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Sir Edward Leigh (Gainsborough) (Con)
1. What recent representations he has received on religious organisations and charitable status.
The Minister for Civil Society (Mr Rob Wilson)
I have not received any representations recently from religious organisations on charitable status. More than 25,000 registered charities involve the promotion of religion. They play a hugely important role in our communities and support those in need. I pay tribute to their excellent work. They are often first in and last out of some of our toughest communities.
Sir Edward Leigh
The Minister may recall the campaign that some of us waged on behalf of the Plymouth Brethren to retain its charitable status. It must have been for love, because they refused to vote on principle. We eventually won that campaign, but there is a worry on the part of many religious groups that increasingly so-called British values will trump faith values. Can the Minister assure faith groups that in the context of toleration for others they will be allowed to have space to teach their own faith?
Mr Wilson
My hon. Friend will know that the Charity Commission is independent of the Government and the Cabinet Office. It already respects the diversity of religious views, registering hundreds of new religious charities from a range of faiths every year, but it is fair to say that the Charity Commission did need to improve, as the National Audit Office said. It is now well on its way to doing that, but he can be assured that the Charity Commission has learned its lessons from the case he raises.
Paul Flynn (Newport West) (Lab)
This is not about the Plymouth Brethren, but about a tiny sect of the Plymouth Brethren known as the Hales Exclusive Brethren. It is practising cruelty, I believe, in many ways against its own people. This is a dangerous sect. Rightly, the Charity Commission withdrew its status. The sect then had a campaign, which spent £2 million, to convince the Charity Commission that it had changed, and it changed its deeds. It is quite clear that this is what it calls “spoiling the Egyptians”, a process to deceive the Charity Commission. It is not abiding by its new status.
Mr Wilson
I thank the hon. Gentleman for that question, but the Charity Commission looked at this matter in detail and that religious group retained its status. Public benefit has always been a defining element of charitable status. That is what is unique about charities and what distinguishes them from private enterprises. We have no plans to change that.
Sir Gerald Howarth (Aldershot) (Con)
Does my hon. Friend accept that British values have been forged in large measure by this nation’s Christian heritage? It is very important that our Christian heritage should be put at the forefront of our concerns. Will he make sure that the Charity Commission understands that there is widespread concern that Christian values are being treated on a par with other faiths, and that Christian values must be pre-eminent? There is a particular threat in our schools, where Ofsted is not taking the right view.
Mr Wilson
I completely understand what my hon. Friend says, but I have been assured that the Charity Commission has learned the lessons of the Brethren case. The commission is currently undergoing a major change programme to address the recommendations of the National Audit Office and become a more focused, robust and proactive regulator.
Mr Gregory Campbell (East Londonderry) (DUP)
The case exhibited a deal of interest among the media, but the Brethren people went out of their way to ensure they provide a public good, in particular in schooling in my part of Northern Ireland and across the United Kingdom. Will the Minister maintain the stance that that public good far outweighs any perceived evil on the other side?
Diana Johnson (Kingston upon Hull North) (Lab)
2. What progress he has made on implementing his Department's transparency agenda.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
In January this year, the UK was ranked top of a list of 86 countries on the World Wide Web Foundation’s open data barometer for the second year running. In addition, last year the 2014 Global Open Data Index again ranked the UK No. 1 out of 97 countries. There are now 19,000 data sets published on data.gov.uk and our national information infrastructure sets the framework for how we manage hugely valuable open data.
Diana Johnson
I have a local issue to which I would like the Minister to respond. In Hull, 1,000 people applied for the first 14 jobs that Siemens recently advertised. Until 2013, MPs got constituency-based figures on the number of jobseekers going after each job vacancy. I would like to know why this was stopped under his Government. I have never had a clear explanation, and I do not think it is aiding transparency in this country.
Charlie Elphicke (Dover) (Con)
Another aspect of the transparency agenda is showing how taxpayers’ money is being spent. Does the Minister agree that that is the best way to safeguard against the massive waste and wild spending we have seen in the past and to avoid ballooning deficits and flat-lining public sector productivity in the future?
Mr Maude
I am proud that the UK is now ranked as having the most transparent Government in the world. It undoubtedly has an effect in driving efficiency and savings. The ability to benchmark and compare spending in different parts of Government is a hugely powerful driver of efficiency and savings, and we intend to continue down that path.
Jonathan Ashworth (Leicester South) (Lab)
Can we perhaps have a bit more transparency with respect to ministerial interests? This week, we saw Ministers hobnobbing at the black and white ball, although I noticed that the Paymaster General was sadly excluded from the Cabinet auction, and we saw new analysis showing that in the past 12 months Tory Ministers have made 168 ministerial visits to marginal Tory-held constituencies. In the interests of transparency, will the Minister now provide a full list of all ministerial visits and the reasons the locations were chosen, and will he publish the ministerial list of interests?
Mr Maude
It sounds like the hon. Gentleman is getting a little concerned about the result of the upcoming election. The Government are disclosing more about what Ministers do than any Government have ever done before, and enormously more than the Government whom he supported before 2010.
Valerie Vaz (Walsall South) (Lab)
3. What his policy is on promoting the formation of public sector mutuals.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The Government are committed to supporting the growth of public service mutuals, which deliver benefits to front-line staff, commissioners and service users. There are now more than 100 live mutuals delivering well over £1.5 billion of public services, and more than 35,000 staff have themselves taken the decision to join a mutual.
Valerie Vaz
I thank the Minister for his answer, but with the flagship mutual, Hinchingbrooke hospital, in special measures, will the Minister say whose idea it was to write to all the foundation and NHS trusts asking them to be pathfinder mutuals, and how many people have replied?
Mr Maude
Mr Speaker, the
“failure of Circle at Hinchingbrooke hospital…where the company very nearly managed to remove an operating loss inherited from the public sector, was due to the failure of the NHS to deliver its side of the bargain”—
not my words, but the words of Tom Levitt, the former Labour MP for High Peak. Yes, a lot of NHS trusts have applied for the Department of Health and Cabinet Office mutual pathfinder programme, and all of that is progressing very satisfactorily. There are huge benefits for patients in this movement. We should all be concerned with that, not with an outworn, outdated ideology.
Michael Fabricant (Lichfield) (Con)
May I say how sad I was to hear that my right hon. Friend would be standing down at the next election? Singlehandedly, he has done more than anyone to reform the home civil service. What companies has he been in contact with to advise him on how public service mutuals might work better?
Mr Maude
I am grateful for my hon. Friend’s kind remarks. This will be the second time I have left the House of Commons—the first time was not entirely consensual—and I shall be sorry to leave, although I think I have one more outing this time before the House dissolves.
Many businesses in the private sector operate as mutuals—John Lewis prominent among them—and they have been generous in their support for this programme because they think that employee ownership and control also benefit service users, which should be our overriding concern.
Stephen Mosley (City of Chester) (Con)
4. What assessment he has made of the effectiveness of the Government Digital Service.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The Washington Post hailed the UK as
“setting the gold standard of digital government”,
and the Obama Administration have created a digital service modelled on our own. The Australian Government announced the same in January this year. The New Zealand Government have taken the source code from gov.uk and used it for their own online presence. Last October, we celebrated the 1 billionth visit to gov.uk.
Stephen Mosley
The Government Digital Service has been one of the unsung success stories of the Government, and it has been introduced smoothly and successfully. There have been none of the mess-ups that occurred on previous IT projects, which has meant that it has not had the public attention it deserves. What further services does the Minister foresee digitising to save taxpayers’ money and improve services for the public?
Mr Maude
We have already saved a great deal of money and improved services for citizens, and we are beginning to roll out much better technology in government, so that civil servants are helped by the technology they have rather than hindered by it. There is much more to do. We inherited some extremely expensive, cumbersome and unwieldy IT contracts, and for one of them the Department had to pay £30,000 to change one word on a website. That is not acceptable; it is no way to treat taxpayers’ money; and it is going to change.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Government Digital Service is a very talented group within the Cabinet Office and is internationally recognised, so it is unfortunate that the Minister has prevented the group from working with local government. On Monday, the Minister for Culture and the Digital Economy said that he agreed with me and Labour’s independent digital government review that this expertise should not be barred from working with local authorities. Will the Minister now concede that GDS should be allowed and encouraged to work more closely with councils, so that we have digital services that work for everyone—locally and nationally?
Mr Maude
The hon. Lady is completely right to flag up the huge scope for improvement in online services in local government. GDS’s focus has had to be on central Government, but in the document on efficiency and reform that we published at the time of the autumn statement, we flagged up that we expect this to be available across the wider public sector. The focus for the time being has to be on finishing the job in central Government, but helping to build an equivalent to support local government is a very high priority for us.
Mr Andrew Turner (Isle of Wight) (Con)
5. What change there has been in the proportion of Government procurement made through small businesses and the voluntary sector since May 2010.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The central Government’s direct spend with small businesses increased from 6.5% in 2009-10 to 10.5% in 2012-13, and small and medium-sized enterprises have benefited from a further 9.4% of indirect spend through the supply chain in that same year. I shall be publishing figures for 2013-14 shortly. We have moved a long way towards our ambition and aspiration that a quarter of Government procurement should be with SMEs.
Mr Maude
I am delighted that my hon. Friend has raised this point about supporting businesses in the Isle of Wight; he has been a huge and doughty champion of businesses in his constituency. We have made public procurement more transparent and accessible. We have published tenders and contracts through the contracts finder website—and we shall be launching a much-improved version of that very soon. We have simplified how procurement takes place to take away some of the bureaucracy that looked like it was designed to stop small businesses competing for, and winning, business. There is much more we can and will do.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
12. Reading through the UK Statistics Authority booklet, I am struck by the number of times that the Government have been rebuked for giving false information in their statements. The Prime Minister is twice rebuked for giving the wrong facts about the debt, saying that it is falling when it has in fact been rising. Could the Cabinet Office get together with the UK Statistics Authority and agree to deal with facts, rather than fiction, in Government statements for the next three months?
Mr Speaker
Order. The question is about Government procurement, small businesses and the voluntary sector.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
6. What system is used for identifying potential candidates for public appointments.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
As was the case under the last Government, appointments to public bodies are made on merit by Ministers after a fair and open selection process regulated by the Commissioner for Public Appointments. We have taken unprecedented steps to open up the public appointments process to new talent, slimming down the application process, placing an emphasis on ability rather than prior experience, and increasing awareness. In the first six months of the current financial year, 44% of new public appointments made by Whitehall Departments were women, compared with about a third under the last Government.
Mr Sheerman
The Minister knows that, following the fiasco of the Home Secretary’s attempt to appoint a chairman of the inquiry into child abuse allegations, there is a sense that there is a black book or a secret list, dominated by the metropolitan elite. They are all from London, they all know each other, and they all went to school together. When will the Government open up the secret list, and let us know how people get on it?
Mr Maude
As I have said, we have moved significantly towards our aim of ensuring that 50% of public appointments are of women. I recently hosted events organised in Birmingham and Leeds to encourage people from outside London to express interest and apply for such roles, and I am delighted to say that there was a huge amount of interest. We will continue down that path. [Interruption.]
Mr Speaker
Order. A great many very noisy private conversations are taking place in the Chamber. We should have a bit of order, not least so that we can hear the Chair of the Public Administration Committee, Mr Bernard Jenkin.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
7. What plans he has to improve the effectiveness of his Department in co-ordinating planning and implementation across Government Departments.
The Minister for Government Policy and Chancellor of the Duchy of Lancaster (Mr Oliver Letwin)
That is a question on which the Public Administration Committee has focused for a long time, and very welcome it is too.
The creation of the implementation unit in the Cabinet Office has done a great deal to increase implementation capabilities throughout the Government, and I am glad to say that we have launched a series of other initiatives to bring Departments together. We have created the better care fund, the stabilisation unit, the international energy unit and the troubled families programme, and we intend to continue the process.
Mr Jenkin
During the inquiry that we conducted on future challenges facing the machinery of Whitehall, we found that, so far, the Government have been very good at imposing departmental spending limits, but there is a capability deficit when it comes to cross-departmental financial planning and management. How do the Government propose to address that?
Mr Letwin
I agree that it needs to be tackled. I think that the most signal example is the relationship between local authorities—in particular, adult social care departments—and the health service. We are now focusing on that above all, and trying to prevent circumstances in which a failure to pool budgets leads to worse results for patients. I think that we shall then have a model that we will try to use in many other areas.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Does the Minister have any discussions with other Departments about the closure of offices? Offices are being closed in my constituency, and that would clearly not be happening if efficiency were the criterion. What co-ordination does the Minister apply to the closure of offices in the areas that need them most?
Mr Letwin
In recent years, my right hon. Friend the Minister for the Cabinet Office has had the unique distinction of having made public services more efficient by finding vast efficiency savings, which have amounted to some £20 billion a year in the current Parliament. Had the last Government followed such a lead, we might not have been in the dire situation in which we found ourselves in 2010, and the need for our long-term economic plan might not have been as great as it was.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
My responsibilities are for efficiency and reform, civil service issues, public sector industrial relations strategy, Government transparency, civil contingencies, civil society and cyber-security.
Debbie Abrahams
Today’s National Audit Office report on late payment says that the Government’s policy to pay invoices more quickly risks boosting the working capital of the main contractors rather than benefiting small businesses down the supply chain. Why then did the Government on three separate occasions refuse to adopt amendments I tabled ensuring that small businesses all the way down the supply chain would have been paid on time?
Mr Maude
We have gone infinitely further than any previous Government ever did to ensure that payment is speeded up through the creation of project bank accounts and inserting into main suppliers’ contract terms a requirement that they pay quickly as well, because the concern is a very real one. Small businesses can end up being starved of cash and it is not acceptable, so we are driving much better practice through these legal obligations. The situation is better than it was, but there is much more still to do.
Mr Christopher Chope (Christchurch) (Con)
T2. May I congratulate and thank my right hon. Friend on having secured a 4.3% increase in public service productivity in the first three years of his watch, by contrast with the zero growth over the previous 13 years? What further measures does he plan to take to increase public sector productivity?
Mr Maude
I am grateful to my hon. Friend for his comments. There is much more to do. According to the Office for National Statistics, public sector productivity remained flat throughout the Labour years and it has started to increase, but there is much more that we need to do. We have said further savings and reductions in the cost of delivering public services can be made while the quality of the service increases. We have shown over this period that we can do more for less, but we are going to need to continue with redoubled effort in the future.
Lucy Powell (Manchester Central) (Lab/Co-op)
Given his laudable aims to improve access to Government contracts for small business, is the right hon. Gentleman as disappointed as I am about revelations in The Independent today that Capita faces allegations of using a major Government contract to short-change small companies, forcing many out of business? He described this contract as a model of how to open up the public sector, yet it has catastrophically failed. Given his championing of the Maude awards for failure, will this contract be a winner of such an award, and what lessons has he learned from this contract?
Mr Gary Streeter (South West Devon) (Con)
T3. The framework agreement for public procurement of infrastructure in the south-west provides that the bidder that gets closest to the average tender price, not the cheapest, gets the job. Will my right hon. Friend look into this matter, because it seems to me that this is wasting taxpayers’ money?
Mr Maude
I am not familiar with the precise issue my hon. Friend raises, but it sounds very odd to me, and I will investigate it. Of course everyone who spends public money procuring services, goods or infrastructure needs to ensure the money is spent as well as it possibly can be, and I will look urgently at the case my hon. Friend raises.
John Mann (Bassetlaw) (Lab)
T4. The Geoffrey Dickens dossier was distributed across the Central Office of Information in the early ’80s, with one special archive suddenly emerging. How can we be certain there is not another special archive in the Cabinet Office that needs to be handed over to the police immediately?
Mr Maude
The Central Office of Information had nothing to do with any of this. That is a completely different, and now defunct, organisation. I am ensuring that officials in my Department are going through all the files thoroughly to make sure that they are organised, that they know what is in them, and that any files that are at all relevant are submitted immediately to all of the inquiries that are under way. There is no excuse whatsoever for these files not being surfaced.
Mr Henry Bellingham (North West Norfolk) (Con)
T5. Will the Minister join me in praising the vibrant charity and social enterprise sector in west Norfolk for all its superb work, especially the two charities chosen by this year’s mayor, Barry Ayres, namely the Prince’s Trust of King’s Lynn and the west Norfolk Kandoo club?
The Minister for Civil Society (Mr Rob Wilson)
Social enterprises and charities make an invaluable contribution to our economy and society, and I am delighted to join my hon. Friend in thanking those charities in Norfolk and others across the country for their work. We are investing about £470 million over the spending review period directly to support charities and voluntary groups.
Alex Cunningham (Stockton North) (Lab)
T7. At Prime Minister’s questions in November last year, the Prime Minister said that “there are 1,000 more GPs across the country than there were in 2010.”—[Official Report, 5 November 2014; Vol. 587, c. 822.]According to the UK Statistics Authority, however, there were actually 356 fewer. That is just one error. The UKSA recently revealed that, since May 2010, it had had to investigate the Government more than 200 times for the use of dirty statistics. When will this Government stop their fiddling?
Mr Tim Yeo (South Suffolk) (Con)
Q1. If he will list his official engagements for Wednesday 11 February.
The Prime Minister (Mr David Cameron)
This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.
Mr Yeo
Does my right hon. Friend recall the general election of 1983? It resulted in a Conservative landslide win in which I and 100 other Conservatives were elected for the first time. At that time, unemployment stood at 3 million; today it is 2 million. The rate of inflation was 8%; it is now under 2%. The work force numbered 24 million; today it is 30 million. There were 9 million women in the work force in 1983; today there are 14 million. Does he agree that those comparisons, coupled with the trump card which he and Baroness Thatcher shared, in the form of a left-wing Opposition leader who has lost control of his own party, will put Britain on course for another Conservative landslide?
The Prime Minister
I am grateful to my hon. Friend. I was not a voter in 1983, but it is true to say that this Government are cutting unemployment and that every Labour Government always puts up unemployment. In my hon. Friend’s constituency, the claimant count has fallen by 55% since the last election. This also speaks to a bigger picture, which is that this Government have created 1,000 jobs for every day that we have been in office. We all remember the prediction from the leader of the Labour party that our plans would cost 1 million jobs. With unemployment tumbling, perhaps today is the day he should apologise.
Edward Miliband (Doncaster North) (Lab)
An hour ago, we learned that linked to the HSBC tax avoidance scandal are seven Tory donors, including a former treasurer of the Tory party, who between them have given the party nearly £5 million. How can the Prime Minister explain the revolving door between Tory party HQ and the Swiss branch of HSBC?
The Prime Minister
I saw that list just before coming to Prime Minister’s questions. One of the people named is the Labour donor, Lord Paul, who funded Gordon Brown’s election campaign. I am very clear: people should pay their taxes in our country, and no Government have been tougher than this one in chasing down tax evasion and tax avoidance.
Edward Miliband
Let us talk about the difference between the Prime Minister and me. None of those people has given a penny on my watch, and he is up to his neck in this. Let us take Stanley Fink, who gave £3 million to the Conservative party. The Prime Minister actually appointed him as treasurer of the party and gave him a peerage for good measure. Will he now explain what steps he is going to take about the tax avoidance activities of Lord Fink?
The Prime Minister
I will tell the right hon. Gentleman about the difference between him and me. When people donate to the Conservative party, they do not pick the candidates, they do not choose the policies and they do not elect the leader. When the trade unions fund the Labour party, they pay for the candidates, they pay for the policies, and the only reason that the right hon. Gentleman is sitting there today is that a bunch of trade union leaders decided that he was more left wing than his brother.
Edward Miliband
The Prime Minister cannot get away from it: he is a dodgy Prime Minister surrounded by dodgy donors. He did not just take the money—[Interruption.]
Mr Speaker
Order. It has always to be said: the questions will be heard and the answers will be heard, because this is a democratic Chamber. I do not mind how long it takes, they will be heard.
Edward Miliband
He did not just take the money; he appointed the man who was head of HSBC as a Minister. It was in the public domain in September 2010 that HSBC was enabling tax avoidance on an industrial scale. Are we seriously expected to believe that when he made Stephen Green a Minister four months later, he had no idea about these allegations?
The Prime Minister
I am glad the right hon. Gentleman has brought up the issue of Stephen Green, who was a trade Minister in this Government. This is the same Stephen Green whom Gordon Brown appointed as the head of his business advisory council. This is the same Stephen Green whom Labour welcomed as a trade Minister into the Government. It is the same Stephen Green whom the shadow Business Secretary, who is looking a bit coy today, invited on a trade mission as late as 2013. We know what happens: every week the right hon. Gentleman gets more desperate. He cannot talk about the economy and he cannot talk about unemployment, and so he comes here with fiction after fiction. Let me deal, while I have a moment, with the fiction we had last week. He came here and, if you remember, he talked about something called intermediary tax relief. It turns out—[Interruption.] We have as long as it takes.
Mr Speaker
Order. I said that the questions must be heard. The responses must be heard.
The Prime Minister
Thank you, Mr Speaker. Last week, the Labour leader asked me six times about the tax treatment of hedge funds. Now it turns out that the treatment he is complaining about was introduced in the autumn of 1997 by a Labour Government. It further turns out that it was extended in 2007. Who was in power in 2007? It was Labour. Who was the City Minister in 2007? I think we’ll find it was Ed somebody.
Edward Miliband
I know the Prime Minister does not care about tax avoidance, but on this day of all days he is going to be held accountable for answering the question. He is pleading ignorance as to what was happening with Stephen Green, but today we discover that the Minister in charge issued a press release in November 2011 which referred to the investigation into the HSBC Geneva account holders. Does the Prime Minister expect us to believe that in Stephen Green’s three years as a Minister he never had a conversation with him about what was happening at HSBC?
The Prime Minister
Why did Labour welcome Stephen Green as a trade Minister? Why were they still booking meetings with him in 2013? My responsibility is the tax laws of this country, and no one has been tougher. Let me remind the right hon. Gentleman about what we found: hedge funds cutting their taxes by flipping currencies—allowed under Labour, banned under the Tories; foreigners not paying stamp duty—allowed under Labour, banned under the Tories; and banks not paying tax on all their profits—allowed under Labour, banned by the Tories. Those two in the Treasury were the friends of the tax dodger. We are the friend of the hard working tax payer.
Edward Miliband
The Prime Minister is bang to rights, just like his donors. And doesn’t this all sound familiar? The Prime Minister appoints someone to a senior job in government. There are public allegations but he does not ask the questions, he turns a blind eye. Isn’t this just the behaviour we saw with Andy Coulson?
The Prime Minister
It is desperate stuff. The Opposition cannot talk about the economy because it is growing; they cannot talk about unemployment because it is falling; and they cannot talk about their health policy because it is collapsing. What have we seen this week? They cannot even go in front of a business audience because they have offended every business in the country; they cannot go to Scotland because they are toxic; they cannot talk to women because they have a pink bus touring the country; and they have even offended Britain’s nuns. No wonder people look at Labour and say that it has not got a prayer.
Edward Miliband
He took the money, gave a job to the head of HSBC, and lets the tax avoiders get away with it. There is something rotten at the heart of the Conservative party and it is him.
The Prime Minister
For 13 years, Labour sat in the Treasury and did nothing about tax transparency, nothing about tax dodging, and nothing about tax avoidance. This Government have been tougher than any previous Government. That is why the Opposition are desperate and that is why they are losing.
Conor Burns (Bournemouth West) (Con)
At the weekend, graduates of Bournemouth university and the Arts university, Bournemouth, enjoyed yet another year of success at the BAFTAs. Last week, Bournemouth was named as having the fastest growing digital economy in the United Kingdom. Does my right hon. Friend agree that Britain remains a world leader in the creative industries because of the talent of our people combined with our long-term economic plan?
The Prime Minister
My hon. Friend is absolutely right. Our creative industries are a vital part of our economy and our country. When we look at the great results at the BAFTAs and the high hopes that we have for the Oscars, it is clear that British television and British film are conquering the world. Bournemouth university plays a very important part in that, because its training of some of our digital effects specialists and of many of our creative people is a key part of this vital and growing industry.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
Q2. Last week at Prime Minister’s questions, I warned the Prime Minister about falling wages. This week, he said that Britain needs a pay rise, so I am glad to see that he is waking up to reality. Does he now agree with me that the people who most need that pay rise are the families who have lost £1,600 a year under this Government, and not those at the top to whom he has given massive tax cuts?
The Prime Minister
The hon. Lady will find that the wages in the public and private sectors are growing ahead of inflation, which is good. As we have raised to £10,000 the amount of money people can earn before they start paying taxes, they are better off. In Scotland, there are 175,000 more people in work today than when I became Prime Minister. As a result of growth in the jobs market, growth in wages, cuts in taxes, and an increase in the minimum wage, things are getting better for families in Scotland.
Ian Swales (Redcar) (LD)
For years, the supermarket chain Aldi has been sitting on an empty supermarket that it acquired in the centre of Eston in my constituency. Does the Prime Minister agree that the supermarket chain should be forced to release assets that it does not need rather than allow them to be a blight on the community?
The Prime Minister
What we need to see is successful development going ahead and brownfield sites being used. If those sites cannot be used for retail, they should be made available for other uses. One change we have made is to liberalise the use classes in planning so that we do not have the long-term planning blight of development not going ahead in towns and cities where houses, jobs and investment are needed.
Paul Blomfield (Sheffield Central) (Lab)
Q3. Given the Prime Minister’s new-found concern that employers should give their staff decent pay rises, can he explain why he did not apply that principle to his own Government when they decided not to implement the recommended 1% pay increase for NHS staff?
The Prime Minister
What we have done with NHS staff is ensure that the lowest paid are getting a pay rise. In the NHS, there is progression pay, so everyone will get at least a 1% rise, but many people, because of progression, will get a 2%, 3% or 4% pay rise. Alongside that pay rise, they will be paying less in tax, council tax in many areas has been frozen, and diesel and petrol prices are coming down. People’s standards of living are rising because we have a long-term economic plan and we are sticking to it.
Maria Miller (Basingstoke) (Con)
Q4. More than ever before, businesses, students and commuters in Hampshire use the trains to get around, but they are increasingly frustrated that our trains are stuck in the analogue age. Access to the internet can be really difficult and very limited. Will my right hon. Friend consider that important issue and see what the Government can do to help commuters and others get access to wi-fi on our trains?
The Prime Minister
My right hon. Friend is absolutely right to raise this. It is vital for businesses and for individuals to be able to access wi-fi, do their work and make other contacts while they are on trains. I am pleased to announce plans that will see the roll-out of free wi-fi on trains across the United Kingdom from 2017. The Government will invest nearly £50 million to ensure that rail passengers, who make more than 500 million journeys every year, are better connected, with the four rail operators—Thameslink, Southern and Great Northern; Southeastern; Chiltern; and Arriva Trains Wales—all benefiting from that investment.
Mr Peter Hain (Neath) (Lab)
The Motability car that my severely disabled constituent, Mark Francis, has had for 11 years is being taken from him in two weeks. Born with hereditary spastic paraplegia and unable to walk without crutches or sticks, he is sadly deteriorating by the week. I have been told that his case will be reconsidered, yet the Department for Work and Pensions is punitively and callously snatching his car from him on 25 February. Will the Prime Minister immediately rectify that heartless and disgraceful injustice?
The Prime Minister
As ever, I am very happy to look at the individual case raised by the right hon. Gentleman. Of course, with the replacement of disability living allowance by the personal independence payment, the most disabled people will be getting more money and more assistance, rather than less, but as I say, I will happily look at the case.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Q5. Given the widespread cynicism about politicians’ promises and claims, will my right hon. Friend remind people, however long it takes, that this Government have presided over the creation of more than 2 million additional private sector jobs, which is far, far more than we ever promised? Does not that discredit the claims of the Opposition that our efforts to cut the deficit would destroy jobs?
The Prime Minister
My right hon. Friend is absolutely right. The figures are clear: we have created 2 million additional private sector jobs, and if we look at the number of extra people in work, public and private sector combined, it is 1.75 million more people. Behind those statistics are families who now have a pay packet and a job, and the chance to have a more secure future, and all that at a time when the Leader of the Opposition was very clear: he warned that our policies would cost 1 million jobs. He was 1 million per cent. wrong, and it is time that the Opposition withdrew what they said and apologised for all those statements.
Ann McKechin (Glasgow North) (Lab)
In November 2012, Her Majesty’s Revenue and Customs, in evidence to the Public Accounts Committee, said that there were a dozen prosecutions in train in relation to the HSBC case load. None of them have come to court yet. Can the Prime Minister explain why?
The Prime Minister
First, on prosecutions for tax evasion, the figures are that they have gone up fivefold under this Government since 2010—2,650 cases, leading to hundreds of years of imprisonment, taken as a whole. That is what has happened, but there is an important point here, which is that, in our country, the tax collection agency, HMRC, is independent of Government and independent of Ministers, and it has to raise the taxes, carry out the investigations and order the prosecutions. It is very important in a free country that Ministers are not given the details of who is being investigated and what the prosecutions are. This does not happen in other countries, and we have a word for that: it is called corruption, but it seems to be the path suggested by the Labour party.
Mr Speaker
Order. The hon. Gentleman is entitled to be heard with courtesy.
Glyn Davies
Thank you, Mr Speaker. My constituents in Montgomeryshire are not able to see a GP as quickly as they should. Does the Prime Minister agree that we need to train more GPs to take forward our plans for surgeries to be open seven days a week and in the evenings, and will he press for similar hours of opening to be available to my constituents in Wales?
The Prime Minister
I will certainly press for that change, because we now have 1,000 more GPs operating in England, and we have made the commitment that we are going to have seven-day opening, from 8 in the morning until 8 in the evening. That is already available now to some 4 million people. We are going to spread that across the country. I would urge the NHS in Wales, even at this late stage—and, more to the point, the Labour Government in Wales, because their decision to cut the NHS has landed the NHS in Wales with those difficulties—to reverse that policy and look at how we can expand access to GPs in Wales, because that is the right policy.
John Mann (Bassetlaw) (Lab)
On Monday, the launch of the second major report of the all-party parliamentary group against anti-Semitism was attended by the Archbishop of Canterbury, Mr Speaker and others. Will the Prime Minister meet a group from that committee, because although the report is a work plan for the next Parliament, the issue of the security of synagogues and other Jewish communal buildings is too urgent to wait until May?
The Prime Minister
First, I commend the hon. Gentleman for the work that he does in fighting anti-Semitism. I know that he takes a very prominent role, both inside and outside the House, with the work that he does. It is vital to reassure Jewish communities at this time, particularly after the heightened tensions because of what happened in Paris and other issues. I have met with the Jewish Leadership Council; I regularly discuss the issues with it. We make support available, and I have made sure that the police have contacted all the relevant organisations to try and work with them, but I am very happy, as ever, to sit down with Members of Parliament and hear their views, too.
Andrew Jones (Harrogate and Knaresborough) (Con)
Q7. Local enterprise partnerships covering Harrogate district have awarded 14 grants from the business growth fund totalling over £1.7 million. This has led to the creation of 158 jobs, many in manufacturing—part of the 60% fall in unemployment that we have seen locally. Will the Prime Minister commit to further investment in northern manufacturing, as it is key to rebalancing our economy?
The Prime Minister
I am very glad that my hon. Friend sees a manufacturing revival taking place in Britain. We have seen manufacturing investment and manufacturing output increase. That is happening in all the regions of our country, which is worth while. We will be playing our part by investing £10 million in the development of the Advanced Manufacturing Research Centre in south Yorkshire. These and other catapults can make a real difference by backing the revival of manufacturing in our country.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
As I remarked earlier, I have been reading the report of the Statistics Authority. The fact is that the Labour Government prosecuted more companies for corporate tax evasion than this Government have done. It is a major scandal in this country that many, many people who make money from our consumers do not pay their tax in this country. What is the Prime Minister doing to plug these gaps?
The Prime Minister
When we chaired the G8, we put at the head of the agenda the issue of tax transparency, tax evasion and aggressive tax avoidance, and we now have 90 countries automatically sharing their tax information, including Switzerland, so the events that we are discussing—events and allegations of crimes—all took place when Labour was in power. Were this to happen again, we would not have this situation, because we have the automatic transparent exchange of tax information, something that this Government put on the agenda. Labour started talking about it only after we did that.
Richard Drax (South Dorset) (Con)
Q8. According to a recent survey of 40,000 patients carried out by the Care Quality Commission, the accident and emergency service at our county hospital in Dorchester is the No. 1 in the country. Will my right hon. Friend praise all the staff who work there, and reassure the hospital that as it prepares to integrate its services for south, west and north Dorset, the money will follow that good work?
The Prime Minister
I certainly join my hon. Friend in congratulating the Dorset County Hospital NHS Foundation Trust. Its work shows what can be done when we better integrate health and social care, and also when we look at how we can treat frail elderly people in the community, often people who have more than one difficult condition that needs treatment. What is best for them is often not A and E, but treating them in community hospitals, looking after their ailments and helping them to do better at home. That is what we should be focused on, and that is Simon Stevens’ plan for the NHS; we have already come up with the money to get the plan well under way.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Q9. Did the Prime Minister have conversations with Lord Green about tax avoidance at HSBC—[Interruption.]
Mr Speaker
Order. I said a moment ago that the hon. Member for Montgomeryshire (Glyn Davies) had a right to be heard with courtesy. The hon. Lady has a similar right to be heard with courtesy, and be in no doubt: she will be heard with courtesy.
Mrs Hodgson
Thank you, Mr Speaker. I just wanted to know whether the Prime Minister has had any conversations with Lord Green about tax avoidance at HSBC; if not, why not?
The Prime Minister
When I appointed Stephen Green, every proper process was followed. I consulted the Cabinet Secretary and the director for propriety and ethics, and of course the House of Lords Appointments Commission now looks at an individual’s tax affairs before giving them a peerage. I made the appointment, it was welcomed by Labour, and three years later, it was still holding meetings with him.
Karen Lumley (Redditch) (Con)
Q10. Jordan Bates is a mother of two from Redditch who works hard to give her children the best start in life. What does my right hon. Friend think she needs: measures to reward those who work hard, get on and do the right thing; or cheap, patronising, pink stunts?
The Prime Minister
I think that what Britain’s families need most to help them get on is the security of a good school place, which we are providing, the security of a good job, which we are providing, and the security of a safe community, which we are providing. On Labour’s campaign, I would say that the wheels are falling off the wagon, but I think that they are falling off the bus. We now know that it is not going to be driven by anyone on the Front Bench. Surprise, surprise, it is going to be driven by Unite.
John McDonnell (Hayes and Harlington) (Lab)
Q11. The Prime Minister may have been briefed that the Care Quality Commission yesterday published its report on Hillingdon hospital, my local hospital. It found that we have an extremely dedicated, hard-working and professional team of staff, but patient safety is being put at risk by critical staff shortages and by the fabric of the building, which one of the report’s consultees described as being like something from the third world. Will the Prime Minister meet me and my parliamentary colleagues in Hillingdon to look at how we can secure the funds to make our constituents safe?
The Prime Minister
The CQC’s findings are clearly disappointing, but the trust seems to be taking immediate steps to address the issues that have been identified: raising standards for infection control and cleanliness; enhanced and more frequent training; and recruiting more permanent staff. I think that this relates to a bigger point, which is that for years in our NHS, when there was a problem with a hospital, it was swept under the carpet, rather than the hospital being properly examined, inspected and, if necessary, put into special measures and then corrected. That is what is happening now in our health service, and that is all to the good. It is important to say that on the day Sir Robert Francis published his report on how important it is to listen to whistleblowers in the NHS. Unlike the Labour party, we are determined to listen to the Francis report and to whistleblowers. I will certainly ensure that the Health Secretary meets the hon. Gentleman, his parliamentary colleagues and others in Hillingdon to make sure that the hospital gets the attention it deserves.
Sir Peter Tapsell (Louth and Horncastle) (Con)
May I put it to the Prime Minister that from President Monroe onwards it has been generally acknowledged by leaders of great powers that, for the avoidance of war, it is often wise to acknowledge the concept of traditional spheres of authority and power; and that although Ukraine is of absolutely no significant strategic importance to Britain, Greece most certainly is; and that unless western statesmen show rather greater skills than they have in recent years, Greece will pass into the Russian sphere of influence without a shot being fired?
The Prime Minister
It is difficult to answer the Father of the House without a long, historical exegesis, but I would argue that, when it comes to Ukraine, it does matter on our continent of Europe that we do not reward aggression and brutality with appeasement; that would be wrong. That is why it is right to have the sanctions in place, right to keep the European Union and America together on the issue, and right to stand up to President Putin. On Greece, of course there is a British interest, which is that we want stability and growth on the continent of Europe. The eurozone crisis has held that growth and stability back; we want those concerned to come to a reasonable agreement so that Europe can move forward. It is good that the British economy is growing and jobs are being generated, but we have to recognise that our largest market at the moment is still relatively stagnant, and the situation in Greece does not help that.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Q12. There are adverts in Newcastle exhorting my constituents to report benefit fraudsters. May I ask the Prime Minister why he does not feel as strongly about tax avoidance? Will he report whether he had a conversation with Lord Green about tax avoidance?
The Prime Minister
I do feel strongly about tax evasion and aggressive tax avoidance. Let me tell you, when it comes to income tax, some of the things people used to get away with. Under Labour, people avoided paying tax by calling their salary from their company a loan: allowed under Labour, banned under the Tories. Businesses could avoid paying tax by paying employees through trusts: allowed by Labour, banned by the Tories. Time and time again, it is this Government who have come along and cracked down on tax evasion.
Jason McCartney (Colne Valley) (Con)
Q13. I am a proud Yorkshireman, and when I come to London I am proud that the glass pods on the London Eye are made by Novaglaze in Lockwood, in my patch, proud that the red carpet used for the royal wedding at Westminster abbey was made in Huddersfield, and proud that the upholstery in Boris’s Routemaster buses was made in Meltham in my patch. I wonder if they do upholstery for pink vans, by the way. There was more good news last week, with £2.9 million—
Jason McCartney
Yes, Mr Speaker; I will finish very shortly. Tomorrow I am meeting local manufacturers at the award-winning Huddersfield university. Can I tell them that the Prime Minister will continue to put Yorkshire at the heart of his long-term economic plan?
The Prime Minister
I am afraid, Mr Speaker, that the truth is that you cannot fit all the good things happening in Yorkshire into one question; it is impossible. My hon. Friend could have added the medals won at the Olympics, or he could have talked about the cricket team—there is no end of things. The point is that the long-term economic plan that we have announced for Yorkshire and northern Lincolnshire sets out plans for transport investment, investment in science, helping universities, and getting behind the industries that are growing the fastest. That is what another Conservative Government would do: success for Yorkshire, security for families in Yorkshire.
Phil Wilson (Sedgefield) (Lab)
Q14. Can the Prime Minister confirm that between May 2010 and December 2013 he never once had a conversation with Stephen Green about allegations of tax avoidance by UK-based HSBC clients?
The Prime Minister
We followed every procedure that one should, and this appointment was welcomed by the Labour party. More to the point, between 2010 and 2014 we passed law after law cracking down on tax evasion and cracking down on aggressive tax avoidance, and saw more prosecutions—all the things that Labour failed to do over and over again.
Dr Julian Huppert (Cambridge) (LD)
Sixth-form colleges such as Hills Road and Long Road in Cambridge do an excellent job in educating our young people, but they struggle to get by because, unlike school or academy sixth forms, they have to pay VAT of over £300,000 each. Will the Prime Minister listen to voices across this House and scrap this tax on learning?
The Prime Minister
I will look very carefully at what the hon. Gentleman says. I know it is important that we try to treat educational institutions fairly, and we all want to see the continued and growing success of our schools and colleges.
Mr Graham Allen (Nottingham North) (Lab)
Q15. If he will commission a new Magna Carta to renew democracy in the UK as part of the celebrations of the 800th anniversary of Magna Carta; and if he will make a statement.
The Prime Minister
We should be proud that in Magna Carta our country established rules of justice and freedom that, 800 years later, still inform our constitution and resonate around the world. While there is a long-standing debate over the issue, there are no plans at present for a written constitution.
Mr Allen
I note that the Prime Minister says “at present”. Does he agree, though, that there are unacceptably high levels of voter disengagement, with more people staying at home than voted Labour and Conservative at the last election? Would he commit his Government, now, to preparing an all-party constitutional convention, in order to give every UK citizen a copy of our society’s rulebook—either a statute of the Union or a written constitution—as a part of electors feeling once again that they own our democracy?
The Prime Minister
Obviously, I always look at the hon. Gentleman’s suggestions very carefully, because he has made a number of sensible cross-party interventions over recent years, but I have my doubts as to whether another talking convention is the answer. I think we need to look at some of the constitutional issues that leave people feeling left behind, not least English votes for English laws, and make sure that we put those things in place. The disappointment I have with the Labour party is that it is prepared to talk about all-party talks on Wales, Scotland or Northern Ireland, but when it comes to empowering English people and making sure that they have rights in this House, it is completely absent from the debate.
Jacob Rees-Mogg (North East Somerset) (Con)
Article 39 of Magna Carta contains the origins of our right to trial by jury. In a recent report, Sir Brian Leveson, not satisfied with undermining the right to a free press, wants to restrict the right to trial by jury. Will my right hon. Friend, as long as he is Prime Minister, defend our historic rights?
The Prime Minister
I am a great supporter of jury trial. I think it is one of the very important things we have in this country that safeguard people’s rights and freedoms, and I do not want to see it reduced.
Francis Report: Update and Response
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Health (Mr Jeremy Hunt)
With your permission, Mr Speaker, I would like to make a statement on the Government’s response to today’s report on NHS whistleblowing by Sir Robert Francis, and on progress to date in implementing previous recommendations from his public inquiry into the failures of care at Mid Staffordshire NHS Foundation Trust.
I asked Sir Robert to carry out a follow-up review because of my concerns that, despite good progress in implementing his original recommendations, the NHS was still not making fast enough progress in creating an open and transparent culture in which staff feel supported to speak out on worries about patient care. As a result, I was concerned that changes are still necessary if the NHS is to protect patients properly by adopting a transparent, no-blame, learning culture as is common in other sectors such as the nuclear, oil or airline industries.
Sir Robert has confirmed the need for further change in his report today. He said he heard again and again of horrific stories of people’s lives being destroyed—people losing their jobs, being financially ruined, being brought to the brink of suicide and with family lives shattered—because they had tried to do the right thing for patients. Eminent and respected clinicians had their reputations maligned. There are stories of fear, bullying, ostracisation and marginalisation, as well as psychological and physical harm. There are reports of a culture of “delay, defend and deny”, with “prolonged rants” directed at people branded “snitches, troublemakers and backstabbers”, who were then blacklisted from future employment in the NHS as the system closed ranks.
We of course recognise the high standards of care day in, day out in much of the NHS, and we know that many staff feel supported in raising concerns about patient care, with many dedicated managers going out of their way to address those concerns. However, the whole House will be profoundly shocked at the nature and extent of what has been revealed today. The only way we will build an NHS with the highest standards is if the doctors and nurses who have given their lives to patient care always feel listened to when they speak out about patient care. The message must go out today that we are calling time on bullying, intimidation and victimisation, which have no place in our NHS.
Before outlining the Government’s response to today’s report, I want to update the House on the progress made in implementing previous Francis recommendations. I have today laid in the House of Commons Library a report showing progress on all 290 recommendations originally made by Sir Robert, as well as the progress made in implementing other recommendations by Professor Don Berwick on safety, by the right hon. Member for Cynon Valley (Ann Clwyd) and Professor Tricia Hart in their complaints review, by Camilla Cavendish in her work on health care assistants and by the NHS Confederation on reducing bureaucratic burdens. The progress was recognised this morning by Sir Robert, who said that the priority that must be given to safety, compassion and quality of care is now better recognised and acted on.
I want to highlight the impact of Professor Sir Bruce Keogh’s review of hospitals with high mortality rates. The special measures regime that followed introduced the toughest and most transparent hospital turnaround regime anywhere in the world, with 19 hospitals—more than 10% of NHS acute trusts—having been put into special measures so far. Among the vast array of improvements since the start of the process, those trusts have recruited 109 additional doctors and 1,805 additional nurses, and have made 129 board-level changes. The independent research company Dr Foster estimated this week that excess deaths in those trusts had fallen by 450 in less than a year. That means that between them, they may have saved as many lives as some estimated were tragically lost at Mid Staffs between 2005 and 2009.
We have moved from a system that tolerated or denied high mortality to one that, while it is by no means perfect, seeks out problems, shares them with the public, takes action and saves lives. Today I can announce that the Care Quality Commission, Monitor and the NHS Trust Development Authority have published a new memorandum of understanding to enshrine and further improve the special measures process.
The other measures that we have introduced include giving the CQC, under its new leadership, legal independence and the legal powers that it needs for its chief inspectors to root out failure and highlight excellence. The chief inspector of hospitals has inspected more than half of acute trusts and will have inspected them all by the end of the year.
We have introduced criminal sanctions for those who wilfully neglect patients and those who provide false or misleading information. The new duty of candour for institutions and professionals means that when mistakes are made, patients or their families must be told. Fundamental standards are now in place to ensure that all providers are required to treat people with dignity and respect. All acute hospitals are now asking patients if they would recommend the care that they receive to friends or members of their family. That is being rolled out to other parts of the NHS, including primary care. Two thirds of hospitals are now implementing the “name above the bed” initiative to ensure that hospital care is better joined up. More than 200 organisations have joined the “sign up to safety” campaign, which involves a commitment to halve avoidable harm and save 6,000 lives by 2017.
The entire NHS is now committed to patient-centred culture change as a key part of the “Five Year Forward View” plans that were put forward by NHS England last autumn. In that plan, we recognise the important point that safe care and efficient use of resources go hand in hand: doing the right things first time in health care saves lives and money.
In respect of whistleblowing, the Government have taken significant steps to protect NHS staff, such as enshrining the right to speak up in staff contracts, amending the NHS constitution, issuing joint guidance with employers and trade unions, extending the national helpline to social care staff, and changing the law to make employers responsible if whistleblowers are harassed or bullied by fellow employees.
Today, Sir Robert makes it clear that there is more to do, and I am extremely grateful to him and his team for their work. He sets out 20 principles and a programme of action. I confirm today that I accept all his recommendations in principle and will consult on a package of measures to implement them.
The recommendations include asking every NHS organisation to identify one member of staff to whom other members of staff can speak if they have concerns that they are not being listened to. Drawing on the inspirational work of Mid Staffs whistleblower Helene Donnelly, those “freedom to speak up” guardians will report directly to trust chief executives on the progress in stamping out the culture of bullying and intimidation that Sir Robert today says is still too common. We will consult on establishing a new independent national whistleblowing guardian as a full-time post within the CQC to review the processes that have been followed in the most serious cases where concerns have been raised about the treatment of whistleblowers.
Because too often the system has closed ranks against whistleblowers, making it impossible for them to find another job, I can announce today that the Government will legislate to protect whistleblowers who are applying for NHS jobs from discrimination by prospective employers. With Opposition support, those necessary regulation-making powers could be on the statute book in this Parliament.
We will provide practical help through Monitor, the NHS Trust Development Authority and NHS England to help whistleblowers find alternative employment. Those three bodies have agreed a compact for action on this issue, and will publish detailed arrangements later this year. We will ensure that every member of staff, NHS manager and NHS leader has proper training on how to raise concerns and how to treat people who raise concerns. As a vital last resort, the right of whistleblowers to contact the press with any concerns they have must always be safeguarded, although it should not have to come to that. Today I will write to every trust chair to underline the importance of a culture where front-line staff feel able to speak up about concerns without fear of repercussions. In addition, Monitor and the TDA will write to trust chief executives today to ask them to ensure that all managers discuss these issues as a matter of urgency with those who report to them.
There must be consequences for trusts that fail to develop a culture of openness, so today I am publishing consultation options to ensure that where hospitals are found to have knowingly withheld information from patients, the NHS Litigation Authority can impose financial sanctions such as reducing the indemnity it offers against litigation awards. The final decision on how we implement these recommendations will be made after proper consultation with NHS providers, whistleblowers and patient groups to ensure that we honour the spirit of what Sir Robert has recommended, and to avoid unnecessary layers of bureaucracy or financial burden. There is no reason for individual trusts not to get on with implementing Sir Robert’s recommendations right away, particularly in ensuring that staff have an independent person with whom they can raise concerns.
A further foundation of a safe and open culture is one where the NHS and the public have access to meaningful and comparable information about the performance of local NHS organisations. The new MyNHS website has already kick-started a transparency revolution by making the NHS in England the first health care system in the world to offer key, up-to-date safety information on every major hospital, including open and honest reporting, nurse staffing levels in every ward, and the number of falls and hospital-acquired infections. Some estimate that we have as many as 1,000 avoidable deaths in the NHS every month, so by the end of March 2016 the NHS will become the first health care system in the world to publish an annual estimate of avoidable deaths by hospital trust, based on case note reviews and the safety record of those trusts.
I will strengthen the accountability of trusts by asking the chair of every trust to write a letter to the Secretary of State by the end of May each year, outlining what measures they will be taking to reduce the number of avoidable deaths in their trust. In all cases we will make it clear that this is not a process of naming and shaming but one of learning and improving so that our NHS becomes the first health care system in the world to adopt system-wide the safety standards that would be considered normal in other industries. We must also better understand avoidable mortality outside hospital settings, and whether we can adapt the methodology to identify avoidable harm as well as avoidable death. I therefore announce today that the Department will fund a national study to establish the extent of avoidable death in community settings, and the feasibility of developing locally attributable death rates.
We will be taking steps to hard-wire transparency into the health and care system, and I am publishing a transparency architecture with plans for further information to be released on MyNHS. That will include comprehensive reporting on the friends and family test, data on residential care home admissions, and a new balanced scorecard on the work of CCGs and health and wellbeing boards. The Care Quality Commission and the National Information Board have confirmed to me that, starting this year, they will report annually and in public to the Secretary of State and the Health Select Committee on the progress of the transparency architecture, and on any recommendations about how we can improve it. The Secretary of State will report to Parliament annually on progress, and today I am publishing for consultation changes that will enshrine that right in the NHS constitution.
One of the biggest causes of poor care is when no one takes responsibility for a vulnerable patient and the buck is passed. That leads to greater costs and numerous personal tragedies as people are passed unnecessarily around the system. The “name above the bed” initiative has strengthened accountability in hospitals, as has bringing back named GPs outside hospitals, but there is still not enough clarity on the role of professionally accountable clinicians, particularly in community settings. Today I can therefore announce that the Academy of Medical Royal Colleges has agreed to develop guidelines for meaningful clinical accountability outside hospitals. It will publish its findings this spring, and before the end of the next financial year all CCGs will publish how many of their patients with long-term conditions are being looked after by clinically accountable community clinicians in the meaningful way the academy will define. Proper proactive care for our most vulnerable patients will not only reduce hospital costs but reduce avoidable harm and improve the quality of compassionate care.
We can fund the NHS with a strong economy, we can put in place new models of integrated care to support an ageing population and we can champion innovation, but if we do not get the culture in the NHS right, we shall never deliver the ambitions that everyone in this House has for our NHS. Today is about tackling that culture challenge head-on so that we build an NHS that supports staff to deliver the highest standards of safe and compassionate care and that avoids the mistakes that have led to both unacceptable waste and unspeakable tragedy. If we succeed, we will be the first country anywhere to put its entire health care system firmly on the path to eliminating avoidable harm and death. Our NHS deserves no lesser ambition, so I commend this statement to the House.
Andy Burnham (Leigh) (Lab)
I welcome the Secretary of State’s statement and his obvious commitment to improve the culture of tackling poor care in the NHS; there is plenty of common ground between us. We endorse the principles laid out in Sir Robert Francis’s new report and we will work with the Secretary of State to get new safeguards on the statute book in the remainder of this Parliament, as he requested.
It was the Labour Government who, in 1998, introduced the first legal protection for whistleblowers in the Public Interest Disclosure Act 1998, reinforced in the NHS constitution in 2008. Sir Robert’s new principles build on those foundations. We thank him and the review team for their work and praise every whistleblower who has had the courage to come forward.
Our shared aim must be to create a climate in which every NHS worker feels able to raise concerns and feels confident that they will be listened to, that appropriate action will be taken and that they will not face mistreatment as a result. Sir Robert’s report will help achieve that. We particularly welcome the call for whistleblowers worried about losing their jobs to be offered alternative employment and for training in whistleblowing for all staff. Those measures are overdue. Will the Secretary of State say more about how Sir Robert’s principles will be enforced across the NHS and about the timetable for implementation? Will he confirm that they will apply equally to all providers of NHS services, including voluntary and private providers?
That brings me to an issue of major substance not covered in Sir Robert’s report. As he points out, his remit did not apply to any form of social care. That is a major concern, given that it could be argued that some of the poorest care provided in England today is in social care settings or in people’s own homes. Only at the weekend, a BBC investigation found that one in five care homes for older people is failing to meet standards for safety. Should we not today, across this House, establish the firm principle that Sir Robert’s recommendations should apply equally to all places where people receive care?
Let me turn to the recommendation for an external organisation that staff can approach for advice and support. In response to the first Francis report in February 2010, I established an expert group to update whistleblowing guidance. It reported in June 2010, and the Secretary of State’s predecessor announced plans for a “safe and independent authority” to which staff could turn when their organisations were not acting on concerns. Will the Health Secretary say why that has not progressed since then and assure us that there will be no further delays now that Sir Robert has reinforced that recommendation?
Although I believe that the Secretary of State’s commitment to improve the culture in the NHS is genuine, he will no doubt be concerned by Sir Robert’s findings that it might have got worse in recent years. In his report, he said about the cases he examined:
“Many were relatively recent or current. This is not about a small number of historic high profile cases from a time when organisations might argue the culture was different. We had a significant number of contributions about cases in 2014.”
The report specifically references figures from the latest NHS staff survey, which shows that reports of bullying have increased from 14% of staff in 2011 to 22% in 2013. Over the same period, the percentage of staff who feel able to speak out about poor care or to report errors or near misses has fallen from 98% in 2011 to 94% in 2013. Those figures suggest that things are getting worse, not better. Will the Secretary of State explain why he thinks that is and whether he will investigate the reasons further? That underlines the importance of any moves to improve the culture being introduced in the right spirit and being supportive rather than punitive, so that they do not reinforce the wrong culture and have the opposite effect to that which the Secretary of State is obviously trying to achieve.
At the weekend, the Secretary of State proposed fines and jail sentences for failure to be open about poor care. Although we support his zero-tolerance approach, is he certain that how this is perceived on the ground will not create a climate of fear and have the opposite effect?
Those concerns also apply to the new inspection regime introduced since the Francis report. In advance of today, I was contacted by a whistleblower who works in a hospital about a Care Quality Commission inspection planned for later this month and about the growing practice of hospitals running mock inspection days in advance of the CQC’s arrival, as schools have come to do with Ofsted. The whistleblower’s letter states:
“I enclose a document that invites us for a mock inspection to show us what to do and say when the CQC comes. Is this the correct thing to do? I think not. I cannot reveal my name as I would be instantly dismissed. Can you help?”
I am sure that the Secretary of State will be as concerned as I am to hear that and I will forward the information to him this afternoon.
I turn now to the Secretary of State’s update on the Francis report on Mid Staffordshire. Both sides of this House supported Sir Robert’s original recommendations and we give credit to the Secretary of State for making significant progress with their introduction, but gaps remain where progress has not been made and that is a concern when standards overall in the NHS are recorded to be falling, not rising.
In particular, there is a long-standing need to reform the system of death certification which goes back to Dame Janet Smith’s inquiry into the Harold Shipman murders. I took a personal interest in that as a Minister on the back of concerns raised by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne)and James Purnell, the former Member for Stalybridge and Hyde. I legislated for reforms of death certification in the Coroners and Justice Act 2009, which made provision for the independent scrutiny by a medical examiner of all deaths that are not referred to the coroner.
Following successful pilots, Sir Robert Francis reinforced Dame Janet Smith’s recommendation. Dr Suzy Lishman, the president of the Royal College of Pathologists, says that introducing these reforms will
“improve patient care whilst reducing harm and saving money”.
It will therefore be a cause of great concern to a great many people, not least the families of the victims of Harold Shipman, that those reforms appear to be stuck in the long grass. Chris Bird, whose mother Violet was one of those victims, recently told the “Today” programme that
“it is criminal that the Government is stalling on implementing something like this that could save lives.”
I have been informed by senior officials in the Secretary of State’s own Department that he personally is holding up this reform. Can he say whether that is true, and if so why? If it is not true, which I am prepared to accept, will he today set out a clear timetable for the introduction of this vital reform?
Alongside that, we need better arrangements in hospitals for reviewing case notes when patients have died, as the Secretary of State mentioned in his statement. Over the weekend, the Government announced plans to introduce an annual review from a sample of patients. Although that will help us to develop a more accurate measure of avoidable deaths than mortality rates, does the Secretary of State think it goes far enough? Should not the NHS learn from all serious failings? Will he give consideration to our suggestion that every death in hospital should be subject to an appropriate level of review?
We welcome the renewed focus on staff numbers since the Francis report, but we also remind the House that in the first three years of this Parliament almost 6,000 nurses were lost and, with record numbers of people in hospital, nurse-patient ratios have not kept pace with demand and there are fewer nurses per head of population now than in 2009-10. One of the problems with having made so many permanent staff redundant is that, post Francis, recruitment has been heavily reliant on agency staff. As Robert Francis warns today, that has made it even harder to get the culture right. We welcome the Secretary of State’s recent focus on nurse numbers, but will he concede that it was a mistake to cut staff so heavily? Will he back Labour’s plan to bring down the agency bill by recruiting 20,000 more nurses?
We welcome the progress made at some hospitals in special measures, but may I caution the Secretary of State on his use of statistics? Is he aware of the graph on page 8 of the Dr Foster report, which shows that mortality rates at the Keogh trusts fell faster between 2006 and 2010 than between 2010 and 2014? There was never a tolerance or denial of high mortality, as he seemed to suggest in his statement.
On openness and transparency more broadly, the Secretary of State will be aware that the King’s Fund delivered a damning verdict on the Government’s reorganisation, concluding that it had damaged patient care. That is consistent with a survey of NHS staff, which found that 69% said the reorganisation had harmed patient care, with only 3% saying it had improved. It is suggested that the Government’s own risk register on the reorganisation warned that reorganising the NHS at a time of financial stress would damage front-line care. So that any future Government can learn the lessons of the past few years, will the Secretary of State publish the risk register, as recommended by Sir Robert Francis?
In conclusion, as I have always said, the lessons from Mid Staffordshire need to continue to be learned if the NHS is to be what we all want it to be: the safest and best health care system in the world. The Secretary of State has today taken some important steps towards that goal, but I hope he will respond fully to the serious questions I have raised.
Mr Hunt
I welcome the broadly constructive tone that we have heard today. May I say, in that spirit, that I hope that that represents a change in substance from some of the other exchanges we have had on these topics? The right hon. Gentleman tried to vote down the legislation that set up the new chief inspectors and he opposed the holding of a public inquiry into Mid Staffs. If we are to have constructive agreement across the House, I do think we need to agree on substance as well as on tone. Let me just take the individual points he mentioned.
We are completely committed to death certification. That was recommended in the wake of the Shipman inquiry. The right hon. Gentleman’s Government took a very long time to do anything on this and we have been trying hard to do it. It is a complicated thing to get right. On the question of looking properly at avoidable deaths, I just want to say this. It is very difficult, when one looks at case notes, to work out whether a death was avoidable or not, but we think we have a methodology to do that. It is more difficult to relate that to individual trusts, but we want to try to achieve that as well. I was disappointed at the weekend that when we announced that, his response was that it was unambitious. Two weeks earlier, he had published Labour’s 10-year plan for the NHS, which did not actually mention reducing avoidable deaths at all. What we are proposing is the most ambitious thing that any health care system has proposed anywhere in the world, and I hope it will have his full support.
On the right hon. Gentleman’s comments about not generating a climate of fear, he is absolutely right; it is really important, in getting the culture right, to make sure that people are supported to speak out and that there is not, as an unintended consequence, the kind of bullying and intimidation that Sir Robert says is all too common today. I suggest to him that one of the reasons for that climate of fear has been over-dependence on top-down targets as a way of running the NHS. That is what has created the fear in managers that sometimes has led them to treat their staff in the wrong way. What would be very constructive would be a recognition from Labour that that top-down targets culture did go too far, and that we need to rely on transparency as a way of improving performance as a much better tool than endless new targets.
In anything we do—this is something else where I agree with the right hon. Gentleman—we must look very closely at making sure that we learn these lessons in the social care sector as well. That is particularly clear when we look at the scandal of what happened in Rotherham. That is why, when we introduced the new CQC inspection regime following the original Francis public inquiry, we did not just set up a chief inspector for hospitals but set up a chief inspector for general practice and for adult social care. We are now getting the same Ofsted-style transparent rankings of how good care is in care homes, and indeed in domiciliary care. I know that he, like me, is concerned about 15-minute care visits. I think those inspections will help to root out those problems.
With respect to nurse numbers, I really do think that is something on which, if the right hon. Gentleman wants to be constructive, he should commend the Government’s efforts. We have 8,000 more nurses in our hospital wards than we had four years ago. Of course, as a short-term response a lot of hospitals are employing nurses through agencies. That must only be a short-term response. We need proper long-term commitment to institutions, which we do not get with agency staff, but I commend hospitals that have said, “While we try and get enough staff in place for the long term we are not going to wait, because we need to make sure that patients are safe today.” They want to do what it takes to do that.
Finally, on the risk register, I simply remind the right hon. Gentleman that when he was Secretary of State he blocked the publication of the risk register. As a Minister, he said:
“This would inhibit the free and frank exchange of views about significant risks and…management, and inhibit the provision of advice to Ministers.”—[Official Report, 23 March 2007; Vol. 458, c. 1192W.]
More broadly, I just want to say this. There are many patients and whistleblowers looking at today’s exchanges and wanting to see constructive agreement on the way forward. I think we can get a measure of that. What they say they want is not just words, but actions.
As we put staff and patients first in England, will Labour do the same for patients in Wales and today commit to a Keogh review of high mortality hospitals, commit to a chief inspector of Welsh hospitals and commit to protect staff who speak out in Wales, as we want to do in England? Will he commit to putting right a top-down culture that prioritised the needs of the system over the needs of individuals? Will he, as we do, recognise that that is always the danger of treating the NHS as a political possession and not as a service for patients? Patients must always come first. Staff who want to do the right thing for patients should always be heard. Our NHS deserves nothing less.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
May I endorse the Secretary of State’s remarks on Wales, having seen it at first hand? Having seen at first hand a constituent who was a whistleblower, and how her career and her family life have been so badly affected after she did the right thing, I know that what the Secretary of State has done today will be widely welcomed.
On the Public Administration Committee, we took evidence from the CQC and others, and it became very obvious that there is still a major problem with complaints procedures for patients and their relations. Patients often tell me that they are afraid to complain about the way that they are being treated in whatever NHS establishment they are in. Is there some way in which the Secretary of State can ensure that there are clear instructions in all NHS establishments on how patients and their relations can raise their valid concerns without their worst fears being realised?
Mr Speaker
Order. The right hon. Lady, whom I know extremely well as a Buckinghamshire colleague, rather like Treebeard does not believe in unnecessary or undue haste, but if I could suggest to colleagues that questions could be pithy rather than too leisurely I think we would all profit from that. The same goes, of course, for the Secretary of State, from whom we expect characteristically pithy, succinct responses.
Mr Hunt
As indeed we learn from you, Mr Speaker.
I welcome the question from my right hon. Friend, who is a former Secretary of State for Wales. People will want to know that these lessons will be learned in Wales. In the original Francis response, we set out clear plans for the way in which hospitals should make it clear, in every ward of every hospital, how one can complain not just directly to the trust, but to independent external organisations, such as the ombudsman, if necessary.
Frank Dobson (Holborn and St Pancras) (Lab)
May I warn the Secretary of State not to think that because he has decided something and because a circular has been issued, something has happened? In 1998, against a lot of opposition, I insisted that the whistleblowing law should apply to the NHS. I also issued a circular banning the use of gagging clauses. As I said in my discussion with Sir Robert Francis on this whole issue, it clearly did not work.
Mr Hunt
I thank the right hon. Gentleman for what he did when he was Health Secretary. I am well aware that in the world’s fifth-largest organisation, nothing happens just because someone issues a circular, which is why some of what we have announced goes beyond what Sir Robert precisely recommended. For example, by publishing avoidable death rates by hospital trust, we want to make the energy for change come from inside trusts, not from their being told to do things by Ministers. However, I welcome what he did as Secretary of State, and I hope we can do some other positive things.
Sir William Cash (Stone) (Con)
May I commend my right hon. Friend for his nuts-and-bolts approach and Sir Robert Francis for what is clearly an extremely good report? My right hon. Friend will know that Helene Donnelly is a constituent of mine, and that I read out a letter from her in Westminster Hall when I called for an inquiry under the Inquiries Act 2005—an inquiry that this Government set up, despite its having been refused by the previous Government and successive Secretaries of State. Will he bear in mind the need to dismiss any chief executive who does not take account of lessons learned and the fact that anyone who puts a whistleblower at risk does not deserve to hold their job?
Mr Hunt
I thank my hon. Friend because without his work and that of some of his Staffordshire colleagues we would not have had a public inquiry into Mid Staffs in the first place. Helene Donnelly has been a great inspiration to everyone who has thought hard about this subject. She had the courage and guts to stand up for patients at Mid Staffs, and she experienced terrible bullying as a result, which is why I am delighted that she is helping us. In fact, I think she is the inspiration for Sir Robert’s recommendation on “freedom to speak up” guardians. My hon. Friend is absolutely right that managers and chief executives must be completely accountable for delivering on this agenda, but we also need to send a signal to them that success for a chief executive means more than meeting A and E or 18-week targets; it is about the quality and safety of patient care.
Barbara Keeley (Worsley and Eccles South) (Lab)
May I support the suggestion from my right hon. Friend the Member for Leigh (Andy Burnham) to extend to social care the measures recommended by Sir Robert Francis? I know from my own casework how hard it is for a whistleblower in social care working for a small organisation to reveal issues of bad care. In addition, the Health Select Committee pointed out that many whistleblowers suffer in their careers, including in social care, lose their job and find it hard to find a new post, and it recommended that whistleblowers who are vindicated receive an apology and practical redress. Does the Secretary of State agree?
Mr Hunt
I agree with the hon. Lady’s argument. Just as poor care has been identified in hospitals, so we have seen terrible examples of things happening in residential care and of inadequate domiciliary care. It is more complex, because the delivery of social care is more diffuse, but one way to deal with this is through the proper integration of health and social care and the proper assessment of quality based on the entire package of care that people receive, not just in individual institutions but across the board. We are doing a lot of work on that.
Andrew George (St Ives) (LD)
Like others, I welcome the report, but may I urge my right hon. Friend to reconsider the issue of safe staffing levels on acute hospital wards? I know that Robert Francis pointed to issues of culture and standards, but those are areas of interpretation and disputation. If we had the measuring stick of safe standards, particularly where a ward has less than one registered nurse to seven acutely ill patients—the level recommended by the Safe Staffing Alliance—whistleblowers would be able to point to a clear failing and service risk, which is especially important if the Secretary of State is worried about avoidable hospital deaths.
Mr Hunt
The hon. Gentleman makes an important point, but I hope I can reassure him, because NICE has published guidelines on safe staffing levels, although they are different for different parts of a hospital: in intensive care, it is 1:1; for less severe illnesses, it is one nurse to eight patients; and in other parts of a hospital, it is one nurse to four patients. Those are all published, and I hope they will help whistleblowers in Cornwall and elsewhere.
Valerie Vaz (Walsall South) (Lab)
What support will the Secretary of State give to trusts to ensure that safe staffing levels are implemented, given that they might need extra resources?
Mr Hunt
We have protected—indeed increased—the NHS budget in real terms at the time of the biggest financial crisis since the second world war, so I think the Government have done what they can to make resources available. However, improving care is not always about money, and some hospitals manage to staff their wards safely and achieve financial balance. In fact, hospitals that practise safe care tend to be in a better financial position than ones that do not, so safe care and good finances actually go together.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I commend my right hon. Friend for his statement and thank Sir Robert Francis for his excellent report, which, as the Secretary of State knows, goes to the heart of the Public Administration Committee’s inquiry into clinical incident investigation. It comes as no surprise that we still have severe problems in the NHS. Perhaps the “freedom to speak up” guardian role needs to provide complete legal protection for people speaking up, immunity from freedom of information requests so that the information and the names cannot be exposed maliciously, and the capacity to investigate what is reported to them on a completely independent basis. We look forward to his giving evidence to our Committee.
Mr Hunt
I thank my hon. Friend for his interest in the issue of culture change, including at his local hospital, which I visited last week and where I was pleased to see a change in culture happening, despite some very severe problems. It is excellent that PASC is doing this inquiry, and his suggestions sound very worth while. We will consider them as part of our consultation—in fact I would encourage his Committee to submit them formally, to ensure that we give meaning to these “freedom to speak up” guardians.
Grahame M. Morris (Easington) (Lab)
I welcome the report by Sir Robert Francis and the Secretary of State’s commitment to changing the culture around the protection of whistleblowers—the Health Committee recently published a report making specific recommendations about such protections. May I draw the Secretary of State’s attention to the actions of the General Medical Council, which wrote to the employer of a whistleblower who gave evidence to the Committee after he had expressly stated that he was acting in a personal capacity in raising questions and providing evidence of financial inducements being paid by private health care companies to secure referrals?
Mr Speaker
In calling the hon. Gentleman, I congratulate him on his wedding. We wish him a long and happy marriage.
Mr Robertson
Thank you, Mr Speaker.
A good friend of mine, a consultant cardiologist, had his career ended and his life completely disrupted after he blew the whistle on the unnecessary deaths of patients at a hospital he worked at. It has taken him more than 12 years to win his case at a tribunal, and he still awaits compensation. These cases often manifest themselves in employment disputes, with trumped-up charges brought against the individual. What can the Secretary of State do to ensure that such things never happen again?
Mr Hunt
I add my congratulations to my hon. Friend, who makes an important point. The heart of the problem of whistleblowing is the confusion between employment law and patient safety. We need to divorce those two things and put in place a proper procedure to ensure that the right thing happens if someone raises a concern about patient care, and that it can be externally investigated to ensure that the trust did the right thing. Issues of employment law and someone’s professional behaviour should be pursued on a completely different track—those things are rightly and properly a matter for the courts. It is precisely because of the kind of issue he talks about that people are afraid to speak out. They worry that if they do, even if they win at an employment tribunal, they might never get a job again. For that reason, we welcome the shadow Secretary of State’s commitment to work with us and put on the statute regulation-making powers making it illegal for NHS organisations to discriminate against former whistleblowers.
John Woodcock (Barrow and Furness) (Lab/Co-op)
The Secretary of State and I spoke last week about the importance of the upcoming Kirkup report. Grieving families in my constituency want to be able to move on from the tragedies they have suffered and see proper change in the culture at Morecambe Bay. What happened was not right and is still under criminal investigation. Will the improvements the right hon. Gentleman has announced today be in place when the report is published, and does he agree that the response to it must be neither whitewash nor witch hunt? If he does, how can he help make it happen?
Mr Hunt
I thank the hon. Gentleman for the close interest he has shown in this issue and the constructive way in which he has engaged with families locally to try to get to the bottom of a really terrible tragedy. He puts it better than I could. We need to implement the recommendations in a tangible and real way so that something actually changes, but we do not want to do it in a way that has unintended consequences. That is why the focus of what Sir Robert is saying this time is not about new criminal sanctions. Although the law has a role—we changed the law on wilful neglect, for example—this is about creating a supportive culture through which people want to listen and learn when others speak out. Of course, if people do not, there should be sanctions, but that should not be the primary motivator.
Sir Bob Russell (Colchester) (LD)
I was pleased to be with the Secretary of State last Thursday when he visited Colchester general hospital—one of 19 in special measures—and I am sure he will want to join me in praising the hard-working medical and support staff for all they are doing. He referred in his statement to the “entire NHS” being “committed to patient-centred culture change”, and observed that no one takes responsibility for a vulnerable patient so that the buck gets passed. I suggest that Sir Robert Francis would do well to look at the silo mentality—the reality rather than the rhetoric—in the case of the Haven Project in Colchester, to which the hon. Member for Harwich and North Essex (Mr Jenkin) and I have drawn attention. That is a classic case where the reality does not match the rhetoric.
Mr Hunt
Yes, and I remember the conversation I had with the hon. Gentleman about that issue. I will look into the case carefully. I am not saying that the NHS culture is changing today, because I think it is a very long journey. That is why it is important to have cross-party agreement. This is something that will take decades to happen. If we look at the best hospitals in the world, in England or abroad, we find that they get their culture right over decades. We must understand that. Breaking down those silos, putting patients first and making sure that that is not compromised, whatever the external pressures—that is the heart of the matter.
