see price cuts go through to consumers. The question is: what is the best way of doing it? Is it through heavy-handed regulation, which has to be changed? As we have heard today, the price freeze has had to be changed because bills are coming down. If that regulation had been put in place, consumers would have seen higher bills now, not lower ones. That is why regulation is not—

[Caroline Flint]

On a point of order, Madam Deputy Speaker. As I said in the House on 2 April 2014 and have done many times since—I reminded the House about this today—the price freeze will stop energy companies increasing their prices but will not stop them cutting them. Therefore I am afraid the Secretary of State’s statements are seriously misleading, albeit unintentionally, I am sure. Can you tell me how he can correct the record?

[Madam Deputy Speaker (Dame Dawn Primarolo)]

That is not a point of order; it is a continuation of the debate. The Secretary of State is responsible for what he says at the Dispatch Box. Fortunately, I am not, unless it is unparliamentary, and so far he has not been.

[Mr Davey]

I will try my best not to be unparliamentary, Madam Deputy Speaker. For the benefit of the House let me quote what the hon. Member for Leeds West (Rachel Reeves), a shadow Cabinet colleague of the right hon. Member for Don Valley, has been reported as saying on Andrew Neil’s programme this morning: She said:

“We didn't use the word ‘cap’.”

I can show the House the Labour advert for the price freeze. I see a block of ice, and I see the words “frozen” and “freeze” but I do not see a picture of a cap. There is no cap on that advert. It is that there has been a change and that the Opposition are in complete confusion.

Let me put on record the fact that I am grateful for the support of the right hon. Member for Don Valley—she has supported, rather belatedly, our support for the deepest ever investigation of energy markets by the Competition and Markets Authority, which is now under way. However, there is one major caveat. Labour’s support for the CMA would be more credible—Labour would be more credible—if Labour was prepared to wait until just later this year to see the report; Labour could wait for the independent advice of the CMA before anyone regulates. If the CMA says that new regulations are needed to protect the consumer, I, for one, will back that. I doubt that new regulations will be its main recommendation, but I am sure of one thing: any regulation the CMA comes up with will be far more effective, far better thought out and far more likely to work than the frankly daft regulations Labour continues to propose. The fact that Labour will not wait for the independent CMA exposes its policy for what it is: a cheap political gimmick.

That is my second argument: Labour’s regulation would be bad for consumers and would put up prices. The first issue is the utter incoherence and inconsistency of Labour’s proposed regulations. Labour wants to freeze prices and, at the same time, force retail prices to go up and down with wholesale prices. As we saw earlier, the right hon. Member for Don Valley cannot explain which policy Labour now prefers: a freeze or yo-yo bills. Worse still, it now seems that Labour’s price freeze is not really a price freeze. She keeps on trying to deny it, but I have quoted the hon. Member for Leeds West and shown the figures. I can also quote The Sun. Under the headline “Mili may ditch price freeze vow”, a senior Labour source is quoted as saying:

“If bills are coming down there will have to be a rebranding to make it a cap.”

Clearly, Labour’s high command is worried: it knows that its price freeze would mean higher bills, as some of us have warned all along.

[Caroline Flint]

rose—

[Mr Davey]

Here comes the rebranding.

[Caroline Flint]

Perhaps, as we are quoting from journalists in the press, the Secretary of State will want to comment on what the energy editor of The Daily Telegraph tweeted today. She said:

“To be fair to Labour, heard them say energy ‘freeze’ is ‘cap’ many times.”

This morning, the Financial Times stated that

“the Government is still in disarray over how to respond to Labour’s campaign for lower energy prices.”

Perhaps the Secretary of State would like to comment on those reports.

[Mr Davey]

Did Members note that there was no quote from a source? The right hon. Lady was trying to compare a quote from a Labour source with a quote from a journalist—not terribly good.

We have always known that the freeze would be a bad idea. If wholesale prices rose during the freeze, small firms would go bust, damaging competition. If wholesale prices fall, energy firms would just make massive profits. If the freeze has become a cap, then that raises more questions. A cap implies that Labour’s regulation would work only one way. Wholesale price cuts would have to be passed on, but not price rises. Energy firms could only lose from such a regulation.

Opposition Members may not care about that, but they should remember that that means that consumers lose. For if the risk is only one way—lose—the energy firms will have to price in that risk in the prices that they charge, which means higher prices. Indeed, they will also have to price in extra regulatory uncertainty from Labour’s wholesale return to regulated prices. This will, therefore, be disastrous for consumers. Clearly, Labour’s policy would end up raising prices, but what about its proposal to force, by regulation, wholesale price cuts to be passed on to consumers? How would that work? First, there would have to be a wholesale price—the reference wholesale price—used for the purpose. Last June, I asked the right hon. Lady whether that wholesale price would be priced daily, weekly or monthly and she did not answer. I have asked her again and she still has not answered. That is strange, because the Leader of the Opposition told Andrew Marr this Sunday that he wanted to fast-track regulation, so one would assume that he had worked this out. We can only guess. Will consumer energy prices yo-yo up and down every day, every week or every month with wholesale prices? We just do not know.

One of the main purposes of energy firms buying ahead and hedging is to protect consumers from yo-yo prices. Forward buying smoothes prices for consumers. Let me explain this rather fatal problem with the Opposition’s proposal another way. Let me use data from last year to show how Labour’s policy would work—or actually not work. Over the whole year, day-ahead wholesale gas prices fell by almost 18%. But that fall over the whole year masked significant ups and downs during the year. For example, between March and July, gas prices fell by almost 40% before rising again by nearly 50% by December. If Ofgem had forced suppliers to drop retail prices to consumers to reflect the lows in wholesale gas prices in July, would it have had to force companies to raise retail prices to reflect the highs of December? Or would the right hon. Lady expect the firms simply to bear that loss? No answer cometh. What a lot of nonsense this is.

[Charlie Elphicke]

Does my right hon. Friend not agree that having that yo-yo system would massively impact on continuity of supply, because we would not be able to have long-term contracts to guarantee the delivery and supply of gas to this nation?

[Mr Davey]

Indeed. The danger is that the Government—some sort of Gosplan regulator—would effectively have to decide the purchasing strategies of all energy companies. Clearly, Labour has found someone who is much better than all the market participants. I do not know who that individual is; he has not been identified. Not only is this a lot of nonsense, but it will be very costly. Firms will face higher administrative costs. They will have to notify customers of price changes far more regularly, and the customer will have to pay for that.

[Gregory Barker (Bexhill and Battle) (Con)]

Will my right hon. Friend give way on that?

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. The Secretary of State will not be giving way. The right hon. Gentleman joined the debate late. He has not been in the Chamber very long. It is a timed debate that has to end at 4.30 at the latest, and I have 13 speakers. After nearly an hour into the debate, we still have not completed the opening speeches. The Secretary of State will resume.

[Mr Davey]

Madam Deputy Speaker, I am sorry for being so generous-hearted.

[Madam Deputy Speaker]

Order. Perhaps the Secretary of State could be generous to all the Back Benchers who wish to speak in the debate as well as intervene on him.

[Mr Davey]

I will take your stricture, Madam Deputy Speaker, as you are the regulator.

My final point on the right hon. Lady’s proposal is that it would damage fixed-price deals. They are the leading deals on the market and would almost certainly go in her model of regulation. I do not believe that consumers want Labour’s yo-yo prices or to pay the extra costs for the privilege of having yo-yo prices.

We have two different policy options on offer. A policy of increasing competition, which is working, has seen energy bills frozen and cut. It is a competition policy that we want to see pushed further still to get more benefit for every bill payer, not least with the CMA investigation. That approach stands against a policy of ill-conceived regulation that even in the most charitable light will increase risk, uncertainty and volatility and, as night follows day, mean higher prices for consumers. Lower energy bills from the Government or higher energy bills from Labour—I look forward to putting that choice to the electorate.

[Several hon. Members]

rose—

[Madam Deputy Speaker]

Order. I am afraid that it will be necessary to impose a time limit on all speeches. The Front-Bench teams require 10 minutes each. Therefore, the time limit on Back Benchers, of whom 13 gave notice in writing before the start of this debate that they wish to speak, will be five minutes starting now. The first speaker is Peter Hain.

14:57

[Mr Peter Hain (Neath) (Lab)]

I thank the Secretary of State for his revelation that The Sun is now the house journal of the Liberal Democrats. It does him and the Government no credit that their attitude to Labour’s price freeze has veered wildly, initially denouncing it as Marxist, which was a revelation to all Marxist disciples, and now misrepresenting it with a patronising approach that belies the fact that my right hon. Friend the Member for Don Valley (Caroline Flint) and the leader of the Labour party have been proved right all along on this policy, as they will be proved right in the future.

One of the best vehicles for keeping energy prices low is the Severn barrage. This huge infrastructure investment boost makes the Severn barrage a no brainer, not least because it requires no Treasury funding. The £25 billion construction cost will be financed entirely privately, mainly from sovereign wealth funds and other large-scale institutional investors, because they would have a guaranteed revenue stream over a period of 120 years or more. The project will create 20,000 jobs during its nine-year build, and with multiplier effects another 30,000 jobs, making a total of 50,000 jobs and a £70 billion boost to the economy. Many of the jobs will be located in communities in south Wales and the south-west of England, which are crying out for such a boost of investment and high-skilled jobs. Some 80% of the spend will be in the United Kingdom, unlike wind power where 80% is spent abroad because countries such as Germany and Norway have stolen the lead on wind turbine manufacture.

The scheme would harness one of the world’s largest potential sources of renewable energy: the huge tidal range of the Severn estuary—the second highest in the world. Building an 18-kilometre barrage between Brean in England and Lavernock Point in Wales would be one of the world’s largest privately funded global engineering projects.

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. I must reluctantly intervene on the right hon. Gentleman. This debate is about energy prices, not energy generation from things like the barrage. He needs to relate his comments to the impact on energy prices and passing on reductions to the consumer.

[Mr Hain]

I was about to do that, but I need—obviously with your permission, Madam Deputy Speaker—to describe the project in order to do so.

Most importantly, the barrage would produce the cheapest electricity in the United Kingdom—half the cost of alternative sources such as gas, nuclear and coal, as well as other renewables. Previous consortia interested in the project have looked to a period of consumer subsidy lasting less than 25% of its life—very small compared with other renewables. After that initial subsidy period, promoted by previous consortia backing the barrage, it would generate electricity at £20 per MWh for at least a century, less than half the wholesale market price that the economy has been used to.

The latest project backer does not want the consumer subsidy of contracts for difference, a point which I hope the Secretary of State will note. In meetings with him, I have discussed support for the barrage, which he has not been able to give. The barrage has attracted widespread criticism from wildlife groups, but it has considerable other benefits, including low electricity prices over its entire life if the current project is taken forward in this way. In addition, it would have other important effects on the economy. The 1,026 turbines required, each the weight of a jumbo jet, would be built at two factories in the region, most probably at Port Talbot and Bristol. The planned caisson-casting yard at Port Talbot deep-water docks could afterwards be converted into a port for ultra-large container ships. It would also enable us not just to keep prices low, but to export the technology and expertise in tidal barrage construction around the world. So it would keep prices low, which consumers desperately need, and it would support flood protection. Some 90,000 properties and 500 square kilometres of Wales and the south-west, including the Somerset levels, would be supported, and it would act as a barrier against storm surges. Therefore, prices would be kept low and there would be many other benefits from the project.

In conclusion, this is the biggest single investment project coming from the private sector, needing no consumer subsidy at all in contracts for difference, according to the latest backer of the project, which I hope the Government will meet. I hope that people will see this as something that should have been backed already, and that now all parties will back it as a—

[Madam Deputy Speaker]

Order.

15:03

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

It is a pleasure to follow the right hon. Member for Neath (Mr Hain), but he will understand if I do not go down the path of his argument. He knows my views about the enormous cost of electricity generated from the Severn barrage, which were set out in the report of the Energy and Climate Change Committee, which I chair, a couple of years ago.

The Opposition’s proposed price freeze is one of those rare policies whose mere announcement causes even more harm than its implementation would do. My right hon. Friend the Secretary of State comprehensively demolished the price freeze and its complete lack of intellectual coherence, which, incidentally, makes it astonishing that it is proposed by a former Secretary of State for Energy and Climate Change. I will not repeat the case against the price freeze, but simply emphasise that the only absolutely certain consequence of a freeze announced months in advance of its implementation would be to raise prices substantially above where they otherwise would be and to discourage, and possibly destroy the prospect of, much needed investment—two totally perverse outcomes that would substantially damage the interests of consumers.

Instead of repeating my right hon. Friend’s effective attack, I want to suggest four ways in which energy costs could be cut. We must focus on costs not prices. It is false for anyone to claim that Government can control energy prices when the biggest factor in determining those prices is totally outside their control, namely the wholesale price of gas.

The first way to cut energy bills is to pay more attention to transmission and distribution, the costs of which account for almost a fifth of the average bill. They are provided by largely unscrutinised monopolies, or quasi-monopolies. Distribution has been neglected, because most consumers do not have a clue who supplies the power to their homes. The tabloid media regularly attack the big six, whose names appear on the electricity bills, but they ignore the distribution companies, which face little or no competition—even less than the big six experience. For that reason, the distribution companies should face not less but more scrutiny from the regulator. Regrettably, in the past Ofgem has rather let them off the hook. However, I make it clear that I exempt the current team at Ofgem from that criticism. It is recently arrived and it has shown some signs of escaping the torpor that used to overcome its predecessors whenever there were signs that consumers were being ripped off.

Transmission is a natural monopoly, and National Grid does a reasonable job, but it, too, is far too leniently treated by Ofgem, and generously—perhaps over-generously—rewarded for running its monopolies. I hope that the Government will give top priority to bearing down on the costs of transmission and distribution.

[Ben Gummer]

Is my hon. Friend not also concerned about the monopoly on connections to new developments, which sometimes inflates the costs of new developments and housing? That also requires further regulation.

[Mr Yeo]

I am extremely concerned about that. It has a big effect in the area that my hon. Friend and I represent.

The second way to cut costs is to embrace enthusiastically the opportunity of demand-side response. Few people understand the enormous potential benefits of this. It is sometimes wrongly characterised as a way of cutting power off from consumers. It is in fact a chance for consumers to earn some money back by agreeing voluntarily, sometimes at short notice, to reduce their consumption. The evidence from America is that this new technology, developed in the last few years, is unlocking a considerable potential for reducing demand for electricity at peak times. This has two big advantages: it cuts the need to maintain large amounts of expensive surplus capacity, most of which is used only for a very small amount of time each year, and eliminating that surplus would reduce the bill of every consumer. It is also one of the cheapest and most cost-effective ways to cut greenhouse gas emissions. At present, providers of genuine demand-side response, as opposed to the operators of diesel farms, are not being sufficiently encouraged by the capacity market. I urge my right hon. Friend to look carefully at the ways in which next year’s capacity market auction can be tweaked to ensure that genuine demand-side response providers get a bigger share of the market than the 1% that was achieved last month.

The third way to cut energy costs is to seize the opportunity provided by the deployment of smart technology to promote energy efficiency. To get the maximum benefit from this, we need to establish a true market in energy consumption where time of use pricing encourages consumers to move their consumption of gas and electricity away from the hours of peak demand towards low consumption periods. Smart technology makes this easy. Indeed, much of it can be done automatically by ensuring that appliances, such as freezers, switch themselves off whenever prices are high, and warn their users that if they are opened the power needed to operate them will be expensive. That is just a tiny example of the myriad ways in which consumers can save money and the cost of maintaining the system can be reduced. We should accept time of use pricing in the energy market as being as normal as when we buy an airline or a train ticket. I hope that the Government will commit to introducing that.

Fourthly and lastly, regardless of the outcome of last year’s CMA reference, ending vertical integration in the electricity industry must be considered. When the immensely successful privatisation of the electricity industry took place, generation was separated from retail supply. After a few years, a consensus emerged that allowed these functions to be merged within single businesses. When energy prices were low this did not seem to matter, but today the lack of transparency in the operations of the integrated companies in the wholesale markets has destroyed consumer trust. More importantly, it is no longer obvious that vertical integration benefits consumers. There will of course be protests from the industries, but this is an issue that we need to tackle.

The harmful effects on consumers in particular of a price freeze announced months in advance of its implementation are plain to see. Instead of political gimmicks whose consequences are perverse, the next Government should take practical steps to cut energy bills, cut the cost of transmission and distribution, nurture demand-side response, use smart technology to introduce time of use pricing and review whether vertical integration is really still in consumers’ interests. I commend these ideas to the House.

15:09

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

It is a pleasure to follow my Chairman of the Energy and Climate Change Committee. I do not necessarily agree with everything he said, but I agree with quite a lot of it.

The Secretary of State should know that a yo-yo goes up and down. It usually goes up the same as it goes down. Perhaps he should have a look at how gravity affects it. Prices, however, just seem to go up. We are still waiting for them to come down, so I look forward to the yo-yo effect on prices filtering through to my constituents.

It is difficult to gauge the importance of a debate such as this. Fuel poverty has increased over the years. About 4.5 million households throughout the country are living in fuel poverty. Meanwhile energy costs have gone through the roof and the energy companies are recording soaring profits. Oil and gas prices have been affected in the past few weeks, and unfortunately because of that there will be a loss of jobs, possibly only temporary, but it could be for a lot longer—years, I am told—before we manage to get jobs in the north-east of Scotland back to where they should be.

I am sure that over the next few months we will hear a great deal about the cost of living crisis from colleagues in all parts of the House, and it is right that we talk about stagnating wages, our national health service and the bedroom tax; but it is also right to talk about making the energy market work for ordinary people and addressing the scourge of fuel poverty.

When we think of fuel poverty, we often think of the frail and elderly who have to choose whether they can afford to eat or to heat their homes. Heating or eating should not be a choice for the British people in the 21st century, but the reality is that half of English households that are classed as fuel-poor are in work—1.1 million households in fuel poverty are in employment but still cannot afford to heat their homes. The single largest group affected are couples with children, who make up 30% of the total. In Scotland between 2012 and 2013 100,000 more households fell into poverty, bringing the total to almost 1 million homes. Since 2003, consumer gas prices have risen 128% in real terms, and since 2010 wages have fallen in real terms, which does not help.

There are many ways to combat fuel poverty, including investing to make homes more energy efficient. To their credit, the Government are trying to do that, but they should realise that it takes a lot more than dealing with 2,500 homes to solve the problem. I urge that we also consider how energy companies treat their customers. Energy companies are in the unique position of being able to identify vulnerable customers and temporarily vulnerable customers, and we need to use that information to protect those customers better. I am looking forward to receiving the letter from the Secretary of State, which he told me last week he would send me. I am still waiting, and I look forward to his support for looking after such people.

Some energy companies have to pay back 1.5 million customers who were overcharged on their gas bills. Is that enough? I say no and I would be interested to hear what the Minister thinks. Does he think that is enough? A poll in The Sunday Post demonstrated that 88% of people thought the energy companies did not act in their interest. Looking at the figures, that does not surprise me. The same poll showed that 81% thought those same companies kept their prices artificially high. I think they are right. I would be interested to hear what the Minister thinks.

We cannot ignore the impact that the broken energy market has on millions of energy bills. Last year the profits of the big six energy companies cost £102 per customer, although the cost of buying wholesale energy fell. That is ridiculous. A 70-year-old living in my constituency should not have to make a choice between heating and eating. A couple with a young daughter should not struggle through Christmas and new year worrying about whether they can buy a present, heat their home or eat. We should put people before the energy companies. It appears that the Government think otherwise.

15:14

[Sir Alan Duncan (Rutland and Melton) (Con)]

Populist posturing is a sick and cheap form of politics, and the motion pretends that if only Labour were elected, there is a quick and easy way of reducing energy prices. The Opposition are promising something that will not be delivered and they know it, and they are promising something which simply cannot be delivered in the way they say.

The policy of the Opposition is the worst conceivable combination of ignorance and deceit, and it labels them as ill equipped to look after the economy. Their ignorance of markets and their Canute-like pretence that they can control prices in the way they propose is pitiful in its fantasy and it is irresponsible. The Labour party is saying that the tide can go out, but that it has the power to stop it coming in.

Energy markets are complicated and multifaceted. None of them enjoys the direct, simple, linear relationship described in the Labour party’s policy and motion. Any such correlation is not the way of the real world. I have been involved on and off in the energy markets, principally in oil, for 35 years. Oil, gas and coal in their pricing are interrelated. They tend to move similarly. The only sector that enjoys a modicum of economic independence and segregation is nuclear, to which one might add, to a lesser extent, wind. But the dominant marker for these major providers of the source of energy, and hence utility bills, is oil. It determines in broad terms the cost of energy for power generation, heating and transport.

I started in the business over 30 years ago, and we now have the free market in oil that we did not use to have. When that changed, the nature of pricing also changed. Our own North sea oil Brent became a marker crude for contract pricing, so instead of fixed prices—30 bucks for everybody, going from one company all the way through that company to the end—we got a free market. That market means that here we are in January, but Brent crude is priced for March and April, and if it is a barrel of oil it has to be shipped and refined, so it takes time—perhaps four months—for prices to work their way through from the wellhead to the pump.

[Albert Owen]

My first job was as a galley boy on an oil tanker in the middle east, so I know a little bit about oil from a different perspective from the right hon. Gentleman’s. He says people are ignorant of the facts. Does he agree with the Prime Minister, who said that the best way to deal with the issue is to

“give the regulator the teeth to order that those reductions are made”?

Those were the words of the Prime Minister. Is he criticising us for repeating what the Prime Minister said? Does he agree with the leader of his party?

[Sir Alan Duncan]

I totally agree with the Prime Minister. What we want is a competitive market—I agree with him—not the control of prices by a regulator, whom the right hon. Member for Don Valley (Caroline Flint) seems to want to be able to write every commercial contract throughout the industry.

Let me say to the right hon. Lady that in the case of gas, the stupidity of the motion is that there is no such thing as a straightforward wholesale price. When I put my question to her, she lamentably failed to answer it. There is no such thing as a straightforward wholesale price whose movement should be fully and simply reflected like that in retail prices. That is the fantasy and the ignorance of this proposal, because life is more complicated.

Let us take gas contracts. Some gas contracts have pricing formulae which do not simply follow the headline daily market price. They may be based on various averages or regional weightings. They may have locked themselves into a one-year or a six-month fixed price. They may face maximum and minimum parameters. Their costs may have been hedged to eliminate the risk of massive fluctuations and guard against another idiotic policy from the Labour party. This is a complicated business, within which suppliers and generators may be locked into various different pricing structures, so the idea that a regulator can suddenly say, “Oh, there’s the wholesale price, therefore there is the retail price,” is total lunacy and ignorance, of which the right hon. Lady should be ashamed.

Even if there were some sort of unshackled easy link to daily prices, the Opposition do not understand the distinction between price and volume. The price might fall in a so-called wholesale market, but if there is no business of any volume in the market, how can that price, as a tiny example of one day’s price, then be used as the determinant of retail prices under the right hon. Lady’s policy? This is folly of such total lunacy and ignorance that I am ashamed that anyone in this Chamber should want to stand up and pretend that it makes any logical, decent sense.

Labour Members started by proposing a freeze—it then became a cap, although they have got very muddled, but the leader of the Labour party called it a freeze—after which all the companies’ share prices fell and their pricing policies had to change to guard against this idiocy. Labour’s policy announcement hit share prices and utilities and was detrimental to the consumer, and its cost of living campaign is in shreds.

The clear point in this debate is that we have a regulator to oversee and police the dangers of collusion and uncompetitive conduct. That is where we should all agree, and that is where the influence of Government should lie. It is foolhardy for the right hon. Lady to pretend like King Canute, or rather Queen Canute, that she can stop the natural movement of prices. It is deceit and delusion of which Labour Members should consider themselves ashamed.

15:21

[Ian Lavery (Wansbeck) (Lab)]

Listening to this debate, it is amazing that Government Members have suggested that this motion is a gimmick. It is far from being a gimmick. The right hon. Member for Rutland and Melton (Sir Alan Duncan) said that it is “populist posturing”. It is about reducing energy bills for millions of people in the UK, so of course it is populist, because people want that to happen. The Government are in a spin because the popular price freeze that Labour announced has become known throughout the country. People are absolutely delighted to see a political party standing behind them rather than the shareholders of the big six who seek a dividend.

Consumers feel as though they are getting a raw deal, and they are getting a raw deal. There is a lack of trust in energy companies—in particular, the big six—and understandably so. Yesterday it was revealed that British Gas could rake in an extra 60% in profits if it continues to refuse to cut prices. Whether it is in billing, information, tariff rates or overpayments, the British public believe they are being ripped off, and rightly, because they are being ripped off. Last year, UK gas prices went up by 1.9%, while the average price across the EU dropped by 5.7%. While electricity prices rose by 1.9% in the EU, UK households were hit by a rise of 6.7%. Wholesale gas costs have dropped by 28% and wholesale electricity costs have dropped by 14%. Of course people believe that they are being ripped off, because they are being ripped off.

The issue of the regulator is extremely important, and the Labour motion refers to it clearly. Put simply, Ofgem has a principal objective, which it says on its website is this:

“To protect the interests of existing and future consumers”.

That is what this motion is about. It is about making sure that instead of standing back and hiding around the corner from the big energy companies—the big six and others—Ofgem does what it is supposed to be doing in protecting people who are suffering greatly in this country. Year on year, we have heard debates in this Chamber about the number of people who are dying. My hon. Friend the Member for Glasgow North West (John Robertson) mentioned the scourge of fuel poverty. About 30,000 people are dying, annually, because they cannot afford energy. This is 2015, and we allow that to happen.

That is why the motion calls clearly for the regulator to be given powers to ensure that when the wholesale price drops, the consumer benefits immediately. I have heard the poppycock from the business men on the Government Benches whose main interests are the interests of the big six, not the interests of the people who cannot afford both to heat and to eat. We should be very concerned about the situation that we face here in the UK. There are a million statistics showing the problems that are facing people who are disabled or looking for employment but cannot afford to heat their homes.

This motion is very simple. It builds on the guarantee that the Labour party is giving with regard to a price freeze in 2017 if elected. It builds on something that people in the UK were absolutely delighted with—the fact that we were looking after people who were struggling. This motion will go to show, even more, that the Labour party is on the side of the people while the Government are on the side of big business.

15:26

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

It is a pleasure to follow the hon. Member for Wansbeck (Ian Lavery). I agree with him that there has been, and is, an issue about the cost of energy for people’s homes, but I disagree with him about what we do about that. We need to ensure that we can get the best prices passed down to the consumer, not only in the short term but the long term. The Government have brought in measures to get rid of the tariffs that were adding unnecessary taxes to energy bills, increase the number of independent suppliers threefold, and reduce the 400 similar tariffs that existed to just a few. Those are all going towards protecting the consumer and getting prices down.

The hon. Gentleman is right that the cost of energy is a large proportion of the cost of living and the money that goes out of people’s homes. However, it is wrong to offer people the false hope that through just a simple black-and-white policy they will see their energy prices reduced. For the past two or three years, the Labour party has run campaigns in my constituency, and in many other constituencies, trumpeting Labour’s price freeze. There was a great big inflatable ice cube on the high street, which, I hasten to add, did not have an image of a cap on top of it. The Labour party put out leaflets in my constituency saying, “People tell me on the doorstep that they want an energy price freeze.” Of course people want an energy price freeze, but what they are telling me on the doorstep is that they want the lowest possible energy prices. If we had had that freeze, the price would have been stuck at that level. Now, at the very last minute, Labour is changing its policy around. Whatever words are used in points of order or in the debate by the right hon. Member for Don Valley (Caroline Flint), the fact is that people’s perception of what has been said to them on the doorstep is that there would be a price freeze. Indeed, this very lunch time the hon. Member for Leeds West (Rachel Reeves) said on television that it is not a cap, but a price freeze.

[Sir Alan Duncan]

Have not Labour Members trapped themselves by gambling that prices would continue to rise? They announced a freeze, but, sadly, global markets are falling.

[Alec Shelbrooke]

As my right hon. Friend will know, Labour Members would make very poor oil traders. If they were in the business, the consequence would be losses that would eventually be passed on to the consumer in higher prices.

The hon. Member for Wansbeck is right: this debate is not flippant, but about the costs of the energy that people need to live. The Government should do all they can to try to reduce those costs, but they cannot do it with gimmicks, or by coming up with a hare-brained scheme for prices that is immediately altered by a change in world markets. The Opposition have called this debate purely to clarify points that they did not advertise or make to people on the doorstep. They are offering false hope, and they are wrong to do so.

People are suffering from high energy costs, but those costs are now starting to come down. Notably, energy companies are offering deals to fix prices for the next few years. They would not do so if they thought that energy prices were about to rise; they are doing so because they can foresee that their costs will drop on energy markets. Some people like to control their finances by entering into a deal with set prices, and they may achieve a better deal, but others want to ride the market—just as people do with mortgages—and see where it takes them. The fact is that we have increased competition in the sector. Competition decreased under the now Leader of the Opposition when he was the Energy Secretary and, for all the trumpeting about, they the big six gained their power during that period.

My point is that we must not be flippant in this debate. This important debate means something to people in their homes. Those watching this debate to see what will happen to energy prices do not want flashy gimmicks that, in reality, would not lower their energy prices or give them a better standard of living. It is disingenuous to say that to people who want something to be done. We need to do what has been outlined by this Government—[Interruption.]—with whom I am glad to have voted in the Division Lobby to reduce the cost of energy bills.

From a sedentary position, the right hon. Member for Don Valley asks, “What is it?” I will tell her what the Government have outlined. It is the reduction to single figures of the number of tariffs, which under her Government expanded ridiculously, confused the market and prevented people from being able to find the best deals. It is the trebling of the number of independent market suppliers, making the best energy deals available to people, such as my hon. Friend the Member for Dover (Charlie Elphicke), who said he has reduced his energy costs by 25%. It is the reduction in the number of silly tariffs brought in by the Labour party. All those factors are having an impact. [Interruption.]

Labour Members are chuntering from a sedentary position because they do not like the truth. They want to pull the wool over the eyes of the British public by saying that they will sort out the mess that they in many ways created. Once again, they have come up with stupid, silly gimmicks, which, to be quite frank, the public can see through. This is a serious debate, and it needs to be taken seriously.

15:32

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is a pleasure to follow the hon. Member for Elmet and Rothwell (Alec Shelbrooke), although he seems a bit out of touch with what is actually happening.

I welcome this debate, which further highlights problems with energy costs across the country. Energy demand by consumers must be met with reasonable prices for energy. Prices should reflect any reductions in the cost of energy as soon as possible. Labour has asked for the energy regulator to be given the power to take immediate action to ensure that reductions in wholesale costs are passed on to consumers immediately.

Only last week, the Government accepted that the energy market was broken. That should not come as news to them. It is certainly not new, because they were told about the practice in a report by the energy regulator in 2011. In stark contrast to what the Secretary of State said about his hyperactive approach, the Government seem to prefer to sit back and trust the large energy companies to do the right thing on pricing. We want big changes in our energy market. As Opposition Members have said, we want a price freeze until 2017—to allow energy prices to fall, but not rise—and we can then fix the market.

As we know, hard-working families are now struggling to meet their energy costs, especially at this time of year. Remembering that the next bill will cover the winter period, they fear that it will again be difficult to pay for their energy. At this time of year, families see their energy consumption rise. It will rise dramatically for families up and down the country this year if the weather that we have suffered in Scotland over the past few weeks is anything to go by. Families especially use the basics of life, such as washing machines, more regularly in the winter months, and tumble dryers will be on constantly day in and day out, which will run up their energy bills dramatically. Energy companies are fully aware of that, I am afraid, and are taking full advantage. The cost of energy is now one of the largest demands on household income.

We have touched on the direct debit payments that never seem to be adjusted down. Energy companies continue to take the same direct debit payment month after month, only for people to discover that they have overpaid by quite a sum. However, it never seems to be returned unless people demand it.

In the time I have left, I will speak about the new i.HEAT project in my constituency, which has been set up to tackle fuel poverty in communities across Inverclyde, where we are seeing a dramatic increase in fuel poverty. The project assists householders not only to access hard measures such as insulation, but to make changes in their energy consumption through behavioural changes. It provides step-by-step guidance on changing suppliers. Anyone who has tried to change suppliers knows that it is not an easy process. Some elderly households and families need to be taken through the process step-by-step to ensure that they get the best deal. Community participation is vital in engaging with householders and building links with registered social landlords. Community groups are brought into the equation to identify vulnerable households and offer them assistance with energy-related issues.

The project offers free impartial advice and advocacy support to anyone across Inverclyde. It has had a significant effect. In its brief few months, it has already pulled almost £1 million into my community to tackle fuel poverty. It is going a great deal of the way towards ensuring that households have energy-efficient homes and the benefits that they bring, as well as the support that they need to meet their increasing fuel bills. I am always amazed at the lack of energy efficiency that is built into new homes. That is an ongoing problem.

Equally, businesses suffer from high energy costs. Low energy costs will attract businesses and jobs to the area. It is like back to the future in Inverclyde, where we are looking at hydro projects to support businesses and subsidise their energy costs.

Today, Labour is challenging the Government to back our plans—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

15:37

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

My colleagues have done a very good job of rubbishing the economics behind this ludicrous Labour policy. I do not need to add much, except to say that we have heard some deprecating comments about shareholders. Opposition Members tend to forget that shareholders are not toffs walking around the City in top hats. Shareholders are millions and millions of ordinary working people who do not have the luxury of a public sector pension. Private sector pension funds rely heavily on companies, including energy companies, to ensure that working people have decent and fair pensions at the end of their working lives. It is about time that Opposition Members realised that shareholders are millions of ordinary people.

I welcome this debate—I really and truly do—because although what the Opposition are suggesting is ludicrous, it is very interesting that the shadow Secretary of State for Energy and Climate Change has chosen to use her Opposition day debate to talk all about energy and to forget all about climate change. She has realised one thing that I could have told her and some Government Members many years ago, which is that people are far more worried about rising energy bills than about so-called global warming.

I should declare an interest at this point, because I do not buy the consensus at all. Unfortunately, I do not have time to point out the obvious flaws in the argument, but suffice it to say that even those who buy the idea, hook, line and sinker, that the climate only started changing 200 years ago—actually, what the Intergovernmental Panel on Climate Change says is very different from what the environmentalists say—must surely be aware that the UK emits only 2% of the world’s carbon emissions. Therefore, the policies that we have implemented, which have pushed up energy prices, are having no impact whatsoever on the climate, and it is about time that we threw them overboard.

If Members of all parties are interested in reducing energy bills—I hope they are, because I certainly am—they need to look at the fundamental point of how much that energy costs to produce. I have recently seen figures that suggest, and I think at least one Member who is present will correct me if I am wrong, that it costs about £20 per megawatt-hour to generate our electricity from coal, about £40 per megawatt-hour to do so from gas, about £95 per megawatt-hour with subsidies to do so from nuclear or onshore wind and a lot more to do so from offshore wind and other renewables. It is a fundamental economic fact that if we want to reduce electricity prices, we need to ensure that as much electricity as possible is generated from coal and gas, not from expensive renewables. That is one sure fire way to bring prices down.

[Dr Whitehead]

The hon. Gentleman presents a bit of a puzzle. How does he explain his own Government’s recently rolled out policy of putting 11p on everybody’s bills precisely to generate more power for consumers from gas and coal? It has nothing to do with climate change; it is just an 11p increase in people’s bills.

[David T. C. Davies]

The hon. Gentleman would have to ask a member of the Government about Government policies. I have always taken a rather different view on energy, as he will be well aware—that we ought to generate it from the cheapest sources possible, which at the moment are coal and gas. That would bring prices down.

Of course, there is more that we could do to bring down prices. Currently, about 40% of our electricity—actually 47%, I see from my notes—comes from gas. It is worrying that Opposition Members are so quick to rule out the possibility of hydraulic fracturing as a means of getting our own gas out of the ground. That energy technology could generate thousands of well-paid jobs and deliver cheaper prices to consumers. It certainly will not do any harm, and provided that all the environmental safeguards are put in place, to which we are absolutely committed, we should explore that technology.

Finally, I turn to smart meters. Like many people, I have a smartphone. Nobody forced me to buy one; they were out there in the shops and somebody else bought one, and it looked like good technology so I went out and bought one. I have absolutely nothing against smart meters. If somebody wants to produce one and put it on sale in Currys, I might think about it. What I object to strongly is the idea—an anti-conservative one, in my opinion—that we will all be forced to have them.

The latest report I have seen on smart meters, from June, suggests that the price of putting them in has gone up to £11 billion, and there is a possibility of its going much higher if people are not as enthusiastic about them as the Government think. I am certainly not enthusiastic about them. That £11 billion will simply be added to our energy bills, but we are told that it does not matter because there will be £17.1 billion of benefits. Of course, if we look at the report carefully it is clear that those benefits, if they ever arise, will not come through until about 2030. One of those benefits is that people will be using less electricity, which will presumably be because their prices have gone up because they have a smart meter. Some of the benefit calculations have been derived from the fact that the Government will be paying less of the taxes that they are effectively imposing on themselves for carbon emissions. It is all smoke and mirrors, and a return of £17 billion on a risky £11 billion investment over 15 years is frankly a pretty poor one anyway. I suggest that the Government might want to think again about that.

It is great news that the shadow Secretary of State has used her Opposition day debate for this subject. Let us talk about energy prices and getting them down as low as possible. People have a right to cheap energy. I knock on thousands of doors—I am up for election in a few months, like everyone else, so I am putting my money where my mouth is—and people in my constituency are more worried about rising fuel prices than about the non-existent rise in temperatures. No rise has taken place since 1997. It is the economic climate we should be worrying about, not the geographical climate.

15:44

[Mr Mike Weir (Angus) (SNP)]

For those of us who have taken part in a few of these debates, there seems to be a depressing familiarity to the arguments that are put forward. Today, the Secretary of State has told us that switching is the answer. To my mind, and based on my experience, switching supplier is subject to the law of diminishing returns. Someone might get a better deal the first time they switch, but they will not get a much better deal the second or third time. Switching is a limited answer to some of those problems.

The right hon. Gentleman mentioned new entrants to the market. Yes, there are new entrants, but many are internet based and depend on direct debit, and the very people whom we most need to help with lower fuel prices are those least able to take advantage of those deals. Many perhaps do not have a bank account or may already have a debt with an existing supplier that means new suppliers will not take them on. The idea is a fallacy. Switching to new entrants in the market will not address the problems that we face with energy prices. As the hon. Members for Glasgow North West (John Robertson) and for Wansbeck (Ian Lavery) mentioned, fuel poverty is at the root of this issue, and we must do something about it.

I talk about Scotland because that is what I know best. The Scottish Government have invested £300 million since 2009 on a raft of fuel poverty and energy efficiency programmes, and they will spend a further £94 million this year and next. Figures from Energy Action Scotland show that in 2013-14 an average of £36.48 central Government funding was invested in energy efficiency programmes for low-income households in Scotland, compared with £31.31 in Wales, £27.55 in Northern Ireland, and a paltry £3.52 in England.

The number of households in fuel poverty continues to be a disgrace. The 2013 Scottish house condition survey shows that 39.1% of Scottish households were in fuel poverty. Last year, despite the many schemes aimed at reducing fuel poverty, that number increased by 100,000 to reach 940,000. That increase is appalling, and it is almost entirely down to the rise in fuel prices. Indeed, it has been estimated that the fuel poverty rate for 2013 would have been 11% rather than 39%, if fuel prices had risen in line with inflation between 2002 and 2013. That demonstrates a fundamental failure of the UK regulated energy market.

The UK Government’s approach is to give lectures on switching, but that will not fix the problem. In Scotland there is a more determined attempt to approach the issue through home energy efficiency programmes, which also helps combat climate change—I do not accept anything said by the hon. Member for Monmouth (David T. C. Davies) on that issue. However, all that is being wiped out by the inexorable rise in fuel prices, and the changes made by the UK Government to the energy companies obligation have impacted Scotland adversely.

I understand Labour’s position on a freeze or cap, or whatever it now wishes to call it, but there may be difficulties with that approach. Having said that, I am prepared to ask my colleagues to support the motion since I am becoming fed up with the actions of energy companies. I have often said that energy companies offering deals for insulating homes and so on is perhaps not the best approach, because people no longer trust energy suppliers—hardly surprising, given what is happening with some of them. We must do all we can to assist vulnerable customers, but wholesale prices are falling and that has not been adequately reflected in the retail price of energy.

The motions wishes to put a statutory duty on the regulator, but as I said in an intervention, my experience of regulators does not fill me with confidence that that would happen quickly, even with a statutory duty. Indeed, I fear that it would end up being kicked into the long grass as the regulator takes its time, holds an endless investigation into the matter, considers the factors leading to increases, analyses price movements and so on—we all know what Ofgem and the Competition and Markets Authority are like. We might all have retired before we have a decision, and matters will have moved on to a new price cycle by then. If we are going to impose such a duty, we must ensure a strict and short time limit for considering the issue and coming to a decision, so that people get the benefit—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

15:49

[Christopher Pincher (Tamworth) (Con)]

I congratulate the right hon. Member for Don Valley (Caroline Flint) on the élan, and not a little brass neck, with which she outlined her case. There is no disguising the fact, try as she might, that Labour’s energy policy is in chaos. If she takes the trouble to read her leader’s speech at the party conference—the one that the right hon. Member for Doncaster North (Edward Miliband) wrote down and therefore remembered—she will see that he said time after time after time that he would introduce an energy price freeze: never a mention of a cap and never a mention of prices going down, only a price freeze. It was only after Labour realised it made that schoolboy error that it morphed its policy into a price cap. It now seems to have transmuted even further. It is a policy in chaos.

Does it matter that Labour’s policy is in chaos? Yes it does. Tony Cocker, the chief executive of E.ON, a company the right hon. Lady praised a short time ago, said in evidence to the Energy and Climate Change Committee that every time the Leader of the Opposition opens his mouth the cost of its capital goes up. Whatever we may think of the big six, we need those companies to invest in our energy infrastructure. In the past five years, each of the big six has invested about £5 billion. We all accept, even the right hon. Lady does not demur, that we need to invest about £110 billion in the next 10 years in our infrastructure—the pipes, pylons and the power stations—to keep the lights switched on. At the current rate of spend, the big six are going to invest about £70 billion only, which is an investment gap of £40 billion. Unless we can encourage those firms and others to invest more, the shortfall will have to be made up by the consumer through higher bills or the taxpayer in higher taxes, or we will have to borrow the money, meaning that market interest rates may go up and everyone’s mortgages go up as well.

The Labour party’s proposal has a very real negative effect on people’s energy prices and on their lives. Just at the time when we are discouraging investment from the big six, Labour’s proposal will entrench their position. As Ovo Energy and First Utility—the provider of choice for the Leader of the Opposition—have said, the proposal for a price freeze will drive them out of the marketplace. It will reduce competition, so there will be even fewer companies to invest and fewer companies to buy energy from. The best, simplest and right approach to deal with the cost of energy for our constituents is to reduce the confusing array of tariffs that have discouraged people from switching.

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

Will the hon. Gentleman give way?

[Christopher Pincher]

I will not give way. I will let the hon. Gentleman make his speech later on, if he so wishes.

The best and simplest proposals to reduce energy prices are to reduce tariffs so that people know what the prices are; put people on the lowest tariff that is best for them; and roll back green levies, which will save in total £250 to £300 a year for our constituents. They are not an ill-conceived sham, which is what Labour’s proposal is. Labour’s proposal is no way to run an energy policy and no way to run a Government.

15:53

[Albert Owen (Ynys Môn) (Lab)]

It is a pleasure to the follow the hon. Member for Tamworth (Christopher Pincher), but I think he misrepresents the words of the chief executive of E.ON in the Select Committee. I certainly never heard him saying those words about the Leader of the Opposition and his energy policy. I can understand energy companies feeling uncomfortable when we have a reset proposal for the energy market and closer scrutiny, but I make no apologies. If it is in the interests of the consumer, we should move forward as soon as possible.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

The important thing is to be concerned about current consumers and their energy bills being as low as possible. However, we must also think about future consumers and ensuring investment in supply and in networks. The lesson from when Labour was in Government and we faced high gas prices is that it did not intervene in the market, but allowed the market to bring forward new investment that brought new supply and prices down.

[Albert Owen]

I thank the hon. Gentleman for his intervention. I think he was complimenting the previous Labour Government on their handling of energy matters. If we get a new Labour Government, we will do exactly the same thing: create the stability that has not been there. [Interruption.] I am pleased that the right hon. Member for Rutland and Melton (Sir Alan Duncan) has returned to the Chamber. When gas and oil prices rise, the suppliers rush to pass on the costs to us, yet when we read in the papers that the oil price has collapsed and gas prices are falling, we have to wait a long time before it comes through on our bills.