Diana Johnson (Kingston upon Hull North) (Lab)
When Pauline Lewin, a whistleblower, came forward in Hull to raise concerns about the then chief executive, Phil Morley, she found herself subject to hostility and bullying and has not been able to return to work—despite corroboration from a damning Care Quality Commission report, an ACAS report that established bullying and an independent KPMG report on financial irregularities. Meanwhile, the chief executive has moved on to another such post, earning £170,000 a year. I listened carefully to what the Secretary of State said—that he was “calling time on bullying…and victimisation” in the NHS—so will he reassure me that that will apply to this case, which his Department is currently investigating?
Mr Hunt
I remember the good meeting I had with the hon. Lady and the former Secretary of State about that issue, which we are looking into. I hope she will understand that it would not be right for me to comment on that individual case, but let me say that it seems to exemplify exactly how things have gone wrong. That is why we need to look into it very carefully. We need to create a culture through which the management actually want to listen to their staff. I do not want managers to do so because of something I say; I want them to feel that they want it happen. It is as much about making sure that organisational priorities are correctly set from the centre, as it is about changing the law.
Charlotte Leslie (Bristol North West) (Con)
Culture change is a big tanker to turn, and senior managers under pressure from targets and headlines need significant sanctions and incentives to reveal rather than smother or downplay difficult truths. Doctors have the General Medical Council, although it needs improvement, but managers have no regulatory body to make them accountable. Will the Secretary of State consider doing something about that?
Mr Hunt
I thank my hon. Friend, whom I know has thought extremely hard about this issue. Indeed, we talked yesterday about getting the fit and proper persons test to work properly. It is still in the early stages, so it is difficult to assess whether it is having the impact we want. We certainly hope it will have some impact. There is an unfairness about the fact that a clinician as a chief executive of a hospital is accountable to the GMC as a doctor, whereas a chief executive who is not a doctor is not accountable. We actually want more doctors to become chief executives. On the whole, they do a really good job, and we should give further consideration to that.
Clive Efford (Eltham) (Lab)
It will take a great deal to change the culture. I have spoken to a senior hospital manager who would like to express his concern about the lack of qualified nurses, forcing him to advertise posts abroad. I have spoken to two A and E nurses who are concerned about the critical situations occurring at their unit every day. One of them has become an agency nurse so she can limit the number of hours she is forced to work. Then there is an ambulance worker who is concerned about the 12-hour shift and the lack of time he is given to clean his ambulance between dealing with patients. They would all like to come forward to express their concerns, but they do not feel that anyone above them would listen. What can the Secretary of State say today to reassure those people?
Mr Hunt
I can say that we are consulting on making a big change that would mean they would have someone independent in their organisations to whom they could talk and raise their concerns. They could say, “I want to say this, but no one is listening to me”. That is what Sir Robert Francis calls “freedom to speak up” guardians, whom he wants in every organisation. It is what Helene Donnelly is championing in her work. That is the way forward to address those concerns.
Andrew Stephenson (Pendle) (Con)
East Lancashire Hospitals NHS Trust was placed in special measures, following the Keogh review, in July 2013, and it successfully exited that regime in July 2014. The trust has employed an additional 201 nurses and nursing support staff and 26 more doctors since June 2013, taking the total increase since May 2010 to 391 additional nurses and 40 additional doctors. In January 2014, the Royal College of Midwives named the maternity services unit the maternity service of the year. Will my right hon. Friend join me in paying tribute to the dedicated staff at East Lancashire hospitals for working with the new tougher regime and turning my local hospital trust around?
Mr Hunt
I absolutely will. This is a great example, and I would like to thank my hon. Friend for the interest he has shown in this issue. For one hospital to have 390 more nurses over four years is remarkable. It may interest my hon. Friend to know that those numbers do not include agency staff, so if the hospitals have any such staff, they will be counted on top of those figures. This is a dramatic turnaround for the quality of patient care, which we all welcome. That just shows that if we get the incentives right from the centre, trusts do want to do the right thing. We did not instruct the trust to employ a single extra nurse; rather, we set up a new inspection regime and special measures regime, and what my hon. Friend said shows it has worked.
Steve Rotheram (Liverpool, Walton) (Lab)
I, too, welcome the report. In his statement, the Secretary of State committed to the view that the new measures are not about “naming and shaming”. Does he therefore agree with the Prime Minister, who said:
“Francis does not blame any specific policy. He does not blame the last Secretary of State for Health. And he says we should not seek scapegoats”?
Mr Hunt
I do not think we should seek scapegoats, but I do think we need to understand where policies have inadvertently led to the wrong outcomes. Sir Robert talks clearly about the dangers of an excessive focus on targets, which is one of the things that have driven the wrong culture. On that, I hope to get cross-party agreement.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
As my right hon. Friend will be aware, one reason why Basildon hospital came out of special measures so quickly is that under the new chief executive, openness and transparency are is encouraged at every level. Does he therefore agree that it should be incumbent on all of us to be open, transparent and honest? Why does he think the Opposition are tweeting that the numbers of doctors and nurses at Basildon hospital are down, when I have just checked with the chief executive and found that the reality is that the numbers are up?
Mr Hunt
It is very important that everyone uses the right figures. What has happened at Basildon hospital is an inspiration to other trusts in special measures. In just a few months, it moved from being in special measures to being rated “good” by the CQC. The trust has an inspiring new chief executive, Clare Panniker, who really does listen to staff. I have been there and been told by staff how they feel that they are being listened to. We all have an obligation to make sure that the right information goes out to local communities, so that they understand where things really are getting better.
Derek Twigg (Halton) (Lab)
Most, if not all, hospitals are very concerned about next year’s proposed 3.8% efficiency saving. They fear that it will have an impact on access to and quality of services, and hence on patient safety. In the spirit of the openness and transparency that we now want to see, may I ask whether the Secretary of State was aware of those concerns, and whether, if he was not, he will find out why?
Mr Hunt
I am glad to note that this is rapidly becoming one of the most open and transparent exchanges of questions and answers we have had in the Chamber. I am, of course, aware of trusts which say that they will find it difficult to meet stretching efficiency targets, but I would say to them that if they look at some of the safest hospitals in the world—such as Salford Royal in England and Virginia Mason in Seattle—they will find that they have the lowest costs. It is not a choice between cost and safety; better safety leads to lower cost.
Mr Marcus Jones (Nuneaton) (Con)
Will my right hon. Friend join me in welcoming the progress that has been made at George Eliot hospital since the Keogh review? The employment of 91 extra doctors and nurses has certainly helped, but does he agree that we cannot be complacent and must continue to root out bad practice wherever it exists, in a very open and transparent fashion?
Mr Hunt
Absolutely. I have visited George Eliot hospital, and observed a few beds in the A and E department. One of the most inspiring things about it is that it came out of special measures by developing a strong link with University Hospitals Birmingham NHS Foundation Trust—under the leadership of Dame Julie Moore—which enabled it to learn very quickly what changes were needed. The “buddying” of trusts in difficulty with high-performing trusts is one of the measures that have worked the best.
Liz McInnes (Heywood and Middleton) (Lab)
I am pleased that the report mentions support for the right of NHS workers to speak up. When I was a Unite workplace rep in the NHS, I spent much of my time giving support and advice to workers who asked about blowing the whistle on malpractice. Does the Secretary of State recognise the vital advisory and supportive role provided by trade unions in the NHS, and will the Government cease their attacks on trade union facility time?
Mr Hunt
I agree that unions have an important role, but this should not have to be about unions. Regardless of whether a hospital has unions, people should be able to contact someone independent if they feel that their concerns about poor care are not being listened to, and that person should be enthusiastic about listening to what they say.
Jackie Doyle-Price (Thurrock) (Con)
This morning I was contacted about a patient at Basildon hospital who was suffering from Parkinson’s disease and who, on asking for assistance to go to the toilet, was told by nurses that they were too busy, so he had to use his pad. He was left in some distress, and suffering from nappy rash. Does my right hon. Friend agree that, when we are developing a patient-centred culture in the NHS, such behaviour should not be tolerated?
Mr Hunt
I do agree, and I have had many discussions with my hon. Friend about how local health care services can be improved. It shows real courage to raise a concern about patient care at one’s own local hospital. Basildon is a fantastic hospital—it is very well run, and it has really turned a corner—but that does not mean it is perfect, as I am sure its chief executive would be the first to accept. It is possible to have a sensible debate about improving care while being honest about the problems. That is the big change we need to make, and my hon. Friend has given us an example.
Sarah Champion (Rotherham) (Lab)
I welcome the focus on whistleblowers and the support package, but the Francis report also said that patients’ complaints should be viewed as the canary for failing hospitals. What support is the Secretary of State giving to patients who make complaints, and can he reassure us that the hospitals and the Care Quality Commission will take the issue very seriously?
Mr Hunt
Yes. We have set out new guidelines. The right hon. Member for Cynon Valley (Ann Clwyd) helped us a great deal when we were looking into how to improve the NHS complaints procedure, in particular advising people about how to complain and ensuring they knew that they could talk to someone independent if they needed to. I try to look at a letter of complaint about something that has gone wrong in the NHS every day before I start my work, and I make sure that the trusts are aware of that.
Martin Horwood (Cheltenham) (LD)
Before Christmas, I alerted Ministers to attempts by Gloucestershire Hospitals NHS Trust to prevent a governor from expressing concern to the local media about the care of local people. Does the Secretary of State agree that gagging governors is also unacceptable, and that the new spirit of openness should apply to governors and board members as well as staff?
Mr Hunt
I do, and I think it important to bear in mind the role of the press as a last resort for whistleblowers. Many of the problems of which we are aware have come to light because people have spoken to the press, and that is to be welcomed, but I think we would all agree that it is a real shame if things have to reach that stage. We need a culture in which people are listened to straight away. That governor should have felt that he or she could talk to someone in the hospital who would do something about the problem, rather than having to go to the press.
Kate Green (Stretford and Urmston) (Lab)
The Secretary of State has said that trusts are becoming more transparent in relation to data, and of course that is welcome, but data alone may not provide full information for patients. In 2011, Trafford general hospital had very poor standardised mortality figures, but, thanks to the assiduity of my constituent Mr Dennis Wrigley, we now know that they were due to a recording error. How will the Secretary of State encourage trusts not just to provide raw data, but to contextualise the data and tell patients what they might mean?
Mr Hunt
I hope the hon. Lady will be pleased to know that we have now made it a criminal offence to supply false or misleading information, but let me respond to the broad point that she has made, because I think it is important.
The publication of data is indeed welcome, but we do not want it to cause the entire NHS to focus on gaming the system, or changing the way in which data are collected in order to make its organisation look better. The purpose of data is to identify issues. The CQC then makes rounded judgments on the performance of institutions, which are based not just on data but on visits and conversations with patients, doctors and nurses. I think that that system can provide us with the best understanding of how well those institutions are actually doing.
Chris Skidmore (Kingswood) (Con)
As the Secretary of State will know, my hon. Friend the Member for Bristol North West (Charlotte Leslie) and I wrote to him about Southmead hospital after a large number of our constituents had written to us about poor quality care there. Today the CQC published its report on North Bristol NHS Trust and Southmead, which states that the urgent and emergency services are inadequate and causing a
“serious risk to patients’ safety”,
and also states:
“Several staff told us they were ‘ashamed’ of the standard of care”
at Southmead.
I have just received a letter from the chief executive of North Bristol trust, which makes no mention whatsoever of the fact that Southmead A and E had been declared inadequate. Instead, she simply refers to
“some teething problems which are being dealt with”.
Does that letter not illustrate the overall culture problem in the NHS, namely that there is active denial among some chief executives who will not admit what is going wrong in their local hospitals?
Mr Hunt
I have not seen the letter, so I hope that my hon. Friend will understand if I do not comment on it, but I strongly agree with his broader point. Any chief executive or manager in the NHS needs to understand that the best way in which to reassure the public, and to reassure Members of Parliament who speak out for their constituents, is to be honest about the problems.
My local trust was the first in the country to be given an “outstanding” rating. When I last went to see its chief executive, I said that I had three constituency problems, and I raised all three of them with him. He said, “Yes—we were wrong on that one; we should not have done that; and we were wrong on that one.” One of the best trusts in the country was being totally honest about its problems, and wanted to do better. We need to make managers understand that that is the right thing to do, and that we will back them if they do it.
Robert Flello (Stoke-on-Trent South) (Lab)
Longton cottage hospital had to close because the local trust could not recruit enough nurses to ensure its safe operation, yet the Government slashed nurse training places. Now the Department refuses to release the secret KPMG report on “distressed” health economies. The people of Stoke-on-Trent deserve to know what is happening to their local hospitals and to local health care. The Secretary of State rightly says that we need to stop secrecy and have openness, but when will he whistleblow his Department’s own report? The Department is setting a very bad example when it comes to openness and transparency.
Mr Hunt
I will look into the issue that the hon. Gentleman raises, but let me deal now with the issue of nurse training places. The cuts began under the Labour Government, and we have been gradually reversing them. The main point, however, is that, in all parts of the House, there was a lack of understanding of the importance of safe staffing in wards before the Francis report, which is why successive Secretaries of State made mistakes in their projections of what was needed.
We have 8,000 more nurses in our hospital wards, including those at Stoke, and I hope the hon. Gentleman welcomes that.
Andrew Percy (Brigg and Goole) (Con)
The Secretary of State will want to congratulate North Lincolnshire and Goole NHS Foundation Trust on getting out of special measures and employing more nurses and doctors. On the issue of “freedom to speak up” guardians, will he ensure there is one in every hospital, because in my trust staff in the smaller hospital sometimes feel their voice is not heard by the two big district general hospitals, which are up to 60 miles away?
Mr Hunt
That is a very good point. I had a great visit to my hon. Friend’s local hospital and saw a knee operation which was quite gory but looked to me to be a very good example of safe care. He makes a good point and I will certainly feed into the consultation the idea that it should be easy to contact somebody who works in the same hospital or building, rather than someone who is a long way away.
Mr Ronnie Campbell (Blyth Valley) (Lab)
When I entered this House in 1987 I was put on a Select Committee for the parliamentary ombudsman, which dealt with the health service and complaints within it. In bad cases, we would bring chief executives, chief nurses and chairmen of the trust concerned before us. That was a good deterrent. Why not bring it back?
Mr Hunt
All these things should be looked at, but through the Select Committee on Health we do now get chief executives of trusts to be accountable to Parliament. The Public Administration Committee is looking at the role of the ombudsman to make sure that works as well as it can, and we should wait for its recommendations.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
Following on from the question of the hon. Member for Barrow and Furness (John Woodcock) about Morecambe Bay trust, has the Secretary of State had a chance to look at yesterday’s “Better Care Together” future plans report by the trust, which finally puts to bed the wild allegations locally of hospital and A and E closures and also sets a road map for eliminating the pre-2010 deficit, provided we get some recognition of the difficult geography of our area?
Mr Hunt
I know geography is a big issue, and the driving distance between Morecambe bay and Lancaster is a big challenge for the trust. I will look closely at that report, and I think Members in all parts of this House would welcome a commitment to avoiding scaremongering about local hospital services in the run-up to the election.
Glyn Davies (Montgomeryshire) (Con)
I represent a constituency in Wales, and look with some envy at the commitment to openness and transparency on both sides of this Chamber, and indeed the commitment to transparency and openness throughout the NHS in England following the Francis report and the Keogh review. What discussions can my right hon. Friend initiate, perhaps with the Opposition, to introduce the same level of transparency and openness in Wales so that my constituents in Montgomeryshire can also benefit?
Mr Hunt
I think it is very simple—there is a lot of agreement between us about what needs to happen. I recognise that the shadow Secretary of State is not personally responsible for what happens in Wales, but his party is, and a Keogh review of high mortality hospitals, a chief inspector of hospitals for Wales and a commitment to the whistleblowing measures announced today would do a lot to allay the concerns of my hon. Friend’s constituents that the lessons about openness are not being learned across the border.
Charlie Elphicke (Dover) (Con)
Does the Secretary of State recall that the Care Quality Commission found that in East Kent hospitals senior management and the front line were disconnected, there were problems with bullying and harassment, and people would not say how things could be improved, including in terms of clinical risk? Does that not indicate that this is not just about whistleblowers, but that it is important that management sets a culture of openness, and listens and hears the staff voice?
Mr Hunt
My hon. Friend is absolutely right, and I thank him for his interest in his local hospitals and his campaign for them. In the end, culture comes from the top. When people start a job they look at the values of their direct line manager and they copy them, because they think that is what it takes to get on, and the line manager looks to the chief executive and the chief executive in the end looks up to the Secretary of State, so it is very important—[Interruption.] I grant that that may not be the best thing. It is important that right from the top we set the right example about these issues.
Robert Halfon (Harlow) (Con)
I thank my right hon. Friend for the work he has done on this and for his forthcoming visit to Princess Alexandra hospital in Harlow. Further to the question on trade unions, we have outstanding trade union representatives in the Princess Alexandra hospital and they do a huge amount of work on these issues. Can my right hon. Friend confirm that these guidelines will also include trade union workers, so that they are covered by his recommendations?
Mr Hunt
That is an interesting point and we should certainly reflect on it in the consultation. I am looking forward to visiting my hon. Friend’s trust in March. On many of the visits I have made to hospitals in special measures, which his hospital is not, I have met union representatives and they have an important contribution to make, because nine times out of 10 the real problem is that the people on the front line feel they are not being listened to, and when that is put right the other things start to be solved as well.
Steve Baker (Wycombe) (Con)
As a former airworthiness engineer, may I strongly endorse my right hon. Friend’s direction of travel? Will he confirm that Buckinghamshire Healthcare NHS Trust, having exited special measures after the Keogh review, has enjoyed a fantastic transformation, which I believe he saw when he visited Wycombe hospital?
Mr Hunt
I had a fantastic visit there. This was a hospital that, putting it bluntly, was one of the worst in the country, and it is now on its way to becoming one of the best. The motivation and excitement not just of the management team but also the staff there, were palpable, and I think a huge number of good things are happening. What has worked there is the sense that what we are asking of the hospital is the same thing that they want to deliver for their patients—safe, compassionate care—and that must remain the focus.
Point of Order
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
John Hemming (Birmingham, Yardley) (LD)
On a point of order, Mr Speaker. I provided your office with a copy of the minutes of the petitions committee of the European Parliament of 11 November—
Mr Speaker
Order. The hon. Gentleman is a remarkable denizen of this House and it was very good of him to give me advance notice of what he wanted to cover, and I am genuinely sorry to interrupt him. He has indeed, as he rightly says, given some advance indication of the question to which he seeks an answer from the Chair. However, the issue he raises, and which he did, as I say, courteously treat of with my officials in advance, is in my view more properly raised not as a point of order in the Chamber, but in discussion between the hon. Member and me and my advisers, since raising the matter orally in the Chamber may itself, no doubt inadvertently, breach the rules of the House. I should therefore be grateful for the hon. Gentleman’s forbearance, and let me say for the avoidance of doubt that to welcome the hon. Gentleman to Speaker’s House for a meeting around the table with my advisers over a cup of tea will be an enjoyable experience for me, and I hope also for the hon. Gentleman, and I look forward to him speedily getting in touch with my office to arrange that agreeable encounter. Perhaps we can leave the matter there for today?
John Hemming
In terms of discussing this at the Procedure Committee, the fact that I cannot even raise the point of order is in itself a useful piece of information for it to consider.
Mr Speaker
Well, it has to be said that the hon. Gentleman is a distinguished member of that Committee and I feel sure he will advise it of his views, as he has always done—with alacrity—in this House. We look forward to further and better particulars in due course, and I am grateful to the hon. Gentleman for his understanding.
Job Creation Powers (Scotland)
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Ian Murray (Edinburgh South) (Lab)
I beg to move,
That leave be given to bring in a Bill to devolve responsibility for operation of the Work programme in Scotland to the Scottish Parliament; and for connected purposes.
These job creation powers under the Work programme should also include associated provisions for the Work Choice programme, as suggested by respected charities such as the Scottish Association for Mental Health and the umbrella group Disability Agenda Scotland.
The Scottish referendum on 18 September delivered a resounding result. That result was for change. The Scottish people spoke and said loudly that they wanted to stay within the UK but with a powerhouse Scottish Parliament. During the referendum, undertakings were given to the Scottish people for more devolution of powers on top of those in the current Scotland Act, which passed through this House in 2012. The Smith commission, led by Lord Smith of Kelvin, was subsequently established to seek cross-party support on those new powers. The subsequent Smith agreement was approved with cross-party consensus, and the Command Paper to enact those powers was produced ahead of the scheduled date of 25 January. Lord Kelvin said in the foreword to the Smith agreement:
“The recommendations are explicitly designed to create a coherent set of powers that strengthen the Scottish Parliament’s ability to pursue its own vision, goals and objectives, whatever they might be at any particular time.”
He rightly concluded that the recommendations set out in the agreement would result in the biggest transfer of power to the Scottish Parliament since its establishment in 1999. It is clear that the expanded powers in the Smith agreement will result in a corresponding increase in the Scottish Parliament’s accountability and responsibility for the effects of its decisions on its own affairs.
A major plank of the new devolution of powers relates to job creation, and that is what this Bill is about. The Smith agreement gives the Scottish Parliament all powers over support for unemployed people through the employment programmes that are presently delivered mainly, although not exclusively, through the Work programme and Work Choice. The Scottish Parliament will have the power to decide how it operates these core employment support and job creation services.
We know that the Labour party has pledged to deliver our home rule Bill for Scotland in the first Queen’s Speech after the general election in May. That home rule Bill will enact the Smith agreement in full but Ministers could do some of this now. Last month, the provisions to allow votes for 16 and 17-year-olds were transferred by Ministers and this House, so there is no reason not to support this Bill and transfer all job creation powers before the general election.
Why is the Bill needed? Because the Work programme is failing Scotland. In fact, in some parts of Scotland the Work programme is statistically less successful than actually doing nothing at all. That shows that it is not responding to local needs or local people. The failure of the Work programme is borne out by the Department for Work and Pensions’ own figures, which state that only one in five people on the Work programme in Scotland gets a job and that in Dundee, which has the worst performing rate in the UK, the figure is one in seven. In my own city of Edinburgh it is just over one in five, and in my own constituency of Edinburgh South it is one in four. Thousands of young Scots have been unemployed for more than a year, and around 12,000 over-25s have been unemployed for more than two years. That is an incredible waste of Scottish talent. I grew up in the 1980s, when the then Tory Government wrote off an entire generation of young people. We cannot allow them to do that again.
I held a jobs fair in my constituency just last Friday. Hundreds of people attended to hear what was on offer from employment agencies, employers and educational institutions. There were many positive outcomes from the event, but what was noticeable was the wide range of ages and the wide variety of needs. That is why my Bill is calling for the Work programme not only to be devolved to the Scottish Parliament but for it subsequently to be devolved to local authorities. The current Scottish Government have been the most centralist Government in Europe by some margin. There is a strong desire on these Labour Benches to see the principle of devolution extended further, with the transfer of powers from Holyrood to local communities. The only way in which local communities in Scotland will benefit from devolved powers is if the Scottish Government use them and work closer with civic Scotland and local authorities to ensure that everyone can benefit from the double devolution of powers.
We know that the Scottish National party does not like to talk about, let alone use, the powers it has at its disposal to transform the lives of ordinary Scots, because it does not suit the party’s agenda to do so. We also know that it does not want to give these powers to local communities, but this is an instance in which local authorities could deliver a much more positive future for many. I always attempt to reach consensus in this place, and I acknowledge that the hon. Member for Banff and Buchan (Dr Whiteford) has signed my Bill. I am grateful to her for that. However, since 2010, I cannot name a single ten-minute rule Bill or private Member’s Bill introduced in this place by an SNP Member that would have devolved any powers to Scotland. They have failed to use the processes in this Parliament to deliver or propose any devolution of powers to Scotland. The only conclusion that can be drawn from that is that once again their rhetoric of grievance outstrips their actions. Where Labour leads on devolution, the SNP is sure to follow.
There is no better place for the Work programme than with the local authorities that do this stuff very well already. They know their local jobs market, they know the make-up of their work forces, they know the skills shortages and providers, and they know how best to deal with local circumstances. The Scottish Trades Union Congress has also backed this call for double devolution, stating:
“We already know that local authorities are delivering excellent employability services and, more importantly, sustainable employment for young people.”
That has led to the leaders of Aberdeen, Edinburgh and Glasgow—the three largest cities, which make up over a quarter of the Scottish population—signing a joint statement last month demanding that powers over job creation be transferred to them now. As the STUC has said, they already do that work very well.
As an example, in 2011 the City of Edinburgh council initiated the Edinburgh guarantee, which had the goal of ensuring that every local authority school leaver secured a positive destination in employment, training or further education on leaving school. Working with the public, private and voluntary sectors, the Edinburgh guarantee also sought to increase the number of jobs, education and training opportunities being made available to young people across the city. The council knew the local jobs market and the needs of young people leaving school, and it tailored a programme to best suit those needs.
The Edinburgh guarantee has had some outstanding results, with 91% of school leavers now entering a positive destination after leaving school. Also, 1,370 jobs, apprenticeships or training opportunities have been generated, and 250 employers have contributed to this success, including Standard Life, the university of Edinburgh, BT, Capital Solutions, Barnardo’s, 02 and the NHS. The guarantee has made a tangible difference to the life chances of young people. There are numerous examples of local authorities across the country taking tailored action, and the double devolution of the Work programme and associated benefits would assist that process immensely and help all Scots looking for work. The devolution of Work Choice would also be transformative for disabled people.
This is a real opportunity for the House to deliver a step change in job-creating powers for Scotland. Devolution works well for Scotland, and this Bill takes another step towards delivering on the promise of a powerhouse Scottish Parliament within the safety, security and stability of the UK. Let us wake up this zombie Parliament, pass this Bill, devolve these powers and take a step towards a fairer Scotland for everyone.
Question put and agreed to.
Ordered,
That Ian Murray, Gregg McClymont, Dame Anne Begg, Mr Jim Murphy, Gemma Doyle, Sheila Gilmore, Gordon Banks, Mr Frank Roy, Ann McKechin, Pamela Nash, Mr William Bain and Dr Eilidh Whiteford present the Bill.
Ian Murray accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 6 March, and to be printed (Bill 175).
Opposition Day
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Compulsory Jobs Guarantee
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:28 - The House divided: - Ayes: 215 / Noes: 301 - Question accordingly negatived.
Stephen Timms (East Ham) (Lab)
I beg to move,
That this House calls on the Government to put a strict limit on the amount of time that people can be left on jobseeker’s allowance without being offered, and required to take up, paid work, by introducing a compulsory jobs guarantee that would ensure that anyone under 25 who has been receiving jobseeker’s allowance for a year, and anyone over 25 who has been receiving jobseeker’s allowance for two years, would be offered a paid job, with training, that they must take up or face losing benefits; and further calls on the Government to ensure this compulsory jobs guarantee be fully funded by a one-off repeat of the tax on bankers’ bonuses and restricting pension tax relief on incomes over £150,000.
This is a debate about the kind of recovery our country needs to see, about who is being left behind, about the kind of future we are building for the next generation and about whether this Government are using more than just warm words when they talk about full employment, as the Prime Minister has done recently.
Our challenge to Ministers today is to put a strict time limit on the period for which someone can be left on jobseeker’s allowance before they are offered, and required to take, proper paid work. The compulsory jobs guarantee, funded by a tax on bankers’ bonuses and restrictions to pensions tax relief on incomes over £150,000 a year, would mean a new start and new hope for the more than 29,000 young people who have been out of work for over a year, and for the 130,000 over-25s who have been out of work for more than two years.
Andrew Bridgen (North West Leicestershire) (Con)
Will the right hon. Gentleman clarify whether this will be the 10th or the 11th time his party has spent the bankers’ bonus tax?
Stephen Timms
We had a bankers’ bonus tax in the past, but this will be the sole purpose for the new bankers’ bonus tax to be introduced after the next election. We will all be committed to the guarantee that I am setting out for the House this afternoon.
Those people I have described are the ones this Government have left behind. They are the people whom Labour Members are not going to forget, not only because we owe them a fair chance to escape long-term unemployment but because we cannot afford, as a country, to leave them on benefits for years on end. Nor can we afford the consequences of the low wages that they are likely to earn if they do find work after such a long period of unemployment.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does my right hon. Friend agree that this guarantee is a serious step towards what has always been my great ambition, which is that there should be no unemployment for anyone under 25? They should be in a job, in a job with training, in training, in education or in valuable paid work experience. That is the ambition and the Government cannot grasp it because it is too ambitious.
Stephen Timms
My hon. Friend is absolutely right about the ambition, and of course this scheme will be an enormous step towards tackling the scourge of long-term unemployment. To build a strong and stable recovery, and a fairer and more united country, we need to make sure, as he says, that everyone gets to play their part, that we harness its talents and fulfil the potential of all, and that everybody knows they have a stake in our country’s future.
We have seen some welcome recent falls in the headline rate of unemployment, from the peaks reached after this Government choked off the recovery they had inherited in 2010. More people in work is always good news, which is why we repeatedly urged the Government to do more to stop the soaring unemployment they presided over after the general election.
Mr Alan Reid (Argyll and Bute) (LD)
I draw the right hon. Gentleman’s attention to the fact that in my constituency unemployment rose by 385 under his Government, whereas it has fallen under this Government by 763. His Government failed, not this one.
Stephen Timms
But long-term unemployment is higher in the hon. Gentleman’s constituency now than it was at the time of the last election. That is the legacy of the three years of almost no growth in the economy following the general election, which we now need to address. Let me say to him and to other Government Members that self-congratulation on what has happened in recent months is dangerously complacent about underlying problems in the labour market and utterly out of touch with the impact such problems have on people who are desperate to work and to earn their way out of the cost of living crisis they are facing. People are deeply concerned about the prospects for their children and the grandchildren. Those are the points we now need to address.
Alok Sharma (Reading West) (Con)
The right hon. Gentleman talks about self-congratulation, but that is not what Government Members are doing. We are recognising that policies have been put in place for businesses to create more than 2 million jobs. Why will he not congratulate the Government on their policies and businesses on creating those 2 million-plus jobs?
Stephen Timms
We were left with a legacy of a very large number of people who have been out of work for a long time. It is welcome that at long last the economy is growing and jobs are being created; the long-delayed recovery is now, finally, in place. The question is: are those who have been left out of employment by the events of the past few years going to get the opportunities that these new jobs will create? Addressing that is exactly the purpose of this afternoon’s debate and of the proposal I am commending to the House.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
If the right hon. Gentleman wants to be completely fair, will he take the chance now to apologise for the fact that under the last Government long-term unemployment doubled and youth long-term unemployment rose by a half? Should Labour not be saying, “We are really sorry, we got something very badly wrong”?
Stephen Timms
The number of long-term unemployed young people—those claiming for more than a year—is a lot higher now than it was at the time of the election. As we are talking about apologies, I would hope the Secretary of State would apologise to the House and to the country for the fact that the Government allowed unemployment to soar to 2.67 million after the general election, allowed youth unemployment to soar to more than 1 million and allowed long-term unemployment to hit historic highs at the end of 2013. Those are the failures and the legacy we must now address.
Pete Wishart (Perth and North Perthshire) (SNP)
I note that Labour’s motion talks about taking benefits away from under-25s if they do not take an offer of a job. How does the policy of the right hon. Gentleman and the Labour party to take benefits away from young people differ from the Tory party’s policy on taking benefits away from young people?
Stephen Timms
Young people want a job. That is what they are asking for and that is what we will provide under the jobs guarantee, and I hope the hon. Gentleman will support us.
Andrew Gwynne (Denton and Reddish) (Lab)
May I commend to my right hon. Friend the work of Tameside’s Labour council, which has implemented, as part of its “15for15” pledges, a local youth jobs guarantee and a Tameside enterprise scheme that will support small businesses not only to take on and to train young people, but to give them vital mentoring?
Stephen Timms
I am glad to join my hon. Friend in congratulating Councillor Kieran Quinn and Tameside’s council on what they have achieved. We are seeing this idea being introduced by Labour councils. We heard earlier this afternoon about the Edinburgh guarantee, and these ideas are now taking their place around the country. We now need the Government to be putting a national guarantee in place.
Unemployment is now, at long last, back on the downward path that the Labour Government set it on in 2010, although, of course, its level is yet to return to the lows under Labour before the global financial crash.
Stephen Timms
I will in a moment, but I wish to make a little more progress first.
There are serious causes for concern in the labour market and much more needs to be done to build a recovery that works for everyone. Long-term unemployment remains much too high. The long period—three years—after the general election when there was almost no growth in the economy has left too many people locked out of employment and now left behind even as overall employment is rising. The number of people claiming jobseeker’s allowance for more than two years is 224% of what it was in May 2010, and young people remain at high risk of unemployment. Strikingly, the relative position of young people has become steadily worse since 2010 The most recent figures show that the youth unemployment rate is almost three times the overall rate—it is 2.9 times that rate—and for the past three months, while overall unemployment has been falling, youth unemployment has been going up. The total is now back above three quarters of a million, and we just have to hope that that is not the new trend. Action needs to be taken now to make sure that it is not and that young people are able to share in the benefits of the recovery.
Andrew Bridgen
Would the right hon. Gentleman like to comment on the words of James Sproule, the chief economist of the Institute of Directors? He said that
“Labour’s job scheme does not bear much scrutiny as a solution. No government can pull a lever in Whitehall and expect youth unemployment to disappear.”
Is not the truth that only the private sector can create sustainable jobs but that it needs a business-friendly Government to do so?
Stephen Timms
Jobs are being created. The question is: who is going to get them? At the moment, the evidence clearly shows that young people disproportionately are not. We know that the future jobs fund worked—I will discuss that in a moment—and we are going to be repeating that approach with this jobs guarantee.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The right hon. Gentleman is making some important points about youth unemployment, which is a big issue in Wales. Given that, does he think his Labour colleagues in Wales have been wrong to cut the Jobs Growth Wales fund for 18 to 24-year-olds?
Stephen Timms
I shall be discussing Jobs Growth Wales. I believe the hon. Gentleman is commending it, and I agree with him; it has been a great success and there are certainly lessons to be learned by the rest of the UK from the great success of that programme.
Derek Twigg (Halton) (Lab)
My right hon. Friend rightly says that young people, in particular, have been suffering and continue to suffer under this Government. Is not one of the important points about our jobs guarantee the fact that it will give young people experience in work? One of the biggest problems on getting into work is that lack of experience because these people cannot get a job.
Stephen Timms
My hon. Friend is right about that. I have spoken to a large number of people, including young people whose break came through the future jobs fund. They have said that having got six months’ work under their belts, thanks to that initiative, they were then able to look after themselves and apply for jobs, do well and build a career. As he rightly says, young people need that crucial first break and that is what this guarantee will provide.
Every day of unemployment means hardship, worry and missed opportunity for someone who wants to be working and earning. But the full costs are borne more widely and last much longer. Every day of unemployment is a cost to the taxpayer in unemployment benefit and tax revenue forgone, and a cost to the economy in lost output. It also imposes a cost we can never account for, through the strain it puts on individuals, families and communities. Those costs—in benefit spending, tax revenues, economic output, and individual and social well-being—can reach far into the future, as the scarring effects of unemployment build up.
The Acevo commission on youth unemployment found that people who experienced unemployment in their younger years are more likely to suffer not only spells of unemployment in later life, but in work an average wage penalty of more than 15%. That is why it is so troubling that youth unemployment is going back up. It is back up today to more than three-quarters of a million. Young women now unemployed will, a decade from now, be earning on average £1,700 a year less as a result of being unemployed today. Young men now unemployed will be earning £3,300 less a decade from now. Those effects worsen the longer that somebody is out of work.
Work by Paul Gregg at the university of Bath and Emma Tommony at the university of York suggests that the 200,000 young people who have now been out of work for more than a year are, on average, likely to spend another two years either unemployed or economically inactive between the ages of 28 and 33, and that the men, by the age of 42, will be suffering a wage penalty of more than £7,000 a year. Those are big effects that need to be addressed.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
My right hon. Friend is making a very powerful case. On the effects of long-term unemployment on young people, he mentioned the impact on income, but will he comment about the impact on mental health, as unemployment can have lifelong effects? Does he agree that it is important to have a joined-up approach between the Department of Health and the Department for Work and Pensions?
Stephen Timms
My hon. Friend is absolutely right. I was at an event yesterday with the Prince’s Trust where a young man was describing how he was about to be sectioned when, thanks to the Prince’s Trust, he was able to go into a job and his mental health problem was resolved. She is also right about the costs to the economy and the health service of long periods of unemployment early on.
Mike Gapes (Ilford South) (Lab/Co-op)
Will my right hon. Friend confirm that the jobs that we are talking about here, unlike the jobs that many young people have to take at the moment, which are zero hours and exploitative, will be real and proper jobs? They will not be the fake jobs that this coalition Government are producing.
Stephen Timms
I can assure my hon. Friend that these will be jobs for at least 25 hours a week and paid at least at the level of the national minimum wage.
The persistent unemployment that we still see today could be contributing to a continued cost of living crisis tomorrow, weakening the productivity and the growth potential of our economy as well as undermining efforts to keep social spending under control and to bring down the deficit. We must take urgent and effective action now to tackle the problem.
What action have we seen from the Government? One of their very first acts on entering office was to abolish the future jobs fund, breaking, incidentally, the promise that the current Home Secretary made during the election campaign. Eventually, the DWP published an evaluation of the future jobs fund and, to the surprise of nobody on the Opposition Benches, it was glowing. It found a net benefit to society—net of all the Exchequer costs—of £7,750 for every single young person who took part. It reckoned that, within three years, half the cost of that intervention came back to the Exchequer because participants stopped claiming benefits and started paying tax and national insurance. It was an exceptionally cost-effective policy.
By late 2012, when the evaluation was published, it was too late. The future jobs fund had gone. In the time since its abolition, unemployment had risen to more than 2.5 million and youth unemployment had risen to more than 1 million.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
As the right hon. Gentleman is referring to the research, may I just read out what it says? It says that
“even under the most optimistic combination of assumptions…the FJF programme is still estimated to result in a net cost to the Exchequer…there might never be an estimated net benefit to the Exchequer.”
That is what the analysis said.
Stephen Timms
If the right hon. Gentleman looks at the previous paragraph, he will see that the evaluation said that half the cost of an intervention came back to the Exchequer within a three-year period and that the wholly inadequate replacement for it was the Work programme, which sends more people straight back to the jobcentre after two years than it places in sustained work. It also performs shockingly badly not just in Edinburgh, as we were hearing earlier on, but for those in need of support, such as older workers and people with health problems for whom it has so far recorded failure rates of 87% and 93% respectively. The Work programme has been a failure and we must replace it with something that works better.
On youth unemployment, the Deputy Prime Minister saw what was going on and had an attack of conscience. He announced the Youth Contract, which the Government promised would lead to 160,000 work subsidies for young jobseekers. It started in April 2012 and it was an utter flop. It was not promoted. That was undoubtedly because DWP Ministers, with the possible exception of the Minister for Pensions, did not have their heart in it. Employers knew nothing about it. Those who did hear of it were confused by it and had nothing to do with it. The Government’s own advisers on poverty and social mobility said that it was not working, so last summer it was unceremoniously shut down early, after it had achieved fewer than 10% of the promised placements that were budgeted for. Ever since then, unemployment among young people has been going up.
The latest proposal from the Government is time-limiting support for young people without giving them the opportunity to train, after which they will simply be required to do community service. That is not an employment policy, but a policy for punishing the victims of the negligence and ineffectiveness of this Government.
Mr Marcus Jones
For all the right hon. Gentleman’s bluster, does he not accept that youth unemployment has gone down under this Government? For all his criticism, does he not accept that youth unemployment under the Labour Government was steadily going up from 2004 to 2010? Labour does not have a good record.
Stephen Timms
Youth unemployment was affected by the worldwide economic crash. What is worrying—even the hon. Gentleman might, in the privacy of his own reflection, be worried about this—is that, at a time when overall unemployment is coming down, youth unemployment is going up. The rate of youth unemployment is nearly three times the overall rate of unemployment now, and that multiple has been going up progressively since the general election.
Stephen Timms
The hon. Gentleman just needs to look at the figures published in January, which show that youth unemployment has been going up for the past three months. The figures that we saw last month cover the period from September to November.
Stephen Timms
Let me make a little more progress, then I will gladly give way again.
Labour has a real plan to get young people into work and to end the scourge of long-term unemployment. It is a tough plan as we will hold people responsible for accepting work when it is offered, but it is also a fair plan as it gives a young person the opportunity to work, earn a wage and develop skills. Our compulsory jobs guarantee will guarantee a real, paid job, most likely in the private sector—[Interruption.] Members just need to look at what has happened with Jobs Growth Wales, which we heard about a few moments ago. About 80% of the jobs provided on the same wage subsidy model—5,000 companies have been hosting those jobs—are in the private sector. We will guarantee a job for every 18 to 24-year-old who has been looking for work and claiming jobseeker’s allowance for a year, and for every adult aged 25 and over who has been looking for work and claiming for two years.
Robert Halfon (Harlow) (Con)
I am grateful to the right hon. Gentleman for giving way. Let me quote him the statistics from Harlow. In May 2010, 605 young people aged 18 to 24 were claiming JSA, a rate of 8.1%. That was higher than the national average. Now, 235 young people are claiming JSA in Harlow—a rate of 3.1%—putting Harlow back in line with the national average. What does he say about that? Surely those figures are to do with not just the Work programme but all the investment in apprenticeships, the new university technical schools and other methods.
Stephen Timms
I refer the hon. Gentleman to the national figures. Of course unemployment was hit hard by the worldwide economic crash, but over the past three months in particular there has been a steady, month-by-month increase in youth unemployment at a time when overall unemployment is coming down. I put it to him—I think many Government Members would sympathise with this view—that we need to ensure that young people have a fair chance in the recovery that is now under way of gaining the jobs that are being created. The measure that I am arguing for will allow that to happen.
Stephen Timms
I will make a little more progress and then I will gladly give way again.
The Government would cover the costs to employers of paying national minimum wage and national insurance for a 25-hour week plus £500 per employee to help businesses with training, admin and set-up costs. In return, employers would be expected to provide training and development for those taking part and show how the jobs were additional—not replacing existing jobs and not leading to somebody else losing their job or seeing a reduction in hours.
Nick de Bois (Enfield North) (Con)
Given the right hon. Gentleman’s faith in the private sector in rallying to his scheme, is he not perturbed by the Institute of Directors saying that it
“does not bear much scrutiny”?
It continued:
“Wage subsidies for employers are not the source of sustainable jobs.”
With that in mind, will he place in the Library or share with the House how many companies have come forward to express their delight at the scheme?
Stephen Timms
I can answer that very directly: 5,000 employers are taking part in the Jobs Growth Wales scheme. The Federation of Small Businesses in Wales is a champion. I simply contrast the quote given by the hon. Gentleman with the experience of those on the ground, including the FSB.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
Many of the jobs that my right hon. Friend is referring to would come from small and medium-sized enterprises. One of the main problems faced by SMEs on my patch is cash flow—trying to get money from work that they have completed. Is there anything that a future Labour Government could do to speed up payments, so that small suppliers could get the money in and take on young people?
Stephen Timms
I have just mentioned the FSB. My hon. Friend will know how active it has been in demanding change of the kind he describes and makes a telling case for. I agree: more should be done to support small business in that way, and in other ways. We need to reform how the banks deal with their small-business customers too.
Andrew Bridgen
The right hon. Gentleman is being generous in giving way. He has expounded a great deal on his belief in Jobs Growth Wales. His party’s socialist policies have been implemented in Wales, but figures from the Welsh Government show that only one in three of the young people who have applied for Jobs Growth Wales got a job, so it is nowhere near guaranteeing a job for all young people.
Stephen Timms
We will be delivering a guarantee, exactly as we did with the future jobs fund. Anyone can look back at the record of the future jobs fund, where a guarantee was delivered. It will be again.
I shall say a little more about how the guarantee would work. Participants would be required, if their employer did not plan to keep them on when the subsidy ended, to pursue intensive job search for a permanent opportunity at the end of the six months. Any jobseeker who refused to take up a job offered under the guarantee would, in the normal way and in line with the long-standing conditions for benefit claims, lose their benefits. That is always the case.
The Minister for Pensions (Steve Webb)
The right hon. Gentleman is very careful with his figures, so he will know the answer to this question. He points to the future jobs fund as evidence of how his new scheme would work, and he says he hopes those new jobs would be in the private sector. What percentage of future jobs fund jobs were in the private sector? What is the figure?
Stephen Timms
Very few. There is the good example of Jaguar Land Rover taking on a group of young people under the future jobs fund, and my understanding is that every single one of those young people was kept on in their job when the wage subsidy ended. The future jobs fund was largely about the charity and public sectors; the guarantee is largely about the private sector, exactly as Jobs Growth Wales has been.
Alok Sharma
The right hon. Gentleman is keen to talk about numbers, so let me give some from his own constituency. In May 2010, there were 410 jobseeker’s allowance claimants who had been unemployed for more than a year. In December 2014, the figure was 225. In May 2010, the six-month figure was 1,585, but in December 2014 it was 1,045. Will he not acknowledge that, even in his own constituency, this Government’s policies are making a difference and people are getting real jobs?
Stephen Timms
Those figures, in my constituency and in his, are far too high. A great deal more needs to be done to enable young people in particular, but long-term unemployed over-25s as well, to share in the benefit of the recovery that is, at last, under way.
Stephen Pound (Ealing North) (Lab)
I am a little distressed at the rather mean-spirited response from some Government Members. Does my right hon. Friend agree that one of the most salient features of the proposal is giving people the experience of work and letting them see what 8 o’clock in the morning looks like and get the idea of being in a job? If the job that they move into in the future is not the same job, so what? The important thing is to get people into the world of work.
Stephen Timms
My hon. Friend is right. I have spoken to many people, including those who went through the future jobs fund, who say exactly that: having the break of getting six months in a job, becoming familiar with the habits and routines of work, and putting that on their CV enabled them to thrive.
This policy is not just an immediate intervention to limit youth and long-term unemployment; it is an investment in the skills and employability of the British work force, underpinning our productivity, growth potential and fiscal sustainability into the future, but we have been clear that there will be no commitments in our manifesto that require more borrowing. Therefore, we have set out clear plans to fund the policy fairly and prudently.
In the first year, to provide for the large number of long-term claimants left by this Government’s policies, we would pay for the policy with a repeat of the successful bank bonus tax, which was levied in 2010. That could raise £2 billion. In future years, the costs would be covered by restricting pensions tax relief for the highest paid—those earning more than £150,000 a year—to 20%. The House of Commons Library has estimated that that could raise between £900 million and £1.3 billion a year. That is a fair and prudent way to fund jobs for young people and the long-term unemployed, and to fund the guarantee throughout the next Parliament.
Stephen Timms
I will not give way again.
Those measures have been opposed and rejected by Government Members, but we have seen where five years of their trickle-down philosophy has taken us—five years of protecting privileges for a few at the top while leaving the rest to fend for themselves.
Our plan is to put working people first, ensuring that those who can and should work are in work, that we make the most of their talents and that hard work is always rewarded. That is the way to secure a recovery from which everybody can benefit and to get social security spending under control and our public finances on a sustainable footing. That is the way to secure a future in which prosperity and social justice go hand in hand and ensure that the next generation can look forward to a brighter future. That is the plan our country needs. This Government will not deliver it. We can be thankful that the time is not far off when we can elect a Labour Government who will.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I say to colleagues that I will give way, but I am conscious also that, owing to all the pressures earlier on, Back Benchers will want to get their speeches in.
It is always a pleasure to follow the right hon. Member for East Ham (Stephen Timms), who took a good shot at making a good fist of a bad job. By my calculation, it is over a year since the Opposition initiated a debate on jobs. I wonder why. So much for their being the party of work, which is what they used to say.
The Opposition have repeatedly avoided talking about the labour market, although my colleagues have been dying to intervene. When the Opposition have spoken about the labour market, there has been nothing but talking the economy down and negativity. They have made gloomy forecasts—I recall the Leader of the Opposition talking about
“the disappearance of...a million jobs”.
Then there was the misguided prophecy of
“a long ‘lost decade’...of...high unemployment”.
The Opposition have opposed welfare reform, and most importantly work experience, at every turn. The hon. Member for Ealing North (Stephen Pound) is right: work experience is what young people want, so why have the Opposition opposed our work experience programme, which has been unbelievably successful?
Meanwhile, it is this Government who have delivered 2.2 million more private sector workers, 2 million apprenticeships starts, work experience and training for over a quarter of a million young people, 60,000 businesses through the new enterprise allowance, and the Work programme, helping 600,000 people to get a job—a sustained job that follows. With the election approaching, the Opposition desperately want to sound as though they have anything positive to say about any kind of jobs programme, now that this Government have turned the situation around. Whereas this Government have a record of success, the more one examines the Opposition’s flagship jobs guarantee, the clearer it becomes that that is little more than a no-jobs guarantee, and certainly a guarantee of no jobs in the private sector.
Let me go through the jobs guarantee, as it is the subject of the debate today. We first heard about it in 2011, when it was said to be for young people who had been unemployed for a year. It offered a guaranteed job for 12 months. In 2013, that seemed to morph into a compulsory jobs guarantee for those who had been unemployed for two years, so the objective had already slipped a bit. It guaranteed a job for only six months—half the time previously advertised by the original statement. Yet there remained complete confusion in the Opposition ranks about how long this programme was meant to last. When pressed, the shadow Chancellor said:
“We would have a guarantee of one year for young people, two years for adults. Anybody who is out of work would be guaranteed a job.”
That is not quite what I heard from the Opposition today. How long will it last—one year, two years, six months? What exactly have they costed?
I can understand why the title of this debate was changed. One could almost hear what was going on behind closed doors between the shadow Chancellor and my opposite number, the hon. Member for Leeds West (Rachel Reeves), when they were hoping to announce all the details about how long the jobs guarantee would last. One could almost hear the shadow Chancellor saying, because it was in the speech from the right hon. Member for East Ham, “You’re not announcing anything that allows anybody to cost this properly, because that way they will tell us that this does not work.” Even the motion carefully leaves those questions unanswered. Why would not the Opposition put in their motion all the details of this apparently wonderful plan? The answer is that no such wonderful plan exists. They allude to certain other plans out there, but they do not tell us what they mean.
What we heard today sounded rather familiar, so I looked it up. Back when Labour was last in government, there was a programme called StepUp. It was piloted by the previous Government, of which the right hon. Gentleman was a member, in 20 areas between 2002 and 2004. I shall not go over the names of the programme, but it was supposed to give paid employment to those failed by the new deal and out of work for two years. StepUp was never rolled out nationally by the previous Government because the evaluation from 2006 exposed its failings: for those nearest the labour market and those under 25, StepUp actually had a negative impact on work prospects, at a massive cost of £10,000 per place.
The right hon. Gentleman referred to the programme in Wales. The hon. Member for Leeds West has been even more explicit that the Opposition’s jobs programme is a rehash of Jobs Growth Wales. She said:
“I went to see a scheme very similar to this in Wales last week and...that’s what we would aim to do across the UK”.
But that is not what was described from the Opposition Front Bench today. A closer look at what has been announced about Jobs Growth Wales reveals that in many senses it is an exercise in cherry-picking. The hardest to help are not eligible; no one on the Work programme, Work Choice or any similar programme is allowed to go for the new programme; and places are given to only one in three of those who have applied, so a place is far from being guaranteed for all. In any case, although Jobs Growth Wales has trumpeted a success rate of 80% of participants in work, an apprenticeship or learning after six months, already 90% of all—not some—young people in Wales move off jobseeker’s allowance within nine months. That has nothing to do with the programme and all to do with what is happening to them through the jobcentres and through the Work programme.
Robert Halfon
My right hon. Friend will be aware that general unemployment in Harlow has gone down by 50% since 2010, youth unemployment has gone down by 56% since 2010 and 83% of the jobs created are permanent positions, yet the Labour councillor Emma Toal said last week at a council budget meeting in Harlow that she feels sick to the stomach when I quote the fall in unemployment and the jobs created. Is that not shocking? Is that not a shame? Does that not show that we are the workers’ party and Labour is the party of dependency?
Mr Duncan Smith
Yes, it is appalling that the councillor is unhappy about the idea that more people are getting work in my hon. Friend’s constituency. The reason why she takes that attitude, I think, is that Labour wants only to be elected. The Opposition do not care about anyone else. They would rather tell bad news to get elected than have a success that they could trumpet. Perhaps that is the real point.
Ninety per cent. of all young people in Wales move off JSA within nine months, so at £6,000 a place, the alleged success that is being trumpeted is nothing like the value for money that the right hon. Member for East Ham mentioned earlier.
Gordon Birtwistle (Burnley) (LD)
In Burnley in 2009 we were classed as a basket case—a town that was going nowhere, or going down. That was at the time that the future jobs fund was happening. Last year we were cited as the most enterprising town in the UK. We have doubled the number of apprenticeships to 4,300 and the number of young people out of work has gone down by 47%. Surely that is the right way to go, not to force people into work that they do not want to do.
Mr Duncan Smith
May I say to my hon. Friend—I repeat, my hon. Friend—what an excellent job he has done in championing his constituency? He is right—it is about getting private sector businesses to create real jobs for young people and older workers to go into.
I want to deal in some detail with the jobs guarantee versus the future jobs fund. A Labour press release that I saw in 2014 extolled the Opposition’s pet project as
“building on the success of the Future Jobs Fund”.
The right hon. Member for East Ham carried on the Labour line. I hope that was noted back at headquarters. He is clearly to be trusted through the election, and I give him a lot of support for that.
As for the claimed success of the future jobs fund, the DWP analysis that I quoted earlier is important. It was commissioned under Labour and was subjected to extensive peer review by the National Institute of Economic and Social Research, which, as I said earlier, found that not only was the fund estimated to result in a net cost to the Exchequer but that, as I pointed out, the future jobs fund was not estimated to benefit the Exchequer at any stage, and the Exchequer would not be able to get back the money that it had spent on the programme.
By contrast, as the hon. Member for Ealing North said, young people want work experience. I remember that early on, when I first went into jobcentres, I was accosted by young people who said that the problem for them was that at job interviews they were asked whether they had job experience, and when they said they had none, they were told that they could not be given a job without work experience, but their response was that they could not get work experience without a job.
Under the previous Government, people were allowed only two weeks’ work experience before they were expected back at the jobcentre. What we did instead was to allow them up to two months’ work experience in a business, and an extra month if they were offered a job or an apprenticeship. So, by contrast, work experience under this Government—this is the interesting point—has achieved the same success rate at least as the future jobs fund achieved, but at a twentieth of the cost—£325 per place as opposed to £6,500 per place. Another difference is that the vast majority of positions under the work experience programme are in the private sector, whereas I can think of hardly any private sector companies that offered jobs under the future jobs fund. It is a success versus a costly failure.
Stephen Timms
As the right hon. Gentleman knows—he has the evaluation in front of him—there was a net benefit to society of £7,500, net of all Exchequer costs, for each person who took part. Is he surprised that youth unemployment has been going up over the past three months, at a time when overall unemployment is coming down, or was that what he expected?
Mr Duncan Smith
Youth unemployment is now lower than it was under the previous Government, and it has been falling consistently. I will wait for the figures for the next few quarters, and when they show that youth unemployment has continued to fall, I expect the right hon. Gentleman to write me a note saying, “Sorry about that; that’s another thing we got wrong.”
Mr Duncan Smith
I will give way in a moment, but I just want to spend a little more time on the future jobs fund, because it is such a rich seam. I continue to ask the right hon. Member for East Ham to give us the list of private sector companies that are signed up to his new scheme, but he has not come up with it. The interesting point is that councils from Merthyr Tydfil to Norfolk and from Tyneside to Wakefield have all complained about how difficult it is to get businesses to deliver the future jobs fund. None of them could find anyone to deliver it. In Barnsley only 7% of the jobs found were in the private sector, and in Birmingham the figure was only 2%.
I was a little intrigued by that, because I know that the right hon. Gentleman is an intelligent man—I have huge respect for him and thought that he was a very competent Minister—and it was unlike him, given how accurate he normally is, to come to the Dispatch Box and, when pressed on how many private sector jobs would come from the scheme, answer, “It is most likely to be in the private sector.” That is it. That is the calculation that the Opposition have made for this incredible programme. He believes that it is “most likely” that those jobs will be in the private sector, yet not a single private sector employer is interested in it.
It is small wonder that the shadow Leader of the House also failed to name a single business that had signed up to the jobs guarantee. When pressed about the vast number of jobs there would be in the private sector, the shadow Chancellor, in a forerunner to his problem with “Bill Somebody”, said:
“But if not, you can do it through the voluntary sector. If not, you have to have a final backstop: a public work scheme.”
That is what they have. He let the cat out of the bag. The reality is that high streets and businesses have now made their views clear about Labour’s “destructive anti-business mood”. The Institute of Directors has stated that
“wage subsidies for employers are not the source of sustainable jobs”.
That is what this ridiculous programme would mean.
Stephen Pound
I was initially reluctant to interrupt the right hon. Gentleman while the compliments were flowing from the Treasury Bench, but normal service has now been resumed. The major difference between the scheme that he is promulgating and that which we are proposing—I reiterate this for the avoidance of any doubt—is that while the Government are proposing work experience, we are talking about real jobs. The advantage of work experience cannot be denied, but the aim of our proposal is proper, permanent jobs. If they turn out not to be permanent jobs that people start with it, so be it, but the difference is between permanence and work experience.
Mr Duncan Smith
The hon. Gentleman, for whom I have a huge amount of time, is right about work experience, and he must not let anyone on his side push him off that, but what he has just said is slightly wrong. He said that we are promulgating work experience and the Opposition are talking about a jobs guarantee, but we are not promulgating it; a quarter of a million young people have already gone on our work experience programme, and over 50% of them have gone into work. He is quite right that not all of them went into the businesses they did the work experience with, but many of them have gone into other jobs almost immediately. What is really exciting is that although many businesses said, “We’ll do the work experience, but we can’t guarantee a job,” a significant number of them, once they had seen the young person for a few weeks, came back and said, “I tell you what: we’re going to create a job around this individual, because we think they’re going to help our company.” That is what work experience has done. I simply say to Opposition Members that they should embrace that, not oppose it, because their Front Benchers have opposed work experience, and that is a big problem.
Pamela Nash (Airdrie and Shotts) (Lab)
In my experience the Opposition do support work experience, and there are many examples of that. Does the Secretary of State realise that there are already local examples of programmes similar to that which we are today proposing nationally? For example, my local authority, North Lanarkshire council, is about to announce that 5,000 people have got into work as a result of a similar project. Permanent private sector jobs have been created as a result of a six-month wage subsidy.
Mr Duncan Smith
But because of what we are doing with local authorities, working through the local enterprise partnerships, and with all the local provision that we have been pushing down, if they want to create additional programmes, Jobcentre Plus will support them through that. We have to be slightly careful, when starting to calculate figures, about one group coming on the back of others, because we will not know how many of those went to work as a result of Jobcentre Plus and how many as a result of the programme. If local authorities, rightly, want to help, we are all in favour of supporting them with extra help.
Mr Duncan Smith
I will make a little progress before giving way again.
The issue still remains for the Opposition which I thought this debate was about. I thought they would have a fantastic motion that answered all these questions, but they do not. These are the biggest questions: which businesses have signed up to the jobs guarantee, and how many jobs have they guaranteed to provide? In the absence of any answers, I will quote the OECD’s view of these kinds of make-work schemes. For the past 20 years it has demonstrated that such schemes are expensive and counter-productive. Its jobs strategy states that having
“large deadweight losses, displacement and substitution effect… direct job creation in the public sector has been of little success in helping unemployed people get permanent jobs in a more open labour market”.
That is probably the final word on the structure of Labour’s jobs guarantee.
Let us look at how the Opposition propose to fund their jobs guarantee, which I had thought would be dealt with clearly today. The right hon. Member for East Ham said something about it, but they seem to have gone back to their original position. Her Majesty’s Treasury has estimated that for 2015-16 the jobs guarantee would cost £1.54 billion for the over-25s and a further £540 million for the under-25s, so over £2 billion in total for only one year. To pay for it, the Opposition have proposed two measures.
First, they would restrict pensions tax relief for earnings over £150,000. Let us deal with that first. They originally committed that funding for the purpose of increasing working and child tax credits, so they seem to have done a little dodge. I have no idea whether they still plan to use it for that, but I am sure we will find out. Apparently it will now pay for the jobs guarantee. Never mind the fact that it would take—this is a real estimate from those who know—until 2018-19 to implement, leaving three years with no funding to cover the annual cost of £1.5 billion. They cannot just wave a magic wand and say, “The money’s there”; they also have to position the money at the right time. The right hon. Gentleman was forced by the shadow Chancellor to say that there would be no borrowing. Well, that looks to me like a chunk of borrowing.
That is even if the proposal raises any money at all, because the CBI has called it “simply unworkable”, the National Association of Pension Funds has warned that it is a “disaster in the making”, and the Institute for Fiscal Studies has said that it
“would be expensive to administer… unfair and would inappropriately distort behaviour.”
The Opposition would create a problem in the pensions industry and damage people’s savings, and all to fund a programme that simply would not work.
The second source of funding is repeating the one-off bankers bonus tax. I have to tell the right hon. Gentleman that no matter how many ways he cuts this, Labour has spent this money 11 times over. That is the 11 that I can find; I am sure my hon. Friends will find a lot more. There were proposals on reversing the VAT increase, at £12.75 billion; reversing tax credit savings, at £5.8 billion; more housing, at £1.2 billion; reversing the child benefit savings, at £3.1 billion; more capital spending, at £5.8 billion; and more child care, at £800 million. It is almost like one of those game shows—“Come on down, there’s another box to be opened and we’ll spend that money as well.” These sources go on and on and on; it is quite fascinating. Yet it has been said time and again that this is a one-off tax. When in office, Labour’s last Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said of the idea of repeating this tax that it is
“a one-off thing…because the very people you are after…will find all sorts of imaginative ways of avoiding it in the future.”
He had no time at all for the idea of a repetition of Labour’s bankers bonus tax. So there we have it: the cobbled-together nonsense of Labour’s jobs guarantee, destined to fail and wholly and utterly unfunded.
Jim Sheridan
On additional funding for the unemployed—I say this as someone who was unemployed for three years, so I know it is not a nice place to be—would this Government consider channelling any retrospective payments from people who have been found guilty of avoiding tax into fighting youth unemployment?
Mr Duncan Smith
Let me say to the hon. Gentleman that in my time before politics I was made redundant, and I know what it is like not to know where the next pay cheque is coming from. I agree with him: it is a terrible place to be, and no one, if we can avoid it, should be there. That is why we have said that, through the long-term economic plan, we have to make sure that the economy is stable and on a good, long trajectory, and that we get our debts and our deficits down. As regards chasing people who are avoiding tax, this Government, as my right hon. Friend the Prime Minister said today at the Dispatch Box, have done more to close tax loopholes than any other Government previously.
Mr Duncan Smith
Hypothecated funding is a matter for the Chancellor, as the hon. Gentleman knows, but I will certainly pass his views on. Many of us in this House loathe the idea of some people being able to hide their money away. We think that hard-working taxpayers deserve a fair deal, and the unemployed do too. I am seeing the Chancellor later today, and I promise the hon. Gentleman that I will pass his comments on to him.
As regards Labour’s proposed programme, with the best will in the world, I say to the right hon. Member for East Ham that he could have done better on the back of a fag packet, having had weeks, months and years to figure it out. I suspect Labour Members had to come up with something for this debate and are therefore doing this now. This slot was probably destined for a debate on the health service, but because they have made such a Horlicks of that, they have decided to throw in this business instead.
Let me deal with the success of the employment programme and talk about what we in this Government have done. Universal Jobmatch has transformed how almost 7 million people look for work, with over 4 million average daily searches. Work experience is one of this Government’s great successes for young people, with half of participants off benefits at a twentieth of the cost of the future jobs fund. The Work programme is helping more people than any programme before. Over 1 million have spent time off benefit, and almost 640,000 have got a job, 368,000 of whom have found lasting work, with a third of them staying in a job for 18 months or longer. It is now the most successful back-to-work programme of all those that have been put forward. Performance is exceeding all our original expectations and is better than under any previous Labour programme.
Let us look at how much better the Work programme is than some of the programmes Labour had. More than twice as many people moved into work in the first two years under the Work programme as under the flexible new deal. Nearly three times as many people have been in a six-month job as under the flexible new deal. For recent and new employment and support allowance claimants, Work programme job outcomes are exceeding expectations and rising all the time, compared with Labour’s Pathways to Work programme—never rolled out fully—which had no statistically significant impact on employment outcomes and was assessed by the National Audit Office as poor value for money. The truth is that we are now doing more for people who have difficulties getting into work than the previous Government ever did.
Does the hon. Member for Edinburgh East (Sheila Gilmore) still want to intervene, as she has been trying to catch my eye? No, she is on her computer. I hope she was writing up a glowing review of my speech; I look forward to reading it on Twitter in due course. I give way to her.
Sheila Gilmore
The Secretary of State always says of the work experience programme that about half of young people who take part in it go into work. His own Department’s evaluation—I do not know whether there has been a more recent one than 2012, but I have not seen it—suggested that following the work experience programme there was a difference between a participant group and a non-participant group, but it was only a small one. Does he not agree that nearly half of those who did not participate in work experience also went into work?
Mr Duncan Smith
It is always a pleasure to listen to the hon. Lady. She has tortuously wound her way around all these figures, but I come back to the simple point that the work experience programme, at a twentieth of the cost of the future jobs fund, ensures that over 50% of those who enter it will go into work. By the way, I did not invent the work experience programme—it was invented for me by somebody on the floor of the job centre because young people were saying, “Can’t we have more time for work experience than the last Government allowed us to have?” I do not know if she has seen the really interesting figure that the claimant count in her constituency is down by nearly 50%. That is a very good story. I know she will want to write that up as well, as an excellent statistic.
The record jobs figures under this Government stand as a testament to our success, with more people in work than ever before, up by 1.75 million, and more people in private sector jobs than ever before, up by nearly 2.2 million. Since 2010, two thirds of the rise in employment has gone to UK nationals—the Opposition never achieved this—thereby reversing the damaging trend of Labour’s last five years in office, when the majority of jobs went to foreign nationals. What is more, we now have more women in work than ever before, more lone parents in work than ever before, and more older workers than ever before—and employment for young people and disabled people is up on the year as well.
Let me now deal with the suggestion that these people are moving into part-time, low-quality work. That is not true. The Opposition constantly harp on about a figure that has no basis in fact, so let me give the facts. Full-time employment is up by over 1.3 million since 2010—over 80% of the rise in employment in the past year alone. Permanent employees are up by 1 million since 2010—nearly 80% of all people in work. Three quarters of those in employment since 2010 have come from managerial, professional or associate professional jobs. The Opposition constantly put about the nonsense that there are nothing but zero-hour, no-value, low-skilled jobs, but that is simply not true.
Adam Afriyie (Windsor) (Con)
It seems to me that with the DWP reforms we have brought through and with the changes to the tax system and regulation, we have created the greatest job creation engine this country has ever seen. Does my right hon. Friend agree that this motion is completely redundant, just as the Labour party’s measures in the previous Government created so many redundancies?
Mr Duncan Smith
I do agree. I also remind my hon. Friend that my hon. Friend the Member for Nuneaton (Mr Jones) said that under the previous Government youth unemployment did not, as the right hon. Member for East Ham claimed, rise only because of the great global recession that somehow crept up on the previous Government, but was rising steadily from 2004 all the way through.
Mr Marcus Jones
Opposition Members often say that all the jobs being created are zero-hours contracts, as in the election literature they put through people’s doors. Can my right hon. Friend say what the prevalence is of zero-hours contracts in the workplace?
Mr Duncan Smith
I can tell my hon. Friend exactly—it is 2% of people and 4% of total contracts. Moreover, this Government are moving to get rid of the exclusivity that we think is an abuse in zero-hours contracts—something that Labour never did anything about when in office. The truth about zero-hours contracts, limited as they are, is that they give some people, such as many of those with caring responsibilities, the flexibility of picking work when they need it. We are closing down on the abuses, and they are reducing. By the way, the previous Government never did anything about that. I am reminded—I should have remembered—that the previous Government said they were perfectly at ease and happy with people getting filthy rich, so the point is that we should not expect too much from Labour Members.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I hope that my right hon. Friend is making progress with the Leader of the Opposition in convincing Doncaster council not to use so many zero-hours contracts, because it is profligate in doing so.
Mr Duncan Smith
With the Labour party, it is always a case of “Look at what I say, not what I do”, because we invariably find that Labour party members out in the country are doing something fundamentally different. Let me finish my speech, because I am conscious of the time, Mr Deputy Speaker.
The Labour Government presided over a great recession—the great Labour recession—which cost the British economy £112 billion, and cost 750,000 people their jobs. We should never forget that their recklessness with the economy cost ordinary families up and down the country very dear in terms of lost jobs, lost money and lost hope. On their watch, youth unemployment increased by nearly half, long-term unemployment almost doubled in just two years, 5 million people were on out-of-work benefits and no one worked at all in one in five households. When we entered government, one in five households had nobody in work: that was the previous Government’s record.
I believe that this Government have got Britain back to work, with unemployment down, youth unemployment down, long-term unemployment down and the lowest rate of workless households on record. We have a proven track record on delivery: departmental baseline spending is down £2 billion; reforms are set to save £50 billion overall next year; and there has been a real-terms fall in welfare spending for the first time in 16 years. Over this Parliament, welfare spending has grown at the slowest rate since the creation of the welfare state.
Above all, our real success is not about figures—in hundreds of thousands, millions or even billions—but about the fact that each and every job created means a life transformed. Each job gives a young person a real sense of self-worth, gives an adult new hope, and gives a parent a sense of security for themselves and their children. That is what the Government stand for, and what we have delivered—hope and security for families up and down the country.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. There is a time limit on all Back-Bench speeches of five minutes. The wind-ups in this debate will start at 4.10 pm.
Dame Anne Begg (Aberdeen South) (Lab)
Interestingly, the very first inquiry undertaken by the Work and Pensions Committee when I took over as Chair after the election was on the Government’s plans to abolish the future jobs fund. It feels as though we have come full circle since then. At that time, the Government promised to bring in something a lot better, but their Work programme was not better and was certainly not as targeted as the future jobs fund.
There is no doubt that the future jobs fund was extremely successful. The fact that it was not allowed to run its course means that on paper it seemed a bit more expensive than an alternative, but that is because it included all the start-up costs. It worked because it was about real jobs for real people paying a real wage. It was not the same as work experience, valuable though that is, because it was much more disciplined in making sure that people were in the world of work. Many young people got a job as a result of the future jobs fund.
I think Members from both sides of the Chamber agree that the best way to tackle welfare spending is to get more people into work. People should not just get into work, but into well-paid work so that they are not still dependent on welfare payments while in work, as is now happening. There has been an increase in in-work poverty, with people in work but still depending on one benefit or another. For example, more than 50% of those in receipt of housing benefit have someone in their household in work, which cannot be right. Hand in hand with getting people into work must be getting them into well-paid work.
This debate is timely for me as an Aberdeen MP. While almost everyone in the rest of the country is welcoming the low oil price, which they think will help their local economy, in Aberdeen it is the very opposite. We do not yet know the numbers involved, but the low oil price means that thousands of my constituents and people from across the north-east of Scotland have become unemployed or are about to lose their jobs. There has been a slight time lag, but a lot is now happening, with Talisman and BP announcing that 600 jobs are going in just one week. Most of the oil majors have announced 200 to 300 job losses, and the supply chain is also shedding jobs fast.
There is nothing to replace those jobs, and when unemployment goes up and an area finds itself in such a situation, the young and unemployed suffer the most, whether those who have left school and cannot get a job or those who are shed first, as often happens, in any kind of downturn. Although the downturn may seem to affect high-level jobs in the oil and gas industry, it will eventually filter down to hotels, shops and nightclubs and all the other jobs in services in Aberdeen.
I was very complacent as the local MP—other Members who also represent the north-east of Scotland were quite pleased—about the fact that we had such low unemployment. Unemployment was coming down—in fact, it was less than 1% in my constituency, which by anyone’s measure is full employment—and there was a labour shortage, so we were looking for more people, but that has now been overturned.
The compulsory jobs guarantee would help to create jobs. The economy of Aberdeen will need new jobs, and we must ensure that the remaining jobs are not completely lost to the economy. I hope that the oil price will pick up, and that such jobs can be recreated. The promise is that we will look after people when times get hard—as they will for many people in the area, particularly the young who cannot get on the first rung of the ladder—and that is where the really important compulsory jobs guarantee will come into its own. I am glad that my party is going into the next election promising to make sure that young people will have the opportunity of jobs being created for them.