The first thing we need to do is

“give the regulator the teeth to order that those reductions are made”—

not my word, but the words of the Prime Minister before the election. I cannot accuse him of being consistent in what he said before the election and what he has said since taking office, but he should be in the Lobby with Labour today, supporting our proposals.

I have long felt that our constituents’ concerns have not been put forward. However, I praise the Energy and Climate Change Committee for producing a number of reports on this subject, including one on prices, profits and poverty in the 2012-13 session. The big issue then—and rightly so—was the confusion and complexity of bills, to which many Members have referred. The outcome was good. We recommended that the Government give extra powers and responsibilities to the regulator to act in the interests of consumers, and the Government enacted just that. We are asking for the same today, and if the Government could do it then, they can do it now. At the time, consumer groups highlighted how, when the price of oil and gas fell, it did not follow through to bills, and Ofgem cited evidence that

“bills respond more rapidly to rising supplier costs compared with falling costs.”

As has been said, the regulator’s remit is to protect consumers. It could intervene sensibly, conduct reviews in its own time—it does not have to wait—and ensure that the consumer gets a better deal. That is what it is there for.

I am pleased with Labour’s policy on energy prices and strengthening the regulator. Like other Members, I have concerns about those off the gas grid. As part of its market reset, Labour will be looking to regulate that area. My constituents who are not on the gas grid are paying considerably more in their unregulated areas—they do not have dual fuel, and their prices have been rising steadily—so I am pleased about the reset and the price freeze, or cap. Whatever hon. Members want to call it, the point is we are going to look at the energy market. It is fractured, and a fracture takes an awfully long time to heal, unless immediate action is taken.

We should be taking that immediate action. Government Members have the opportunity today to stop standing up for the big companies and the industry and instead stand up for their constituents. If they are knocking on doors, they will be hearing how consumers are being hurt by rising energy prices. I have seen the bills of my constituents, very recently, which show not a fall but an increase in the cost of energy since last year—and in that period we had a relatively hot summer and a relatively mild autumn and winter. What is coming will be even harder for people. Yes, there will be a slight drop in prices, and I do welcome E.ON taking the lead, but why has it done it just for gas? When gas prices were rising, the big six told us it had an immediate effect on electricity prices, yet they are not now reducing their electricity prices.

In the last year, the wholesale price of gas has dropped by 20%, but the consumer has seen just a 3.5% drop—from one energy company. We need to rebalance the energy market. We need to stand up, and be proud to stand up, for our constituents. The motion gives us the opportunity to follow the Prime Minister’s wise words. Instead of playing King Canute, instead of being ridiculous—he has been ridiculed by Members of his own party—the Prime Minister, as well as all Government Members, should stand up for our constituents, join us in the Lobby to support our constituents, who send us here to protect their interests, and get the regulator to do its job.

15:59

[Charlie Elphicke (Dover) (Con)]

The longer this debate goes on, the clearer one can see why, under Labour, gas bills doubled, electricity bills went up by 15% and fuel poverty trebled. Labour Members like to talk the game when it comes to lower prices, populism and easy answers, but the reality, as we saw when they were in office, is that their measures are ineffective and often counter-productive.

Let us take their current price freeze idea. If Labour’s policy had been implemented when it was announced, energy consumers would have lost out. Today’s consumers are better off with the Conservative/coalition policy that has been pursued. It is clear that Labour sources realise this and provide quotes that admit it. A Labour source spoke to The Sun and “Mail Online”, so let me acquaint Labour Members with this for their better understanding of their own policy. This Labour source said, and Labour Members should listen carefully:

“The freeze was announced at a time when energy prices were rising inexorably—nobody was talking about prices coming down, or even thinking about it. Obviously, if bills are coming down at the election there may have to be a bit of rebranding to make it clear it will operate as a price cap instead.”

What we are seeing, and what this debate is all about, is the screeching of brakes and the squeal of tyres as the Labour bandwagon puts into effect another mad U-turn that is ill thought out and entirely chaotic, as the freeze is rebranded as a cap to take advantage of the reality that petrol, fuel and energy prices are now falling.

[Mark Reckless]

The hon. Gentleman is absolutely correct in the criticisms he makes of the Opposition, but does he, like them, support the increase in the levy control framework and green levies from £2.3 billion in 2012 to £9.8 billion in 2020—a quadrupling of money added to bills or to taxpayers?

[Charlie Elphicke]

I am proud that this Government have rolled back the green levies by £50, and I note that, not so long ago, the shadow Secretary of State was talking about green taxes as being “only” £113. I note, too, that the Leader of the Opposition wants to increase green levies and put more greenery in our electricity bills, driving up the cost of power. We know that the Opposition have set out that policy and that we have taken action to safeguard the interests and position of consumers. [Interruption.] If the shadow Secretary of State wants to make an intervention, I would welcome it.

[Caroline Flint]

Is the hon. Gentleman aware that when the Government let the energy companies off the hook, this meant 400,000 fewer households got insulation, and that a huge amount of the benefits going to the energy companies was never passed on to their customers?

[Charlie Elphicke]

It is pity to hear that from the shadow Secretary of State who served in a Government who allowed the sort of integration in the energy market that permitted generators to integrate vertically so that providers at the downstream end were able to have an unnecessary and wrongful monopolistic position.

That brings me to the key point that switching is a really important part of a competitive market. It is a real shame that the Opposition have sneered at switching and mocked its importance. They seem to want some kind of monopolistic Leviathan of energy oligopolies that they had when they were in office. I think that is wrong and that we need to encourage competition and switching. When I switched, I made a substantial saving and all Members should encourage people to do the same. We should be there for our constituents as consumers, helping them by urging them to be aware of how to get the best possible deal.

What we have seen in today’s debate is complete chaos in the Labour party’s position on the energy market, just as we have seen complete chaos when it comes to their economic policy. Time and again, and so close to an election, the Labour party is simply all over the place when it comes to the kind of policies that go to the heart of how our consumers, our constituents and our people will live. That underlines the fact that we need a long-term economic plan, which Government Members have, and that this Government’s longer-term planning on the energy market is clearly the right way forward, getting consumers the best deal.

16:04

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

Listening to the hon. Member for Dover (Charlie Elphicke) was a rather curious experience, given that more or less the entire policy of the Department of Energy and Climate Change under the current Government, particularly as it relates to such matters as contracts for difference and the levy control framework, is based on the assumption of inexorably rising energy prices. In fact, the policy is rather falling to bits, because the Department can no longer make that assumption. The Opposition’s proposal, on the other hand, is based on the reality of the regulator as we now find it, and the reality of what will continue to be a volatile energy market over the coming period.

I smile a little at some of the assumptions made by Members about what the regulator actually is. It has always been the case—or, at least, it has been the case during recent periods—that the regulator has done a great deal more than the right hon. Member for Rutland and Melton (Sir Alan Duncan) believes that it has. As he said, he believes that the regulator simply prevents collusion, but it performs a number of other functions, relating to, for instance, the close of market, cash-out and balancing, which are integral to the energy market as it stands. At present, however, the regulator is itself regulated asymmetrically when it comes to its ability to intervene in that volatile market. Our proposal, which is very simple, is to remove some of that asymmetricalness, if such a word exists—

[Sir Alan Duncan]

Asymmetry.

[Dr Whitehead]

I thank the right hon. Gentleman. We propose to remove some of that asymmetry. While we would not expect a regulator to have a knee-jerk reaction to every change in a volatile market, we would, in the event of a considerable drift between those changes and what energy companies are doing, expect the regulator to be able to do what the public would expect it to do: we would expect it to be able to intervene on behalf of the consumer and bring those arrangements into line. That seems to me to be a straightforward and laudable proposal, not only from the point of view of the consumer, but because it constitutes a recognition of the reality of markets.

The objections to the proposal that have been expressed also make me smile a little. We are told that hedging and purchasing strategies would not put up with it. On the basis of what I have heard from the Secretary of State this afternoon, I think that he has done for utility hedging roughly what Edward Scissorhands did for real hedging.

The operation of hedging in energy and utility markets is not the same as it is in a number of other areas. That hedging, those purchases and that trading must take account of factors such as securing the right amount of energy for the customer—not too much and not too little—at the time when the customer needs it, at the time of gate closure. If the outcome of that hedging turns out to be wrong, the regulator will fine those who are undertaking the process. On such occasions, hedgers will weigh the cost of the cash-out fine against the cost of getting the balance wrong. So a range of other factors are involved in that hedging, over and above the simple question of buying long and hoping that some money can be made out of it.

One of the strategies of the larger energy companies will, in fact, be to buy long—rather more than they can conceivably hope to provide for their customers—and shape the amount as gate closure approaches. If the markets are volatile, they will adopt strategies which get that right. The ability of the regulator to undertake those changes is compatible with the process leading up to gate closure, notwithstanding what has been suggested this afternoon.

Finally, I smiled a little at the haste with which the Secretary of State, in particular, talked of reducing energy prices, given that, as I said earlier, the recent capacity auctions have potentially raised prices by £11 per customer. I may have inadvertently said 11p in an intervention. The sum is in fact £11 per customer—I thank Tim Probert for that proper figure—and that gives the lie to the idea that this is all about price reduction. It is about disguising price increases in the context of regulation which should be in place to ensure that these things work properly in the future.

16:10

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

We have, as is customary, had an interesting and wide-ranging debate, and we have been able to establish beyond peradventure three important facts, mostly through the contribution of the Secretary of State, who is, characteristically, I have to say, not in his place for the end of the debate; that happens frequently. The first of them is that over the past 12 months as wholesale energy costs have fallen, consumer bills from the largest suppliers have not followed. Secondly, as my right hon. Friend the Member for Don Valley (Caroline Flint) said and the hon. Member for Angus (Mr Weir) also made clear, the least well-off—those with the lowest disposable incomes—have had the highest increase in their bills and have the lowest rates of switching. Thirdly, as has become typical in these debates, the Energy Secretary made a lengthy and confused speech, and four years into his job he is neither in control of energy policy nor intends to do anything about the issues we are debating. Constituents in all parts of the UK will find that an extraordinary and unacceptable state of affairs.

We know that the regulator is concerned. It made that clear in its state of the market assessment, and there is an asymmetrical approach between cost increases and decreases in consumer bills—the rockets and feathers argument. We know it thinks that that is worse than it was the last time it looked at it in 2011. We also know as of today that Ofgem thinks that the E.ON change is a small step in the right direction, rather than some demonstration, as the Secretary of State seems complacently to believe, of a dynamic market working in the interests of consumers. We know from the figures to which Ofgem has access that over the course of the last 12 months the profit margin on the retail part of the businesses of the largest companies has increased from 4% to 8%, and that is without taking into account the generation businesses and the margins achieved by the integrated companies in that area.

The Secretary of State gave away his real attitude, probably inadvertently. He claimed that people could, if they really cared, get a better deal. They might not care in Kingston or Surbiton, but in many communities around the country represented by Members of all parties they do care. They do care that they have had higher bills—£260 higher since 2010. They do care that they see wholesale prices falling but their standard tariffs not following, and they do care that they have heard this afternoon from the Secretary of State a litany of excuses and, distortions and complacent disinterest in doing anything at all about the situation we find ourselves in.

I agreed with much that the hon. Member for South Suffolk (Mr Yeo) said—that will probably not do him any good with his own party, but given his recent experience with it, I doubt he cares very much, frankly. I think it is disgraceful that demand-side management was less than 1% in the recent capacity market auction, and that case was made prior to those auctions. I also agree with his points on vertical integration. He knows, unlike other Members who have tried to demonstrate their expertise in these areas, that the proposals we set out in November 2013 included looking at, and making sure there was, a proper ring fence between the supply and generation arms of the companies precisely for the reason he gave in relation to transparency. Where I disagree with him—and the hon. Member for Tamworth (Christopher Pincher) made a similar case—is on the impact on investment. I think both of them will recall, if the hon. Member for Tamworth was present on that day, that when Andrew Buglass from the Royal Bank of Scotland, one of the biggest investors in clean energy, came before the Energy and Climate Change Committee, he was explicitly asked whether he thought the Labour party policy on energy prices was affecting investment decisions, and he made it clear that the investors he talked to

“take a lot of comfort from the cross-party support that has been shown through the EMR process”,

in terms of supporting contracts for difference and the framework, if not the detail, of the capacity market mechanism. That is what is most important in relation to investment, and I am sure the hon. Member for South Suffolk knows and understands that.

My hon. Friends the Members for Glasgow North West (John Robertson) and for Wansbeck (Ian Lavery) helpfully reminded us with both passion and precision—as they frequently do in such debates, and on the Select Committee of which they are both members—of the impact of high fuel prices on consumers. My hon. Friend the Member for Glasgow North West reflected on the power of big suppliers who could, with the will, do so much more.

The right hon. Member for Rutland and Melton (Sir Alan Duncan) gave a spirited lecture on posturing—a subject he appears to have great expertise in. He seemed not to be aware that Ofgem has access to market data and can therefore observe trends. This is not just about one market, but the combination of the day-ahead and forward markets over a sustained period. Over that period, wholesale costs are down and that has not been reflected in consumers’ bills.

The hon. Member for Elmet and Rothwell (Alec Shelbrooke) is a less frequent speaker in these debates, although he is an habitual sedentary chunterer. We have all become used to that—it is part of his charm. He will know that he voted back in June against the regulator being able to take action for consumers. His constituents will find that difficult to understand, and I am sure they will be reminded of that fact between now and May. Because he did not take part in previous such debates, he seemed unaware that, as my right hon. Friend the Member for Don Valley made clear, the policy we have had since autumn 2013 has been transparently set out in this House. She and I have been asked a number of times about the price freeze, and we have made it clear that the policy is to prevent increases in bills, not reductions. The first time I did so was during a speech at an afternoon fringe meeting at the September 2013 party conference, which was recorded by the BBC, so the record is absolutely clear, as reflected in the comments of the energy correspondent of The Daily Telegraph.

[David Mowat (Warrington South) (Con)]

rose—

[Tom Greatrex]

I am conscious that I do not have much time, but I will give way to the hon. Gentleman, who has been present for the debate but has not been able to contribute.

[David Mowat]

I have a quick question on the price freeze—or price thaw, as it now is. In the event that prices fall during the time of the price freeze, will companies be permitted to increase them subsequently, and if so, to what level: the previous level, the new level—or will some pronouncement be made on that subject?

[Tom Greatrex]

I am slightly surprised at the hon. Gentleman. In the conversations we have from time to time, he usually demonstrates a much better grasp of the issues. He knows that our policy is a freeze on price increases, which does not prevent decreases. That policy is in place because of the increased margin that was made between 2008 and 2009, when the same problem occurred: wholesale prices went down by 45% but that reduction was not passed on to consumers. That is the reality, which has affected his constituents, mine and those of every Member of this House. The Government should ensure that the regulator addresses that, in line with the motion before us.

[David Mowat]

Will the hon. Gentleman give way?

[Tom Greatrex]

I will not give way again because I want to respond to more of the contributions that were made.

My hon. Friend the Member for Inverclyde (Mr McKenzie) made clear the importance of taking action on fuel poverty. My hon. Friend the Member for Ynys Môn (Albert Owen), in a telling contribution, helpfully reminded us of what the Prime Minister said about the importance of the regulator being able to take action when the fairness principle is not applied—an important point that we should all be aware of. My hon. Friend also touched on the issue of off-grid customers.

The hon. Member for Dover (Charlie Elphicke) quoted from an anonymous Labour source in his speech, which effectively defended energy companies rather than standing up for his constituents. A named Labour source—me—can tell him that that will not go down well with his constituents in the 113 days we have left until the general election. My hon. Friend the Member for Southampton, Test (Dr Whitehead) made some important points about the regulator’s role in standing up for consumers when it is clear that the competition in the market that we would like to see is demonstrably failing.

This is a simple, straightforward and compelling proposition before the House: where there is a failure of the competitive market dynamics—we have seen precious little evidence of those in recent months—that the Secretary of State and others are proposing, the regulator can help to focus the attention of suppliers through the use of a back-stop power to ensure that the relationship between wholesale prices and the retail prices consumers pay is properly applied. If the suppliers do not act, the regulator will be able to step in and make good the situation. The Secretary of State has demonstrated again today that he is out of touch, out of his depth and, unfortunately, almost out of time. I am a generous-spirited individual, however, and as he seeks to secure a lasting legacy as his tenure in his job comes to an end, I will give him one last chance. He can now vote for the motion and act to ensure that energy cost reductions are passed on to consumers. I strongly advise him to do so, and I commend the motion to the House.

16:20

[The Parliamentary Under-Secretary of State for Energy and Climate Change (Amber Rudd)]

This has been a welcome opportunity to debate one of the biggest issues in British politics, and there have been some lively contributions from both sides of the Chamber. Helping households to stay warmer for less has been the No. 1 priority for this Government. That is why, since coming into office, we have been working hard to make the energy market more competitive and to break the stranglehold of Labour’s big six.

We have taken action to encourage switching, to reduce policy costs on bills and to support the first competition inquiry since privatisation. Indeed, since 2010, the number of independent suppliers has nearly trebled, to 19, and their market share is now the highest on record, at 10.5%. We have slashed the number of energy tariffs and ensured that suppliers are putting people on the cheapest variable tariff, helping consumers to save up to £200. New figures suggest that the savings could be up to £300. We supported the first competition inquiry since privatisation. The Labour Government did none of those things when they had the chance.

Yesterday, E.ON announced that it was cutting its standard variable gas price by 3.5%. That is very welcome news for households, and energy suppliers must continue to pass on savings from lower gas prices. Yet the chief executive officer of E.ON has admitted that, given the possibility of a price freeze, the company was “undoubtedly taking a risk”. We should be clear that this reduction would not have happened under the Opposition’s ludicrous price freeze policy, which would have resulted in high bills being frozen until 2017 and families being unable to feel the benefit of falling global gas prices.

[Albert Owen]

I am sorry to interrupt the Minister’s party political speech—[Laughter.] Conservative Members may laugh, but they are on the wrong side of the argument when it comes to consumers. On the 3.5% reduction in the price of E.ON’s gas, is she as confused as I am about why there has been no throughput to the company’s electricity price, which is not being reduced? When gas prices go up, it is the companies, not the Secretary of State, that tell us they have to follow suit and increase electricity prices.

[Amber Rudd]

Electricity prices have not fallen at that rate. I must gently tell the hon. Gentleman off for suggesting that I might be trying to “weaponise” this important subject. That is something we should never do.

We know that the cheapest tariff currently on the market is £100 cheaper than the cheapest tariff a year ago, and that if Labour had been able to freeze prices in October 2013, customers would already be £100 a year worse off. Labour’s price freeze proposal is preventing bills from falling further. I know that the right hon. Member for Don Valley (Caroline Flint) likes to take comments such as these as confirmation of an expectation of another Labour Government, but the frisson of fear from the market at the prospect of the chaos that would ensue under a Labour Government is resulting in suppliers being unsure about making price reductions.

Labour does not understand that we need to fix the market for good, not freeze it. That means taking policy costs off bills, forcing suppliers to be transparent about their costs and profits, and getting behind the independent inquiry, which reports in June and has the power to break up Labour’s big six. Unfortunately, the Labour party appears to think that it can make up for its total failure to reform the energy market during its 13 years in office by advocating short-term gimmicks. This goes to the heart of the debate on the future of the energy market and the debate that we have heard today.

Let us consider for a moment what regulating to require that suppliers pass on reductions in wholesale costs would mean in practice. For a start, it is likely to mean more volatile prices for customers. Gas wholesale prices can change significantly and unexpectedly. If companies have to put prices down immediately following a reduction in wholesale prices, they will have to put them up immediately after a rise, so I think we can see from the contributions we have heard and from the comments from people in the market that that would not work.

Let me address some of the comments made in this afternoon’s enthusiastic debate. The right hon. Member for Neath (Mr Hain) told us about the Severn barrage project and his view about the opportunities for cheap electricity from it. We all listened carefully and I thank him for his contribution. My hon. Friend the Member for South Suffolk (Mr Yeo), the chair of the Energy and Climate Change Committee, highlighted other areas where we could bear down on costs and the action that Ofgem needed to take. The hon. Members for Glasgow North West (John Robertson), for Ynys Môn (Albert Owen) and for Rutherglen and Hamilton West (Tom Greatrex) spoke about fuel poverty. I wish to remind the House of this Government’s absolute commitment to reducing fuel poverty. We have made that central to our policies since we came to office. We recognise that vulnerable consumers need more action to help them take action to save money.

One point made by the hon. Members for Ynys Môn and for Inverclyde (Mr McKenzie) is that not everybody is able to take action to switch, and they questioned the value of switching. That is why we have committed nearly £2 million over two years to fund community and voluntary organisations through the big energy saving network; our network provides specially trained volunteers to help consumers in communities across the country to get better deals from energy suppliers and reduce their energy bills—this helped more than 90,000 people last winter. We know that there are people out there who need our help and we are determined to make sure that they get it, so that the most vulnerable are never left behind.

My right hon. Friend the Member for Rutland and Melton (Sir Alan Duncan) gave us an excellent talk on Labour party policy, saying that the tide can go out but the Opposition think, extraordinarily and Canute-like, that they can bring it back. I was grateful for the contribution from the hon. Member for Wansbeck (Ian Lavery), who chose to characterise this debate as being about big business versus people. He is quite wrong. This is not an example of that; it is an example of an energy market that needs to be regulated well. I urge Opposition Members not always to think of businesses, which provide investment and employment, and which are vital to our economy, as somehow being wicked.

My hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) made his usual excellent contribution, commenting on behalf of his constituents. He stressed that not only is Labour’s proposal wrong, but it could cost constituents money. May I say what a pleasure it was to visit him in Kippax in his constituency to see the excellent work being done for home efficiencies in his area? The hon. Member for Inverclyde raised issues on behalf of consumers, specifically referring to direct debits. May I point out to him that this Government have regulated for money accumulated by energy companies under direct debit always to be returned by the end of the year? I was interested to hear of the project he mentioned, whereby there was local working with his vulnerable constituents.

My hon. Friend the Member for Monmouth (David T. C. Davies) pointed out that shareholders of these energy companies play an important part in our community, too. It was good to hear of his enthusiasm for shale, although less so for smart meters—let me reassure him that they will not be compulsory. The hon. Member for Angus (Mr Weir) spoke about fuel poverty and he should be in no doubt of our efforts to help people out of fuel poverty—we will continue to do that. I should point out to him that switching is an important part of not only delivering lower bills on a one-off basis, as he described, but stimulating other independent companies to join the market. Competition is the way to reduce the costs. My hon. Friend the Member for Tamworth (Christopher Pincher) highlighted the chaos of the Labour party and the need for energy companies to generate funds to invest—he is quite right.

My hon. Friend the Member for Dover (Charlie Elphicke) contrasted the chaos of Labour’s policies, both in this area and more generally, with the competence and careful planning, which is needed for a stable economy, under this Government. The hon. Member for Southampton, Test (Dr Whitehead) made the case for the regulator to regulate hedging policies, which is, I think, a little ambitious.

We have had an excellent debate, which, as always, has raised a lot of interest from fellow Members. But let me make the point that it is only by providing the right competitive framework that we will help to ensure that investment in our energy markets continues to flow, that industry can grow and that the markets deliver for consumers. Only through fixing the market for good—not interesting, temporary, short-term gimmicks—can we truly help consumers to stay warmer for less. I urge the House to reject the motion.

Question put.

16:30

Division 132

Ayes: 228

---

Labour: 219
Plaid Cymru: 3
Scottish National Party: 3
Social Democratic & Labour Party: 2
Green Party: 1
Democratic Unionist Party: 1

Noes: 305

---

Conservative: 258
Liberal Democrat: 43
UK Independence Party: 2
Labour: 1

Steel Industry

Wednesday 14th January 2015 Commons Chamber

16:44

[Mr Iain Wright (Hartlepool) (Lab)]

I beg to move,

That this House recognises the importance of the UK steel industry including as a provider of highly-skilled jobs and research and development; values the steel supply chain which supports strategic industries such as automotive, aerospace and construction; notes with concern Tata’s proposed sale of its Long Products Division and the impact this could have on UK steel industry capacity; welcomes the efforts of UK steel producers to cut carbon emissions and expresses concern that losing trade to countries with less efficient processes could increase global carbon emissions; further notes with concern that some steel imports do not meet British standards; calls on the Government to recognise the importance of the steel industry and to work with it, the Scottish and Welsh Governments and trade unions to provide a co-ordinated plan for the industry’s future; urges the Government urgently to reconsider whether mitigating measures on energy prices, planned to start in April 2016, can be brought forward to support the competitiveness of UK steel producers, to press the European Commission to launch an inquiry into the CARES certification of imported steel products to ensure safety and traceability and to take action through the EU and World Trade Organisation to challenge the uncompetitive subsidisation of steel products; and further calls on the Government to introduce an active industrial policy for the metals industry, including strengthening supply chains, strategic approaches to public sector procurement, encouraging innovation, skills development and resource efficiency and providing support for steel exporters.

Manufacturing matters if Britain wishes to have a modern, dynamic and innovative economy. A vibrant manufacturing sector is vital to an economy that wishes to prioritise high value and secure jobs and improved productivity, and to see rising living standards for all. In turn, the steel industry is vital to the future competitiveness and flexibility of British manufacturing.

This is not a debate that harks back to an industrial past, although I am proud to say from the Dispatch Box that I come from a family of steelworkers. Both my grandfathers, Jimmy Wright and Alan Harland, were steelworkers for most of their working lives at the British Steel site in Hartlepool.

However, this debate is not about the past. It is focused on the future—on our long-term competitiveness as a leading economic nation and on what is needed to secure our place as one of the top-ranking economies in the 21st century. Steel has to be a key part of that vision of a modern, innovative economy. As our motion makes clear, the UK’s steel and metals sector provides highly skilled jobs in all parts of the United Kingdom, from Hartlepool and Teesside in God’s own country of the north-east to, among others, Sheffield and Scunthorpe; Corby; Deeside in north Wales; Cardiff, Port Talbot and Newport in south Wales; and Clydebridge and Motherwell in Scotland.

The economic contribution that those facilities make through the wealth that is created by the plants and the workers who make the steel, and the way in which that wealth is then circulated around firms and businesses in those areas, whether through the supply chain or the spending power of the steelworkers, is the foundation of many local economies. Indeed, we should stress that the steel industry is literally the foundation of many valuable sectors of the economy, forming part of a number of important value chains in manufacturing—the construction, automotive, aerospace and energy sectors, in which Britain has a competitive advantage and which all play a significant role in downstream activities for the steel industry.

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

As someone who is also from a family of steelworkers, it is good to hear my hon. Friend speak strongly about the traditions of the industry as well as its important contribution today. Will he join me in thanking the Community union, particularly its president, Dougie Fairbairn, who is from Corby and a very strong ambassador for Corby steelworks? We are not part of the long products division that we are focusing on today, but we recognise that we need to fight for the future of the steel industry, whichever part we are in.

[Mr Wright]

I thank my hon. Friend for mentioning Community, which is a fantastic trade union that wants to secure the long-term viability of the steel industry and is working hard to make sure that that happens. Its keenness to work with the work force, with management and with Government to ensure that we have a future in the UK steel industry is second to none, and I pay tribute to it.

As my hon. Friend said, this is not a sunset industry—steel cannot be seen as that. This is an industry that has, and should have, a future. Internationally, the acceleration of globalisation in the first half of this century provides rising demand for steel products, especially for long products, which I will refer to later. The World Steel Association has estimated that global steel use will rise from about 1.5 billion tonnes a year now to about 2.5 billion tonnes in 2050. Within that rising demand for steel, we see process innovation, technological developments, increasing efficiency and sustainability, and pressure to increase the added value of steel products by making them stronger, lighter in weight, less resource-intensive and more flexible in their uses and reuses. Those developments can be powerful drivers of comparative advantage for the UK steel industry.

[Mark Tami (Alyn and Deeside) (Lab)]

My hon. Friend will know that added value is key to the products that are made at Shotton. Does he accept that energy prices in this country are holding back some of the potential opportunities for expansion, because steelworks are finding it very difficult to compete with other countries in Europe and throughout the world?

[Mr Wright]

My hon. Friend has raised time and again the need for a level playing field for energy costs, as have other hon. Friends, and I will want to focus on that.

Our motion hopes to secure the support of the whole House by, crucially, recognising the importance of the steel industry. We must work in a long-term way to address the issues and challenges, whether in energy costs or other matters such as skills, research and development and innovation, to ensure that steel has a prosperous future, providing important highly skilled, well-paid jobs as part of a modern, open and innovative economy. To achieve that, we require a joint vision from industry and Government as to the importance of the industry, with an active policy that addresses the challenges and works with industry and all of Government in a co-ordinated way.

All too often, however, Ministers give the impression that the steel industry is not a priority. Their deeply unhelpful approach to the sector ensures that steel firms have to fight a battle on two opposing fronts, which undermines the future prosperity of UK steel. On the one hand, the Government offer the industry a laissez-faire approach—they say that its corporate ownership, capability and capacity, and product pricing are entirely up to the market—but on the other hand, they are intervening in the steel and metals sector in a purely negative way. By imposing additional burdens on the steel industry, they are tying steel producers’ hands behind their backs, removing the gumshield from their mouths and then pushing them back into the ring of the global marketplace. Such an approach to the future viability of the UK steel industry cannot work.

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

I share with the hon. Member for Scunthorpe (Nic Dakin) the Scunthorpe steelworks, which are very important to our constituencies, as well as to that of my hon. Friend the Member for Cleethorpes (Martin Vickers). One mistake made by this Government—my hon. Friend and I voted against them on this—was on the carbon floor price. One way to make things better would be to increase accessibility to UK Government work and contracts. There is general agreement on that, but we have not seen a great deal of progress.

[Mr Wright]

I am pleased that the hon. Gentleman has mentioned those two points. I will come on to the importance of the Scunthorpe works in a moment. As part of a real, active and proper industrial policy, it is incredibly important to ensure that we have smart procurement to maintain and enhance supply chains and industrial capability in this country. As he says, we often hear warm words, but we do not see decisive action from this Government or the devolved Administrations from across the United Kingdom.

The hon. Gentleman mentioned Scunthorpe, and I want to turn to the very important matter of the potential sale of Tata Steel’s long products division to the Klesch Group. That is worrying many hon. Members and steelworkers, and I raised that in an urgent question in October. My hon. Friend the Member for Scunthorpe (Nic Dakin), who has the largest affected plant in his constituency—unless it is in that of the hon. Member for Brigg and Goole, in which case I apologise—as well as my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop), for Rutherglen and Hamilton West (Tom Greatrex) and for Motherwell and Wishaw (Mr Roy) have been particularly strong on this matter.

It is absolutely imperative for Britain to retain a long products capability. The construction industry, both domestically and internationally, provides a real opportunity. Improving the rail network is a good example. Network Rail will spend billions of pounds on rail infrastructure in the next couple of decades, with projects such as Crossrail, High Speed 2 and possibly Crossrail 2. I shall expand on that later, but to respond to the hon. Member for Brigg and Goole, I would say that a proper, co-ordinated industrial strategy, with smart procurement as one of its guiding principles, could unlock real value for UK steel firms and their workers.

[Kevin Brennan (Cardiff West) (Lab)]

At the risk of repetition, I, too, come from a steel family. My father worked for more than 20 years at Llanwern, and I even managed six months there as a young man. Is my hon. Friend surprised that no one is present in the Chamber from Plaid Cymru, the Scottish National party or even the UK Independence party to debate an industry that is very important for our country?

[Mr Wright]

I thank my hon. Friend for his intervention, because I had not realised that no such representatives were in the House for this debate. Given the importance of the steel industry to the United Kingdom and the role that they could play in public procurement through various Governments and Assemblies, it is absolutely vital for them to be present.

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

My hon. Friend makes an important point about procurement, particularly in Scotland. As he will be aware, when the devolved Scottish Government tendered for a new Forth crossing, they chose to place the steel order with a Chinese company, rather than to support Scottish jobs in my constituency and that of my hon. Friend the Member for Motherwell and Wishaw (Mr Roy). Does that not demonstrate that warm words but no follow-through means that British steelworkers lose out?

[Mr Wright]

My hon. Friend, who has been a real champion on this issue, has pre-empted one of my later remarks. His clarification about the contract is absolutely right. This £790 million contract for 37,000 tonnes of steel for the Forth bridge project would have been really helpful in making sure that we had a vibrant long-term steel industry in Scotland, but all the steel came from China and Europe, and certainly none of it came from Scotland. How can that be allowed if we have a real industrial policy? I do not believe in protectionism or bailing out obsolete industries, but Governments of any complexion working with industry and the supply chain to ensure their viability is the key to a modern, innovative economy. Other countries are doing that and so should we.

[Nic Dakin (Scunthorpe) (Lab)]

My hon. Friend is making a powerful argument. Did he notice how the Italian Government stepped forward before Christmas to ensure that their steel industry could carry on into the future and be in a strong position to compete in Europe and the world?

[Mr Wright]

My hon. Friend is absolutely right. Governments, in conjunction with industry, can look at the global steel market, consider where they want to fit into the value chain and how they can exploit it, and work together in a co-ordinated way on research, development, innovation and skills to ensure that they fulfil the potential.

What has happened with long products provides a good example. It is important that this country continues to have a long products capability for domestic and international reasons. It is important that we remain a key player in that area. That is not about helping obsolete, old-fashioned industries; it is about thinking about the future and about how we can exploit the opportunities. Just because a single company, albeit one as strong and as important to this country as Tata, makes a strategic decision to divest itself of its long products division, which comprises about 50% to 60% of its steel operations, this country should not lose that capability. Should not such matters be considered in an effective industrial strategy? As I said, it is not about bailing out obsolete industries, but about identifying the parts of the value chain where we can make inroads and receive dividends in the future.

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

Does my hon. Friend agree that it was not helpful of the Government to refuse to find the loan for Sheffield Forgemasters that would have put it in a position to compete worldwide in nuclear engineering?

[Mr Wright]

I am pleased to see my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) in her place, because she was particularly strong early on in this Parliament on the issue of Sheffield Forgemasters. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) is absolutely right. One key thing that an industrial strategy can do is identify the opportunities in the supply chain and work with firms to exploit that potential. When the Government came in, they did nothing to help and they might have undermined a great capability in that important part of the steel industry and its auxiliary supply chain.

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

Will my hon. Friend give way?

[Mr Wright]

I will give way to my hon. Friend, and I pay tribute to the work that she did earlier in this Parliament with regard to Sheffield Forgemasters.

[Angela Smith]

I thank my hon. Friend. Our capability to deliver supply chain opportunities in the nuclear industry has been compromised by the Government’s decision. It was cast at the time as a cancellation of Labour’s sweeties to industries in Sheffield in an attempt to win Sheffield Central in the general election. Will he take the opportunity to deny, even now, that that was the case and to say that it had been a serious strategic investment in a key industry for the UK?

[Mr Wright]

My hon. Friend is absolutely right. It was a serious, strategic, targeted investment that was based on a credible assessment of what would be required in our future industrial capabilities. As someone who has a nuclear power station in his constituency and who wants to see the supply chain in steel and other parts of industry thrive as a result of a new generation of nuclear power, I think it is important that we look at this issue in a co-ordinated manner.

I want briefly to conclude my remarks about the long products division. I do not want to see assets stripped away from the UK by a buyer, so I have some questions that I hope the Secretary of State will answer when he responds. What guarantees will the Government extract from any potential buyer of the long products division on the safeguarding of jobs, additional investment and the maintenance of existing sites, such as Scunthorpe, as places where steel is made? Is any such deal contingent on grants and funding being provided by the Government, and what would those be?

The Secretary of State will be aware of the UK’s national trade union steel co-ordinating committee, which is made up of representatives of Community, the GMB, which is my union, and Unite. It has hired the consultancy Syndex to look at alternatives to Tata’s selling its long products business. What support is being given to that work, and what pressure will the Government put on all the parties concerned to ensure that any recommendations in the Syndex report are considered and acted on?

[Andy McDonald (Middlesbrough) (Lab)]

My constituency exists because of iron and steel, and many of my constituents continue to work in the Teesside plant. Does my hon. Friend agree that the Community union has at its disposal incredible expertise and knowledge about processes and markets in the industry? We would be foolish to ignore that resource. It should be exploited to the full as we try to preserve the long products division of Tata Steel.

[Mr Wright]

My hon. Friend is right. I would like to class him as a good friend, and I take great pleasure in pointing out that West Hartlepool was a thriving industrial port at a time when his area was just sand dunes. I appreciate, however, that his area was later nicknamed “Ironopolis” and was an important part of the iron and steel industry in the 19th century. He makes an important point—why would we remove assets, both physical and intangible? Why do we not exploit the real talents that lie within the trade union movement and the work force to ensure that we have a real future for the steel industry?

With regard to the ownership of the long products division, the Government say, “Let the market decide”. However, they are intervening in other areas, producing an uneven playing field for British-based producers, to the detriment of the UK steel industry’s competitiveness. Nowhere is that more acute than in the field of energy costs, as has been pointed out time and again, including by my hon. Friends the Members for Alyn and Deeside (Mark Tami), for Middlesbrough South and East Cleveland, for Scunthorpe, for Newport East (Jessica Morden) and for Llanelli (Nia Griffith).

The future of the steel industry should prioritise low carbon and sustainability, and the task of an industrial policy is to assist the sector in the transition. It should not happen in a way that forces UK steel producers out of business or away from these shores. We should not get into a ludicrous situation where there are higher global carbon emissions because we are importing more and more of our steel requirements from countries with reduced regulation.

Steel costs more to manufacture in the UK than in European neighbours, often by as much as 25% to 50%, because the French and German Governments have prioritised the steel industry as being vital for manufacturing, have not imposed cost burdens on it and have worked to mitigate any pressures quickly. In contrast, the UK Government’s response has been half-hearted and slow, reflecting the lack of priority that they give to the steel industry.

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

Does my hon. Friend agree that it would be an absolute absurdity were steel production to end up being offshored to places such as China, where processes are far less carbon-efficient and carbon emissions will be higher, and where there are serious concerns about quality standards and environmental degradation?

[Mr Wright]

I will turn in a moment to the traceability and sustainability of imports, but I hope that my hon. Friend will be able to catch your eye later in the debate, Mr Deputy Speaker, so that he can expand upon those points.

The Port Talbot site lost 400 jobs in July, and on announcing the redundancies, Tata Steel’s chief executive Karl Koehler said that

“steel demand and prices are likely to be under pressure for some years. Our business rates in the UK are much higher than other EU countries’ and our UK energy costs will remain uncompetitive until new mitigation measures come into effect.”

State aid approval has not been pursued with any sense of urgency or vigour, and Ministers have allowed the process to drag on. Romania was able to commence and conclude state aid negotiations within six months, so why does it take years for the UK? Help to mitigate the renewables obligation will not come into force until April 2016, despite the fact that steel firms need help now. I appreciate that the process can take time, but will the Secretary of State commit to pursuing it with a renewed sense of haste? Crucially, if approval comes forward prior to April 2016, will the Government implement the measures as soon as possible?

The Secretary of State will acknowledge that when it comes to capital expenditure decisions, especially for an industry as capital-intensive as steel, global investors will base their decisions on a dashboard of different factors, including tax, access to a skilled work force, the regulatory environment, access to markets and innovation. In that context, inward investors see business rates as a fixed cost. They do not flex with changing market conditions and industrial output. Business rates are five to 10 times higher in the UK than in European neighbours, putting British-based steel at yet another cost disadvantage compared with our competitors.

I appreciate that the system cannot be changed overnight, and the Chancellor’s announcement of a business rates review is welcome and we support it. As part of that review, will the Secretary of State confirm that the Government are looking to simplify the system and ensure that it boosts manufacturing activity? Specifically, does the review cover the valuation of plant and machinery in the business rates system?

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

The hon. Gentleman is right to mention business rates, which will soon be devolved to the Labour Government in Cardiff. What discussions has he had with colleagues about creating a business rates regime in Wales that would help the steel industry in my country?

[Mr Wright]

That is an important point, and ensuring co-ordination across the United Kingdom in things such as tax systems and procurement measures is vital. As part of a proper industrial policy, we must champion free trade and try to stamp out unfair trade. As part of that co-ordinated response, the Government should be working with other partners. We are concerned—my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) has already touched on this—that China and Turkey are subsidising their steel exports, making it impossible for UK and European steel products to compete on a level playing field, and domestic steel production suffers.

Imports from China now account for more than a third of the UK domestic steel market, and they are growing substantially year on year. I pay tribute to my hon. Friend, who has been particularly robust on that matter. We are calling for the Government to take decisive action within the European Commission and the World Trade Organisation to clamp down hard on unfair trade from other nations, but there is precious little evidence that the Government are standing up for steel and pursuing such an approach. What are they doing to ensure that fair change? The large increase in Chinese imports in recent years also includes steel reinforcement for concrete, or rebar. China has significant excess capacity in that product, and as such is exporting it to Europe. That particularly affects Celsa Steel, which is based in Cardiff, and my hon. Friend has been an extremely strong and assiduous champion for steel jobs and that firm in his constituency.

The Secretary of State may recall that I asked him a question on this issue during questions to the Department for Business, Innovation and Skills last year. As my hon. Friend has said, there is concern about traceability within the supply chain and the failure to comply with British standards—I am sure my hon. Friend will catch your eye during the debate, Mr Deputy Speaker, but I want to flag up the issue because it raises serious questions about the structural integrity of buildings and infrastructure. In answer to my question last November, the Secretary of State said that he was in the middle of an inquiry into whether the testing process operates effectively. Will he update the House on that inquiry, as well as on its findings, recommendations and actions?

I mentioned the potential of domestic markets in energy, construction and infrastructure that UK steel producers could tap into, but far too often—I think the House is united on this—British-based steel manufacturers miss out. I have already mentioned the £790 million contract for the Forth road bridge. In the North sea we have the largest offshore wind market in the world, and a supply chain that runs along the east coast—including Tata’s pipe mill in my constituency—that is ready and eager to make the steel. Tata’s offshore processing centre in Hartlepool is geared up to provide steel tubulars and line pipe for wind turbines and their foundations.

Every time I sit at Hartlepool United’s football ground, I can look out—it is often not worth actually watching the football—and see the fantastic Teesside wind farm project. However, less than 10% of the steel in that project was produced by UK-based manufacturers, even though there is a steel industry and supply chain literally on its doorstep. That is madness, and the Government need to work harder to address that.

I am not advocating protectionism, but I urge the Government to emphasise the importance of smart public procurement that aids the industrial and employment capability of supply chains in this country. Why do they not encourage local economic benefit clauses in public procurement contracts, as other countries in Europe do? Some of the work being undertaken in sectors such as automotives and aerospace is welcome, but the Government are failing to join up the dots with supply chain capability. Why do they not work harder to provide linkages between original equipment manufacturers and firms within the supply chain, to ensure that the needs and requirements of primes are understood, and that steel producers within the supply chain can adapt and work collaboratively? For example, when the Automotive Council identifies that £2 billion to £3 billion of additional value can be created in the UK car industry by reshoring some of that work, what is the Department doing, with industry, to ensure foundation industries such as steel, as well as chemicals and glass, can be positioned to take advantage of that great opportunity? By prioritising steel as a foundation industry, and as an essential part of industrial strategy and a vital component in the ongoing competitiveness and success of other, perhaps more visible, manufacturing success stories such as Airbus, Nissan and Jaguar Land Rover, UK manufacturing could be better placed to succeed in the future.

[Mark Tami]

rose—

[Mr Wright]

I give way to my hon. Friend, who is a passionate ambassador for Airbus.

[Mark Tami]

How many times has my hon. Friend been around factories to see very important machinery only to be told that it has had to be imported because it is not produced here any more, and that we used to produce it years ago but we no longer have the capability? That is very sad and shows where we are going wrong.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The shadow Minister has been speaking for 26 minutes and there are 13 speakers after the Secretary of State. I do not want to interrupt the shadow Minister—he is making a great speech—but I just ask him to bear in mind interventions.

[Mr Wright]

Thank you for your guidance, Mr Deputy Speaker.

My hon. Friend is absolutely right about making sure that we assess, in a strategic and co-ordinated way, a vision for the steel industry: how we want it to be linked in to a manufacturing sector that is vibrant and competitive, and how we can work collaboratively to ensure that that happens.

With that in mind, work is ongoing within the industry to produce a UK metals strategy. That is welcome. I am pleased that it is industry-led rather than top-down Government imposed, but its status is unclear and there is no evidence from Ministers that it will be accepted by Government. Will the Secretary of State state how he and his officials are engaging with the process? Will the strategy be given similar status to the 11 industrial sector strategies? How will the strategy develop and ensure it does not just consist of a nice launch and a glossy brochure, but then stays on the shelf and is not a real, meaningful and co-ordinated engagement to address the challenges and ensure the ongoing success of the steel industry?

Steel matters. It is vital to a modern and innovative economy. We need a Government who recognise that, and act to addresses the challenges and the opportunities of the industry. We need Ministers to champion it. We need a Government that will stand up for steel in this country. I commend the motion to the House.