Nigel Adams (Selby and Ainsty) (Con)
I thank the Opposition for giving the House the opportunity to discuss jobs and their compulsory jobs guarantee scheme. [Interruption.] I am told that that is very generous, and it is. I am a little surprised that the Opposition have been unable to rustle up more than half a dozen Members, aside from their Front Benchers, to debate their own motion. [Interruption.] I apologise, one additional Member has walked into the Chamber.
The aspiration for any political party should be full unemployment, and no Government should rest until that is achieved. It is always correct to say that more can be done on jobs; frankly, more needs to be done following the downturn that did so much damage to our country’s economy. This Government have made great strides in restoring economic credibility with plans that are working and will continue to work if we stick to them.
It is worth reminding the House about the record of the previous Government. We are all aware that long-term unemployment almost doubled between 2008 and 2010, from 381,000 to 788,000. We also know that under Labour unemployment rose by almost 500,000, female unemployment rose by almost a third and youth unemployment almost doubled. The number of households in which nobody worked or had ever worked also almost doubled, and more than 2.5 million people spent at least five years on out-of-work benefits. In my constituency, the number of people out of work in May 2010 was higher than in May 1997. According to the Office for National Statistics, every period of Labour Government since 1945 has concluded with unemployment higher than when it began. That is not a record that I would be proud of.
Sheila Gilmore
Will the hon. Gentleman concede that the figure that he gave was not correct? In fact, unemployment was not higher in 2010, even after the recession, than when the Labour Government came to office.
Nigel Adams
I am not prepared to concede that. I am happy with the numbers that I have. I will go away and check them. I promise to write to the hon. Lady and apologise if I have got my figures wrong, but I think they are fairly robust.
Thankfully, Government Members know a little bit about employment. One or two of us have run businesses that have employed people. We also know what it is like to be made redundant. I was interested in the Secretary of State’s remarks on that. I know from my experience how unpleasant it can be and how difficult it is for families. I started a businesses when I was 26 with Government help under the enterprise allowance scheme, which is helping many thousands of businesses now. Back in 1993, £20 a week was not a lot of money, but it was enough to fill up my car with fuel, which enabled me to grow a business that was eventually acquired by a public limited company.
Let us see what we have done so far. The number of jobs is about 1.75 million higher than in 2010. Thanks to our plan, the economy is stable and there is no reason to believe that job numbers will not continue to rise. Some 80% of employment is full time. Since this Government took office, 1,000 jobs have been created every day. The youth unemployment claimant count has fallen to its lowest level since the ’70s. In the last year alone, there was a fall of 34% in young people claiming jobseeker’s allowance, and the claimant count has fallen every month for the past three years. The Work programme has helped almost a third of a million people into long-term employment since 2011.
Sir Oliver Heald (North East Hertfordshire) (Con)
Does my hon. Friend agree that it is very telling that the number of part-timers who would like to have full-time work has fallen by 140,000? That is a clear indication that full-time work is back.
Nigel Adams
My hon. and learned Friend is absolutely correct. There are people who enjoy working part time and feel that it suits their lifestyle. The figure that he mentioned is encouraging.
In my constituency, the number of young people claiming JSA has dropped by almost 40% in the last year alone. We have introduced a couple of schemes that are helping people into work or back into work. The Work programme is helping 1.75 million unemployed people. As of September last year, it had helped a third of a million people into lasting work. Help to Work, the scheme for long-term unemployed young people who have been in the Work programme for a couple of years, is providing community work placements. The Government have pledged to fund Help to Work with £700 million over four years, and it is helping 200,000 people.
The number of apprenticeships has more than doubled in this Parliament. Since the coalition came to office, 2 million apprenticeships have been started, which means that this Government have overseen the biggest ever boost to apprenticeships and fulfilled their commitment that there would be 2 million apprenticeship starts in this Parliament. The apprenticeship grant for employers has provided for 92,500 apprenticeship starts, with 8,000 more in the pipeline. My constituency has seen almost 1,000 apprenticeship starts. I thank all the employers who have taken up the scheme and the excellent colleges that are delivering the training, including York college and Selby college. Apprenticeships give young people an opportunity to get on the work ladder.
The Chancellor has announced that from April 2016, employers will not have to pay employer’s national insurance contributions for apprentices under the age of 25. That will ensure that even more apprentices are taken on. We have delivered more apprenticeships in two years than the last Government delivered in five. The Prime Minister has announced that a future Conservative Government would make a £1 billion commitment to deliver 3 million apprenticeships by 2020.
Those results show that we are on the right track, but there is plenty more to do. I am not minded to support a compulsory jobs guarantee scheme. It appears to be modelled on the Jobs Growth Wales scheme, which has helped only one in three of the young people who has applied and therefore comes nowhere near guaranteeing a job for all young people who are out of work for a year or more. I urge all right hon. and hon. Members to oppose the motion.
Stephen Pound (Ealing North) (Lab)
I am chagrined to hear that the hon. Member for Selby and Ainsty (Nigel Adams) will not vote with the Opposition this afternoon. However, when I think of his demonstrable lack of numeracy when he referred to the number of people in the Chamber and his apparent willingness—naive or foolish, I know not—to draw to the attention of the nation the fact that there are more people on the Opposition Benches than on the Government Benches, I wonder whether we would have found space for him over here had he chosen to support us.
Nigel Adams
It is always a pleasure to listen to the hon. Gentleman, but I think he will find that when I made my speech there were more people on the Government Benches than on the Opposition Benches.
Stephen Pound
Madam Deputy Speaker, there are matters of greater moment before us today. The point has been made.
In all seriousness, the comments of the Secretary of State at the end of his speech were very well made and measured. He drew our attention to the single most important fact: this debate is not about cold statistics, but about real experience, real people, real lives, real hopes, real dreams and, in some cases, the dashing of those real dreams. However, when he referred to the marvellous blizzard of feel-good statistics it was almost as if Dr Pangloss had ridden out of the pages of “Candide” and tethered his horse to the Treasury Bench to tell us that this is the best of all possible worlds and that everything is well. I, like most people, respect the Secretary of State, but this is not the best of all possible worlds.
May I pray in aid, as I seldom do, the Office for National Statistics? The labour market statistics from 21 January—not last year, not 2010, but 2015—show that youth unemployment stands at 764,000, which is an increase of 30,000 on the previous quarter, and that long-term unemployment for 18 to 25-year-olds stands at 188,000.
Stephen Pound
I hear a sedentary intervention from down the Thames valley. The figure for long-term unemployment, which is made up of those who have been on JSA for more than two years, has increased since May 2010 by—I pause to let the number sink in—224%. Let us not try to fool ourselves that everything is wonderful out there. Let us accept, however, that there is good will on both sides. We all want to see people in work; it is the mechanism by which we achieve it that divides us. In some ways, the quintessence of the major political argument is being expressed here today—it is about the role of the state and the duty of the individual.
The hon. Member for Perth and North Perthshire (Pete Wishart) rightly referred to the sanctions regime. One of the important things about a realistic, modern, pragmatic Labour party is that we are not in the position of saying that there will be no sanctions. We are maintaining the present level, just as Beveridge—a great man, if a deluded Liberal at the time—envisaged when he proposed the blueprint for what, in effect, became our modern welfare state. We are talking about a combined approach. We are saying to long-term unemployed young people in particular, “We have not forgotten you.” We will not simply place them in a temporary job and expect them to use it to access the labour market, although some may do so, but we will find them a real job.
Over the years, we have tried over and over again to achieve that. The Manpower Services Commission schemes of the 1980s were initially quite successful, but were ultimately affected by the major economic picture. I hope that, as part of the new scheme, the Labour party will be talking about placements in football and sports clubs, because those were one of the successes.
The Labour party—the party to which I have dedicated myself all my adult life—has done many marvellous things, but seldom have I heard an example of it riding to the rescue of the reputation of bankers. Bankers have been having a difficult time lately. Hedge fund operators are salving their consciences by shovelling great barrowloads of cash to Black and White balls, and leasing out their estates to shoot peasants—I mean pheasants—and partridge. If bankers pay an impost of a bank bonus, they will do something to reclaim their battered reputation. How good it will be for those with silk hats, swaggering down Threadneedle street and throwing their cigars over their shoulders, to realise that they are part of the solution. They have been part of the problem for far too long.
We are currently in an extraordinary period in which bankers are about to fill their boots when it comes to bonuses. A famous recruitment firm, Phaidon International, estimates that this year bankers’ bonuses could be up by 25% or 35%. Bankers’ bonuses are on the increase, but I think those bankers want to help the country more and to help the unemployed; I think there is good even in bankers. Let us support the Labour motion this afternoon, not just for the unemployed or the youth unemployed, but for the battered, tattered, shattered reputation of Britain’s bankers. Let them come back from their offshore tax havens and from Davos, and let them say, “We are part of society; we are prepared to pay.” This modest tax on bankers’ bonuses will go a long way to make this country a better, more decent and productive place for all of us, and hopefully a place in which we will talk about unemployment in the past tense.
Neil Carmichael (Stroud) (Con)
It is always a pleasure to follow the hon. Member for Ealing North (Stephen Pound), not least because of his vivid imagination, which was on full display during his speech.
I want to celebrate the fact that 30.8 million people are at work in this country, because that is a huge achievement of this Government. We should put to bed the nonsense that there are loads of inappropriate part-time contracts when people want to work full time. In my constituency, more than 80% of jobs are full time, and those jobs have got quality and will lead to a fulfilled life. I am immensely proud of that.
The plan that Labour has attempted to roll out today is uncosted—that is obvious—and unfinanced. We have already revealed that the so-called bank bonus tax has been spent so often that it will go round in circles and become like butter out of lions going round and round and round—it just won’t work. One problem with the motion is the way that it traps people into the wrong job and gives them the wrong signals for their future career. I am worried about that.
What are we doing? One important thing is that this Government have an industrial strategy and need a supply pipeline of skills in sectors such as engineering and construction. One would think there were two worlds: one in the Labour party, which is worrying about people wanting to get jobs, and one in the construction sector—as represented by the Institution of Civil Engineers, for example—which is worried about where people will come from to fill the positions. We must address that angle and ensure that our work force are equipped with skills, motivated by the opportunities that we provide, and ready and willing to think about a career early in life. Forcing people down a particular track, as in the Labour party’s scheme, is not the way to do that.
Let us salute what we have already done and continue with it. We have shown an outstanding approach towards the aerospace and automotive industries by demonstrating that there is a future and an investment pathway, and that investment needs people to be part of a successful outcome—that is certainly the case in my constituency and a good point to make.
There are also our reforms of education. I am hopeful that we will encourage more and more people to take up science, technology, engineering and maths at school, but we have already made progress and effectively turned things around from a situation in which schools and further education colleges were producing students without the right qualifications for the jobs available in the outside world. There has been an improvement in that regard, and we should celebrate that and continue with it.
In my constituency I am proud of the fact that the number of young people claiming jobseeker’s allowance has more than halved since 2010. I also celebrate the fact that unemployment is now down to approximately 541—that is great for the Valleys and Vale, and a tribute to this Government’s persistence with their long-term economic plan. I have played my part too, including by setting up a festival of manufacturing and engineering. We must get young people engaged in that sector, which is big in my area and critical to this country’s long-term future.
If we tantalise young people with the prospect of designing, making or innovating something, or serving a firm or whatever, their eyes light up because they know that there is an enticing opportunity for them and something worth working for that will deliver them a fulfilling lifestyle. That is what I have done, and I shall continue with that.
There is, however, another side to the coin—infrastructure. I am keen and eager to improve infrastructure in my area, which is why I keep emphasising different projects, such as the bridge from Sharpness to the constituency of the Minister for Disabled People, my hon. Friend the Member for Forest of Dean (Mr Harper). I do that because I like him, but also because I know that such projects require more and more skilled people, and that is the way to give them opportunities and positions for the future.
Sheila Gilmore (Edinburgh East) (Lab)
In all the debates on this issue, sweeping statements are made about how Labour Governments have higher unemployment at the end of their term than, it is implied, Tory Governments do. The Tory Government of 1979 to 1997 inherited an unemployment rate of 5.2% and left an unemployment rate of 7.4%, and in 13 out of 18 years unemployment was over 10%. We really should not take lessons from a party that produced those kinds of results during one of its longest periods in government in recent years.
I was slightly wrong when I intervened on the hon. Member for Selby and Ainsty (Nigel Adams). Unemployment rose slightly between 1997 and 2010, in the midst of a world economic recession—it was 0.4% higher in 2010 than it was in 1997, and that is after a major recession. Between 1945 and 1951 unemployment fell, so I hope we will hear slightly less of that generalisation.
One of the other generalisations made by the Secretary of State was meant to frighten people outside this place with the notion that Labour creates a situation in which nobody works. He said that under Labour 20% of households had never worked. That is one in five of all households. If someone heard that, they would think it shocking and dreadful, but what he did not say was that 48% of those—nearly half—were students who had never worked because they were students, 14% were carers, 18% were sick or disabled and only 10% were unemployed.
The number of workless households has fallen slightly under this Government, but it has gone back to where it was in 2008. After the recession, there has finally been a slight fall in the number of households not in work, but, again, many are not in work because of caring responsibilities, because they have children or because they have taken early retirement. We must be realistic about the figures.
Conservative Members always throw figures at us to show how unemployment has fallen in our constituencies, but they always use the claimant count. The gap between the claimant count and the unemployment rate has been very high under this Government and that is something that we must consider. What is happening to those people who are unemployed but not receiving any benefit? Who are they, what is happening to them and how are they living? Are they getting any of the help that we are so often told about and that they are supposed to be given? I know that many of those people are living on much reduced incomes and many are not getting benefits, either because they have lost them in some way or because they have a partner in what might be only part-time work.
Sir Oliver Heald
Listening to the hon. Lady is reminding me of Nicola Sturgeon’s speech. She is arguing for more borrowing, more spending and more tax, so is the hon. Lady buying into the SNP agenda?
Sheila Gilmore
We say that there is a different way to tackle the budget deficit. We said that we would do it differently in 2010. Of course, the Conservatives went to the electorate and said that they knew the answer and would eliminate the deficit in five years. They set about trying to do that and have manifestly failed. We said that we wanted to stimulate the economy rather than depress it as they did month after month in their first three years when growth fell. Despite all the measures in the so-called emergency Budget, the Conservative party has not achieved what it said it would.
We always have an argument about work experience, and the counterpoint to anything we propose is that the work experience scheme is, to use the words of the Secretary of State, unbelievably successful. As he constantly says, half the people who go through the work experience scheme get a job. What he did not say is that nearly half those who did not go through work experience in a matched cohort, according to the DWP’s own research, did not get a job. Being in the work experience programme did have an effect, but it was not the type of effect the Government suggest.
After 21 weeks, 50% of those who had been through work experience were back on benefits, but those who did not go through the scheme did not do much worse. There is no point in exaggerating these schemes. A real and proper job, which involves real training and will get people into permanent employment, is worth much more than a short-term work experience scheme, which is not to say that there should not be work experience. We are proposing that particularly for young people because they need it.
Alok Sharma (Reading West) (Con)
Back in 2011, I had discussions with Tesco about its plans to set up a major distribution centre in my constituency. They were very successful and a couple of years later we had a new distribution centre employing more than 1,000 people. As part of its commitment to helping the long-term unemployed, Tesco ring-fenced 85 of those new jobs for those who had been long-term unemployed; about 18 months ago I went to a graduation ceremony for those who had been on the scheme. They had not only gained new skills in the workplace but received training at a local college. The age range of those graduating was from the mid-20s to the mid-50s, and the event was one of the most emotional and uplifting that I have been to during my five years as an MP. The sheer sense of achievement and pride for those graduating was palpable, and it was not because somebody had just come along and handed them a job but because they had each worked hard, had achieved and had won a job on their own merits. There are many examples of employers across my constituency who have created jobs over the past five years.
A number of my colleagues have talked about apprenticeships. They have been a huge success in Reading West in the past five years. We have had thousands of new starts. All sorts and sizes of businesses, everyone from Cisco and Microsoft to Chiltern Training and Pertemps—a huge range of organisations—have been taking advantage of help from the Government to start apprenticeships,. We talk about real jobs—these organisations have been creating real opportunities for young people. The end result of all that job creation and help for young people is a massive 60% fall in unemployment in my constituency since May 2010. Overall, unemployment is now below 2%. The right hon. Member for East Ham (Stephen Timms) talked about youth unemployment. That has fallen from 7.8% in May 2010 to 1.7% today.
Those businesses did not need any kind of compulsory guarantee from Government; they got on and created jobs. The reason why businesses have invested, putting money into research and development and infrastructure, is that they have regained the one absolutely precious commodity that one needs to succeed in business: confidence. Businesses have confidence in the British economy and they have confidence in the future. Above all, they have confidence in a Government who have cut corporation tax, national insurance and red tape, and increased the investment allowance and extended small business rate relief. All these are policies designed to create jobs. It is not Governments who create jobs; it is companies in the private sector that create jobs.
The right hon. Member for East Ham, who is no longer in his place, was not able to say what percentage of jobs under the compulsory jobs guarantee would come from the private sector. I can tell him that, according to a BBC report in March 2014, the Labour party was talking about 80% of jobs coming from the private sector. In the past few weeks, it has been bashing businesses and demonising wealth creators. Labour has made it clear that it will put up taxes and have more red tape. That will end up driving businesses away from our shores. With all due respect, I have to say that I do not think the Leader of the Opposition, or indeed very many Labour Members, understand business. That is because they have never worked in business.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
There are a number of Labour Members who have worked in business, including me. What the hon. Gentleman said was ridiculous, and perhaps he will withdraw it.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I just say that interventions are going to take time from Members who are going to speak later? That is the only worry I have, but by all means continue.
Alok Sharma
I thank the hon. Lady for intervening. I am delighted she has some experience of business. The same is not so for the Leader of the Opposition, is it?
When it comes to businesses, I think the Leader of the Opposition has actually decided—this business bashing is not an accident—that bashing businesses will win votes. He thinks that bashing big businesses will somehow compel small businesses to move towards him. I have to say that that is utter fantasy. In my constituency, many people are employed by small businesses and they will not like what the Labour party has been saying. Small businesses want to grow into large businesses. They have ambition and aspiration, but that is not what we have been hearing from the Opposition.
The Government’s policies have created the real jobs, the real prospects and the real skills that young people and those who have been long-tem unemployed need. That is what has been happening in the past five years. I will not support the Opposition motion. It is unfunded, it is unclear and it has no support in the business community. Unless the shadow Minister can tell me otherwise, I do not think there are huge numbers of businesses crying out for the compulsory jobs guarantee.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I do not think we should pretend today that tackling long-term unemployment is anything other than immensely challenging. Fluctuations in levels of employment and unemployment are largely driven by the state of the economy, but somewhere in today’s debate we have lost sight of the fact that, even allowing for economic cycles, most people claim jobseeker’s allowance for a very short time. Most people come off JSA in a matter of weeks or months. Only a small minority of claimants will experience long-term unemployment, and most of them are concentrated in geographic areas where work is hard to find. Inevitably, in a competitive labour market those with least experience and low skill levels find it hardest to find work, and many of those who struggle to sustain employment, and those most at risk of long-term unemployment, face additional hurdles.
In the short time I have today I want to talk about young jobseekers. Youth unemployment is unacceptably high and much more could be done to address it. Young people’s job prospects have been very adversely affected by the financial collapse and recession, but it is really important to emphasise that as the economy recovers youth unemployment has been falling—certainly in Scotland—and is now at its lowest level for five years. I welcome that, but there are still enormous challenges ahead.
The question today is whether the proposed compulsory jobs guarantee would tackle long-term unemployment effectively. I am not convinced by what I have heard from either Front Bench. I do not think the policy addresses the underlying causes of long-term unemployment. It is a blunt instrument that will not help those facing the biggest disadvantages, and it offers too little, too late. It is desperately important that we do not wait until somebody has been unemployed for a whole year before we intervene, because all the evidence suggests that earlier interventions with young people are much more effective. I also regret the lack of ambition from the Government to make the kind of early interventions that might tackle disadvantage.
In response to soaring youth unemployment in the wake of the financial crash, the Scottish Government introduced the Opportunities for All scheme, which offers every 16 to 19-year-old in Scotland a place in work, education or training. Take-up has been overwhelming: record levels of school leavers—more than 92%—now have a positive destination on leaving school, and more importantly, those positive destinations are being sustained for 90% of school leavers. The number of young people not in education, training or employment is now at its lowest level since before the financial crash and has decreased across every local authority area.
There is no room for complacency, however, and we need to talk about the minority still being left behind. In certain parts of the country, job opportunities are still very limited. The final report of the commission for developing Scotland’s young work force, chaired by Sir Ian Wood, was published in June last year. It set out recommendations to reduce youth unemployment by 40% by 2020 and proposed an ambitious transformation of the way in which employers, schools and colleges, and local authorities work with young people to fulfil their potential. However, it also highlighted the extent to which inequalities were compounding disadvantage in the labour market. For example, although disabled young people often have positive destinations when they leave school, a few years on they are four times more likely to be unemployed than their non-disabled peers.
Jonathan Edwards
The motion states that those who do not take up the compulsory jobs guarantee would face losing their benefits. Is there not a danger that such a draconian measure would lead to many people being lost in the system with little hope for the future?
Dr Whiteford
The hon. Gentleman makes an important point. Obviously, young people who lack skills and qualifications are more likely to struggle in the labour market, but our black and minority ethnic young people are also experiencing disproportionately high rates of unemployment. Our looked-after young people have the poorest job prospects of all. Just one in three care leavers is likely to be employed nine months after leaving school.
The point is that many of the young people furthest from the labour market, and certainly those at greatest risk of long-term unemployment, face complex barriers. It is not just a case of, “Here’s a job, get on with it.” The compulsory jobs guarantee does not address these complexities at all. Indeed, it would make unemployed young people wait a year before they get an offer of a work opportunity, and that offer would be made with the threat of benefit sanctions held over their heads like the sword of Damocles. I do not think anyone objects to sanctions that are proportionate and fair—everyone who is fit for work should be willing to take a job if it is offered—but that is not going to overcome the challenges facing many of the people at the greatest risk of long-term unemployment.
We have seen the impact of poorly applied sanctions in the food banks in all our communities. The young people I have met in my constituency—kids with learning disabilities, literacy problems, impaired speech or movement or chronic health issues, or kids who have just had wretched early lives—all want to work, but it is not always straightforward to help them to find work, to make themselves attractive to employers or even to understand that they have something valuable to offer. In that regard, I pay tribute to the teachers in our schools and to voluntary organisations such as the Prince’s Trust and Theatre Modo, which are working in my constituency to help vulnerable young people.
We were talking earlier about the failure of the Work programme in Scotland and the need for that responsibility to be devolved as soon as possible. The same applies to other aspects of employment support, as was recommended by the Smith commission.
Pete Wishart
Is it the case that the more powers the Scottish Parliament has, the more we can do for the people of Scotland?
Dr Whiteford
That is right. The commission has shown that the opportunity for joined-up working between public, private and voluntary sector employers—our schools, colleges and local authorities working in partnership with the Government and being empowered by Government initiatives—is there already and has been shown to work in providing opportunities for all. We need the powers to tackle youth unemployment, and we need them now. The sooner they are devolved, the better.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I have to reduce the time limit to four minutes. I have tried, but there is nothing else I can do.
Nick de Bois (Enfield North) (Con)
With some skilful editing, I shall proceed, Mr Deputy Speaker, and it is a pleasure to proceed after the hon. Member for Banff and Buchan (Dr Whiteford).
I would like quickly to set the scene in Enfield North, where, I am pleased to say, we have seen unemployment down by 42% and youth unemployment down by 53%. We are even making progress among the over-50 cohort, where unemployment is down by 18%. It is worth highlighting something that has not been sufficiently talked about in this debate—that the number of VAT and PAYE businesses registered in Enfield North has grown by 15% since 2010, while we have had a massive change across the borough of Enfield in start-ups. That is something that will play an ever-increasing role in dealing with the continuing challenge of unemployment.
Having set the scene and speaking as an employer who started out with a great idea in a pub that turned into a business for over 25 years, let me say that we have been bandying statistics across the Floor of the House pretty much all day and that I have had the pleasure of employing people, but also been through the difficulties—frankly, the agonies—for the employer and still more for the employee of having to let people go in difficult times. We should always remember that unemployment is never a price worth paying; it is an extremely difficult situation.
I think there is a difference between the parties on dealing with unemployment. I do not believe it is the role of Governments to create jobs, but it is the role of Governments to create and set the conditions for employment to thrive. That is perhaps where we divide in many respects. Any employer is unlikely to be wooed by a bit of a sub for someone on a job for a period of time. The employer wants to take people on so that his organisation or sector can profit, and wants jobs to be sustainable in a sustainable business. Employers look to the Government to set those macro-economic conditions.
Where should the Government’s emphasis be in trying to help deliver the conditions for employment? Frankly, it should be focused on the area of reducing tax. One of the absurdities I felt we got away with at the beginning of this Parliament was the jobs tax—in many ways, one of the most hideous of taxes. It taxed an employer for wanting to employ someone, when the Government are there to help, not hinder, employing people.
We must understand the massive role we have in welfare reform. Welfare reform is not about cutting costs as much as it is about leveraging and helping people back into work. That is why making work pay is a philosophy with which an employer and an employee would agree—as, I am sure, would Government accountants. Fundamentally, employers know there is a skills gap at the moment in the UK, and this partly explains some of the stubborn youth unemployment figures. We have to remember that these are crucial and must be dealt with. We have to deal with that problem and the soft skills. By creating the right conditions, we will see employment go down even further
In my last 40 seconds, I can draw the Minister’s attention to 26 February, when my fourth jobs fair will take place. It has a special focus on the over-50s for the first time. We are being supported by companies that want people to come and work in sustainable jobs. Crossrail, TFL, Ardmore Construction, Barclay and local successes such as Kelvin Hughes, Risual and even Stansted Airport are coming because they want to employ people on a long-term sustainable basis—not through artificial subsidies that, however well-intentioned, are set to fail in terms of long-term delivery.
Pamela Nash (Airdrie and Shotts) (Lab)
Thank you for calling me to speak in this important debate, Mr Deputy Speaker. I have to start by saying that I am particularly proud to be a member of the Labour party and the labour movement, as we debate this policy. I feel it reflects the heart of our movement and where our priorities lie in creating new opportunities for young unemployed and long-term unemployed people to give them the dignity of paid work and skills development, while simultaneously supporting job creation and business growth, making for a stronger, more vibrant economy with permanent long-term jobs. I have no doubt that, should we have a Labour Government in May, this policy will make an incredible impact in my constituency of Airdrie and Shotts, complementing the existing work going on at local government level and in the voluntary sector. Indeed, it will help thousands of people back into work across the country.
We know that youth and long-term unemployment has a detrimental effect on people’s self-worth, their mental and physical health and their circumstances. However, that impact is not confined to individuals; it is also felt by their families, by the people around them, and by their communities. The youth dole queue, which is currently the length of Hadrian’s Wall, shows us the impact that this is having, and can have, on society as a whole, and it is the responsibility of whichever Government are in power to tackle it.
In the short time that is available to me, I must confront the Secretary of State’s claim, in his opening speech, that the Labour party is opposed to work experience. I find that offensive, because it is categorically wrong. Our opposition is to the Government’s exploitation of the unemployed through poor-quality, mandatory, unpaid work experience. I would be less likely to be in the House today had I not had the opportunity to benefit from high-quality work experience when I was young. That led me to launch the Our Community project, in conjunction with the trade union Community and the local jobcentre. The project matches young unemployed people with voluntary, high-quality work experience provided by local employers. Work experience is extremely valuable, and we must do all that we can to nurture the culture that produces it.
Mr Iain McKenzie (Inverclyde) (Lab)
My hon. Friend has referred to the importance of keeping young people in employment, and to the project that matches them with local employers. Constant contact with employers makes it possible to find out what new skills and career directions can benefit those who are placed with them. Is that not one reason for the success of the project?
Pamela Nash
Absolutely—and I think that the jobs guarantee will extend or complement the ability to do that, rather than take it away. However, it will also have a positive impact as a whole. It will create new jobs. As we heard from my right hon. Friend the Member for East Ham (Stephen Timms), employers will have to prove that the jobs would not otherwise be there. It will also be mandatory for them to include a training element that will provide over six months of guaranteed paid work, with all the benefits that that brings.
As I said earlier in an intervention, the system is already working. We have seen several examples of that. My local authority, North Lanarkshire council, is doing fantastic work in getting people back to work, and creating new jobs—in the voluntary and public sectors, but mainly in the private sector—through its project “North Lanarkshire’s Working”. A key part of the project is the provision of a 50% wage subsidy for employers who give unemployed people new jobs for six months. It is aimed primarily at young people, although 15% of the funds are earmarked for older people, and it has returned nearly 5,000 people to employment and training. I hope that a version of it will be rolled out throughout the country, so that others can benefit from it. The project has also put considerable effort into encouraging the creation of jobs for those who find it most difficult to obtain work, including those who live with disabilities and young people who are leaving the care system.
Earlier, both SNP and Tory Members heckled my right hon. Friend the Member for East Ham, saying that after the six months was over, people would end up back in the dole queue. Our experience in North Lanarkshire shows that that is not the case among the vast majority of participants. The wage subsidy allows businesses to expand at reduced risk, because it allows them to take people on for six months and then create permanent jobs for them. Even when that has not been possible, the skills, confidence and routine that people have gained from six months of paid employment have left them with much brighter prospects.
The jobs guarantee that my party has proposed today, and in the last few months, is the culmination of other successful policies that we have seen in the past, and see currently in other parts of the United Kingdom. I think that it will be a game changer, creating jobs and tackling both youth and long-term unemployment, and I look forward to its implementation by a Labour Government in May.
Andrew Bridgen (North West Leicestershire) (Con)
I oppose the Opposition’s motion, but I wholeheartedly thank them for giving me an all too brief opportunity to talk about the huge success of the economy in my constituency under the current Government, and about the impact of their long-term economic plan on job creation there.
Unemployment in my constituency is 1.5%, which means that there are 716 jobseekers. That is too many, and we have much more work to do. But the good news is that only last week, East Midlands airport in my constituency announced that it was creating 1,250 jobs across the airport this year. Depending on the traffic on the M1, I hope to go up there this evening to join the Chancellor of the Exchequer in congratulating the airport on its sterling work and economic growth. Since 2010, we have had nearly 800 fewer jobseeker’s allowance claimants, a drop of almost 60%. Even more pleasingly, our youth unemployment claimant count has fallen by 310 since 2010, a reduction of almost 70%.
In North West Leicestershire, we have one of the highest-growing economies outside London and the south-east. That is because we have business-friendly government at all levels—a Conservative-led coalition Government, a Conservative county council and a Conservative district council—delivering the long-term economic plan right to the doorsteps of my constituency. In North West Leicestershire, Labour’s proposal for a compulsory jobs guarantee would be a solution—an expensive, discredited one—looking for a problem.
Last week I visited a multinational company, Schneider Electric, in Ashby-de-la-Zouch. It trains 15 to 20 people a year to become highly skilled engineers, and it is a very impressive set-up. It is not looking for Government intervention; it is looking for a Government who will provide the right mood music, set the right agenda and create an environment in which businesses can feel confident to invest, create jobs and wealth and pay the taxes that will support the essential public services that we all need.
I struggle to understand how business can have any confidence in a party led by an individual who ducked out of addressing the British Chambers of Commerce conference just the other day. Just as we cannot have a strong NHS without a strong economy, we cannot have strong wealth creation without a Government who support enterprise and business. That is something that Labour would not do, given its relentless attacks on business and wealth creation. After all, how can we take seriously a party that wishes to emulate François Hollande’s failed and discredited economic model? I remind the House that the Leader of the Opposition has stated that he wants to do in the UK what President Hollande is doing in France. He should clearly be more careful what he wishes for, because the socialist policies in France have resulted in a youth unemployment rate of 25.4%.
This Government have got to the root of the problem when it comes to unemployment. The Opposition want to do what all Labour Governments do—they want to chuck taxpayers’ money at the issue in the hope that some of it sticks. Their compulsory jobs guarantee scheme seems to be modelled on the discredited future jobs fund, a scheme that was five times more expensive than some other employment programmes and created only short-term placements, costing around £6,500 per job.
It should come as no surprise to those in this Chamber or to the people of our country who will go to the polls in a few months to elect a new Parliament that no Labour Government have ever left office with unemployment lower than when they took office. The Labour party claims to love the poor, and indeed it must, because every time it gets into government it always creates more of them.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Unfortunately, I must bring the time limit on Back-Bench speeches down to three minutes.
Nic Dakin (Scunthorpe) (Lab)
It is a pleasure to follow the hon. Member for North West Leicestershire (Andrew Bridgen). I should like to make it clear to him that my party is the party of work. It is called the Labour party; the clue is in the title. That is what we are about, and work includes business and enterprise. That is why it is so pleasing to have a debate this afternoon about the future of our young people and what we can do to ensure that we can get them all into work. This relates to the future not only of those individuals but of the nation and of UK plc—something to which we are all committed and in which we all play a part.
I know from my experience of working with young people that they gain confidence when they have work. Work is the biggest builder of confidence, and the biggest provider of health and well-being. Tackling the issue of young people who are stuck without work is essential for this nation, and we should unite around it. We should recognise the things that have been done well in the past, whether under Labour or Tory Governments. Let us celebrate those things and build on them.
Let us not play this year-zero game again, where we get rid of things that work, such as education maintenance allowance, because the previous Government introduced them. In my experience of working in further education, nothing motivated young people more than EMA, which was amazing to me. It was not what I expected, but it delivered attendance, achievement and better outcomes. That is what we should be about in this place. We should be about focusing on the future and what people need. Data showing youth unemployment at 764,000, a rise of 30,000 on the previous quarter, should cause us all concern, and we should all roll up our sleeves to do something about it.
The compulsory jobs guarantee will guarantee real, paid jobs, preferably in the private sector, for every 18 to 24-year-old who has been claiming JSA for more than a year. That is the sort of initiative we need in future to turn the tables. I have to say that there are really good things going on, and I am looking forward to visiting the Youth Engineering Scunthorpe initiative, where innovative work is being done in my constituency by Bradbury Security and North Lindsey college to get young people back into work today. We should build on these things and celebrate them. We should build together, across this House, a better future for our young people.
Robert Halfon (Harlow) (Con)
We have more people employed now than at any time in our island’s history, and I am saddened at the way this debate is going on across the country. The millions of people who have been employed are now able to provide for their families and are, for the most part, off benefits. For Labour Members to say that these are not real jobs is not just an insult to these people and their families; it is not a fair reflection of what is taking place. I say that because last week a Labour councillor in my constituency, Emma Toal, said that she feels “sick” to the stomach every time I do a
“lap of victory about unemployment statistics”.
Since I have been in this House, I have worked incredibly hard to try to bring jobs back to Harlow: I fought for two years for a new university technical school; and I championed apprenticeships, including by having the first full-time apprentice in my office. The number of jobs in Harlow is growing—we have got jobs back.
Let me briefly mention a few figures. In May 2010, 605 young people aged 18 to 24 were claiming JSA in Harlow, which was a rate of 8.1%, whereas the current figures are 3.1% and 235 people. I am proud that there has been a 61% decrease in the number of young people claiming JSA, and it is worth remembering that 83% of the jobs created in 2014 were full-time positions. I know that because year after year I established three jobs fairs, which we entirely set up ourselves. We had hundreds of jobs on offer, of all kinds—permanent jobs. Thousands of jobseekers came and I received many messages from people who had got jobs as a result. So for the Labour party in Harlow to say it is sick to the stomach because the number of jobs has gone up in Harlow and unemployment is down is shameful and shocking, and Labour has done the same thing on apprenticeships. The number of apprenticeships has increased by 106% in my constituency. In 2009-10 there were just 450 young people in Harlow starting apprenticeships, whereas last year’s figure was 770. According to Ipsos MORI, 88% of apprentices said they were satisfied with their course, and only 7% of employers expressed dissatisfaction.
So there is a good story on jobs and on apprenticeships. It is important to see job creation not only in terms of individual schemes that the Opposition are proposing, which are very expensive and have been proved in Wales not to work; we also need to look at it holistically. This Government have created a programme by investing in new schools, in university technical schools, in apprenticeships, in real welfare reform and in our businesses, with lower taxes.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
If there is one group of people in this country whom the Government have let down it is our young people. Young adults in this country have been pushed to the fringes by this Government, who have chosen to focus their energies on pockets of society they believe are more important. But nobody is more important than our young people. No one knows that more than our older people. Grannies and granddads are heartbroken that their grandchildren are unable to start making their own way in the world, and are having to rely on mums and dads who are dealing with pressure on top of pressure. Our older people have seen it all before, and this Government should have spent the past five years helping them and helping our young people. Instead, they have sat back and watched poverty creep across the UK, so that it is now a normal part of far too many working people’s lives.
Gemma Doyle
I will not give way.
The Government have sat back as almost 1 million people have turned to food banks for help. Their mismanagement of the economy means that prices have risen faster than wages for 52 out of their 53 months in office. Under this Government, unemployment reached more than 2.5 million, which is its highest level for 17 years, and youth unemployment peaked at more than 1 million.
Ministers may rejoice at the figures in their briefings, but let me tell them that things do not feel like they are getting better for my constituents. Some 6% of young people in my constituency are claiming jobseeker’s allowance, which is twice the UK average. Although that figure represents about 500 people, in every month of this Parliament the number of unemployed young people in my constituency has been closer to 1,000. Sometimes the figure is above 1,000, but mostly it is close to it. Those young people, who are struggling to find work, have been let down month after month after month by this Government. Tory Ministers would rather give millionaires a tax cut than help our young people. Young people think that life under the Tories is not fair, and they are absolutely right.
A Labour Government would introduce a compulsory jobs guarantee to get more young people into work. Those young people would receive in-work experience, on-the-job training, and wages; perhaps most importantly, they would have the dignity and confidence they need and deserve.
Government Members are wrong in saying that our scheme is not costed. We have set it out very clearly. It would be paid for through our tax on bankers’ bonuses and by restricting pensions tax relief for those who earn more than £150,000 to the same rate as that for basic taxpayers, which is fair enough. This scheme is necessary. Our young people deserve a better future. We cannot have another five years of this Government.
Mike Gapes (Ilford South) (Lab/Co-op)
To hear some of the criticisms from Government Members, one would think that the Labour party had no policies at all. We will restore Sure Start to what it was when we were in Government. We will continue to have a programme for modern apprenticeships and to invest in infrastructure. I should declare an interest here as chair of the all-party Crossrail group. I have the Tunnelling and Underground Construction Academy on the edge of my constituency, on the banks of the River Roding. It is training up apprentices in great numbers and giving them high skills. It is taking many people who are registered as unemployed and providing them with quality training. That scheme was initiated under the previous Labour Government and is operating in a fantastic way. That is the kind of skills training we need.
Some Members from Scotland and elsewhere—I am not talking about my hon. Friends—think that the streets of London are paved with gold and that everything is perfect, but we have pockets of deprivation and some serious levels of unemployment, particularly in certain communities, in our capital city. Some young people have been persistently unemployed, and we need to boost their confidence by giving them the possibility of long-term permanent jobs.
Our jobs guarantee proposal will benefit young people and older people who have been registered as unemployed for more than two years. Yes, it does cost, of course it does. When I talk about investing in young people and unemployed people, I am not thinking about the youth training schemes that were used by Tory Governments 20 or 30 years ago, the zero-hours contracts or subsidising exploitative employers. What we need to do is provide real jobs and real hope. Many of these young people will not have experienced the structured life that can exist within the work environment. Many of them might have problems in their lives, whether from disabilities or from past alcohol or drug dependence, and some might have mental health problems, and they need to be integrated into our society and given hope. This proposal provides a route for people to get the experience of work and to go from that to permanent employment. That is why the Government are totally wrong to oppose it today.
Kate Green (Stretford and Urmston) (Lab)
This has been a good debate and I thank all hon. and right hon. Members for their contributions.
Our motion is about how we tackle long-term unemployment, particularly long-term youth unemployment. While I welcome the belated increases in the numbers in work that hon. Members have talked about in relation to their constituencies—in passing, I point out that that rise in employment has been accompanied by record in-work poverty—today’s debate is about the fact that our long-term unemployment rate, particularly our long-term youth unemployment rate, remains far too high.
As my right hon. Friend the Member for East Ham (Stephen Timms) pointed out in opening the debate, long-term youth unemployment, at 750,000, is not only rising but worsening relative to the population as a whole. Research by the House of Commons Library has shown that in 2010 youth unemployment stood at 2.5 times all unemployment. Now, on the latest figures we have, that proportion has increased to 2.9 times, so young people’s position is not improving; it is getting worse. As many hon. Members have noted, we should all be concerned about the scarring effect that occurs over lifetimes for individuals and communities if young people do not get the best start at the beginning of their working lives.
Andrew Bridgen
Does the hon. Lady agree that not having a role model and being brought up in a workless household are also sources of long-term youth unemployment? Does she welcome the fact that there are 400,000 fewer workless households under this Government?
Kate Green
Very few households choose to be workless. Indeed, very few—[Interruption.] I understand that the hon. Gentleman was not saying that. It is an issue not just of role models, but of opportunities. It is welcome that more people are in paid employment, but today’s debate is about that vulnerable minority who are scarred by long-term unemployment.
Mr Jim Cunningham (Coventry South) (Lab)
One thing we should remember is that the Labour Government helped one-parent families through Sure Start, whose schemes allowed trapped housewives on council estates to get back into work if they wanted it.
Kate Green
I am extremely proud of the fact that, under Labour, lone parent employment rose from 44% in 1997 to nearly 60% by the time we left office.
An interesting debate opened up this afternoon about the proper role of Government in relation to long-term unemployment. One argument was expressed very well in a thoughtful speech by the hon. Member for Enfield North (Nick de Bois), who suggested that the role of Government was only to create the conditions for business to thrive and to make employment available. That is the real philosophical divide between Opposition and Government Members. We believe that it is the role of Government proactively to intervene as a backstop to tackle entrenched long-term unemployment. We believe that programmes that have attempted to do that—for example, the future jobs fund and Jobs Growth Wales—prove that such programmes, in those terms, are effective.
Those programmes were much criticised today by the Secretary of State, but they have been cost-effective and have created real jobs with real pay for those who participated. That, fundamentally, is what young people want.
Our compulsory jobs guarantee will be a quality offer for long-term unemployed people. It will be paid at least at the national minimum wage. It will guarantee work for at least six months. We expect, drawing on our experience of other programmes, that many of those jobs will turn into permanent jobs. It will consist also of support, to ensure that training and the opportunity to develop one’s career are embedded as part of the programme. Contrast those conditions with work experience which, of course, is important, but which fulfils a different function. I do not think it is appropriate to expect anyone, even our young people, to work for three months without proper pay, because at that point they must be doing a proper job.
My hon. Friend the Member for Ealing North (Stephen Pound), who is not in his place, made an important point about our compulsory jobs guarantee—the fact that it is founded on the concept of mutual obligation. For those who are out of work, we will make sure that after a period of one year for the under-25s or two years for the over-25s it will be our role to take the responsibility to guarantee them employment, and in return that individual will be expected to take up the opportunity that is offered.
The hon. Member for Banff and Buchan (Dr Whiteford), who made a very useful speech in many respects, seemed to think that the sort of conditionality that we propose in our compulsory jobs guarantee programme was not appropriate. I am entirely with her in the appropriate and careful use of sanctions—which I do not think we are seeing under the present Government—but I do not see what the problem is with having conditions for support which our compulsory jobs guarantee will offer, and it is right that they should be contained in the programme.
There was an important and interesting debate about engaging the private sector in our programme. As my right hon. Friend the Member for East Ham pointed out in opening the debate, we have seen successful engagement of the private sector, particularly of the small and medium-sized enterprise sector, in Jobs Growth Wales. One criticism that many Government Members levelled at the future jobs fund was that it had not engaged with private sector employers. I readily accept that the programme was brought in as an emergency in response to a significant employment and financial crisis, and at that time the most straightforward way to do so was through the medium of the voluntary and the public sectors. But there is no reason at all why that could not have evolved to encompass private sector employers, and indeed those private sector employers who did participate, such as Jaguar, as my right hon. Friend mentioned, found it a very positive programme, as did those who went through it.
We heard some useful contributions from, for example, my hon. Friend the Member for Scunthorpe (Nic Dakin) and the hon. Member for Stroud (Neil Carmichael), about the importance of accompanying jobs programmes with investment in education, skills and vocational training. As the hon. Member for Stroud said, it is right that certain industry sectors struggle to recruit suitably qualified and appropriately skilled workers. That is why I so deplore some of the reforms that we have seen to the education system under this Government, which so erode the value of vocational education and training. Although Government Members like to tell us often about the growth in apprenticeships under this Government, young people aged 16 to 19 have not seen a growth in opportunities to take up apprenticeships. What is more, those apprenticeships too often take young people to only a level 2 qualification, and we know that many employers consider a level 2 qualification insufficient for someone to make a meaningful start in the kind of jobs that the hon. Gentleman rightly talks of.
Finally, let me address the concerns that were raised by a number of Government Members about whether our programme is fully funded and costed. May I take the opportunity to assure them that it is? It will be funded by the bankers’ bonus tax—[Interruption.] Not again, as the Minister says. This will be the only purpose to which an incoming Labour Government will put the funds raised by this one-off repeat of the bonus tax. When the Minister for Disabled People is sitting on the Opposition Benches after 7 May, I invite him to hold us to that commitment, because this is one that I confidently give on behalf of my party.
We also think it is right to impose further restrictions on pensions tax relief for the very highest earners. I can see no objection to those with the broadest shoulders bearing more of the burden of funding so that some of our young people have the chance of employment, and that is what we will do.
Many people lost out after the global economic crash and in the three years after the general election, when the economy hardly grew under this Government. Even now, as Ministers point to improving levels of employment, long-term and youth unemployment remain a scourge on our economy. Labour’s compulsory jobs guarantee is the key policy to change that, and the sooner we have a Labour Government ready to introduce it, the better.
The Minister for Employment (Esther McVey)
With only three months to go until the general election, I was intrigued to hear what the Opposition would put forward today to help people into work. What was this compulsory jobs guarantee? What we have learnt today is that there is no real commitment and no real understanding of what would happen. As my hon. Friend the Member for Reading West (Alok Sharma) said, it is unfunded, un-thought-through and unworkable.
Many questions remain about the jobs guarantee. Which businesses have signed up to it? How many jobs would it provide? What would happen if someone refused to do it? What would happen to apprenticeships if people did it? How would it be funded? None of those questions has been answered adequately. What we do know is that it is important to distinguish between proposals that have not been thought through, prepared or funded and what this Government have done.
Members spoke today about what has happened in their constituencies—and those are facts. In Aberdeen South the claimant count is down 56% since 2010, and in Stroud it is down 56% since 2010. I congratulate my hon. Friend the Member for Stroud (Neil Carmichael) on setting up the festival of manufacturing and engineering in his constituency. When it comes to building infrastructure and helping business, we know that we have put forward £12 billion for the growth fund. We are putting £15 billion into roads and infrastructure. We have the northern powerhouse, bringing together science, manufacturing and infrastructure and absolutely turbo-charging our northern cities.
In Ealing North the claimant count is down 38%, and in Nuneaton it is down 46%—the same is true for every Member who has spoken today. We are seeing employment going up and unemployment going down. We need this clear distinction: should people go forward with a party that does not know what it is doing or what the outcome would be, or should they go forward with a Government who have a tried and tested record—1.75 million more people in work and the biggest fall in youth unemployment since records began?
Esther McVey
I will not take any interventions, as the shadow Minister did not do so, but I will get through this in plenty of time for Members to speak—[Interruption.] Okay, I will take two interventions later.
What does the OECD have to say about Labour’s compulsory jobs guarantee? It says that there would be “displacement and substitution effects” and that it would not get anyone into permanent jobs. What did the Institute of Directors say? Like my hon. Friend the Member for Enfield North (Nick de Bois), it said:
“Wage subsidies for employers are not the source of sustainable jobs. Government must focus on creating the conditions for growth, as only businesses know when consumer demand will allow them to create more positions.”
That is exactly what we are doing, with business tax support, welfare changes, infrastructure and true fiscal discipline. I work with businesses pretty much every day, and we know that over the next 10 years, as a result of what this Government are doing, there will be 12 million new jobs created, fundamentally in science, engineering and IT. We have to ensure that our young people can take up those jobs, and that is what we are doing, with increased support for training and increased support for schools, for example through the pupil premium. We will help those who have been left on the unemployment list for so long and tackling the long-term youth problems and family problems through support for troubled families. We are systematically tackling unemployment and working with people to ensure that they are in work.
It is really important that we draw a clear distinction between what is working under this Government and what never worked under the Labour Government. My hon. Friend the Member for Selby and Ainsty (Nigel Adams) said that when Labour leaves office, it always does so with higher unemployment than when it came into office, and that is absolutely true. So why would anybody choose to move forward with this jobs guarantee without knowing where these guaranteed jobs are coming from?
Interestingly, even the European Commission, which likes to foist initiatives on people, has said that
“the draft Country Specific Recommendations published 2 June call for commitment to the UK’s Youth Contract to be maintained.”
In other words, it would not pursue Labour’s proposal on guaranteed jobs, and what we did was correct. We supported people and put money in place to create work experience, sector-based work academies, and incentives.
Kate Green
I am grateful to the Minister for giving way; this must be one of the two interventions that she is going to accept. Given that she is speaking of the European Commission’s comments on the youth jobs contract with such approval, why did her Government decide to scrap it, and how can it have been such a failure in delivering the outcomes it was promising?
Esther McVey
No, it is still going ahead. As I said, we have had the biggest falls in youth unemployment since records began. The Commission agreed that we are creating the right conditions, with more jobs being created in the UK than in the rest of Europe put together. That is why we have been having meetings with it to explain what we are doing rather than what the Opposition would do. The key point is that of course people would stay with those who have ensured that 1.75 million more people are employed.
I want to read out some of the predictions that Labour Members have made. They said that 1 million more people would be unemployed if we followed what we are doing. [Hon. Members: “Wrong!”] As all my Back Benchers are saying, that was wrong. In fact, nearly double that number of jobs were created. Labour Members said that what this Government were doing would lead to out-of-control inflation. [Hon. Members: “Wrong!”] That did not happen—we have brought it down. They said that there would be a double-dip recession. [Hon. Members: “Wrong!”] That never happened. No—the only recession was under Labour, and it was the longest and deepest since the war. They said that it was a fantasy that the private sector could create more jobs than were lost in the public sector. [Hon. Members: “Wrong!”] That was never the case; in fact, the private sector created over 2 million more jobs.
So why would anybody trust the Opposition with the economy, with jobs, and with the future of this country? The answer is that they certainly would not. That is why we are firmly saying today, three months before the general election, that their idea of how to create jobs is unfunded, ill thought through and unworkable, and we cannot find a business yet that wants to follow it. We reject the motion.
Question put.
Mr Speaker
I have now to announce the result of the deferred Division on the draft Smoke-Free (Private Vehicles) Regulations 2015. The Ayes were 342 and the Noes were 74, so the Question was agreed to.
[The Division list is published at the end of today’s debate]
Tax Avoidance
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:57 - The House divided: - Ayes: 213 / Noes: 286 - Question accordingly negatived.
19:10 - The House divided: - Ayes: 289 / Noes: 208 - Question accordingly agreed to.
Mr Speaker
I inform the House that I have selected the amendment in the name of the Prime Minister.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
I beg to move,
That this House notes with concern that following the revelations of malpractice at HSBC bank, which were first given to the Government in May 2010, just one out of 1,100 people who have avoided or evaded tax have been prosecuted; calls upon Lord Green and the Prime Minister to make a full statement about Lord Green’s role at HSBC and his appointment as a Minister; regrets the failure of the Government’s deal on tax disclosure with Switzerland, which has raised less than a third of the amount promised by Ministers; welcomes the proposals of charities and campaigning organisations for an anti-tax dodging Bill; and further calls on the Government to clamp down on tax avoidance by introducing a penalty regime for the general anti-abuse rule, which is currently too weak to be effective, closing the Quoted Eurobonds exemption loophole, ensuring that hedge funds trading shares pay the same amount of tax as other investors, introducing deeming criteria to restrict false self-employment in the construction industry, and scrapping the shares for rights scheme, which the Office for Budget Responsibility has warned could cost £1 billion in avoidance.
When citizens hand over their hard-earned cash to the Government in the form of taxation, they do so on the basis that at some level they have faith in our system of democratic governance—a system in which the Government are entrusted to make decisions about how to use that money in the best interests of all their people, and to keep them safe. The collection of tax is a core responsibility, and trust underpins the whole structure—trust that if I pay my fair share, so will my neighbour, and trust that the rules are applied as vigorously to the sole trader as to the huge multinational, and as fairly to the basic rate taxpayer as to those in the higher band. However, that foundation has been profoundly shaken.
The global crisis, austerity and a series of media disclosures about the low tax bills and complex avoidance schemes of multinationals and high net worth individuals have led members of the public to question like never before whether, when they pay their tax, their neighbour is doing the same. This week’s revelation that an arm of a leading high street bank, HSBC, helped clients to evade and avoid tax using Swiss bank accounts has simply added fuel to an already roaring fire. It seems that the Government have neither the will nor the ability to get a grip on the situation, which is fast spiralling out of control.
Mark Garnier (Wyre Forest) (Con)
The hon. Lady is quite right that the news is coming out this week, but is it not fair to say that the crime, if you like, happened in 2007 during the lead-up to the financial crisis? This is old news being brought out today, not new news.
Shabana Mahmood
I am grateful to the hon. Gentleman for his intervention. He and I have had a number of discussions on the airwaves about these issues, given that the Government have failed to field any Ministers to debate on those media channels. He has been doing a grand job of trying to defend the indefensible, but he is quite wrong. The central point in what we have discovered about HSBC this week is that the data with evidence of what had happened with tax avoidance and tax evasion were handed over by the French authorities to this Government in May 2010. That is the central point: that is the point at which we had evidence of wrongdoing that needed to be acted on, but that is not what happened.
Charlie Elphicke (Dover) (Con)
Is the hon. Lady’s case that Ministers should have direct and executive responsibility and decision-making powers over how and when Her Majesty’s Revenue and Customs should prosecute and collect taxes in specific taxpayers’ cases? Yes or no?
Shabana Mahmood
The hon. Gentleman is completely missing the point about the debate we have been having this week about the HSBC affair. As I said in answer to the intervention from the hon. Member for Wyre Forest (Mark Garnier), we know that data with evidence of tax avoidance and tax evasion were handed over to the Government in May 2010. That raises serious questions about due diligence and the appointment of Lord Green, the man in charge of the bank at the time, as a Minister in this Government only eight months after the data were handed over. Nobody on the Government Benches has answered the point about why that happened, and I hope that the Minister might try to answer some of those questions today.
Steve McCabe (Birmingham, Selly Oak) (Lab)
When David Hartnett said that the whole nation knows we had our disc from the Swiss, is it conceivable that he meant that everybody but the Prime Minister? Or is it the case that rather than sunlight being the best disinfectant, the stench from Downing street would knock over a horse?
Shabana Mahmood
My hon. Friend makes a powerful point. I agree and I shall come on to that a little later in my speech. We have had an ever-moving, ever-changing story about what the Government or members of the Government knew or did not know and the questions that they asked or did not ask about HSBC. That goes to my central issue of trust: trust is being undermined in our tax system, which absolutely depends on it.
The Government have tried to trumpet their record in recent days, but I am afraid that it is not the great source of pride that they have been trying to pretend it is. We know that the tax gap—that is, the difference between how much tax should be collected and how much is collected—rose from £31 billion in 2009-10 to £33 billion in 2011-12 and now to £34 billion in 2012-13, which is the information available for the latest year.
Toby Perkins (Chesterfield) (Lab)
Alongside the appalling impact of the tax gap on our public services and the public finances, does my hon. Friend agree that it has a massive impact on the businesses that are playing by the rules and paying their taxes? To stand up for law-abiding businesses and say that everyone should pay their taxes is not an anti-business argument but a profoundly pro-business one.
Shabana Mahmood
My hon. Friend makes an incredibly powerful point. All businesses and all individual taxpayers need to know that the tax system is based on a level playing field, that nobody is getting away with gaming the system, and that when the system is being gamed we have robust measures to deal with it. That is profoundly pro-business and it is also in the interests of individual taxpayers, UK plc and our economy as a whole.
Shabana Mahmood
I am going to make a little progress; then I shall give way again.
The famous Swiss deal between the UK and Swiss Governments in 2011 came into force on 1 January 2013. Ministers told us it would mean that British domiciles would start to be taxed on their banking deposits in Swiss institutions and raise £3.12 billion. We are now told that this has raised just a fraction of that amount—just £873 million, or a shortfall of £2.247 billion.
The Government have increased opportunities for tax avoidance. We know that the Office for Budget Responsibility has warned that the Government’s shares for rights scheme could open a tax avoidance loophole costing hundreds of millions of pounds. On page 52 of the policy costings section of the 2012 autumn statement, the OBR states:
“It is hard to predict how quickly the increased scope for tax planning will be exploited...this could be quantitatively significant as a quarter of the costing already arises from tax planning”.
I have to say to the Minister that it is one thing to have to close loopholes that have been an unforeseen consequence of legislative change, but quite another to make changes in the full knowledge that they will lead to a loss in the tax take.
Charlie Elphicke
Not so long ago, the Opposition opposed the Government measure on disguised remuneration, effectively a tax anti-avoidance measure taken by this Government in relation to hedge funds. Why did the Opposition do that?
Shabana Mahmood
I am surprised the hon. Gentleman has not done his homework. If he were to read the debate on that measure in the Finance Bill Committee, he would know that concerns were raised about the effectiveness of the initial draft legislation put forward by the Government. In fact, the Government had to table 100 amendments to their own legislation at the last moment on Report before the Bill became law. At the time, the concern was that nobody even understood what the impact of those 100 amendments would be. That is why the Opposition took that view at that time. If all the issues relating to the 100 amendments were remedied, of course we would support the thrust of that measure, but that was a technical issue discussed in Committee. The hon. Gentleman does himself no favours by not knowing the detail, given how much of an interest he takes in Finance Bill Committees and how much I have enjoyed debating with him in those Committees.
Mr Jim Cunningham (Coventry South) (Lab)
I thank my hon. Friend for giving way. Has she thought that had the Government collected all the taxes due to them, rather than protecting their friends, they might not have needed to inflict cuts and could have paid off a good bit of the national debt?
Shabana Mahmood
I am grateful to my hon. Friend for his intervention, which goes to the central point: we need to make sure we are collecting all the tax that is owed. That is fundamental not just for trust in the system for our taxpayers and businesses, but for our public services that depend on that tax take.
Sir Oliver Heald (North East Hertfordshire) (Con)
Does the hon. Lady not accept that Labour was lax on tax? Look at the arrangements for hedge fund managers paying 18% tax, when their cleaners were paying a lot more. It is quite wrong for her to take this high position. When was the Lagarde list from? It was from 2007, when the shadow Chancellor was City Minister.
Shabana Mahmood
The hon. and learned Gentleman should look at last week’s Financial Times report on tax avoidance and tax collection. It compared the Government’s anti-avoidance measures for companies with the measures Labour put in place to tackle corporate tax avoidance during its time in office. It found that the tax collected by the Government’s measures was going to be 90% lower than under measures introduced by the previous Labour Government:
“Measures put in place by Labour during its 13 years in power to counter corporate tax avoidance are projected to raise ten times as much over the next four years as those introduced by the current coalition government.”
Andrew Gwynne (Denton and Reddish) (Lab)
Does this not come down to a question of priorities? In the current economic climate, money for public services is very tight. We need to really clamp down on tax avoidance measures that have been abused for far too long—for example, by closing the tax loopholes that allow hedge funds to avoid paying stamp duty. That money, which we have identified, will go towards paying Labour’s £2.5 billion time to care fund to save our national health service.
Shabana Mahmood
My hon. Friend makes a powerful point. I entirely agree with him, and it is something I shall come to later.
Richard Graham (Gloucester) (Con)
I am grateful to the shadow Minister for giving way; she has been generous in taking interventions.
I think that everyone in the House agrees that every company should pay the tax it owes. The hon. Member for Chesterfield (Toby Perkins) is right that it is not encouraging for companies that pay the right amount of tax when others do not, but Labour first talked about introducing a general anti-abuse rule in 1997. It has taken 16 years and this Government to introduce one. Does she not agree that it is this Government who are implementing steps to prevent serious avoidance?
Shabana Mahmood
I shall deal with the substantive thrust of that intervention when I come to the general anti-abuse rule later.
In the context of what has been happening on the Government’s watch in revelations to tax avoidance, we have now had the shocking revelations about HSBC. We now learn that the Government were handed information about malpractice at HSBC, and that one of their first acts was to make the then boss of the bank, Stephen Green, a lord and then a trade Minister. Richard Brooks, a former HMRC tax inspector and BBC reporter, has said that the Treasury and HMRC
“knew that there was a mass of evidence of tax evasion at the heart of HSBC”
in 2011, but that they
“simply washed their hands of it”—
a damning indictment, if ever there was one.
The consequences are clear. More than 1,100 individuals were identified as allegedly guilty of tax avoidance or evasion, but we are led to believe that in only one case was there sufficient evidence to prosecute. In November 2012, a senior HMRC official told The Times that the Government had adopted “a selective prosecution policy” towards cases related to HSBC. Later that month, HMRC told the Public Accounts Committee that another dozen criminal prosecutions were to follow. However, there have been none since. It seems that HMRC adopted a deliberate strategy to minimise the number of prosecutions, rather than pursue them, which explains why just £135 million has been recouped, which contrasts unfavourably with France, for example, which has prosecuted more cases and raised more money on the basis of fewer account files being handed over.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
My hon. Friend is making some excellent points. Has she contrasted this Government’s aggressive sanctioning and demonisation of benefit claimants with their lax approach to those who avoid tax, and does she think it might be because they know far more tax avoiders than benefits claimants?
Shabana Mahmood
My hon. Friend makes a powerful point. We should pursue with equal vigour all those who game the rules in our country, whether it be benefit fraud or tax avoidance and evasion.
There remain serious questions for the Government to answer. I hope we hear some answers from the Financial Secretary to the Treasury to these pressing questions. Did he ever speak to Lord Green about tax avoidance and evasion at HSBC? If not, why not? I am happy to give way to him, if he wants to clarify those matters now, but it does not seem as though he is willing to take up that offer. I hope he will see fit to answer some of those questions in his speech. The Prime Minister was asked about conversations with Lord Green four times during Prime Minister’s questions today, but he failed to answer each time.
It has been difficult to keep up with the conflicting reports about who knew what and when, but today the Government have claimed they knew that HSBC customers were in the frame for tax avoidance and evasion but not about any possible culpability by the bank itself. It is ridiculous to suggest that, despite having files showing that 1,100 customers of a bank possibly avoided or evaded tax, Ministers did not consider the possibility that perhaps the bank itself had a hand in it and did not bother to ask any questions of a ministerial colleague they knew was head of the bank over the period in question.
The Government were given the data in May 2010; Lord Green took office in January 2011; and the Swiss tax deal was signed in August 2011. In fact, the Minister and David Hartnett, the senior tax official, started negotiating the Swiss tax deal straight after the data on HSBC were received from the French authorities, so at a time when the Government knew, or should have known, that serious wrongdoing had been going on.
I think we need some answers from the Minister about whether he ever discussed the Swiss tax deal with Lord Green, who was, after all, a colleague who had run an organisation with a Swiss banking arm. We need the Minister to explain the conversations he had—or the conversations that, on reflection, he now feels he should have had—with colleagues in government, and to clarify whether he has any regrets.
We also need to hear explicitly from Lord Green—our motion calls for this—with a full and frank statement about what he knew and what discussions he had with those in government about his knowledge of what was going on in the Swiss arm of HSBC. I also think it is about time we heard from the Chancellor. He has been quiet since Sunday, when all this started to come to light, so we need to hear from him as the head of the Treasury what he knew.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Richard Brooks is a fine journalist for Private Eye, not the BBC, and has done seminal work in investigating tax avoidance and evasion. Does my hon. Friend agree that the fact that neither HSBC nor any of the individuals involved are being prosecuted shows that HMRC is still a pussycat when it comes to big tax avoiders, yet will eagerly go after the small fry and small businesses?
Shabana Mahmood
There are real questions to be answered about how HMRC conducts its investigations and the rigour with which it pursues its different investigations. These take place, of course, within the context of legislation set by this Government, so ultimately these are matters for the Government. It is also the Government who decide on the amount of resources HMRC gets to do its job—an issue that I have discussed with the Minister on a number of occasions.
Fundamentally, the failure to act is symptomatic of the Government’s failure to tackle abuse within the tax system. That is why people are losing faith in it. Our motion sets out what we would do to restore that faith in the system. First, we have said that we will introduce penalties for those caught by the general anti-abuse rule, which is supposed to catch those who set up abusive schemes—the most egregious forms of abuse. However, there is currently no penalty scheme association with the so-called GAAR, which lacks teeth.
A Labour Government would introduce a tough penalty regime with fines of up to 100% of the value of the tax avoided. That will provide a tough and genuine deterrent to those who try to abuse the system and avoid paying their fair share of tax. [Interruption.] The Minister says from a sedentary position that the Government are now consulting on whether to have a penalties regime for the GAAR—but only after we announced our policy that we would have such a regime.
The truth is that when the GAAR was introduced, there was a huge amount of discussion and a review was carried out for the Government, with lots of academic work done on whether or not we should have a general anti-abuse rule in this country. The Government could and should have introduced penalties immediately. Where they have failed to act, we will act.
Secondly, the quoted eurobond exemption is used legitimately by many companies to raise finance on the international bond market, but it is also abused by some companies to shift profits out of the UK into tax havens, and so reduce the amount of corporation tax they pay. HMRC itself identified the problem, but the Government failed to act. Again, where they failed to act, we will act.
Shabana Mahmood
I will not give way; I want to make some progress. Thirdly, we have had much discussion relating to—
The Financial Secretary to the Treasury (Mr David Gauke)
Will the hon. Lady give way?
Mr Gauke
On the quoted eurobond exemption, the hon. Lady will be aware—we have debated the issue on a number of occasions, and it is a quite technical matter—that I made available Treasury and HMRC officials to talk through with her the reasons why it would be ill advised to pursue this policy; it would not raise any significant sums of money, but would just create an administrative burden. I made that offer over a year ago, and the offer still stands. Will she take me up on it?
Shabana Mahmood
At the risk of repeating our previous debate about the quoted eurobond exemption, I said at the time that I was fearful that the Minister was patronising me. He assured me then that he was not, and I take that point on board again. I have not taken the Minister up on his offer of a meeting and I have no intention of doing so. The HMRC’s proposal for closing down the exemption on which the Treasury consulted involved instances in which there was no regular or substantial trading of the bonds in question.
We all accept that there is limited liquidity for many legitimate eurobond issues, so such a criterion would be difficult to put into operation. However, we propose to explore the possibility of removing the exemption when bonds are issued to connected persons. We are making a substantially different offer with the aim of closing a loophole that everyone knows is being abused, and on which the Government have failed to act. I should be happy to meet the Minister and talk to him about how we propose to close down the eurobond exemption. I do not have access to the same officials as he does, but I do have another way of closing down that exemption.
Shabana Mahmood
I will not, because I am going to make some more progress.
Thirdly, we have said that we will prevent hedge funds that are avoiding stamp duty on shares from being able to do so. Hedge funds currently avoid stamp duty by not buying the shares directly; instead, they get intermediaries to buy them on their behalf. Those intermediaries are investment banks, which benefit from tax relief on stamp duty. The hedge funds then enter into a contract for difference with the banks, which means that they benefit from changes in the share prices without holding the shares directly. That is an exploitation of intermediaries’ relief by hedge funds.
We have had a great deal of discussion about hedge funds in the past few days. I note, in particular, that during Prime Minister’s Question Time today, the Prime Minister did not address the point of the relief that is being abused. He wanted to get involved in a debate about who had introduced the relief, rather than about the fact that it is currently being abused by hedge funds. We have said that we will stop the practice, but we hear nothing from the Government about what they intend to do about an issue of which they too are fully aware.
Fourthly, we will take forward proposals that we were developing in government to deem construction workers to be employed for tax purposes if they meet criteria that most people would regard as obvious signs of employment. That would reverse the Government’s decision to abandon these measures, thereby dealing with a major cause of avoidance in the construction sector.
Finally, we would scrap the Government’s shares for rights scheme, which allows individuals to trade key employment rights for shares in a company. The policy has received widespread criticism. Writing in the Financial Times, Paul Johnson of the Institute for Fiscal Studies has said:
“just as concern over tax avoidance is at its highest in living memory, just as government ministers are falling over themselves to condemn such behaviour, that same government is trumpeting a new tax policy that looks like it will foster a whole new avoidance industry. Its own fiscal watchdog seems to suggest that the policy could cost a staggering £1 billion a year, and that a large portion of that could arise from ‘tax planning’.”
Labour will scrap the shares for rights scheme and redeploy HMRC resources to other areas where they are greatly needed.
Caroline Lucas (Brighton, Pavilion) (Green)
I welcome the proposal for an anti-tax-dodging Bill, to which the motion refers. Does the hon. Lady support the idea of country-by-country reporting requirements, which I proposed in a private Member’s Bill a few years ago? They could at least have helped to show just how dependent HSBC was on Switzerland, and begun to ring alarm bells for the tax authorities at a much earlier stage.
Shabana Mahmood
I agree that we need a public form of country-by-country reporting. In government, we would seek an international agreement, if possible, on public forms of such reporting. At present, the agreement arising from the base erosion and profit-shifting process is to make country-by-country reporting available to tax authorities, but we believe that there is a strong case for the information to be made public. We will seek a multilateral agreement, but if that is not possible, we will discuss with business in this country the best way to introduce a public country-by-country reporting format on a unilateral basis.
As I have said, we will take further action to stop umbrella companies exploiting tax relief, and to force the United Kingdom’s overseas territories and Crown dependencies to produce publicly available registers of beneficial ownership. [Interruption.] The Minister again chunters from a sedentary position. I note that there was no chuntering from him when it came to his record and the decisions that he made about Stephen Green, but he has suddenly come back to life. He says from a sedentary position, “How?” I say to him that the Prime Minister himself said this was a vitally important policy, which was desperately needed in order to open up the secrecy associated with the overseas territories and the Crown dependencies.
The Prime Minister has been writing increasingly shirty letters to the Crown dependencies and overseas territories, saying that they need to move forward with a publicly available register of beneficial ownership, and nothing has happened. Actually, since my right hon. Friend the Leader of the Opposition made his announcement at the weekend that we would seek a blacklisting of overseas territories and Crown dependencies if there was no movement on a public register of beneficial ownership within six months of the next Labour Government, today Gibraltar, for example, has said it will take very seriously our call for a public register. I think that turning up the heat on this issue and being serious about action can gain a lot more than the Government’s approach thus far.
As I said in response to the intervention by the hon. Member for Brighton, Pavilion (Caroline Lucas), we will make country-by-country reporting information publicly available. We will tackle the use of dormant companies to avoid tax by requiring them to report more frequently, and we will ensure stronger, independent scrutiny of the tax system, including reliefs, and the Government’s efforts to tackle tax avoidance.
The problem of tax avoidance and tax evasion is not new. For as long as the state has been levying tax, people have tried to avoid it—a fact that, rightly and understandably, is resented by those who do pay what they owe. Members on the Government Benches have failed to understand that those levels of resentment, frustration and mistrust have risen to critical levels. This is a problem that requires a new level of determination to fix. The problem corrodes the central tenet of the contract between the Government and their people. It is simply not okay to have one set of rules for those who have enough money to require a Swiss bank account and another set for those who do not, one set of rules for those with armies of accountants and another set for those who do not, and one set of rules for those who are well connected and another for those who are not. The Government have failed to rise to the enormity of the challenge; the motion I speak in favour of this evening shows how the next Labour Government will do so.
The Financial Secretary to the Treasury (Mr David Gauke)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“notes that while the release of information pertaining to malpractice between 2005 to 2007 by individual HSBC accountholders was public knowledge, at no point were Ministers made aware of individual cases due to taxpayer confidentiality or made aware of leaked information suggesting wrongdoing by HSBC itself; notes that this Government has specifically taken action to get back money lost in Swiss bank accounts; welcomes the over £85 billion secured in compliance yield as a result of that action, including £850 million from high net worth individuals; notes the previous administration’s record, where private equity managers could pay a lower tax rate than their cleaners, very wealthy homebuyers could avoid stamp duty and companies could shift their profits to tax havens; further recognises that this Government has closed tax loopholes left open by the previous administration in every year of this Parliament, introduced the UK’s first General Anti-Abuse Rule, removed the cashflow advantage of holding onto the money whilst disputing tax due with HMRC, and allowed HMRC to monitor, fine and publicly name promoters of tax avoidance schemes; notes this Government’s leading international role in tackling base erosion and profit shifting; welcomes the commitment to implement the G20-OECD agreed model for country-by-country reporting and rules for neutralising hybrid mismatch arrangements; notes the role of the diverted profits tax in countering aggressive tax planning by large multinationals; supports the Government’s adoption of the early adopters initiative; and recognises that as a result the UK is collecting more tax than ever before.”