17:12

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

I very much welcome the debate. It is an opportunity to show shared recognition across the House of the importance of the steel industry. In terms of basic crude steel production, we still have approximately 20,000 workers in the industry. In the steel industry more widely, we have about 300,000 workers. It is a very big and important industry, and I recognise that importance. I also recognise the anxieties that exist in the industry at the moment, notably over the future of the long products division, but also over the future of Celsa in Cardiff. We are engaging with Celsa on a regular basis, but I know the uncertainties and problems the situation presents for the work force.

The motion poses a great challenge: why are the Government not more active? I will simply speak for myself. [Interruption.] I will speak for my own personal involvement as Secretary of State before the current anxieties arose. In the course of my period in office I have been to Scunthorpe, as hon. Members would expect. I have visited Port Talbot twice. I have been to Beam Mill in Redcar on two occasions. I went to the opening of the SSI plant in Redcar, which the hon. Member for Hartlepool (Mr Wright) may recall closed under his Government, but which, with the help of my hon. Friend the Member for Redcar (Ian Swales) and others, has restarted. I have been to Celsa to discuss its very particular problems, and to a wide variety of steel-using plants involved in casting, forging, pressing and steel wire rolling, and other such installations. I have tried to engage with this industry, and understand and support it. Despite the slightly carping tone of the speech by the hon. Gentleman, I hope he recognises that there has been a great deal of engagement with the industry and some positive outcomes.

Quite apart from my own personal involvement, the Department has had three Ministers of State with responsibility for this industry, all of whom have taken a very close interest in it. The current Minister, the Minister for Business and Enterprise, would have been here, but he is at a funeral, and I personally must apologise because unfortunately I cannot be here for the winding-up speeches. However, the Minister for Culture and the Digital Economy will report back on any important issues that arise.

I will not recommend to colleagues that we vote against the motion because most of the points are perfectly reasonable—they are just telling us to do things we are already doing, and I do not object to that. It is the job of the Opposition to chase us, but on almost every item that the hon. Gentleman listed, we are taking the action he described.

Given the negative tone of the hon. Gentleman’s speech, it is worth reviewing some facts about the evolution of the steel industry. Historically, of course, it was once much bigger than it is today—it has gone through a prolonged and painful process of consolidation and contraction. However, when we entered government, crude steel production was about 9.7 million tonnes a year, whereas it is now more than 12 million tonnes and growing at about 5% to 6% a year. When I looked at the long-term time series, I was surprised to learn that the current level of production is higher than it was back in 2002 and in 1980, though the last was an exceptional year. He sought to criticise the Government, but it is worth recalling that in the Thatcher years, which are not considered to have been particularly friendly to the steel industry, steel production declined from 21 million to 18 million tonnes a year. In the rather shorter period—13 years—of the Labour Government, steel production actually halved, so the rate of contraction was substantially greater than in that difficult period of the 1980s. We could do without Labour’s sense of piousness and self-righteousness.

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

It would be remiss if we did not mention Geoff Waterfield, the multi-union chair at Redcar steel works, who was the real hero behind the saving of that site during a campaign that lasted from 2008 to 2011. We also need to mention that on the Secretary of State’s watch, Thames Steel has closed, and Alcan aluminium smelter—not a steel manufacturer—in Northumberland has also closed, with the loss of 500 jobs. He needs to have a broader review of his record in this period.

[Vince Cable]

I pay tribute to all the members of the community who fought for the steel works and secured the reopening by my hon. Friend the Member for Redcar and others.

Of course, this is an industry with a great many problems, which I will review in a moment, and the metal sector generally has been under great pressure. I was just trying to make the simple point that the rather self-righteous tone from the Opposition is perhaps not reflected in the historical record, so I would urge a slightly more balanced approach.

[Angela Smith]

On the subject of the Secretary of State’s record, what representations did he make to the Chancellor when the latter proposed to introduce the carbon floor price?

[Vince Cable]

My Department has been engaged in active discussions with the Treasury about the implications of the carbon price floor and other environmental measures. I was going to make the point that the principle of trying to change incentives through the tax system to discourage carbon-intensive production was inspired by the Leader of the Opposition when he held this role in government, and we have maintained that green principle in taxation. Of course, that has costs for energy users, and we have sought to deal with that through a compensation mechanism, which so far has made commitments of £3 billion. I shall explain in a moment the progress we have made on implementing that.

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

The Business Secretary is urging a balanced approach. Is he aware that the shadow Business Secretary has said that trade unions at their best are wealth creators for this country? We never hear that from the Prime Minister or the Chancellor. Can we hear that, along with a tribute to trade unions, from the Business Secretary?

[Vince Cable]

I have no inhibitions about doing that. I am always happy to engage with the trade union movement, either at the TUC level or a community union level. On this whole issue, they have been very constructive, so I have no problem agreeing with the right hon. Gentleman.

[Stephen Doughty]

I am slightly disappointed by the Secretary of State’s painting of this rosy picture that the Government are doing everything listed in the motion. Certainly from conversations I have had with his Department, Ministers and others, including with the steel industry in my constituency, I am aware of a cautious, sit-back approach. Letters I have received identify that, particularly in respect of action taken at the European level. When was the last time the Secretary of State raised with the European Commission the issue of countries such as China and Turkey dumping into UK markets?

[Vince Cable]

When I was in Brussels a few months ago—I do not recall the exact date—I was actively pursuing the issue of speeding up state aid clearance and I have certainly actively raised trade policy issues. We support the principle of the European Commission acting—if evidence can be acquired. As the hon. Gentleman will know, getting anti-dumping action and countervailing duty action by the Commission is not easy. Proof has to be established, but we are pressing where unfair practices can be established.

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

I thank the right hon. Gentleman for charting and laying out the facts of the decline in steel production in the UK. I have heard from a reputable source that Ravenscraig in Scotland could have been saved by being bought by a rival, but to prevent competition from other areas of the UK at the time, British Steel chose to end production at Ravenscraig. Will he look into the veracity of that statement and perhaps report back at some other time that Ravenscraig was deliberately sabotaged and ended for purposes related to other places?

[Vince Cable]

I recall that when I lived in Scotland, Ravenscraig was still producing as an integrated producer. I do not know the history of why it was closed, and I doubt the conspiracy theory. I suspect that the industry was under a great deal of pressure. The simple point to make is that the industry has been contracting over three to four decades, both under British Steel—some Labour Members might remember the name of Mr MacGregor—and subsequently under privatisation, so it was not ideological.

Before I finish the point about the historic trends, let me say that the decline in employment has been far more dramatic and far more brutal than the decline in output. It is worth recalling that, back in 1980, 155,000 people were working in the industry, and there are now 20,000. We are down to little above a 10th of the total labour force. There were two major spasms when this occurred. One was between 1979 and 1981, when the industry halved in manpower—a very difficult phase. Then, during the period of the last Government, the level of employment halved again after 1997. The question we now face is whether we can avoid another spasm of contraction as a result of the difficulties faced by several leading producers, particularly Tata.

[Nick Smith (Blaenau Gwent) (Lab)]

On the topic of jobs, looking to the future, what binding guarantees are the Secretary of State and the Government obtaining from Klesch about maintaining jobs and ensuring greater steel capacity in the UK for the future?

[Vince Cable]

We are not in negotiation with Mr Klesch. He has expressed an interest to Tata about acquiring the long products division. I and my officials have had a conversation with him in very broad terms. If he wants to make proposals, we will obviously look at them, then talk to him and to Tata. At that point, the issue of conditionality might well arise, but I think the hon. Gentleman is premature on this issue.

[Tom Blenkinsop]

Bringing the Secretary of State back to his comments on spasms of contractions of labour in the steel industry, he will know that between 1987 and 1992, in my locality and particularly the Teesside Cast Products site, the work force went from 25,000 to 5,000. My predecessor but one, the now Lord Langbaurgh, actually celebrated that in his maiden speech in this House when he was elected in 1992.

[Vince Cable]

I thank the hon. Gentleman for the embellishment of the detail.

I hope it is accepted that the situation with the numbers and the trends arose under both previous sets of Governments and under both nationalisation and privatisation. Let me try to get to the bottom of the underlying problems with the industry, which are serious. The first problem is structural, and has absolutely nothing to do with decisions by industry or Government; it has to do with the nature of demand.

Technology is changing. If the Eiffel tower were rebuilt now, a third of the amount of steel that was used for its original construction would be required. Construction techniques and materials have changed. Even in industries in which steel has a major market and is a major success, such as the automobile and aerospace industries, it is already being driven out at the margin by composites. Let me give a little example. In my constituency, I am trying to bring about the restoration of a pedestrian bridge over an expressway. It is a steel bridge, but if Transport for London proceeds with the project, it will be replaced by a plastic bridge at a small fraction of the cost, and composite materials will be used. Technology, about which we can do little except to encourage it in an innovative context, is a key driver in the steel industry, in respect of both production and employment.

The second problem originated with the banking and financial crisis, which resulted in a massive cut in infrastructure spending. That cut was initiated in 2009, although, admittedly, the present Government have continued restrictions on capital expenditure. The contraction of capital spending and the ending of private finance initiative projects also contributed to the drying up of a great deal of infrastructure demand.

Thirdly and crucially, the steel industry exports more than it imports. That is a rather obvious point, but the hon. Member for Hartlepool did not refer to it. He talked entirely about import competition. What he did not mention was that for Tata and the other steelmakers, export markets are critical. A key export market is the European Union, and in the European Union there is a serious problem of excess capacity. Many steel plants in France, for example, have been mothballed. Anyone who tries to compete in the European market will be operating on very fine margins, and that is a serious problem for all the producers in Europe.

[Andy Sawford]

Roy Rickhuss, the general secretary of the Community union, along with steelworkers in my constituency and throughout the country, will be watching this debate. Fourteen minutes into it, the Secretary of State is still being entirely negative about our brilliant steel industry, about all its opportunities for the future, and about the solutions that we need from the Government to the problems that he is describing.

[Vince Cable]

In the remaining part of my speech, I shall explain exactly how we will deal with the problems faced by the steel companies, but it is right to be realistic about those problems. The companies are losing money, and we shall need to understand why they are losing money before we embark on policy action.

Fourthly, there is the fundamental problem of competition and high-productivity competitors. It is all very well to complain about unfair competition, and there may be some, but the most productive steel plants in the world are in Japan, Korea and, potentially, China. For decades there has been massive under-investment in the British steel industry. Tata has invested in blast furnaces in south Wales, but there has nevertheless been chronic under-investment, which is why there is a productivity issue in relation to overseas competition.

[Mark Tami]

Does the Secretary of State not accept that, as I said at the beginning of the debate, it is possible to become far more efficient, but, no matter how much efficiency is improved, there will still be a massive gap between energy costs.

[Vince Cable]

I had already begun to deal with the cost issue. Let me explain how we are trying to offset it. Among our competitors, the French have a nuclear power industry, and the marginal cost of nuclear power is extremely low. The Germans use a lot of thermal power, but, under European rules, they have been able to grandfather the support that they have given to their industry. We have not overlooked the problem; there are very specific reasons for it.

I have dealt with the problems. Let me now deal with the major areas of opportunity, as I have rightly been asked to do. What is beginning to emerge is that successful British producers—notably Tata—are finding markets in two particular areas. One is high-quality production—alloy steels, light vehicles, aerospace—using sophisticated steels. That is where the market is beginning to consolidate and where companies are making significant margins to stay in business. The second area—again, I am very surprised the Opposition spokesman did not mention it—is exports. Within the last three to four years, exports have been growing rapidly. Tata Steel has won contracts in Singapore. We are working with it to win business in Qatar and Iraq on pipelines and other things. The future increasingly lies in export. The SSI plant, which is the big success for Redcar, has been based entirely on export production. Rather than focusing just on the problems created by import competition, let us think about this as a global industry in which good British producers have significant markets.

Those are the two areas of specialisation where British steel producers are doing well, so let me now turn to the areas of policy where the hon. Member for Hartlepool (Mr Wright) is asking us to do more: energy costs; the industrial strategy; and imports and certification.

On energy costs, I completely agree with Members on both sides of the House who argue that it is completely counter-productive to drive away energy-intensive British producers who simply pollute somewhere else. Carbon leakage is not sensible policy, so we should stop it.

We fully recognise that where British producers enjoy a cost disadvantage because of high energy costs they should be compensated, and we have agreed to compensate to the scale of £3 billion, which in an environment of fiscal pressure is by no means insignificant. In respect of one area of extra cost—the EU emissions trading scheme—compensation has already been paid; the cheques have gone out. In respect of the carbon price floor and the renewables obligations, we are in the process of trying to secure EU agreement on state aid. We have been waiting 18 months. If Opposition Front Benchers were familiar with what is happening in the European Commission, they would know that there is a major bottleneck in getting state aid clearance, not just for the UK but across the EU. It is important to reflect a little on that, because Opposition Members proclaim they believe in the EU—a belief which I happen to share—but the EU has as part of its operation something we support: strict state aid disciplines. When we are dealing with very complex problems, such as the approval for Hinkley or the approval we have recently obtained for the British business bank, those strict state aid disciplines take a great deal of time. We would be happy to bring forward compensation, subject to financial priorities, if state aid clearance could be obtained, but we are still waiting for it.

[Mr Chuka Umunna (Streatham) (Lab)]

Is the Secretary of State saying that the only reason why the Government—I take it he is speaking for the Government—will not bring forward the compensation package due to kick in in April 2016 is state aid approval?

[Vince Cable]

Yes, that is the reason. There is financial provision in a later financial year. We would clearly have to argue with the Treasury for bringing that forward, and there would be an argument, which the hon. Gentleman would have were he in government, for funding that as against other priorities. That argument has to be had, but the current constraint is state aid approval, and it is a very real one.

[Mr Umunna]

If the Treasury, the European Commission and state aid approval are the issues, why has the Secretary of State not started having a discussion with the Treasury on that point, or has he done so already?

[Vince Cable]

Yes, we have that discussion on a frequent basis both at European level and internally within the Government. We are well aware of the sense of urgency in the industry and the pressure it faces from high energy costs, and we are anxious that it should be compensated as quickly as possible.

When I came into this job, we did not have an industrial strategy. We now have one. We had, as the hon. Member for Hartlepool correctly said, a strategy built around 11 sectors. We have added to that chemicals, electronics and metals. The metals strategy paper will be available later this year and will be the basis on which we can work in future with the industry.

The hon. Gentleman asked for several specific respects in which an industrial strategy could help. Let me itemise them. On R and D innovation, he is right: a forward-looking industry needs Government to support innovation. The fact that the advanced manufacturing catapult is in Sheffield is highly relevant to some of the specialist producers that make major use of it. In addition, we have provided more than £8 million for a steel industry R and D centre at the university of Warwick, which will do a lot of the innovative work in this field, so we recognise the importance of R and D.

The hon. Gentleman mentioned training. Quite apart from the across-the-board work we do on apprenticeships, we have a programme to fund 100 postgraduate researchers and 250 apprenticeships for Tata, specifically dedicated to the future manpower requirements of the steel industry.

The hon. Gentleman rightly mentioned procurement issues. One of the first problems we had to confront was procurement in the rail industry, where contracts were defined in such a way that they did not help British suppliers. We have rectified that problem. We have to operate within the laws of the European Union on procurement, but under the industrial strategy we now actively seek strategically to develop British suppliers. This is now happening in respect of, for example, energy supply chains and railways—all the recent big railway contracts are going to companies based in the UK. The point is fully understood that we have to develop British supply chains, albeit within the rules of international law that we subscribe to.

[Mr Umunna]

I am grateful to the Secretary of State for giving way again. Does he not accept that simply waving the flag of EU state aid approval problems in respect of the use of procurement is a red herring? So long as the benefit for growth and jobs in this country is not the sole criterion used for making procurement decisions, it can be taken into account when making such decisions. It seems to me that that is not really happening in government.

[Vince Cable]

It is happening, it is taken into account, and end-user industrial strategies such as those for the railways sector and the energy supply chain industries—nuclear, oil and gas, offshore wind—are operating entirely on that basis. Contracts that would otherwise have gone overseas are now going to UK producers. Why else are wind turbines being fabricated on Humberside, which we hope will provide a linkage back into the steel industry in Scunthorpe in due course?

The hon. Member for Hartlepool asked about supply chain development. I do not know whether he is aware of the advanced manufacturing supply chain initiative, which is providing support for specific supply chains. A substantial award was given to the Proving Factory, based in Sheffield, which was designed specifically to develop the supply chain within the steel industry. The things that the hon. Gentleman is calling for are happening, and we fully understand the need for them.

I turn to imports and the quality issues relating to China. I think the hon. Gentleman may have misunderstood the mechanisms involved. The testing of steel—this is a particular issue, as he correctly pointed out, in respect of rebar and Celsa—is carried out by the UK Certification Authority for Reinforcing Steel, which is an industry body not a Government body. It does the testing and tracing. As he correctly pointed out, a year ago we initiated an inquiry into whether the system had integrity and was effective. We asked the United Kingdom Accreditation Service, which is part of the BIS family of institutions, to investigate whether the certification process was working and whether the correct testing procedures were being followed. It said that, having checked, there was no particular fault within the Chinese products. We have had further strong representations from Celsa, among others, and further investigations are taking place as a result. I believe that a team from CARES is doing detailed testing in China at the moment. We want to make absolutely sure that the process is investigated. So far, no hard evidence has been found of a serious fault in the Chinese products. There may be such a fault, but we have to find the evidence and, so far, we have not done so.

The hon. Member for Hartlepool raised the topical issue of the future of Tata and Celsa. The position of Tata is straightforward: it has announced its intention to sell the long products division. As I have explained in the House before, I had a substantial discussion on this matter with Mr Mistry when I was last in India. Mr Klesch has expressed an interest in buying it, and my colleagues and officials and I have had discussions with him, although we have so far discussed ideas only at a very general level. When he has proposals, he can bring them to the Government and we can discuss them and negotiate. The whole process is at a much more general level at the moment than the hon. Gentleman hinted at in his speech.

I very much welcome the fact that Tata has engaged with the Community union to produce an analysis of the future of the industry. Perhaps that will give us a whole new set of options. It is a good initiative and we are eager to work with it. I believe strongly in the steel industry. I have been closely engaged with it since I became Secretary of State. I think it has an excellent future, but it will need continuing support from this and the next Government. As far as I am concerned, I will remain close to it and closely involved with it.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. It will be obvious to hon. Members that a large number of people wish to take part in the debate, but we have only 59 minutes left. I therefore have to impose a time limit of five minutes on Back-Bench speeches.

17:41

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

I welcome this debate and I also welcome its timing, because 2015 will be a critical year for the British steel industry. At the heart of the motion is a call for the Government to recognise the importance of the industry in the UK and to work with it and the trade unions to come up with a co-ordinated plan for its future. I hope that this debate will help to achieve that aim. The general secretary of the Community union, Roy Rickhuss, captured the imperative that faces us very well when he said:

“UK steel companies and their workers need a government that is prepared to intervene to support us on areas like energy, tax and procurement, just as they do in France and Germany”.

That is what we are looking for from Ministers today.

After nearly five years of failing economic policies, Britain badly needs a successful steel industry, not only in its own right but as a foundation industry for the success of this country’s many other advanced manufacturing sectors, including the aerospace, automotive, oil and gas and renewables industries. The Secretary of State and other Ministers brag about their economic success but, in fact, we have seen a double deficit failure. We have seen failure on the fiscal deficit, with the Government promising to balance the books by this year but instead having to admit that they are borrowing £200 billion more than they planned over this Parliament. We have also seen failure on the trade deficit. Back in 2010, the Chancellor promised an

“economy where we save, invest and export”.—[Official Report, 22 June 2010; Vol. 512, c. 167.]

He failed, and we now face a trade deficit of £110 billion a year and the biggest ever trade deficit in goods.

The steel industry and our UK companies together are positive contributors in that disastrous trade balance, involving £5 billion a year of exports. In 2013, the steel industry made a positive trade contribution of £2.4 billion. Tata’s speciality steels manufacturing, which is largely based in South Yorkshire, now employs 2,250 people, 1,050 of whom are at the Rotherham site.

That steel-making in South Yorkshire is innovative, internationally competitive and successful—27% of the sales are to the UK market, with 18% going to the US and fully half to other eurozone countries—but it is under great pressure. It is hampered by high energy costs and held back by the Government not doing all they can to back this great British industry. We have been making steel in Rotherham since the early 1800s, and Tata’s steel-making, re-melting and mill processing now supplies some of the world’s highest-quality, highest-performance metals to some of the world’s biggest and best known companies.

We have come close to losing our Aldwarke plant before, and it was only because of the trade unions, working alongside the management—led by Stuart Sansome of Community union, alongside Mark Broxholme of what was then Corus Engineering Steels—that in 2009-09 we brought that company through that period. I pay tribute to them, and I was glad to hear the Business Secretary paying proper tribute to the trade unions’ role in the steel industry.

I am very short of time now. This is an internationally competitive but internationally exposed industry, clearly suffering the effects of weak eurozone demand, exchange rate changes and, above all, as a high-intensive energy user, very high comparative energy costs.

[Mr MacNeil]

Are there any estimates of the effects of austerity on the steel industry, because of a lack of demand coming from the Government, in particular?

[John Healey]

Weak demand is always a problem for an industry such as the steel industry. Although in the past year UK demand for steel has increased by 15%, most of that has been supplied by imported steel, not UK-produced steel—that is what we have to change. It is the high energy prices that pose the risk of pricing British steel-making out of business. The full cost of energy for large energy-intensive users, such as steel makers, is €77 per megawatt-hour in the UK, which compares with €49 in France, €38 in the US and €33 in Germany. Of course when high-end products go through several processes—melting, casting, re-melting, rolling and finishing—that premium and extra cost is multiplied.

We need the Secretary of State to commit his Government to bringing in, once state aid clearance is achieved, help with the cost of the renewables obligation—that is imperative. We need help and a promise to negotiate a good transatlantic trade deal which benefits the metals industry and many of its user industries and deals with some of the problems associated with restricted procurement practices arising through the “Buy America” regime. Finally, we need to see a commitment to using any local economic benefit clauses that can be put in place in public procurement. Just as there is common ground in the industry among companies and the trade unions on the future of the industry and what is needed, we need in this House, from today’s debate, common ground among the parties.