The disclosures of the last few days have reminded us of an era when it was all too easy to squirrel assets offshore, reliant on offshore centres providing secrecy from tax authorities; a time when mass market avoidance schemes were prevalent, tax avoiders could enter schemes, however artificial or contrived, and wait for years before paying their taxes; a time when highly paid employees could disguise their remuneration and avoid tax on it; a time when the payment of stamp duty on expensive properties was seen as voluntary; and a time when HMRC did not get the support it needed to take effective action against those dodging taxes.
That time is behind us. Under this Government, loopholes are being closed, tax avoiders are paying their tax up-front, bank secrecy is being abolished, prosecutions are increasing, the international tax rules on multinationals are being reformed, and HMRC is bringing in the money to a greater extent than ever before. For all the bluster we hear, look at the record. As a Government who care about the public finances, we have done far more than our predecessors.
I will set out what we have done over the course of this Parliament. First, let me turn to the issue of HMRC. Lord Green was a very effective trade Minister, but let me be crystal clear: there is no suggestion, and no regulator has suggested, that Lord Green was at fault with regard to what happened with the Swiss subsidiary of HSBC. Ministers, and indeed the general public, were aware of the release of information pertaining to individual HSBC account holders. There is a long-standing legal requirement for taxpayer confidentiality. Ministers cannot under any circumstances be made aware of individual cases. At no point were Ministers made aware of the evidence that has emerged in recent days of wrongdoing by HSBC itself.
Shabana Mahmood
I am glad that the Financial Secretary to the Treasury is giving us some answers, although they are not shedding quite enough light on what actually happened. Let us look at the media reports. In September 2010, for example, everyone knew that The Daily Telegraph was talking about the number of HSBC customers who were involved. It therefore beggars belief that the matter was not raised with Stephen Green when he was appointed trade Minister just a few months later.
Mr Gauke
Let me put it this way. It was, and is, the case that UK residents can have bank accounts in Switzerland without committing any illegal acts. It is also the case that a Swiss bank can provide banking services to a UK resident without committing any wrongdoing. It was the case, in terms of what was known at that time, that a disc was acquired by HMRC relating to HSBC accounts. The question that HMRC was asking was whether the UK residents whose names were listed within those data had paid the tax they should have. Were they declaring their income as required under UK law? That was what the investigation was about. [Interruption.] I am afraid that the hon. Member for Birmingham, Ladywood (Shabana Mahmood) is making a non-point. It was known that there was an investigation into HSBC account holders—that was in the public domain. However, regarding the evidence we have seen of, for example, bricks of cash being handed out and advice being given to keep several steps ahead of the taxman who is dealing with tax evasion, that information has come to light in the public domain—and, indeed, to Ministers—in the past few days.
Ian Lucas (Wrexham) (Lab)
If the information was in the public domain, will the Minister answer the question that the Prime Minister refused to answer four times today? Did the Prime Minister discuss these matters with Lord Green when he appointed him to the Government?
Mr Gauke
The position is this: Lord Green was appointed in January 2011 and at that point the information about the fact that there was an investigation into HSBC account holders was in the public domain. There was no big secret about that. Of course, I was not privy to the specific conversations that were held, but there is no suggestion that Lord Green had acted improperly, that he was complicit in tax evasion or that he was involved in this particular activity. That could not be clearer.
Shabana Mahmood
I am grateful to the Minister for giving way; he is being generous. Does he agree that Lord Green’s continued silence on what he knew about what was going on at HSBC is creating a climate in which more questions are being asked? Does he also agree that what we need—and what our motion calls for—is a full and frank statement from Lord Green about what he knew? Yes or no?
Mr Gauke
It is a matter for Lord Green as to what he says. It is clear that the Government have taken the strongest action to deal with tax avoidance and tax evasion. Ministers are responsible for tax law and for resourcing HMRC’s enforcement of that law, so I would suggest that questions about activities that took place between 2005 and 2007 should be directed to those who were Ministers at that time. They might be in a better position to answer them.
Ann McKechin (Glasgow North) (Lab)
The Minister will be aware that in November 2012, a senior HMRC official who was being questioned by the Public Accounts Committee said that 12 prosecutions relating to HSBC cases were in line to be proceeded with. None of those prosecutions has been brought. Has the Minister received any explanation from HMRC as to why? Why did the Minister not, in turn, advise the House and the Public Accounts Committee of the change in tack?
Mr Gauke
Let me address the point about decisions to make a prosecution. First, HMRC determines whether to bring a prosecution and build up a criminal case, and then it is a matter for the Crown Prosecution Service to make a judgment as to whether it is confident that a conviction can be achieved. Rightly—I would hope there is consensus on this point—those decisions are made by HMRC and the CPS, not by politicians. It is very important that that independence be maintained. I do not believe it would be right for politicians to decide how many prosecutions are made, and that has not happened in this particular case.
Andrew Gwynne
The Minister continues to insist that Lord Green had neither knowledge of nor involvement in these matters while he was chairman of HSBC, having said that during Monday’s urgent question. That still suggests that the Government must have asked those questions, given that they are so certain in their answers. This is not just a matter for Lord Green; it is simply a matter for Ministers and the Prime Minister. The easiest way to resolve it is for the Prime Minister to place all the information in the House of Commons Library, so that Members of this House can be the judge.
Mr Gauke
I make the point that I have made before: there is no suggestion and no evidence that Lord Green was complicit in any wrongdoing—that remains the case. Opposition Members can stand up to make allegations and suggestions, but there is no evidence that he was engaged in that type of behaviour and certainly no information was available to Ministers to suggest that he was.
Mark Field (Cities of London and Westminster) (Con)
The Minister made the important point in earlier exchanges that there should never be any political inference, whichever Government are in power, in disciplining or legal action over these sorts of matters. We would be going down an incredibly dangerous path, particularly this close to an election, if the pressure became so strong that politicians tried to play to the gallery and interfere in any way with the legal process.
Mr Gauke
My hon. Friend makes an extremely good point, and the fact that some Opposition Members do not appear to agree with it is troubling. The role of the Government is to set out the policy. Our philosophy is clear: individuals and businesses must pay what they owe, just like the vast majority of UK taxpayers. That point has been reiterated by the Prime Minister and the Chancellor again and again. Aggressive tax planning and, indeed, tax evasion are simply not acceptable. As I will set out, this Government have a proud record on that front.
Ian Lucas
I agree with the point made by the hon. Member for Cities of London and Westminster (Mark Field), but let me come back to the question of what the Prime Minister discussed with Lord Green about the political matter of his appointment as a Minister, and these allegations. Why will the Prime Minister not tell us whether he had conversations with Lord Green about these matters?
Karl Turner (Kingston upon Hull East) (Lab)
We did not have the information.
Mr Gauke
The hon. Gentleman says from the Front Bench that the Opposition did not have the information, but just a few minutes ago he was saying that it was all in the public domain. He cannot have it both ways. The position is that Lord Green was appointed and his appointment was widely welcomed. We can hear the rhetoric from the Opposition, but the reality is that this Government have backed up rhetoric with hard, decisive action. Since we came to power in 2010—
Mr Gauke
I am going to make a little progress. Since we came to power in 2010, we have made a huge investment in HMRC to tackle avoidance, evasion and non-compliance. That investment has clearly made a difference. HMRC has secured more than £85 billion in compliance yield since the beginning of the Parliament, £31 billion of which was from large businesses and £850 million of which was from high net worth individuals.
HMRC’s successes were recognised last week by the National Audit Office in its report “Increasing the effectiveness of tax collection: a stock-take of progress since 2010”. In that report, HMRC’s response to the recommendations to tackling marketed tax avoidance has been exemplary, particularly in terms of co-ordinating action and seeking new powers to tackle promoters and scheme users. In every year of this Parliament, my right hon. Friend the Chancellor has stood up at the Dispatch Box and closed loophole after loophole, which, I am afraid to say, had been left open by the previous Administration.
We have made more than 40 changes to tax laws since 2010. Let me trot through just a few of them as I am conscious of time. We stopped groups of companies clubbing together to reduce their overall tax bill by using loans and derivatives between themselves; we stopped businesses using trusts to pay employees in order to pay less tax; we stopped banking groups avoiding tax on profits that they were able to make by buying back their own debt cheaply; we blocked the practice by which companies could wipe out their tax bills by accessing losses made in a different group and we stopped hedge fund managers in partnerships obtaining unfair tax advantages by allocating profits to companies they controlled.
In 2013, we introduced the UK’s first general anti-abuse rule to tackle abusive tax avoidance arrangements and to deter those who might be tempted to use them. We are not stopping there. We are currently consulting on options to target serial avoiders and, on the very measure the Opposition seek in their motion, a general anti-abuse rule penalty.
In the Finance Act 2014, we introduced a set of ground-breaking measures aimed at the small minority of wealthy people in this country who involve themselves in tax avoidance schemes. If individuals and businesses are suspected of involvement in tax avoidance schemes, they have to pay HMRC the disputed amount of tax up front while the dispute is being resolved.
Accelerated payments remove the cash-flow advantage that those who deliberately try to bend the tax rules by avoiding tax previously had over the majority who paid their tax up front. We saw the problem and we dealt with it.
Paul Farrelly
Given that list, will the Minister explain to the House why tax avoidance schemes used by multinationals such as the double Irish and the Dutch sandwich are still in existence and what the Government are doing to tackle that sort of multinational tax avoidance, which we have debated and scrutinised here on many occasions?
Mark Durkan (Foyle) (SDLP)
Will the hon. Gentleman also address the controlled foreign companies rules that were introduced by this Government? Those rules cost revenue here and in developing countries. Sir Martin Sorrell told “Newsnight” that they, and not the change in corporation tax, were the main reason why he was coming back from his business in Dublin.
Mr Gauke
The CFC regime is part of corporation tax. The hon. Gentleman makes my point for me. As a consequence of our changes to the controlled foreign companies regime, we are seeing businesses move operations back to the United Kingdom. It was not that long ago—2007 and 2008—when business after business was looking to move its head office out of the UK. That flow has not only been staunched but reversed. We are seeing businesses choosing to locate in the United Kingdom, which is good for business, a successful achievement for this country and something of which we should be proud.
The changes in accelerated payments will bring forward billions in tax revenue in the coming years to help us afford the public services on which the country depends. I am pleased to say that, since the introduction of accelerated payments only a few months ago, avoiders have already agreed to pay more than £185 million to the Exchequer’s coffers, and millions more is being collected from those who, having received their up-front bill, have conceded their tax position and settled.
As well as tackling the end users of tax avoidance, we have also introduced structural changes targeted at the small but persistent minority of promoters who peddle schemes that typically use concealment or misdescription. If those promoters do not change their behaviour voluntarily, HMRC now has powers to monitor, fine and publicly name them. All this has contributed to the fall in the use of tax avoidance schemes over this Parliament. The Opposition motion suggests several areas for further action—this Government will always give a fair hearing to measures that increase compliance and tackle evasion—but they have to be properly thought through and I am afraid that some of their suggestions simply do not pass that test.
Therefore, we will not be abolishing the intermediary relief in contract for difference trading. There is no way to raise sums of the kind mentioned by the Opposition without causing serious damage to London’s position as a global centre for listing companies, as was recognised back in 1997, when the measure was introduced, and again in 2007, when it was expanded. Yes, it is relevant that the Labour party was in government at the time.
Nor will we introduce a deeming test for self-employment in the construction industry. We considered that, but it was not practicable. Indeed, to be categorised as self-employed, a bricklayer would have had to supply their own bricks. Instead, we have addressed false self-employment in construction and other industries through the Finance Act 2014 measures on onshore intermediaries, raising £2.1 billion in the process.
The Opposition motion urges us to close the quoted eurobonds exemption loophole, but it is not a loophole. I have explained repeatedly to the hon. Member for Birmingham, Ladywood that that measure would create an administrative burden, but not raise money. I have even offered a meeting with officials to discuss that, which, once again, she has declined. She set out a new proposal, but it has been looked at and it is simply not practicable.
The Opposition might be trying to recover lost ground, given their failure to get on top of avoidance and evasion, but they have to do better than this. We have led the way not only domestically, but internationally. Let me deal with the point about multinational companies. We originated the base erosion and profit shifting, or BEPS, process and have set out our commitments to multilateral action through the G20 and the OECD. In last year’s autumn statement, my right hon. Friend the Chancellor announced UK action on two of the internationally agreed outputs of the BEPS project. We are introducing legislation to implement the G20-OECD agreed model for country-by-country reporting, which will require multinational companies to provide tax authorities with high-level information on profit, corporation tax paid and certain indicators of economic activity for risk assessment.
We are consulting on implementing the G20-OECD agreed rules for neutralising hybrid mismatch arrangements. We have gone further still to strengthen our defences against the erosion of the UK tax base. As a complement to the BEPS process, we have introduced the new diverted profits tax to counter the use of aggressive tax planning by large multinationals that seek to avoid paying tax in the UK on profits generated from economic activity here.
Paul Farrelly
I am aware of the international dimension, but HMRC has been criticised frequently for its timidity in challenging some of those arrangements. The hon. Gentleman will be familiar with the important concept of permanent establishment. For example, has HMRC challenged Amazon’s tax arrangements, whereby everything is billed through Luxembourg and it claims, for tax reasons, not to have a permanent establishment in the UK, despite having huge warehouse operations?
Mr Gauke
The first point to make is that it is a matter for HMRC to challenge in accordance with the law, and taxpayer confidentiality applies. As a Minister, I do not get involved in individual cases.
Furthermore, if we want to address broader matters—I am not talking about any individual company here—and if the hon. Gentleman wants to address the issue of businesses carrying on activities here but not paying taxes here because they do not have a permanent establishment, the diverted profits tax is just the measure he should want. It is designed to address that issue.
I say again that I am not talking about the specific case, but in general the measure deals with circumstances in which contrived and artificial arrangements are made so that a business manages to misuse, if you like, the permanent establishment rules. The hon. Gentleman raises an interesting point, but the Government are already dealing with it.
Charlie Elphicke
I welcome the diverted profits tax. Does my hon. Friend agree that there is a double problem, which is partly the European Union rules, particularly the parent-subsidiary directive, which makes tax avoidance all too easy, and partly the fact that international tax law is out of date? It was set in the 19th century, is no longer fit for purpose and needs to be updated and modernised, which is what the Chancellor of the Exchequer and the Prime Minister have been working on.
Mr Gauke
I agree with my hon. Friend, who brings great expertise on these matters to the House. There are constraints with regard to European law as to precisely what measures can be undertaken, and he is right to say that the international tax system needs to be modernised. The strongest voices calling for that happen to be those of the Prime Minister and the Chancellor of the Exchequer.
Under the UK’s presidency of the G8, we called for a new global standard of automatic tax information exchange. Endorsed by the G20, this marks a step change in the ability of Governments to tackle tax evasion. It will rapidly remove the remaining financial hiding places. The common reporting standard instigated by the UK along with our G5 partners—France, Germany, Italy and Spain—has seen over 90 countries and jurisdictions, including all the UK’s Crown dependencies and overseas territories with a financial centre, commit to automatic exchange of information, with the first exchange in 2017 or 2018. This will give HMRC access to information on billions of pounds worth of assets held offshore.
On Switzerland, our agreement has so far raised over £1.2 billion that would otherwise have remained beyond our reach. I think the hon. Member for Birmingham, Ladywood referred to £900 million. That is almost two thirds of the £1.9 billion that the latest forecasts expect it to raise. HMRC has contacted more than 22,000 of the 25,000 people who agreed that their accounts could be disclosed to HMRC and time is running out for those who continue to hide.
The Government have been tough on avoidance and evasion, both here in the United Kingdom and on the international stage. The measures that we have taken so far in this Parliament to tackle aggressive tax planning, avoidance and evasion add up to £7.6 billion in additional revenues in 2015-16. Do the Opposition think their proposals can get anywhere near that sum? As a result of the actions that we have taken, it is now much harder for avoiders and evaders to cheat the system and get away with not paying what they owe. Our multilateral agreements are systematically removing the remaining international hiding places. As a result, HMRC is collecting more tax than ever before, supporting our public services and helping this nation get back on its economic feet, because that is how we get a fair and balanced economic recovery for all.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. There will be a five-minute limit on all Back-Bench speeches, starting from now. We have just about an hour for Back-Bench contributions before we have to start concluding the debate, so I hope each Member will bear that in mind.
Anas Sarwar (Glasgow Central) (Lab)
I start by congratulating my right hon. and hon. Friends on tabling the motion. The subject is one of extreme importance not just to the United Kingdom, but to the global tax justice campaign. I shall focus my remarks on the international aspect and consequences of what we are proposing today, not just on the domestic consequences.
It is a shocking statistic that three times as much is lost in tax receipts to developing countries as the entire aid budget combined—three times as much. Proper tax systems in developing countries and proper tax regimes in well-off countries like the United Kingdom would reduce our need to spend abroad and would lift people out of poverty and create opportunity. I pay tribute to all the non-governmental organisations that have championed the Let’s Make Tax Fair campaign. I have enjoyed working with them personally, as I know have members of the shadow Treasury team. I want to put on the record our thanks to organisations such as ActionAid, Christian Aid, Oxfam, the Global Poverty Project, the National Union of Students, the Jubilee Debt Campaign and many others that have been leading the way on this important issue.
I think that all of us on the Opposition side agree with the campaign’s three key principles and would wish to implement them if we have the privilege of being elected to government on 7 May: first, making it harder for companies to dodge UK taxes and ensuring that they are not getting unjustified tax breaks; secondly, ensuring that UK tax rules do not incentivise companies to avoid tax in developing countries; and thirdly, making the UK tax regime more transparent, and tougher on tax dodging.
I believe that those principles have the support of public opinion in the UK. A poll conducted last year showed that 84% of the public reported being angry at multinationals avoiding tax and 74% believed the Prime Minister should be demanding international action to tackle tax evasion and avoidance. We need a domestic commitment to international projects. We have already made a commitment to double our current spend in developing countries to help them expand their own tax bases, but we must look at what we do in this country and the negative impact it can have globally.
I think this Government’s biggest failure has been the lack of global leadership and advocacy on this issue on the international stage. The previous Government championed the extractive industries transparency initiative and the cancelling of third-world debt. I think that the same energy and vigour need to be shown by the next Government. However, we can be a credible advocate for global tax justice only if we get our own house in order, and the reality is that it is not in order. A perfect example is our overseas territories and Crown dependencies. That is why we are pushing for a public register of beneficial ownership, not only for the UK but for our overseas territories and Crown dependencies. I congratulate the Leader of the Opposition on making that position clear for the first six months of the next Government.
Let me mention two shocking statistics, both from Christian Aid’s beneficial ownerships scorecard. First, three British overseas territories are among the 20 jurisdictions that are most used by the corrupt—they are the British Virgin Islands, the Cayman Islands and Bermuda. Secondly, the Crown dependencies of Jersey and the Isle of Man also feature on the list, making UK-linked jurisdictions the most used for grand corruption. We cannot credibly say on the international stage that we are champions for tax justice while that is happening.
Another shocking statistic, this one from Reuters, is that between $21 trillion and $32 trillion in private financial assets is held in tax havens, and an estimated 30% of that comes from developing countries. Nearly $1 trillion a year in capital flows out of developing countries, making Africa a net creditor to the world, which in itself is a shocking statistic.
We therefore call for strong action on country-by-country reporting. We will look to get international action to ensure that multinational companies operate in an appropriate way. If we cannot get that action, I congratulate the shadow Treasury team on saying that we will push for unilateral action here in the UK so that we can fulfil our obligations to the poorest and most vulnerable, not only in this county but around the world, and finally make extreme poverty history.
Mark Field (Cities of London and Westminster) (Con)
It is understandable, especially this close to a general election, that political fervour over tax avoidance comes to a contentious pitch. Politicians on both sides of the House would do well to reflect on the fact that there was virtually universal consensus on the appropriate level of regulation to be applied to the financial services industry in the decade or so before the crash in 2008. Since then both the erstwhile Labour Administration and the current coalition Government have made often courageous moves to take a global lead to clamp down on tax avoidance and evasion.
Those moves were courageous because taking unilateral action in that arena has been likely to disproportionately damage the UK’s own narrow economic interests. Moreover, while this Government have flagged up in successive G8 and G20 summits their desire to take that lead, they have also risked being criticised for a lack of delivery, as we have heard today, simply because other nations have been less willing to follow. The truth remains that for as long as the UK has a globally competitive financial services sector, effective regulation against tax avoidance can be achieved only by concerted, international and, ideally, global agreement.
Over the past four years, I have been an adviser to the law firm Cains, and as a result I have seen at first hand the work that has been done within the Isle of Man and other Crown dependencies to get our house in order in the sphere of tax avoidance and transparency. A key focus for the Isle of Man is engaging with the emerging markets to drive investment into the rest of the UK, not least the north-west region of England.
For decades, the Crown dependencies have also had a close and effective working relationship with the City of London. For the Isle of Man, this includes connections with many of the leading law firms, accountancy practices and banks in the City. This is a very important route in providing inward investment into Europe and the UK by foreign nationals and in assisting UK businesses to expand overseas. That involves not just financial services but, for example, precision engineering, aeronautical engineering, professional services generally, property development, shipping, yachting, and aircraft registration. As the local Member of Parliament representing the City of London, I am all too aware of the importance of the services provided by the Crown dependencies to the wider UK economy.
In recent years, the Isle of Man has attempted to strengthen its links with the UK regions, many of which desperately need good economic activity, with a view to providing them with foreign direct investment and jobs. It is working closely with the neighbouring cities of Liverpool and Manchester, and it has signed a memorandum of understanding with Northern Ireland. It believes that by working in a mutually supportive manner with the UK, wealth and jobs are generated for all of us, including those in the more deprived parts of the UK. Specifically, the UK banking industry’s competitive advantage is increased by having access to the Isle of Man funds, which have contributed some £40 billion a year in liquidity to domestic lending. That international offering of UK banking is in my view augmented by what would sometimes be called tax havens, but which are centres of excellence for things such as expatriate banking services.
Transparency lies at the heart of any effective tax avoidance regime. For some years, the UK Government have often led the way in ensuring that standards apply to all UK dependencies so that anti-money-laundering measures and countering the financing of terrorism are at the forefront of our ongoing commitments. Consistent initiatives over recent years have ensured that tax evasion, corruption and related criminality are subject to the strictest international standards.
As the Chancellor of the Exchequer rightly pointed out over the weekend, we are also subjecting so-called tax havens to a new rigorous beneficial ownership regime. The Isle of Man, for example, has already co-operated on this by ensuring and verifying the integrity of the company beneficial ownership information it collects, particularly through taking a leading role in the regulation of trusts and company service providers. As a result, the UK tax authorities have been provided, and continue to be provided, with effective access to all these markets. Nevertheless, the Governments of all our Crown dependencies have always been committed to maintaining domestic legislation, policies and procedures that ensure effective compliance with the international standards; and, where necessary, to progressing further measures in future to implement evolving international standards and the very best practice.
I wanted to put this on the record today because much feverish and worryingly inaccurate commentary surrounds the activities of our Crown dependencies, which, as I say, often provide great liquidity and real benefit, particularly in some of the poorer parts of the UK. Compliance with the highest international standards is at the heart of their activities nowadays. Our own Government have much to be proud of in their keen insistence that tax evasion become a thing of the past.
Frank Dobson (Holborn and St Pancras) (Lab)
HSBC had a lot of customers in Switzerland with secret bank accounts, and it helped them and conspired with them to break British law. Even if HMRC does not want to do anything about it, it seems to me that this was obtaining financial advantage by deception, which is a general crime, not something that needs to be prosecuted by HMRC.
Why are the names of these self-confessed tax swindlers kept secret? The names of small businesses that get into trouble with HMRC—it is worth bearing in mind the fact that that organisation puts more companies in this country out of business than any other—are not kept secret, even if all that happened was that they could not keep up their tax payments: they have not been doing any fiddling or swindling, or breaking the law.
I want to move on to the much wider question of whether the HSBC subsidiary in Switzerland was the only offender. HSBC has 556 subsidiary companies located in tax havens. Why are they there? It might be because of the weather in some tax havens, but not in all of them. Was the Swiss racket a one-off? No answer. Barclays has 390 subsidiaries in tax havens and RBS has 406, while Lloyds, to be fair, has rather fewer with just 297.
Frank Dobson
No I will not, because other Members want to speak.
Between them, the big four banks have 1,649 subsidiaries located in tax havens. So far, we know about the wrongdoing of only one of them. When will the Government start to find out what the other 1,648 have been up to, and probably still are up to, in tax havens abroad? We know that all four big banks will have been involved in money laundering, sanctions busting, fiddling foreign exchanges and fiddling LIBOR, and some of that is facilitated by having subsidiaries in tax havens. Basically, subsidiaries in tax havens exist to help people and companies avoid paying tax. There is no other good reason for being located in a tax haven other than to save tax.
The fact is that nothing is being done. Many small businesses find it difficult to meet their tax obligations in this country. Firms in Norwich, Carlisle, Worcester or Gloucester that find it difficult to do so will be hounded by the Inland Revenue, but these big companies and big individual tax swindlers in tax havens will not. It is about time that there was a thoroughgoing inquiry into the whole thing.
Ian Swales (Redcar) (LD)
This whole area of tax ranks as another mess that the Government are having to clear up. We inherited a situation in which the Labour party had put into action the philosophy of its former Business Secretary in being
“intensely relaxed about people getting filthy rich”.
Frank Dobson
The hon. Gentleman should complete the quotation. I am not usually regarded as the greatest defender of Lord Mandelson, but the part-sentence he has just quoted was followed by the words “providing they pay their fair share of tax”.
Ian Swales
I accept that correction. On Labour’s watch, the rate of capital gains tax was 18%, and it had been as low as 10%, which especially benefited hedge funds; it is now up to 28%. There was pensions tax relief on up to £250,000 a year; the figure is now £40,000. The rate of VAT on their yachts, sports cars and Rolexes was 2.5% lower. There was lower stamp duty on property, and there was no duty on property bought and sold through corporate envelopes. The rate of income tax was 5% lower throughout the 13 years of the previous Government until 5 April 2010, the day before they left office. There was also tax avoidance on an industrial scale.
We have to be careful of our language, but it is worth saying that avoidance is fine as long as it follows the law. As with pension contributions, many ways of saving tax are perfectly legitimate—in fact, they are encouraged by the Government, sometimes to support economic activity—but many others are not. For example, a Radio 1 DJ used the so-called “working wheels” bogus scheme to create losses on a used car business. That scheme was promoted by NT Advisors. The clue was in the name, because NT stood for “no tax”. That happened in 2007-08. The appropriately named Take That and many others used a scheme to shelter £340 million from the taxman. There was the case involving Patrick Degorce, in which Goldcrest Pictures sold him the rights for two films for the artificially inflated amount of £21.9 million. They were immediately sold back for a fraction of that, which meant that his hedge fund profits of £18.8 million could be entirely sheltered from tax. The promoters of that scheme made £1.6 million on the deal and HSBC made £438,000 for giving the advice. Incidentally, Patrick Degorce later worked with Lansdowne Partners, which is a hedge fund founded by a Conservative donor. To me, such schemes look not just like tax avoidance, but like fraud.
I welcome the moves that the Government are making. The number of prosecutions is up from 165 in 2010-11 to 1,165 in the current year. However, there is a lot further to go. A culture change is needed. When people engage in such activity, they are depleting the public purse. Whereas benefit fraud is treated as a crime in this country, tax fraud is treated as a sport. It is perhaps ironic that tax avoiders often give a great deal to charity. I do not know whether that is because of guilt or because they feel like giving back some of the money that they have salted away.
I have often spoken about tax avoidance in this place. I will repeat what I have said before about one big issue that I constantly raise, where there is more that the Government need to do. International finance directors will say that the main way in which they shift profits around is through their financing structures. It is simple and totally legal to finance a UK activity from offshore, then export the UK profits via interest payments to a low-tax regime. Many companies do that and those that do not may be aggressively taken over, as was Boots, so that somebody else can do it.
Large parts of the financing of the private finance initiatives that ballooned under the last Government have been moved offshore. Some 50% of the PFI schools in my constituency are owned in Jersey. Junctions 1A to 3 of the M40 are 50% owned in Guernsey. Famously, HMRC’s own offices are wholly owned in Bermuda after a deal that was done in 2001.
Dealing with tax evasion and avoidance is important to my party because they are not victimless activities. Every pound that is lost is a pound less for public services or a pound extra that has to be raised from other taxpayers. As the hon. Member for Glasgow Central (Anas Sarwar) said, charities such as ActionAid and Christian Aid point out that aggressive tax avoidance is a drain on third-world countries. I disagreed with him when he said that the UK is not taking a global lead on the issue, because that is one of the things that the Government are doing. We are changing the international climate, as well as closing many loopholes and spending much more to deal with the issue in this country.
There is more that needs to be done. We have not made much headway on tax simplification in this country. We still have the most complex tax code in the world. We need more transparency and more country-by-country reporting. As I said, we need a culture change, so that tax cheats are seen as just as antisocial as benefit cheats.
Based on my experience of this issue in this place, I am left with the nagging feeling, which I think is shared by the public, that Labour lacks the competence to deal with it and the Conservatives sometimes lack the will, whereas the Lib Dems are proud of our contribution and will keep campaigning.
Helen Goodman (Bishop Auckland) (Lab)
I am pleased to follow the hon. Member for Redcar (Ian Swales). Much of what he said, apart from the last sentence, was very sensible.
I am pleased to be called in this debate but disappointed that the debate is necessary. The recent revelations about what has been going on at HSBC are shocking. They are shocking because of the scale of the problem and because of the apparent lack of shame. Even according to the Government’s own figures, the tax gap, which shows the amount of tax avoidance, has gone up from £30 billion to £34 billion in this Parliament.
For two weeks in a row, the Prime Minister has been avoiding—some might say evading—questions about this tax problem. Last week he refused to say why he would not increase tax for hedge funds, and the very next day the Financial Times revealed that the number of big City donors to the Tories has doubled, and that they now account for a third of the Tory party’s income. Today he refused to explain about HSBC and what happened with Stephen Green. In Newcastle there are buses going around asking, “Do you know a benefit cheat?” One wonders whether there were chauffeur-driven cars at the black and white ball saying, “Do you know a tax cheat?” They might have found a few people.
We must take the international dimension seriously. Between 2006 and 2011, Google’s turnover in this country was estimated at £18 billion but it paid only £16 million of tax.
Mark Garnier
I hate to interrupt the hon. Lady, but does she realise that tax is paid on profit and not turnover?
Helen Goodman
I will come to that point.
Facebook’s turnover was £200 million, and its tax payment £0.25 million—[Interruption.] Will the hon. Gentleman just wait? What is going on at the moment? One big thing is the division by multilateral companies of different subsidiaries, and a key aspect is the payment of branding through trade marks and licences registered in low-tax domains. We all understand that marketing and advertising are legitimate business interests, and it is completely reasonable to set them against revenues in order to determine profits and decide the tax liability. That, however, is not what is going on, because brands and trade marks are registered in low-tax domains, and licences and royalties are then paid into those low-tax domains to shift money around.
Helen Goodman
I am glad that the hon. Gentleman is now nodding his agreement.
That is a way of moving money from high-tax jurisdictions to low-tax jurisdictions. Now, of course, these prices are not contested; they are not the result of supply and demand, but are administered just as much as prices in the Soviet Union were administered. Sometimes they are administered at suspiciously high levels, and as far as one can tell that device has been used by Starbucks and Facebook, which is why there is a big discrepancy.
I also want to call in aid our noble Friend Lord Mandelson, who said that we must deal with this issue at an international level. At the moment we have constant competition to see who can cut corporation tax the most, and an arbitraging day-ahead market that is undermining everybody’s tax base—we have seen that with the Irish Republic, and now new freedoms must be given to Northern Ireland. The situation is simply not sustainable, but agreeing international changes to the rules of the game takes time. We in this country must take more urgent, unilateral action, and I hope we can consider the way that trade marks, royalties and licences are being abused.
These arrangements are complex, and to tackle them we need Ministers with determination, the right legal framework, and enough experienced HMRC officials. It is disappointing that Ministers have reduced the number of experienced officials in HMRC who have the expertise to follow up such matters. The Minister kept saying that he has a good record of which he is confident, but the Financial Times says that the amount of tax that will be brought to the British Exchequer from measures taken by the previous Government is 10 times the amount that he will bring in. The truth is that this Government are defending the tax loopholes. We want to address them in order to abolish the bedroom tax, which is paid by the most vulnerable and by disabled people in this country. The Government are defending the hedge funds and the City loopholes because they want the money for the Tory coffers for their attempt to buy the next general election.
Charlie Elphicke (Dover) (Con)
It is a real pleasure to follow the hon. Member for Bishop Auckland (Helen Goodman), who always makes such fascinating and interesting speeches and observations—[Interruption.] Indeed—and colourful, as well.
I want to draw attention to the incredible amount of historical revisionism we have seen in the debate. It is worth looking back first at what happened in the 13 years before this Government came to office. In those years, the Labour party was very taken with its prawn cocktail offensive and allowed a culture of industrial-scale tax avoidance to grow. We can see it in the figures. During Labour’s time in office, income tax rose by 81% whereas non-oil corporation tax receipts rose by just 7%. Under the previous Conservative Government, between 1986 and 1997, income tax receipts rose by about 79% whereas non-oil corporation tax receipts rose by a stunning 144%. If anybody wants to see more receipts and more money coming in from business, they should send for the Conservatives. We have seen that happen again in this Parliament. Income tax receipts have gone up by 11% whereas non-oil corporation tax receipts have gone up 16%. Again, business tax receipts have outstripped income tax receipts.
David Mowat (Warrington South) (Con)
Those points are important, but capital gains tax is equally important. As the hon. Member for Redcar (Ian Swales) said, this Government’s rates change on business assets—from 10% under the previous Government to 28%—is huge and has made a massive difference in the number of millionaires that are being created.
Charlie Elphicke
That is indeed a huge change. The Government have also supported entrepreneurs with entrepreneurs’ relief, which I greatly welcome.
Under this Government, the tax gap for 2012-13 is lower as a percentage of tax receipts than in any year under the previous Labour Government. Tax yield for HMRC has gone up by £7 billion since 2010-11. The Government have been very effective at dealing with the tax gap and bringing in receipts. The corporation tax gap for large businesses in 2009-10 was £2 billion, whereas in 2012-13 it was lower, at £1.8 billion. We see a lot of revisionism from Labour, but when it came to getting money through the door they had an atrocious record. The Conservative party and this Government have had an effective record. Why? We understand that to up the take one must cut the rate. That is what the Government have done with corporation tax, with massive success.
Let me draw attention to another problem with the Labour party: its proposals are completely and utterly muddled. Labour talks about UK overseas territories that do not have a public central register for offshore companies being on some sort of OECD blacklist. The only problem is that countries such as America, Luxembourg, Ireland and the Netherlands and a whole stream of other countries do not do that. The chances of getting the OECD nations that do not do that to agree to blacklist a whole lot of other nations that do not do it are minimal, and that shows the absurdity of the Labour position.
Mark Garnier
A further absurdity of the Labour position is the comments that have been made about tax havens. In the talk about subsidiaries in so-called tax havens, how we define a tax haven was not mentioned. It is a relative thing. Many people look to the UK as a tax haven, yet there are plenty of banks in the UK that nobody would suggest closing down.
Charlie Elphicke
My hon. Friend makes a powerful point. If I wanted to avoid tax on an industrial scale, I would not use the Channel Islands. I would use the European Union: I would use Luxembourg, Ireland and the Netherlands—and, goodness me, that is exactly what happens. Why? Because European Union tax rules are structured to enable that to happen. Labour did nothing in their years in power to deal with the massive problems of the European Union and the nature of the parent-subsidiary directive. They should be ashamed of themselves. Nor did they do anything to deal with the problems of international tax avoidance. Companies such as Starbucks, Amazon, Google and Apple—the list goes on—pay hardly any tax in this country because the tax rules were set up in the 19th century and are not fit for purpose.
In the past decade, the previous Government did nothing at all on this. They were utterly asleep at the wheel. They were in denial. They were too busy snuggling up to businesses to hold them to account. They did not make the case for reform of the international tax rules. What have this Government done? They have made the case internationally to the OECD. This Chancellor and this Prime Minister have said that the rules for branch and tax presence are out of date and need to be updated. The rules on transfer pricing and many other international tax rules are out of date and not fit for purpose in the internet age. They need to be updated. It is this Government who have made the running, not just here at home but internationally. It is this Government who have introduced the diverted profit tax and are seeking to deal with this enormous problem.
As for Labour’s other ideas, they are hopelessly muddled. Who was it who brought in the stamp duty reserve tax on share transfers? My recollection is that it was the previous Labour Government. Now they are saying it is all a terrible mistake. What about the issue of the stamp duty reserve tax and schedule 19? They say it is a relief for hedge funds, but they do not understand that a hedge fund could not actually use this relief. This is another Labour pension tax. We in this House know about Labour’s pension taxes, their attack on thrift, on savings, on the savings culture, and the undermining of anyone who wants to take personal responsibility. This proposal is another attempt at a pensions tax. Again, we see Labour coming to this House with an Opposition day debate, claiming to be concerned about tax avoidance when their record in government suggests the complete opposite. The record of this Government suggests a very strong approach. Labour’s policies and proposals are completely and utterly muddled.
This Government have a strong record that I am proud of. I am proud of what we have done. I am proud of the fact that we have ensured that those who have been gaming the system are increasingly being brought to book. I am ashamed of what the previous Government did and ashamed of the Opposition coming to the House and talking the way they do, when they had such a shocking and disgraceful record in office.
Mark Durkan (Foyle) (SDLP)
In following the hon. Member for Dover (Charlie Elphicke), I am conscious that it is usually Northern Ireland Members who are accused of rehearsing what has or has not happened over a period of decades and engaging in all sorts of historic “whataboutery”. This is one debate where that accusation will not fall to us, but I note the hon. Gentleman’s observations.
I do not disagree with all the hon. Gentleman’s points, not least those relating to wider international matters and the EU. The Financial Secretary put great emphasis on the Government’s commitment to legislating for country-by-country reporting, but we need EU and G20 countries to move seriously in that direction. However, some of the more notorious tax havens happen to be Crown dependencies or Overseas Territories, and various jurisdictions hide behind that as their reason for not moving on full country-by-country reporting. Similarly, we need more transparency on the linked question of beneficial ownership. If the Government are to class themselves as a world leader in the steps they are taking, they need to be leaning on various other countries more heavily.
It might help the Government to develop a better relationship with other EU member states, and one better appreciated by citizens across the EU, if they applied themselves to those questions, rather than the more turgid questions raised around renegotiation ahead of a referendum in 2017. We need public registers on beneficial ownership, but we also have to recognise that the proposals apply to only 10% of multinational companies—those with turnovers of more than €750 million—and that reporting will apply only to the headquarter jurisdictions by treaty. Even the much vaunted country-by-country reporting touches on only a fraction of the problem.
I have tabled questions to the Financial Secretary about other matters, including a spill-over analysis of tax rules and their impact on developing countries—Ireland and the Netherlands have now done them, but we need one from the UK as well. Contrary to the impression he gave, the controlled foreign company tax rule changes, introduced by this Government in 2015, have removed a protection from developing countries, as well as costing us in revenue. The CFC finance company partial exemption allows companies a 75% tax break on the internal profits they make from lending to related companies in tax havens. Surely that is an unfair exemption and should be curtailed.
People have raised concerns about the tax regime in Ireland, and I welcome the curbs on the double Irish and other arrangements, but several years ago, when Martin Sorrell announced on “Newsnight” that he was moving back to the UK from Ireland, he made it clear it was not just about the reduction in the headline rate of corporation tax; the key motive was the change in the CFC rules. He decided that the rules gave him greater tax comfort than the much criticised position in Ireland, which says something about the Government’s actual performance on tax.
I welcome the commitments on which the Government partly led at the G8 summit at Lough Erne, but we need more follow-through. We are not getting real traction in the BEPS process, and there is still too much evasion both within individual countries and jurisdictions and, more importantly, by many multinational companies.
Robert Neill (Bromley and Chislehurst) (Con)
It is a pleasure to follow the hon. Member for Foyle (Mark Durkan), whose contribution, as always, was thoughtful. I did not agree with every word, but I sympathised with much of it, and it was in marked contrast to the Opposition’s “Alice in Wonderland” approach to history and policy. Theirs is a topsy-turvy view of recent history that ignores their repeated failure over 13 years to do anything about tax transparency and efficiency, and ignores the work of this coalition Government—but perhaps we should not expect anything more.
Even worse is the Opposition’s remarkably cavalier attitude not just to the facts—I will come to that in a moment—but to the UK financial services industry. We ought to remember that it employs more than 1 million people. I represent a constituency in Greater London. Some 340,000 people in Greater London alone are employed in the financial services sector. It is a world leader for the UK, and the dismissive and scornful attitude shown by some Labour Members to this vital contributor to the tax revenues that fund our public services is pretty shameful.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I also represent a constituency to which financial services are important, but should we not be defending and promoting the UK financial services industry, rather than those in offshore havens across the world?
Robert Neill
I am glad the hon. Gentleman raised that point. He and I agree about the importance of financial services, but ironically, the blunderbuss approach taken by the Leader of the Opposition in his extraordinarily inept intervention in relation to the Crown dependencies and overseas territories is a perfect example of the cavalier approach that we have seen from the Opposition. I noticed that the shadow Minister mentioned it only briefly towards the end of her speech, as if some kind of major triumph had been achieved by this statesmanlike international figure, the Leader of the Opposition. I might just dissect that a little in a moment. [Interruption.] If the hon. Member for Birmingham, Ladywood (Shabana Mahmood) wants to intervene, I will give way.
Madam Deputy Speaker (Dame Dawn Primarolo)
I agree with the hon. Gentleman. If the hon. Lady wishes to intervene, she should rise to the Dispatch Box and not shout across the Chamber.
Shabana Mahmood
I am sorry, Madam Deputy Speaker, you are quite right to admonish me. The policy of having a publicly available register of beneficial ownership is a policy of the hon. Gentleman’s own Prime Minister. Does the hon. Gentleman disagree with that policy?
Robert Neill
I am happy to quote the whole of the correspondence between the Labour Chief Minister of Gibraltar and the leader of the Labour party. I thought it amusing in this regard that the hon. Lady should claim that some success had been achieved. In fact, Gibraltar has already accepted the need to sign up for a register of beneficial ownership. There is an argument about the level of publicity, but this was conceded long before the cack-handed intervention of the Leader of the Opposition. Fortunately, the Chief Minister of Gibraltar was able to set the Leader of the Opposition right on a number of his other factual errors—never mind the fact that the OECD is not in a position to create a blacklist in itself. That is a pretty basic level of ineptitude in terms of policy, but it goes a little further than that.
This issue is important. Overseas territories Ministers were in London in December for the joint ministerial conference. Gibraltar’s Minister of Financial Services was meeting officials at the Treasury to progress the arrangements we need to make around tax transparency and a register of beneficial ownership. All the leaders of the overseas territories wrote to the Leader of the Opposition, asking if they could meet him to discuss this important matter. What did the Chief Minister of Gibraltar have to say? He said:
“We are unfortunately still awaiting a response.”
The Leader of the Opposition did not even have the courtesy to reply to the leaders of Britain’s Crown dependencies and overseas territories. What does that say about this man’s level of policy co-operation?
Let me turn to the matter that the hon. Member for Birmingham, Ladywood prayed in aid. She is quite right that the Chief Minister said that Gibraltar is
“specifically…committed to implement a Central Register deriving from the forthcoming adoption of the fourth Anti Money Laundering Directive...along with all Member States of the EU because, as you are aware”—
perhaps it was a mistake on the Chief Minister’s part to assume that the Leader of the Opposition was aware of something as basic as this—
the Treaties that form the EU apply to Gibraltar. As those advising you should be aware, we are unique in this regard when compared”
with other territories. He continued:
“only last week my Minister for Financial Services was at HM Treasury discussing”
this. The Chief Minister rightly went on to point out that this was important in Gibraltar’s case because we have responsibility for the defence of Gibraltar overseas. I shall come on in a moment to deal with the damage done by the Labour party in that respect.
The Chief Minister pointed out, too, that Gibraltar has
“a tax information exchange agreement…with the UK that is fully operational. Gibraltar has a further 26 TIEAs with other countries”
and that
“under Directive 2011/16/EU…Gibraltar has tax information exchange arrangements to the OECD standard”
with OECD countries, and
“132…exchange agreements with some 75 countries around the world…This was confirmed by the…Phase 2 report”,
and Gibraltar was given
“the second highest rating possible”
in its compliance, along with that well-known tax haven, Germany.
It is quite extraordinary that the Leader of the Opposition goes rushing forth into print without having checked facts as basic as that. He also forgot that
“Gibraltar has signed an automatic exchange of information agreement with the UK and the USA as well as its global counterpart being the Common Reporting Standard”,
along with some other 90 countries. The Chief Minister signed this in Berlin in October, together with our Chancellor of the Exchequer. I do not suppose that Google worked too well in the Leader of the Opposition’s office there.
Finally, the Chief Minister wrote:
“you should know that your remarks…have already been picked up by the Spanish press and are being used as a rod with which to beat us.”
The fact that the Leader of the Opposition, through a mixture of ignorance, bad manners and ineptitude, gave comfort to people who were persecuting the British citizens of Gibraltar economically in order to make a cheapskate and inaccurate political point is nothing short of a scandal, and is contemptible.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. It is now necessary for the time limit to be reduced to four minutes for the remaining Back-Bench speeches. If there are interventions, there will need to be a further reduction before the winding-up speeches.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Members will recall that earlier today, during Prime Minister’s Question Time, a question was asked about political engagement. We often discuss in the House how we can tackle the alienation which, as we all recognise, has become so prevalent in our country and others. We suggest various technical fixes, such as online voting, as well as constitutional reform and the like. No doubt all those changes would be beneficial to a greater or lesser degree, but one of the biggest reasons for the disillusionment with the political system must be the fact that people see more and more instances in which the behaviour of banks, other large corporations, and mega-rich individuals—time and again—has involved hundreds of millions, or even billions, of pounds, in malpractice of various sorts: irresponsible speculation, excessive profiteering, the ripping off of consumers through mis-selling, and, as we have seen again this week, tax evasion.
What people also see is that, with very few exceptions—a few scapegoats who are thrown off the gravy train—no one ever seems to account for what they have done. Even the few who are forced to resign often seem to end up with equally lucrative new jobs, while many seem to escape with censure, and proceed onwards and upwards to even more prestigious roles and appointments. If the political system will not hold those institutions and individuals to account, it is no wonder that the public are cynical about the system. That is one of the reasons why we must now show that we will crack down on abuses such as tax evasion, not just for the future but, when possible, in order to deal with what has happened in the past.
The HSBC scandal must be properly investigated. I welcome the decision of the Public Accounts Committee to hold an urgent inquiry. I am sure that it will be forensic and hard-hitting, as the Committee’s inquiries normally are, but it will inevitably be time-limited, and I therefore hope that those who are members during the next Parliament will continue its activities then. However, this is not just a matter for Parliament to investigate.
The Minister has tried to wash his hands of any responsibility for action by the Government. He said earlier that it was for HMRC to decide whether to pursue individuals in Switzerland and, if necessary, to go to the Swiss courts. That may be true in relation to individual cases, but this does not just involve individual tax evaders. As was pointed out by my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson), what has been revealed is collusion of various kinds with those involved in criminal activity: a massive criminal conspiracy with an international dimension.
Let me ask the Minister a simple question, to which I hope she will reply. Given this week’s revelations in The Guardian about HSBC—revelations of which I think her colleague the Financial Secretary said he had not previously been fully aware—do the Government now accept that an investigation of those revelations should take place in the United Kingdom, and who do they believe should conduct such an investigation?
This is not, of course, just a question of HSBC; it involves the whole system. While I am pleased that the international community has made certain commitments to tackle tax dodging and some steps have been taken, the fact remains that real progress has been made at a glacial rate. That is why the public are becoming impatient, and that is why there has been such strong support for the campaign for an anti-tax dodging Bill among non-governmental organisations. I welcome the commitment by Opposition Front-Benchers to include such a Bill in their legislative programme soon after the general election.
Robert Jenrick (Newark) (Con)
I want to say a few words about the international dimension of what we have been discussing today, because I think that Opposition Members have been, at the very least, unkind about the Government’s record of tackling the issue internationally.
A real problem confronts most developed countries. Corporate tax receipts remain largely flat, and they face the challenge of raising tax in a global economy in which technology and the internet are upending old industries and old tax-raising methods. There is also the complexity of modern businesses and, indeed, modern lives, with mobile entrepreneurs and people who live in, and marry, those from other jurisdictions. That is the reality of the modern tax landscape.
The issues we have discussed today are inevitably international, therefore, and the solutions will come from working with international partners and some of the processes and projects like the BEPS project we have heard about today. The question is how one could increase tax receipts, harnessing some moral and Government pressure to encourage businesses without damaging the perception of this country and other developed economies in the world as good places to do business—how, essentially, we can shrink the grey areas of tax, particularly for sophisticated businesses and entrepreneurs, without seriously compromising certainty for businesses and entrepreneurs of all sizes and incomes as they do business around the world. That is exactly what this Government have set out to do, and with a level of priority that we have not seen in any previous Government—certainly not in the previous 13 years of the Labour Administration.
All the international comparisons are extremely favourable. My old law school read, the Tax Journal, in its special report on tax avoidance, talked about the measures being taken by the OECD countries to tackle base erosion and profit sharing—the BEPS project. It said:
“The UK government is widely regarded as one of the more enthusiastic proponents of reform.”
That is a fair assessment of what the Minister and my right hon. Friend the Chancellor have set out to do. We only have to look at the position paper published by the Treasury with the Budget last year to see the Government setting out aggressively to tackle tax evasion and avoidance, alongside moves to make the UK a most competitive tax environment.
Adam Afriyie (Windsor) (Con)
My hon. Friend is making a clear and powerful speech. Does he agree that, with £24 billion collected from large corporates in corporation tax over the last year—a record for the country—the measures for tackling anti-avoidance while encouraging businesses to operate here are clearly working very well?
Robert Jenrick
I agree entirely with my hon. Friend’s comments.
The Tax Journal sets out its analysis of all the countries in the world that are taking this seriously. It lists all the major, modern, 21st century challenges—whether the digital economy, the hybrid mismatch arrangements, treaty abuse, re-examining transfer pricing, CFC rules, harmful tax practices, artificial avoidance of private equity status. The Government have a strong record of tackling each and every one of those areas and taking them forward in the international community. Indeed, this survey concluded that the Government are not only taking this seriously, but are in the vanguard of each and every one of those and 15 other areas, which will be the major issues facing tax policy in the years to come. These areas sound dry and technical, but this is the reality of tax reform. It is not about soundbites and playing to the gallery; it is about methodical research and reform to improve the situation and taking it forward with our partners around the world.
As we have heard, we are already seeing the fruits of this work. The idea that this Government are in the pocket of tax advisers and lawyers on these issues is fanciful, and anyone who says that clearly has not met them recently. I was sitting on the back row of a meeting at which the Financial Secretary was speaking to Accountancy Age, I think, some time ago, and he was being given a difficult time because the Government have pursued some of the most aggressive tax reforms, which many feel have fundamentally changed the relationship between companies and individuals and HMRC and the state. I and many others have some concerns about those—such as the risk to privacy and the workability of requiring a beneficial register to be published for all companies in England and Wales—but we cannot consider these to be anything other than radical approaches. Allowing HMRC to claw back from individuals’ bank accounts and arguably looking retrospectively at tax schemes do not have much sympathy from many Members of the House. They are undoubtedly radical attempts to take this issue forward.
The Government have a very strong record in this area of which they should be proud. We must take this forward.
Nia Griffith (Llanelli) (Lab)
Nobody likes paying tax, but we all want our services, such as the NHS, to be there when we need them. Above all, we want fairness. We have an expectation that we should all pay our taxes, wherever we are. We want the same standards to be applied to all. It is damaging for honest businesses to face competition from corporations that are not paying the tax that they owe. Horrifying revelations about HSBC have been made this week. Instead of its clients being encouraged to pay the tax that they owed, they were being issued with credit cards to enable them to spend the money without it being identified. That is utterly shameful behaviour on the part of the individuals and the banks, and how many more are there like them?
Cheating the Inland Revenue is never acceptable, but it is particularly galling when councillors up and down the country are agonising over how to manage their severely reduced budgets, and having to decide whether to cut help for special needs children or help for the elderly, for example. My own indignation at the offshoring of the public money being used to pay private finance initiative debts led me to introduce a private Member’s Bill on the issue. In it, I tried to clamp down on that activity so that our money would not go offshore through those contracts. Furthermore, as my hon. Friend the Member for Glasgow Central (Anas Sarwar) said, the amount of money that is lost to developing countries through companies offshoring accounts and therefore not paying their tax in those countries is three times the global aid budget.
I am very concerned by the Government’s record to date. The amount of tax that is owed and has not been collected has risen from £31 billion to £34 billion in the past three years. The Government were told about HSBC back in 2010, but nearly five years later only one of the 1,100 people involved in the tax irregularities has been prosecuted. The Prime Minister promised that he would lead on transparency in tax havens, but to date not one overseas territory or Crown dependency has produced a publicly accessible central register. The Government’s Swiss tax deal has raised less than a third of what the Chancellor said it would raise. In the 2012 autumn statement, he said that it would raise £3.12 billion, but the latest HMRC figures show that it has raised only £873 million.
On the record, Labour has been praised in the Financial Times for our measures against tax avoidance. During the 13 years of the Labour Government, we produced 10 times the income that the four years of this coalition Government have produced. We have a good record on this, but we can never be complacent. That is why we are making it clear that we would do a lot more to tackle tax avoidance. We would make tax avoidance and tax evasion a priority.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The Opposition motion does not mention the need adequately to resource HMRC. Could that be because, as George Monbiot said in 2010, HMRC was “hacked to bits” under the previous UK Labour Government?
Nia Griffith
We believe it is important to resource HMRC properly, and we would like to see it much better resourced than it is at present. We have seen cuts recently that appear to involve getting rid of very skilled people and putting much less skilled people in their place. We would certainly want to reverse that situation.
The Minister mentioned people being caught up in the general anti-abuse rule. However, we will not get anywhere if we do not have proper penalties to impose on such people. We would put proper penalties in place to ensure that any new ideas that people might dream up could be dealt with effectively. We also want to close the loopholes that allow hedge funds to try to avoid stamp duty, and those that let companies move profits out of the UK to avoid corporation tax.
Also, very importantly, we would scrap the Government’s shares for rights scheme. It amounts to immoral blackmail to ask workers to give up hard-won fundamental rights, and it is proving expensive because of the amount of HMRC inspectors’ time required to deal with the scheme. Paul Johnson of the Institute for Fiscal Studies has said of the shares for rights scheme that the
“government is trumpeting a new tax policy that looks like it will foster a whole new avoidance industry. Its own fiscal watchdog seems to suggest that the policy could cost a staggering £1 billion a year, and that a large portion of that could arise from ‘tax planning’”.
I hope we will hear a commitment from the Minister to scrap the scheme. I also hope that the Government parties will take seriously our suggestions and include them in their manifestos, because we need to take a really good joint approach to these matters. I do not believe that the Government have carried on the work that we successfully set up. Their record is poor, and we need to see them putting in a great deal more effort to crack down on tax avoidance.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
As my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) said in her opening remarks, the tax system in this country is based on trust: trust that the Government will make responsible decisions on how to use the money they collect; trust that if I pay my fair share, so does my neighbour; and trust that the Government will be even-handed in their application of the rules. But, as we have heard in today’s debate, under this Government that trust has been eroded.
I wish to highlight a few points made by Opposition Members in the debate. My hon. Friend the Member for Glasgow Central (Anas Sarwar), who has been a champion on this issue, rightly raised international aspects, the links with tackling poverty and the role of non-governmental organisations. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) raised serious concerns about HSBC operations and the links to tax havens, and the role of the other big banks. My hon. Friend the Member for Bishop Auckland (Helen Goodman) highlighted specific examples that have been in the public domain relating to large companies and their position on paying tax, and she stressed the need for fair play. My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) highlighted the sometimes inappropriate messages sent out to the public when people are not held to account and the need to crack down harder. My hon. Friend the Member for Llanelli (Nia Griffith) emphasised the need for fairness and spoke about the damage done to honest businesses when larger businesses are not held to account. She also rightly raised issues relating to resources for HMRC. The hon. Member for Foyle (Mark Durkan) also spoke about international matters and the need for EU countries to work to take action, as the G20 countries also should.
We heard a number of strong speeches containing important points, but we have also heard a lot today about the Government’s record—or perhaps lack of a good record—on tax avoidance. We have heard about a tax gap of £34 billion, which has grown larger by the year, and a Swiss deal that, of course, is full of holes. The Chancellor claimed when announcing it in 2012 that it would raise £3.1 billion, but as we have heard today, it has raised just £873 million. Perhaps the Government are failing because rather than closing existing loopholes, they are busy opening new ones.
The Office for Budget Responsibility has warned that the Government’s shares for rights scheme could cost the taxpayer hundreds of millions of pounds, yet it seems today that the Government regard their record on tax avoidance as a source of pride, rather than as something that needs far more work. Let us go back to that much quoted study by the Financial Times, to which a number of hon. Members have referred, because it is important yet again to put on the record what it actually said:
“Measures put in place by Labour during its 13 years in power to counter corporate tax avoidance are projected to raise ten times as much over the next four years as those introduced by the current coalition government.”
There we have it: 10 times more raised under plans introduced by our Government during those 13 years. And that is even before we get started on HSBC.
We all know the story by now. HMRC was passed information about HSBC’s complicity in abetting tax evasion. Other Governments in other countries received the same information and used it proactively to recover millions of pounds of unpaid tax. What did our Government do? They cut corners and they cut deals behind closed doors. As our motion highlights, just one of 1,000 people alleged to have avoided or evaded tax has been prosecuted. Perhaps the Government are going to point to the money repaid, but it is just a fraction of what is owed. As Labour Members have repeatedly asked, what kind of message does that send? It sends the message that not paying tax is fine for big companies and big corporations because this Government will not pursue them.
My hon. Friend the Member for Birmingham, Ladywood also quoted Richard Brooks, a former HMRC tax inspector, in her opening remarks. He said that the Treasury and HMRC
“knew that there was a mass of evidence of tax evasion at the heart of HSBC”
in 2011, but the Government
“simply washed their hands of it”.
She was also right to say that that is a damning indictment. It is not good enough and it is time we got some answers.
My hon. Friend also put questions to the Chancellor when she wrote to him earlier this week and she reiterated them to the Minister today. Did he ever speak to Lord Green about tax avoidance and evasion at HSBC? Given the scale of the alleged wrongdoing, why was there only a single prosecution? What role did Ministers play in deciding on a selective prosecution policy for those accused of tax evasion or avoidance? These are substantive questions and we deserve substantive answers, but so far we have had no answers at all, and the Government must now come clean and supply answers to those specific questions.
I found it increasingly difficult to listen to what the Ministers were saying. Somehow they were denying all responsibility and failing to join the dots when they were given information, and they failed to ask the right questions. People have lost faith in this Government because they have shown time and again that they cannot be trusted to act fairly and in the best interests of all. Our motion sets out what we would do to restore that faith. We will be able to do that because we recognise a fundamental truth about the tax system that this Government have failed to appreciate, which is that it is about trust and it is about fairness.
Let me reiterate what our plan is to restore that faith. We will introduce penalties for those who are caught by the general anti-abuse rule. We will give the plan teeth by introducing a tough penalty regime, with fines of up to 100% of the value of the tax that was avoided. We will close loopholes on stamp duty that allow the hedge funds to avoid paying hundreds of millions of pounds in tax through intermediary relief. We will take action to close loopholes that allow some large companies to move profits out of the UK and avoid corporation tax. According to HMRC, the tax loss from that loophole is around £200 million each year, and it has been reported elsewhere as £500 million.
Frank Dobson
Does my hon. Friend agree that it is absolutely essential that if people have swindled their tax, confessed and avoided going to court, their names are disclosed, even if they are great big corporations or wealthy individuals, in the same way as a small business in Swindon would have its name disclosed if it was being pursued by the Inland Revenue?
Cathy Jamieson
I think that we all could cite examples of where small businesses and others in our local constituencies have had some fairly aggressive actions taken against them. They find it difficult to understand why the same rules do not seem to apply to others.
To go back to the point I was making, it is important that we use the money that we generate from closing loopholes to save the NHS as part of our £2.5 billion a year Time to Care fund, and we will supplement that with another £400 million a year raised by stopping employment agencies exploiting tax relief and travel and subsistence through the use of umbrella companies. We will act, where this Government have failed to do so, by making tax havens, which have links to the UK, put company ownership information in the public domain. Importantly, we will scrap the failed shares for rights scheme, which the Office for Budget Responsibility warned could enable avoidance and cost £1 billion.
We will also ensure stronger independent scrutiny of the tax system, giving new powers to the National Audit Office and placing new responsibilities on the Chancellor and chief executive of HMRC to report annually on their efforts to tackle tax avoidance and to reduce the tax gap.
As we have heard today, tax avoidance and tax evasion are not new problems. For as long as states have levied taxes, people have sought to avoid them. But we owe it to the taxpayers who pay their taxes to ensure that the rules are applied fairly and that is what we intend to do, because that is how we will restore faith and trust in the system. We will do the right thing, close the loopholes, and ensure that everyone pays their way and that the system is fair for all.
The Exchequer Secretary to the Treasury (Priti Patel)
Like my hon. Friend the Financial Secretary to the Treasury, I shall begin by highlighting the fact that tackling tax avoidance and tax evasion has been a key priority for this Government, and we will take no lessons from the Opposition on that issue. At every opportunity, this Government have introduced measures to clamp down on this corrosive practice. It is this Government who, over the course of this Parliament, have secured £85 billion in compliance yield, £31 billion of which came from large businesses. We are the Government who have abolished the shocking loopholes in the tax system that we inherited in 2010—loopholes that the Labour party chose to ignore when in office for 13 years, turning a blind eye when it could have acted. Now, belatedly, Labour Members lecture Government Members on their new-found wisdom in this area.
We have introduced groundbreaking measures to clamp down on tax avoidance schemes. Internationally we have led the world in this very area, as my hon. Friends rightly highlighted during the debate—for example, my hon. Friends the Members for Cities of London and Westminster (Mark Field), for Dover (Charlie Elphicke) and for Bromley and Chislehurst (Robert Neill), who spoke so robustly about Britain leading the way internationally and the work we have been undertaking in the Crown dependencies and overseas territories, which are all supportive of transparency and have been signing up as early adopters of common reporting standards. Everyone in the House should welcome that and support those measures, rather than belittling the actions of those territories and Crown dependencies. They have led the way.
My hon. Friend the Member for Newark (Robert Jenrick) was clear about the standards we have set, and I deny absolutely the bluster and assertion from Labour Members. To claim, as they have, that Lord Green was at fault with regard to what has happened with the Swiss subsidiary of HSBC when there is no suggestion from anybody, and certainly not from the regulators, that that was the case is quite disgraceful. It is a fact that Ministers and the general public knew about the release of information about individual HSBC account holders, and it is also a fact, as my hon. Friend the Financial Secretary highlighted, that it is a long-standing legal requirement for taxpayer confidentiality that Ministers cannot, under any circumstance, be made aware of individual cases.
Shabana Mahmood
We have been calling for Lord Green to make a full and frank statement. No allegations have been made, but he needs to explain what he knew about what was going on at HSBC. The Exchequer Secretary should correct the record on what we have been requesting from the Government and from Lord Green and say whether she agrees that he should make a full and frank statement.
Priti Patel
Let us be quite clear on the point regarding Lord Green: that is now a matter for him. He is also not a Minister. We should be very clear about that.
When it comes to tax in particular, let us focus on the facts here. We have specifically taken action to get back money lost in Swiss bank accounts. Our agreement has so far raised more than £1.2 billion that would otherwise have remained beyond our reach, which is almost two thirds of the £1.9 billion that the latest forecasts expect it to raise. That is more than 22,000—[Interruption.] The hon. Member for Birmingham, Selly Oak (Steve McCabe) sits there laughing. It was his Government who did absolutely nothing in this area, despite having the opportunity to close down loopholes. Labour Members do not like hearing it, but these are facts.
Priti Patel
No, I will not give way because of time. The right hon. Gentleman has had his chance to speak in the debate. Tax avoidance is a serious issue for the public and for us as a Government. Let us be clear: it was his Government who chose to sit on their hands in this place.
We have taken clear and concerted action to tackle tax avoidance in every single year of this Parliament. We have closed loophole after loophole to clamp down on those who did not follow the rules. We have made more than 40 changes to tax law in this Parliament to introduce major reforms. Those measures to tackle aggressive tax planning, avoidance and evasion add up to £7.6 billion of additional revenues in 2015-16 alone. Many of the issues that we have tackled have been problems for years, but nothing was done until we took that clear action.
The wealthy could avoid stamp duty under a Labour Government, so we stopped that. Private equity managers boasted about having lower tax bills than their cleaners, so we tackled that head on. Nor have we been afraid of addressing and tackling the clear structural issues. We introduced the UK’s first general anti-abuse rule, or GAAR, in 2013. We are consulting on strengthening that. In 2014, there was a new regime for high-risk promoters of tax avoidance schemes under which the most outrageous promoters can be monitored, fined and publicly named.
Last year, we went further. The Chancellor announced in his Budget the accelerated payment of disputed tax in avoidance cases. We removed the cash-flow advantage that tax avoiders had over the majority of taxpayers who pay their tax up front.
These are fundamental changes. Incentives to enter avoidance schemes have been removed. As my hon. Friend the Financial Secretary stated, under these new powers, HMRC has already secured £185 million for the Exchequer coffers. In addition to those new powers, contrary to what the Opposition say, we have supported HMRC with more resources, to tackle avoidance, evasion and non-compliance. Year on year HMRC is able to do more and recover more tax that would otherwise have gone uncollected. This progress was recognised by the National Audit Office last year.
We are taking action on the international stage and leading the world in reforming the current international tax rules, which were first developed in the 1920s. The OECD’s BEPS project, led by the Prime Minister and the Chancellor through the G8, the G20 and the OECD, will help resolve those problems. We announced in the autumn statement that we are taking action on a country-by-country reporting level.
We have not stopped there. We have taken groundbreaking action domestically and introduced the diverted profits tax, which will complement the BEPS process and strengthen our action against multinational companies that try to avoid paying their fair share. From 1 April this year, the tax will be applied using a rate of 25%.
These are clear actions that this Government have taken, contrary to the assertions that we heard from the Opposition. For all the political noises that we heard, for all their new-found wisdom in the area of tax avoidance and evasion, we are the party in government that has been sensible, pragmatic and firm in leading the way and leading the debate. We have been clear in every step that we have taken. Since 2010-11, the percentage tax gap has stayed lower than at any time under the previous Government, saving the country £4 billion. There is always more to do, but this is clearly in line with all the reforms and measures that we have introduced in government. The Government remain committed to all the action that we have taken, which is why the House should thoroughly reject the Opposition motion.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Caroline Lucas (Brighton, Pavilion) (Green)
On a point of order, Madam Deputy Speaker. The Government have allowed a derisory amount of time for consideration of all aspects of the Infrastructure Bill, particularly given that issues around fracking are so controversial. Is there any way of allowing us to speak for at least two hours, rather than the one hour designated for consideration of Lords amendments, not least because there are now substantive new amendments from the other place, and we ought to do them justice by having proper time to discuss them?
Madam Deputy Speaker (Mrs Eleanor Laing)
I can certainly give the hon. Lady advice on that matter. I am about to put the programme motion to the House, and I do not know whether it will agree to it or not. If the House agrees to the programme motion, the amount of time available will be one hour. If it does not agree, there will be another procedure.
Infrastructure Bill [Lords]: (Programme) (No. 3)
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Madam Deputy Speaker
The hon. Member for Brighton, Pavilion (Caroline Lucas) has her answer: the House has decided that Members shall have one hour to take these proceedings forward.
Andrew Miller (Ellesmere Port and Neston) (Lab)
On a point of order, Madam Deputy Speaker. When this House sent the Bill to the other place, we sent a strong message through an amendment that we unified around. The Lords have now diluted it and my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) has tabled an amendment to rectify the situation. Will you use your good offices to ensure that the House has an opportunity to vote on the amendment so that the will of the House, so clearly demonstrated last time, is upheld?
Madam Deputy Speaker
Once again, I am grateful to the hon. Gentleman for having given me some notice of the point he wished to raise, which has given me the opportunity to consult Standing Orders Nos. 83F and G, from which I surmise and therefore rule that there is no opportunity for further debate, as the hon. Gentleman wishes, and I must give him the same answer as I have given to the hon. Member for Brighton, Pavilion. The House has just decided on a programme motion that encompasses all that needs to be considered as far as the Bill is concerned.
Madam Deputy Speaker
I will not have a debate on this, but I will allow the hon. Gentleman to speak.
Andrew Miller
Further to that point of order, Madam Deputy Speaker. For clarity, are you saying that if the House provides time for a Division to take place on the Opposition amendments, that can happen?
Madam Deputy Speaker
Yes, indeed, of course it can. I am happy to clarify that for the hon. Gentleman. Once again, it is up to the House. If the House decides that it wishes to use all the time available in debate and discussion, there will be less time for votes. If the House decides not to use the time for debate, there will be time for votes.
Joan Walley (Stoke-on-Trent North) (Lab)
On a point of order, Madam Deputy Speaker. As the Ministers are both in their place, as well as the Government’s business managers, is it not the case that irrespective of the Standing Orders of the House, if the Government so wish they could cease the debate at the appropriate time so that the Opposition amendments could be voted on?
Madam Deputy Speaker
I am not going to take up any more time on this as I have already answered that point. It is up to the House. If no Member wishes to speak, there will be plenty of time to vote. If many Members wish to speak, there will be less time to vote. I suggest that we proceed, rather than using any more precious time on points of order one way or another.
Infrastructure Bill [Lords]
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
20:28 - The House divided: - Ayes: 257 / Noes: 203 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Energy and Climate Change (Amber Rudd)
I beg to move, That this House agrees with Lords amendment 20B to Commons amendment 20 and with consequential Lords amendment 20C.
Madam Deputy Speaker (Mrs Eleanor Laing)
With this it will be convenient to consider the following:
Commons amendments (a), (b), (d), (e) and (c) to Lords amendment 21B.
Government motion not to insist on Commons amendment 21 and Lords amendments 21B to 21D in lieu.
Government motion to agree to Lords amendment 33A to Commons amendment 33.
Amber Rudd
On Report in the Commons, I informed the House of our intention to strengthen the amendments we tabled in Committee by specifying that if the Committee on Climate Change advises us that onshore oil and gas might adversely impact on climate change objectives, the Secretary of State must either make regulations providing that the right of use for petroleum and deep geothermal exploitation will no longer be available for future projects, or report to Parliament on the reasons for not doing so. Amendment 20B and consequential amendment 20C seek to address that commitment. By introducing them, we are making it absolutely clear that shale development will remain compatible with our goal to cut greenhouse gas emissions.
The Government disagreed with Commons amendment 21 and proposed amendments 21B, 21C and 21D in lieu. There is a clear and pressing need to ensure that this legislation is absolutely right. As drafted, amendment 21 cannot be included in the Bill. Although the courts would attempt to interpret the provisions, it is not viable as law and simply would not work in practice. Our amendments are designed to support the growth of the shale industry, while reassuring local communities it will be done in a safe and responsible manner. They also ensure clarity for all interested parties by proposing clauses that can be interpreted and enforced effectively by the courts.
Regarding the scope of our amendments, they will apply to associated hydraulic fracturing for onshore oil and gas, as defined in the amendment. Geothermal operations will be excluded. Conventional oil and gas well stimulation techniques will also be excluded, which makes perfect sense as they have been used for decades onshore. The territorial extent of the amendments will be limited to England and Wales. To that end, I ask that this House agree with amendment 33A.
Glyn Davies (Montgomeryshire) (Con)
Will the Minister clarify the position in relation to hydraulic fracturing in Wales? We read reports that this matter may well at some stage be devolved to Wales. Is that under consideration, and could it happen in the foreseeable future?
Amber Rudd
I thank my hon. Friend for the opportunity to clarify that. The Welsh Government, as he will know, already have substantial control of onshore oil and gas activities through planning controls and environmental regulation, as they are already devolved. As he will also be aware, the Secretary of State for Wales is leading discussions on further powers for Wales ahead of the St David’s day announcement. I understand that there is some merit in these decisions being devolved to the Welsh Assembly. However, this issue requires further consideration before a decision can be taken.
Turning to the specifics, we outlined on Monday in the other place that Government amendments 21B, 21C and 21D in lieu are designed to ensure associated hydraulic fracturing cannot occur unless a set of 13 conditions have been met. The Secretary of State will not grant consent for associated hydraulic fracturing unless that has been done. I would be very happy to speak about each condition if colleagues have specific questions, but I would like to focus on areas of concern raised during Monday’s debate and by amendments that have been tabled subsequently.
First, amendment (a) indicates a misunderstanding of our clauses, and specifically the way in which subsection (3) works. At the end of (3)(a) it very clearly says “and”, not “or”, so paragraph (3)(b) is not a get-out provision for the Secretary of State, but an additional safeguard to ensure that my Department refuses consent if there is something else wrong with the proposal. We should not change anything here.
Secondly, amendment (b) asks that the environmental impact assessment of the development be taken into account. I want to reassure the House that there is no difference between us on the outcome we are seeking to achieve; it is simply a question of how we deliver the requirement in law. The term “environmental information” is used in the Town and Country Planning (Environmental Impact Assessment) Regulations 2011. It captures the information that must be taken into account by the relevant planning authority before planning permission is granted, including, but not limited to, an environmental statement. This process is commonly referred to as an environmental impact assessment. The Secretary of State cannot give consent for associated hydraulic fracturing unless he is satisfied that the environmental impact of the development has been taken into account by the relevant planning authority. He can be satisfied that this has happened where he is given a notice by the local planning authority stating that the environmental information has been taken into account. As I have said, this is simply about delivering a provision that has a meaning in law. I hope that reassures the House.
Amendment (b) asks that we refer to fugitive emissions, rather than emissions of methane into the air in our clauses. The Environment Agency already requires operators to manage, monitor and report on fugitive emissions. It is unlikely it would require this for carbon dioxide emissions, which are likely to be negligible. The MacKay Stone report on potential greenhouse gas emissions from shale gas sites shows that on average, shale gas is approximately 86% methane and 3% carbon dioxide, as well as ethane, propane and nitrogen. Methane represents more than 99% of the carbon dioxide equivalent emissions—in other words, the global warming emissions—from fugitive shale gas. It therefore makes sense for the conditions related to associated hydraulic fracturing to focus on methane. The principal source of carbon dioxide emissions would be from combustion of gas in flaring. Such emissions from flaring are modelled and monitored as part of the permit conditions. I can also confirm that we are actively considering whether the drilling of bore holes for monitoring purposes should be classified as permitted development, and we hope to take this forward in the near future.
Amendment (b) also deals with individual notification of residents. It is just not feasible to require separate notifications for each individual resident regarding associated hydraulic fracturing. We live in a free country where individuals are not required to register where they live. It would be practically impossible for the Secretary of State to identify each individual resident and check whether they had been notified, so making individual notification a condition of issuing consent for associated hydraulic fracturing would leave every consent wide open to legal challenge by third parties. Similarly, it would be unreasonable to introduce a demand that would require every single resident to consent to associated hydraulic fracturing.
Amber Rudd
The hon. Gentleman will have a chance to respond in a minute.
Planning regulations currently require persons submitting planning applications for shale gas to serve notice on individual owners and tenants of land where surface works are required.
Amber Rudd
I am going to make some progress.
Persons submitting such planning applications must publish a notice in a local newspaper and put up site notices. We believe this is proportionate and fair to residents. In addition, the industry has agreed, as part of a voluntary package, to notify the public when exercising the right of use to access underground land. We have taken a reserve power in the Bill to enforce this if the notice scheme relating to the right of use is not honoured appropriately.
Amendment (c) stipulates that no hydraulic fracturing, as defined in the amendment, can take place until the regulations defining water source protection areas and other protected areas have been approved by Parliament. It is worth noting that, at the moment, no operator in the UK has well consent where hydraulic fracturing for shale gas is intended. I can confirm that the Government will not grant any consent for associated hydraulic fracturing operations until all the conditions are clearly defined.
Amendments (b), (d) and (e) insert wording into the clauses about associated hydraulic fracturing not taking place “within or under” protected areas. Amendment (b) also asks that we insert the environmental regulator’s definition of groundwater protection zones into the clauses. I would like to stress that we are talking here about how to define these things in law. It is absolutely crucial to get these legal definitions right. The Government amendment does not refer to “within or under” protected areas because the meaning of this term needs to be flexible to allow proper provisions to be made in secondary legislation.
There is a strong case that sites such as World Heritage sites and the Norfolk Broads should be protected from fracking taking place under them. In other cases, that would not be so sensible. For example, in the case of areas of outstanding natural beauty and national parks, given their size and dispersion, it might not be practical to guarantee that fracking will not take place under them in all cases without unduly constraining the industry. However, that is something we need to consider in more detail, and we will do that in due course.
We will look at the evidence to ensure we get this right when setting out the details in secondary legislation. The regulations will be subject to the approval of both Houses, so now is not the time for this. Our clauses put a duty on the Secretary of State to lay draft regulations containing a definition of “protected areas” by 31 July 2015. We must not rush this now, because we would risk putting in place restrictions in areas in a way that does not achieve the intended aim of the condition, or that goes beyond it and needlessly damages the potential development of the shale industry.
We have been working tirelessly over the past week to come up with a set of clauses specific to the shale industry that, in keeping with the spirit of each of the points in amendment 21, will provide the public with confidence that it is being taken forward in a balanced way. Officials and Ministers have worked hard on this, and I would like to thank the Minister of State, Department for Transport, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bristol West (Stephen Williams), for working so hard with us in Committee, together with our excellent cross-departmental team of officials.
I hope the points I have made address hon. Members’ concerns. Shale gas is an exciting new energy resource for the UK, with huge potential that we can deliver safely. Now is the time to seize, not squander, the opportunity to develop the United Kingdom’s shale industry.
Tom Greatrex
I note from the number of Members seeking to catch your eye, Madam Deputy Speaker, and the amount of time left that even if I try to be brief, which I will, we will probably not have the opportunity to repair the damage that the Government have done to the amendment that was passed wholeheartedly by this House just a couple of weeks ago. The Minister should regret that. Given that she refused to take interventions on a number of specific points, I will put them to the House.
My understanding is that some of the changes the Government have made in introducing the amendment in the other place do not go as far as what was agreed by this House on 26 January—again, a matter to be regretted, particularly in view of some the commitments and comments that the Minister made in her sometimes rather chaotic contribution on that date. Once again, I think the House will come to regret that.
Last month, many in the Chamber were left with the impression that the Government had listened and accepted the case being made, which included issues concerning groundwater protection and areas of protection, as well as other detailed points. Although I accept that there has been value in clarifying some of the language in our amendment, I do not accept that every one of the changes made by the Government and the Minister protect the integrity of the amendment passed by this House. As I have said, that is to be regretted.
Tom Greatrex
I am not giving way. It is to be regretted on both sides of the House. [Interruption.] The Minister’s Parliamentary Private Secretary is chuntering away, as she is wont to do, so let me remind her that we are short of time and that the Minister refused to give way during her contribution. I will repay that lack of courtesy to the Minister. That is how she seems to want to deal with the issues this afternoon.
Joan Walley
I am so grateful. Not just the House, but the public outside will have noticed that the Minister did not give way on the safeguards that the Opposition sought to place in this Bill. If we accept the Government’s case that our previous amendments had to be refined, is there not a precedent whereby the Government could accept the Opposition amendments and take forward the safeguards when we vote at the end of the debate?
Tom Greatrex
I am grateful to my hon. Friend, who is absolutely right that that course is open to the Government. I shall come on to say more about amendment (c) and respond to what the Minister said about it. She accepted that nothing would happen before 31 July, so what is the problem with accepting amendment (c) to make sure that it is clear and built into the Bill before it becomes an Act?
The Minister said that amendment (a) is not a get-out clause, but I am afraid that her explanation did not convince me. Proposed new subsection (3)(b) says that a well consent could still be issued if the Secretary of State is
“otherwise satisfied that it is appropriate”—
not the other way round. That suggests some ambiguity in the Government’s amendment, and we need to ensure that it is removed.
The Minister touched on a number of different areas in respect of amendment (b). When it comes to groundwater protection zones, it is our contention, as I said during the debate a couple of weeks ago, that the range of protections developed cannot be cherry-picked. It is a comprehensive set of conditions that were developed in dialogue with a number of different sources, including specialist engineers, geological survey experts and others, in order to get the points right. It is not just a wish list drawn up at the last minute. Many people concerned about groundwater protection think the Minister is saying, “Well, we’ll leave that to secondary legislation, and we will not use the definition because it already exists in law.” Groundwater protection zones are defined—we know what they are—but the Minister seems to be content to rely on the much more ambiguous term “protected areas” while having no sense of what those areas are. It is vital for groundwater, and sources of drinking water, to be properly protected, and there is concern about that on both sides of the House.
Dr Julian Huppert (Cambridge) (LD)
I noted that the regulations that would be made in July, after the general election, would be dealt with through the affirmative resolution, and that there would therefore be no opportunity to amend them. If the hon. Gentleman were in a position to influence that within his party, would he rule out any fracking within or under any protected area? Can he make that commitment now?
Tom Greatrex
If the will of the House is to support the Government amendment this evening and we reach a point at which there must be a definition in secondary legislation, we shall want to ensure that such areas are properly protected, just as we did when we proposed the amendment that the House accepted two weeks ago. [Interruption.] I am talking about the definition that was in an amendment that was supported by the hon. Member for Cambridge. In fact, a Division was not necessary, because everyone supported it. I think it vital for those areas to be properly protected, and we will seek to protect them if we are in a position to do so in the future. I am sure that if the hon. Gentleman can imagine being in that position himself, he may think that he would do so as well.
Gregory Barker (Bexhill and Battle) (Con)
Will the hon. Gentleman give way?
Tom Greatrex
I will not give way again, because I am conscious of the time, and I hope that we can reach the stage at which my amendments are put to a vote.
Let me now deal with what the Minister said about environmental impact assessments. She had previously accepted that they should be mandatory for all shale gas sites, not just those measuring more than 1 hectare. The Government’s proposed new clause, however, would ensure only that
“the environmental impact of the development... has been taken into .account”.
That stops short of a full commitment to an environmental impact assessment.
Like the Minister in the other place, this Minister said that individual notification was impractical. Let me raise a point that I wanted her to clarify earlier, namely the decision to exclude shale gas operators from the need to notify people individually. That requirement still applies to other horizontal activities, such as those involving geothermal energy. Why has the arrangement been changed when it will still apply to operators of another technology? That seems absurd to me.
The Government accepted our amendment on Report, which required that
“site-by-site measurement, monitoring and public disclosure of existing and future fugitive emissions is carried out”.
Their version weakens that wording on two counts. First, it limits the emissions to methane emissions, and to emissions generated during the operation of the site. As the Minister will know, the nature of hydraulic fracturing means that methane and other gases may continue to leak upwards through fractures and the borehole long after a site is decommissioned. Given a greenhouse gas impact about 25 times as potent as a tonne of carbon dioxide, it is vital that those emissions are properly reported.
The Minister seemed to think that amendment (c) was not necessary, because there would be no activity before the deadline of 31 July deadline. If that deadline is placed in law, what reason is there for not ensuring that there is absolute clarity, so that people cannot misunderstand? The Minister gave the impression that she agreed that there would be no activity within that time frame, but I think it important for the law to be properly clarified.
One of the reasons we tabled a number of amendments is that the Government have been unclear about policy in several areas. On Report, we moved an amendment to include hydraulic fracturing under the scheduled list of activities in the environmental permitting regulations. That amendment was not carried, but in the debate the Minister said that
“the Government welcome in principle the sentiment behind the proposed amendment to the Environmental Permitting (England and Wales) Regulations 2010 to make explicit reference to hydraulic fracturing”—[Official Report, 26 January 2015; Vol. 591, c. 596.]
However, in answer to a written question from my hon. Friend the Member for Brent North (Barry Gardiner) on 9 February, her DEFRA colleague the hon. Member for North Cornwall (Dan Rogerson) said:
“There are no immediate plans to amend the Environmental Permitting (England and Wales) Regulations 2010.”
Will the Minister clarify that? Was she mistaken when she told the House that the regulations were being updated, or was it her colleague in DEFRA, who said there were no such plans? That is just one example and I am going to list another couple where there is inconsistency in what the Government have said even in the last couple of weeks. That hardly helps us to have confidence in the integrity of the regulatory regime, and that is why I believe our amendments are still necessary.
On Report, the hon. Member for Fylde (Mark Menzies), who is in his place, asked whether Health and Safety Executive inspections would be unannounced. The Minister replied:
“The short answer to that is yes.”—[Official Report, 26 January 2015; Vol. 591, c. 589.]
However, in a written answer on 4 February the Minister for Disabled People, the hon. Member for Forest of Dean (Mr Harper), said:
“Decisions on whether an inspection is announced or unannounced are made on a case by case basis by the HSE inspector.”
Which is it? Are they unannounced or not? Is the “short answer” also the wrong answer, or, again, have we got confusion at the heart of Government about the way in which these regulations will be applied?
The Minister’s colleague, the Minister for Business and Enterprise, the right hon. Member for West Suffolk (Matthew Hancock), was asked whether DEFRA had a role in regulating shale gas, and he said on 10 February:
“DEFRA does not have a direct regulatory role in shale gas operations”.
However, the hon. Member for North Cornwall said on 3 February:
“DEFRA is responsible for the environmental aspects of shale gas policy”.
With this kind of confusion, it is not difficult to see why people accuse the Government of not taking the regulations for shale gas seriously, and why there is a lack of confidence in what the Government are saying this evening and what they have been saying over the past couple of weeks.
The Minister for Business and Enterprise (Matthew Hancock)
Will the hon. Gentleman give way?
Tom Greatrex
No. I am concluding now as I know other Members wish to speak in the short time available to us.
Just over two weeks ago we had a debate in which we discussed a number of different aspects of this subject in a very constrained time frame. We also did so in good faith. We accepted the Government were taking our new clause 19 as it then was, and I also accepted in conversation with Ministers that they would seek to correct some ambiguities in it. I do not have a problem with that, but what I do have a problem with is the way in which the Government have weakened the scope of what was agreed by this House. As I have said, this is not a list to cherry-pick from, and it is not a party political issue. It is an issue that affects a number of communities across the UK—and a number of communities represented by Members of the Minister’s party, my party and other parties represented in this House. We all want to have confidence in the regulatory regime—that it is robust, that monitoring is comprehensive, and that can inform debates in local areas. By watering down aspects of the amendments that were accepted by this House the Government are at risk of undermining that case around which I felt on 26 January the House had united. I think the Government will come to regret that.
Sir John Randall (Uxbridge and South Ruislip) (Con)
I had not intended to speak, although I did sign amendments (d) and (e) tabled by my hon. Friend the Member for Cambridge (Dr Huppert). I did so because I wanted more clarification. I was encouraged by what I heard from the Minister on Report, and I am slightly disappointed that what we heard then has been slightly watered down. Although I accept in good faith that this will be resolved by 31 July, it will be to my eternal regret that I will not be able to see that as I will not be here. Accepting the good faith of the Government is always the right thing to do, because Ministers always do right for the whole country. However, when the regulations are clarified on 31 July, if they are not as strong as people want, the Government—it will be the same Government—will have a few more questions to answer. I will leave it there.
Caroline Lucas (Brighton, Pavilion) (Green)
I shall be brief because I know that others want to speak. I also want to leave as much time as possible in case we get the opportunity to push more of the amendments to a vote.
On the Government amendment on the impact of shale gas on carbon budgets, I hope that the Minister will confirm that, should the advice provided indicate that there is indeed a risk of undermining the UK’s domestic or international climate change commitments, that would categorically result in a halt to exploitation and extraction.
Amendment (b) does not go far enough, particularly on climate change, but I will support it. I am concerned, however, about what I see as collusion between the Front Benches to take away people’s right to say no to fracking under their homes and their land. Asking for people to be notified is very different from asking for their consent. This is a slap in the face for the 99% of the people who responded to the consultation who were absolutely against the removal of the right to object. Given public opposition to changing the rules on trespass, it is regrettable that we shall not have the opportunity to debate and vote on that tonight.
The Government’s attempt to weaken the partial protections in amendment (b) is reprehensible: failing to ban fracking in groundwater source protection zones, failing to require an environmental impact assessment, and failing to rule out fracking underneath as well as in national parks and protected areas. If the wording is somehow insufficient, the Minister should go away and redraft it. The Government should certainly not use that excuse for weakening safeguards. Worse still is the new definition of fracking in Lords amendment 21B, based on a specific volume of fracking fluid. That risks allowing significant fracking with less than the defined volume limit to go ahead, without even the safeguards that are before us today.
What a mockery this is making of legitimate public concerns on fracking, and indeed of the democratic process. The paltry hour scheduled for today’s debate is particularly disgraceful, given the lack of time that we had to debate the issues on Report. These are far-reaching changes that are being discussed here, and our constituents deserve better. Parliament has let them down tonight.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
The one point on which I agree with the hon. Member for Brighton, Pavilion (Caroline Lucas) is that we have inadequate time to debate this important issue tonight. We also have inadequate time in which to debunk the many myths that she herself propagates. Indeed, she relies on their not being debunked. We all want our water supplies to be pure in quality and ample in quantity. One of my first successes in the House was to secure the closure of the Friars Wash extraction plant in my constituency following over-abstraction from the aquifer that was damaging the aquifer and threatening the chalk streams in the area. I would therefore support any measures to protect the quality of our water supply if I thought that it was threatened by fracking—but I do not think it is.
A number of those who write to me are genuinely convinced that there is a serious threat and that as a result of fracking their water supplies will be contaminated and their health put at risk. We should be clear, however, that the majority of those who are hyping those fears are not primarily concerned with the quality of the water. Their campaign to prevent the extraction and use of fossil fuels in this country is what motivates them, and that is a perfectly legitimate objective, but it should not be achieved by hiding their real motives behind some grossly overblown, exaggerated fears relating to other matters. They know that they will not succeed on the CO2 thing, because to abandon the use of fossil fuels in this country would be dramatically to undermine our quality of life. In any case, if we did not extract shale gas and oil in this country, we would simply import it from abroad, so all we would be saying is that we should make other people rich while impoverishing ourselves and not creating jobs and opportunities where they are most needed in this country.
Dan Byles (North Warwickshire) (Con)
Is my right hon. Friend struck, as I am, by the fact that the Committee on Climate Change—hardly made up of a rabidly right-wing bunch of cut-throat business people—has expressly stated that a domestic shale gas industry can be entirely consistent with our emission reduction targets, because the lifecycle emissions of domestically produced shale gas are lower than those of imported liquefied natural gas? This is simply about gas substitution. It is not about burning more gas; it is about burning domestic gas.
Mr Lilley
My hon. Friend is absolutely right about that. In addition, the Select Committee on Energy and Climate Change, where I used to be in a minority of one but I am now joined by the hon. Member for Blackley and Broughton (Graham Stringer) in a minority of two, was unanimous on the issue of fracking: it could and should be pursued energetically in this country, with appropriate safeguards, of course.
Mr Lilley
I hope the hon. Gentleman will excuse me, but I want to make a little progress.
A number of fears have been raised about water supplies, the first of which is the fear of well failure. We have drilled 2,000 onshore wells in this country and, as far as I know, not one of them has resulted in contaminated water supplies. If that has happened, it has not resulted in any ill health to anybody.
Miss Anne McIntosh (Thirsk and Malton) (Con)
This is one of the myths that my right hon. Friend has fallen into. We have only fracked at shallow depth for natural gas. The only time we have fracked at depth for shale gas was in Fylde, which is why the question of the independent regulation of this industry hangs in the balance this evening.
Mr Lilley
I am sorry but my hon. Friend misheard me. I said that we have drilled 2,000 onshore wells—I was not talking about fracking wells. As for the risks of escape of gas, it does not matter whether it is fracked or not. We have drilled 2,000 such wells, only 200 of which have been fracked, and they tend to be shallow and small pressure. I will move on to the issue of fracking, but if people are worried about methane or liquids permeating to the surface, that is an issue about well casing. We have very adequate and strong controls on that, and, as far as I know, there is not a single case among those 2,000 wells where a problem has resulted.
The second issue is whether fracking—the use of high pressures, at depth, as my hon. Friend says—will lead to those fractures reaching up to the water table. The useful report produced by the Royal Society and the Royal Academy of Engineering, which is studiously ignored by those who wish to raise fears and concerns, makes it absolutely clear that that is extremely unlikely. For fractures to permeate requires immense energy and for them to remain open proppants have to be put in; sand is injected to try to keep them open. The idea that they will be able to be kept open for several hundred if not thousands of feet, extending up to the aquifer, is almost laughable. Even this well-measured report states:
“Sufficiently high upward pressures would be required during the fracturing process and then sustained afterwards over the long term once the fracturing process had ceased. It is very difficult to conceive of how this might occur given the UK’s shale gas hydrogeological environments.”
Even if that did occur, an upward flow of fluids would not result unless
“the permeability of the fractures”
was
“similar to that of the overlying aquifer for any significant quantity of fluid to flow. In reality, the permeability of the aquifer is likely to be several orders of magnitude greater than the permeability of the fractures. Upward flow of fluids from the zone of shale gas extraction to overlying aquifers via fractures in the intervening strata is highly unlikely.”
That is an understatement.
Concerns have also been raised about the process resulting in excessive abstraction of water—too much water being used—putting our water supplies under threat. The report states that the amount of water
“needed to operate a hydraulically fractured shale gas well for a decade may be equivalent to the amount needed to water a golf course for a month”.
It states that
“the amount lost to leaks in United Utilities’ region in north west England every hour”
exceeds the water required by one shale gas well for a decade, so there is no danger of excessive water abstraction and use as a result of this process.
Then we hear the frequent assertion, “We just can’t take the risk. This is a new, untried, untested process. We don’t know what dangers could result.” In fact, 2.5 million wells have been fracked worldwide and not a single person has been injured or harmed as a result of contaminated water. Not a single building has been damaged by the resultant seismic events that are so small that they would probably be less than if we dropped one of the Dispatch Boxes on the floor.
We are dealing with a well-tried and tested procedure worldwide. In this country, we have drilled 2,000 wells well below the aquifer and had no problems of contamination. We know from very respected bodies such as the Royal Academy of Engineering and the Royal Society that the risks are negligible, certainly if we continue with the sort of processes and environmental protection that they say already exist, although they do recommend that they could be strengthened in certain ways.
I urge the House not to be frightened by those who are trying to scare us into failing to exploit a resource that is potentially of immense value to this country and, not least, to those areas where shale is most prolific.
Jim Fitzpatrick
I am very pleased to follow the right hon. Member for Hitchin and Harpenden (Mr Lilley), and I agree with much of what he said. I too support the recovery of shale gas within the UK. I also agree with the comments of the right hon. Member for Uxbridge and South Ruislip (Sir John Randall) who gives the Government the benefit of the doubt, but says that some questions might have to be asked in due course. However, as a former deputy Chief Whip, he would give the Government the benefit of the doubt. I cannot say that I am quite so generous, because I am disappointed that the Government risk jeopardising the support across the Chamber from those of us who believe in shale, shale recovery, fracking and the energy resource that we have underneath our shores.
I say with no disrespect to the Minister that this is disappointing. The Government accepted the Labour amendment when we debated the matter two weeks ago, partly because they felt that they might lose the vote because of rebellions and other things and partly because they thought the approach was correct. I do not think that fracking is dangerous. I think that with the appropriate regulatory regime, it will be safe. I much prefer the idea of sourcing our energy from within the United Kingdom than importing it from Saudi Arabia, Qatar or Russia, with all the associated problems. We should also consider the jobs, the manufacturing, the side products and the rest of it.
I am disappointed that the Government are not accepting the amendments that we put down originally and are rejecting those refined by the Lords. I am equally disappointed that the Minister was not prepared to engage in a debate with my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex), who sits on the Labour Front Bench, and accept his intervention. We should exploit shale and use it as a national resource, but to do that, and to be able to defeat those who are scaremongering, as the right hon. Member for Hitchin and Harpenden put it, we need the strongest consensus possible, and the Government’s approach tonight jeopardises that.
Dr Huppert
It is always a pleasure to follow the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) even when I do not quite agree with everything he said, although I do agree with much of it.
The frustration here is that we are discussing the small details, the minor issues. It is a shame that we do not have the chance to discuss and vote on the principles. We were denied that chance last time. There was not an opportunity to vote on the duty to maximise extraction or on trespass. There was a chance to vote on a moratorium, but, unfortunately, the Opposition abstained in large numbers. It is frustrating that we do not get the chance again this time. The two amendments on trespass which I co-sponsored with the hon. Member for Brighton, Pavilion (Caroline Lucas) were not selected, and it looks as though we will not get a chance to vote on very much today.
Let me be positive to the Government and start with Commons amendment 20. I am pleased that the Minister has delivered on the promise she made when she intervened on me in our last debate, which was to give a key role to the Committee on Climate Change. I am pleased that the Committee on Climate Change will have to make reports. I hope the Minister can assure me that “from time to time” means every few years rather than every few generations. I am pleased that the Minister has gone further and given what I think will be a crucial power, which is that if the Committee on Climate Change does say that fracking is increasing UK emissions, this new Lords amendment gives the power to a Secretary of State in the future to stop fracking. That will become quite an important measure, particularly when the balance changes as we become much better at energy efficiency—the issue that the right hon. Member for Hitchin and Harpenden did not want to think about. As we change that balance, where we get our fuel from will change substantially.
The proposal goes slightly further in that any Secretary of State who gets a report saying that fracking is increasing emissions and does not take steps to stop it will be required at least to report formally to Parliament to say why they are flying in the face of expert advice. I welcome that.
Dr Huppert
Compared with what would otherwise be the case. I am aware that the hon. Gentleman is keen on the figures, but he will find that the range of values—we do not know the exact emissions from fracking—overlaps with the range of values from imported LNG. We do not know whether they will be about the same or lower.
The hon. Gentleman is interested in reports, so I am sure he would be interested to see the Government’s own official report, led by my constituent, Professor David MacKay, which said:
“In the absence of global climate policies, we believe it is credible that shale-gas use would increase both short-term and long-term emissions rates.”
That was published by the Department; we should give it some credibility.
Dr Huppert
No, lots of people would like to speak and the hon. Gentleman has had a chance to do so.
Let me move on to the long list of requirements in Lords amendment 21; I have concerns about both the versions we are likely to have a chance to consider. The version that left the House was deficient and the version that has come back from the other House is also not good enough. That is why I wanted to table other amendments on where fracking should be allowed—the within and under issue, which is covered in amendments (d) and (e) to the table in Lords amendment 21B. I am grateful to those Members who have given us support. Support has also been given by organisations such as the Royal Society for the Protection of Birds, the Campaign to Protect Rural England and many others.
I was struck by the fact that the shadow Minister, the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), used a lot of words to say neither yes nor no to a simple question about whether he would want to ban fracking within or under all those protected areas. The whole House heard that he was not prepared to give a yes or no answer, whereas some of us believe we should take a firm position and be clear. I would take further steps on it. I therefore have a problem with both versions.
I also have a problem with issues to do with water. There are concerns about abstraction of water in some areas, and I think that a duty merely to consult, but not necessarily to do anything with the consultation, does not go far enough.
I am also interested in the issue of how to give notice. I accept what the Minister says in that it would be going too far to require every single person definitely to have been notified. I can see the problems with that, but I can also see the problems with a measure that means that a notice being put in the bottom of a locked filing cabinet could be considered notification. I was hoping the Minister would let us know what that balance should look like so that there will be reasonable notification.
I am frustrated that it seems we shall not have a chance to vote on much of this—
Mr Hayes
I did try to intervene on the shadow Minister. The hon. Gentleman might choose to invite the shadow Minister, who must have modelled this, to give us some idea of the cost and timetable of such individual notification, given that it was not in the original amendment and was added at a late stage, contrary to what the shadow Minister suggested.
Dr Huppert
I thank the Minister for his intervention, although I am not sure whether he is asking me to answer; I certainly have not modelled what the shadow Minister would like to do.
I am very frustrated that it looks as though we shall have to choose between two options, both of which are deficient, and that we shall not have the chance to vote on the stronger proposals that I would much prefer.
Gregory Barker
I rise to support the Government on these crucial amendments and to congratulate the Minister on very deft handling of an issue that is difficult because it is complex and technical, and because there are some extreme opinions on the matter, some of which are based on ideology rather than technology or science. I commend her efforts to try to find a middle way and reach a broad consensus.
I was encouraged by the stance taken by the Opposition through most of the passage of the Bill. They behaved responsibly, taking the important role of opposition seriously and scrutinising the Bill, and offering up amendments and criticisms that they thought were valid. However, I am very disappointed that the Opposition in the Lords and back here again are trying to have their cake and eat it. They are trying to hunt with the hounds and with the hare.
Miss McIntosh
This has been a good debate on the amendments. I pay tribute to the Minister for steering a difficult piece of legislation through the House. My hon. Friend the Minister has not had the advantage of the years in opposition which show that the detail should appear on the face of the Bill. The House will unite around the fact that we present a hostage to fortune by allowing some of the detail that will no longer be on the face of the Bill, which was achieved through consensus around an Opposition motion on Report which united the House on specific aspects—
Tessa Munt (Wells) (LD)
One of the details I am particularly concerned about is coal bed methane, which is exploited at depths of 150 to 400 metres—unlike high-volume hydraulic fracturing, which is done below 1,000 metres—and which is not defined in the Bill. Does my hon. Friend agree that there should be a prohibition on all gas exploitation at depths of less than 1,000 metres?
Miss McIntosh
I am sure the Minister will respond.
My right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) put his finger on the issue before the House today. I would not stand in the way of fracking in Thirsk, Malton or Filey, which is a deeply rural constituency dependent on farming and tourism in precisely the area for which, I am told, the licence application is to be submitted in March, before the regulations have come before the House. There are too many unknowns in the regulatory regime. My question to the Minister—I have tabled a question in this connection—is which independent regulator will enforce the controls, the traffic light system which the Prime Minister refers to, stopping seismic activity above 0.5%? This is the big difference between drilling in every other aspect and causing an earthquake below ground, making the earth move, possibly never to return to where it had been before.
I would also like to raise with my hon. Friend the Minister the matter of ground water contamination. How can Third Energy hope to remove by pipes the waste water at a depth of less than 2 metres underground? How can it possibly hope to submit a plan for a licence application by the end of March without having a traffic movement plan or a waste disposal plan?
I leave the House and the Minister with the thought that in the present economic climate, given the fall in the price of oil, we can allow ourselves the luxury of making sure that the regulatory regime is independent and fit for purpose and that no fracking will take place until the regime has been tried and tested.
Andrew Percy (Brigg and Goole) (Con)
I had not intended to speak tonight but, having heard the debate, feel that I must contribute. My right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) made the important point that some of the people who are against fracking are patently against it for environmental reasons; I do not associate myself with those people, and neither does he. However, I think that many people in this country have genuine concerns about fracking. In my constituency, where there are a number of test sites, I find that many people are very reasonable, in that they would be open to the option of fracking as long as they felt that the regime was strict enough and that there were enough environmental protections in place.
What concerns me about tonight’s debate is the restricted time, our inability to vote on all the amendments, and what has happened between the Lords and the Commons with regard to what I thought we agreed in the Commons a week or so ago. It leads many people to conclude that the Government are in league with the extraction companies or that there is something to hide. I do not believe that is the case at all, but given our concerns, I think there is a very strong argument indeed for pausing and thinking again about this issue, particularly given what has happened to oil prices internationally. That is why I and other Members on both sides of the House recently voted in favour of a moratorium.
Andrew Percy
I will not, because other Members are still to speak.
There is clearly the potential for fracking. I do not pretend to be a scientist—I stopped studying science when I finished my double-award GCSE at the age of 16—so I will not get into the arguments, but clearly there is the potential for an industry that a large number of my constituents would support, subject to those safeguards. That is why I voted the way I did in previous stages of the Bill’s consideration. I do not think that the way the Lords amendment has been drafted, or indeed this evening’s debate, has done a great deal to increase the confidence of residents. I make a plea to the Government that we have to take people along with us on a journey, particularly when there is a new technology that is very controversial—[Interruption.] Hon. Members say that it is not a new technology, but it is new to this country, as we heard from my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), so people’s concerns about it should be heard, just as concerns about wind farms should rightly be heard.
I urge the Government to think very carefully about this. I reiterate my view that the residents of Brigg and Goole and of the Isle of Asholme are not closed-minded about this technology; they simply want to know that the evidence is there to support it and that their homes, communities and local environment will be sufficiently well protected. That is what I thought we had agreed to with the amendment a couple of weeks ago.
Christopher Pincher (Tamworth) (Con)
I am reassured by the words of my hon. Friend the Minister, particularly with regard to groundwater protection. I think that she and the ministerial team have gone out of their way to be as consensual as possibly in order to bring the Opposition with them in support of hydraulic fracturing. Having heard the shadow Minister, who is a decent and knowledgeable man, say that he believes in a bipartisan approach, I think it is a great pity that he has chosen not to adopt such an approach tonight. He and I served on the Energy and Climate Change Committee, and it is worthy of note that the Committee has produced in this Parliament not one but two reports on fracking and shale gas.
It is also worthy of note that except for the hon. Member for Wansbeck (Ian Lavery), not one Opposition member of the Select Committee is here tonight. That seems to suggest that the others are not particularly concerned about the proposals put forward by the Government. Conservative, Labour and Liberal Democrat members of the Committee all supported the importance, with safeguards, of fracturing for shale gas.
My right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), a fellow member of the Committee, made an eloquent speech demolishing many of the myths that surround shale gas extraction. I will not attempt to reheat and rehearse most of what he said. He made a point about aquifers relative to shale layers underground. The hon. Member for Brighton, Pavilion (Caroline Lucas) has worries, as have others, about the potential pollution of the water table. I think that that is almost impossible as a result of shale gas fracturing. Fracking, in and of itself, cannot cause pollution of the water table, because the shale layer is hundreds, sometimes thousands, of feet below the earth’s surface, whereas the aquifers are just a few feet below the earth’s surface. In between the aquifers and the shale layer are hundreds, sometimes thousands, of feet of solid rock. Firing sand grains into fractures a hair’s breadth wide is not going to cause pollution of the aquifers. That will happen only if the wells themselves are compromised, and given that we have some of the best environmental protection in the world, that is very unlikely. If one drills down thousands of feet—
Gregory Barker
My hon. Friend draws attention to the fact that here in the UK we have the best environmentally regulated regime for oil and gas extraction in the world. That is a very important point. We have a terrific record, particularly for onshore drilling. It would be wrong to cast out—
Business without Debate
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Delegated legislation
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Deputy Speaker (Mr Lindsay Hoyle)
With the leave of the House, we shall take motions 5 to 8 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Forestry
That the draft Public Bodies (Abolition of the Home Grown Timber Advisory Committee) Order 2015, which was laid before this House on 2 December 2014, be approved.
Freedom of Information
That the draft Freedom of Information (Designation as Public Authorities) Order 2015, which was laid before this House on 12 January, be approved.
Pensions
That the draft Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2015, which was laid before this House on 19 January, be approved.
Financial services and markets
That the draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2015, which was laid before this House on 20 January, be approved.—(Mel Stride.)
Question agreed to.
Radio Broadcasting (Diversity)
(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Stephen Timms (East Ham) (Lab)
I am grateful for the opportunity to initiate this debate.
Premier Christian Radio celebrates its 20th anniversary this year. It is a full-service, speech-based radio station for Christians on the Digital One national radio multiplex, and it provides 24-hour ministry, discussion and news from a Christian perspective to a committed audience. It has been on Digital One since 2009. Digital audio broadcasting now accounts for 61% of its audience of 600,000 to 700,000 people who listen for at least 10 hours per week.
At the end of March, in about six weeks’ time, Premier’s six-year contract with Arqiva—the owner of Digital One—will come to an end. It was due to end on 20 December, but Premier was granted an extension until 31 March. Beyond that, its continued presence on Digital One is in doubt. Premier tells me that it has been trying to initiate contract renewal since last summer, but it was made clear that it would have to come off the platform. On 10 December, Global—the media entertainment group—announced that further pop stations, including Heart Extra, would be introduced on Digital One early this year. The intention appears to be for Heart Extra—which is frankly rather similar to quite a few other stations on that multiplex—to take up the slot vacated by Premier. Premier has not been outbid; this appears to be a knock-on consequence of wider commercial manoeuvring.
I welcome the fact that yesterday, Premier received an offer from Arqiva that could provide a basis for its continued presence on Digital One. I hope that the negotiations that follow will be successful, but we shall see.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I am grateful to the right hon. Gentleman for raising this important topic. There is, however, some confusion, because Ofcom sent me and other Members a message this afternoon, saying that
“Digital One has been in conversation with Premier and has been offered a means of remaining on the national DAB platform until 2018”.
At that point, Premier Christian Radio did not know about it. I hope the offer is serious and will operate.
Stephen Timms
I think it is serious and hope that the discussions that follow will be successful, but I understand the right hon. Gentleman’s puzzlement about the precise timing of what happened.
Earlier this month, Ofcom announced that it has received two competing applications—from Listen2Digital and Sound Digital respectively—for the licence to run the second national radio digital multiplex from next year. Premier is listed as a station on both the bids, so it should be assured of a place on Digital Two. However, if it cannot stay on Digital One after March, it will have a very serious problem. Digital Two will not open until the second quarter of next year, so Premier would lose more than half its audience and a large chunk of advertising and other income. It does not have a big corporation standing behind it, and removal from Digital One would be an existential threat.
Mr Gary Streeter (South West Devon) (Con)
The right hon. Gentleman is making a great case and is right to raise this issue. It is very important that Premier maintain a presence. As it is broadcasting and will be broadcasting again from April 2016, as he has just explained, is it not clear that a solution needs to be found that suits Premier and suits Arqiva to let it continue to broadcast in the meantime?
Stephen Timms
The hon. Gentleman is absolutely right and I think we can be hopeful that such an arrangement will be found.
Premier has worked very hard over 20 years to build its audience and has a lot of very committed listeners. The issue I particularly want to raise concerns the requirements of the Broadcasting Act 1996, as it seems to me that they should apply in this case. Section 54(6) of the Act states:
“Where the licence holder applies to the Authority for the variation of any condition imposed in pursuance of subsection (1)(b) and relating to the characteristics of any of the digital sound programme services to be broadcast under the licence, the Authority shall vary the condition accordingly unless…(a) it appears to the Authority that, if the application were granted, the capacity of the digital sound programme services broadcast under the licence to appeal to a variety of tastes and interests would be unacceptably diminished”.
Jim Shannon (Strangford) (DUP)
This is an important subject and many of us in the Chamber today have had the chance to be interviewed on Premier Christian Radio and understand its importance. I share the right hon. Gentleman’s concern that the national coverage of Premier Christian Radio should be changing. In 2014, it reached the largest number of listeners it had ever had, which shows its appeal and the interest it generates. Does he share my concern that every effort must be made by the Minister and by us in this House to ensure that Premier Christian Radio can continue?
Stephen Timms
Yes, I do agree.
It seems to me that the summary removal of Premier from Digital One, and its replacement with a pop music station very similar to several others, falls foul of the requirement in the 1996 Act, as the capacity to appeal to a variety of tastes and interests would be unacceptably diminished. I hope that Ofcom will take that view; I would have hoped that it might have done so already. I hope the Minister will take that view as well.
I feel strongly about this, as I was a member of the Committee on the Broadcasting Bill back in 1996, and I remember being very impressed by the diligence of the then broadcasting Minister, the late Iain Sproat, in bringing forward a regulatory framework for broadcasting that was commercially viable but also decent. That requirement to “appeal to a variety of tastes and interests” was at the heart of it.
In Committee, on 14 May 1996—I was there—Iain Sproat said:
“For digital radio, as for digital television, allowing the new technology to extend choice is a main aim of the Government.”
I hope the Minister will confirm that it still is. Iain Sproat also said that
“no more than two of the stations on the multiplex should be aimed at predominantly the same section of the listening audience”.—[Official Report, Standing Committee D, 14 May 1996.]
I understand that MPs are likely very soon to start receiving listeners’ postcards on the subject. As a London MP I have been on the receiving end of Premier postcard campaigns in the past, and the number of postcards is pretty impressive. Section 3 of the Communications Act 2003 also applies, with its requirement to secure
“the availability throughout the United Kingdom of a wide range of television and radio services which (taken as a whole) are both of high quality and calculated to appeal to a variety of tastes and interests.”
Premier Christian Radio is not the only Christian station on Digital One—United Christian Broadcasters is there as well—but it provides a unique and distinctive service. It is speech-led, and one of only three non-BBC stations on Digital One with 50%-plus speech content. Premier has its own news team, with journalists who provide a distinctive perspective on current affairs. It has a unique Christian telephone helpline and it is a very distinctive presence on Digital One.
Premier leads on important campaigns: the RE.ACT campaign in 2011 to safeguard religious education in schools; the Safetynet campaign in 2012 to protect children from online pornography; and the Not for Sale campaign, which did important work on the Modern Slavery Bill.
Mr Streeter
I am very grateful to the right hon. Gentleman. He is being very generous and is making an excellent speech. On the point about diversity and appealing to a wide range of interests, is it not the case that many of Premier’s listeners are fairly elderly and take great comfort from the ministry it provides, whereas most listeners to a pop station tend to be slightly younger?
Stephen Timms
The hon. Gentleman is absolutely right. Last week, Premier started to ask its listeners to write in with their support. I am told that 2,000 to 3,000 a day have been writing in since then. Let me just read what one of them said, which very much echoes the hon. Gentleman’s point:
“Premier is a lifeline for me. I am registered disabled, with M.E., and unable to get to church or meet with other people. Premier helps me to connect and engage with my faith and feel part of a wider community.”
I think a large number of people who listen to Premier feel the same way. Premier Christian Radio has recently announced an annual “society Sunday” to build closer relationships between local representatives and faith groups in their area to celebrate the work of faith groups in communities. The first is due to take place on 14 June, and has been backed by the Communities Secretary. The hon. Gentleman is absolutely right that Premier is very important indeed for many of its listeners.
Jim Shannon
The right hon. Gentleman is being very gracious. On the impact that Premier has across the whole of the United Kingdom, I just wanted to make the point that in Northern Ireland those who listen to Premier Christian Radio enjoy it. Culturally and regionally, it brings us all together to enjoy programmes we all take great pleasure in.
Stephen Timms
I am grateful to the hon. Gentleman for making that point. Before it went on to Digital One, I think I am right in saying that Premier Christian Radio would not have been available in Northern Ireland, and now it is.
There are currently 14 stations on Digital One: Classic FM, Capital Xtra, Smooth Xtra, LBC, Kiss, Magic, Planet Rock, Absolute Radio, Absolute 80s, Talksport, Premier, UCB, which I mentioned, BFBS, the armed forces station, and TeamRock. LBC and Talksport have 100% speech content; Premier has 50:50 speech and music. The other 11 stations focus predominantly on music in varying proportions. The inclusion of yet another music channel at the expense of Premier would clearly harm the aim of appealing to a variety of listeners and tastes.
There is a trend of losing speech-based stations from Digital One. A number of stations were there but are not any longer: One Word, a speech-based service of plays, books and comedy; ITN, speech-based rolling news; Talk Radio; Primetime, targeted at the over 50s; The Jazz, a Jazz music station, as one would expect; NME Radio, music news; and Bloomberg, financial and market news. All of those were on Digital One but have now gone. Against that disappointing pattern, the enforced removal of Premier looks even less defensible.
Even a gap in transmission of 12 to 15 months would be a very serious blow to Premier’s listeners, to viability of the station, and to the principle of diversity set out in the Broadcasting Act 1996. Premier provides its listeners with a valued opportunity to connect to their faith, and to reflect from that starting point on what is happening in the world and on current affairs. Removing Premier Christian Radio from Digital One—I very much hope yesterday’s approach means that that will not now happen—would be unacceptable. If a request is to be made to replace Premier with a pop music station—it has not been made yet—Ofcom should reject it. I am very much hoping that the Minister will agree.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
It is a great pleasure to respond to the right hon. Member for East Ham (Stephen Timms), who made his case in a characteristically forthright, clear and brief manner, getting all the right points across as succinctly as possible. I shall try to follow his lead. I am also grateful for the contributions from my hon. Friend the Member for South West Devon (Mr Streeter), my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) and the hon. Member for Strangford (Jim Shannon), who has contributed to many debates in which I have taken part.
It might sound like I am going off topic, but I hope that as I speak it will become clear why I wish to talk generally about digital radio. As the right hon. Gentleman made clear, Premier Christian Radio is now available in Northern Ireland thanks to digital radio. I was interested to hear him talk about the postcard campaign that Premier Christian listeners might undertake to save their radio station. I hope that we can turn this army to another purpose, because I hope that they will work with me to promote the virtues of digital radio. As he mentioned, I have been a great supporter of digital radio precisely because it promotes diversity in broadcasting. The BBC, a laudable institution, dominates the radio airwaves, with something like two thirds of listening, and digital broadcasting is a great opportunity for a much wider platform of voices to be heard, which is why his points about whether we should have another pop music station or preserve Premier Christian Radio were so well made.
For that reason, the Government are working hard to promote digital radio, and I am pleased that figures for digital radio listening, driven in part, perhaps, by listeners to Premier Christian Radio, have risen in the last five years from about a quarter to almost 40%, and that the proportion of households with digital radios, and therefore able to receive Premier Christian Radio, has risen from about 32% when we entered office to about 50% now. It is also possible to listen to Premier Christian Radio in the car. Two thirds of new cars now have digital radios fitted as standard, although we need to do more to get cheaper car conversion kits for those of us who drive an older make of vehicle. That is all because of our digital radio action plan pushing out key improvements in digital radio infrastructure.
There are several successful digital radio music stations that have shown how viable this platform is. For example, Radio 6 Music was another station threatened with closure, not by being thrown off the mux it was broadcasting on, but by the decision of BBC bureaucrats. It might interest the right hon. Gentleman to know that I personally intervened, and although I would be too humble to claim credit for 6 Music’s survival, I hope that when the history of that station is written, I will earn a small footnote. In fact, 6 Music is now more popular than BBC Radio 3.
The right hon. Gentleman mentioned pop music stations. Before concentrating on the virtues of Premier Christian Radio, it is worth saying that pop music stations do also have some virtues. Absolute 80s draws 1.5 million listeners every week, making Bauer the first radio group where more than 50% of its listeners now listen on digital radio. There is further good news for those devoted to these new digital radio stations. The construction of 182 new digital transmitters across the UK—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I have given the Minister a free rein, but, in fairness, I think there are a few Members here who would like him to concentrate on the debate. All this good news is welcome, but the debate is more about Premier Christian Radio than the success of pop stations.
Mr Vaizey
I take your point, Mr Deputy Speaker. In fact, on the next page of my brief, it says, “This brings us on to the crux of the issue and debate today”, so I had better start reading from there.
As the right hon. Gentleman said, Premier Christian Radio started broadcasting on D1 in 2009. We are in a period of transition—I will come to that in a minute—but there is an opportunity for Premier Christian Radio arising from our announcement of another national multiplex—the imaginatively name D2, to go alongside the equally imaginatively named D1. The good news is that Premier Christian Radio is part of both bidding consortiums for D2. So Premier Christian Radio should and, I expect, will have a great future when the D2 multiplex is launched, which we expect to take place in the spring of 2016.
Now, let us get back to where we were with Premier Christian Radio on D1. It had a five-year contract, which was due to end at Christmas, as the right hon. Gentleman said. That was extended until the end of March. Since Christmas, additional capacity has become available on D1. As either my hon. Friend the. Member for South West Devon or the right hon. Member for Berwick-upon-Tweed mentioned, there have been discussions with Premier about taking up this capacity. Those were on commercial terms, but in order to take up that capacity, Premier Christian Radio would have to transmit on D1 until 2018. Clearly, if Premier Christian Radio wants to move to D2 in mid-2016, it does not want to have a slot on D1 that runs until 2018. Furthermore, the D1 slot on offer is at 80 kilobits rather than the 64 kilobits that Premier, primarily a speech service, uses at the moment.
These are important matters. Technically, I should not intervene in these discussions, which are commercial, so it is not for me to influence them, but this is an important radio station—one I support wholeheartedly—and I spoke to its managing director, Peter Kerridge, this afternoon to ascertain the situation. I hope a solution can be found. I am pleased with some of the progress made. As I understand it, Arqiva is going to see if it can re-purpose some other spare capacity on D1 to create a 64 kilobit stream for Premier Christian to take over. For that to work, there would need to be some give and take on all sides.
It is important, and, I think, good news for Premier, that even if for the sake argument the contract came to an end on 31 March, Arqiva would still need to apply to Ofcom to change services and until a decision is made by Ofcom, Arqiva will need to meet the current format requirements for the slot. That would allow Premier to continue to broadcast potentially beyond 31 March. As the right hon. Gentleman noted, Ofcom would need to consider whether the multiplex was still catering to the variety of tastes and services required under the original licence. Ofcom cannot intervene in that respect or in the commercial negotiations until any application is made by Arqiva to change the current line-up of services.
The right hon. Gentleman mentioned that D1 carries another Christian station, UCB, which will continue to cater for other Christian listeners, and listeners to Premier can listen to it on tablets, smartphones and, of course, on Freeview until D2 comes on stream. It is available on medium wave in some areas. I want to urge both parties to continue their discussions and to negotiate in good faith. Premier was an early adopter of digital radio. When it was on the D1 multiplex, there were only three other stations on the national commercial multiplex. It is a matter of good faith, shall we say, to recognise the stations that had faith in digital radio at an early stage, which were part and parcel of the success that digital radio is now, and are therefore part and parcel of the success that Arqiva is enjoying by being a broadcaster.
I think that there is an opportunity for a solution to emerge. It seems to me pretty obvious that Arqiva should come to the table, sit down with Premier, negotiate a solution for a 64 kilobit service that runs until the spring of 2016 and then allow Premier to move seamlessly to D2. I am not influencing the outcome of the D2 bidding process, because, as I said earlier, Premier is part of both bids, so it should be on the D2 service regardless of who wins.
It is not helpful for such an important broadcaster with such a devoted and enthusiastic audience to be subject to this level of uncertainty. I think that Arqiva needs to understand that there are issues that go beyond purely commercial graft, or hard grind, and that there is something called “doing the right thing”. I hope that, in this instance, Arqiva does do the right thing by Premier.
It is important to remember that, although the muxcos must comply with the licence from Ofcom, they act as gatekeepers to a certain extent. They are subject to Ofcom oversight, but as more radio listening becomes digital and demand for capacity increases, it may be necessary to ensure that Ofcom has the appropriate powers to intervene if necessary, and we may need to think about that in the next Parliament.
I think that the right hon. Member for East Ham, and those who have intervened in the debate, have put the most forceful case possible for Premier Christian Radio. I hope and intend to see an end to the negotiations in short order, and a secure future for Premier on D1. As I have said several times tonight, I trust that it will take only 12 to 18 months to secure that future. Let us all work together to ensure that we achieve the right result.
Question put and agreed to.
Westminster Hall
(9 years, 9 months ago)
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Diffuse Mesothelioma Payment Scheme
(9 years, 9 months ago)
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Steve Rotheram (Liverpool, Walton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Owen. At the outset, may I welcome yesterday’s written statement from the Minister on behalf of Lord Freud? It goes some way towards addressing one of the central points that I wished to raise, but it also raises a host of points that require clarification. I hope that the Minister will be able to address those. I am certain that my hon. Friend the Member for Stretford and Urmston (Kate Green), who has led the campaign for fair compensation for sufferers, will also have a number of questions for the Minister, as will other Members.
As the honorary president of the Merseyside Asbestos Victim Support Group, I place on the record my thanks to the mesothelioma victim support groups up and down the country for their continued championing of victims and for the dignified and diligent manner in which they fight their cause. I should also make special mention of the late Paul Goggins, who did so much in this place to advance the cause of mesothelioma sufferers and without whom we would not have reached this advanced point.
To give credit where it is due, and so that I cannot be accused of being partisan, let me also say that the work of the hon. Member for Chatham and Aylesford (Tracey Crouch) should also be recognised. The Government’s U-turn should vindicate her steadfast support for victims of this dreadful disease. By the way, I suspect she might still be smarting from the result of last night’s match, when Liverpool secured a deserved victory over her beloved Spurs.
It is now eight months since the Mesothelioma Bill—now the Mesothelioma Act 2014—passed through Parliament. Given that Parliament will dissolve at the end of next month, I thought this would be an appropriate juncture for MPs to convene to discuss the status of the Diffuse Mesothelioma Payment Scheme. That, of course, was before yesterday’s announcement, but the issues before us are no less relevant for that.
Throughout my contribution, I wish to focus on two key points: the 3% levy and research funding. First, however, I would like to highlight the issues that remain outstanding after the Minister’s statement. The 2014 Act delivers the legislative framework for the Diffuse Mesothelioma Payment Scheme, which is a source of compensation for mesothelioma sufferers who could prove they were negligently exposed to asbestos at work, but who could not trace a relevant employer or that employer’s insurer. In addition, the scheme makes payments to eligible dependants of mesothelioma victims who have, sadly, passed away.
Originally, payments of 80% of the level of average civil claims were to be made in respect of people first diagnosed on or after 25 July 2012. The new guidance means that the uprating to 100% will include all those diagnosed from yesterday onwards but exclude those who have already lodged claims.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I congratulate the hon. Gentleman on holding this important debate, which is very much needed. I also welcome the change that the Government announced yesterday. He mentions the 2014 Act and those who were diagnosed on or after 25 July 2012, but some were, of course, diagnosed before then. A constituent’s husband died in November 2012, but she cannot get compensation because they fell outwith the claim period of a year. Does the hon. Gentleman think that that should be remedied, given yesterday’s changes and the Government’s more enlightened understanding of the issue?
Steve Rotheram
The case the hon. Gentleman highlights is similar to cases Members raised in Committee and on the Floor of the House when the issue was debated. It is for the Minister to respond to the question of what will happen to those diagnosed before the 2012 threshold.
The arbitrary nature of yesterday’s ruling caused great distress to a small group of about 250 claimants who already receive payments from the scheme. Will the Minister comment on the unjust nature of the anomaly created by Lord Freud? Instead of sticking to yesterday’s written statement, the Minister should stand up today and announce that he will backdate the increase to include victims who have successfully claimed at the lower, 80% rate during the scheme’s first eight months.
It is obvious that Lord Freud has had to take the action he has, because, as the Opposition predicted, the number of claimants has not reached the inflated figure the insurance companies came up with to make the compensatory package look punitive—the number is far smaller. Lord Freud admits:
“The number of claimants has proven to be below the level anticipated.”—[Official Report, 10 February 2015; Vol. 592, c. 42WS.]
Yes—a whopping 70% lower. He might put this down to the fact that insurers are only now tracing an increasing number of policies, but if we start with an overestimate of the number of claimants, we cannot simply put any decrease down to the fact that the industry has only belatedly got its act together and started tracing compensators for remedy.
It should not be forgotten that, over the life of this Parliament, pressure from mesothelioma campaigners has pushed the Government to increase compensation rates from the initial derisory offer of 70%, to 75%, then to 80% and now to 100% of the level of civil claims. I pay tribute to those resolute campaigners. The Labour party consistently called for an increase during the passage of the Bill, so I am delighted to see that increase come to fruition.
The scheme is funded by a levy on insurers that provide employers’ liability insurance. Throughout the passage of the Bill, the Government gave assurances that the levy would be set at a rate equal to 3% of the gross written premiums on employers’ liability insurance policies. Ministers told us that the insurance industry could afford to fund the scheme through a levy of 3% of GWP without having to pass on the costs to its customers through additional premiums. The expectation in the original impact assessment was that the levy on the industry would raise £338.7 million over 10 years.
In a ministerial statement on 28 November 2014, the Government announced that the levy would raise £32 million in the first year. That in fact represents a levy equivalent of just 2.2%, not the 3% originally agreed to and promised. That was due to the fact that the employers’ liability market accounted for GWP of £1,418 million in 2013—an increase of 4.8% on the previous year. From that figure, it is clear that a 3% levy would net £43.6 million, not the £32 million cited in the ministerial statement. The Department for Work and Pensions does not contest those figures, and it verified them at a meeting involving Lord Freud and the hon. Member for Chatham and Aylesford. I guarantee that, if the converse had happened and the take from the insurance pot at 3% had been lower than anticipated, the Government would not have argued to increase that percentage. Why, then, are they letting the insurance industry get away with a lower yield because the market has increased?
The issue is a cause of major concern, because the Government explicitly promised that the 3% target would be met in year 1. The importance of the additional 0.8% differential cannot be understated. If the Government chose to act, the additional £11.6 million difference could enable payments to be made to sufferers of other asbestos-related diseases, who are currently not covered by the scheme, or in respect of those diagnosed before the scheme was in place, such as the constituent of the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). The additional £11.6 million could provide much-needed investment in medical research—something I will say more about shortly.
The Minister was not in his current post during the passage of the Bill; his predecessor, the right hon. Member for Hemel Hempstead (Mike Penning), was. The right hon. Gentleman declined, in Committee, to enact Labour’s proposal for the 3% levy to be enshrined in law. Instead, he gave Members a cast iron guarantee:
“I say to the shadow Minister, the hon. Member for Stretford and Urmston, that I met Lord Freud, my fellow Minister in the Department for Work and Pensions, this morning. Three per cent. is 3% and we have no intention of moving away from it.”––[Official Report, Mesothelioma Public Bill Committee, 12 December 2013; c. 117.]
He was unequivocal. What do they say about actions speaking louder than words? If the Government do not commit to ensuring that the insurance industry will meet the 3% levy target, they will leave themselves open to legitimate criticism from mesothelioma campaigners that they are on the side of the insurers, not the victims, and are letting insurers walk away from that cast iron guarantee. That is why we pushed for the 3% to be enshrined in law.
I should be grateful for answers to some questions. Why are the Government set to renege on the promise that they made to mesothelioma victims and Members of this House about the 3% levy? Given the present understandable uncertainty about whether the 3% levy figure will be met, will the Minister confirm whether the Government intend to amend the 2014 Act to enshrine it in law? If applications to the scheme increase steadily, as more people become aware of it, and claims exceed 3% of gross written premiums, will the industry pay out from the windfall that it gets from the underpayment it currently presides over? What work is the Minister doing with hospitals, colleges, surgeries and GPs to make those diagnosed with mesothelioma aware of the scheme, to encourage increased take-up? How much is his Department spending on promoting the scheme to sufferers?
I will remind the House—as if this were needed—of what a terrible disease mesothelioma is. Thankfully, it is not a common cancer, but according to Cancer Research UK it is responsible for 2% of all cancer deaths in the country. The latest statistics showed that there were 2,570 known cases, which was a rise on the previous 12 months, with 2,429 subsequent mesothelioma deaths in the same year. A victim is likely to live less than a year after contracting mesothelioma. The disease is commonly associated with men who have worked in heavy industry, such as the construction industry, which is why I am proud of the lead that my union, the Union of Construction, Allied Trades and Technicians, has taken on the issue.
Andrew Bingham (High Peak) (Con)
The hon. Gentleman is making a good case. As he says, mesothelioma is an asbestos-related condition usually associated with heavy industry, but the incidence in my very rural constituency is higher than the national average. I just wanted to point out that it does not necessarily occur only in big cities and industrial centres.
Steve Rotheram
I absolutely agree, and was not painting a picture in which only males or people working in heavy industry are affected. Women who never worked and who were housewives have contracted mesothelioma, because they washed clothing with asbestos dust and particles on it, which they breathed in. I was not trying at all to underestimate the impact on the rest of the country.
There cannot be a debate on mesothelioma without talking about research. When the 2014 Act was being considered, the late Paul Goggins tabled amendments on that very matter, which I moved. The Government contended in the House of Lords on 9 December 2014, at column 1710, that funding for mesothelioma research is available, but no good research proposals have been forthcoming.
There are two points to make. First, it is estimated that at present £1.4 million is spent on mesothelioma research. That can be compared with research spending of £22 million for bowel cancer, £41 million for breast cancer, £11.5 million for lung cancer and £32 million for leukaemia; we can quickly see that mesothelioma is at the bottom of the research pile. Lord Alton of Liverpool previously made it clear that there are 17 other forms of cancer for which far more research resources are reserved than for mesothelioma.
Secondly, the Government’s position on the quality of forthcoming research proposals is contradicted by the recent announcement that Aviva and Zurich have commissioned the British Lung Foundation to undertake £1 million of mesothelioma research. That is of course welcome, but is not a statutory requirement. It is voluntary, and future moneys may not be guaranteed, but it shows that the industry believes that quality research proposals exist and that it is only the Government who are not willing to back the scientific community to lead on the matter.
I come back to the point about excess moneys raised from the full 3% levy being utilised for the benefit of the victims. Should an additional £11.6 million be available in the pot, even if claimants were paid out at 100% of their claim, as they now will be, there would still be about £5 million left, which could be devoted to research. Why is that not happening? Under section 13(2)(b) of the Mesothelioma Act 2014 the Government can use the amount recovered from scheme payments under the recovery of benefits legislation to help pay for the costs of the scheme. Now that the costs of the scheme can be covered completely by a 3% levy, there is no need for the subsidy. It is currently estimated that nearly £5 million will be recovered from payments. That money should be used to fund medical research, not to subsidise the insurers unnecessarily.
I have several questions for the Minister. I would appreciate it if he replied today, but if he cannot answer them all, perhaps he would write to me and the shadow Minister on each point. The written statement released by the Department yesterday says:
“Following discussion with the insurance industry, I have agreed to introduce some additional administrative safeguards to ensure that we can all be confident that the scheme continues to act as we intended and remains a scheme of last resort.”—[Official Report, 10 February 2015; Vol. 592, c. 42WS.]
What assurances can the Minister give sufferers and their families that that will not lead to increased restrictions and a higher threshold for proof of employer negligence? Why did he meet only with the insurance industry and not with victims to discuss possible amendments needed in the scheme? Why was the need for additional safeguards not picked up during the passage of the Bill through both Houses? Are the Government still lending the insurance industry a full £17 million, even though the take-up of the scheme is lower than expected?
Lord Faulks told peers,
“The Government fully recognise the need to stimulate an increase in the level of research activity and continue actively to pursue measures to achieve this.”
What measures are the Government taking to increase the amount of research? In the same House of Lords debate, Lord Faulks went on to say:
“It is absolutely not the case that there is insufficient funding for research. As I have said more than once, the case is that, at the moment, there is not a suitable number of applications for research.”—[Official Report, House of Lords, 9 December 2014; Vol. 757, c. 1710-1712.]
What specific number would constitute a “suitable number” of research applications? Has that figure been met?
Finally, there has also been a question of whether insurers have made a profit out of the system because the levy target of 3% has not been met. Lord Faulks agreed to look into that. Can the Minister update Members?
For the public and the mesothelioma victims support community to have confidence in the scheme, it is vital that in the first instance the commitments that this House made to the victims should be met without any hiccups or backtracking. Failure to enforce the 3% levy and to commission the necessary research, with adequate and proportionate funding, would be a dereliction of duty and undermine the entire scheme. We owe it to the victims of this cruel disease to get things right.
Tracey Crouch (Chatham and Aylesford) (Con)
It is a pleasure to serve under your chairmanship, Mr Owen. Despite his cruel reminder of last night’s football result, I congratulate the hon. Member for Liverpool, Walton (Steve Rotheram) on securing this timely debate.
This is a matter of great importance to me. I have campaigned on it for a decade, both before and after my election as an MP. Naturally, my interest as an MP stems from the fact that the Medway towns are a mesothelioma hot spot, with 6.5 in every 100,000 people across the area getting meso, compared with the national average of 2.5 in every 100,000. The area’s history of shipbuilding and heavy industry contributes to that exposure and diagnosis rate, so it is an issue that the people of Chatham and beyond are acutely aware of.
Much progress has been made on mesothelioma, but I want to start by congratulating the noble Lord Freud, via his and my Commons ministerial colleague here today, on yesterday’s announcement about increasing compensation under the Diffuse Mesothelioma Payment Scheme to 100% of average civil damages to those who are unable to trace their insurer. If it had not been considered unparliamentary or just a bit weird, I would have hunted him down in the other House to give him a big hug. Instead, I will do the entirely British thing of just saying, through the medium of Hansard, well done.
It is also appropriate to congratulate the noble Lord Alton, who has been an absolute champion on this issue in the other House. His tireless campaigning on meso issues has been a source of great hope to many victims and campaigners. He has been an inspiration to those of us in this House who have often been wearied by procedural hurdles. Like the hon. Member for Liverpool, Walton, I pay tribute to the asbestos campaign groups, which not only lobby us on this issue but hold the hands of the victims once they are diagnosed.
Although the Minister was not in the Department at the time, he will be aware that, during the passage of the Mesothelioma Act 2014, I pushed for 100% compensation for victims of this fatal disease. Parliament settled for a compromise deal of 80%, albeit after a lot of pressure from campaigners in all parts of the Commons and Lords. That compromise was agreed after levels were raised from 70% to 75% and then to 80%, on the understanding that insurance companies would not participate in the scheme at all if the levy were to cost them more than 3% gross written premiums, which they in turn would be forced to pass on to an already difficult employers’ liability market.
I think “reluctant acceptance all sides” is an appropriate phrase; none the less, many felt that the outcome remained unfair. The fact there were far fewer claims than predicted, representing a total of just 2.2% GWP, was surprising, but perhaps not unexpected, given the number of times that the calculations and the costs were altered during the consultation and the passage of the legislation. It was a pleasure, therefore, to meet with Lord Freud immediately after Christmas to discuss the shortfall. I am delighted that, through his inevitably tough negotiations with the sector, he has managed to pull off a deal that means that, as of yesterday, anyone diagnosed with mesothelioma will get 100% compensation.
The Minister may think it is cheeky to ask for more, given how much progress has been made, but a few questions need to be asked. Around 200 people were compensated under the original scheme, at the rate of 80%. Are there plans to reconsider and uprate their payouts? Although I appreciate that there may be issues about retrospective payments, it would be reassuring to know whether the Department is undertaking any further consideration regarding those claimants. Yesterday’s statement also alluded to additional safeguards that have been requested by the insurance industry and agreed by the Minister. Although I fully accept that the 100% compensation scheme would not have been agreed without some form of negotiation, it would be helpful for the House to be made aware of what those administrative safeguards are and whether they require changes to either the primary or the secondary legislation.
I want to mention research, an issue that was much debated during the passage of the legislation for this scheme. The late Paul Goggins was a champion of ensuring more medical research into mesothelioma, for both treating and curing the cancer. The Minister will be aware that Paul sadly passed away between the Committee and Report stages of passing the Mesothelioma Act; I moved his amendments on the Floor of the House for him. It is an honour to continue to fight for more funding for research in his name.
Emotion aside, the facts are simple. Mesothelioma is an invasive type of lung cancer for which there is no cure. Victims often experience painful, debilitating symptoms, and most will die within 12 months of diagnosis. Someone dies from meso every five hours in the UK. It is estimated that 2% of men born in the ’50s will get the disease; yet research into this cancer is lagging way behind. As an illustration, I was given a table of the number of research papers into meso. In 2012, when 2,431 people died from mesothelioma, just 44 papers were published on it, compared with 2,828 papers on oral cancer and 1,160 on cancer of the uterus—both of which, thankfully, have nearly 1,000 fewer deaths per year.
Great work is being done out there, but it is starved of money. I visited the Medway campus of the university of Greenwich, where Professor Adrian Dobbs is leading the research into meso, including looking at the recent discovery of the compound JBIR-23, which is the first ever natural product to show activity against tumour cells. That work is being funded by the June Hancock Mesothelioma Research Fund, but with much more to do to refine the biological activity—from the scale of an oil tanker to a saloon car and down to the scale of a grain of sugar—significant funding needs to be found.
Insurers have contributed to wider research funding programmes with the British Lung Foundation. I was delighted to see that my old company, Aviva, has joined forces with Zurich to donate a combined £1 million over two years to the BLF’s meso programme. However, it is not fair that only those two companies are funding the research; frankly, others should be ashamed of themselves for not also contributing. It is also disappointing that the funding is time limited, and there is no guarantee that it will continue after the two years.
Finally, I want briefly to mention the issue of teachers dying of mesothelioma, which was also discussed during the passage of the Mesothelioma Act. Today, 75% of the 33,600 schools in Britain still contain asbestos. There is some variation in the statistics—which is why I may have confused matters further with a possibly incorrect recollection of the figures in the Chamber on Monday—but the often-cited stat is that in the past 10 years, 140 school teachers have died of meso. In the United States, for every one teacher who has passed from mesothelioma, nine children will follow.
Quite simply, we have a problem with asbestos in schools, which is why those who are diagnosed with the disease are not limited to the industrial professions. Just one fibre of asbestos can cause the cancer, and fibres can be transferred simply by putting a drawing pin in a wall. Local education authorities have insurance, which is why the scheme was deemed not appropriate in general terms for teachers; nevertheless, as politicians who will inevitably have schools in our constituencies that are riddled with asbestos, we need to be mindful of the potential problems. We need to introduce regulations similar to those in Australia and the US to remove asbestos in schools. I hope that, post 7 May, the Government will consider this matter extremely carefully.
Time is short and I know that other hon. Members wish to speak. Let me end by saying that the victims of the disease will now get the full compensation that they deserve. There are still issues to resolve, such as those I have raised, as well as others, which I have not had time to go into, that are equally important, such as secondary exposure. There are many people who will today hear that they have mesothelioma. That news will, in a short time, take them away from their family and loved ones; but at least now, if they are unable to trace their insurer, they can have financial peace of mind. It can only be the good thing and right that we have finally achieved that.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate. I thank the hon. Member for Liverpool, Walton (Steve Rotheram) for securing it and for giving us all a chance to participate and give a viewpoint—I will obviously give a Northern Ireland viewpoint. It is also a pleasure, as always, to follow the hon. Member for Chatham and Aylesford (Tracey Crouch) and to hear her contribution.
This issue has affected a great number of people in my constituency of Strangford and, indeed, across the whole of Northern Ireland. I thank the Minister for his announcement, but I seek clarification on how the compensation will affect Northern Ireland. I am aware that the Northern Ireland Assembly made a decision in 2012 on the issue. I will ask him some questions on that later, because it is important to get the situation and how the compensation payments will affect those in Northern Ireland entirely clarified. When I comment on that later, hon. Members will see the clear disparity between Northern Ireland and the rest of the United Kingdom. Those are important issues.
This is a common disease, particularly among the older generation and particularly in the old industrial towns of Belfast. With Harland and Wolff employing some 15,000 workers in the shipyards, and as many as 30,000 workers at one stage, it is unsurprising that so many men—and also women—in and around Belfast were affected by asbestos-related illnesses. For many plumbers, electricians and builders working in the ’50s and ’60s in towns within and outside the shipyards, asbestos was commonplace, so unsurprisingly a large number of people in my constituency have been affected. Indeed, the story is told that when Harland and Wolff was at its height, the asbestos flakes were of such enormity and quantity that they were in the streets of east Belfast, where the children played among them, never realising that doing so would be detrimental to their health, so it is not necessarily just the workers in the shipyard who were affected, but those outside it. Over some 30 years as an elected representative—I was doing the figures the other day; figures are always a reminder of how many years we have been on this earth—as a councillor, a Member of the Northern Ireland Assembly and, now, as a Member of Parliament here, I have had occasion to represent many of my constituents on this issue in relation to their benefits and their compensation claims as well.
Malignant mesothelioma is the most serious of all asbestos-related diseases. As has been mentioned, exposure to asbestos is the primary cause and a risk factor for mesothelioma. Making a correct mesothelioma diagnosis is particularly difficult for doctors because the disease often presents with symptoms that mimic other common ailments, so people may sometimes not be aware of exactly what is happening. There is currently no cure for mesothelioma, but treatments are available to help with the typical mesothelioma prognosis.