17:48

[Ian Swales (Redcar) (LD)]

When I was elected in 2010, I became the representative for the large steel complex in the Redcar area—the Tata long products business, based on the Lackenby beam mill and the then mothballed Tata iron and steelmaking facilities at Redcar. I was delighted that in my early months here we managed to get a deal to have the plant taken over. Many people were involved in that, particularly a very constructive group of trade unionists; Geoff Waterfield has been mentioned, and I have no problem mentioning him again. The iron and steelmaking facilities had suffered neglect and under-investment for decades.

The integrated plant suffered a big blow in 2001 with the closure of the coil plate mill and had been slowly dying. I am delighted to see that it has restarted and I am pleased that SSI—Sahaviriya Steel Industries—has invested £1.5 billion in the site to help deal with some of that under-investment and to put pulverised coal injection on to the plant. The company has plans to do a lot more, particularly in respect of energy. Only this week the chief executive gave a very positive report to the press; despite the financial problems, the corner is being turned. It was particularly pleasing to see the recruitment of 21 apprentices and six graduate trainees recently.

I will not repeat all the points in the motion. I am pleased with the common-sense measures and played a role, I think, in ensuring that the Government will not oppose the motion. However, I want to talk about a couple of things that are not in the motion. The allowances under the EU emissions trading system are inadequate for the plant in Redcar. The way that the reference period has been established means that the business has to pay extra for emissions trading, and, in fact, the allowances are declining. We need to deal with that anomaly.

The EU is imposing best available technology on steel plants, which is, in a sense, a good initiative. Levelling up to the level of the best is especially good around emissions in the area. My constituents in Dormanstown will be delighted about that. However, the amount of investment required will take time. I draw a parallel with the clean-up of the River Tees, which was a dead river when I moved to Teesside in the 1970s. It now has salmon back, but that did not happen overnight. There was a constructive arrangement between the companies involved and the Department for Environment, Food and Rural Affairs, or whatever it was called in those days, to pace that work. We need to have that same approach on best available technology.

I mentioned Lackenby beam mill. This is an incredibly uncertain time for the workers and their families, and I certainly feel for them. The Secretary of State has visited the plant where the workers proudly told him that nine out of 10 of the world’s tallest buildings have beams from that mill. On the day he visited, they were making beams for the new World Trade Centre. That plant remains a very attractive proposition for whoever owns it.

The Secretary of State mentioned exports. The complex in my constituency is almost entirely export related. Sahaviriya Steel Industries is selling not just to Thailand but to the US, Turkey and even Germany, so producing high-quality goods is one way to survive. A lot has happened. Manufacturing is reviving after being halved under the previous Government. We have sector strategies. I hear what was said about foundation industries, and I am delighted to have pushed for the chemistry growth partnership. The steel industry may be able to propose a partnership with the Government that makes sense.

I welcome the direct support for the Tata research centre at Grangetown, which deals with high-temperature research in partnership with the Centre for Process Innovation, part of the high-value manufacturing catapult. It is now turning that centre into a material institute, with support from the Institute of Materials, academia and others.

The Tees Valley city deal majors on the Teesside industrial complex. Its wish to develop carbon capture and storage will be hugely beneficial for the steel industry. The Government set the climate for the industry. They need to have a strategic view of steel for security reasons. There are no Members in this House who have lived through a world war. There are perhaps those who were born in one. The steel industry is a strategic necessity for a country such as the UK and that needs to be factored into any thinking.

What my constituency shows is that if a company has the right products, a great work force, constructive trade unions, a supportive community and long-term investors, it can still run a successful steel business in this country.

17:53

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

I will not be taking any interventions so that as many Members as possible can speak.

I welcome today’s debate and the members of Community, the Union for Life, who are in the Public Gallery. I especially welcome the general-secretary, Roy Rickhuss, and make a special mention of Ross Clark, who has travelled more than 400 miles from Dalzell steel plant in Motherwell to hear this debate.

There are two elements to the steel industry: the sector itself and the people who work in it. But who is a steel worker? Who works in our plants up and down the country? A steel worker is the office worker, cleaner, canteen assistant, instrument mechanic, electrician, welder, crane driver, fork-lift driver, locomotive driver, engineer and the list goes on and on, and that is before we start to talk about the actual process workers themselves—the people who operate the iron ore, limestone and coal yards, sinter plants, coke ovens and blast furnaces. When that iron is made it is transferred to the steel plants, the degasser units, the basic oxygen steel plants and the continuous casting plants, until we get to the raw material called steel. Then the mills shape that raw material that is so badly needed in our country—the hot strip mill, the slab mill, the plate mill, the section mill, the wire rod mill, the welded pipe mill and the seamless pipe mill. Added to those are the small foundries and fabricators and steel stockholders throughout the United Kingdom. These are the most important components of what we call our steel industry.

But it is the men and women who collectively are our most vital component, the steel workers themselves. The people who ensure that we have steel are the people who ensure that we have oil rigs in the North sea; that we have pipes bringing gas and oil from the furthest north; that we have a Channel tunnel reinforced with steel in the south; that we have the ships that sail from our ports, the planes that fly from our airports, the buses and cars that drive on our roads, the trains that go along our rail tracks, the bridges, the buildings and the white goods. I could go on and on. That is the steel industry of the 21st century.

The one thing that our steel workers have in common is the need to make sure that their steel industry and their livelihoods are supported and protected by both Government and industry alike. I take this opportunity to congratulate the Community union, which today is launching its new stand up for steel campaign with four specific pillars that need addressing. It calls on the Government to support our UK steel industry by bringing forward the compensation package for energy intensive industries to help the industry become competitive and using Government procurement to deliver for UK foundation industries.

I am reminded of an earlier reference to the contract for the new Forth road bridge. Just to make sure that hon. Members know what happened, the Scottish Government gave that contract to companies in Poland, Spain and China. That steel came 7,500 nautical miles from Shanghai to Edinburgh. There is a plate mill in Motherwell called Dalzell and Clydebridge just a couple of miles down the road. Its steel could have come 35 miles along the M8 motorway, but, no, the nationalist Government decided to look after the interests of Scotland by looking after the interests of Shanghai steelworkers. We have heard much about the intended purchase of long products, but I will leave that to others to expand on.

As a former steelworker of nearly 15 years, I know from personal experience the worries of potential redundancy from an industry that workers have spent most of their life working in. Their skills are those of a steelworker, melting materials to a red hot liquid, shaping cold steel in a rolling mill that will last for more than a century. Now is the time for the Government to stand up for our steelworkers, to stand up for steel. Our steelworkers deserve nothing less.

17:58

[Jessica Morden (Newport East) (Lab)]

I start by saying how important it is that the Labour party has chosen to use one of its Opposition days to debate issues affecting the steel industry, which is very important for my constituency. That, combined today with the launch of the Community union’s stand up for steel campaign, provides an extremely welcome focus on an industry that, as the Secretary of State said earlier, is still experiencing extremely challenging times, which put at risk not only the contribution that the steel industry makes to the UK today, but the role that it can play in the future as we transition to a low carbon economy. This is an industry that continues to improve its processes to be more efficient in production and can provide the steel for vital renewable energy production, and is, in itself, infinitely recyclable.

I know that the Government have argued that they are addressing some of the issues around competitiveness, but I am clear from visiting those businesses in my constituency that they have done everything they can to weather the storm, but the environment remains challenging. We need the issues raised today to remain a focus for this Government, with no complacency and real action to support and promote UK steel.

I have in my constituency Llanwern and Orb, which are owned by Tata, and BRC in Lliswerry, which is part of the Celsa group. As my hon. Friend the Member for Motherwell and Wishaw (Mr Roy) said, we should pay a big tribute to those work forces working alongside their union, Community, who, as we have said in previous debates, have had to face hard decisions over recent years. They have had to adapt, accept changes and rise to the challenge of the targets that companies have set them. As Community union says, we have the best steelworkers in the world. To support them and the steel companies, we need this Government now to implement measures, as we have heard, to alleviate their energy costs and business rates, which are undermining the competitiveness of the UK steel industry and denying us a level playing field with our competitors. We also need a more robust approach to procurement for major investment projects and a more holistic look at supply chain strategies.

Llanwern in my constituency is a swing plant and a significant energy user. Unfortunately, it does not have the same ability as, say, Port Talbot to recycle energy for electricity generation. Energy costs for that plant are particularly crucial. We know that the Chancellor announced a compensation package for the renewables obligation in the 2014 Budget but, as was said earlier, that is not scheduled to come into force until April 2016. This puts huge pressure on UK-based steel producers in the interim period. That will cost Llanwern more than £4 million per annum, going up to £5 million with the tax increases in April. This is a large sum, which our competitors in France and Germany, for example, do not pay, or pay at a far lower rate.

On business rates, I understand that some plants in my constituency pay five to six times the amount that equivalent sites in continental Europe pay. There is a difference of millions of pounds. Every time they invest in new plant machinery, their bill goes up. That is bad for competing and bad for attracting investment. The Government have been lobbied to remove plant and machinery from the business rate valuation; it would be useful to hear their response.

We welcome the review of business rates announced by the Chancellor, but it is too slow. The industry is struggling now, and as an employee at Llanwern said to me this week, “Llanwern needs help now, not over a period of years. We are a good plant that, if given an even playing field, could be one of the best producers of pickle and coil, and that would also support our Zodiac, which is one of the best in the world, not just Europe.”

I agree with all the points made on infrastructure, which would help sites such as Llanwern, Orb and BRC, as would a robust approach to considering local economic benefit, such as jobs and apprenticeships. I agree, too, with the comments on Chinese and Turkish imports, which will no doubt be raised by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), and which affect BRC in Newport as well.

In my constituency there has been investment by Tata in Llanwern on the Zodiac line and others, and help from the Welsh Government through the React and Proact schemes, but we need to know what more the Government can do, working with the Welsh Government, to help.

As my right hon. Friend the Member for Wentworth and Dearne (John Healey) said, this year is a big year for UK steel. Steelworkers in my communities need to know that the Government are prepared to intervene to support us on energy, tax and procurement, as Governments do in other countries.

18:03

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

I shall be brief to enable other colleagues to get in.

Unlike others who have spoken and will be speaking in this debate, I am not from a family of steelworkers and I am not a former steelworker, but I am proud to represent the dedicated work force at Clydebridge in Cambuslang, a plant that is twinned with the Dalzell plant in the constituency of my hon. Friend the Member for Motherwell and Wishaw (Mr Roy). The two plants work together, and members of that dedicated work force are here for the debate this evening.

In the past Clydebridge and its predecessor employed thousands of people and it has a strong connection with the town of Cambuslang. My concern is that without action from the Government on points that have been made and others that I shall make briefly, we could endanger the opportunity of having not just a proud industrial heritage, but a bright manufacturing future for Clydebridge and other steel plants. That is why all of us here are seeking to ensure that the Government take these points seriously today and going forward.

It was rather churlish of the Secretary of State not to recognise that the contribution from my hon. Friend the Member for Hartlepool (Mr Wright) from the Front Bench was a responsible, reasonable position, setting out a range of issues that we want to see properly addressed. I shall focus on two. The first relates to procurement, which is vital. When we look at the number of infrastructure opportunities available in a range of sectors in the UK and Europe, we see the potential of the UK steel industry to have a significant part, which would sustain jobs and sustain an industry that is the foundation of much of our manufacturing base. It is a foundation that exists not completely but largely outside south-east England. That is good for the policies of the Secretary of State, which seek to rebalance the economy not just sectorally, but geographically. That important aspect of this debate should not be overlooked.

My other point relates to the concerns about the sale of Tata Steel’s long products division. The Secretary of State, who is no longer in his place, met a number of steel MPs a few months ago when that matter was first raised. I hope that the Minister of State will be able to respond on what action the Secretary of State has taken, because at that point he talked a good game about taking this very seriously, but in his speech he seemed to suggest that he had had only one conversation about it. That is very disappointing given that Tata Steel has said, in effect, that this is its first choice and what it wants to happen. It creates real danger for jobs in my constituency and in others owing to Klesch’s record in other places, which has caused significant and serious concern. Community and other trade unions are working jointly with their appointed specialist consultants to come up with alternative scenarios that do not involve potentially losing those jobs because of plants going to Klesch, with its very poor record. Will the Minister confirm that that is being taken seriously by his Department and that its officials are fully engaged with those alternative options? All of us here who represent plants in these areas would be much more confident and comfortable about the future if it did not involve Klesch.

The Government need to be absolutely clear about the importance of this debate. We are here to stand up for steel, but to do that effectively we need the Government to stand behind the industry and recognise its strategic importance for all of us and for the economy of the UK.

18:06

[Nic Dakin (Scunthorpe) (Lab)]

The Olympic stadium, the Shard, Jodrell Bank, Sydney harbour bridge, the rails on which our trains run: those are just some of the world-class products produced by UK steelmakers in Scunthorpe and elsewhere. This debate represents a fantastic opportunity for all of us in this Chamber to unite behind those working in UK steelmaking and respond to the clarion call from the Community union and others that we stand up for steel today.

The UK’s demand for steel is currently at 74% of the 2007 level, and that should cause the Government real concern. Worse still, much of the demand is met by an increase in foreign imports. Alarm bells should be ringing in Government ears and action should be taken. Since the global crash of 2008, the Scunthorpe works has experienced many challenges. Work force and management have delivered everything that Tata has asked of them. That is why the valuable Network Rail contract was won—justification for the significant investment in advanced rail manufacturing at Scunthorpe. To Tata’s credit, it has continued to invest, with record numbers of apprentices being taken on, year on year, and the multimillion pound relining of the Queen Anne blast furnace.

However, Tata’s decision to divest itself of the long products division and embark on a due diligence process to sell to Klesch Group has meant that 2015 begins with uncertainty about the future ownership of a huge amount of the UK’s steelmaking capacity. Some 6,500 people are directly employed in long products in the UK, 4,000 at Scunthorpe. In reality, far more than that—32,000 to 33,000 workers—are directly employed through contractors and the supply chain. These are good jobs providing good livings and making a crucial contribution to the UK’s economic well-being. UK Steel, in its “Charter for Sustainable British Steel”, states:

“Exports of British steel were worth £4.9 billion in 2013 and contributed £2.4bn to the UK’s balance of trade. The sector’s overall contribution to the UK economy is worth around £9.5bn a year.”

There needs to be a successful partnership between Government and the industry to respond to the urgent, critical challenges that we face. I take the Secretary of State at his word—I do think he cares—but I was disappointed that at times he appeared rather complacent. He needs to put his shoulder to the wheel to make sure that these difficult things are really delivered on. We need a co-ordinated, active industrial strategy for steel to secure its long-term future. It is a credit to the UK metals industry that it is working to produce the very first industrial strategy for metals in the UK. Will the Minister provide assurances that the Government will work with the industry to take forward the metals strategy?

As many Members have said, we need a level playing field on energy. Quite frankly, the Government’s carbon price floor tax fiasco has made things worse and given all the wrong messages on energy prices. It is good that they made a commitment on mitigation in relation to the renewables obligation, but we are in 2015 and will have to wait until 2016 for that. Come on—try to bring it forward.

As my hon. Friend the Member for Newport East (Jessica Morden) said, business rates in the UK are five or six times more expensive than our European competitors’, which is surely something at which the Government can look imaginatively. We need action to ensure that local content is pursued in the procurement process, so that if, as we hope, the renewables industry takes off in the Humber and elsewhere, UK taxpayers and energy bill payers are not funding jobs outside the UK, but securing jobs in the UK, as we would wish. We also need support, with the Government putting their shoulder to the wheel, on innovation and skills.

This debate is an opportunity for the House to say very clearly that we see steel as a foundation of the UK economy, and that we are all proud to stand behind it to ensure that it delivers a prosperous and successful UK economy in the future. I am proud to stand alongside the steelworkers in my constituency and in my community, and to stand up for steel here today.

18:11

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

We have nearly reached the fourth anniversary of possibly the greatest feat of industrial escapology, when Teesside Cast Products was purchased by SSI on 24 February 2011, after nearly three years of solid fighting by its work force. At the heart of the campaign was the Community trade union. It is my pleasure to declare my interest as a current member of Community, the chair of its parliamentary group, and a former industrial regional officer who helped to save the TCP site.

I want to echo many of the comments made by my hon. Friends about the importance of steel to our local economy. I know that Tata and Community have worked closely and constructively, particularly since the worldwide recession in 2008, to manage a series of major restructurings. Under projects such as Weathering the Storm, Fit for the Future and Project Ark, thousands of steelworkers have left the industry, but they did so with the goal of keeping our industry going in the hope of expanding again later, when the recession was overcome, and most importantly, of retaining and perhaps recruiting to the industry.

It must, however, be said that the news in late October 2014 about the proposed sale of Tata’s long products plants in the UK has cast a shadow over Teesside and east Cleveland. I share the same thoughts as my friend and the Labour candidate for Redcar, Anna Turley—she has said that she is now most concerned for the workers at long products sites across the UK—as well as those of, among many others, Robbie Middlemass at Skinningrove special profiles mill, Peter Hobson at the beam mill and, of course, Paul Warren, who works at the South Bank coke ovens and is the multi-union chair at SSI. Some of them are with us in the House today.

Before the memorandum of understanding was signed on 15 October 2014, there was no consultation with the trade unions, despite the existence of long-standing information and consultation arrangements, both domestically and within the framework of the European works council. That followed Tata reneging on a nationally settled two-year secondment deal at Grangetown labs in September 2014, which was an early warning sign of a new tone, or lack of tone, from Tata. Communications between management and the work force were negligible, and Tata had had many clandestine chats with Klesch for some time.

What Skinningrove and the Lackenby beam mill produce has more than the balance sheet appeal that Mr Klesch requires; it impacts on daily life where I live. A long drawn-out process of due diligence has again unsettled that way of life for the workers and their families. They have watched workers at the ESCO works in Guisborough lose their jobs, and have wondered what will happen to them. Whether Mr Klesch picked that up during his 20-minute visit to the Skinningrove works—he never even went near the mill floor—is, at the very least, debatable.

What beats me is the logic of Tata at the moment. It has decided to consolidate its business around its strip division, which is largely based in south Wales and Ijmuiden, with a heavy focus on supplying the automotive sector. However, even now, the long products division in the UK was significantly more profitable than the strip division in the last financial year.

Tata’s subsidiary Jaguar Land Rover plans to build its new Jaguar F-Pace sport utility vehicle at Solihull, but the fact that it is aluminium-based indicates the direction in which the industry is moving. Tragically, that will come too late for the 500 aluminium smelters at Alcan in Northumberland, who have already lost their jobs owing to inaction by this Government. Aluminium is providing a serious challenge to steel strip. The reduction in energy costs through the development of smelters in low-cost energy countries is putting a strip-only strategy in serious doubt.

What makes the UK steel industry stronger is diversity within the steel portfolio. Those in the industry remember not so long ago having to defend Stocksbridge from closure. It is now booming within its sector. A diverse steelmaking sector provides mutual security for each steel division. When one does well and another poorly, they look after each other, much like in a trade union.

Even more seriously, Klesch’s strategy of playing the raw materials market in order to make longs a success—a strategy that is based on cheap iron ore surpluses—is exactly the same strategy that other competitors will be using over the next two to three years. That strategy, despite the assurances, is not a panacea. Tata’s current diverse product mix within long products means that it is closer to the customer and can provide product-based bespoke solutions. Being a strip-only producer would make it difficult for Tata Steel to integrate into integrated construction solutions.

Inside the massive sheds at Skinningrove and Lackenby are human beings who are willing to work well for the benefit of our United Kingdom—men and women backed up by the spirit, traditions and history of Teesside, East Cleveland and our nation. The trade unions that represent those men and women have played a fighting role in preserving that heritage and protecting the jobs of their members. Those trade unionists preserved the history of an industry, an area and a nation. It was the Community union, led locally by Paul Warren and nationally by Roy Rickhuss and previously Michael Leahy, that spearheaded the fight to ensure that iron and steelmaking on Teesside did not die. It won that fight. The Government must help the workers to win the fight now.

18:16

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

I welcome this debate. As has been rehearsed already today, the importance of steel to the UK economy cannot be underestimated, and neither can its importance to my local economy in south Yorkshire.

Tata’s speciality steels operation, which was referred to by my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), is headquartered at Stocksbridge in my constituency. As my right hon. Friend the Member for Wentworth and Dearne (John Healey) pointed out, it nearly went under in 2008. He paid tribute to the trade unions and the management of Tata in Stocksbridge for pulling the plant around. I also want to pay tribute to my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), who as Minister of State worked hard, alongside the unions and Members, to secure the future of the plant.

[John Healey]

And the local councils.

[Angela Smith]

Indeed, the local councils in Sheffield and Rotherham were also involved. Of course, the plants at Sheffield and Rotherham, which work in partnership, survived. They are now back to the employment levels that they had in 2007-08. I have been told that every third plane that flies over the United Kingdom has a component that was made in Stocksbridge, which is a record to be proud of.

[John Healey]

And Rotherham.

[Angela Smith]

That’s cars.

What has happened at Stocksbridge has not happened everywhere. In October 2014, Tata announced that it was selling its long products division. We stand together. People in Stocksbridge do not want the plants in Teesside, Scotland and Scunthorpe to be sold off to Klesch. My uncle worked for 20 years at Appleby-Frodingham in Scunthorpe, but was made redundant after the steel strike. We do not want to see that happen again. We do not want to see steel plants in the UK placed in jeopardy. I am pleased that the national trade union steel co-ordinating committee, which includes Community, the GMB and Unite, has hired the consultants Syndex to look at the alternatives. What are the Government doing to support Syndex in its work, and what will they actively do to ensure that the UK retains a long products capability?

Sheffield was once the world’s biggest producer of steel. At one point, it made more steel than the rest of the world put together. We are proud of that legacy. We have heard a lot today about family backgrounds. I come from four generations of steelworkers, if not more. Not only that, but my grandmother was a steelworker who drew wires at Arthur Lee, along with all her sisters. We in south Yorkshire are very proud of that legacy, and the future of our industry matters. It matters economically, but it is also a matter of pride.

The Secretary of State spoke about the consolidation and the way in which the industry went into decline in the early ’80s. In Sheffield, we know that all too well. The memory of it is painful. We do not want to hear the history of the steelmaking industry rehearsed in the Chamber time and time again. What we want to hear is what the Government are going to do about the future of the steel industry. That matters to Sheffield. We want to see Ministers standing up for steel and, in doing so, standing up for Sheffield, Teesside, Scunthorpe, Rotherham and Scotland.

What needs to happen to ensure the future of our steel industry? There are three key things, and the Secretary of State, to give him his due, pointed out clearly what they were: dealing with Chinese imports; developing an industrial strategy, although we heard precious little about what that would be and what the Government would do to deliver it; and creating a level playing field in energy costs and so on. A lot has been said about energy costs, and I will not rehearse the same arguments, but I will mention business rates.

Business rates are five to 10 times higher in the UK than elsewhere in Europe, and complaints about the rates facing the steel industry are beginning to reach my ears in Stocksbridge on a regular basis. The review is not due to report until 2016, but the problem is pressing, so I want to hear what interim measures the Minister is prepared to deliver to relieve the steel industry. Will he consider removing plant and machinery from business rates valuation as a short-term measure?

The steel industry matters. It is a foundation industry, and our automotive and aerospace sectors rely on its future. What are the Minister and the Government going to do to secure its future?

18:21

[Nia Griffith (Llanelli) (Lab)]

Like many other Members, I would like to pay tribute to all those in the steel industry, including the trade unions, who are working hard to adapt, move, modernise and do everything they can to ensure that we are as efficient and competitive as possible. Diversity is key, as my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) pointed out, and in my constituency we have a Tata plant that makes all shapes and sizes of cans, along with holographic wrapping paper, which people might not realise is a steel product.

Procurement at all levels of government is vital to the steel industry. One key point that has been made time and again is that low demand is one of the biggest problems facing the steel industry. That is where the Government can step in and do things straight away. Why on earth did they not continue with construction projects in 2010? Why did they slash, for example, the plans for rail electrification to south Wales, meaning that we had to go through a whole process to get them reinstated? If we had pressed ahead with construction projects much faster, it would have been much better for the steel industry there and then. However, it is not too late now for the Government to turn around and push forward all the promised infrastructure projects, of which very few have been started. We need to start immediately, to provide a market for the steel industry.

Of course, we should use UK supply chains. That is possible, because community benefit clauses can be used. Other EU countries do it and get around the EU rules in that way, so we should push the boat out and be brave. We should explore the limits of what we can do and ensure that we bring home jobs for the UK. Why do we want to procure here in the UK? First, safeguarding jobs locally is vital for us, as is safeguarding the future of our industry and ensuring that we do the right thing for our balance of payments. Procuring in the UK is also environmentally better, because it means that we are not bringing products thousands of miles. We have higher standards of energy use than other countries, and carbon leakage occurs when we import from elsewhere. In other words, other countries produce more carbon in making the products than we do.

It is much like energy security—if we get rid of our foundation industries, we are for ever dependent on imports. That is why it is vital not only to keep current jobs but to create future jobs, and to keep the skills base and ensure that we always have products such as steel readily available. We will always want rail infrastructure and construction work, and we will always want to build power stations, wind turbines or whatever, so we should have steel products and the steel industry here.

We need to rebalance the economy away from financial services to the foundation industries. It is also true that the foundation industries are found more in the areas of Britain where there has been less economic development—in other words, outside the south-east of England. Rebalancing towards foundation industries helps us all across the UK.

Let me turn to research and development. In the autumn statement the Chancellor stopped raw materials qualifying for R and D credits. That decision needs to be reversed, so will the Minister ask the Chancellor to do that? Enhanced capital allowances need to be used where they will have a real impact. It is also vital that we do not shilly-shally with lots of nonsense about a referendum on staying in the EU, and put companies such as Tata in an impossible position where they would be far more likely to invest in IJmuiden than Llanelli. It is vital to send the message that we will stay in the EU. We do not want to lose the industry; it wants to be on mainland Europe where it knows it will have the market.

We need a much more proactive industrial strategy in which what we want is clear. Long-term investment is vital to steel. It cannot work, day to day, year to year; it works in decades. Energy policy has already been mentioned. Why on earth did anyone bring in a carbon floor price at that level? It was a ridiculous idea. Now, with the state aid difficulties with the energy-intensive package, we have to sort it out. It would have been far better not to have set the price that high in the first place. We were punishing ourselves, unilaterally, when we belong to a perfectly good mechanism in the EU, and our Ministers should be in there, negotiating the next stage so that the steel industry is not disadvantaged.

I fully support my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) on the issue of CARES, and I am horrified at the complacency I have seen from the Government. That steel needs to be sorted so we can ensure that—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order.

18:26

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

The steel industry has a proud history in Cardiff South and Penarth, particularly in the community where I live: Splott and Tremorfa. Although East Moors steelworks was closed in 1978, Cardiff remains a major centre for steel production, especially the reinforcing bar that is used in construction and infrastructure projects—such as Crossrail—across the UK.

I am proud that my constituency is home to Celsa Steel, a family owned company. It has an EU-wide footprint with 7,000 directly employed workers and more than 30,000 indirect employees. That company puts sustainability at the core of its business plan, using a modern electric arc furnace to process 100% UK scrap, with a melt shop that ranks among the top 10% most efficient in terms of carbon emissions in the EU. I pay particular tribute to the Celsa work force and the constructive working relationship between the managing director of Celsa, Luis Sanz, and his team, including James Ellis, and also to the trade union representatives, including the Community representative, Roy Rickhuss, and the senior representative at Celsa in Cardiff, Paul Simmonds.

There is a united view in the company, and from hundreds of employees who have written to me over the past few months, as well as trade union and local Labour representatives, that much more needs to be done to back the steel industry in Cardiff and across the UK, but warm words must be backed up with substantive action. I praise the Community union Stand up for steel campaign which is being launched today. It could not be more timely.

Let me be clear: Celsa and the UK steel industry are not asking for special treatment; they are asking simply for decisive and urgent action by the Government to level the playing field. They want action not to posture or erect barriers to free trade in our globalised world, or to protect the industry from fair competition, but simply to level the playing field where damaging distortions are growing to our disadvantage. Despite countless representations, meetings and letters to the Secretary of State for Business, Innovation and Skills, the Secretary of State for Energy and Climate Change, the Minister responsible for steel, the Secretary of State for Wales—I am disappointed that he was not here today—and many others, I am sorry to say that to date those have been met with dither, delay, paralysing caution and bureaucratic handwringing.

Let me raise some key issues. The point about energy and compensation essentially boils down to a simple question: would it be crazy if steel rebar currently used in British construction and infrastructure, and made by Celsa in my constituency using state-of–the-art low-carbon technology, was instead produced elsewhere in the world where there is no such regard for emissions or the environment? Other EU countries, including Germany and France, are providing additional help to their energy-intensive industries to level the global playing field, but what has been this Government’s approach? They promised mitigation for the carbon floor price from April 2013, but that was delayed and put in place only from March 2014. Although the Chancellor announced a package of compensation for the renewables obligation in last year’s Budget, as we heard, that is not due to start until April 2016.

We now understand that the Government are heading for a significant underspend in their much-trumpeted £250 million compensation package for the energy-intensive industries in 2013-15. I was intrigued by the Secretary of State’s comments on the real reasons for the delays in the programme. I would be very interested to find out further from the Minister what is really going on. Will the Government urgently reconsider bringing forward the mitigating measures? They are needed and they are needed now.

On foreign imports, rebar from countries such as China and Turkey—this has been discussed—now occupies a third of the market. Non-EU imports have increased tenfold in the past two years. Those are extraordinary statistics. The fact is that many of those products are produced using large amounts of finite raw materials before being shipped to the UK. In contrast, places such as Celsa in my constituncy have an efficient recycling process. We have heard how overall steel imports have risen by a quarter in 2014 and now make up a massive 60% of the UK market. As has been discussed, serious questions are being raised about some of those imports from a quality perspective and a lack of traceability in the supply chain. I believe that the certifying authority for steel products, the Certification Authority for Reinforcing Steels, has been too slow and ineffective in its response to date, and so have the Government. I would like clarity from the Government on this issue.

I want to draw specific attention to the charter for sustainable British steel, which has been launched today by UK Steel and producers such as Celsa. I urge support for its reasonable and straightforward demands, urging consumers in the UK to purchase carbon steel reinforcement from vendors that adhere to the framework standard for responsible sourcing, BES 6001.

Any one of the issues I have outlined is enough to put serious strain on any business. The Minister, and the Ministers involved in this industry, should be left in no doubt that the risks are real and intensifying. They require urgent and robust action from the UK Government. If capacity is lost it may be lost for ever, with dire consequences not only for employees but our economy and infrastructure supply chains.

18:31

[Sarah Champion (Rotherham) (Lab)]

UK steel is critical to our economy. It employs more than 330,000 workers across the country, people whose wages are then invested in their local communities and in taxes to the Government. In 2012, UK steel’s contribution to the economy was worth more than £45 billion. Clearly, UK steel reaps strong benefits for the whole economy.

Steel has a strong history in Yorkshire and the Humber, and currently employs almost 7,500 people in the region. I want to compete with my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith). The specialist steel contribution of my constituency means that every five seconds an aircraft reliant on Rotherham steel takes off or lands somewhere in the world.

The impact and reach of the UK steel industry are vast, and it is our duty to ensure they remains so. However, keeping the industry strong means creating a level playing field, a situation that does not exist at the moment. Our steel firms are severely disadvantaged both by business rates and energy costs. On energy in particular, prices paid by UK steel firms are more than double those paid in competitor countries such as Norway and Germany. High energy prices, combined with business rates five to 10 times higher than in other European countries, mean that UK steel finds itself at a severe disadvantage when pitched against manufacturers in the EU and internationally. The Chancellor proposed a review of business rates in the autumn statement. I welcome that, but we need action more quickly than the promised 2016 report. UK steel needs to be competitive now.

We already face the threat of a significant loss to the industry, with the sale of Tata Steel’s long products division. I, and a number of my constituents, have expressed our strong concern about that. I ask that the Government strongly consider giving a commitment to work with Syndex and the unions to look at alternatives to the sale.

In Rotherham, the same failure to consult has been replicated locally in the move of 135 research and development jobs to Warwick. The R and D staff in Rotherham are world-class experts dedicated to working in this specialist field. Tata Steel is asking to move them, uprooting them and their families, to Warwick or they potentially lose their jobs. That seems deeply unfair. The relocation is a lose-lose situation: Tata could lose skilled workers and those workers could lose their livelihoods. I ask today that the Government intervene to support Rotherham’s R and D team by working closely with Tata Steel and the unions to establish an alternative solution. It is not right that such a concentration of highly skilled workers is lost, particularly, as the Secretary of State said, as the advanced manufacturing centre’s catapult scheme and the steel proving factory are both in Rotherham.

Ultimately, we want steel to thrive in the UK, because it is a critical part of our supply chain, but the future sustainability of the industry will be under threat, unless the Government act quickly and strategically to safeguard UK steel. The industry needs a Government willing to act now on energy tariffs and business rates. We need a Government who will proudly fly the flag for UK steel across the world. We need a Government who not only commit to supporting the industry, but follow up with action. The UK steel industry can have a strong future, but only if we act now to protect it.

18:35

[Dr Hywel Francis (Aberavon) (Lab)]

I am proud to be a member of Community and a founder of the all-party group on steel in the 2001 Parliament. I also draw the House’s attention to my entry in the Register of Members’ Financial Interests, which refers to the fact that I had the privilege of addressing the Community biennial conference last year.

I represent the proud steel town of Port Talbot. The late great Jack Thomas, of the Union of Construction, Allied Trades and Technicians, once said that Sir Brian Moffat wore an Aberavon rugby jersey. I am not sure whether he always wanted to wear it, but I am proud to wear my Aberavon rugby tie today.

This has been a good, constructive and timely debate, and it has raised the key issues of energy costs, the importance of steel as a foundation industry and—the point I want to elaborate on—the importance of co-operation among the unions, management and the Government. In Port Talbot, we have developed an important initiative, called “the journey”, which in essence is a microcosm of that co-operation. Given the many important issues, it is understandable that duty of care has not been mentioned. The steel unions, particularly Community, have a proud record of representing their members, but they also have a duty of care to the steel industry. I want to mention two aspects of that: first, safety; and secondly, pensions.

My cousin, Ian Powell of South Cornelly, a mill boy aged 16, was killed in the steelworks at Port Talbot, and shortly after I was elected in 2001, Len Radford, Stephen Galsworthy and Andrew Hutin were killed in the terrible explosion in the No. 5 blast furnace. No one in the steel industry needs reminding of the price of steel. In my regular discussions with steel union representatives, including Alan Coombs, the national vice-president of Community, John Tetsill, also of Community, and David Bowyer, of Unite, safety is always the first issue discussed. In these straitened, strained and difficult times, safety should remain the top priority. In our discussions with the hub director of Strip Products UK, Mr Hridayeshwar Jha, he has recognised that point too. Recently, we have been discussing the issue of contractors working at height and the need for the proper training of scaffolders, particularly contractors.

On pensions, frequent mention has been made of the future ownership of the steel industry, and there is great concern across the industry about what will happen to the steel pensions scheme. The Government, employers and unions need to recognise the importance of their duty of care to steelworkers past, present and future.

When I entered the House in 2001, there was an enormous air of uncertainty, and as I leave the House, in 2015, there remains an enormous air of uncertainty around the steel industry. In between, particularly in Port Talbot, there have been many redundancies, but there has also been considerable investment, much of which has been off the back of the effective co-operation developed between the unions and the management. I also commend the Welsh Government—this has not been mentioned—for supporting, training and helping steelworkers past and present. I hope and trust that the co-operation among unions, employers and Governments, which we Labour Members have urged tonight, will be achieved in order to sustain this important industry, which is vital for this country.

18:40

[Ian Murray (Edinburgh South) (Lab)]

I declare my interest as a member of the wonderful Community union; I am very proud to be so. We have had an important and critical debate, sending out a strong message not just to the steel industry that we stand up for steel, but to the Government that more needs to be done. It is a sad indication of the Government’s commitment to this issue that we have heard only one speaker from the Government side—the hon. Member for Redcar (Ian Swales)—and nobody from the Conservative party. The Government Benches have been almost completely empty for the majority of this debate. This is not to belittle the contribution of the hon. Member for Redcar, but if someone lives in Redcar and wants a party that stands up of for steel, they should vote for the Labour party and get their MP on the Government Benches.

It is worth emphasising the importance of the industry to this country. The UK steel industry and associated metals sector has 24,000 firms employing more than 330,000 people and generating £45.5 billion in the UK economy. Every directly employed job in the sector sustains a further three jobs in the wider economy. Today’s debate is important, too, because steel is a foundation for supply chains of strategic sectors such as aerospace, automotives, construction and energy, which are so important to the UK economy. The debate is important because steel is an essential part of a low-carbon, resource-efficient future.

All these points have been raised consistently by my right hon. and hon. Friends, and particularly in the wonderful opening speech made by my hon. Friend the Member for Hartlepool (Mr Wright). The Secretary of State was ungenerous in his praise for my hon. Friend. I thought my hon. Friend made a very positive speech, outlining the industry’s problems, and it is important to raise with the Government our concerns about their actions in supporting the sector.

There is no bigger or more passionate supporter in this House of steel and manufacturing than my hon. Friend the Member for Hartlepool. He stands up for his constituents’ jobs and he stands up for his constituents in promoting the steel industry. Indeed, we should call him “Mr Hartlepool” and “Mr Manufacturing”. He does so much for current generations in Hartlepool and looks after the future as well. During his opening remarks, my hon. Friend was right to say that steel has to be a key part of the vision of a modern innovative economy. The UK steel and metal sector, as our motion rightly makes clear, provides highly skilled jobs—not just in my hon. Friend’s constituency, but throughout the United Kingdom, and we have heard contributions from Sheffield, Scunthorpe, Corby, Cardiff, Port Talbot, Newport and Clydebridge and Motherwell in Scotland.

My hon. Friend was absolutely right in his opening remarks to highlight the significant economic contribution that those facilities make through the wealth created by the plants and by the workers who make the steel. The wealth that is circulated in firms in the supply chain and businesses in those areas, not to mention through the steelworkers themselves, is often the foundation of many local economies. My hon. Friend stressed that the steel industry is the foundation of many valuable sectors of the economy, forming part of a number of important value chains in which Britain has a competitive advantage.

I have a number of pages to my speech and I would have liked to have run through them, but it is probably much better to reflect on the wonderful contributions made by my right hon. and hon. Friends. We heard speakers from Wales, from England and from Scotland who all had two things in common: standing up for steel and being Labour Members. Members from no other party—apart from the hon. Member for Redcar, who I am delighted to see back in his place—spoke in this debate.

I was delighted when my right hon. Friend the Member for Wentworth and Dearne (John Healey) mentioned the contribution of the Community union to this debate and reminded us that the union’s general secretary said:

“UK steel companies need a UK Government that can intervene just as they do in France and Germany.”

That was brought out as part of the general debate. My right hon. Friend also spoke up for his Aldwarke plant, explaining how it was saved in the past by proper co-operation among the trade unions, the Government and the owners.

Let me especially mention and pay particular tribute to my hon. Friend the Member for Motherwell and Wishaw (Mr Roy)—a steelworker himself for many years. Whenever he speaks in this House or when we speak privately and professionally together, he talks of his love for the steel industry. He stands up for his constituents in Motherwell and Wishaw, and he is a strong advocate of steel and jobs in his constituency. I was struck by what he said about all the processes involved in the steel industry. It is not just about forging and blacksmiths; it is about the cleaners, about the accountants, about the drivers, and about the wider supply chain. It is about every single business that the industry supports in his constituency.

My hon. Friend also referred to the Scottish Government’s approach to the steel industry. It was an absolute dereliction of duty for them to import £790 million-worth of steel from Poland, Spain and China for the new Queensferry crossing when there was a plant 35 miles down the road. We need Governments to stand up for industry in this country, rather than being full of rhetoric about standing up for it. Standing up for it in practice is slightly different.

We heard a valuable contribution from my hon. Friend the Member for Newport East (Jessica Morden), who rightly pressed the Government to do more. That has been a common theme in the debate. I hear the members of the Scottish National party chuntering behind me, but the facts speak for themselves. Moreover, none of them contributed to the debate, just as they did not contribute to debate on the urgent question on steel that was asked back in November. My hon. Friend spoke of the pressures on the steel plants in her constituency. As she explained, Tata and other companies have invested in key industries in her constituency for many years, but they cannot continue to do that in isolation, and the Government must help.

The Clydebridge plant in Cambuslang is in the constituency of my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex). It is a centrepiece not just of the constituency as it is now, but of the constituency’s industrial heritage. However, as my hon. Friend reminded us, it should be not just part of the past, but part of the future. He pointed out that procurement was vital, and, like many other Members, he mentioned the dangers involved in Tata’s sale of the long products division to Klesch, which has been raised in a number of other debates.

My hon. Friend the Member for Scunthorpe (Nic Dakin) speaks passionately about the steel industry in his constituency. He is one of the many Members who spring to mind and are always talked about in the same fashion when steel and manufacturing are discussed in the House. He was right to praise Tata’s contribution to the United Kingdom in the form of investment in skills and diversification—it has invested in a number of industries—but he was also right to worry about the future. That, too, was a common theme in the debate.

My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) spoke of the way in which the trade unions, Tata and the regions worked together to improve the position of the steel industry following the 2008 worldwide crash. He made a point that was at the heart of the debate when he said that it was all about livelihoods—people’s lives and communities—and not just about steel manufacturing and Government intervention. The Minister may wish to reflect on some of his comments.

My hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) told us that four generations of her family had worked in the steel industry, including her grandmother. I think that that is a wonderful model for those working in the industry.

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

And her grandmother’s sisters.

[Ian Murray]

The Minister may want to mention that in his speech. We were also reminded earlier of the contribution that my hon. Friend made in highlighting the Government’s decision about Sheffield Forgemasters.

My hon. Friend the Member for Llanelli (Nia Griffith) spoke about the steel industry in her constituency. She said that it was a proud British industry that should form an integral part of the future. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) pointed out that, in a globalised world, we did not want protectionism; all we want is a level playing field. I think that that is a very sensible and pragmatic approach. My hon. Friend the Member for Rotherham (Sarah Champion) is not just called Champion; she champions the steel industry and jobs in her constituency.

My hon. Friend the Member for Aberavon (Dr Francis) is a founder member of the all-party parliamentary group on steel and metal related industries. We shall certainly miss his contribution to steel debates when he leaves the House later this year. He ended with a poignant reminder of the dangers involved in the industry; we should all remember those whom he lost in the tragedies in his constituency.

We have had a wonderful debate, which has shown that Labour Members, at least, stand up for steel. Our motion makes clear the importance of the steel industry to this country. The industry supports tens of thousands of jobs, and supports many of the supply chains that are key UK sectors. It supports communities and livelihoods. The Government must provide a co-ordinated response that involves energy-mitigation measures, challenges the European Union in regard to certification and safety, and supports an active industrial strategy for the metals industry in the United Kingdom. It is time for the Government to stand up for steel. Labour clearly stands up for it, but we want the Government to support it as well. I commend our motion to the House.

18:49

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

Let me begin by agreeing with the hon. Member for Edinburgh South (Ian Murray)—who lived up to his reputation as an articulate and passionate Member of this House—that this has been a good and important debate on the steel industry. It is important to note that there will be no Division at the end of the debate, because the Government take no issue with the Opposition motion.

The hon. Member for Hartlepool (Mr Wright) set out a coherent and passionate case for what he perceives to be the issues affecting the steel industry in this country, and there was some suggestion that the Secretary of State replied to him in a somewhat churlish manner. I have worked closely with the Secretary of State for many years now, and I have to say that I have always found him to be one of the more congenial members of the Government, and I simply think that perhaps his manner was misinterpreted. He was perhaps less churlish and more wounded. That is how I would characterise the Secretary of State’s response, because he clearly articulated the many visits he has made to the steel industry itself and industries that use steel, and his great engagement with the industry, and his own perception that he is engaged with, and seeking to provide solutions to, many of the issues highlighted by the hon. Gentleman.

This has been a good and passionate debate because so many Opposition Members have strong links with this industry. As the hon. Member for Edinburgh South noted, we heard speeches from those who have worked in the steel industry and those whose families have a long and distinguished history of working in this brilliant industry. It is an industry that began in this country hundreds of years ago and, as some Opposition Members know, I have a tenuous connection with it as my father wrote “The History of British Steel”, published 40 years ago. My father had a somewhat waspish sense of humour; he died 30 years ago, and I suspect he would find it mildly amusing that his son has now spoken in three debates on the steel industry on behalf of the Government despite not having formal responsibility for the industry. However, I can tell Opposition Members that should they ever call a debate on the south London barge-building industry, I will be there to talk about the history of the Vaizeys who worked in that industry from the mid 19th century until just after the second world war.