It is clear that investment in research into mesothelioma is desperately needed. The United Kingdom has the highest rate of the disease in the world—that is not something to be proud of, but it is a fact of life that we have the highest figures. That is largely because the UK Government permitted the use of asbestos long after other countries outlawed the mineral’s use. In addition, and as mentioned previously, shipbuilders historically are among the people most affected by mesothelioma, and the shipbuilding industry plays a large role in the history of the United Kingdom, in particular in Belfast and Northern Ireland, especially around the time of second world war. The British Lung foundation has said that this year, it is estimated that 2,400 people will die of the disease, and that over the next 30 years, more than 50,000 people will die of mesothelioma in the UK unless new treatments are found. The hon. Members for Liverpool, Walton and for Chatham and Aylesford both mentioned the need to do more research and to try more actively to find a cure.
Mr Gregory Campbell (East Londonderry) (DUP)
My hon. Friend is talking about heavy industry and the shipyards, and the impact that they had. Given that the numbers of people dying from mesothelioma are continuing to increase post that revolution, that would indicate that the research that he is talking about—and is generally agreed should increase—should be where the effort is concentrated after the announcement yesterday that greater research has to be done for the future.
Jim Shannon
I thank my hon. Friend and colleague for that intervention. Yes, that needs to happen. I know that this Minister is not responsible for health, but perhaps he could give us some idea of what discussions he may have had with the relevant Health Minister on finding a cure or treatment that works and is more effective.
Relatively little is spent on mesothelioma research in the United Kingdom compared with other cancers of comparable mortality. In 2011, the National Cancer Research Institute reported that £400,000 was invested in mesothelioma research by its partners. That seems like a lot of money, but compared with figures for research today, it is not, so we need some indication of how that will be increased. The amount compares with some £5 million and some £5.5 million spent respectively on myeloma and melanoma—two cancers that kill a similar number of people each year—in the same year.
Given how aggressive this cancer is, it surprises me, but also saddens me, that in 2015 we are still not working hard enough to find a cure. That is the very issue to which my hon. Friend the Member for East Londonderry (Mr Campbell) referred. I was pleased to see that the Northern Ireland Assembly introduced a scheme to help those not just affected first hand, but who had come into contact through relatives—by washing clothes, for example, which is how many of the wives, girlfriends, mothers and children have been directly affected by what has happened. On 1 October 2008, the scheme was launched and then, last year a scheme was introduced in the UK. Although it is similar, there are some key differences, and it is those key differences that concern me most. I will focus on those quickly and seek the Minister’s response on them; his help would be greatly appreciated.
In Northern Ireland, a person—this includes dependants—has to claim within 12 months of receiving a diagnosis or within 12 months of receiving an industrial injuries disablement benefit. On the UK mainland, a person has three years to make the claim. That is quite a difference, so I seek to clarify how and what methods can be used to address that issue. The scheme is also open only to those diagnosed on or after 25 July 2012. That automatically cuts out a large proportion of the community, because so many of those who worked in the ’50s and ’60s and before that were diagnosed some time ago. That means that they are directly disadvantaged and excluded. That simply should not be the case, because every person affected by this cancer deserves some form of compensation. Unfortunately, compensation will not make them better; but what it does do, importantly, is help them in some way, and it is what is deserved, so it just seems like a no-brainer to me that we should be doing our best to help them.
Not only that, but there is a significant disparity between compensation payments in Northern Ireland and those on the UK mainland. Both systems work on the same basis, so the younger someone is, the more compensation they receive. In Northern Ireland, if a person is aged 37 or under, they will receive just over £80,000 as a lump sum. At the other end of the spectrum, if a person is aged 77 or over, they receive just over £12,500. At the same time, in the UK mainland, someone aged 40 or under will receive just over £216,000, and a person aged 90 or over will receive just under £70,000. There is a massive disparity in payouts. It is quite shocking to see such a difference, so I seek an explanation from the Minister and perhaps his help on how we can make progress, so that there is a similarity between payouts across the whole of the United Kingdom of Great Britain and Northern Ireland.
Mesothelioma does not change. It does not stop at the Irish sea, nor does it lessen when it crosses the Irish sea, so it disappoints me that people living in Northern Ireland are afforded so much less because of their postcode. Last January, I asked the Secretary of State for Health what discussions he had had with his counterparts in Northern Ireland about introducing this strategy on a UK-wide basis. He said at the time that he had not had any discussions with them. A year on, I put the same question, this time to the Minister present in the Chamber. What discussions have taken place with his counterparts in Northern Ireland about a UK-wide strategy to tackle mesothelioma, so that everyone in the United Kingdom and Northern Ireland can have the same payouts, the same compensation and the same help?
Ian Lavery (Wansbeck) (Lab)
As ever, it is a pleasure to serve under your chairmanship, Mr Owen. I congratulate my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) on once again bringing this really important debate to the fore in Westminster Hall.
Only last year, I had the experience of sitting on the Bill Committee for the Mesothelioma Act 2014. Many problems were brought up about that Bill. Like other Members, I think it really important to remember Paul Goggins’s work, efforts, commitment, passion and dedication on behalf of mesothelioma victims. As a Member of Parliament, he was much treasured in this House, and he did fantastic work right up to the Bill stage. He was sitting with us the weekend before he tragically died from a medical condition. We must always remember people such as Paul Goggins for their efforts.
One big issue with regard to the Mesothelioma Bill was the compensation. That was discussed long and hard, as were the insurance companies. Initially, the maximum was 75%, because the insurance companies could not and would not be able to afford anything more than that. The arguments were long and very bitter at times, because not many compensation schemes agree to pay only 75% of what people should be entitled to.
We should not forget, and we did not forget, that to be entitled to any form of compensation, people have to be diagnosed with the dreaded disease mesothelioma. Once someone is diagnosed with mesothelioma, the prognosis is death. They are lucky if they can last 18 months. The position at this point in time is that once a doctor informs someone that they have this horrendous, horrible disease, they can see the end of their natural life.
We should always recognise and support the victims, and the vast majority of the Bill Committee and Members of this House do, but at that time there was—there still is—too much focus on the power, influence and finances of the insurance companies. The Minister in the Committee said that he was extremely concerned at the Opposition pushing for 80%, 90% and 100% compensation, because the insurance companies had not come to the table willingly. In his words, not mine, the insurance companies had to be dragged to the table. He was concerned that if we pressured the insurance companies—again, these are his words, not mine—they would walk away and there would be nothing for the victims. We agreed eventually, after the Bill was enacted, that the figure for compensation would be set at 80%.
I was delighted that yesterday’s written statement increased the compensation to 100%, but I am not really here to celebrate the fact that the insurance companies have made that decision. The decision should have been made many moons ago. It should have been enacted in the Bill and then we would have seen the correct compensation paid to many of these individuals and their families. It was not, and the Minister might consider—in fact, should consider—whether the people who have been able to claim since July 2012 should be able to claim backdated finance: the difference between 80% and the 100% that was, happily, announced yesterday.
There are a few other things to say about the insurance companies. We should never let these people off the hook, because the insurance companies made millions and millions of pounds on insurance for mesothelioma and other types of disease. They had the finance to pay this money; it is not that they have not had the money. The insurance companies have had the money and have invested the money, or did they give the money out in dividends, meaning that we cannot compensate the people who are suffering greatly as a result of mesothelioma? The insurance companies have had the finance, but it was said that they needed to be dragged to the table. That in itself speaks volumes.
I agree with the hon. Member for High Peak (Andrew Bingham), who is no longer in his place, that mesothelioma does not affect just those who have worked in shipyards, mining and heavy industry; it goes across the board. Teachers are one example. Thousands of teachers have died as a result of mesothelioma. They are dying on an annual basis. Of course, the problem with this dreaded disease, as we all understand, is that its latency period can extend up to 20, 25 or 30 years. People can be fine right up to that time. Then they start to feel unwell, and the prognosis for mesothelioma is, as I said, a death sentence.
Can I mention, Mr Owen, something extremely important? If teachers are getting mesothelioma from working in schools, what is happening to the kids? That is a different issue, but it is cancer and asbestos-related. I fear for the future of many kids who are in schools constructed in the 1950s, ’60s, ’70s—sometimes earlier—in which there is still a large asbestos presence. If teachers are dying, that means that kids are being exposed to the same asbestos dust because of the nature of the school’s construction. We need to look at the issue of asbestos in schools and see whether we can monitor kids who might be exposed. We should in some way be able to measure and control that situation. That is a huge concern of mine.
Let us look at the disease itself. Many people in my constituency have had this dreaded condition. I place on the record my thanks to the Mick Knighton Mesothelioma Research Fund, from the north-east region. It does tremendous work, as my hon. Friends mentioned, across the UK. There are a very large number of people in these support groups. Many of them do not have mesothelioma and will never have it, but feel the need, because of the nature of the condition, to support individuals who do have it. My thanks go to those people.
I mentioned the cut-off date in the legislation. People can claim mesothelioma compensation only if they were diagnosed after 25 July 2012. That is nonsense. There is not a politician in the House of Commons who would not accept that mesothelioma has been present for many years—decades, in fact. Insurance companies were taking premiums for mesothelioma 50 and 60 years ago, so the idea that it is acceptable to have a cut-off date of 25 July 2012 is nonsense. It is an affront to the many hundreds, if not thousands, of victims of mesothelioma who were diagnosed before the cut-off date and can in no way claim compensation. That is just not fair.
Mr MacNeil
To back up the hon. Gentleman’s argument, I reiterate that I have a constituent whose husband died after 25 July 2012 but was diagnosed before 25 July 2012.
Ian Lavery
Again, there are all these anomalies. If we look at the other types of compensation deal with insurers, trade unions and law firms, we see that the vast majority would pay compensation dating back to what is classified as the date of guilty knowledge, not a date that has just been plucked out of the air. As I said, mesothelioma goes back for generations. We should be looking to compensate people—never mind the cut-off date of July 2012. There was even a document for a consultation that began on, I believe, 25 February 2010. Is that not a date of guilty knowledge in itself? Why can compensation not be paid to victims going back to at least 2010?
Everyone who has spoken has mentioned the real issue at the moment, which is medical research. My hon. Friend the Member for Liverpool, Walton mentioned Dr Moore-Gillon, who has said that mesothelioma is
“not an attractive area for researchers…If you’re a bright person with a PhD making a career in cancer research and you are told you can work on a mesothelioma project for a year, you’re looking for a new job in 12 months. Instead, you can hook into breast cancer research and be employed for 20 years.”
Steve Rotheram
On that point, my hon. Friend is absolutely right. A leading researcher has done some positive work using adult stem cells, which, once they are adapted and injected into a vein, target cancerous mesothelioma cells. Unless additional funding is put forward to develop that research to clinical trials, we will simply be paying compensation to people who have this terrible disease instead of doing what we should be doing—giving them a cure. I am sure that everybody who has mesothelioma would rather have a cure than the compensation.
Ian Lavery
I do not think I could have put it better myself. We debated medical research long and hard in the Mesothelioma Bill Committee, but we have not really made any progress. I urge the Minister to think about the fact that we really should put mesothelioma right up there with other cancer-related disease so that we can, as my hon. Friend has said, try to cure and prevent that horrible disease, rather than just thinking that it is right to pay compensation 30 or 40 years later.
Finally, I want to ask for clarification on a point that I am genuinely unsure about. When it was agreed that 80% of the compensation would be paid, the DWP stated that 100% of any benefits that had been paid with regard to mesothelioma would be clawed back. I am not sure whether that has changed, but I would welcome the Minister’s view on that. If it is still happening—the insurance companies and everybody else has come up with 100% compensation, and that is fine—for the period where people receive 80% compensation, compared with 100% clawback from the DWP, surely there is a case for them to have some form of claimant rebate.
All in all, I welcome the statement, but there are still lots of questions to be answered. The Mesothelioma Bill gave us a great opportunity to give 100% support to the victims, but we did not quite get there. Perhaps we are getting there step by step, but why do we not simply take the massive step that is needed and put things right as soon as we possibly can?
Kate Green (Stretford and Urmston) (Lab)
It is a pleasure to serve under your chairmanship, Mr Owen. I congratulate my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) on securing the debate. I am delighted that we are joined by parliamentary colleagues from all parties who have long been doughty campaigners on this issue. I join colleagues in paying tribute to the asbestos victim support groups, which have kept us so well informed about the issues in relation to this matter. I also join colleagues in remembering the late Paul Goggins, my good friend and former parliamentary next-door neighbour. We miss Paul very much, but I think he would have been pleased to see that there has been further progress in the light of yesterday’s written ministerial statement.
It is just over a year since the Mesothelioma Act 2014 completed its parliamentary passage, and I warmly welcome the opportunity to debate what has happened since then. Although everyone recognises that it is early days still to assess the effectiveness of the Diffuse Mesothelioma Payment Scheme, even in its short life so far there have been a number of developments, some of which were welcome and some less so. I know that hon. Members who take a close interest in the matter appreciate the opportunity to raise issues of concern with the Minister today.
The Diffuse Mesothelioma Payment Scheme is an important and welcome development in offering a measure of justice to sufferers of that terrible disease. It serves to ensure that those who contracted the illness as a result of exposure to asbestos at work, but who cannot now trace an employer or an employer’s liability insurer, can receive payment in recognition of their suffering. Initially, as we have heard, the Government set the proposed payment at 70% of average civil damages, but an increase was made to 80% when regulations to implement the scheme were introduced last year, as a result of savings that had been found in legal and administrative costs. Yesterday, we learned from the written ministerial statement that payouts are to be increased to 100% of average compensation. Of course, that is very welcome, although I echo my hon. Friends the Members for Liverpool, Walton and for Wansbeck (Ian Lavery) in asking the Minister why the increase cannot be backdated to those who have already received 80% payouts under the scheme or who have already been diagnosed. The Department’s press release painted a rather rosy picture of the impact of the increase, suggesting that victims would receive an additional £54,000. In fact, that amount would be paid only to those aged under 40, and so far no victims as young as that have been compensated under the scheme. The average increase will be more like £21,000, which is welcome but not quite as good.
I am also concerned that the reason for increased payments is because the take-up of the scheme has been lower than expected. My hon. Friend the Member for Liverpool, Walton was right to express some scepticism about the assumptions that were made when the scheme was first proposed. Take-up has been substantially below expectation. It was originally envisaged, if memory serves me correctly, that in the first year of the scheme there would be some 900 applications, but I understand that the expectation now is that there will be only 300 claims in the first year. What analysis has the Minister made of the much lower than expected take-up and the reasons for it? What discussions has he had with the oversight committee on the matter? Is he confident that the application process is working smoothly and speedily for applicants? Is he confident that the scheme has been adequately promoted? What steps are the Government taking to ensure that potential claimants are made aware of it? What evaluation of the application process is he undertaking, and, in particular, what measures is he taking to ensure that he obtains feedback from the asbestos victim support groups?
Have any claimants yet resorted to arbitration when they have been unhappy with the outcome of their claim? Is the Minister confident that the much lower figure for expected claims represents a true picture of those who could make a claim under the scheme? What profile, over time, and what volume of future claims does the Department now expect? As has been mentioned, yesterday’s written statement referred to administrative changes being made as a result of discussions with the insurance industry to ensure that the scheme remains one of last resort. Will the Minister tell us exactly what those administrative changes are, and what impact they will have on victims and their ability to access the scheme?
As my hon. Friend the Member for Liverpool, Walton has explained, the scheme is funded by a levy on current employers’ liability insurers. When the legislation proceeded through Parliament, we were told that the levy would be set at 3% of gross written premiums, because the industry could accommodate a levy at that level without having to pass the cost on to its customers via increased premiums. In addition, because it was expected that claims would peak in the first few years of the scheme, which would mean that the cost of meeting payouts could exceed the levy, we were told that the Government would make a £30 million loan and £17 million gift to the industry to smooth the cost of the scheme in the early years. Although the expectation was that 3% would prove insufficient fully to meet claims in the early years of the scheme, there were always fears that the industry might try to get away with a lower payment. That is why I tabled amendments to the legislation, in Committee and on Report, to enshrine the 3% levy rate in law. The then Minister, the right hon. Member for Hemel Hempstead (Mike Penning), gave assurances to the Public Bill Committee on 12 December 2013 that there was no need for such amendments, because:
“Three per cent. is 3% and we have no intention of moving away from it”.––[Official Report, Mesothelioma Public Bill Committee, 12 December 2013; c. 117.]
In a written statement on 28 November 2014, however, the Government announced that in the first year the levy would raise £32 million, so it was in fact set at 2.2%.
Following yesterday’s written ministerial statement, the position on the levy is somewhat opaque. I hope the Minister will clarify the situation today. First, can he confirm whether the uplift in payments to 100% is met from a levy of 2.2%, a levy of 3% or some other figure? How much is the levy now raising in cash terms? Is it still £32 million, or is it another amount? How much in cash terms are the additional and total costs of meeting payments at 100%? In a briefing to MPs in December, the Asbestos Victims Support Groups Forum UK estimated that increasing payments to 100% would cost an additional £5.5 million and that increasing the levy from 2.2% to 3% would raise an additional £11 million. With lower than expected payouts, there would be plenty of surplus cash if the levy were set at 3%, even with payments at 100%.
Andy McDonald (Middlesbrough) (Lab)
Does my hon. Friend agree that, at whatever level the levy is set, it is perfectly clear that there is more than enough funding available to do the right thing by those victims and families who received under-settlements at 80%? We could do the right thing by those victims and give them the full compensation at 100%.
Kate Green
Absolutely. Given the relatively small number of claims and the relatively small amounts involved, it is a matter of justice, and I hope the Minister will address the mood of the House this morning by giving us some assurances.
Even if 100% payouts could be afforded from a lower levy, the 3% figure is important because, in addition to funding more generous payouts, surplus cash could be put to other uses, as we have heard. My hon. Friend the Member for Liverpool, Walton and the hon. Members for Chatham and Aylesford (Tracey Crouch) and for Strangford (Jim Shannon) all asked about funding for research. Mesothelioma is always fatal. It is a truly terrible disease that is massively cruel to sufferers and their loved ones, who have to watch them die in the most horrific manner. There is a crying need for research into treatment of the disease, yet today research is woefully underfunded. Although the recently announced voluntary contribution to the British Lung Foundation by the insurers Aviva and Zurich over the next two years is welcome, the abundance of good research proposals, as evidenced by the written answer I received from the Under-Secretary of State for Health, the hon. Member for Mid Norfolk (George Freeman), on 7 January 2015, suggests that mesothelioma research could benefit from more funding, which would benefit the insurance industry, the public purse and, of course, victims. What steps are the Government taking to place research funding on a sustainable footing?
With claims lower than expected, and with a 3% levy, another possibility is to backdate payments under the scheme to an earlier date. Under the legislation, the cut-off date for claims is for those diagnosed after 25 July 2012 but, as my hon. Friend the Member for Wansbeck pointed out, we have known about the lethal effects of asbestos for many years—indeed, since the early decades of the last century—and for many years, the industry did all it could to evade its responsibilities to victims. There will now be very few, if any, survivors who received a diagnosis before 2012, given the speed and ferocity of the disease after diagnosis. The usual prognosis is less than 12 months, and personal representatives cannot make a claim where the sufferer died before the commencement of the scheme. None the less, in a few cases there may be an opportunity for greater generosity in relation to the cut-off date, or the Government might like to rethink their position on personal representatives. Has the Minister considered the scope for earlier eligibility? What will happen if claims increase over the next few years to the extent that the levy is insufficient to meet them after all? Will payments remain at 100%?
Can the Minister confirm that the cost to the industry will never fall below 3% in any given year? Or is it his intention that the levy will not average less than 3% over the whole life of the scheme? What is happening to the Government’s £30 million loan and £17 million payment to the industry to help it meet the costs of the scheme? Given the lower than expected number of claims, will that generous Government support now be reduced or removed? We know that the industry expected the scheme to run for 30 to 40 years because of the long latency of the disease. What discussions have the Minister or his colleague, Lord Freud, who has been leading discussions with industry representatives, had about the industry’s forecasts of future costs?
As my hon. Friend the Member for Wansbeck said, we would like the Minister to say something about the figure for benefits recovered by the compensation recovery unit. Under the legislation, social security benefits that have been paid to sufferers are clawed back if the sufferer makes a successful claim under the scheme. My understanding is that recoveries amounted to £8 million in the scheme’s first seven months. Does the Minister think that clawing back benefits at 100% is fair to sufferers who received less than 100% of average damages? Will he consider reducing recoveries from their benefits, at the very least, in line with the proportion of average damages that they actually received?
On other matters, what progress has there been on addressing the difficulty we ran into with the approach of Her Majesty’s Revenue and Customs to releasing employment records, which are essential to making a claim under the scheme or, indeed, to pursuing a claim in the courts? I am pleased that a Government amendment to the Deregulation Bill has ensured that, in future, HMRC will be able to release those records without fear of breaching data protection law, but the Bill has not yet completed its parliamentary passage. Is the Minister aware of any cases in the meantime in which HMRC has been asked for records? What approach is HMRC currently taking? There has, of course, been a recent helpful legal judgment in a case brought by my own union, Unite, but I understand that the limitations of the judgment mean that the matter will not be fully resolved in all cases until the Bill becomes law.
Finally, and especially given the lower than expected take-up, has the Minister taken the opportunity to consider how the Diffuse Mesothelioma Payment Scheme might be widened to non-employment cases, to cases of collateral contamination—for example, where a family member contracts the illness as a result of exposure to the clothes or equipment of a relative who has worked with asbestos—to the self-employed or to Government employees, including veterans of the armed forces, who are not covered by the scheme? What steps are the Government taking to provide relief for sufferers of other asbestos-related diseases?
The legislation passed by Parliament last year and yesterday’s announcement have at last offered some justice to some victims but, as the hon. Member for Strangford pointed out, this country has the shameful record of having one of the highest incidences of asbestos-related illness in the world. We can, and we must, do much better for those who have suffered. I hope the Minister will indicate his willingness, indeed his determination, to look for ways to do so.
Albert Owen (in the Chair)
I am grateful to the hon. Lady and to all hon. Members for their thoughtful contributions. I ask the Minister to respond.
The Minister for Disabled People (Mr Mark Harper)
It is a great pleasure to serve under your chairmanship, Mr Owen. I congratulate the hon. Member for Liverpool, Walton (Steve Rotheram) on securing this debate. He takes a close interest in asbestos-related issues. A little while ago, we both took part in an Adjournment debate on other issues related to asbestos and safety.
I start by echoing the hon. Gentleman’s sentiments towards the late Paul Goggins. I remember very clearly the debate in the House on the Mesothelioma Act 2014 shortly after his sad death. I also echo the hon. Gentleman’s generous comments about my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), who picked up the baton on that occasion, although I do not echo his comments about football. Coming from Gloucestershire, which is a rugby-playing part of the world, I should probably leave the football dispute to other people. [Interruption.] It is probably not good for me to talk about rugby in your presence, Mr Owen, so we will move on.
This has been a very good debate, and it has been helpful in the context of yesterday’s written statement. I will answer some of the questions that colleagues have raised. Following some of the contributions, including from the shadow Minister, it is worth briefly placing on record that the scheme that was legislated for last year, the Diffuse Mesothelioma Payment Scheme, is of course not the only scheme in statute to address such difficult issues. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979 set up the first scheme. That had significant gaps in it, which is why the previous Government, with the support of the then Conservative Opposition, introduced the 2008 scheme in the Child Maintenance and Other Payments Act 2008, which deals with those who did not necessarily work in the industry, but were self-employed, or, in some cases, family members of those who worked in the industry. This scheme comes in the wake of that to deal with some of the issues that those schemes did not deal with.
It is worth putting on the record the scope of the schemes. Although the hon. Member for Strangford (Jim Shannon) mentioned them, the 1979 scheme and the 2008 scheme are both Great Britain schemes, so they do not apply to Northern Ireland. The responsibility for welfare policy lies with the Northern Ireland Executive. The 2014 scheme, which we are discussing today, is a UK-wide scheme and applies in Northern Ireland as well as England, Scotland and Wales.
To pick up the point raised by the hon. Member for Strangford, people in Northern Ireland have three years to apply for the scheme from the point of diagnosis, which is the same as in England, Scotland and Wales, so I do not think there is a difference in the way the scheme operates. However, he is right to point out that the previous two schemes do not apply in Northern Ireland.
Jim Shannon
I thank the Minister for giving way; he knows I have to leave fairly shortly and I wanted to intervene in advance of that. After the announcement has been made, when does the Minister hope to have direct contact with the Minister responsible in the Northern Ireland Assembly so that we can co-ordinate the delivery of the compensation plan for the whole of the United Kingdom—Great Britain and Northern Ireland?
Mr Harper
I referred to the hon. Gentleman’s point first because I know that he has other pressing business on behalf of his constituents, and he had the courtesy to let me know, so I wanted to deal with his point while he was still in the Chamber. As he knows, I plan to meet the Northern Ireland Minister with responsibility for welfare to discuss other matters to do with welfare in the wake of the Stormont House agreement. I will ask my officials to place this issue on the agenda and we can have a conversation about that to make sure it is clear how it will be implemented in Northern Ireland.
One point flowed through the remarks of the hon. Members for Liverpool, Walton and for Stretford and Urmston (Kate Green) and my hon. Friend the Member for Chatham and Aylesford. I will set out my understanding of the position, which is clear. There was a lot of discussion about the levy on the industry. The scheme is effectively demand-led: people make applications to it and the costs of the scheme are then recovered through a levy on the industry. The 3% that has been talked about is a cap. The insurance industry agreed that if the cost remained below that level, it would absorb the cost of the scheme and would not pass it on to other employers who take out employers’ liability insurance through increased premiums. That was important. The Government did not want the cost of the scheme to fall on employers across Britain: we wanted it to be absorbed by the insurance industry.
So the 3% is a cap, not a target. The costs of the scheme are calculated and then the levy is calculated to recover the costs of the scheme. The hon. Members for Liverpool, Walton, for Strangford and for Stretford and Urmston referred to Lord Freud’s written statement on 28 November last year. He set out the costs of the scheme in the first period of the year, how much that encompassed and how much would therefore be recovered from the insurance industry. That position is clear. [Interruption.] Let me finish this thought and then I will take a question.
Hon. Members seem to have envisaged, although it was not envisaged by the Government, that there would be a 3% levy, some of the money from which would be used for settling claims and the rest would form a pot of money that could be distributed as Ministers or others saw fit. However, it is a cap on the costs that land on the industry. The industry agreed that if that remained the cap, it would absorb the costs of the scheme and not pass them on to employers more generally.
Kate Green
Unlike me, the Minister did not sit through all the Bill’s Committee sittings when we were passing the legislation. It really was not our understanding, when his predecessor said that 3% is 3% and not going anywhere, that that meant it was a cap. We took it as a figure that would be reached, and it was also what was understood by the victim support groups.
Mr Harper
I take the hon. Lady’s point that I was not the Minister at the time and was not present at those sittings. She asked me a written question following the written statement in November, and I made it clear in my answer that the 3% figure was the maximum percentage of the active employers’ liability insurance market to be levied on the insurance industry to recoup the costs of the scheme. I made it clear that the figure was a cap, rather than a set rate, and that the levy rate was based on the estimated costs of the scheme, extrapolated from the first seven months of the operation. The scheme is demand-led and calculations for the levy are done afresh each year. An upturn in applications to the scheme would result in a higher levy rate in future years, so the levy rate is kept under continual active review.
Steve Rotheram
The Minister has used the words “levy” and “cap” interchangeably on numerous occasions, which is confusing. During the passage of the Bill, it was clear that we talked about a levy. The right hon. Member for Hemel Hempstead (Mike Penning) was the Minister at the time, and he talked about a levy. When is a levy a cap?
Mr Harper
No, I do not think we are at cross purposes at all. It is a levy, but it is capped at 3%. The amount of the levy is set, based on the costs of the scheme. The costs are calculated and then the levy rate is calculated to recover the costs, and it was agreed that the cap would be 3%. That is the position that I made clear in my answer to the written question from the hon. Member for Stretford and Urmston. It is a levy that is capped at 3%. The deal was that the insurance industry would absorb the costs of the scheme and not pass them on to employers through employers’ liability premiums if they remained below 3%, which is why the 3% cap was set.
Steve Rotheram
The Minister is trying valiantly to justify what he has picked up. It is not what was intended for the scheme and it is not what was said during the passage of the Bill. I understand that the cap is a maximum, but it was calculated according to what the industry said it could afford. The industry said 3% of this huge figure—about £1.4 billion or £1.5 billion—was the levy it would draw down. That was the amount that the industry thought would be needed for claimants, and that is why we get the figure of 80%, by the way. It was 80% because the industry thought it would be swallowed up by the 3% levy. I am sorry, but the Minister cannot have it both ways.
Mr Harper
The commitment that the industry made was not in terms of what it could afford. It was about what the industry was going to absorb and not pass on to employers more generally. It was important that the costs of compensating sufferers of the disease did not fall on employers generally. We wanted the costs to fall on the insurance industry. It is worth reminding people that the insurance companies that pay the levy today are not necessarily the insurance companies that took the premiums for the policies in the first place. That is part of the problem, because of the long latency of the disease.
Governments have created all the schemes—the 1979 scheme, the 2008 scheme and this one—because of the long period between when someone has exposure to asbestos and the diagnosis of the disease. The impact of the disease over a very long period of time led to all the issues with employers not being in business—that generated the 1979 scheme—and the inability to trace either employers or their insurers. All such issues relate to that long period of time, which is why it is important that the costs are borne by the insurance industry, although they are not necessarily the same companies that took the premiums in the first place. That is why it was important for the Government to work on this in an agreed and proportionate way, so that we could get the scheme in place to ensure the benefits go to the victims of the disease. If the matter had got bogged down in a big argument and legal disputes, there would not be a scheme and there would not be any compensation for people. Both Lord Freud and my predecessor as Minister wanted to make sure that the scheme came into force, so that it could start benefiting victims of this disease.
Let me respond to a couple of questions that the hon. Member for Liverpool, Walton specifically put about the written ministerial statement yesterday, which I think was generally welcomed by colleagues, including my hon. Friend the Member for Chatham and Aylesford. Lord Freud made it clear at the beginning of that statement that we are going to monitor the progress of the scheme and the extent to which the assumptions about claim rates are borne out.
During the first months of the scheme, the number of claims is much lower than at other times. However, partly because the Employers’ Liability Tracing Office has been doing an increasingly good job of tracing insurance policies—meaning that sufferers of this disease can more easily, and rightly, pursue compensation from those from whom compensation is due—the costs of the scheme are lower than had been thought. Therefore, we thought it was right to increase the tariff from 80% of average civil claims to 100% from the date of the announcement. The regulations to bring the scheme into effect will become law next month, but as is usual in government the uprating will apply from the date of the announcement, in the same way that the scheme in the first place applies from the date it was announced, which was 25 July 2012.
That is a general rule in government. I know that it is always difficult, because when a scheme is set up there always has to be a starting point and obviously some people will always be on the wrong side of that starting point. However, it is a general rule in government that we have to start things from when we announce them, and not backdate them. [Interruption.] I hear the shadow Minister, sighing, but if she ever has ministerial responsibility—for various reasons, I hope that she will not have such responsibility—I think she will very quickly understand the logic of not backdating things, and if she does not then the conversations she will have with others in her party will soon persuade her of the wisdom of that approach.
I want to be clear, although I think it was made clear in the written ministerial statement yesterday, that the announcement yesterday means that the scheme will start from yesterday for those already diagnosed, even though that is ahead of the legislation coming into force. Again, that is the same argument that the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) made—I probably mispronounced the name of his constituency, although I always try to pronounce it correctly—when he referred to the starting point of the scheme. I know that he has tabled a number of written questions about this subject on behalf of his constituents, but I am afraid that that has to remain the position.
Both the hon. Members for Liverpool, Walton and for Stretford and Urmston, as well as my hon. Friend the Member for Chatham and Aylesford, talked about increasing the take-up of the scheme. We have been working with stakeholders, including the Asbestos Victim Support group, Macmillan nurses and other groups, to ensure they have information about the scheme, so that they can notify those victims who have been newly diagnosed. We will continue to consider what more we can do. For example, if someone searches for information about this subject on the internet, as is common now, we have made sure that the scheme will come high up on the search list, so that people can locate it. If anyone has any ideas about how better to communicate that information, I am very happy to listen to them. We think that we are doing a good job, but I guess that one can always do better at communicating.
Mr MacNeil
I just wanted to check a point with the Minister. Is it his intention that everybody who suffers from this terrible disease gets the compensation they are due, regardless of dates, timings, or whatever? They have suffered and there is compensation in place, so should they all not get that compensation, regardless of some bureaucracy around the edges?
Mr Harper
When one sets up a scheme, it has to have a starting point; we cannot extend it indefinitely. Of course, this scheme is not the first such scheme or the only scheme that is available for those who suffer from mesothelioma. There were two previous schemes—the 1979 scheme and the 2008 scheme—and the reason for developing the latter scheme is that there were obviously groups of people who were not covered by the earlier scheme. I remember that the 2008 scheme was specifically designed to cover, for example, family members of those people who had perhaps come into contact with asbestos fibres but who had not worked in the industry and had not been covered by the 1979 scheme; I think that it was the hon. Member for Wansbeck (Ian Lavery) who mentioned those family members. So, we can widen the scope of schemes, but we still need to have a starting point for a scheme. That always generates some concern, because wherever one starts a scheme there will always be somebody on the other side of the line. I recognise why those people will not be comfortable with that, but I do not think that it is an issue.
I will just be clear about another point. Although people affected will be encompassed by the scheme from yesterday’s date, the actual payment to them from the scheme will obviously have to wait for the regulations to come into force next month. Nevertheless, those people will be eligible for the payment from yesterday.
My hon. Friend the Member for Chatham and Aylesford, and others, referred to the issue of research. I know that she has a long interest in this subject because her constituency is, as she said, a hot spot for this disease, given the industrial history of the local area. So she was interested in this subject even before she was a Member of this House. She referred to some research that is taking place in her local area and welcomed the fact that two insurance companies have put money into research. She made the point very well, that those companies had perhaps demonstrated a certain amount of leadership, and she was keen for others in the industry to follow their lead; I am sure that they will have noted that call.
As I say, my hon. Friend specifically talked about research. The Government agree with her: we also want to see more research in this area. The National Institute for Health Research is calling for mesothelioma research proposals. I listened carefully to the point that was made—I think it was by the shadow Minister—about a written answer that the Minister of State, Department of Health, my right hon. Friend the Member for North Norfolk (Norman Lamb), had given about this issue. I have not seen that written answer, but it sounded like he had talked about some research proposals that were awaiting funding. However, my hon. Friend the Member for Chatham and Aylesford referred to a shortage of research proposals. So I will ask officials to look at this apparent discrepancy. The shadow Minister said there were lots of proposals but no money, whereas my hon. Friend said that there were not really enough proposals.
Another hon. Member also referred to a shortage of research proposals; I forget whether it was the hon. Member for Liverpool, Walton or the hon. Member for Wansbeck. The general sense that I was picking up was that the number of research proposals did not seem to be in line with the tragically large number of people who are dying from this disease—it seemed out of kilter—so the points by my hon. Friend and other hon. Members about research were well made. We set up a partnership, including patients and clinicians, to identify research priorities in this area, and the results were published in December.
Mr MacNeil
What then is available to my constituent, who was diagnosed before 25 July 2012, but died in November 2012?
Albert Owen (in the Chair)
The Minister has just over two minutes left to speak.
Mr Harper
Given what the hon. Gentleman says, and it is obviously the reason why he has tabled written questions, his constituent is not eligible for this scheme. What I do not know without looking at the specific facts of the case—obviously, if he has not already done so, he can either write to myself or Lord Freud with those facts—is whether they will be eligible for one of the other existing statutory schemes. If the hon. Gentleman writes to us, we can then look into the case to see whether his constituent is eligible for the other schemes.
Steve Rotheram
I will be very brief, before the Minister finishes his remarks. Given that the expectation, even from the industry, was that the cost of the scheme would equate to 3%—I do not think that is arguable; hence the levy—does he believe that some of the residual amount, or underspend, should be invested in research? It is really important that research is top of the agenda.
Mr Harper
There are two separate questions there. I do not agree with the hon. Gentleman’s characterisation—I suppose it depends where you start from. His understanding was that the 3% was an amount that was going to be levied to generate an amount of money, some of which would be used for the compensation and then, effectively, others could choose to spend it, but that is not my understanding and not the Government’s understanding of the scheme.
However, his general point—I am trying to answer his question about research funding—is that there is a clear view that there should be more research in this area. I will undertake to go away and look at the gap in the general debate between—
Mr Harper
Let me just answer the hon. Gentleman’s question; I hope the hon. Lady will forgive me for not giving way to her. As I was saying, I will look at the gap between the number of research proposals—my hon. Friend the Member for Chatham and Aylesford suggested there are not enough proposals, whereas the hon. Lady suggested there were quite a lot of proposals but not enough money. Let me look at what money is available from statutory funding sources; from the National Institute for Health Research and other funders in the area. It might be helpful if we can draw that funding information together, so that Members can see the overall picture of funding in this area. I would be interested to look at that and see how it is related to the need, based on the number of people who are sadly victims of this dreadful disease. That may be helpful to inform further developments—
Housing (Horden, County Durham)
(9 years, 9 months ago)
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Grahame M. Morris (Easington) (Lab)
It is a pleasure to serve under your chairmanship, Mr Owen, for what I believe is the first time. I am grateful to have this opportunity to raise an important issue on behalf of the residents and community of Horden in my constituency of Easington.
By way of background—this is for the Minister’s benefit, because I am unsure whether he is familiar with the communities of east Durham—Horden, like many of the communities I represent, is a close-knit former mining community, located on the east Durham heritage coast. The village, which has a long and proud industrial heritage, was established to serve the needs of the colliery. The sinking of the pit brought new workers and the village began to take shape with the construction of terraced housing—that style of housing will be familiar to you, Mr Owen, because similar terraced housing exists in all the former mining areas, including in Wales and Yorkshire.
The demand for housing remained high until the closure of Horden colliery in 1987. I recall that Horden was one of the biggest collieries in Europe when it was at peak production and we had a number of associated industries, including a petrol-from-coal plant, which was a considerable employer, which I think was developed during the war.
The loss of the coal mine has led to issues found in many former mining communities such as unemployment, health inequalities and an ageing and declining population, which has led to lower demand for family-type housing in particular. While today’s debate is on the situation caused by the Accent housing association, I hope that the Minister will acknowledge the wider issues concerning the lack of investment and support given to Horden in particular—other mining communities have received such support—to attract new industries, jobs and investment since the end of its mining operations.
I hope that the Minister is aware of precisely what has happened with Accent. It is quite a large housing association that manages more than 20,000 properties nationally, but I want to raise specific concerns regarding the 361 properties that it manages in Horden and Blackhall, the neighbouring village. Of its 220 homes in Horden, 130 are currently empty. In Blackhall it owns 141 properties and 30 of those have become vacant. The problem is that, as properties become empty, Accent no longer seeks to let them as homes. Instead, vacant properties are being boarded up, which are an eyesore and a drain on the community.
It is clear, from walking around the area, that properties have gradually fallen into a state of disrepair and now require substantial work. Accent did have an investment plan in place to improve those properties to the decent homes standard through replacing bathrooms, kitchens, windows, doors and heating systems as well as making other repairs, but millions of pounds of regeneration funding were withdrawn following the Government’s implementation of the bedroom tax. In Accent’s view, those properties are no longer financially viable because many of them had been let to single people who, under the terms of the bedroom tax, would be under-occupying them and so be subject to an additional charge.
Although the bedroom tax was the tipping point, to be fair to the Minister—I hope that he is paying attention—the cause of the problem is long-term mismanagement by a social landlord that has failed to invest in the homes over many years. Accent acknowledges that as long ago as 2008, it was letting two-bedroom former colliery houses to single people in the knowledge that that was not a long-term option. Its failure to maintain its properties adequately is evident: estimates suggest that to bring the homes up to a fit standard would require a £7 million investment, based on £20,000 a property. The bedroom tax significantly reduced demand for the properties and although I will criticise Accent for many things, it cannot be blamed for the bedroom tax. However, it is responsible for a chronic lack of investment.
I have had considerable communications with local residents and representatives of Horden residents association, who are highly critical of Accent. They said that it has had a “non-dynamic” approach to the care and maintenance of the properties that goes back as far as 2006. It seems to have total disregard for the community in terms of vetting potential tenants. The residents’ groups, who have worked closely with the local authority and the police, have been out litter picking, clearing up fly-tipping and identifying problems to report to the local authority. However, the residents say that their efforts to clean and improve the area have been undermined
“as a result of poor quality tenants being given access to poor quality properties, which were suffering from a lack of investment by Accent”.
As we know, when areas fall into disrepair, they become a target for crime and we get a vicious circle of decline. Accent has an obligation not just to its existing tenants, but to the neighbours of its tenants, because its properties are not necessarily continuous on streets; they may be in small clusters and groups. Residents in neighbouring properties are also experiencing problems such as antisocial behaviour, fly-tipping and rat infestations owing to issues in the Accent-owned derelict properties. The crime figures from the previous three months indicate that in this relatively small village there have been 409 reported incidents, including 88 incidents of antisocial behaviour and 14 incidents of criminal damage. Arson is not uncommon at the derelict properties.
The feeling is that Accent has abandoned the community and I would like the Minister to ensure that it will not be allowed simply to walk away from its responsibilities. I understand that it is currently seeking permission from the Homes and Communities Agency to dispose of its properties on the private market, which means that it will put them up piecemeal for auction. However, a wholesale sell-off where the homes disperse into many ownerships would be the worst possible option for the community. The genuine fear is that that will lead to an influx of absentee landlords with no interest in the community buying and letting substandard properties to maximise their return and get a quick profit from housing benefit. That would be bad for the residents, future tenants and the wider community.
I would also like to mention the role of the Homes and Communities Agency, which in relation to Horden has been hugely disappointing and incredibly ineffective. It seems to have no long-term plan for the regeneration of housing in Horden. As an aside, I perhaps should have declared a non-pecuniary interest at the start. I am the secretary of the all-party group on housing in the north. We have had many presentations from housing associations and organisations with an interest in housing. The big issue that we face in the north and in particular in my constituency—in Easington, Horden, Blackhall and some of the other villages—is not so much a lack of housing, although there is a need for new housing, but the fact that the existing housing stock in many cases is very old. It needs modernising. We need some selective demolitions and the existing stock needs to be refashioned in a way that accommodates the needs of local populations. The Homes and Communities Agency should be taking a lead in developing that strategy.
The views that I have received on the effectiveness of the HCA are that its priority and primary concern seems to be the viability of the social landlords, of the housing association, rather than the legitimate concerns of the local community about the condition of their neighbourhoods and localities.
The Homes and Communities Agency and the Government have no strategic plan for housing in the north. Particularly in former industrial areas and especially in former coal mining areas, housing is often tied accommodation—houses were built to accommodate the workers—and part of the legacy of the coal mining industry. There is a failure to recognise that the problems with housing needs in the north are not the same as those faced, acute though they are, in London and the south-east. Housing in the north needs a different set of solutions and strategies. We certainly need more housing, but we also need to reshape our communities, replacing high-density colliery housing with more modern housing to meet the needs and aspirations of local communities.
You might be aware, Mr Owen, that these densely packed terrace houses have no gardens or parking facilities. They tend to have a path running along the front of the terrace and yards at the back. We need some selective demolition and some strategic oversight to open up these areas, as has happened with Easington colliery, where some excellent schemes have been carried out by the Durham Aged Mineworkers Homes Association, East Durham Homes and others. There is a model to follow there.
Will the Minister rule out the wholesale disposal of the properties on the private market? Everyone in the locality feels that that would be a retrograde step that would hurt the community in the short, medium and long term. Instead, I would like the Minister to intervene and to seek alternative options.
A homesteading scheme has been suggested, and I saw some coverage in the national news of schemes in Staffordshire, Liverpool and Middlesbrough. Homesteading involves a property being purchased by a first-time buyer at a significant discount. They then renovate the property as a home and are prohibited from selling the property for a specified period. I understand that the aim of that is to deter speculators, who would pick up the properties very cheaply, improve them and sell them on. If that happened, that would put us back in the same situation we are in now, where large amounts of property are in the hands of absentee landlords.
We need stable communities. Homesteading would help that, and the proceeds from any sales of such properties could be used to support the homesteading initiative or be reinvested in the remaining housing stock, to bring it up to a decent standard where it could then be re-let. It is an interesting idea that is worth considering, but significant investment is required to repair the properties in Horden and, to a lesser extent, in Blackhall. If it is a viable solution, I would welcome the Minister’s thoughts on it.
I highlight the community initiative of the Horden residents association. It has been extremely active in looking to establish a community-led co-operative similar to those in Liverpool and closer to home in Middlesbrough. It will be holding a meeting on Friday to explore the option further. Can the Minister provide an assurance that the Homes and Communities Agency will offer practical assistance to the residents association if it tries to pursue that option? Ideally, we would like a long-term investment strategy for former industrial communities, both for regeneration and redevelopment.
I understand that we are in a time of austerity, but if there is a political will, we can overcome any barriers on finance. With all due respect, I point out that huge spending commitments have been made recently—on High Speed 2, for example. My good and hon. Friend the Member for Gateshead (Ian Mearns), who is serving on the Committee considering that legislation, tells me that the estimates on the cost of HS2 vary between £40 billion and £50 billion. Already, £1 billion has been committed to acquisition, and the scheme has not yet got full parliamentary approval. The lifetime cost of replacing the Trident missile system is estimated to be in excess of £100 billion.
Those are just two items of Government spending. One is not coming to the north-east and the other’s success is based on the assumption that it will never be used. I am not asking for tens of millions of pounds or billions of pounds, but a similar level of commitment from the Government to former industrial communities. At the moment, we lack a national plan and the political will and resources to tackle this important issue.
I will conclude, because I would like to hear what the Minister has to say. Before that, I will ask him some questions and raise three specific issues. First, in the short term, will he use his influence with the HCA to ensure that Accent is not allowed to walk away from its responsibilities by disposing of its properties in a piecemeal fashion on the open market? That would be another betrayal of a community that feels it has already been betrayed by Accent.
In the medium term, will the Minister investigate the role and effectiveness of the Homes and Communities Agency? As a Government agency, it has clearly failed in Horden, and I am sure there are other examples. We need to work in the interests of the community, rather than in the interests of social housing providers; as we have seen with this case, they are not necessarily one and the same. In the long term, we need a national housing plan that recognises the unique needs of former industrial communities. We need not only more housing, but full-scale regeneration to ensure that our communities can succeed and thrive for future generations.
The Minister of State, Department for Communities and Local Government (Brandon Lewis)
It is a pleasure to serve under your chairmanship this morning, Mr Owen. I congratulate the hon. Member for Easington (Grahame M. Morris) on securing a debate on this topic, which bears directly on his constituency.
First, I will respond to the specific points he raised about the challenges faced by his constituents who are living in places blighted by empty homes. I am absolutely committed to bringing empty homes back into use. Secondly, I will explain that our welfare reform programme is part of the solution—not part of the problem, as has been suggested by some. Thirdly, I will look more widely at the action we have taken to reduce empty homes and improve affordable housing for tenants. Finally, we need to acknowledge that we are fixing a broken housing market and reviving an economy that will give Horden and Blackhall the hope and economic future that they are looking for. We should bear in mind that in 2010, we inherited the lowest level of house building that this country has seen since 1923.
Grahame M. Morris
I am looking for some constructive help, so I do not want to have a row, but I point out with all due respect to the Minister that the issues we face in the north—I believe he represents a northern constituency, although it is not as far north as mine—are very different from those faced in the south and the south-east. The issue is not so much the lack of housing, but the lack of decent housing. That is why Labour concentrated on reaching the decent homes standard, particularly in the local authority stock.
Brandon Lewis
That is the first time that I have heard the East Anglia coastline described as the north, but I will take that as a compliment for Great Yarmouth. If more people from the north want to visit our fantastic seaside resort this summer, we will be pleased to see everyone.
The hon. Gentleman made the point about what the Government are doing with housing programmes in the north more generally; I would point out that Durham is the fifth highest beneficiary in the entire country of the benefits introduced by the Government’s Help to Buy scheme. We are very much helping people in the north. Durham is not the only part of the north that is one of the higher beneficiaries of Help to Buy, let alone other schemes.
The hon. Gentleman painted a sobering picture of a town struggling with empty homes and the damaging impact that that can have on the wider community. Horden is in one of the most beautiful corners of the country. I appreciate that, having visited the north-east in the past few weeks: I visited Newcastle and took part in announcing the £40 million of devolved money that we have given to the local enterprise partnership there. That money is there for regeneration as well. The north-east has a lot to offer in terms of location and, as the hon. Gentleman says, environment, but the blight of empty homes is an issue.
I assure the hon. Gentleman that I keep a close eye on the effectiveness of the Homes and Communities Agency and have confidence in its work. In the local area that he discussed, the HCA has been working with Durham council and Accent, seeking to allow the two parties to reach an agreed way forward. He mentioned the examples that we have seen in the past few weeks of schemes, which I fully support, in Liverpool and elsewhere in the north and south of the country to get empty homes back into use and to get discounted sales to benefit local residents. I understand that Accent is currently working on a homesteading initiative, whereby, as he said, properties can be sold at a discount in return for the purchaser guaranteeing that the property will be their home for a specific period. That proposal will require the consent of the HCA, bearing in mind its objective to ensure value for money from public investment in social housing. As we have seen elsewhere in the country, such schemes can work very well.
The HCA is not only taking action in Horden, but working across the wider area to ensure that empty homes are brought back into use and that new affordable homes are delivered. I am pleased to report that the HCA has been working with Durham county council in nearby Seaham, for example, where it has entered into a joint venture agreement to provide a site for the new Seaham school of technology, as well as the delivery of more than 400 homes on HCA and council-owned land, of which a percentage will be affordable. I can tell the hon. Gentleman that more than 1,000 homes will be delivered in County Durham under the affordable homes programme, from more than £25 million of funding. As of the end of September 2014, 843 of those homes had been completed.
Empty homes on the scale we are talking about is a particular issue to the communities and the provider that the hon. Gentleman mentioned. To provide a point of comparison, a local arm’s length management organisation, East Durham Homes, also owns stock in the area, albeit with some different types of property—I acknowledge that—but it has a very low vacancy rate of less than 1%.
Some of the media coverage of the issues in Horden has seemed to imply that the removal of the spare room subsidy was part of the picture. That is not an implication that I accept. The removal of the subsidy not only balances fairness in a system based on what the previous Government did in the private rented sector, but is encouraging the more effective use of social housing by addressing issues of overcrowding and under-occupancy. Let us be clear about the facts: in this country, 820,000 spare rooms in social housing in working-age households were being paid for by housing benefit, while about a quarter of a million households live in overcrowded accommodation. The removal of the subsidy has already introduced greater fairness between claimants living in the social and private rented sectors, where benefit entitlement has been based on household need for more than two decades. In the current climate, let us also remember that it is achieving savings of more than £1 million per day.
More widely, we have made significant changes to encourage local authority and housing association landlords such as Accent to provide decent homes for their tenants. We have put in place measures that have brought empty homes to their lowest level since records began. Bringing empty properties back into use helps to support local economic growth. We have brought forward a number of measures related to that. Self-financing reforms give local authority landlords a long-term, stable source of funding—on average, 15% more to spend on their homes than previously. The new homes bonus rewards local authorities for not only delivering new homes but bringing empty homes back into use. Local authorities have received £3.4 billion from that, and 100,000 empty homes have been brought back into use.
Durham’s unitary authority is the 24th largest earner of bonus funding in the country: taking account of the recent allocations, it will have received almost £24 million by the end of the financial year. We have set up a £200 million direct funding programme for community groups, councils and housing associations, that has so far created just shy of 5,000 homes from empty property, with the potential to deliver more. That has provided opportunities for apprenticeships, training and employment, as well as homes and better neighbourhoods for local people. We have promised almost £2.5 billion of funding going forward to 2016 to make social homes—to take the hon. Gentleman’s point—decent. In addition, the affordable housing programme prospectus for the years to 2018 makes it clear that private registered providers of social housing are expected to take a strategic and rigorous approach to considering vacant properties as part of their active asset management.
We have not only made substantial progress in social and affordable housing, but are fixing the broken housing market. We have to look at things in the context of some 700,000 new homes having been delivered, including just shy of 220,000 affordable homes. We have got house building up to a seven-year high. Councils are giving planning permission at a rate that we have not seen for a long time—650 homes a day—and local people now have a real say in local development. That turnaround bears testament to our approach to housing and planning—as well as to our action to cut the deficit, which has sustained low interest rates and economic growth—giving local people local power in planning while ensuring that we are building the homes that we need and getting empty homes back into use on a scale that we have not seen before.
I recognise the particular circumstances in Horden that the hon. Gentleman has highlighted today. We need to see beautiful places such as Horden thriving, but we must also ensure that we fix the broken market so that they can deliver on that. That is why we are taking action in the wider Durham area, and nationally, to tackle the underuse of social housing, reduce the numbers of empty homes, and deliver the affordable homes that we need. The Homes and Communities Agency is working with local partners to seek a solution to the problems being experienced in Horden. If it would be useful, I will be happy to facilitate a meeting between the hon. Gentleman and the HCA so that he can discuss some of the ideas that he has outlined. I will take that up with him after the debate. I wish all parties well with the work that they are doing.
Afghanistan
(9 years, 9 months ago)
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Mr Keith Simpson (Broadland) (Con)
It is a great pleasure to serve under your chairmanship, Mr Pritchard, and to see an interesting cross-section of colleagues present at what I hope will be a good debate about the lessons from the war in Afghanistan.
Over the past week I have had to put up with a number of colleagues rather facetiously asking, “Lessons from which Afghan war?”—with the assumption that my right hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell) might come along and talk about the first Afghan war and his own personal experiences. However, there is a serious element to this, because of course we, the British, were directly involved, more or less on our own, in three wars in Afghanistan—the 1839-42 war, the 1878-81 war, and in 1919—and then as part of a wider coalition from 2003 to 2014. That is part of the background for the Afghan people and what they think about the British—even if that is thoughts in the most benign way.
The second point to make is that I do not have military experience. I was a soldier manqué and taught military history at Sandhurst and the Army staff college, as well as for the Royal Air Force and the Royal Navy—a few of my former students who slept through my lectures are sitting here in the Chamber. My point, however, is that we tend to forget—perhaps not colleagues in the Chamber now, but often journalists and many times the public—that if we decide to initiate military action, two things are consequences. First, no military plan normally conforms to immediate contact with the enemy, so it is usually incredibly difficult to see how military action will develop. Secondly, such action will inevitably result in casualties.
We know that, for example, in both Iraq and Afghanistan the British suffered heavy casualties—not as many as the Americans or, indeed, as the Iraqis and the Afghan people. For example, in Iraq between 2003 and 2009, we lost 179 people, with several hundred wounded. In Afghanistan, between 2003—or, if we count Helmand, 2006—to the end of last year, 453 were killed and about 2,000 wounded. Without degrading that loss, that is probably about two days’ casualties suffered by the British Commonwealth armies in the 1944 Normandy campaign. The difference, of course, is that in 1944 it was total war—a war for national existence—so the public, while not welcoming the casualties, were more than prepared to tolerate them. With Iraq and Afghanistan, however, a sizeable proportion of British public opinion never supported either intervention.
Why do I wish to debate the lessons from the war in Afghanistan? I think that to do so is crucial. In a debate we had the other week on the Chilcot inquiry, I said that we are in fact talking about a two-act play. Iraq is the first act and overlapping with it is Afghanistan. In many respects, Afghanistan is as important, if not more so. The Chilcot inquiry is looking into the reasons why we went to war in Iraq and the lessons to be learned. That inquiry will tell us certain things, but Afghanistan is a black hole into which, as far as I can see, the Ministry of Defence, other Departments and the Cabinet Office are not as yet prepared to look for strategic lessons that should be learned.
A vast amount of evidence, ironically, is in the public domain. We have the evidence of many witnesses at the Chilcot inquiry who touched on the war in Afghanistan—the military, the intelligence and the politicians overlap. We also have a whole series of memoirs of one kind or another. The great lacuna is of course the memoirs of politicians and Ministers. Tony Blair, the Prime Minister, spent a considerable amount of time in his memoir on Iraq, but only about a dozen pages on Afghanistan. Perhaps for obvious reasons, we do not have any memoirs of former Foreign or Defence Ministers—perhaps constrained by the Chilcot inquiry—but we have the memoirs of the military, mainly the Army, ranking from non-commissioned officers, through middle-ranking officers to a whole series of senior officers and generals, some of which have said more about their personal ambitions and their desire to get retaliation in first, rather than giving us an overview and an insight into what went on.
I want not only to get down into the weeds, looking at the lessons from the war in Afghanistan, but to address some fundamental points that are crucial to understanding the war and to our foreign policy and security posture.
Jeremy Corbyn (Islington North) (Lab)
I congratulate the hon. Gentleman on securing the debate. The good news is that I will not be present for all of it, because I have a union group to attend—which I am sure he would like to be at too. I understand the hon. Gentleman’s point of history and I am fascinated by his historical references, which are important, but does he not also think that there is another narrative: the stories of the ordinary people of Afghanistan who have been through the war, are still going through it and are still living in poverty? Sadly, tens of thousands of them are ending up as refugees well away from Afghanistan. Is that not a failure of the whole operation?
Mr Simpson
The hon. Gentleman makes a valid point. That is the law of unintended consequences. I do not think that we, the Americans or our allies wanted things to turn out in that way in either Iraq or Afghanistan, but he is correct: that story is continuing and should concern all of us.
Were the policy and strategy outlined by the British Government at the time correct? Were they well thought through? Was the intervention considered calmly and rationally, taking into account the best advice of Whitehall, the Departments—the Foreign Office, the Ministry of Defence and the Department for International Development —and the intelligence services?
Graham Stringer (Blackley and Broughton) (Lab)
I have enjoyed the first eight minutes of the hon. Gentleman’s speech. A thesis gaining ground is that after the British Army’s failure in Basra, the top of the Ministry of Defence wanted to increase our involvement in Afghanistan in order to prevent greater cuts in the Army and to prove itself after not being as successful as it had wished in Basra. Does he agree with that thesis of a direct connection between Iraq and Afghanistan?
Mr Simpson
There is a direct connection, although I do not necessarily completely agree with the hon. Gentleman’s logic. If he will bear with me, I shall come on to that.
The basis of British foreign and security policy is twofold: first, absolutely to hang on to and stand by the special relationship with the United States of America; and, secondly, to play a leading role in NATO. Those two elements merge in our participation in the operations in both Iraq and Afghanistan. We need to think seriously about the first, our special relationship with the United States of America. Crucial to it, and part of our mythology, is the way in which Winston Churchill persuaded the Americans to come into the war when we were on our knees. That, however, is of course a myth, because the United States of America eventually came into the war because Hitler declared war on it after the Japanese attack.
The special relationship, in many respects, has been more important to us than to the Americans, because of the decline of empire and because we want to participate with and influence a superpower with which we had much in common. However, by the time of our participation in Iraq in the 1990s, it seems to me that there was a serious problem with the ability of a British Prime Minister to influence the United States of America and make certain that Britain’s national interests were addressed.
At a military level, our problem is increasingly that we cannot will the military resources to the promissory notes we write to the Americans. Sustainability of political and military effort then becomes very crucial indeed, and we are found wanting—not because the military are incompetent or because the men and women in our armed forces are not courageous, but because we are punching above our weight. We need to look seriously at what we can and cannot do as a powerful regional power with global interests and commitments.
Jack Lopresti (Filton and Bradley Stoke) (Con)
I congratulate my hon. Friend on securing this debate. Does he not think that there is a case to be made for saying that the conflicts in Iraq and Afghanistan were in our national interest, in keeping our streets safe and maintaining our homeland security?
Mr Simpson
The problem with our participation in the Iraq campaign and our military commitment in Afghanistan, which then expanded, was that the policy aims changed, and widened out. There is an argument—I do not actually stand by it but there are many who believe it, including perhaps some hon. Members present—that, through our participation in Iraq and Afghanistan, we made our streets less secure. But that comes back to the issue that we and the Government should be considering: the lessons learned.
Mr John Baron (Basildon and Billericay) (Con)
I congratulate my hon. Friend on securing this debate. My point in a way reinforces his key earlier message. Is not the key error that we made in Afghanistan that, on succeeding in our initial objective of ridding the country of al-Qaeda, we allowed the mission to morph into one of nation building—a mission that we have struggled to resource properly?
Mr Simpson
I agree with my hon. Friend. That was the problem.
The material in the public domain—official records and the memoirs of civil servants and senior military officers—shows that it is difficult to establish how, for example, our commitment to Helmand came about. Helmand province was irrelevant in terms of the overall security picture in Afghanistan, and we did not want to go there. The logic stated that we should go to Kandahar, but unfortunately the Canadians were already there.
Loose political-military thinking bedevilled our military mission, coupled with the fact that, as my hon. Friend rightly said, we then glued on to our original policy things such as poppy eradication. At the time, many experts said that all we would do with that was drive impoverished farmers into the hands of the Taliban—we now know that was the case. That was a problem not just for the British but for the United States of America and many of our partners as well.
Coming back to the business of willing the means, I should say that there is no doubt in my mind that a crucial element in all this was what was perceived by the Iraqi Government and the Americans as our failure in Basra. It appeared that we had abandoned Basra. I am simplifying—there was a big argument at the time made by successive military commanders on the ground—but there was a sense that we were unable to cope with the situation in southern Iraq. At the same time, there was the feeling—and I have heard contradictory views about this, which is why, in terms of lessons learned, it would be nice to hear the truth—that there were elements in the Ministry of Defence who wanted to get out of Iraq because it was costly and not going anywhere, we had achieved our original objective and it seemed that Afghanistan was going to be an easier policy to explain to the British public. I am open to persuasion on that.
The interventions in both Iraq and Afghanistan were predicated on the idea that they were part of the war against terror, but, as I have said, the objectives kept changing. Many of us who participated in debates on the interventions at the time were horrified by the inability not just of the British and American Governments but of our allies to show any understanding of the history and culture of both those countries—and, indeed, previous military operations in them. There were many voices attempting to explain that the interventions would be more difficult than people thought. Naturally, given a mission, the military were prepared to get stuck in and to think about the consequences later.
There is a real need to look at the policy-making machinery of the Government in Whitehall. To use the words of Lord Reid when he was at the Home Office, I am beginning to wonder whether that machinery is partly dysfunctional when it comes to complex operations such as Iraq and Afghanistan. There was no lead Minister or Department for either Iraq or Afghanistan. Ultimately, decisions were made by the Prime Minister. There was no National Security Council then to at least try to co-ordinate policy. Individual Ministers attempted to take a lead, but I can remember going to briefings with officials in the Foreign Office, laid on in 2004 and 2005 by the Labour Government; after the second one, several of us said, “Perhaps it would be a good idea to have officials from the MOD and DFID along.” It took some time to get them to appear.
Mr Kevan Jones (North Durham) (Lab)
I accept that the National Security Council did not come into being until 2010, but I assure the hon. Gentleman that, when I was a Minister, a cross-departmental body, including the MOD, DFID and other Departments, met about Afghanistan on a weekly basis at least.
Mr Simpson
As we all know, that kind of co-ordination is helpful, but it is not the same as having a proper machine, with minutes, allocation of clear objectives and a full-time National Security Adviser.
Alistair Burt (North East Bedfordshire) (Con)
I am enormously grateful to my hon. Friend for having brought forward this debate and I am listening to him carefully. This is absolutely the sort of thing we should be doing much more frequently. In his research, did he find any evidence of serious conversations with those who know the history of the region even better than us—those who are there?
In my work at the Foreign and Commonwealth Office over recent years, I was struck by how much was known by those in the region, who gave warnings to us about what we might have done, and how little that knowledge seemed to have been fed into the processes. Is that something else that he thinks should be looked at further?
Mr Simpson
It is indeed. My right hon. Friend, who is very experienced, has touched on a problem that occurred not only with the Foreign Office but with DFID and the Ministry of Defence. Often in life, there is the feeling that once an overall decision has been made to do something, the phrase, “I hear what you say,” comes out, but people are not prepared to factor in what they have heard because it complicates the situation.
It also seems to me that, under successive Governments, we have stripped out large parts of the Ministry of Defence and the Foreign Office to make savings, to make Government smaller, and the like, and have therefore got rid of a lot of the specialist expertise that was there 20 years ago but is not there now. We have probably reduced the knowledge base in the Foreign Office and we have reduced the size of the armed forces, so that now there is only a limited critical mass that can provide that kind of expertise, or—if we think of the armed forces, for example—sufficient people for the special forces, which are not recruited separately as some people think but are taken from the broad mass of our armed forces. It is increasingly difficult to provide expertise in languages and intelligence. In my opinion, the situation is worse now than it was 10 years ago.
Sir Gerald Howarth (Aldershot) (Con)
We are all grateful to my hon. Friend for bringing his expertise here. I am worried that the contraction in our armed forces and everything else he has talked about will diminish Britain’s influence in the world. Earlier, he made a point about the special relationship, which I think is critically important. Does he agree that there are concerns in America, which were expressed today by President Obama—it was in The Daily Telegraph, so it must be true—about the fact that Britain is considering further reducing our spending on defence, which will further diminish our ability to influence a turbulent world?
Mr Simpson
There is no doubt that the Americans have viewed with a degree of dismay what they see as the decline in the critical mass of our foreign policy and defence, because they value that. However, they have often been disappointed in our ability to deliver what we promise.
We suffer, and have suffered in the past, from what I call “Montgomery syndrome”—a snobbery, particularly among the armed forces, towards the Americans. Macmillan also had it; he said that we were like Greek slaves in the Roman empire. There has been a view that they were awful, rather vulgar people who did not know how to hold a knife and fork properly and did not have the kind of experience we had. Unfortunately, they had all the money and resources, but we would teach and train them. That view was particularly apparent before the operation in Basra in southern Iraq, when the Americans got the impression that we could teach them about counter-insurgency. They thought that our experience from Malaya, Cyprus and Northern Ireland meant that we knew how to do it. However, not only did we perhaps not know how to do it, but we did not have the resources either. We suffered and have suffered badly since then.
I will make only two or three more points because I am conscious of the time, and other colleagues want to speak. There is a serious issue about the Ministry of Defence’s ability to practise the kind of operations that we saw in Iraq and Afghanistan. Ministers frequently arrive with no experience of the military or the complex jungle of the Ministry of Defence. There has been a high turnover of Ministers under both Governments. There is tension among the Chief of the Defence Staff, the chiefs of staff and the senior civil servants. The Ministry of Defence, as my colleagues know, is both a Department and a command post, and the Permanent Joint Headquarters is out in the sticks. All the things we saw in Iraq and Afghanistan show that there was considerable tension among the forward combat commanders, PJHQ and the Ministry of Defence. Frequently, people did not know who was in charge, which was complicated by the fact that we were also a member of a NATO alliance.
It is often Buggins’s turn to take the post of Chief of the Defence Staff, but the gene pool—I mean this in the nicest possible sense—is getting smaller. One of the Army generals’ criticisms is that when the CDS was from the Air Force or the Navy, he had difficulty understanding the mainly land operations. There are serious questions to ask about that.
The Army is now on a learning curve. I have no doubt that the Minister will say that during these operations the Army learned many lessons from combat analysis. My problem is that, although the Army learned many lessons, the Minister, in an answer to a parliamentary question on 3 February, told the House that at the moment the Ministry of Defence has no plans to study the lessons of the war in Afghanistan. The Cabinet Office also has no plans to look overall at the lessons, and the Prime Minister has made it clear that the strategic defence and security review, which will be carried out in the autumn, needs only a light touch. I am just a humble Back Bencher, but I think he is wrong. I think the strategic defence and security review needs not a light touch but a fundamental reassessment based on all the things that I have set out.
Sir Gerald Howarth
My hon. Friend is making an important point. I was a Minister at the Ministry of Defence, and when I had some responsibility for the strategic defence and security review it was Treasury-driven. It had to be so, because of the catastrophic state of the public finances. Strategy took second place. Does my hon. Friend agree that there can now be no excuse—I am looking at the Minister when I say this—for not taking a proper, strategic look at our armed forces, particularly given the extraordinary events that have taken place since 2010?
Mr Simpson
None of us is naive enough not to think that the view of the Treasury is paramount, but there has to be a balance. It is not about Ministers versus the military. I would draw into the National Security Council not only the CDS but the chiefs of staff. I would put their fingers in the mangle, because we know that they leak like sieves.
The Times recently ran a front-page story about the fact that the Chief of the General Staff is thinking of cutting senior ranks by a third. It came as a surprise to Ministers, as they did not realise that that policy would be put into the public domain. I do not expect the Minister to comment or even raise an eyebrow about that. That story made no mention of the Navy or the Air Force. The military must be gripped on this, in the best possible sense.
Finally, we in Parliament need a greater say on this issue—and not only for our amour propre. If we are going to persuade the electorate, who do not rate spending on foreign policy and defence as one of their highest priorities, we have to show that we are investigating this issue and have good arguments about why it is necessary for us to continue our close special relationship with the United States of America and why we need to spend money on the armed forces. I hope the Minister will be able to address at least some of the points I have raised.
Dr Julian Lewis (New Forest East) (Con)
I congratulate my hon. Friend the Member for Broadland (Mr Simpson) on his tour d’horizon. I am sure that, given his wealth of experience and knowledge, he could have used up the entire hour and a half with an analysis from which we would have derived nothing but benefit. As he has been generous enough not to do that, the rest of us can make brief contributions to the debate.
I would like to focus on four lessons from the campaign in Afghanistan. First, we failed to focus on the key objectives. Secondly, we overreacted against former campaigns. Thirdly, we failed to fight on the ground where we are stronger and our enemy is weaker. Fourthly—and, importantly, my hon. Friend concluded by drawing attention to this issue—we failed to maintain dedicated decision-making machinery for controlling and constructing campaigns of this sort. Let me deal briefly with each of those lessons in turn.
In my opinion, there were only two relevant strategic objectives in going into Afghanistan: first, to prevent it from again being used as a base, a training ground or a launch pad for further terrorist attacks against the west; and, secondly, to assist its neighbour, Pakistan, in preventing its nuclear weapons from falling into the hands of al-Qaeda or its imitators. We did not stick to those objectives, as my hon. Friend said and as my hon. Friend the Member for Basildon and Billericay (Mr Baron) emphasised in an intervention. We allowed the campaign to change into one that effectively committed us to transforming Afghan society and building up the Afghan nation on the lines of a modern democratic state.
Even if we had been able to succeed in carrying out that objective, what would we have done if al-Qaeda, having been driven from Afghanistan in the first few days or weeks—as it was—had then re-established itself in another state that was vulnerable to acting as its host and base for operations? Would we have invaded that country too and built it from the ground up, all over again, while our enemies, fleet of foot, went to one bolthole after another? We did not concentrate on the key objective, which was to deny Afghanistan to al-Qaeda as a future terrorist training ground and launch pad for its operations. As for the second objective—of being able to assist Pakistan, should the need ever arise, to protect its nuclear arsenal from falling into the wrong hands—that remains as far from being fulfilled today as it was at the outset of the campaign.
However, I do not go along with critics who say that taking a military campaign to Afghanistan was wrong in principle, even if it was badly handled in practice. What was the United States meant to do after an attack had been launched on its homeland, killing nearly 3,000 of its citizens, many of whom were Muslim American citizens? Was it simply supposed to sit back and take no action by way of punishment, retribution and, as an example for the future to other countries, a determined policy to make sure that no such attack could be repeated? Of course it could not be expected to operate in that way, and with our ally having been attacked, it was right and appropriate that we participated in the campaign in response to that attack. The mistake was trying to take over and micro-manage the whole country.
The second question—that of overreaction against former campaigns—leads us to the question of why the mistake of trying to micro-manage the whole country and rebuild it from the grass roots upwards was made. I am sure that it was in response to the way in which Afghanistan had been left entirely to its own devices after the Russians had withdrawn. It was felt, therefore, that by allowing ungoverned space to exist in that way, the opportunity had been created—as it had—for the pestilence of an organisation such as al-Qaeda to take root and flourish. The pendulum swung from leaving the country completely ungoverned to total management, reform and burden-carrying by the western countries for the whole nature of Afghan society. Then, when that did not work and when there was a change of Government in this country, we overreacted again, and the pendulum swung back from micro-management of the whole society to setting an arbitrary date for withdrawal, four years from the announcement in late 2010.
The third failure that I mentioned was the failure to fight according to our strengths. That is where the doctrine of war “down among the people” came in. We do not hear too many people talking about war down among the people these days, but at the time it was very much in vogue. It was a method of combating the enemies that we had mobilised against us in Afghanistan—quite apart from al-Qaeda, who had been expelled from the country—and it was a method by which we sought to fight them at ground level. The effect was that with every patrol that we sent out, we supplied the Taliban with targets to be shot at and blown up at will. As my hon. Friend the Member for Broadland set out in his survey of the scene, every casualty we incurred was an individual tragedy played out in the living rooms of the whole nation, even though, as he rightly said in relation to the sort of casualties taken in a war of survival such as the second world war, the casualties of a single day in that war were often greater than the casualties of the entire campaign in Afghanistan.
What method should we have adopted? The method that I have always recommended is one of strategic bases or garrisons and bridgehead areas. One does not have to swing from one extreme, of having no involvement in a country and allowing it to become ungoverned space, to the other extreme, of trying to govern the whole country, manage it at the most basic level and build the whole nation and carry the governance of that country on one’s shoulders. One can have regional centres of power from which one can exercise military power periodically and through methods that suit our purposes rather than our enemies’, yet without having to take on the burden of governance of the whole territory concerned, thus making ourselves an irritant and a target for the indigenous people.
That leads, fourthly, to the failure to maintain dedicated decision-making machinery. I was particularly struck by what my hon. Friend said about whether one particular Chief of the Defence Staff from one service could fully appreciate the strategic concerns that somebody from another service might better have grasped. That leads me back to another theme I have been trying to pursue in recent months: the mistake of allowing the chiefs of the armed forces, who used to be central to strategic planning, instead to become the managers of the Royal Navy, the Army and the Royal Air Force is likely to have further consequences of this sort. If one is going to get joint advice on military campaigns, the top representatives of each of the services should be involved in debating and agreeing the military advice that should be given to the political leaders.
I finish by saying that unless we get back to a situation in which there are solid, consistent and tri-service forums in which strategic plans can be properly evolved, politicians will tend to take campaigns in directions that sensible strategic thought would not have them go.
I shall give just two brief examples. First, there was the decision that we took to bomb Libya in 2011. That was a classic case of not having learned the lesson of sticking to the task that was originally set out, because we thought we were voting on having a no-fly zone imposed over Libya. If a no-fly zone had been imposed over Libya, the result would probably have been a stalemate, but the moment Parliament voted for a no-fly zone to be imposed, we got something very different: an all-out aerial offensive on behalf of one side in a civil war. The result was to replace yet another Arab dictator with another aggressive, potentially lethal Islamist state.
Secondly, in Syria in 2013, Parliament prevented something similar from happening. If the Government had had their way at that time, we would have done exactly the same thing in Syria as we did in Libya. Now people are coming to the view, albeit reluctantly, that Assad’s downfall would not necessarily have improved the situation. On the contrary, it would have given our deadly enemies, who have now morphed from al-Qaeda into ISIL, opportunities to take the offensive.
To conclude, there are lessons to be learned, and my hon. Friend has done us a great service by giving us the opportunity to outline a few. I join him in regretting the fact that no serious study is being made of the lessons to be learned. If Libya and Syria are anything to go by, some of the lessons we should have learned from Afghanistan have yet to be taken on board.
Richard Benyon (Newbury) (Con)
I congratulate my hon. Friend the Member for Broadland (Mr Simpson) on securing the debate. I first came across him at Sandhurst, where he was chairing a debate entitled “This house would rather be dead than red.” It being the Army, I was instructed to propose the motion, regardless of my views at the time.
My hon. Friend spoke with his customary knowledge and intelligence about this difficult issue. He quoted the famous German field marshal, Moltke, who said that no plan survives contact with the enemy, and that was certainly the case in the United Kingdom’s foray into Helmand.
Afghanistan remains the monkey on the back of United Kingdom foreign policy. I recall the Father of the House, my right hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell), talking in 2006 about how difficult it would be to succeed in Afghanistan. He quoted historical precedents, and some Members of the House smiled and laughed at that, but my right hon. Friend was right. He was prescient about the morass of conflicting political agendas in that country; indeed, the Pashtun peoples alone comprise 60 major tribes.
Currently, there is an element of historical revisionism being played out between the political and military leaders at the time of the Helmand deployment, with each perhaps seeking to deflect criticism or to deny shortcomings. Some of this occasionally has the unattractive smell of those at the top drawing on circumstances in which commanders on the ground were found wanting, which is regrettable.
To truly understand the decisions that were made, and whether they were right or wrong, we need to take a more sensible approach. My hon. Friend the Member for New Forest East (Dr Lewis), who spoke so well, and I are on the Defence Committee, which is looking at decision making in defence matters. One of the key decisions we are looking at is the move into Helmand, and I hope the Minister will take our report very seriously, because I think it will inform future operations.
I do not want to stand here like some armchair general and second-guess decisions taken in the teeth of battle. There were difficult decisions to be taken at times, when local Afghan requirements were one thing, the requirements of the international security assistance force and the Afghan Government were another, and the demands of the United Kingdom Government and our constituents were in conflict with both. It is incredibly difficult to assess what happened and what was right or wrong.
However, the first fact of which there should be no doubt—I intend to deal in facts—is that our troops performed magnificently against, in the main, a determined and incorrigible enemy. Like many hon. Members, I have been moved to hear commanders describe with pride how young men and women have performed in the most difficult and testing circumstances. We are told daily in the media about the failings of the young—the PlayStation generation—but we have seen in recent wars how this generation is every bit as brave and resourceful as their grandfathers and great-grandfathers were in a perhaps more heroic age.
One of the groups of men I have in mind is the platoon I once had the honour to command several decades ago—9 Platoon, C Company, in what is now 2 Rifles. In one day, the platoon lost four men, with several more wounded, including the platoon commander. His replacement was severely wounded on his journey to the patrol base to take command. The whole unit was held together by a remarkable man—Platoon Sergeant Moncho. He has since been awarded the conspicuous gallantry cross, and I can do no more than recite a line from his citation:
“His supreme courage in the face of the most testing of circumstances was exemplary and his personal actions steadied all those around him.”
With much of the public and media focus centred on the as yet to be published Chilcot report into Britain’s military endeavours in Iraq, understanding and learning the lessons of a conflict that lasted longer than the first and second world wars combined, and that was Britain’s fourth foray into Afghanistan, should by no means be neglected. It is clear that, between 2004 and 2006, policy makers in Whitehall significantly underestimated the threat posed by the Taliban and the conditions on the ground, which led to the roll-out of inadequate equipment in the early days.
That situation was compounded by huge gaps in our capacity to deliver nation building, and I entirely accept the concerns my hon. Friend the Member for Basildon and Billericay (Mr Baron) expressed about that. As a result of opaque directives, the term has now come to be used in a different sense—using an armed force to underpin an enduring transition to democracy, as opposed to making a deliberate effort to construct and install institutions, which was the accepted view before.
What is even more frustrating about this period is that the threats and risks posed in the intelligence picture were clear and present. However, they were misunderstood, ignored or clouded by differences of opinion or conflicting priorities. In 2005, the failure of senior military officials to react to the intelligence picture was exacerbated by the fact that our force was under-resourced and based on best-case and aspirational objectives.
Either the brutal facts were kept from political leaders, or politicians did not ask the right questions. Lord Reid has my respect for pausing the deployment in the early days, but many argue it should have been paused for longer. That was, of course, a double-edged sword, because it allowed the Taliban to organise more determined resistance.
The key point is about the mission. In the Falklands, the mission was simple: to retake the islands. In Afghanistan, one got a different priority depending on which Department, ally or actor in the conflict one spoke to. Put simply, how can one hope to achieve success when success and failure are undefined concepts? Was the mission to defeat the Taliban? Was it to implement an anti-narcotics strategy? Was it to pursue nation building? Was it to introduce education for women or one of the other laudable things that were mentioned in the House? Or was it all of them?
Setting numerous and competing missions, with sub-optimal command and control structures in the UK taskforce, ISAF and the London headquarters, nearly resulted in the campaign failing within the first six months. Those fundamental issues were addressed only following the implementation of a campaign that was redefined with achievable objectives and that saw a surge in Helmand, resulting in a tenfold increase in force levels by 2010. That was supported by structured command and control mechanisms.
Von Clausewitz said war is the continuation of politics by other means. That makes the cessation of war a resumption of politics by normal means. However, nothing is normal in Afghanistan. I supported the Prime Minister’s determination to end our combat role by 2014, for a variety of reasons I will not go into. However, although pulling out by a precisely flagged date may have been a triumph of logistics—I hope those involved in that remarkable piece of logistics are being rewarded—it is questionable whether Afghanistan is ready to survive and progress.
So what are the lessons? Some of the revisionism centres on perceived or actual failings in the chain of command, which meant that commanders on the ground took the wrong tactical decisions, but that is not, in the main, backed up by evidence. Judging by the evidence I have seen and that we in the Defence Committee have seen, the truth is that issues including insufficient resources, ill-thought-through time lines, mission deliverability and the move north were raised from as early as 2005. All politicians and senior military personnel who visited the Helmand taskforce in 2006 received the same briefing with regard to the situation and the huge challenges facing the mission at that time.
The war cannot be viewed in isolation, given the events that unfolded in Iraq, which proved a major distraction with respect to both resources and intellectual analysis—political and military. The hypothesis that the military could deliver its objectives of deploying two medium-sized commitments simultaneously was evidently incorrect.
So what is the main lesson from Afghanistan, besides the obvious one never to be tempted to go there a fifth time? By late 2005, those at the highest levels of government and the military should have asked the strategic question about what we wanted to achieve in Helmand province. They should have had the courage to pause the deployment in advance of the unstoppable momentum, to ensure sufficient resources and appropriate command-and-control structures and measures were in place to achieve deliverable successes. The simple implementation of common sense would have highlighted the fact that better governance, some development objectives and sustainable security were always highly unlikely to be achieved in southern Afghanistan, and that they were never going to be achieved within a set three-year time scale. We forget that that was the time scale.
I look with interest at developing thinking in our armed forces about a smarter, more subtle type of intervention. I think that that is what my hon. Friend the Member for New Forest East was referring to in his excellent speech. I applaud the creation of the new 77 Brigade, which I have visited; it is in my constituency. Organisations of that kind will change the way we do warfare—in a way that might actually mean we do not do warfare, because we will achieve different results without using kinetic forces. That is an interesting new development.
I met a young Army officer at a Remembrance day parade. He had a chest full of medals. I said, “You have been busy,” and he replied, “Yes, I have done all of Blair’s wars.” Whether one may refer to them in that way or not, that is the lexicon in the armed forces today. Perhaps we have learned the lessons of “Blair’s wars” and perhaps we have not, but we know that in Afghanistan we undoubtedly paid a heavy price in both blood and treasure.
Crispin Blunt (Reigate) (Con)
I add my congratulations to those that have been offered to my hon. Friend the Member for Broadland (Mr Simpson) on obtaining the debate. It is a pleasure to follow his speech and the thoughtful contributions of my hon. Friends the Members for New Forest East (Dr Lewis) and for Newbury (Richard Benyon). I shall be tempted briefly along the road of contributing my view on why lessons need to be learned and what some of them may be. However, my central point is that the lessons to be learned from Afghanistan are not done justice by an hour and a half in Westminster Hall—or, frankly, by the combat analysis, if that is what has been undertaken, inside the Ministry of Defence on its own.
That combat analysis may be splendid for people serving in the armed forces—I do not know; I have not had access to it. It might even be able to contribute something towards telling the parents of Corporal James Hill why he was killed on the outskirts of Camp Bastion a couple of days after arriving in Afghanistan, and how the Taliban could get so close to what was supposed to be a safe area. I do not know. However, it will not tell Mr and Mrs Hill why their son was there in the first place. It will not look properly at the story of how we got into Afghanistan, taking in everything from the attack on the twin towers, which is probably the appropriate starting point, and examining the western response all the way through, including the mismanagement in 2001 and 2002 of our reaction to and relationship with Iran.
Iran initially was on our side in helping to take out the Taliban Government. How far should our objectives have gone at that point? In my view, our objective should simply have been to do our best to eliminate a Government who were responsible for harbouring our enemies. The lesson that should have been meted out to the people of Afghanistan was: “If you are going to support a Government who will harbour people who directly attack us, you cannot expect us to accept that Government continuing.” That is what happened in 2001 and 2002. It was highly effective and was achieved with assistance from previously hostile countries such as Iran, because our interests elided.
The opportunity to recast a wider relationship with Iran at that point was blown away in President Bush’s speech when it was described as part of the “axis of evil”. That destroyed the reformers’ position in the conversation that was happening inside the Iranian Government at the time. Such lessons should be part of any comprehensive examination of the subject.
Jack Lopresti
Does my hon. Friend accept that Iran was then and now remains one of the biggest world sponsors of terrorism, and that its weapons and money cause chaos around the world to our strategic interests and peaceful nations?
Crispin Blunt
We should take the trouble to understand why Iran behaves as it does. Why does it have the relationship it does with Hezbollah? What interests are served by its supporting what we have proscribed as a terrorist group in Lebanon? What is its relationship with the Assad regime, its neighbours in Afghanistan, and the rest? We must add to that the complexity of the whole existing Iranian political set-up. We ought not simply to deal with things in black and white. The world is all shades of grey, and all the actors playing into the drama that led into Afghanistan had their interests.
Our failure in all instances to turn the board around and understand the perspective of the other players in the drama led us into a series of decisions that were, overall, catastrophic for the British national interest, with 453 dead soldiers as a consequence and al-Qaeda replaced in Afghanistan by the forces of Islamic State. Those are beginning to emerge in Helmand, as parts of what was the Taliban appear to be changing sides and declaring allegiance to it. Goodness knows what that will mean for the future of Afghanistan.
From the decisions of 2001 through to those leading to the military campaign in Helmand, what was Dr Reid —now Lord Reid—doing as Defence Secretary, along with the Prime Minister, at the NATO summit in 2005? Who was trying to drive a new role for NATO—some new justification for NATO’s role? When the United Kingdom picked up responsibility for drugs policy in Afghanistan at the 2002 conference, that was the moment at which the west decided we were going to try to create Switzerland in the Hindu Kush, and the nations of the west took up differing responsibilities for helping Afghanistan in various ways. Why did people not properly understand what happened to poppy cultivation in Helmand between 2001 and 2004, which led to our feeling that there was a role for the United Kingdom there? Then, with all the tragic military mis-appreciation that my hon. Friend the Member for Newbury referred to, we went in with a wholly inadequate military force, with an objective that frankly could not in the end be achieved with 10 times as many troops.
There are so many issues to examine from the Afghan disaster that it can only be right, even though one trembles at the expense and time that it would take, to hold a proper inquiry. Its terms of reference should give it enough resources to do the job in reasonable order. It would cost a lot of money, but we owe it to 453 of our servicemen who did not return alive from Afghanistan, as well as all those who served there and were grievously injured in the process. Because of the fantastic medical contribution that was made there, there are many more such people than would have been associated with other conflicts.
Paul Flynn (Newport West) (Lab)
Does the hon. Gentleman not feel that after the endless Chilcot inquiry, which has been delayed and delayed, and the Saville inquiry, which took 10 years to report on the events of a single afternoon, it is a matter of urgency that we look at an inquiry into the decision to go into Helmand, made in the hope that not a shot would be fired? That decision changed the situation from one in which just half a dozen of our soldiers died in combat to one in which 453 died. Should we not be urgently told the truth of what happened, so that we will be informed in respect of future decisions to go to war?
Crispin Blunt
Frankly, I would support a very narrow inquiry into the Helmand decision, but that would not do justice to the entire sweep of events and exactly what happened. As far as the United Kingdom is concerned, that is the key moment, but there is a strategic analysis that then has to join up with all the other elements of defence policy that have gone on.
We owe it to the soldiers, sailors and airmen who have been sent into combat on our behalf, and to their families, to have a proper understanding of how we got into this and of the circumstances in which we are getting out, and properly to learn the lessons from what, frankly, has been an unqualified disaster for the United Kingdom.
Mark Pritchard (in the Chair)
Order. This debate is due to end at 4 o’clock. We expect a Division at 4 o’clock. I will expect to start calling the Front Benchers at 20 to 4. I am sure, Paul Flynn, that you will be mindful of that in your remarks.
Paul Flynn (Newport West) (Lab)
I am very grateful to have been called, because for reasons that people know about—other demands in the House—I could not be here earlier. I am very grateful to have the chance to talk about this issue. I recall speaking in virtually every debate on it in the last few years. In one speech, I threw away all the rhetoric that I had intended to use and just read out the names of the soldiers who had died in Afghanistan. There is a splendid group active on this issue just a few miles from my constituency.
The last time I read out the names was the day when the 200th victim of the Afghan conflict was announced. He lived in Abergavenny. It is extraordinary that it is now forbidden, under the rules of the House, to read out the lists of the names of the fallen. The decision was taken at that time, but it is much more powerful to read out those names so that we, as Members of Parliament, can be confronted with the terrible reality of the deaths of these young, brave warriors that we have caused. We took the decisions that led to that, but we are frightened against doing what I have mentioned.
I was once expelled from the House for suggesting that politicians lied and soldiers died, but I do not think that any of the politicians, of all parties, who said to our young soldiers, “You are going to Afghanistan to ensure that there isn’t terrorism on the streets of Britain,” were so stupid as to believe that. There was no threat from the Taliban that they would commit terrorism on the streets of Britain. There might have been from al-Qaeda, but those two groups were conflated. The reason why the Taliban were killing our soldiers was that we were in their country and it was part of their religious duty to expel us from there, but none the less the lie was used by Ministers of all parties to send our troops to their deaths in an utterly futile war.
We must examine the issue. We must have a full inquiry into it as soon as possible, because we must inform ourselves about why we took that decision. I think it is to do with the hubris of Prime Ministers. Prime Ministers, of all parties, behave in a special way when the war drums start beating. They talk in a different way. They get the rhetoric of Churchill. They drag it out, because here they are, having their big moment in history. They are writing their page in history—it is usually, sadly, a bloody page. The situation is not to do with the ramshackle things that Prime Ministers do every day, the boring details of law-making. It is a chance for them to be there and to be recorded, and they behave in a different way. They are hardly entirely sane on these occasions.
I have seen four Prime Ministers behave in that way. They strut like Napoleon here. At least we have the good sense of 650 MPs, as we had on 29 August 2013, when the present Prime Minister was urging the House of Commons, urging the nation, to go into Syria to attack Assad, who is the deadly enemy of ISIL. Now, we are in the same country and attacking ISIL, which is the deadly enemy of Assad. Even today, we hear the conflicting views on the conflict there. Why on earth should we go into a conflict between the Sunnis and the Shi’as that is ancient, deep, incomprehensible to us and nothing to do with us?
Dr Julian Lewis
I strongly agree with the hon. Gentleman’s last point, about the 1,000-year conflict between those groups. He may remember that I was one of the 39 rebels whose votes were decisive in preventing the attack on Assad. However, could I ask him not to overstate the case, in this sense? Even he admitted that it would have been right to take military action to expel al-Qaeda. Surely the key point is how and why the campaign changed its nature after al-Qaeda was expelled.
Paul Flynn
Indeed. We have an honourable history in which we have intervened in various conflicts in the world on a humanitarian basis. We have done that in Sierra Leone, East Timor, Bosnia and Kosovo. It is something that we do very well. It is part of our history, and we are very good at it. We have all the skills and the bravery of our soldiers to do it. That is entirely honourable.
Where we have gone wrong is when we have gone into conflicts in which we have attempted to be masters of the universe. We are not. We are not a superstate—far from it—and we have not been for a long time. I believe that if we change our priorities and become an independent country, we have an independent foreign policy. We do not have that. Canada does. Holland does. Both those countries were involved in Afghanistan and they made honourable contributions above what could be expected of nations of their size, but they pulled out at an early stage when they saw the futility of the mission—that we could not succeed, we were not going to reduce the amount of heroin that was being grown there and we were not going to have an effect in terms of nation building.
It was mission impossible to move a nation from the 13th century to the 20th century, but we kept on because we have this link with the United States. I believe that if we are to have a defensible policy in the future on this area, where we have spent huge sums of money, we have to do it as an independent country and not be tied to the United States. I believe that we have not had that since the Vietnam war. Harold Wilson rightly said that we were not going to be involved in another mission impossible.
We must learn from this decision before we take any other decision. I believe that very strongly influencing the decision that we took on 29 August 2013 not to go to war, not to follow the Prime Minister into attacking Assad, was the fact that the House of Commons and the nation have lost faith in prime ministerial edicts that come out and say that we act as leaders of the universe, leaders of the world, setting world policies. We are not in that position.
We all pay tribute—tribute has been paid this afternoon —to the extraordinary bravery of our soldiers. How much we owe them! They are as professional and courageous as any of the soldiers in our proud military history, but I believe that we, as politicians, have let them down through our decisions on the Iraq war and the decision to go into Helmand.
Mr Kevan Jones (North Durham) (Lab)
It is a delight to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Broadland (Mr Simpson) on initiating the debate. I am sure that we could have listened to him speak for a lot longer on the subject. His knowledge of present conflicts and others is well known in the House.
It would be wrong not to start the debate by remembering those who have fallen in Iraq and Afghanistan, and those who have been wounded in the service of our country. I was a Minister in the Ministry of Defence during the previous Labour Government, and I do not think that anyone takes decisions easily on the things that happen. My hon. Friend the Member for Newport West (Paul Flynn) said that we should be reminded of the individuals who died. I say to him that if a duty Minister is rung late at night on a dark weekend to be informed that there have been nine casualties, it never leaves them. Irrespective of political party, no one can detach themselves from the individuals, the sacrifice that their families have made, or the circumstances in which they died.
The debate is about Afghanistan, but the hon. Member for Broadland drew out broader questions of strategy. The hon. Member for Reigate (Crispin Blunt) talked about where we started with Afghanistan, and, of course, it leads back to the response to 9/11. I believe that it all started with the use of the terminology of a war on terror. I thought that that expression was wrong, and I never used it. It gave the impression that the only possible response was a military solution. We all know that the fight against terrorism involved not only the military, but law enforcement and politics, as has been made clear in several contributions today.
The initial invasion of Afghanistan was about dealing with the Taliban, who were the hosts for al-Qaeda. A lot of people forget the attempts that had previously been made by the Clinton Administration and the very early Bush Administration to get the Taliban to give up bin Laden and expel al-Qaeda from Afghanistan, but that did not happen. I think that there was confusion over policy. Members of special forces who went into Afghanistan in the early days have told me that their first remit was to expel the Taliban, and that there was no notion of nation building. I think that is where the confusion and mission creep came into being. From my dealings with the Bush Administration and senior figures, and as a member of the Defence Committee, prior to the invasion of Iraq the message was quite clear that they did not do nation building; they did war fighting. I do not think that they were committed from an early stage to nation building in Afghanistan and Iraq.
The hon. Member for Newbury (Richard Benyon) has said that he met someone who called the recent wars “Blair’s wars”, and my hon. Friend the Member for Newport West has just described them as Prime Ministers’ wars. However, we must not forget that Parliament took the decision that we should be part of the invasion of Iraq, and there was cross-party support for our mission in Afghanistan. It would be wrong, therefore, to try to apportion blame to an individual or a political party. Should we have questioned some things more? Yes, on some occasions we should have done, and that goes back to the strategic points that the hon. Member for Broadland made. One question we have to ask is about the relationship between politics and the military. The notion of the public, and perhaps the media, is that politicians are bad and the military is good, but we all know that life is not as simplistic as that. That relationship is one of the serious issues that we need to address.
The hon. Member for Newbury mentioned Lord Reid. I have spoken to him on several occasions about the deployment to Helmand, and he was the one who held it up for quite a while. The enthusiasm for going to Helmand clearly came from parts of the military. There is a saying in the Army: “We will crack on.” The military must give clear advice to Ministers, and if things are not doable, Ministers should be told that they are not. In my experience of the military, however, that does not happen, and there is a notion that everything can be achieved.
The hon. Member for Broadland referred to military structures. I would like to reflect a little on that, and especially on the way in which the military operate within the MOD. The hon. Gentleman accepts that there is a difference between the military, the political and the civil service: I used to refer to it as a three-legged stool. The situation in the military is even more complex, because of inter-service rivalry, as I have seen. On one occasion, I attended a meeting of Ministers and chiefs, at which the senior naval officer and the head of the Army shouted and swore at each other across the table. The relationship is not always unanimous or harmonious. Senior military must be joined up and speak with one voice, and I think that they are getting better at that. The movement towards the joint command under this Government is a move in the right direction to try to achieve more joined-up thinking.
Stephen Barclay (North East Cambridgeshire) (Con)
The concern is often expressed that the senior military were speaking with one voice, under pressure from the then Government. Will the hon. Gentleman clarify which senior military generals spoke against the previous Government’s policy and were promoted under that Government?
Mr Jones
This is where the nonsense comes in—where the political line that was taken and the party politics of that line cause confusion. The problem we had was that there was disagreement between the service chiefs at the time on different strategies. If politicians ask the military whether it is possible to do something, there is an in-built response of “Yes, we can,” but I am saying that there has to be a grown-up relationship. When Ministers ask for advice, they must sometimes be told by the military, “No, that cannot be done.” [Interruption.] The hon. Gentlemanhas asked me to give an example. At the tail end of the last Government, certain senior generals acted completely outside their remit by being political, which was not a helpful stance and did not ensure that they were above the party political debate. That was unfortunate.
I return to Helmand and the deployment south, about which the hon. Member for Broadland raised an important issue. Corporate knowledge in an organisation is important, and, like the hon. Gentleman, I fear that we are losing a lot of that. In addition, in our approach to deployment we must not look solely at the military kinetic effects. We should consider, for example, employing anthropologists to inform the debate about what will happen when we deploy somewhere, to ensure that when people are deployed, they have the fullest possible knowledge about the situation.
I have to disagree with what the hon. Member for Reigate said about Iran. I accept his point about the Iranians being against the Taliban, although I think that that was mainly to do with the Taliban murdering Iranian diplomats in Mazar-e-Sharif in 1998. It was a maligned force in Basra and, in the latter days, in Herat in Afghanistan, where it was used in the proxy war against the United States and ourselves. Should we actually engage with them in negotiations? Yes, I think we could.
Finally, one major strategic failing in Afghanistan was the issue of Pakistan. All the emphasis was on rebuilding, and on occasion we treated Afghanistan in isolation, but the real problem was related to Pakistan. When the history books are written, they will say that the Musharraf Government, by speaking both ways, made our job much more difficult in Afghanistan.
Mark Pritchard (in the Chair)
Order. I encourage the shadow Minister to bring his remarks to a close so that the Minister can respond.
The Minister for the Armed Forces (Mr Mark Francois)
It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate my hon. Friend the Member for Broadland (Mr Simpson) on securing this debate, which gives us an opportunity to discuss what we all realise is a very important subject. He said that he wanted a good debate, and he has succeeded. By my count, 19 Members have been present for either all or part of this debate, including you, Mr Pritchard. That figure includes a number of members of the Defence Committee and, indeed, former Defence Ministers.
This debate takes place a short time after our combat mission in Afghanistan concluded. At the height of our involvement, the United Kingdom had the second largest fighting force in Afghanistan, and our troops undertook some of the heaviest fighting. At one time we had more than 9,000 troops and some 137 bases in Afghanistan, but the increasing capability of the Afghan security forces has enabled us to bring our combat troops home. Our troops left Camp Bastion, our final base in Helmand, on 27 October 2014, and on 24 November 2014 the final UK service personnel left Kandahar airfield, marking the UK’s departure from southern Afghanistan. Although our combat mission is over, we are continuing to help the Afghan people and have made an enduring commitment to Afghanistan.
Jack Lopresti
What would have been the impact on the deployment if we had had longer tours of duty like our friends and comrades, the US?
Mr Francois
My hon. Friend asks a good question. In simple terms, our normal, standard tour was six months with a two-week break in the middle; the Americans, for instance, tended to go for 12 months. There are advantages and disadvantages with both ways of doing it, and we continue to discuss that with the Americans. We will look at that in future to see whether there are lessons to be learned. They are two different ways of doing it, and they both have pluses and minuses.
We now have around 470 troops contributing to the NATO “train, advise and assist” resolute support mission, our element of which is called Op Toral. The UK is leading international support to the Afghan national army officer academy near Kabul to help to develop the next generation of Afghan military leaders. Just last week, the second graduation of Afghan cadets trained at the academy took place. The United Kingdom has also committed £70 million a year to help sustain Afghan security forces, as well as £178 million a year in development aid.
I have visited Afghanistan twice and have seen for myself the progress that has been made. We have given Afghanistan the best possible chance of a safer future. As part of a coalition of 51 nations, the UK helped to build the Afghan security forces from scratch to an effective force of more than 330,000 personnel. The Afghan security forces now have lead responsibility for delivering security across the country, and they are performing well against a capable and determined enemy. Last year, despite prolonged fighting over the summer, the Taliban failed to take and hold any district centres. Country-wide, Afghan security forces successfully secured the presidential elections last year, with more than 7 million people voting.
The inauguration of President Ghani last September was an historic moment for Afghanistan. It was the first democratic transfer of power from one President to another in the country’s history. We welcome the formation of a Government of national unity, the recent appointment of a number of key Cabinet Ministers and, indeed, the approval of a budget for the country by the Afghan Parliament. In December 2014, the UK worked with the Afghan Government and international partners to deliver the co-hosted London conference on Afghanistan, during which President Ghani and Chief Executive Abdullah set out an ambitious reform programme that focused on addressing corruption and reconnecting Afghan citizens to their Government. President Ghani and Chief Executive Abdullah continue to have the UK’s full support in making those and other important reforms.
Mr Simpson
My right hon. Friend has only six minutes left, but will he address some of the questions that we have all raised?
Mr Francois
I will attempt to do that now. I will make a point about the number of children educated in schools and then I will come straight to my hon. Friend’s questions. In 2001, some 1 million children went to school in Afghanistan; now, more than 6 million children, including 2 million girls, are in school. Sixty per cent. of the population is within walking distance of a public health facility. Life expectancy in Afghanistan is at its highest ever level.
Several lessons have been learned. On the medical front, my hon. Friend the Member for Reigate (Crispin Blunt) said that our personnel had done a fantastic job. I did not agree with everything in his speech, but I agreed with that point. The contribution of the role 3 hospital at Camp Bastion was remarkable. It was the busiest military medical facility in Afghanistan, treating in excess of 7,000 UK casualties, with a survival rate of more than 95%, before its closure in September 2014. The hospital was world leading and pioneered new medical treatments and techniques that have led directly to improvements in NHS—
Paul Flynn
On a point of order, Mr Pritchard. The Minister has just informed us that he is going to deal with the very serious issues raised in this debate. He is not doing it, and there are only three and a half minutes left.
Mark Pritchard (in the Chair)
You have made your point. We are running out of time, and I know that you will want to hear the Minister.
Mr Francois
I was talking about the medical lessons that we have learned from Afghanistan, which flow back into our national health service. To drive my point home, a number of medical helicopters flying in Britain now carry plasma and blood, which is a lesson we learned directly from our experience in Afghanistan. We routinely sought to learn lessons from operational incidents and to adapt our equipment, tactics, training and procedures accordingly. That included, for instance, procuring new equipment quickly through the urgent operational requirement process to address emergent threats. We are considering how the lessons of the UOR process can inform our procurement of equipment more generally.
My hon. Friend the Member for Newbury (Richard Benyon) mentioned 77 Brigade, which will have the old Chindits badge, and we will consider how we can use capabilities within that brigade more effectively in future, again building on lessons that we have learned about the importance of influence operations in Afghanistan. I hope to be able to visit the brigade in his constituency when it is fully stood up.
The redeployment of equipment also presented a massive challenge in terms of both scale and complexity, which my hon. Friend also mentioned. Camp Bastion alone covered an area approximately the size of Reading, and much of the matériel returned from Afghanistan had to be redeployed via a 900 km-long land route. We brought back 3,600 vehicles and 4,700 20-foot ISO container-equivalents of matériel. That was a massive logistical achievement, and we have learned lessons from that, too.
The time I have does not fully allow me to pay tribute to the 453 personnel who died in the service of their country. We will never forget them. The Camp Bastion memorial wall will be established at the national memorial arboretum close to the armed forces memorial. The wall was carefully dismantled and flown back to the UK from Afghanistan, and it is currently being reconstructed so that the families of the soldiers named on it can visit to pay their respects. We hope that the completion of that memorial will be achieved by the summer of this year.
I have two minutes to conclude my speech. We should be proud of what we have achieved in Afghanistan. In 2001, the country was used as a launch pad by international terrorists. Since then, through our actions and the actions of the international coalition, the terror threat to the United Kingdom from the region has substantially reduced. Afghanistan is no longer a safe haven for terrorists. We have helped to build effective Afghan national security forces capable of taking the fight to the enemy and of sustaining progress made in the removal of the terrorist threat. The Afghans are now securing their country’s future. They have defended their election and elected a Government of national unity.
Of course, we want to consider broader lessons that can be learned from the campaign, but our recent focus has been on a successful drawdown from the ISAF combat mission and the transition to the NATO resolute support mission. In making a decision on how to learn lessons, the Government want to think through how best to do it in a way that enables us to implement those lessons quickly and practically so that they have a real impact. Several members of the Defence Committee have been here today, and they are undertaking an inquiry into decision making in defence policy. The Secretary of State for Defence gave evidence to that inquiry earlier this month.
There will be challenges ahead for the Afghan people, and there are no guarantees of their future success, but as we continue to support the people of Afghanistan, we should be proud of what we have achieved and confident that we have given that country the best possible chance of a stable future. I believe it was worth while and that we were right to do it.
NHS Mental Health Care
(9 years, 9 months ago)
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Mr Mike Hancock (Portsmouth South) (Ind)
I am delighted to be able to have this debate with you in the Chair, Mr Pritchard; I am sure that on this occasion you will not be disturbed by colleagues making signals to you, trying to stop you from calling me to speak. The debate is very important, and I have been trying to secure it for some time. It is fair to say that there is widespread concern about mental health services in this country, and concern about how things have declined. Promises have been made by successive Governments to take more interest in this issue.
Since 2010, there has been a steep fall in the number of mental health nurses. Up to 4,000 have been lost, leaving a skill gap within the NHS. Nearly 2,000 beds have gone, a drop of 6%, while demand has risen by up to 30%. The Government must ensure equal access to mental health services and that the right treatment is available for people when they need it. The Government and NHS providers must ensure a commitment to parity of esteem that is directly reflected in the funding of commissioning services, work force planning and patient outcomes, and must ensure there are enough local beds to meet demand.
Mr Mark Williams (Ceredigion) (LD)
Will the hon. Gentleman add to his list of requirements the needs in rural areas, which often compound the problems that he has talked about in relation to the loss of beds in hospitals and lack of alternatives? Often the alternative is a prison cell overnight, which is completely unacceptable.
Mr Hancock
Absolutely. I agree with that entirely and I will come to it when I talk about my own personal experiences of spending a long time in a mental hospital trying to recover from a mental breakdown. I know only too well the issues that the hon. Gentleman has raised.
The urgent action plan that is needed cannot be put off for another five years. It needs to be put in place and direct action needs to be taken. There must be a sustainable and long-term work force planning strategy that acknowledges the current challenges facing the mental health world at the present time. We cannot leave it. You yourself, Minister, stated that only 25% of young people with mental health problems have access to mental health services, which you described as “dysfunctional and fragmented”—
Mark Pritchard (in the Chair)
Order. May I encourage the hon. Gentleman to address the Chair, rather than the Minister directly?
Mr Hancock
I am sorry. I was quoting the Minister, Mr Chairman. He stated that 25% of young people with mental health problems had access to mental health services, which he described as both “dysfunctional and fragmented”. That cannot persist. That cannot be right in a society that claims to care and aims to try to deliver services that are perfect for it. There are serious problems with mental health services and the way in which young people are treated. So many of them have ended up in prison, because there are simply no beds available.
If I may, I will talk about my own experiences. I was very fortunate. I will praise my own GP, Dr Chhabda, who was excellent and got me help. I have praise for Talking Change, where I had several sessions, and for Dr Barker and his intermediate crisis team at St James’s hospital. They were of enormous benefit to me. Subsequently, I was under the care of Simon Kelly, the psychiatrist who looked after me when I was in hospital for a long time.
What did I learn during that long period of mental illness? I learned about the stigma. When I was in hospital for several weeks with major heart surgery, the problem was obvious to people—I did not worry about telling them that I had had major heart surgery—but for the last two months of my being in hospital getting over a mental breakdown, I was worried about how I would explain to people where I had been. I was making myself ill with the worry of how I would explain to people that I, this strong person who could fight off most things, was suddenly unable to do so and had to seek help.
But I was not alone. The other people, who have become close friends of mine, were going through the same thing: the GP who did not know how he was going to go back to face his patients, and the dentist who did not know how he was going to work things out. Many other people, from different professions and none, were struggling with the reality of going home to face their immediate families with what had gone wrong with them, and there was little or no help coming from outside the hospital to give them the support that they needed.
In the rest of the time that I have in politics, and in the rest of the time that I am alive, I want to fight to lift once and for all the stigma attached to mental health issues and be proud to say that I was broken but I got fixed, because of the love and skill of the people who were there to help me.
Some of the people whom I met in hospital had travelled long distances. One was from the Minister’s own constituency in Norfolk. There was not a single bed available, from the coast of the North sea, where this person lived, to the waters of Southampton, where a place was available. That was the nearest place. They were transported down there and eventually transported back.
Other people I met in the hospital came from Truro. They had been brought from the furthest edge of our country to the edge of Southampton, because no bed was available. Ironically, when they arrived at the hospital, they came in an ambulance with a driver plus two nurses, and they stayed for four days. Then they were transported all the way back to Exeter, because a bed became available nearer there.
What sort of society are we living in? Somebody at the lowest ebb of their life is transported across the country, away from their family and support networks, because there are no beds available. The way in which people are treated is a national disgrace. We could see in the faces of the people that they knew it would not be possible for their families to come and visit them, because of the enormous distances involved. We have got to do something about that. We cannot allow that situation to persist.
There is the situation of somebody whom the NHS sends into a hospital for a detox programme. They are given a six-day detox programme, probably costing several thousand pounds, and then, on a Friday night, they are told that they have to go 50 miles up the road to spend two nights in a Premier Inn, with no support available over the weekend to help them. For anybody going on a full-time detox programme, the minimum time is 28 days. The NHS will spend a lot of money several times, but limit it to six days and then give the person little or no support when they are out. That cannot be right. No Government should be proud of the record that we have on mental health issues.
Mr Nigel Evans (Ribble Valley) (Con)
I am pleased to stand alongside my hon. Friend and I congratulate him on the debate that he has secured today. Mental health is one of the Cinderella conditions that people tend not to want to talk about, because of the stigma that my hon. Friend talked about earlier on. If someone has a broken leg, it is fine, but if someone’s mind is broken or there is a mental health issue, nobody wants to talk about it. It is easier to sweep it under the carpet.
Will the Minister understand that we really need to get to a situation in which the stigma is no longer there? All we need to do is to give people the help that they need—and, indeed, the hope that they need—as if they had a broken leg or a broken arm, so that they can get back to normal living.
Mr Hancock
I agree entirely. We lucky ones who are privileged and proud to be in this House of Commons must use whatever elements are available to us, whether in speeches here or outside this House, to do more to expose this issue.
I was fortunate because the people I was in contact with were able to put me through a series of different things. They saved my life—I have no doubt whatever about that. I could not stand my life any more and, like so many people, I realised that far too late. I had probably left it six months too late, and because of that my recovery took much longer.
There are others outside the system—people and organisations that try to help. They include Talking Change, which is in my constituency. However, I say to the Minister—through you, Mr Pritchard—that the crisis care service is at breaking point. Services are understaffed and under-resourced; they are overstretched. As for talking therapies, which a lot of people mention and which I have heard the Minister himself praise in the past, 40% of the people who want to use them have to wait more than three months just for an assessment, and that assessment is normally carried out on the telephone. I urge the Minister to try that interview over the telephone. Then, if they are lucky, they will receive some treatment, but one in 10 people wait more than a year to get even the chance to talk about the problems that have driven them to the edge of the abyss, so that they are living in total despair. In addition, a third of the people who are assessed have to wait more than three months to start the therapy.
I ask this Government and whoever is in power after 7 May to really mean what they say about mental health services. There is a crying need for that. When I heard the Deputy Prime Minister talk about mental health services, I thought, “Oh! Maybe we’ll get somewhere and something might happen.” I live in hope, but my experience—having looked into this issue in quite some detail—tells me that the same promises have been made many times during the past 20 years.
I was someone who felt that he could tough out most things, but in the end I had to succumb to the stress and strain I was under, to such an extent that I had no alternative but to seek real help. However, there are literally thousands of people out there who are affected. A quarter of the population of this country will come into contact with mental health problems at some time during their life. Unfortunately, so many of them are disappointed by what they get in the way of treatment from the NHS.
Jim Shannon (Strangford) (DUP)
I apologise, Mr Pritchard, for not being here earlier; I was on the Heathrow Express and just could not get here any quicker, unfortunately.
I commend the hon. Gentleman for bringing this matter to the House for consideration. One in five elderly people will suffer from a mental or emotional breakdown. Such breakdowns are more prevalent among women, but the suicide rate among men is three times higher than among women. Given how we are, men, unfortunately, do not tell our stories in the way that we perhaps should.
The hon. Gentleman is putting forward a very strong argument as to why we need to focus within the NHS on those men who have difficulty addressing the issues of depression, anxiety and emotional breakdown. Does he feel that the Government need to have an educational strategy, one that encourages people and helps families and GPs in particular, so that men will discuss these matters with someone who will listen?
Mr Hancock
I could not agree more; it would make such sense for that to happen. The hon. Gentleman is dead right. It is vital for people just to have someone outside the family circle to talk to and open up to, and then later they can develop the inner strength to tell people, “Oh, by the way, it happened to me.”
I have no hesitation in believing and saying that we have got to do more, because a lot of the elderly people who the hon. Gentleman just mentioned were in a stressful situation long before they got to that age. I know, because I have met such people, both before my illness and subsequently.
We have to do all we can in this place not only to keep this Minister and this Government focused on this issue but to commit ourselves—as a Parliament—to fight this issue, on and on and on. There should be no neglect of people who suffer from a mental illness. If they receive help early enough, it will save the NHS a fortune, and if the treatment is thought through properly, which might include the NHS talking to people such as myself who have been through the system and seen the good and bad of it, maybe, just maybe, we might start to get things right.
The Minister of State, Department of Health (Norman Lamb)
Thank you very much indeed, Mr Pritchard, for calling me to speak. It is good to serve under your chairmanship.
I congratulate my hon. Friend the Member for Portsmouth South (Mr Hancock) on securing this debate; I know that he has been trying to secure such a debate for some time. I particularly congratulate him for speaking out about his own mental ill health, because it is at the heart of changing attitudes and addressing the stigma that he and other hon. Members have talked about that people who have been successful in life should speak out and explain that they themselves have suffered mental ill health. Every time someone speaks out about their own mental ill health, that makes it easier for a youngster to be open about their own issues and seek help. That is the critical change that is needed, so that mental health comes out of the shadows and we lose the embarrassment about discussing it.
I commend to hon. Members the brilliant campaign, Time to Change, which this Government have funded, along with Comic Relief. It is all about tackling stigma. Interestingly, attitudes are changing. They are being measured on a regular basis and the dial is moving; people feel more able to talk about their mental ill health.
Mr Nigel Evans
I am extremely grateful to the Minister for what he has just said. When I was 27, I had depression for a year. I did not know where I was; I did not know whether I was going to come through it. It was awful. I received support from a lot of people who loved me and who got me through that particular period. Then I became an MP and eventually Deputy Speaker of the House of Commons.
The one thing that we must give people is hope, and I hope that the Minister’s response to this debate will be one not only of understanding—he has already expressed that—but of hope for people out there and their families, who look on, feel dejected and want support.
Norman Lamb
I totally agree. I hope to be able to convey some sense of optimism, actually, because, despite all the challenges that my hon. Friend the Member for Portsmouth South referred to, there are very some exciting things happening, which are laying the foundations for genuine equality for mental health. We have legislated in this Parliament for parity of esteem, but to be honest I am not interested in empty rhetoric—our words must mean something for people in need of help.
My hon. Friend referred to many aspects of the system that need to improve significantly. I will deal briefly with one—the issue of beds. We must be a bit nuanced here. It is absolutely clear that when there is a moment of crisis a bed must be available, and available locally. Incidentally, we should also look at places such as recovery houses. Increasingly, there are lots of third sector organisations that provide recovery houses around the country and it is often better for people to go into a place such as that than to be an in-patient admission, which might not be the best thing therapeutically for them. But the idea that in a middle of a crisis someone is shunted somewhere else in the country, or even put into a police cell, is really an outrage in a civilised society.
The interesting thing is that when I came into this job I realised more and more that I was operating in a fog. The data that we are absolutely used to when it comes to physical health, and the scrutiny of that data and evidence, have simply been lacking when it comes to mental health. Traditionally, we have not collected the information about access to services and what is happening to people on the ground, and that has been a fundamental issue that I have sought to address.
On out-of-area placements, I had no idea from the data that came to me about what actually happens around the country. Last week, we finally got the first sight of real data, which will now be provided on a regular basis, so that we can hold trusts to account if they fail to meet local need. The fascinating thing is that there are many trusts around the country that have no out-of-area placements at all under existing financial circumstances, while there are others that completely fail and are sending many people out of area. We need to understand why that is happening and address the causes, whether they are in commissioning, in the provider organisation or because of lack of funds, because some areas have demonstrated that that is not necessary.
Mr Mike Hancock
I entirely accept the idea that, when a bed is needed, a bed needs to be found. However, that person is at the very start of the crisis that made them seek help. They are shifted several hundred miles across the country, settled in and then, because the NHS suddenly finds a bed available half way back to their home, they are moved there without being given a chance to get used to the idea that they are getting help.
Norman Lamb
My hon. Friend does not need to convince me of that. I am completely with him and I am determined that we should eradicate this practice, which is unacceptable for people in a moment of crisis.
The use of police cells is a practice that has always gone on. Actually, because of the crisis care concordat that we published last February, for which 20 national organisations came together to set standards for crisis care in mental health for the first time ever, this year we will see a 50% reduction compared with two years ago in the number of people going into police cells. That is a real advance. We must go further and completely eradicate under-18s going into police cells. We have said that we want to ban the use of police cells for under-18s and to make such use an exceptional event for anyone else.
I want to try to deal with what we are doing to convey a sense of optimism, because I think that we are now on the right track. My hon. Friend painted a picture of the situation. There is, in my view, discrimination at the heart of the NHS, where people who suffer from mental ill health are disadvantaged compared with those with physical health problems. That must end. Access and waiting time standards were introduced in the past decade, so those who are thought to be suffering from cancer get to see a specialist within two weeks. Why does a youngster who suffers a first episode of psychosis not get that right? We cannot begin to justify that. We are therefore introducing, for the first time ever, access and waiting time standards in mental health from April so that, for a youngster suffering a first episode of psychosis, the standard will be to start treatment within two weeks. We will start with 50% of people and progressively increase that.
My hon. Friend talked about psychological therapies. There will be a standard of access within six weeks for 75% of people, with a 95% backstop to start of treatment within 18 weeks. That is what transformed care in physical health in the past decade. As Sir Mike Richards, who was the cancer tsar in the last decade, said to me, we can achieve the same transformation in mental health by applying the same rights of access that we have had in physical health for some considerable time. That complete imbalance of rights between mental and physical health dictates where the money goes, and that must end.
Mr Hancock
I will be very quick. This issue is made worse: Mind carried out a survey of all local authorities in England and found that, on average, they allocated just 1.36% of their public health budget to help people avoid developing mental health problems. Some planned to spend nothing at all. I want to see the Minister put pressure on local authorities to have such programmes that may, just may, keep people alive.
Norman Lamb
Indeed, I have done exactly that. The sense is that this issue is hidden away from public view. It is not recognised that there is an extraordinarily powerful invest-to-save argument to be made, as my hon. Friend said. If we invest in public mental health and early access to therapies, whether psychological therapy or therapy for eating disorders or psychosis, there will be a return on that investment, but, critically, the individual will be helped to recover and to be able to lead a good life again. That is the challenge that we face.
Alongside announcing the first ever waiting time standards, we published a vision for making them comprehensive throughout mental health in the next five years. I want all parties to commit to implement those standards through the next Parliament so that, just as Sir Mike Richards suggested, we can achieve genuine equality for those who suffer mental ill health.
The crisis care concordat set standards for what should happen in a crisis. Across the country, we are seeing a dramatic reduction in the use of police cells, which is a very good thing. We are investing more in liaison psychiatry so that for the first time those who turn up in A and E suffering from mental ill health get access to someone who knows something about it. At the moment, people often turn up in A and E and find that they cannot see anyone with the relevant specialism. That must end, so we are investing in liaison psychiatry.
On children and young people, which my hon. Friend raised in particular, I set up a taskforce last summer, bringing in experts from outside Whitehall such as YoungMinds, the campaigning organisation. We have engaged with young people. The taskforce will publish a report soon. That is the opportunity to fundamentally modernise children’s and young people’s mental health services.
There is a funding issue. More funding is needed—some areas of the country have cut investment ridiculously in young people’s and children’s mental health services—but there is also the question of how the money is spent. Such services are commissioned in a horribly fragmented way and there is not nearly enough focus on what can be done in schools to build resilience and focus on mental well-being. If we were to do that much more effectively, we could stop the deterioration of health.
On liaison and diversion, it is a scandal of our time that so many people suffering from mental ill health end up in prison, largely because their illness drives offending behaviour. Yet so many of those people have never had access to the sorts of therapies that could help them to recover. When someone who is suffering from mental ill health turns up at a police station or a court, liaison and diversion is all about diverting them into treatment. We have 25% of the country covered now and we will cover more than 50% from April with a view to covering the whole country by 2017. No other country in the world is doing that on such an industrial scale, and we should be proud of that.
On access to psychological therapies, which my hon. Friend talked about, waiting times are far too long; that is why we are introducing a maximum waiting time standard. However, in 2010 about 300,000 people got access to psychological therapies. This year that figure will hit about 900,000—a tripling of that number.
Norman Lamb
It does, absolutely. The next challenge is to bring the improving access to psychological therapies programme into line with Jobcentre Plus. We are working on that, with pilots around the country. It is ridiculous that there are so many people out of work, languishing on benefits through no fault of their own because of their mental ill health and not getting access to the therapies that could help them recover. That has to change. We must link mental health services much more closely with employment services, schools and the criminal justice programme.
There are significant areas where mental health services fall short and, as my hon. Friend rightly said, they have always done so. However, as the Minister responsible, I am on a mission—[Interruption.]
Mark Pritchard (in the Chair)
Order. We have a Division, so will the Minister bring his remarks to a conclusion, please?
Norman Lamb
I congratulate my hon. Friend and I think that we are on the way to achieving genuine equality for mental health.
Commercial Waste Recycling (Eccles)
(9 years, 9 months ago)
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Barbara Keeley (Worsley and Eccles South) (Lab)
It is a pleasure to serve under your chairmanship, Mr Pritchard.
This debate is about issues that have caused considerable concern and distress to a number of my constituents, and relates to a waste recycling site in Eccles that was run by White Recycling Ltd until January this year, when the firm went into liquidation. The way in which the site has been operated and the persistent failure of the operator to comply with regulations have had a significant effect on my constituents who live near the site. I want to discuss the weakness of the response of the Environment Agency, which has failed on numerous occasions to provide the swift and robust response required to address the environmental problems caused by the operation of the site. I also want to question whether the existing regulation and monitoring regime is robust enough to deal with the many failures to comply with regulations at the site. Does the Minister believe that the Environment Agency’s powers need strengthening to make them sufficient to the task of regulating this and other similar waste recycling sites?
I will begin by discussing how the running of the site has affected my constituents. Residents have experienced problems with the site for several years. Indeed, local ward councillors David Jolley and John Mullen have been bringing the problems reported by local residents to the attention of the relevant agencies since 2008, including problems with dust, flies, odour and vermin. Old food waste was held in stacks and not disposed of correctly. The site was found to be accepting excess quantities of waste, which exacerbated many of the problems. Infestations of flies caused serious problems during hot weather over a number of summers, particularly the past two. A constituent who contacted me last year told me that they were unable to open their windows in warmer weather because they wanted to avoid swarms of flies coming in. It is totally unacceptable that people living around the site had to endure such conditions, year after year and summer after summer.
In addition to the unhygienic conditions and the possible associated health risks, residents experienced disruptions from the site in other ways. There were reports of heavy goods vehicles entering and exiting the site with no covering, so that the waste materials being carried were blown out of the vehicles, littering the surrounding roads. The site also caused unnecessary noise issues by operating outside of its specified hours—for example, it was operating from 7 am on a Saturday morning, instead of 8 am. Basic regulations restricting the height of waste stacks were often ignored, with stacks becoming dangerously high and at risk of falling over the fences at the site. On at least one occasion, the stacks of waste did collapse and fall through the fence, polluting a brook that runs next to the site.
[Mr David Crausby in the Chair]
The site has also had two fires in the past two years. In April 2013, 20 firefighters had to be called to the site after a shredding machine caught fire. In October 2014, a large amount of waste in a skip caught fire. It took fire crews six days to get the most recent fire under control, and it generated a large amount of smoke that affected people living in nearby streets. Indeed, I understand that the waste stacks still give off steam and smoke four months later, which is a further concern for local residents. At the time of the fire, Public Health England had to issue a health warning advising people to stay indoors. White Recycling had two fires at the site in Eccles, and in January 2014 there was another at a site that the firm ran in Burnley, which reportedly required the attendance of five fire engines to bring under control.
On 3 September 2014, my hon. Friend the Member for Blaenau Gwent (Nick Smith) led a debate in this Chamber on the issue of fires at waste management sites in which he said:
“A total of 600 fires occurred at waste management sites in England between 2012 and 2013, with 61 additional fires occurring in Wales. Despite waste management sites being monitored and requiring licences, we are getting nearly one fire a day across England and Wales.”—[Official Report, 3 September 2014; Vol. 585, c. 137WH.]
He also explored the cost to the fire service of dealing with fires at waste management sites, citing a figure of £49,000 per fire. The annual cost of managing fires at waste management sites could therefore amount to £14.5 million in England and a further £1.5 million in Wales.
My hon. Friend cited answers to parliamentary questions that reveal that, of the 600 fires at sites in England, 595 were at private sites, compared with just five at local authority sites. One in every 18 private sites suffered a fire, compared with just one in every 110 local authority-run sites. It is a similar story in Wales, where only three out of 61 fires have been at local authority-run sites—a similar proportion. It appears that fires are much more likely to occur at privately run waste management sites than at local authority-run sites, even though both are subject to the same regulations and standards. That tells us something about how those privately run sites are being operated and points to a failure of regulation that could be costing the fire services of England and Wales some £16 million a year.
On 16 January, SalfordOnline reported that the Environment Agency had suspended White Recycling’s waste permit, meaning that the firm could no longer take new waste into the site. In my view, that action was too little, too late; the reported licence suspension actually coincided with the day that the firm called in liquidators. I trust that the Minister agrees with me that it is unacceptable for any business to fail to comply with regulations on so many occasions, particularly when there is such an impact on the lives of those living close to the site operated by that business. The Environment Agency has failed to respond to complaints with the urgency and robustness that is required in the face of the numerous environmental and health concerns I have mentioned.
The very few steps taken by the Environment Agency to bring White Recycling into compliance with regulations at the Eccles site were not proportionate to the scale of the problems it was causing to local people. The agency also failed to require the company to make improvements within time limits acceptable to the local community.
For example, after a visit from the fire service in August 2013 a regulation 37 notice was served due to the risk of serious pollution from the site. Having accepted small improvements and having been provided with reassurances, the Environment Agency removed the suspension in December that year, claiming that its aim was for the site to be fully compliant with all permit conditions by summer 2014. So that is one year, from August 2013 to summer 2014, to become fully compliant after offences had been committed. It is not acceptable for a site causing such immediate problems to nearby residents to be given a whole year in which to improve performance when the permit conditions should have been met all along.
In 2014 I asked the Environment Agency to take swift and robust action to address the problems of excess waste, dust and flies—the same old problems that we had had for years. In reply, the agency agreed to allow the company 13 weeks further to sort out the problems. White Recycling had already had a year to come into compliance and when I complained it was given another 13 weeks. The agency said that that was because the financial situation of the operator had to be taken into account. Too often the Environment Agency seems to have used a light-touch approach to enforcement, failing to consider the impact that operations at such sites have on nearby communities.
In spite of the history of persistent non-compliance by the firm, White Recycling was able to challenge and overturn agency decisions. On 1 December 2014 local media reported that the agency had issued a revocation notice to shut down the site entirely. It was also reported that White Recycling successfully appealed the revocation decision on 30 December, less than three weeks before the company called in liquidators.
The issues raised by the case in my constituency raise significant concerns about the ability of the Environment Agency to carry out effective regulation. When I talked to agency staff recently, I was given a string of excuses such as, “We cannot monitor the site 24 hours a day,” and they also talked about cuts in staffing at the agency affecting what they could do.
When I raised the issues with the Secretary of State in August 2014, I received a response from the Minister present in the debate today, of which I want to remind him:
“I agree it is totally unacceptable for residents and businesses to be affected by fly infestation and dust from waste management activities”.
He also said:
“The Environment Agency has a duty to inspect waste management sites and has a wide range of enforcement powers. I have made it clear to the Environment Agency that it has my full support in taking a tougher approach against those who, by their actions or omissions, demonstrate a deliberate and often repeated disregard for the law and the environment”.
I have not seen the Environment Agency taking a tough approach against those who demonstrate a deliberate and often repeated disregard for the law and the environment, nor have I seen the agency using a wide range of enforcement powers against a firm that persistently evaded compliance with environmental regulations.
After the experience of the site in my constituency, I do not think that the existing regulatory framework addresses the problem of companies such as White Recycling that show such an apparent disregard for the community in which they operate. Will the Minister in his response tell me and the House what additional steps he will take to ensure that the Environment Agency acts much more swiftly to prevent such waste management operators that fail repeatedly to operate in compliance with regulations?
A similar point came up in a discussion earlier about health issues. A former Health Secretary said to the current Health Secretary that just because he sends out a note or a circular about how he would like something to operate, it does not mean that it happens. I appreciate the words of the Minister in the note that he sent to me, but he was clearly ignored. We need to bear that in mind. We need a much more robust way of ensuring that directions from Ministers are followed.
I firmly believe that more must be done to protect the health and quality of life of local people and, more generally, the environment. Sites such as the one in Eccles should not be permitted to operate in an area surrounded by houses. If they are, residents are left to suffer the unacceptable consequences. Furthermore, as I said, the Environment Agency clearly does not use
“the wide range of enforcement powers”
referred to by the Minister in his letter to me, nor does it adopt the “tougher approach” that he urged on it last year.
In conclusion, I ask the Minister three questions. First, does the Environment Agency need to apply different tests to the way in which it issues permits for waste management sites, so that the lives of residents are not blighted as the lives of my constituents have been? I have talked about my constituents contacting me and about letters being written, but even people I know have simply moved away and out of the area because they could not stand the continuing issues. The site has been a serious blight on people’s lives.
Secondly, does the Environment Agency need tougher enforcement powers and a different approach to using powers to ensure compliance? Thirdly, my constituents having suffered from the operation of the site as described, what assurances can he offer them that the Environment Agency will require both that the hazards be removed from the site—I understand that there are now hazardous materials there—and that the site be cleared as speedily as possible?
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)
It is a pleasure to serve under your chairmanship, Mr Crausby. I congratulate the hon. Member for Worsley and Eccles South (Barbara Keeley) on securing the debate. I also thank her for bringing these issues to my attention, via a letter last summer and in the Chamber today, so that we can discuss things in detail. What I said in the letter—I will return to some of those issues—about the situation being unacceptable is absolutely true.
The hon. Lady is quite right in her determination that her residents should not have to suffer nuisance and potential health risks, as well as environmental risks to the local area. I have huge sympathy for them, given what they have been through. It might seem sometimes that it is all very for a Minister to stand here and say that when people have experienced something like this, but I very much sympathise with them, because in this role I have had the opportunity to visit places where there are such issues.
As the hon. Lady said, she wrote to me last August to express her concerns about the impacts on residents, in particular from the flies, odour and dust generated by the site. I made it clear in my response, which she read out, that it is unacceptable for residents and businesses to be affected by such poor practice at a waste management site. Today she set out a history of the site, which dates back many years, but the agency heard about the issues raised more recently in July 2014. The action it took to follow up on that was as follows. On 12 August, the agency served a formal notice requiring White Recycling Ltd, the operator, to reduce the volume of waste on site and to control pests and vermin. Waste volumes continued to increase on the site and at the beginning of October there was a significant fire—which she mentioned—which resulted in the fire and rescue service being on site for a protracted incident lasting six days.
On 22 October last year, the agency served a suspension notice on the operator, with suspension taking effect from 28 October. On 3 November, an inspection was carried out and the amount of waste stored at the site was found to be compliant with the permit. The suspension notice was withdrawn, as the enforcement notice had been complied with. Nevertheless, given the history of repeated non-compliance and permit breaches on the site, the Environment Agency decided to revoke the site’s permit on 1 December. The revocation notice was subsequently appealed; as such, the company was able to continue to operate while awaiting the results of the appeal.
On 15 January, the agency undertook a joint inspection with the Greater Manchester fire and rescue service, which deemed the site to pose a significant risk of fire. The agency therefore served the company with a second suspension notice, which was effective from 6 o’clock that evening. That prevented the operator from accepting further waste at the site, but allowed it to remove waste in order to reduce the risk of fire. On 21 January, the operator, White Recycling Ltd, entered into administration.
The Environment Agency sometimes faces a difficult challenge of striking the right balance between encouraging businesses to comply and supporting growth while coming down firmly on those who flout the law or cause harm to local communities and the environment. In common with other regulators, the agency has a duty to give regard to the regulators’ code. The first principle of the code emphasises the need for regulators to carry out their activities in a way that supports those that they regulate to comply and to grow.
The Environment Agency took enforcement action against White Recycling Ltd to tackle the non-compliance. I accept that the hon. Lady might consider that the agency action was not speedy enough. As I said in my letter to her, I made it clear to the agency that it has my full support in taking a speedier and tougher approach against those who by their actions or omissions demonstrate a deliberate and often repeated disregard for the law and the environment. In the first oral questions to the Department after my appointment as Minister, I answered a question on a similar site in another part of the country and it became clear to me that we needed to examine and discuss this issue.
Persistent and entrenched poor performance at waste management sites causes nuisance to local communities, pollutes the environment and undermines the legitimate waste management sector, which is working hard to deliver a much better service. There is anecdotal evidence of a growing trend in such behaviour, and tackling it is a priority for Government and for the agency. I strongly support action by the agency to tackle these problems and I am pleased it is taking a tougher approach to regulation and enforcement at waste sites. Since September, it has increased its interventions to reduce the risk of serious fires. In that month, 76 high-risk sites were identified, 88% of which—including White Recycling—are now subject to enforcement action, including investigation for prosecution. The remaining 12% have improved and are now compliant.
Barbara Keeley
The Minister has talked about tougher responses and coming down firmly. I do not know whether he is going to come to this point—I do not want to labour it, but I want him to address it, as is it quite important—but I gave him an example in which the agency appeared to take a year to act following a non-compliance notice. When I complained—the complaint in which he was involved last year—it gave the company another 13 weeks, taking into account its financial situation. All of that seems to have been entirely concerned with letting the business carry on, and not at all concerned with the residents who suffered all that summer, the second in which they had a particular problem with flies. That is what is unacceptable.
Dan Rogerson
I understand the hon. Lady’s concerns. It is clearly her firm view that action could have been taken more quickly. I understand that view and am pleased she has had the opportunity to express it today. As I have said, I have made it clear in my discussions with the agency that I want it to take action swiftly and to use all its powers to bear down on poor practice. That is also the strong wish of the industry—the legitimate operators that are concerned that they might lose business to those who have far poorer practices, with poorer safeguards for the local community and environment.
The agency recently launched a consultation on changes to its standard rules for environmental permits—the sorts of issues on which the hon. Lady is keen to see progress. The proposed changes include the introduction of a new requirement for a fire prevention plan for those sites with permits that are allowed to store combustible waste material. Additional amendments cover storage periods for combustible waste and clarification about the maximum amounts of waste that can be stored. The agency has closed 255 illegal waste sites during the first half of this financial year. It stopped 116 of the 225 new illegal waste sites found since 1 April in under 90 days, and agency action has resulted in 86 illegal waste sites being cleared, with waste totalling 133,310 cubic metres diverted into the legitimate industry.
We want to do more, however. We will consult shortly on strengthening further Environment Agency enforcement powers, including ensuring that the agency can physically prevent waste from coming on to sites that are in breach of their permits—again, the sort of matter on which the hon. Lady is keen to see progress. We will also seek views on further changes to strengthen the law, including a requirement for greater financial provision from operators of waste management sites through bonds, insurance or other mechanisms. That will reduce the opportunities for rogue operators to obtain permits. One concern has been that if we tackle an operator that then goes out of business and into administration, we are left with the clean-up costs. If there is some sort of financial arrangement providing a guarantee, the money can be used to remediate any problems.
Barbara Keeley
I understand that that issue was touched on in the debate on 3 September led by my hon. Friend the Member for Blaenau Gwent. I believe that he expressed the view that insurance companies were pulling out of that market because the risk was substantial.
Dan Rogerson
In the consultation there will be the opportunity to put forward options for that idea. The main focus is on giving the agency the tools that it needs to tackle poor performance.
The Environment Agency has a duty to inspect waste management sites and a wide range of enforcement powers, which the Government plan to expand. Entrenched and persistent poor performance by the rogues and chancers in the waste management industry is not acceptable to the public or the responsible and compliant waste management industry. That is why the Government are taking action in partnership with the agency.
The hon. Lady will rightly want to know when the particular site she has discussed will be returned to a condition that does not pose a continuing nuisance to the local community and the environment. Liquidators acting for White Recycling formally advised the Environment Agency that they disclaim all the company’s interest at the site, and the agency understands that the operator has disclaimed the permit, so the primary legal responsibility for the site now sits with the landowner, Peel. I understand that the agency has been in regular discussions with the landowner for over a year. It is meeting the landowner on Friday, along with the Greater Manchester fire and rescue service, to discuss the potential fire risk and will provide her with an update following the meeting.
The agency has confirmed to me that it will take all necessary action to ensure that there is no immediate danger to human health and the environment from the waste stored on the site and that it is considering all possible forms of enforcement action against the individuals responsible for White Recycling Ltd.
Barbara Keeley
Will the Minister say whether that involves criminal sanctions? People’s lives have been made miserable and, as I said, some have moved away because of the situation. I do not want people to have to move away from the area.
Dan Rogerson
The agency is looking at all forms of enforcement action, which would include the sorts of things that the hon. Lady is considering.
I understand that the agency has been advising Peel of its responsibilities as a landowner; I trust that it will take steps to work with the various agencies to achieve satisfactory resolution of the situation.
I thank the hon. Lady for raising her concerns. She has rightly raised these issues in the interests of her constituents, and today’s debate has given me the opportunity to provide some reassurance that the Government take the matter seriously. I hope that she will look at the consultation; perhaps the constituents of hers who were affected might want to add their thoughts on the powers and changes proposed, to make sure that we have a well functioning, well regulated industry that takes account of local circumstances and that where poor performance is identified, it is dealt with swiftly.
Question put and agreed to.
Written Statements
(9 years, 9 months ago)
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ECOFIN
(9 years, 9 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
A meeting of the Economic and Financial Affairs Council was held in Brussels on 27 January 2015. Ministers discussed the following items:
Investment plan for Europe
The Commission presented a proposal on the establishment of a European fund for strategic investments, a key element of the investment plan for Europe.
Current legislative proposals
The Council took note of ongoing work on financial services dossiers.
Presentation of the presidency work programme
The new Latvian presidency presented a work programme on economic and financial matters for the duration of its term, which runs from January to June 2015.
Presentation of the Commission work programme
The Commission presented its work programme for 2015, focusing on the economic and financial agenda.
Economic governance
The Council discussed two communications from the Commission dealing with the EU’s fiscal and economic rules.
Preparation of the G20 meeting of Finance Ministers and Governors on 9-10 February 2015 in Istanbul
The Council endorsed EU terms of reference for a meeting of G20 Finance Ministers and Central Bank Governors in Istanbul on 8-9 February.
[HCWS277]
Votes A Annual Estimate 2015-16
(9 years, 9 months ago)
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The Secretary of State for Defence (Michael Fallon)
The Ministry of Defence Votes A estimate 2015-16, will be laid before the House today as HC 1054. This outlines the maximum numbers of personnel to be maintained for each service in the armed forces during financial year 2015-16.
[HCWS279]
Food and Environment Research Agency
(9 years, 9 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Elizabeth Truss)
I am announcing today £14.5 million of new investment in the Food and Environment Research Agency through a joint venture with Capita and Newcastle University. This is part of DEFRA’s ambitious science programme and recognition of the importance of cutting-edge research. The joint venture will expand the agency’s world-leading scientific capability and strengthen its role in food safety research. It will enable Fera to play an even greater role in helping to drive growth in our £100 billion agri-food industry.
The investment builds upon the £2.7 million already committed by the local enterprise partnership (LEP) to DEFRA’s National Agri-Food Innovation Campus York, where Fera is based. It represents a strong commitment to the regional economy and to the LEP’s priority area of agri-food business.
Fera has a significant presence in the agri-food market where it is already recognised as an internationally respected scientific organisation. As the joint venture partner, Capita will bring valuable commercial expertise and experience enabling Fera to maximise its capabilities. The venture also includes the creation of a joint academic institute with Newcastle University aimed at advancing the understanding and application of science to practical agri-food problems.
In bringing together the public sector, private sector and academia, the joint venture allows Fera to build on its reputation as an international centre of excellence and provide the invaluable scientific services that DEFRA and wider Government will continue to require in the future.
It is intended that the new joint venture will commence operating on 1 April 2015.
[HCWS276]
House of Commons Governance
(9 years, 9 months ago)
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John Thurso
(Representing the House of Commons Commission): At its meeting on 9 February, the House of Commons Commission again considered implementation of the recommendations of the Committee on House of Commons Governance.
The Commission agreed a job specification and recruitment process for the new post of Director General of the House of Commons. The recruitment process will commence shortly with the intention that a long list of candidates will be identified by the end of March. Final selection of an appointee will take place after the general election and the establishment of the Commission in its new format.
The recruitment for the post of the Clerk of the House was launched on 28 January. The closing date for applications is 16 February.
The Commission noted that the House of Commons Commission Bill was published in the House of Commons on 5 February. The Bill provides for the changes in Commission membership that the Governance Committee recommended, and would place a new statutory responsibility on the Commission to “set strategic priorities and objectives in connection with services provided by the House Departments”.
The Governance Committee expressed surprise—paragraph 82 of the report—that the Commission had never reviewed its own working practices. The Commission has agreed that it will undertake a light-touch review before the election in order to provide a baseline against which the new Commission can assess itself.
[HCWS278]
Pension Savings (Automatic Transfers)
(9 years, 9 months ago)
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The Minister for Pensions (Steve Webb)
Later today I intend to publish an update paper entitled “Automatic transfers: A framework for consolidating pension savings”.
This paper sets out the progress we have made in designing a model for automatically transferring a worker’s small pension pots when they change employment.
Automatic enrolment is helping people to save for retirement, but we must help them to keep track of their pension savings. We do not want members to end up with more dormant pots, but we expect 50 million dormant pots by 2050 if nothing is done.
This is the rationale behind the system of automatic transfer of small pension pots into the new employer’s scheme when a member changes employment, which was outlined in the Pensions Act 2014. To ensure this system is workable for both industry and members, we need a practical implementation model.
The update paper is the culmination of work that has taken place since the Act with a wide section of the pensions industry to analyse different options and create a safe and efficient model that works in the interest of workers saving for their future.
As outlined in the paper, it is my aim that automatic transfers will first apply to a limited number of schemes, but will still cover the vast majority of members. This first stage will introduce automatic matching of an individual’s small pots. The individual will then be contacted to confirm if they want these pots to be moved to their new scheme.
With minimal change the system will then transition to the opt-out model. The transfer of dormant pensions will then take place unless the member decides not to make the transfer.
I want to introduce the automatic transfer of pots as soon as possible, while also giving sufficient time for the industry to develop the new systems required. My goal is for the initial phase of automatic pot-matching to be in place by autumn 2016.
The document will be available at: http://www.gov.uk
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House of Lords
(9 years, 9 months ago)
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Local Enterprise Partnerships
(9 years, 9 months ago)
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Baroness Bakewell of Hardington Mandeville
To ask Her Majesty’s Government what assessment they have made of the effect of local enterprise partnerships on the economy and key skills in their local areas.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)
We have not made an overall assessment in quite those terms. It is early days, especially for the Local Growth Fund, which starts paying out in April. LEPs are locally accountable, but we have asked them to develop monitoring frameworks so we can access progress in the important areas of growth and skills. Of course, recently we also announced investment of a further £1 billion in local economies across England.