We heard passionate contributions from the right hon. Member for Wentworth and Dearne (John Healey), who talked about energy tax and procurement, and the hon. Member for Redcar (Ian Swales), who has Tata in his constituency. We also heard from the hon. Member for Motherwell and Wishaw (Mr Roy), who has worked in the steel industry, the hon. Member for Newport East (Jessica Morden), the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), who talked about the infrastructure opportunities for the steel industry, and the hon. Member for Scunthorpe (Nic Dakin), who talked in detail about the long products division potential sale, which I hope I will have a chance to speak about. The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) also talked about the long products division and is a worthy successor to that great former Member of this House, Ashok Kumar, who, as well as having been a distinguished Member of this House, is the only Member who has ever read John Vaizey’s “The History of British Steel”. We heard, too, from the hon. Members for Penistone and Stocksbridge (Angela Smith) and for Llanelli (Nia Griffith), and the hon. Member for Cardiff South and Penarth (Stephen Doughty), who talked, obviously, about Celsa in his constituency. My hon. Friend the Member for Vale of Glamorgan (Alun Cairns), who is sitting on the Front Bench with me, has been passionately involved in this issue, as indeed has the Secretary of State for Wales, who was in the Chamber earlier discussing the issue with me and the Business Secretary.

The hon. Member for Rotherham (Sarah Champion) made the point that every five seconds a plane made with steel from Rotherham takes off or lands—challenging, in effect, the hon. Member for Penistone and Stocksbridge (Angela Smith), who was only able to say that of one in three planes flying overhead. The final contribution was from the hon. Member for Aberavon (Dr Francis), whose daughter went to school with my hon. Friend the Member for Vale of Glamorgan, and whom we are sorry to see retiring from the House.

[Mr Frank Roy]

Before he sits down, would the Minister like to tell the thousands and thousands of steelworkers’ families watching or reading this debate what he is going to do for their future?

[Mr Vaizey]

If I am unable to answer any of the specific questions that were asked in the time allocated to me, the Minister responsible for the industry will write to each and every Member who has contributed to the debate.

The main issues that arose from the debate are the need to compensate the steel industry for the high energy costs resulting from the renewables obligation and other mechanisms designed to reduce carbon, a procurement strategy as part of a metals strategy, business rates, the future of the long products division, and CARES. As the Secretary of State explained at length, we are giving as much energy compensation as we are allowed to give under European rules. We are working as fast as we can to get state aid clearance, so that we can increase the level of compensation. We are working with industry to introduce a metals strategy. We hope that such an industry-led strategy will be produced in the next few months, to be published, provisionally, in the summer.

The future of the long products division is a very serious issue and Ministers are engaged with it. The Prime Minister and the Business Secretary met north Lincolnshire MPs, and the Secretary of State and the Minister with responsibility for such matters met Klesch. As I understand it, our officials are supporting the Syndex report, which will be published this month and will look at the rationale for sale and alternative proposals. We hope that the proposals will come forward at the end of February or the beginning of March. Those could include a commercial solution or working with organisations such as the Green Investment Bank or Infrastructure UK.

As has been well trailed, an extensive review of business rates is being undertaken, and a £1 billion package of business rate support is already in place. We do understand that the steel industry, like other large industries, is concerned that new investment in plant and equipment affects the business rate valuation, thereby increasing business rates. It wants such new investment to be excluded, and I would expect the Treasury to consider that as part of its ongoing consultation. However, Members should understand that this includes the whole business rate framework, and needs to be consulted on.

[Tom Blenkinsop]

Will the Minister give way?

[Mr Vaizey]

I will, provided that other Members understand that doing so will reduce my time to address other points of concern to the thousands of steelworkers watching this debate.

[Tom Blenkinsop]

Perhaps the Minister can give a succinct answer. Given that the Government are not opposing the motion, they must support it. The motion

“urges the Government urgently to reconsider whether mitigating measures on energy prices, planned to start in April 2016, can be brought forward”.

Could they be brought forward before or at the Budget?

[Mr Vaizey]

We are in the hands of the European Commission. There is a bottleneck on state aid and, having previously dealt with a state aid issue myself, I know that despite time being of the essence from the UK Government’s perspective, that is not always the Commission’s view. On energy prices, I remind Members that France has the benefit of extensive nuclear power, and Germany has the benefit of having grandfathered previous state aid rights into its current energy prices and state aid support.

As I have said in other debates, the important issue of rebar has been looked at in some detail and we have asked CARES to examine how it is dealing with it. It has increased sampling and checks—

[Ms Rosie Winterton (Doncaster Central) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question put and agreed to.

Resolved,

That this House recognises the importance of the UK steel industry including as a provider of highly-skilled jobs and research and development; values the steel supply chain which supports strategic industries such as automotive, aerospace and construction; notes with concern Tata’s proposed sale of its Long Products Division and the impact this could have on UK steel industry capacity; welcomes the efforts of UK steel producers to cut carbon emissions and expresses concern that losing trade to countries with less efficient processes could increase global carbon emissions; further notes with concern that some steel imports do not meet British standards; calls on the Government to recognise the importance of the steel industry and to work with it, the Scottish and Welsh Governments and trade unions to provide a co-ordinated plan for the industry’s future; urges the Government urgently to reconsider whether mitigating measures on energy prices, planned to start in April 2016, can be brought forward to support the competitiveness of UK steel producers, to press the European Commission to launch an inquiry into the CARES certification of imported steel products to ensure safety and traceability and to take action through the EU and World Trade Organisation to challenge the uncompetitive subsidisation of steel products; and further calls on the Government to introduce an active industrial policy for the metals industry, including strengthening supply chains, strategic approaches to public sector procurement, encouraging innovation, skills development and resource efficiency and providing support for steel exporters.

Business without Debate

Wednesday 14th January 2015 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Constitutional Law

That the draft Reservoirs (Scotland) Act 2011 (Restrictions on Disclosure of Information in relation to National Security etc.) Order 2015, which was laid before this House on 18 November 2014, be approved.—(Mr Foster.)

Question agreed to.

petition

Wednesday 14th January 2015 Commons Chamber

19:00

[Andrew Stephenson (Pendle) (Con)]

I should like to present a petition on behalf of the Nelson Asian Christian Fellowship regarding the plight of minorities living in Pakistan. I was presented with the petition, signed by more than 200 of my constituents, when I joined them for worship in the run-up to Christmas and I said I would bring it to the attention of the House.

The petition states:

The Petition of residents of Pendle,

Declares that the Petitioners believe that the laws of Pakistan systematically discriminate against non-Muslims and leads to the persecution of Christians such as Shahzad Masih and Shama Bibi, who were beaten, tortured and burned alive on 4th November 2014.

The Petitioners therefore request that the House of Commons urges the Government to use its influence to encourage the Pakistani authorities to ensure that perpetrators of hate attacks against minorities are convicted; the Blasphemy Laws are abrogated; modern day slavery in Pakistan is ended; Asia Bibi is released; and that aid to Pakistan is terminated until its human rights record is improved.

And the Petitioners remain, etc.

[P001421]

Horticulture (Skills and Training)

Wednesday 14th January 2015 Commons Chamber

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

19:01

[Sir Bob Russell (Colchester) (LD)]

Each year, twice as many people visit the gardens of England as watch premiership football—around 28 million versus 14 million. Horticulture is a great British success story, but it is an industry in crisis. There is not enough home-grown talent for the industry to sustain itself without increasingly importing skilled labour from overseas. Successive Governments, and the education establishment, can be blamed for this. Horticulture has not been seen as important; it is not something that young people have been encouraged to pursue as a career.

The coalition Government can take great pride in the way they have developed apprenticeships over the past four to five years in many areas of the British economy. However, there is still more to be done in horticulture. In 2010-11, only 1,060 of the more than 200,000 apprenticeships completed were in horticulture, and only 10 of those were in production horticulture. Elsewhere, there has been a renaissance for apprenticeships after the years of decline and failure by so many parts of industry and commerce, during which something that had stood the nation in good stead for centuries had become, in many respects, a neglected concept. While that decline has to a large extent been challenged and reversed under this Government, that has not been the case in horticulture, and the industry’s needs for skills and training are at a crossroads. I hope, however, that the Minister can bring good news on that front, because a little bird tells me that there might be an announcement during the next month.

Last year, in partnership with the Colchester Daily Gazette newspaper, the Colchester Institute and the National Apprenticeship Service in the east of England, I launched a campaign for local businesses to recruit 100 apprentices in 100 days. We soared past that target, and more than 150 young people were placed in apprenticeships. Sadly, not a single one was in horticulture, yet that is a part of the country where horticulture and food growing are still a major part of the landscape, so perhaps the industry should also be asking questions of itself.

There is some good news, in that across the border in Suffolk, Otley college has horticulture courses. It is now a good 55 years since I gained my gardening badge in the scouts—something that my wife, children and grandchildren find hilarious when they observe my current efforts. My excuse is that I lead a busy life. I love gardens, and we would be hard-pressed to find any better than those in the award-winning Colchester Castle park, or at Beth Chatto’s gardens a few miles to the east.

My town was once renowned for its roses. The Colchester rose show, at which my paternal grandfather was a leading member—he has a cup named in his memory—was once a major event in the town’s summer calendar. Today, it is a shadow of its former glory, kept going by a small group of enthusiasts, whom I commend. Professional rose growers from Colchester used to win many cups and prizes at national shows. Sadly, only one company, Cants of Colchester, remains, and I fear it will soon make its way into the history books as its rose fields disappear under a massive housing estate, following the dastardly decision to allow them to be lost to development, which the local community does not want.

Let me make a further local observation. The people’s choice garden at last year’s internationally acclaimed Chelsea flower show, “Hope on the Horizon”, which was created in association with Help for Heroes, was later taken to Colchester, where I can confirm it is an attractive feature in the grounds of the Chavasse VC House recovery centre for members of Her Majesty’s armed forces who have been injured. The garden was designed by a 29-year-old first-time exhibitor at Chelsea, landscape designer Matt Keightley. What a great role model for young people to look up to!

People love gardens, both their own and those they can visit. I am told that the Royal Horticultural Society is the world’s largest gardening charity, with a growing membership that exceeds 420,000—that is more than the combined membership of the UK’s mainstream political parties. In 2013, the RHS published a cross-industry report, “Horticulture Matters”, supported by 180 horticulture organisations, including the Chartered Institute of Horticulture, Lantra, the Horticultural Trades Association, Landex, the British Association of Landscape Industries, English Heritage, the Royal Botanic Gardens, Kew, and Grow. The report was launched by the then Minister with responsibility for agriculture and food, my good friend and colleague, my hon. Friend the Member for Somerton and Frome (Mr Heath). At the time he said the UK is facing

“a serious issue as we look forward in terms of food security and feeding the UK and the world. We have to have the best possible skills.”

That, of course, is what my debate is all about. He continued:

“We have got to invest in this sector—we’ve got to understand some of the messages in the report and react to that. We can work with the industry to massively improve its prospects.”

In June last year, the then Secretary of State for Environment, Food and Rural Affairs started an initiative to identify the key opportunities and challenges in the ornamental horticulture sector, with the aim that the industry should agree an action plan to take forward with Government support. So that we can have it placed on the official record, will the Minister this evening say where we are with the promised “action plan”?

Lantra, the land-based and environmental industries sector skills council—it covers horticulture—estimates that horticulture will need 595,000 more people by the end of this decade As 2020 is only five years away, the need is very urgent if overcoming such a large skills shortage is to be achieved. In doing so, it will be necessary to educate an educational establishment that undervalues the role of those who work in the horticulture sector. Perhaps that is due to a lack of understanding of the breadth of work that horticulturists do, and of its importance to the well-being of the planet and its inhabitants, by which I mean all forms of life.

The stigma that is attached to careers in the horticulture industry was recently underlined by a survey by the RHS, supported by the wider horticulture industry, which showed that 70% of 18-year-olds believe that horticultural careers should be considered only by people who have failed academically. Almost 50% of under-25s are of the opinion that horticulture is an unskilled career—that is insulting and ignorant in equal measure. With horticulture wrongly seen to be lacking career appeal, increasing numbers of horticulture businesses struggle to fill skilled vacancies and are being forced to recruit from overseas. British jobs for British people are available—more than 100,000 each and every year over the next five years, and not exclusively in the horticulture industry, but across the land-based and environmental sectors. It is essential that we act now to change the public perception of skills and careers in the horticulture industry. Horticulture contributes £9 billion to the UK economy each year. Gardening plays such an important role in everyday lives that garden products make up 1.7% of all UK retail sales.

Gardening centres in Colchester, which I visit at weekends, are always busy. Local economies benefit from a thriving horticulture sector as the “green” appeal of parks and other green spaces attracts businesses, residents and customers to an area. Horticulture also benefits the tourism industry by attracting millions of people to our nation’s stately homes, nature reserves—I recommend those of the Essex wildlife trust—and public, private and charitable gardens.

A strong horticulture sector provides employment, but, as I have mentioned, there is a serious shortage of workers, which could be addressed through the promotion of skilled apprenticeships. When it comes to career opportunities, the sector provides a huge variety of roles, all of which require a diverse set of professional and practical skills. I am talking about crop growers, gardeners, scientists, tree surgeons and turf specialists to name just a few.

By the end of this century, it is estimated that temperatures in major UK cities could rise by as much as 4%. However, increasing the amount of “green infrastructure” by 10% could entirely offset the impact of rising temperatures in such high-density urban centres. Horticulture has the power to mitigate the consequences of environmental change. It can help combat the harmful effects humankind is having on the environment. I support the concept of “greening the urban environment”. Indeed I promoted it and had it approved at a Liberal Democrat party conference. I want to see more trees in our towns and cities. Indeed, growing trees is something that I practice as well as preach. I have been growing trees, mostly oaks from acorns, for more than 25 years.

Planning policies of at least 70 years that include concreting and paving open land within commercial and residential developments must stop. Surface water run-off could be mitigated by an increased amount of vegetation and “green space infrastructure”, helping to reduce localised flooding during heavy rain. In the spirit of joined-up Government, does the Department for Environment, Food and Rural Affairs discuss such matters with the Department for Communities and Local Government? How much better it would have been if the new housing developments in Colchester on the former cavalry barracks, the former Paxman’s factory site and the Solus estate had had considerably less paved areas and more trees, shrubs and gardens.

The time allowed for this debate is sadly too short to cover all aspects of the subject—for example, how horticulture has a vital role to play in helping to overcome Britain's chronic failure to grow more of the food we eat. At this point, I pay tribute to the National Farmers Union for its work in this area. It is a founding member of the agri-skills forum, which addresses skills and training issues throughout agriculture and horticulture. Today, we are only 63% self-sufficient in vegetables and salads, and the figure is declining, and only 40% self-sufficient in fruit. The spirit that rallied the British people on the home front during two world wars is needed now.

We had a gardening class at primary school, but not at secondary school, which brings me back to what this debate is all about: promoting skills and training in the horticulture industry. The Government need to work with the industry on three priorities: improving the perception of horticulture among the population; supporting horticulture in education and training; and safeguarding UK horticulture with financial support for research into plant science and other initiatives. A positive response from the Minister will give the British horticultural industry the boost it needs, particularly in respect of skills and training.

19:15

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

I apologise for it being me again. I seem to be dominating proceedings in the House this afternoon, representing the Government across a range of fronts, from steel to vegetables. I congratulate my hon. Friend the Member for Colchester (Sir Bob Russell) on an important and timely debate on the horticulture industry. He is quite right that we do not have enough time to go into all the issues that we could cover under the auspices of this debate. Certainly, I could have carried on listening to him for a great deal longer, particularly his pun-tastic approach in talking about home-grown skills.

I was interested to hear about my hon. Friend’s boy scout gardening badge, which shows that we are never too old to learn a new skill. He was slightly modest in outlining his horticultural achievements. I have been informed by a good source that he has made a prize-winning blackcurrant jam.

[Sir Bob Russell]

Blackberry.

[Mr Vaizey]

I stand corrected.

[Mr Speaker]

Order. I can personally testify to the truth of what has just been said.

[Mr Vaizey]

I am unaware of whether the hon. Member from a Scottish constituency who stands poised to enter the Chamber has sampled this jam, but it is depressing that 60% of the Members present have sampled it and that I am in the 40% who have not. I trust that my hon. Friend will rectify that as soon as possible.

This could lead on, Mr Speaker, but I know you will want me to get to the nub of the argument. I could start talking about the Prime Minister’s prize-winning vegetables, but it is an important point to make that even those at the very top do take their horticultural skills seriously. I know that my right hon. Friend is very proud indeed of the prize-winning marrow that often wins prizes in his local village competition. My hon. Friend mentioned the farmers markets, and I am asked by an influential Member of the House to point out that the first farmers market took place in Bath.

My hon. Friend also talked about the need for joined-up government, and it is important that the points that he has made in the Chamber this evening are communicated both to the Secretary of State for Energy and Climate Change, particularly with reference to the points my hon. Friend made about the impact of the horticulture industry on climate change, and to the Secretary of State for Business, Innovation and Skills, who will want to hear personally about the points that my hon. Friend made about skills.

As my hon. Friend made clear in his excellent speech, the horticulture industry is important to the UK, contributing £9 billion a year to our economy. It often appears dry and desiccated constantly to refer to important industries in terms of their economic value, but Ministers have learned that to get some of the things that we need for the industries that we look after, when we knock on the door of the Treasury, we have to provide some kind of economic justification for the support we seek from it.

My hon. Friend made a good point, which I make about a lot of the creative industries that I represent in the Department for Culture, Media and Sport as well as in the Department for Business, Innovation and Skills, about the wide ecology that is supported. One talks about horticulture and one may simply be talking about planting plants and trees, but a whole industry surrounds that that benefits from horticulture. That is why one comes up with the figure of £9 billion. It is a diverse industry and it is closely linked to farming and agriculture, which get a great deal of prominence.

My hon. Friend’s speech focused mainly on skills, and that is entirely appropriate because he identified a skills gap and urged the Government to act as soon as possible to try to close that gap. I am grateful for his remarks in recognising that the Government have put an enormous amount of effort into the skills agenda. I referred earlier to the Secretary of State for Business, Innovation and Skills, and a personal passion of his has been both apprenticeships for young people and for adult education. When he was fighting for his budget during the regrettable reductions in expenditure that we have had, skills were very much at the forefront of this thinking.

We have also adopted an employer-led approach to skills. It would be absurd of the Government to identify the skills that are needed. We need employers to come to us, as my hon. Friend indicated, and tell us where they think the skills gaps are, and then to work in partnership with us to look at how we can remedy that skills gap.

We welcome the agri-tech strategy, which aims to ensure that the horticultural sector is equipped with the knowledge and skills that are needed by horticultural employers. We are facilitating employer engagement across a range of sectors, including horticulture, with our employer ownership pilot schemes, which are pilot schemes owned by employers, giving them even more opportunity to take greater control of the skills agenda. For example, the G Growers project has given £1 million to employers to train their staff in cutting-edge research and agricultural techniques. We have made £20 million available through the Skills Funding Agency for adult vocational training in horticulture, an increase of 11% on the previous year.

I hope that the perception to which my hon. Friend referred—I stress that it was not a perception that he shared in the slightest—that working in horticulture is a menial job which one can do if one has no qualifications could not be more wrong. The climate is changing. In some of the industries that I represent, such as the fashion industry, there is a return to craftsmanship and old-fashioned skills. The crafts industry has achieved notable success, and the “Made in Britain”, “Made in England” and “Made in Scotland” tags are all becoming measures of quality and authenticity. Although I do not have specific evidence to bring to bear on this point, I suspect that the horticulture industry will benefit from that. I would like to work with my hon. Friend and Ministers to ensure that we change the perception of the horticulture industry. As I said, we made £20 million available through the Skills Funding Agency. That is an increase of 11% on the year before, so the investment is going in.

The “Horticulture Matters” report said that job candidates often lack basic workplace skills and practical experience. We have put together traineeships to tackle that gap. As my hon. Friend knows, we have a new Trailblazer project in the horticulture sector, which focuses on a level 2 technician doing horticultural, fresh produce, arable and glasshouse work, a level 2 pack house operative, and a level 2 stock person for dairy, sheep and pigs, which is not strictly horticulture, but the project covers agriculture and production as well as horticulture. These traineeships are an education and training programme which includes work experience to give young people the skills and vital experience they need to help them compete for apprenticeships or other jobs. The G Growers employer ownership pilot that I mentioned should deliver 10,000 learning opportunities at level 4 plus in the horticulture sector.

The latest figures show that a step change is taking place. We now see almost 5,000 horticulture apprentices at work. That is an increase of almost 250% since 2009-10. The latest figures for higher education show that over 19,000 are studying an agriculture-related subject in higher education. These are the graduates who will lead the profession well into the 21st century.

My hon. Friend mentioned the food and farming plan, which we hope to publish at the end of the month. He wanted me to put that on record. It will look at food enterprise zones and potentially local development orders for local enterprise partnerships in food and farming businesses. It will also look at apprentices. The Department for Environment, Food and Rural Affairs is planning a round-table conference in March to look at increasing competitiveness and increasing growth in the food and farming industries. DEFRA is also working alongside us in the Department for Business, Innovation and Skills. My hon. Friend, who talked about the need for joined-up Government, will be pleased to know that DEFRA is working with BIS to promote apprenticeships in the industry.

As Minister for the creative industries, I am not in a position to annex the horticultural industry, but I think there is a close link between the two. Those of us who occasionally go to the Chelsea flower show will know how unbelievably popular it is. Funnily enough, it is popular with some of the elites in our society. I go there occasionally—I am not referring to myself as part of one of those elites, I hasten to add—and one sees captains of industry, as I think we can still call them, flocking to it. We see there the nexus of advanced, innovative and creative horticulture alongside architecture and design. In rather the same way as London fashion week sits at the apex of the fashion industry, the Chelsea flower show sits at the apex of horticulture but is not remote from it; it acts as a bellwether. Just as the catwalks of the London fashion show will be translated into high street shops and the wider ecology of make-up, photography and magazines, the ideas piloted at the Chelsea flower show will percolate through the horticulture industry. In talking about the image of the horticulture industry, we should recognise that the crowds that gather at the Chelsea flower show represent a snapshot of the passion that exists in this country for gardening and horticulture.

I should also say, in my role as heritage Minister, that we fully recognise—in working with the heritage lottery fund, for example—the very important role that the gardens of historic houses play in drawing in tourists and enhancing the role of those houses as visitor attractions. One only need visit Chatsworth, with the landscapes of Capability Brown, and, closer to my own home, the amazing landscapes of Blenheim to see that this country has taken the role of horticulture very seriously for many centuries.

This is a timely and important debate. I think that those involved in the horticulture industry all over the country will praise my hon. Friend for bringing these important matters to the attention of the House.

Question put and agreed to.

19:27

House adjourned.