Baroness Bakewell of Hardington Mandeville (LD)
I thank my noble friend for her response. Since health is a primary concern among the public, it is somewhat surprising that the Heart of the South West LEP refused to assist the local FE college, working with one of the largest hospitals in Somerset, to develop a joint health and care career college on the basis that health was not one of its priorities. Does the Minister agree that that particular LEP should revise its priorities?
Baroness Neville-Rolfe
That is primarily a matter for the LEP, but we undertook a robust assessment of the strategic economic plan for each LEP in allocating the funding—both the £1 billion recently and the £6 billion last year. However, I am very pleased that the noble Baroness has brought this project to public attention, and that she will continue to discuss these claims with the local enterprise partnership. Like her, I live off the A303; the new road investment is changing the area, and the population is ageing. However, the decision on where these projects are focused is a matter for the LEP.
Lord Snape (Lab)
My Lords, would the Minister like to monitor LEPs countrywide and share my concern at the lack of women members of those organisations? Is she aware that only 15% of LEPs countrywide consist of women; that in Birmingham, for example, out of 18 members only three are women; and that out of 13 members of the Black Country LEP there are no women at all? Before she gets embroiled in too many specific projects, can she ask the organisation responsible for LEPs overall why there is such a deplorable lack of female representation?
Baroness Neville-Rolfe
I thank the noble Lord for raising the point, not least because I was discussing it only this morning. My right honourable friend in the other place, Greg Clark, is planning to write to LEPs about diversity. On diversity, gender is important, but so is having small business as well as large business.
Lord Bilimoria (CB)
My Lords, in my role as chancellor of the University of Birmingham, I have heard that the Greater Birmingham and Solihull LEP has been a great success. A bold decision was taken to place the local enterprise zone right at the heart of the city. Is the Minister aware of this, and does she believe that it creates high-skilled jobs and has been replicated around the country? On the other hand, in the spirit of the Government’s own partnership, Vince Cable, the Secretary of State for Business, said he was sceptical about whether local enterprise partnerships had been successful at all. What does the Minister have to say about that?
Baroness Neville-Rolfe
My Lords, I am delighted that the noble Lord mentioned the Greater Birmingham and Solihull LEP, because the total that it is receiving under the growth deal is £379 million. We think that local enterprise partnerships have huge potential. What they did in the past I am not sure, but certainly for the future lots of funding is going into skills, enterprise, transport and housing. They are bringing in business funding as well, and there is local matching—following the report by my noble friend Lord Heseltine, which the Government welcomed.
The Lord Bishop of Worcester
My Lords, does the Minister agree that the involvement of the third sector in local enterprise partnerships is very enriching? As that involvement is very varied across the nation, would she be prepared to monitor the involvement of, and the partnership with, the third sector, as part of an assessment of the progress of LEPs?
Baroness Neville-Rolfe
As I have said, the composition of a local enterprise partnership is very much a matter for the LEP, provided that it is business led and brings in local democracy with the local authorities. Otherwise, we draw on people who can help with growth and skills, and certainly there are those in the third sector who bring great strength to these areas.
Lord Young of Norwood Green (Lab)
My Lords, does the Minister share our concern about the decline in the number of apprenticeships for 16 to 18-year olds, when there are still areas of very high youth unemployment, and apprenticeship demand vastly exceeds supply? What contribution are LEPs making to encourage employers to offer apprenticeships? Can the Minister give examples of the most successful LEPs working with local authorities, small businesses and so on?
Baroness Neville-Rolfe
My Lords, as always, the noble Lord asks a very good and detailed question, and I will follow up in writing—but £125 million of the £1 billion growth deal recently announced is addressed to skills capital, and a further £26 million to particular apprenticeships. By bringing business and local authorities together, and by looking at growth and what is needed—skills represent a particularly important constraint—the LEPs can really help to achieve our ambition of having more apprenticeships, and raising the numbers from the 2.1 million that we have had in this Parliament to 3 million in the future.
Baroness O'Cathain (Con)
My Lords, may I suggest that people write to Birmingham City Council and ask for details about how its LEPs are organised? As part of the team from European Union Select Committee Sub-Committee B, as part of our unemployment study, we visited Birmingham City Council and we also went out to some of the organisations funded by it and through the LEPs. That was quite revelatory. Of all the witnesses to that inquiry, those people were by far the best, and they had new ideas about how to get ex-cons and young people who had never had a job, and would not get out of bed to get one, into particular areas. Please let us not condemn a body such as Birmingham City Council, in view of the reality on the ground and the fact that the witnesses’ evidence was so good.
Baroness Neville-Rolfe
I thank my noble friend for drawing attention to all this and look forward to hearing fuller details. I do not think that any of us is condemning LEPs. There are always good and bad things about such organisations. My own view is that they are making a great drive forward in helping local people choose the projects we should support with government funding and matching funding from business and others.
Lord McFall of Alcluith (Lab)
My Lords, in the debate on the constitution will the Minister keep in mind the distinction between decentralisation and devolution? Decentralisation is superior to devolution in terms of local enterprise companies. I give the Minister an example. The SNP Government in Scotland abolished the local enterprise zone in my area, but not before I established a public-private partnership in 1998. Sixteen years later, 2,000 jobs have been created with gross value added to the local community of more than £500 million. The public investment in that is one-1,000th, at £500,000. Will the Minister bear in mind that we have no hope of rebalancing the economy if we do not keep in mind the merits of decentralisation and local involvement?
Baroness Neville-Rolfe
My Lords, I very much agree about the power of localism and partnership, which that example demonstrates.
Voter Registration: Students
(9 years, 9 months ago)
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Lord Storey
To ask Her Majesty’s Government, in the light of the initiative in Northern Ireland, what plans they have to allow pupils to register to vote in schools, sixth form and further education colleges.
Lord Wallace of Saltaire (LD)
My Lords, the Government have no plans to legislate to require electoral registration officers or schools and colleges to provide for pupils to register to vote at school. EROs are free to arrange registration sessions in their local education establishments, and many already do. The Government have recently provided additional funding to encourage activities which promote the registration of young people among other target groups.
Lord Storey (LD)
I note what my noble friend says, but, given the success of the initiative in Northern Ireland, is there not a case for having an independent evaluation to see whether it is worth using that scheme in the rest of the UK? The fact that 189,000 17 year-olds in college will turn 18 before the deadline shows even more clearly how we need to get the message across.
Lord Wallace of Saltaire
My Lords, we have, of course, evaluated the Northern Ireland experience. We were dealing with paper transactions then and we are now moving to online transactions. Since the beginning of February, there have been nearly 500,000 online registrations, so we are very much achieving what we want, and we look forward to seeing more coming. The Northern Ireland experience was useful at the time. However, it was not a great success in maintaining registration: that there was a very substantial drop-off after the first year of registration for 17 year-olds to the level of registration of 18 to 19 year-olds.
Lord Kennedy of Southwark (Lab)
My Lords, first, I declare an interest as the chair of the All-Party Group on Voter Registration. When I asked the noble Lord, Lord Wallace of Saltaire, last week what the Government were doing to deal with the scandalous situation whereby, according to the Electoral Commission, 30% of 18 to 24 year-olds are not registered, he avoided answering the question, so I will give him another chance to do so today. What are the Government doing to deal with this serious matter, because from here it seems that they are doing very little to get these young people registered by 20 April to vote in the general election?
Lord Wallace of Saltaire
My Lords, the Government are doing a great deal. We have provided an additional £14 million over the last 18 months precisely to deal with help in those areas. Most of that has gone to EROs in local authorities, with the largest proportion going to those in areas with a substantial number of students. We have also just funded a number of groups, many of which work with young people and disadvantaged groups, to assist in this process.
Lord Phillips of Sudbury (LD)
My Lords, does my noble friend the Minister agree that it sends at best a very weak message to young would-be voters if we do not equip them while at school to take their place as citizens in a highly complex society? Will he do something about the steady decline in citizenship education?
Lord Wallace of Saltaire
My Lords, that is a different question. However, as the noble Lord knows, I strongly support that and have worked to support it in government. I point out that young people are increasingly online. One of the things that government and local authorities are doing is to provide links to registration when you go into GOV.UK. For example, we have links for those inquiring about student jobs or paying tax, those looking for higher education courses who need to find and apply, those looking for tenancy deposit protection, a careers helpline for teenagers and so on to make registering to vote easier and to nudge people into thinking about it.
Baroness Armstrong of Hill Top (Lab)
My Lords, does the Minister realise that in many areas of the country his answers will seem very complacent? Much of the problem arises because for many young people it is the first time that they are registering. I will give another example, involving, admittedly, not a young person but my husband. Having moved, he was asked to go to the town hall with his passport to prove who he was before he was registered. Most people will never do that, and that is one of the reasons why individual registration is proving very taxing in some areas.
Lord Wallace of Saltaire
My Lords, I am extremely sorry to hear about the difficulties of the noble Baroness’s husband in having to demonstrate that he existed, and I look forward to hearing more offline. In the last two or three weeks, the number of people registering has risen considerably. Part of that has clearly been due to the extra publicity around National Voter Registration Day, and I give credit to those who organised it. However, all of us have to help in raising the level of interest. For example, I took part with candidates and spokesmen of other parties in a packed meeting at the University of York on Friday evening. Some students came up at the end and said, “We had not been thinking about voting so far, but now perhaps we will”. We all need to get out there to encourage young people.
Baroness Perry of Southwark (Con)
My Lords, there is a real problem with student hostels, where a number of young people live together and the delivery of post to individual students is not the easiest thing in the world. What are the Government doing to try to address the problem of group registration?
Lord Wallace of Saltaire
My Lords, we have switched from group registration to individual registration, but the Government are working with the Student Forum, which brings together universities, student organisations and representatives of FE colleges, to raise awareness through a whole range of activities for students arriving in universities. There were pilots in Sheffield and Manchester linking registration at university with registering to vote—so we are very active in this area.
The Lord Bishop of St Albans
My Lords, I am grateful to the Minister for referring to last week’s National Voter Registration Day. As part of that, I went into Townsend School in St Albans with two dynamic members of Bite the Ballot, who were able to bring the whole thing alive in an interactive and very lively session. They handed out registration forms at the end and offered to take them back in—so they are already doing this sort of work. Have Her Majesty’s Government considered supporting that organisation and other similar ones that are already doing this work in a very creative way?
Lord Wallace of Saltaire
My Lords, I have played the game Rock Enrol!, and I hope that a lot of other noble Lords have done so, too. It demonstrates to young people how politics matters to them. I hope that that is going on all over the place. The Government have their own version of this, and Bite the Ballot has adapted another one. We are discussing with Bite the Ballot the question of support and we very much encourage what it and a number of other organisations are doing to bring young people back into being interested and involved in politics.
Public Sector Strikes: Union Support
(9 years, 9 months ago)
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Lord Carrington of Fulham
To ask Her Majesty’s Government what measures they are proposing to ensure that public sector strikes have the full support of union members.
Lord Gardiner of Kimble (Con)
My Lords, public sector strikes undoubtedly have a very considerable impact on the public at large and the economy but, between now and Dissolution, the Government will not be bringing forward any further proposals.
Lord Carrington of Fulham (Con)
My Lords, does my noble friend agree that public sector trade union bosses should not be able to hold working people to ransom over industrial disputes that have nothing to do with them? Should not public sector trade unions be required to demonstrate a balloted majority of more than 50% of their membership before being able to call a strike?
Lord Gardiner of Kimble
My Lords, we are very much committed to ensuring that people have the right to strike but it is important that this is balanced, so that everyone else’s right to get on with their daily lives is understood as well. The concept of thresholds is very interesting. There are certain public sector strikes where 11% of the membership have caused a strike, with very considerable inconvenience to the public.
Baroness Donaghy (Lab)
My Lords, in the interests of balance, does the Minister agree that the legislation governing trade unions is already some of the tightest in Europe and that the level of strikes in this country is, I am glad to say, comparatively low? Does he agree that any further tightening of the noose of that legislation might lead to a growth in unofficial action?
Lord Gardiner of Kimble
My Lords, any responsible Government should look at a situation from time to time, certainly if we were to have strikes where the percentage of the membership voting in favour was 11% or 12%. We have a possible RMT strike coming up with under 25% of the union membership voting for strike action. This is a matter of concern for the public, and, I have no doubt, for the 75% of the union members who did not vote.
Lord Tebbit (Con)
My Lords, does my noble friend recollect that when I was undertaking the changes to industrial relations law which brought about the most enormous change in our industrial relations, from the worst in Europe to the best, I resiled from putting in a requirement of the sort that is now being discussed because I could not believe that trade union leaders would be so irresponsible as to pull a strike on tiny numbers of their members voting for it? Therefore, while I agree that we should not act immediately, trade union leaders should take into account that it will become necessary to do so if they persist in this extraordinary behaviour in the public sector.
Lord Gardiner of Kimble
My Lords, I have the figures of 11% to 12% before me. These are very low figures. They show very often that we have strikes and inconvenience to the public when a huge majority of union members have decided either not to vote for the strike or not to vote at all. These are things that we should think about. We have a responsibility for the public sector—of course we do—but public sector workers have to remember that they are working on behalf of everyone. I think that large numbers of members of unions should be voting for strike action, rather than minorities.
Lord Monks (Lab)
My Lords, will the Minister accept that the hallmark of a democratic society is the right to strike, however inconvenient that might be from time to time? British unions—my eye catches the noble Lord, Lord Tebbit—are already among the most restricted in the western world in legal terms. The real problem with turnouts is the insistence on postal ballots to the exclusion of all other possible measures. As we just heard from the noble Lord, Lord Wallace, young people in particular tend to vote online more comfortably than by post nowadays. Rather than engaging in yet another rather tribal round of union bashing in the pre-election period, will the Conservative Party apply its mind to thinking about other means of balloting, rather than simply postal balloting?
Lord Gardiner of Kimble
My Lords, I certainly do not approach this as a political matter. We have in the public sector people who are very important to us all. It is not reasonable for a strike that causes huge inconvenience to people to be on the back of 11% of a union’s membership. Postal votes are increasingly popular. It is one of the ways forward for many people and I encourage it.
Lord Goddard of Stockport (LD)
My Lords, I am sure that the Minister will acknowledge that there is not society-wide support for trade unions. Does he agree that this is as a result of many individual unions affiliating themselves to one political party? Does he think that it may be beneficial to the membership levels of those unions if they appeal to a wider section of society away and apart from the traditional political groupings?
Lord Gardiner of Kimble
My Lords, unlikely though it may seem to noble Lords opposite, I think that trade unions and the trade union movement have a very strong place in our national life. There have been difficulties, but I think that trade unions are institutions that have had many responsible members—of course I do. The whole issue is whether they have reasonable and responsible leadership on occasion; leadership should be shown. We could be about to have bus strikes where 21% of the union membership have voted for that strike.
Baroness Corston (Lab)
My Lords, if a turnout of 21% in a trade union postal ballot is unacceptable, can the Minister explain why we are told that a turnout of 8% in an election for a police and crime commissioner is perfectly okay?
Lord Gardiner of Kimble
My Lords, there is a very big difference. One is offering public service and one is withdrawing public service.
Lord Balfe (Con)
My Lords, I point out that the settlement put in place by my noble friend Lord Tebbit— my good friend—has substantially stayed throughout many years of opposition and government. I hope that the leaders of the trade union movement will take note that strikes on very low turnouts are increasingly unacceptable. I also ask the Minister to look positively at ways in which voting could be extended beyond the postal ballot to reflect the modern age that we are in.
Lord Gardiner of Kimble
My Lords, all issues should be looked at, and I very much encourage all trade union leaders to think of their broad membership, most of which often does not vote for strike action.
Adult Social Care Contracts
(9 years, 9 months ago)
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Lord Laming
To ask Her Majesty’s Government what assessment they have made of the use of an auction-style process by some local authorities to tender for adult social care contracts.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
The new Care Act directs local authorities to put the well-being of people at the centre of all decisions about care and support. Commissioning high-quality social care is ultimately a matter for local authorities. We are aware of electronic marketplace systems that, together with professional judgments by authority staff, help to embody this well-being principle by prioritising quality above cost while achieving value for money.
Lord Laming (CB)
My Lords, I am very grateful to the noble Earl for that thoughtful response. Does he agree that advertising a block of services in an impersonal way is entirely different from advertising a vulnerable individual, stripping them of their humanity and dignity? Would he be willing to take forward the point that he made about the legislation and examine whether these authorities are disregarding the duty placed on them by Parliament to carry out a proper assessment of need for each individual, to produce a care plan and to make sure that that care plan is related to the individual’s developing situation? Will he ask the Care Quality Commission to make unannounced inspections of these authorities to see whether they are complying with the law?
Earl Howe
My Lords, I make it clear that the personal details of would-be service users should not be put in the public domain. The purpose of this system is to develop a tailored care plan that best meets the person’s needs and does not undermine their well-being. Where this has been done well, it has resulted in good-quality care while also, as I said, providing value for money for the taxpayer. We would not wish to make provision for spot checks of local authorities by the CQC but, where there is clear evidence that a local authority’s commissioning practices are leading to poor-quality care—which they should not be—the Secretary of State can order the Care Quality Commission to carry out a special review.
Lord Campbell-Savours (Lab)
My Lords, the Minister will know that self-funders have been subsidising local authority places for decades. Have the Government measured what the impact of the increased cost on self-funders would be in the event that we were to go down the route suggested?
Earl Howe
My Lords, whatever system is chosen for commissioning care in a local authority, there has to be a fair system for setting fees. We expect local authorities to comply with their legal duties to sustain a high-quality market of providers in their area, and that involves paying fair fees. That is a matter for local determination. It has to be because, in seeking an open market, as we do, we are also aware that local market conditions have to be taken into account.
Baroness Campbell of Surbiton (CB)
My Lords, many service user-led organisations—for instance, the National Centre for Independent Living—provide a high quality of service. Does the Minister accept that in order to achieve high quality and high value, local authorities may have to pay a premium in the short term to achieve long-term cost-effectiveness? If he does, can he remind local authorities of this?
Earl Howe
My Lords, the principle that the noble Baroness articulates is, I am sure, applicable in some areas. I hope that she will be reassured to know that the department has developed statutory guidance for the Care Act to support local authorities, including commissioning. The guidance to the Act directs local authorities to ensure that all packages of care and support that are arranged are good quality and do not undermine people’s well-being. Furthermore, the department will, with partners, be developing a set of commissioning standards which will help local authorities to improve their commissioning practices.
Lord Mackay of Clashfern (Con)
My Lords, can the noble Earl tell us whether the Care Act effectively prevents the practice to which the noble Lord, Lord Campbell-Savours, referred?
Baroness Barker (LD)
My Lords, commissioning of social care is changing fundamentally, not least because of increased use of individual budgets and integration with health commissioning. Does the Minister agree that it is time for the CQC to do a thorough review of the commissioning skills and capacities of local authorities?
Earl Howe
I think that that would be premature. As I have said, we are developing statutory guidance for local authorities, as well as commissioning standards. We have no evidence to date that the process to which the noble Lord, Lord Laming, has drawn attention is leading to perverse results. If there is such evidence, we would be interested to hear about it. But until we are aware that there is a problem, I think that the noble Baroness’s suggestion is not timely.
Lord Campbell-Savours
My Lords, I go back to my original question. Will self-funders be further subsidising local authority auctioned places?
Earl Howe
My Lords, it is impossible to give generalisations. As I indicated, it will depend on what happens in a given local area. We know that it happens at the moment but, again, it is impossible for me to make a general statement about how much or how little it is happening across the country.
Local Elections (Forms) (Northern Ireland) Order 2015
(9 years, 9 months ago)
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Baroness Williams of Trafford
That the draft Orders and Regulations laid before the House on 8 January be approved.
Relevant documents: 19th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 4 February.
European Parliamentary Elections (Amendment) Regulations 2015
(9 years, 9 months ago)
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Lord Wallace of Saltaire
That the draft Regulations laid before the House on 6, 7 and 8 January be approved.
Relevant documents: 18th and 19th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 9 February.
Freedom of Information (Designation as Public Authorities) Order 2015
(9 years, 9 months ago)
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Lord Faulks
That the draft Orders laid before the House on 8 and 12 January be approved.
Relevant documents: 19th and 20th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 9 February.
Francis Report: Update and Response
(9 years, 9 months ago)
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The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, I refer the House to the Statement made by my right honourable friend the Secretary of State for Health in the House of Commons, copies of which have been made available in the Printed Paper Office and the text of which will be printed in full in the Official Report.
The following Statement was made earlier in the House of Commons.
“With your permission, Mr Speaker, I would like to make a Statement on the Government’s response to today’s report on NHS whistleblowing by Sir Robert Francis, and on progress to date in implementing previous recommendations from his public inquiry into the failures of care at Mid Staffordshire NHS Foundation Trust.
I asked Sir Robert to carry out a follow-up review because of my concerns that, despite good progress in implementing his original recommendations, the NHS was still not making fast enough progress in creating an open and transparent culture in which staff feel supported to speak out on worries about patient care. As a result, I was concerned that changes are still necessary if the NHS is to protect patients properly by adopting a transparent, no-blame, learning culture as is common in other sectors such as the nuclear, oil or airline industries.
Sir Robert has confirmed the need for further change in his report today. He said he heard again and again of horrific stories of people’s lives being destroyed—people losing their jobs, being financially ruined, being brought to the brink of suicide and with family lives shattered—because they had tried to do the right thing for patients. Eminent and respected clinicians had their reputations maligned. There are stories of fear, bullying, ostracisation and marginalisation, as well as psychological and physical harm. There are reports of a culture of ‘delay, defend and deny’, with ‘prolonged rants’ directed at people branded ‘snitches, troublemakers and backstabbers’, who were then blacklisted from future employment in the NHS as the system closed ranks.
We, of course, recognise the high standards of care day in, day out in much of the NHS, and we know that many staff feel supported in raising concerns about patient care, with many dedicated managers going out of their way to address those concerns. However, the whole House will be profoundly shocked at the nature and extent of what has been revealed today. The only way we will build an NHS with the highest standards is if the doctors and nurses who have given their lives to patient care always feel listened to when they speak out about patient care. The message must go out today that we are calling time on bullying, intimidation and victimisation, which have no place in our NHS.
Before outlining the Government’s response to today’s report, I want to update the House on the progress made in implementing previous Francis recommendations. I have today laid in the House of Commons Library a report showing progress on all 290 recommendations originally made by Sir Robert, as well as the progress made in implementing other recommendations by Professor Don Berwick on safety, by the right honourable Member for Cynon Valley, Ann Clwyd, and Professor Tricia Hart in their complaints review, by Camilla Cavendish in her work on healthcare assistants and by the NHS Confederation on reducing bureaucratic burdens. The progress was recognised this morning by Sir Robert, who said that the priority that must be given to safety, compassion and quality of care is now better recognised and acted on.
I want to highlight the impact of Professor Sir Bruce Keogh’s review of hospitals with high mortality rates. The special measures regime that followed introduced the toughest and most transparent hospital turnaround regime anywhere in the world, with 19 hospitals—more than 10% of NHS acute trusts—having been put into special measures so far. Among the vast array of improvements since the start of the process, those trusts have recruited 109 additional doctors and 1,805 additional nurses, and have made 129 board-level changes. The independent research company Dr Foster estimated this week that excess deaths in those trusts had fallen by 450 in less than a year. That means that between them, they may have saved as many lives as some estimated were tragically lost at Mid Staffs between 2005 and 2009.
We have moved from a system that tolerated or denied high mortality to one that, while it is by no means perfect, seeks out problems, shares them with the public, takes action and saves lives. Today I can announce that the Care Quality Commission, Monitor and the NHS Trust Development Authority have published a new memorandum of understanding to enshrine and further improve the special measures process.
The other measures that we have introduced include giving the CQC, under its new leadership, legal independence and the legal powers that it needs for its chief inspectors to root out failure and highlight excellence. The chief inspector of hospitals has inspected more than half of acute trusts and will have inspected them all by the end of the year.
We have introduced criminal sanctions for those who wilfully neglect patients and those who provide false or misleading information. The new duty of candour for institutions and professionals means that when mistakes are made, patients or their families must be told. Fundamental standards are now in place to ensure that all providers are required to treat people with dignity and respect. All acute hospitals are now asking patients if they would recommend the care that they receive to friends or members of their family. That is being rolled out to other parts of the NHS, including primary care. Two-thirds of hospitals are now implementing the ‘name above the bed’ initiative to ensure that hospital care is better joined up. More than 200 organisations have joined the ‘sign up to safety’ campaign, which involves a commitment to halve avoidable harm and save 6,000 lives by 2017.
The entire NHS is now committed to patient-centred culture change as a key part of the ‘Five Year Forward View’ plans that were put forward by NHS England last autumn. In that plan, we recognise the important point that safe care and efficient use of resources go hand in hand: doing the right things first time in healthcare saves lives and money.
In respect of whistleblowing, the Government have taken significant steps to protect NHS staff, such as enshrining the right to speak up in staff contracts, amending the NHS constitution, issuing joint guidance with employers and trade unions, extending the national helpline to social care staff, and changing the law to make employers responsible if whistleblowers are harassed or bullied by fellow employees.
Today, Sir Robert makes it clear that there is more to do, and I am extremely grateful to him and his team for their work. He sets out 20 principles and a programme of action. I confirm today that I accept all his recommendations in principle and will consult on a package of measures to implement them.
The recommendations include asking every NHS organisation to identify one member of staff to whom other members of staff can speak if they have concerns that they are not being listened to. Drawing on the inspirational work of Mid Staffs whistleblower Helene Donnelly, those ‘freedom to speak up’ guardians will report directly to trust chief executives on the progress in stamping out the culture of bullying and intimidation that Sir Robert today says is still too common. We will consult on establishing a new independent national whistleblowing guardian as a full-time post within the CQC to review the processes that have been followed in the most serious cases where concerns have been raised about the treatment of whistleblowers.
Because too often the system has closed ranks against whistleblowers, making it impossible for them to find another job, I can announce today that the Government will legislate to protect whistleblowers who are applying for NHS jobs from discrimination by prospective employers. With Opposition support, those necessary regulation-making powers could be on the statute book in this Parliament.
We will provide practical help through Monitor, the NHS Trust Development Authority and NHS England to help whistleblowers find alternative employment. Those three bodies have agreed a compact for action on this issue, and will publish detailed arrangements later this year. We will ensure that every member of staff, NHS manager and NHS leader has proper training on how to raise concerns and how to treat people who raise concerns. As a vital last resort, the right of whistle- blowers to contact the press with any concerns they have must always be safeguarded, although it should not have to come to that. Today I will write to every trust chair to underline the importance of a culture where front-line staff feel able to speak up about concerns without fear of repercussions. In addition, Monitor and the TDA will write to trust chief executives today to ask them to ensure that all managers discuss these issues as a matter of urgency with those who report to them.
There must be consequences for trusts that fail to develop a culture of openness, so today I am publishing consultation options to ensure that where hospitals are found to have knowingly withheld information from patients, the NHS Litigation Authority can impose financial sanctions such as reducing the indemnity it offers against litigation awards. The final decision on how we implement these recommendations will be made after proper consultation with NHS providers, whistle- blowers and patient groups to ensure that we honour the spirit of what Sir Robert has recommended, and to avoid unnecessary layers of bureaucracy or financial burden. There is no reason for individual trusts not to get on with implementing Sir Robert’s recommendations right away, particularly in ensuring that staff have an independent person with whom they can raise concerns.
A further foundation of a safe and open culture is one where the NHS and the public have access to meaningful and comparable information about the performance of local NHS organisations. The new MyNHS website has already kick-started a transparency revolution by making the NHS in England the first healthcare system in the world to offer key, up-to-date safety information on every major hospital, including open and honest reporting, nurse staffing levels in every ward, and the number of falls and hospital-acquired infections. Some estimate that we have as many as 1,000 avoidable deaths in the NHS every month, so by the end of March 2016 the NHS will become the first healthcare system in the world to publish an annual estimate of avoidable deaths by hospital trust, based on case note reviews and the safety record of those trusts.
I will strengthen the accountability of trusts by asking the chair of every trust to write a letter to the Secretary of State by the end of May each year, outlining what measures they will be taking to reduce the number of avoidable deaths in their trust. In all cases we will make it clear that this is not a process of naming and shaming but one of learning and improving so that our NHS becomes the first healthcare system in the world to adopt system-wide the safety standards that would be considered normal in other industries. We must also better understand avoidable mortality outside hospital settings, and whether we can adapt the methodology to identify avoidable harm as well as avoidable death. I therefore announce today that the department will fund a national study to establish the extent of avoidable death in community settings, and the feasibility of developing locally attributable death rates.
We will be taking steps to hard-wire transparency into the health and care system, and I am publishing a transparency architecture with plans for further information to be released on MyNHS. That will include comprehensive reporting on the friends and family test, data on residential care home admissions, and a new balanced scorecard on the work of CCGs and health and well-being boards. The Care Quality Commission and the National Information Board have confirmed to me that, starting this year, they will report annually and in public to the Secretary of State and the Health Select Committee on the progress of the transparency architecture, and on any recommendations about how we can improve it. The Secretary of State will report to Parliament annually on progress, and today I am publishing for consultation changes that will enshrine that right in the NHS constitution.
One of the biggest causes of poor care is when no one takes responsibility for a vulnerable patient and the buck is passed. That leads to greater costs and numerous personal tragedies as people are passed unnecessarily around the system. The ‘name above the bed’ initiative has strengthened accountability in hospitals, as has bringing back named GPs outside hospitals, but there is still not enough clarity on the role of professionally accountable clinicians, particularly in community settings. Today I can therefore announce that the Academy of Medical Royal Colleges has agreed to develop guidelines for meaningful clinical accountability outside hospitals. It will publish its findings this spring, and before the end of the next financial year all CCGs will publish how many of their patients with long-term conditions are being looked after by clinically accountable community clinicians in the meaningful way the academy will define. Proper proactive care for our most vulnerable patients will not only reduce hospital costs but reduce avoidable harm and improve the quality of compassionate care.
We can fund the NHS with a strong economy, we can put in place new models of integrated care to support an ageing population and we can champion innovation, but if we do not get the culture in the NHS right, we shall never deliver the ambitions that everyone in this House has for our NHS. Today is about tackling that culture challenge head on so that we build an NHS that supports staff to deliver the highest standards of safe and compassionate care and that avoids the mistakes that have led to both unacceptable waste and unspeakable tragedy. If we succeed, we will be the first country anywhere to put its entire healthcare system firmly on the path to eliminating avoidable harm and death. Our NHS deserves no lesser ambition, so I commend this Statement to the House”.
Lord Hunt of Kings Heath (Lab)
My Lords, I am very grateful to the noble Earl for referring to the Statement in the way that he did. We welcome the Statement and its commitment to improve the culture around tackling poor care in the NHS. The Opposition endorse the principles in Sir Robert Francis’s new report and we will work with the Government to get them on the statute book in the remainder of this Parliament.
In 1998, the previous Government introduced the first legal protection for whistleblowers in the public interest disclosure legislation, reinforced in the NHS constitution in 2008. We see Sir Robert’s new principles building on those foundations. Our shared aim should be to create a climate in which any NHS worker feels able to raise concerns and confident that they will be listened to, that appropriate action will be taken and that they will not face mistreatment as a result. Today’s report establishes a number of new principles to which all NHS organisations should work. We fully endorse these. The call for support for whistleblowers worried about losing their jobs or finding alternative employment, and training in whistleblowing for all staff, is long overdue. Can the noble Earl confirm that this will apply equally to all providers of NHS services, including voluntary and private providers?
Let me turn to the recommendation for an external organisation which staff can approach for advice and support. In response to the first Francis report in February 2010, my right honourable friend Andy Burnham, when he was Secretary of State, established an expert group to update whistleblowing guidance. It reported in June 2010 and the then Secretary of State, Andrew Lansley, announced plans for a “safe and independent authority” to which staff can turn when their own organisations are not acting on concerns. Will the noble Earl say why little progress has been made since then and assure us that there will be no further delays now that Sir Robert has reinforced this recommendation?
Are the Government concerned by Sir Robert’s findings that the NHS culture might have got worse in recent years? As regards the cases he examined, he said:
“Many were relatively recent or current. This is not about a small number of historic high profile cases from a time when organisations might argue the culture was different. We had a significant number of contributions about cases in 2014”.
The report specifically references figures from the latest NHS staff survey, which shows that reports of bullying have increased from 14% of staff in 2011 to 22% in 2013. Over the same period, staff feeling unable to speak out about poor care, report errors or near misses has fallen from 98% in 2011 to 94% in 2013. Those figures suggest that things are getting worse and not better. Will the noble Earl comment on that and give the reasons?
This seems to underline the importance of any moves to improve culture being brought forward in the right sprit, supportive rather than punitive, so as not to reinforce the wrong culture and create a climate of fear. At the weekend, the Secretary of State proposed fines and jail sentences for failure to be open about poor care. We certainly support that zero tolerance approach but is the noble Earl not concerned that this might be perceived on the ground as creating such a climate of fear and therefore having the opposite effect?
I know that the Minister’s right honourable friend frequently quotes the airline industry as a model to be followed. I remind him that the experience in the airline industry has been to create a safe environment in which pilots can report near misses and untoward incidents so that the industry can learn from them. I urge the noble Earl to consider that whatever happens in the future, the encouragement to be open is not lost in this new approach.
Turning to Mid Staffordshire, we supported Sir Robert’s original recommendations and I certainly give credit to the Secretary of State for making progress on this since the report was produced and the recommendations were accepted. However, he will know that there are gaps where progress has not been made and that this is a concern when standards overall in the NHS are recorded to be falling and not rising. I particularly want to ask him about the long-standing need to reform the system of death certification. This goes back to Dame Janet Smith’s proposals which were embraced within the Coroners and Justice Act 2009 to make provision for the independent scrutiny by a medical examiner of all deaths that are not referred to by the coroner. Following successful pilots, Sir Robert Francis reinforced Dame Janet Smith’s recommendations. I was the chair of a trust which ran a pilot scheme, and I can testify to the effectiveness of having a senior consultant as the medical examiner looking at the case notes where deaths have occurred, informing patients, finding out where things have gone wrong and helping doctors to improve their practice. There is concern that the Government have shelved this proposal, and I hope to hear that that is not so.
Can the noble Earl set out a clear timetable for the introduction of medical examiners and comment on the arrangements in hospitals for reviewing case notes when patients have died? Over the weekend, the Government announced plans to introduce an annual review from a sample of patients. While that will definitely help us to develop a more accurate measure of avoidable deaths than the current mortality rates, does he think that it will go far enough? Should not the NHS learn from all serious failings, and will he give consideration to our suggestion that every death in hospital should be given an appropriate level of review?
We welcome the progress which has been made at some of the hospitals in special measures, but I want to ask the noble Earl about the use of mortality statistics. Is he aware that the graph on page 8 of the recent Dr Foster report shows that mortality rates at the Keogh trusts fell faster between 2006 and 2010 than between 2010 and 2014? Perhaps I may also refer him to the plans outlined by the Secretary of State to calculate the number of avoidable deaths for individual hospitals. They were described by Nick Black, a professor of health services research who has produced many of these ideas, as not having any meaning because of concerns about the robustness of the figures. Will he also acknowledge that a recent investigation by the Academy of Medical Royal Colleges into the use of hospital standardised mortality ratios as a means of comparing the quality of US and English hospitals has shown the method to be unreliable? He will know that Professor Jarman made a proposition that mortality rates between English and US hospitals were such as to cause concern about the UK position. The investigation demonstrates very clearly that the data are not comparable and cautions the use of a crude approach towards trying to judge institutions simply on the basis of HSMR statistics.
Finally, does the noble Earl agree that encouraging an open culture where whistleblowers feel secure in being able to raise issues of concern emanates from a culture that must apply throughout the system, starting at the top in his department and then through all the national regulators as well? If the national bodies feel that they are not able to raise concerns about government policy publicly and if the chief executives of NHS organisations know that if they make any public criticism, they will be penalised in one way or another by the system, is it any wonder that they then find it difficult to create a culture of openness? I urge the noble Earl to embrace fully what is being proposed today by acknowledging that if we are really going to grip the system, a culture of openness and of whistleblowing has to go right through the system and must include his own department, the regulators and NHS England.
In conclusion, we welcome the Statement today and we will do everything we can to ensure that the regulations the Government bring forward are able to go through Parliament before the election.
Earl Howe
My Lords, I am grateful for the welcome and support that the noble Lord, Lord Hunt, has given to the Statement. I do of course agree that Sir Robert’s recommendations, which we accept in principle, build on the current safeguards for whistleblowers. But, as the noble Lord knows, Sir Robert did identify some important gaps in those safeguards which we must now address.
The noble Lord asked me a number of questions. First, he asked whether these provisions would apply equally to all providers of NHS services, including to the voluntary and private sectors. Similar provisions will certainly apply to the voluntary and private sectors. We will expect such providers to reflect on how Francis’s recommendations might apply to them, but we will also use the NHS contract in an appropriate way.
The noble Lord asked whether the Government were concerned about an increase in the number of whistleblowing cases over the last few years. There is evidence that safety and compassionate care have in fact improved in recent years. It is also possible that the new emphasis on openness and transparency may lead to more concerns being raised, which is a slightly counterintuitive effect of a better culture. We want to examine Sir Robert’s findings carefully and would encourage NHS organisations to do the same. But it is important to emphasise that however much improvement we see, we must never be complacent about how good the system is.
The noble Lord asked about progress in identifying an authority to whom whistleblowers could turn. I refer him to Sir Robert’s recommendations, which provide for local “freedom to speak up” guardians, who will report directly to trust chief executives and, crucially, to whom members of staff in an organisation can speak if they have particular concerns. There will be a new independent national whistleblowing guardian as a full-time post within the CQC, as a further safeguard in this process—a person who can understand what has happened in a given local case and refer back to that local organisation in an appropriate fashion.
I agree with the noble Lord that we want to achieve, above all, a supportive and learning culture. That is something emphasised not only by Sir Robert but by Professor Don Berwick in his review of patient safety issues. He is also right that if we go too far with a punitive approach to these matters, it could deter people from wishing to step forward. That is why we hope that we have the balance right in the legal provisions that we put through in the Care Act so as to ensure that, while organisations must always be on the line for the extent to which they have complied with, for example, the duty of candour, we do not put employees in a state of excessive fear, lest they refrain from speaking up when appropriate.
All the measures we have taken so far—the duty of candour, the new offence of wilful neglect, the fundamental standards that Sir Robert recommended, which will be coming in, and the fit and proper persons test—combine to shore up the system in a helpful way, without, we trust, making the NHS feel oppressed by regulation.
The noble Lord asked about death certificates. No, the policy has not by any means been shelved. The work is continuing. To be frank with him, progress has been slightly less fast than we would have wished, but the Government remain totally committed to the principle of these reforms. Further progress will be informed by reconsideration of the detail of the new system in the light of other positive developments on patient safety since 2010 and by a subsequent public consultation exercise. A number of recommendations in Sir Robert Francis’s Mid Staffordshire inquiry report refer to that reform of the death certification system. A new system of medical examiners has been trialled successfully in a number of areas across the country. The work of the two flagship sites in Gloucestershire and Sheffield has been continued and extended to operate a medical examiner service on a city- and countrywide basis at a scale that will be required for implementation by local authorities when legislation is introduced. We will be publishing shortly a report from the interim National Medical Examiner setting out the lessons learnt from the pilot sites.
The noble Lord, Lord Hunt, referred to the criticism voiced by Mr Nick Black on the way that we interpret statistics on avoidable deaths. The work that we have set in train builds on innovative work at the London School of Hygiene and Tropical Medicine, and we think it has the potential to enable NHS trusts to develop a better understanding of actually avoidable deaths. But we will continue to work with front-line clinicians, national organisations and academics to find ways to support trusts to understand better their levels of avoidable mortality and, crucially, to take effective action to reduce those levels.
The first Francis inquiry emphasised the importance of trusts looking carefully at their mortality rates as part of their overall scrutiny of safety measures. We believe that most, if not all, are now doing that but we want to do more to improve the data and their use to make improvements. I would just say to the noble Lord that we should not let the best be the enemy of the good. Imperfections in data should not get in the way of vigilant local scrutiny of those data, even though they may not be 100% accurate.
The noble Lord concluded his remarks with some questions about culture. In particular, he asked me whether I agreed that the culture of the system starts at the top. Of course, I agree with him fully on that. But I would just say to him that as a Government we have taken a conscious approach not to overemphasise poor care where it occurs but to expose it and to adopt a policy of transparency so that poor care as well as good care can be apparent to patients, the public and the system at large. We have given greater legal independence to the CQC. We want it to speak out without fear or favour, and it has indeed done that.
We believe it is right to confront poor practice where it occurs. The key, however, is to turn around those organisations that are found wanting, and the system of special measures has undoubtedly proved its worth, as the Dr Foster report recently made clear. There was an unequivocal finding in that report that the levels of avoidable mortality in most of the special measures trusts had gone down by a statistically significant percentage. There is undoubtedly a high degree of utility in the special measures process, painful as it may be to some organisations.
Baroness Barker (LD)
My Lords, will the Minister please say whether the proposals in the report relate to the provision of mental health services as well as physical health? The proposals are very much focused on hospitals. Secondly, review after review has shown that in a hospital the one group of staff who know better than anybody else what is going wrong are the junior staff—junior doctors and so on. In the work going forward, will the Government pay particular attention to junior doctors and non-clinical staff who are whistleblowers, and what happens to them? Finally, the report mentions the extension of this work to an examination of avoidable deaths in community settings. Will the Minister say who will be involved in that work and when we can anticipate a report on it?
Earl Howe
We envisage that all NHS providers should be subject to whatever practical measures are agreed. We are not yet in a position to be prescriptive about what those arrangements should be. We will consult on how best to implement Sir Robert’s recommendations in the least burdensome way possible but in a way that fulfils his ambitions to the maximum extent. I totally take my noble friend’s point that junior doctors and non-clinical staff are often in the best position to judge the health and culture of an organisation. Indeed, I am aware that the CQC, when inspecting a hospital, often makes a point of convening a focus group consisting of junior doctors because it knows that there is a great deal to be learnt from that source. On community care, again, we have taken no firm decisions on how this will come about, but we wish to take the advice of those whose views we value.
Lord Morris of Aberavon (Lab)
My Lords, I welcome the Statement and congratulate Sir Robert once again on his most thorough analysis. I also welcome the long overdue proposed change in the law to make employers responsible if whistleblowers are harassed. Does the suggested new duty of candour mean that never again will we see gagging clauses in any NHS contractual arrangements? How long have gagging clauses been tolerated and what is the justification for them?
Earl Howe
I am grateful to the noble and learned Lord. NHS guidance has consistently made it clear that, where confidentiality clauses are used, they should go no further than is necessary to protect the legitimate interests of both the employer and the employee. There are circumstances when a gagging clause is appropriate, but local policies should always prohibit the inclusion of confidentiality clauses in contracts of employment and settlement agreements that seek to prevent an individual making a disclosure in the public interest, in accordance with the Public Interest Disclosure Act. Such clauses are often referred to as gagging clauses. If such clauses were to be included in a severance agreement or settlement, they would be deemed void in any event. We have made it amply clear to NHS organisations where the boundary lies between those two types of confidentiality clause.
Lord Naseby (Con)
Is my noble friend aware that the question of patient safety, which is emphasised, is fundamental to all this? In contrast, the number of claims for medical negligence continues to rise—in the past year, it did so by 18%—and now costs the NHS well over £1 billion. Has the time not come to have a thorough review of how such medical negligence claims are handled and who is behind some of them? Perhaps it is ambulance chasers. In any case, is not arbitration possibly the way forward, such as happens in essence when a coroner looks at a difficult case?
Earl Howe
My noble friend makes a series of very good points. We are, as he knows, extremely concerned about the rising level of litigation costs in the NHS. My department is consulting on proposals for how the duty of candour can be further incentivised by requiring trusts and foundation trusts to meet a proportion of the cost of negligence claims in cases where they have failed to be candid. We are also committing up to £35 million so that the NHS Litigation Authority can support trusts in implementing their safety improvement plans where those plans show a likely reduction in the number of higher-volume and higher-value claims over the medium to long term.
Baroness Masham of Ilton (CB)
My Lords, I congratulate the Government on accepting this second report. The report states that staff working with vulnerable patients should be responsible. How will the Minister make this happen? Patients and carers should be listened to. They can become whistleblowers, but may feel that they will be branded as troublemakers. How can he stop this happening?
Earl Howe
Making every employee responsible goes hand in hand with the duty of candour—the feeling for every employee that they have the freedom to speak up and take ownership of a given situation that is within their control, professionally. We hope that this will gradually show its value in the way that the culture of an organisation changes for the better. Ultimately, though, professionalism depends on training as well. On the whistleblowers, may I ask the noble Baroness to repeat the second half of her question?
Baroness Masham of Ilton
My second question was that since patients and carers could become whistleblowers but might feel that they would be branded as troublemakers, how can the Minister stop this happening?
Earl Howe
I apologise to the noble Baroness. It is very important that that does not happen. This was very much a matter that Sir Robert had in his sights when preparing the report. We have a certain amount of protection for whistleblowers at the moment—the noble Lord, Lord Hunt, referred to this—and the current Government have augmented that protection, not least through the way in which we have improved the NHS constitution. But Sir Robert is clear that we need to go further and, in particular, to ensure that those whistleblowers who find their position untenable in an organisation and are obliged to leave are not thereby blacklisted by the NHS merely for having spoken up. We think that the measures Sir Robert has proposed will achieve this but, more importantly, they will ensure that there is a better form of conflict resolution, able to nip concerns in the bud at an early stage and at a local level.
Lord Touhig (Lab)
My Lords, I had the privilege of introducing the first whistleblower protection legislation when I served in the other place. I regret that it was not successful because the then Conservative Government opposed it. Richard Shepherd, a Conservative Member of Parliament whom I consider a good friend, was much more successful in 1998 when he introduced the Public Interest Disclosure Act, together with the support of the Labour Government. Sir Robert refers to that Act a number of times in his report. On page 9, he says:
“For a number of reasons this legislation is limited in its effectiveness … The legislation does nothing to remove the confusion that exists around the term ‘whistleblowing’ … The legislation is also limited in its applicability”.
He also refers on page 78 to suggestions that PIDA should be strengthened. I agree with him; the Act needs to be reviewed and amended. Will the Government agree to do this, because that would certainly overcome many of the problems that this report has highlighted?
Earl Howe
My Lords, it may be that Sir Robert’s recommendations lead to legislative proposals. At the moment, we have no view on that. We want to consult broadly to seek people’s views, not least from all parties in Parliament. If I understand Sir Robert correctly, he was keen to achieve answers to these questions that do not involve legislative change and can be achieved easily, without too much bureaucracy. However, we would certainly wish to leave the door open if legislation is needed. In fact, there is one particular measure that we will endeavour to put through in the current Parliament, as long as we have cross-party support for it.
Lord Walton of Detchant (CB)
My Lords, I express the thanks of everyone who has worked in the National Health Service for this extremely important and compelling report. Is the Minister in a position yet to say anything about the terms of reference of those who will be the local whistleblowing guardians, what kind of qualifications they will be expected to hold and who will employ them? I take it that the national whistleblowing guardian is to be employed by the Care Quality Commission. Again, it would be helpful to know the Government’s views about the kind of individual who will be sought to fulfil that appointment.
Earl Howe
The noble Lord, as ever, makes a series of very important points. The personal qualities of these guardians need to be considered very carefully. At this early stage, we have made no firm proposals along those lines. As I have indicated, we think that every NHS organisation needs to identify one member of staff to whom other members of staff can speak if they have concerns, particularly if they feel that they are not being listened to. Clearly, the qualities of that local guardian need to be of a kind that inspires trust in the body of employees. As regards the national whistleblowing guardian, that will be a full-time post within the CQC. Again, it will require somebody of stature, sensitivity and trustworthiness so that the system can be seen to be robust.
Lord Framlingham (Con)
My Lords, when I served in the other place, I tried very hard to persuade the then Government to bring back the traditional role of matron into our hospitals. I know that we have modern matrons, but they are not the same thing. It was a most disastrous day when we took matrons away from our hospitals; heaven knows why we did it. If we reintroduced that role, with all its responsibility—and particularly its authority—and an awareness of what goes on the hospital, many of the things that we are talking about today would be resolved.
Earl Howe
I am sure that my noble friend’s comments will strike a chord in many places. I am aware that we have had debates of this kind quite often in the past. Of course, it is open to any NHS organisation or hospital to appoint a matron if it so wishes—and indeed some do that. The key point here is that there should be appropriate leadership in nursing at a senior level in the organisation. The successful organisations of which I am aware have had a senior nurse on the board and someone who has taken direct responsibility for nursing standards throughout that organisation.
Lord Warner (Lab)
My Lords, I am not necessarily of the Hattie Jacques school of nurse management, but will the Minister say a little more about these leadership issues? Those of us who have actually been involved as either a chair or a chief officer of a public body know how difficult it is to keep these agendas alive after they have lost their fashionability in the public eye. What are the Government going to do to ensure that the regulators and the boards keep coming back to this issue and keep bringing to the attention of the front-line staff their enthusiasm—and I use that word advisedly—for learning about failings that are going on in their organisation?
Earl Howe
The answer to that must lie chiefly with the way in which the CQC now operates. One of the domains that it pays attention to in its inspections is the well led domain. Is this an organisation that has leaders in it who are aware of what is going on in the hospital, have a clear vision and a strategy for that hospital and are in touch with patients’ views and experiences, not least through complaints? These, and a whole range of other factors, are what the CQC looks at when assessing the quality of the leadership. The noble Lord is, of course, quite right that this must be and remain a key ingredient of a successful NHS culture and good-quality care for patients. We now have a system in which poor leadership will be exposed quite rapidly.
Lord Stoddart of Swindon (Ind Lab)
My Lords, first, I am quite astounded that people should be treated in this way by one of our great national services. Secondly, will the Minister tell us whether arrangements were put in place whereby people who felt aggrieved or threatened would be able to appeal? Thirdly, will he also tell us what the trade union involvement was, and whether the unions were obstructed from doing their proper job of protecting their members? Finally, are the trade unions going to be consulted about this report to give them ideas about how they could be better involved in protecting their membership?
Earl Howe
My Lords, I agree with the noble Lord, Lord Stoddart, that the examples of poor care exposed by Sir Robert’s report were shocking. In many respects, the work he has done and the recommendations he has made constitute a wake-up call for everybody in the NHS—even those who are providing a very good service, which most of the NHS is providing.
There are many levels of protection for NHS employees. An employee can always lodge an appeal if they feel aggrieved and turn to their trade union for support in that context. We intend to consult widely on Sir Robert’s recommendations, including with the trade unions. We welcome their input to these ideas and look forward to further discussions—which, in the normal course, happen very regularly anyway.
Baroness Pitkeathley (Lab)
The Minister has acknowledged that it should be the responsibility of all staff to support the principles of openness and whistleblowing. However, has he any concern that the creation of these freedom-to-speak-out guardians might—I say only “might”—lead to staff thinking that they could abdicate that responsibility and leave it all to the guardians?
Earl Howe
My Lords, the role of the guardians will be primarily to provide advice to those who have concerns and feel that they are not being listened to. They will be able to report directly to trust chief executives on not just individual issues but on progress in general in stamping out any bullying that may be occurring, or the intimidation that Sir Robert says is all too common. I do not think that the creation of a freedom-to-speak-up guardian will in itself inhibit the process. Of course, we are open to views. If that concern is widely held, we will have to take it into account.
Lord Elystan-Morgan (CB)
Does the Minister agree that while of course it is right and proper that, in relation to whistleblowers, Sir Robert’s recommendations should be given every opportunity to see whether they succeed in removing this scourge from our society, the situation should be monitored and should it be the case that it is not possible to remove this disgraceful practice of victimising whistleblowers, stern, swingeing criminal sanctions should be considered if necessary? It is a drastic proposal, but the practice it would be designed to meet is disgraceful.
Earl Howe
I take full note of the noble Lord’s proposals. Clearly, we will wish to monitor the effectiveness of these new arrangements once they are in place. It will be open to the next Government to make a judgment on that score and, if necessary, to come forward with more stringent proposals that could indeed involve legislation with penalties attached.
Deregulation Bill
(9 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
17:14 - Division on Amendment 44 - Ayes: 197 / Noes: 208 - Amendment 44 disagreed.
18:08 - Division on Amendment 44A - Ayes: 158 / Noes: 222 - Amendment 44A disagreed.
Lord Hunt of Kings Heath
“( ) This section does not apply to the following—
(a) Care Quality Commission,(b) Human Tissue Authority,(c) Medicines and Healthcare Products Regulatory Agency,(d) Professional Standards Authority,(e) General Medical Council,(f) Nursing and Midwifery Council,(g) Health and Care Professions Council,(h) General Chiropractic Council,(i) General Dental Council,(j) General Pharmaceutical Council,(k) Human Fertilisation and Embryology Authority, and(l) any persons exercising a regulatory function with respect to health and care service that the Secretary of State specifies by order.( ) An order under this section must be made by statutory instrument.
( ) A statutory instrument containing an order under this section may not be made unless a draft has been laid before, and approved by a resolution of, each House of Parliament.”
Lord Hunt of Kings Heath (Lab)
My Lords, I am concerned about the unintended consequences of the economic growth clauses on a number of health regulatory bodies. The clauses on the impact of economic growth specify that regulators must consider the promotion of economic growth in exercising their regulatory functions. The Government have said that the health regulators likely to fall under Clauses 88 to 90 are as follows: the Human Fertilisation and Embryology Authority, the Human Tissue Authority, the Medicines and Healthcare Products Regulatory Agency, the Professional Standards Authority and the Care Quality Commission.
The noble Lord, Lord Wallace of Saltaire, has said that the economic growth duty will complement existing duties and will not override or reduce the protection of the public. However, I put the question to him: if the economic growth duty does not impinge on the prime responsibility of the regulator, why bring in the clause at all?
The Minister then said that the economic growth duty sits alongside any other factor that a regulator must consider. However, “sitting alongside” suggests that it has some weighting and cannot simply be ignored. Indeed, the noble Lord has also pointed out that regulators must understand and consider the impact of their policies on individual businesses. That is of course reinforced by the provisions in the Bill.
Clause 88(2) states that “the person”—that is, the regulator—must,
“consider the importance for the promotion of economic growth of exercising the regulatory function in a way which ensures that … regulatory action is taken only when it is needed, and … any action taken is proportionate”.
In Committee my noble friend Lord Tunnicliffe specifically asked about the position of the Care Quality Commission —the principal health quality regulator, to which the noble Earl, Lord Howe, has just been referring—as regards whistleblowing. My noble friend asked,
“do we want a situation where, when the CQC is contemplating putting a requirement on a failing nursing home that may close it down to protect the residents of that home, the operator of the home can say, ‘Closing me down is against growth. Please prove that this regulation, which you may have used elsewhere, is both needed and proportionate’?”.—[Official Report, 20/11/14; col. GC 206.]
I have to say to the noble Lord that I do not detect any enthusiasm from the health regulators themselves about the economic growth duty. The CQC’s briefing to me can hardly bring itself to mention the duty.
The Professional Standards Authority, in line 1, says that it supports the intention behind Clause 88, and then spends the rest of its briefing critically examining the clause. It concludes that Clause 88 ought to be restricted by excluding from the duty any regulatory function the prime purpose of which is to protect the public. I must say that I am surprised to see the Professional Standards Authority included. It is not a regulator. Its job is to oversee the nine statutory regulators, including the General Medical Council, and I do not understand why the GMC and the NMC are not on the Government’s list of organisations to be included within this clause.
Can we come to the Human Fertilisation and Embryology Authority? The noble Lord will know that that body has a crucial and difficult task, and this responsibility could make that duty even more difficult. On 24 February we will have a debate about regulations on mitochondrial donation. Currently, the law only allows these techniques to be used in research. For the IVF techniques to be used in patients, Parliament must pass new regulations.
Both the Nuffield Council on Bioethics and the HFEA held extensive public consultations in 2012. They identified broad public support for the use of these techniques with a “robust regulatory framework”. I stress those words. As the noble Earl’s honourable friend the Minister Jane Ellison told the other place when it debated the regulations:
“The HFEA is highly respected across the globe as a model for the regulation of fertility and embryology treatments and research. Many other countries do not have such a framework”.—[Official Report, Commons, 3/2/15; col. 163.]
Indeed, if the regulations are passed by Parliament on 24 February, the HFEA will be expected to introduce a robust regulatory process, as it has in other areas of fertility treatment. I know that not all noble Lords think that it is as robust as they would wish it to be. None the less, many of us would say that it is a robust process.
The question that I put to the noble Lord is about where the economic growth considerations come in. There is no provision in the Human Fertilisation and Embryology Act for the HFEA to have regard to the imperative to promote economic growth when making its decisions. If a clinic does not meet statutory requirements, it cannot grant a licence or allow a certain activity to take place, regardless of how economically desirable it might be thought to be. Similarly, if there had been gross failings at a clinic, regardless of the economic impact of closing it down the HFEA would be bound to say so in the interests of ensuring patient safety and maintaining public confidence in it as a regulator. Surely the economic growth duty is inconsistent with those requirements. The HFEA’s own website has often acknowledged that it is not an economic regulator. This has been confirmed by Ministers in Written Answers. Peter Thompson, the chief executive officer of HFEA, has recently been quoted as recognising a responsibility by that authority to take action against what he described as rampant commercialisation of IVF in the UK.
The Minister has prayed in aid the draft guidance during the passage of this Bill, but it only adds to concern. The guidance summary states:
“The growth duty does not automatically take precedence over or supplant existing duties held by regulators”.
The term “not automatically” must by implication mean that it is entirely possible for it to take precedence.
The decision about mitochondrial donation is of huge importance. It must be made in the absolute certainty of the regulatory process. There is no time for ambiguity. Will the Minister agree to give this further consideration? I find it very difficult to understand why any of these bodies are going to be included in the list for which regulations will be brought forward. Why on earth has the Human Tissue Authority been brought in scope of this provision, or the Care Quality Commission? I certainly do not understand why the PSA is included. I hope that the Minister will bring some words of comfort that the Government have reconsidered this issue, and I beg to move.
Lord Winston (Lab)
I support this amendment wholeheartedly. If my noble friend Lord Hunt decides to divide the House, I shall join him in the Lobby. I disagree with him on a fundamental point, which I shall discuss in a second, but the basis behind his amendment is absolutely correct.
One issue is that London in particular and the United Kingdom in general is increasingly becoming a centre for the healthcare market, which is burgeoning—and, increasingly, there are risks that various practices are being adopted that are not ideal for patients and in some cases are clearly not safe and not validated. If there is an issue about a regulatory authority considering the commercial value and income for the United Kingdom, that would be a very serious issue indeed.
On the Human Fertilisation and Embryology Authority, I was not going to get to my feet until I heard my noble friend move his amendment, but I disagree with him fundamentally about that body. It is not a good body but one that we have been left with, and I think that it badly needs reform. It is nothing to do with mitochondrial transfer, which we will discuss in a couple of weeks—I think that it will regulate that perfectly well. But at present there are large areas that that body is not regulating well. My noble friend says that it is the envy of the world, but I say with deference to him that the fact is that there is not a single sovereignty anywhere in the globe that has adopted that model. No one has adopted that model because it is not widely respected outside the United Kingdom. That is a problem. None the less, we have it.
Baroness Warnock (CB)
I rise simply to underline everything that the noble Lord, Lord Winston, has just said. It seems to me a disgraceful possibility that individual private clinics might be allowed to exploit these vulnerable people. The words that the noble Lord quoted show that this could happen automatically. It is not just that people may be allowed: the suggestion is that they will be allowed, unless some very special consideration applies. I therefore beg the Minister to reconsider this part of the Bill.
Lord Alton of Liverpool (CB)
My Lords, the Minister may not be surprised to find that I am keen to intervene on this amendment, moved by the noble Lord, Lord Hunt of Kings Heath, but he may have been surprised by the noble Lord’s ability to put together an interesting coalition of voices which would not necessarily always agree on some of the substantive issues raised in the context of human fertilisation and embryology. On this occasion I strongly agree with what my noble friend Lady Warnock and the noble Lord, Lord Winston, have said, and I hope the House paid attention to the specific example that the noble Lord gave of someone having to spend £11,000 in a London clinic. I find that extraordinary and we are all grateful to the noble Lord for telling us about it.
I strongly agree with what the noble Lord, Lord Hunt of Kings Heath, said about some of the organisations mentioned in the amendment: the Care Quality Commission, the Human Tissue Authority, the Professional Standards Authority and the Human Fertilisation and Embryology Authority. What have they got to do with economic growth duties? They have much more important duties than that and I find it amazing that we are dealing with this issue at all in the context of the Deregulation Bill.
If we examine the press releases of the Human Fertilisation and Embryology Authority, or look at its website, we will see, in terms, the phrase that the noble Lord, Lord Hunt, used. The HFEA says:
“We are not an economic regulator”.
That is also emphasised in a previous Written Answer by the noble Earl, Lord Howe, in which he stated:
“The HFEA is not an economic regulator and, accordingly, does not publish information on costs at a clinic level”.—[Official Report, 22/1/13; col. WA 195.]
And nor should it. So, surely this serves only to emphasise that the HFEA is not competent to undertake any economic growth duty.
Indeed, at last year’s Progress Educational Trust’s annual conference, the noble Lord, Lord Winston, described how most NHS trusts charge above cost, and that they are driven by profit motives. Dr John Parsons, the former director of King’s College Hospital’s assisted conception unit, also argued at the same conference that simple greed had made profits, rather than compassion for patients, the top priority of many fertility clinics today. That point was underlined by the noble Lord, Lord Winston. Dr Parsons further argued that this encouraged the use of dubious technologies which are motivated simply by market forces rather than treatments motivated by compassion that are targeted to suit the needs of the individual patients about whom we have heard today. Are the Government proposing that the HFEA should emulate those whom it is failing to regulate?
If the HFEA, which is not an economic regulator, should now have the additional duty to make a profit, how might its judgments be further impaired by such pecuniary interests? How might this exacerbate what the report of the Progress Educational Trust’s last annual conference described as—I repeat what was quoted by the noble Lord, Lord Winston—
“the rampant commercialisation of IVF in the UK”?
If the profit motives of some avaricious clinics go unchecked by the regulator, and the regulator itself becomes increasingly motivated by profit, will this not make an already bad situation even worse?
It is far from clear that the HFEA has proven itself to be a particularly effective regulator as it is. The noble Lord and I do not agree on this point. I do not believe that it is sufficiently robust. To begin with, recent Written Answers to Parliamentary Questions reveal that it does not even maintain proper records on the number of human embryos used in research or allowed to perish. Instead, the HFEA seems more concerned about providing repeated references to a pinhead, the relevance of which to the number of human embryos destroyed is far from clear, except perhaps as a reflection on the competence of whoever is responsible for answering these Questions.
The HFEA’s enforcement of its multiple births policy has already proven to be utterly toothless. That is exemplified by a press statement on the HFEA website from 13 November 2013, in which it was conceded that IVF clinics would no longer be subject to a condition on their licence that they keep their multiple births rate below the HFEA target. As the press statement further revealed, this was in response to a legal challenge launched by two UK clinics,
“resulting in considerable cost to the HFEA”.
How much easier it will be for the HFEA to cave into those it is supposed to be regulating if it has to prioritise an economic growth duty.
Strikingly, an ensuing Written Answer from the noble Earl, Lord Howe, on 9 December 2013 stated the following in relation to the incidence of multiple births and the HFEA’s publication of clinic success rates:
“It is not clear whether additional powers of economic regulation would alter the HFEA’s influence on such practice”.—[Official Report, 9/12/13; col. WA 79.]
If the profit motives of some clinics already remain unchecked in a continuing environment of IVF postcode lotteries, how will this not be made even worse by having the HFEA join the fray in prioritising profit over protecting patient interests?
Although the HFEA chief executive, Peter Thompson, may be trying to make some modest efforts to combat,
“the rampant commercialisation of IVF in the UK”,
this seems limited only to “tentative steps” for increased transparency on the part of clinics and an expectation that others will bring about a change in culture. This does not exactly sound like an effective regulator, does it? If it is up to clinics to bring about a change in culture, what is the HFEA there for? The impotence of the HFEA is already serious enough as it is. As Dr Geeta Nargund, who I met recently, pointed out in a Huffington Post article that I would encourage noble Lords to read,
“no-one appears to be monitoring the drugs given to women during IVF treatment. Extremely high doses of stimulation drugs and intravenous immune therapy injections are administered to women by some clinics with no scientific evidence to support those practices. The HFEA do not collect information about drugs and dosages given to women, but we need this information to study any adverse effects of the drugs on women and their children in the future”.
How is the HFEA protecting the interests of patients if neither it nor anyone else is monitoring this? Dr Nargund’s concerns are only reinforced by the Written Answer I received from the noble Earl, Lord Howe, just yesterday, in which it was admitted that the,
“administration of medicinal products to patients undergoing fertility treatment ... is not regulated by the Human Fertilisation and Embryology Authority ... The HFEA has advised that it does not collect information on the identity of medicinal products used in treatment”.
But it gets worse. The same Written Answer received yesterday goes on to describe nevertheless how the,
“HFEA is aware of some clinics that have administered reagents to permitted gametes or permitted embryos that are then introduced into patients when the reagents concerned have not been CE marked. … Although the HFEA does not hold information on the effects of particular dosages on the welfare of the developing child and the health of the mother, the HFEA expects clinics to do such monitoring as part of their licensing conditions”.
It should be noted that we are not just talking about unlicensed medicines but about off-the-shelf laboratory reagents, most of which I gather would typically be labelled as unsuitable for clinical application. It should also be noted that no mention is made here of the sanctions imposed by the HFEA on clinics for putting goodness knows what into patients without knowing the effects,
“on the welfare of the developing child and the health of the mother”.
It therefore seems that as long as the clinic is responsible for whatever happens, the HFEA is satisfied.
In closing, I would like to reinforce what the noble Lord, Lord Hunt, said in relation to proposed interventions for mitochondrial diseases. Regarding the question of profit, it is noteworthy that a “competing interests” statement on a recent paper by Shoukhrat Mitalipov—belatedly added as a corrigendum—includes the admission that he has a patent application entitled:
“Method for mitochondrial DNA replacement in oocytes”.
My understanding is that researchers at Newcastle have no similar patent applications for pronuclear transfer, which is probably unsurprising because their proposed use of this technique is not original, having already been attempted in humans in China with woeful results. However, how would the economic growth clauses in the Bill affect the HFEA’s consideration of such licence applications? Would the HFEA be compelled to favour proposals for spindle-chromosomal complex transfer over proposals for pronuclear transfer on the basis of patent applications and potential profits to be gained? Or can the Minister please spell out clearly how the projected use of pronuclear transfer in admittedly limited numbers of clients could be seen as a contributing factor to economic growth, such that the HFEA would be seen as satisfying the economic growth clauses in the Bill?
I am sorry to have wearied the House with some of this but the point I am making is that these are complex and clear ethical, as well as medical and scientific, issues. This is not about things being driven by the state of the economy or deregulation, and it is a great error on the part of the Government to have included this in the Bill. I hope that between now and Third Reading the noble Earl will listen to what the noble Lord, Lord Hunt of Kings Heath, has said and give this much greater and more detailed consideration.
Baroness Masham of Ilton (CB)
My Lords, we should be protecting desperate patients from being ripped off by clinics whose main interest is to make money. I hope that the Minister will look at this again.
Lord Wallace of Saltaire (LD)
My Lords, this debate has ranged widely over a number of health issues, and I realise the seriousness of the issues that have been raised. Given that I am painfully aware of the cost of a new hip, and the noble Lord, Lord Winston, is telling me cost of IVF treatment is in the same league, there are some major questions. I am also conscious, partly as a result of conversations with the noble Lord, that the United Kingdom has identified biomedical research and development as one of the core areas that we want to develop. One member of my family is heavily involved in some of that. London, Oxford, Cambridge, Edinburgh and other places are centres of expertise, and this is therefore an important area in which aspects of economic growth are entirely relevant, but careful regulation also has to be part of it. The question of care homes has also been raised. That is another very broad area where sustainability, how far profit should be part of the process and how far we should be promoting mutuals are some other major questions.
Lord Hunt of Kings Heath
My Lords, I am very grateful to all noble Lords who have spoken. However, I am disappointed with the Minister’s response because I thought that at the least he would have been prepared to give this matter further consideration between now and Third Reading. With my noble friend Lord Winston here to talk about the Human Fertilisation and Embryology Authority and the noble Lord, Lord Alton, also present, I knew that we would have an interesting debate.
The point is that, however effective or not the HFEA is at the moment, the one thing that unites us all is that we do not want to see its regulatory function weakened. My noble friend Lord Winston spoke about London becoming the centre of a healthcare market, and the Minister welcomed that. When I took through the 2001 regulations that extended the purposes of research in the original 1990 Act, which was based very much on the extraordinary work of the noble Baroness, Lady Warnock, we clearly had in mind that there was research potential for the UK. That was one of the factors behind taking through those original regulations. The argument that we put forward then was that the UK would be able to attract research investment because, despite some of the doubts that noble Lords have expressed today, we were considered to have a first-rate regulatory function. I put it to the noble Lord that he is putting that reputation at risk by allowing ambiguity in the nature of the regulatory process.
My noble friend talked about the dangers of commercialisation in this field and he is surely right. It is interesting that the chief executive of the HFEA has recently been quoted as recognising the responsibility to take action against rampant commercialisation of IVF in the UK. That statement is very welcome. My noble friend has argued that at the moment it does not have the powers to do anything about it, but the noble Lord comes here with a proposal to weaken its already inadequate powers. That is quite remarkable.
The Government are very keen for the mitochondrial donation regulations to be approved on 24 February. I support them, but has the noble Lord considered the risk to that decision from the impact of this Bill? This will be a big issue when we debate those regulations. When the noble Earl, Lord Howe, comes to make proposals for the regulations, he will say that your Lordships can have confidence in passing the legislation because of the robustness of the HFEA. However, I, who support those regulations, will have to get up and say that actually the noble Earl is incorrect because of what the noble Lord here is proposing to do.
Lord Alton of Liverpool
I entirely agree with what the noble Lord is saying, but does it not also undermine the noble Earl, Lord Howe, who has consistently said that the HFEA is not an economic regulator, to now put him in that invidious position?
Lord Hunt of Kings Heath
That is absolutely right. The noble Lord then went on to say that we should be fine because the provisions in the Bill say that all the regulator has to do is to “have regard to” the desirability of promoting economic growth. However, the moment you include those words, the regulator becomes liable if it can be shown that he does not have regard to that, even though the noble Lord recognises that in many cases he ought not to have regard to it.
It is quite inadequate to say that we are consulting on this. This is absolutely wrong. We need to know by Third Reading whether the Government are going to keep in the HFEA and the PSA. I think that the noble Lord ought to allow further discussions to take place between now and Third Reading, and he ought to discuss this with his colleague—particularly the impact on the new regulations on mitochondrial donations that will be coming forward. As for his assurance that any of these bodies will be included by an affirmative resolution, how many times has an SI been defeated in Parliament? It is fewer than 10 times, so it is a meaningless safeguard in effect. I invite the Minister to say that he will at least give this further consideration before Third Reading before I make my decision.
Lord Wallace of Saltaire
I will be glad to take this back and confer with others, but I cannot give any assurances that the Government will come back with anything different on Third Reading. However, I am always open to conversations off the Floor.
Lord Hunt of Kings Heath
My Lords, that is very handsome of the Minister and I beg leave to withdraw the amendment.
Lord McNally
“(d) a regulatory function of the Commission for Equality and Human Rights.”
Lord McNally (LD)
My Lords, I am not sure that I can give the same assurance to the Minister about withdrawing my amendment because, as I will try to explain, even the offer he may make—that the Equality and Human Rights Commission will be excluded from future statutory instruments—will not relieve the commission from the sword of Damocles that is hanging over it, as a future Government could bring it within the ambit of this legislation.
Perhaps I may explain to the House the position and why I think it should take this as an exceptional case and put the commission into this primary legislation. First, I should like to make clear the commission’s current position:
“The Commission supports the principle and intention behind the growth duty. We do, and will continue to, exercise our regulatory functions fairly and proportionately, taking all relevant considerations into account—including the impact on businesses and economic growth. However, applying the growth duty to the Commission risks our status as an NHRI”—
national human rights institution—
“and a National Equality Body and introduces legal uncertainty into the exercise of our functions. We therefore consider that the Commission should be excluded from the scope of the growth duty, as proposed by”—
Amendment 44. It continues:
“The Commission has the highest possible UN accreditation (‘A status’) as an NHRI rated against the UN ‘Paris Principles’, which clearly and unequivocally require NHRIs to be independent of government”.
I made sure that I had that clear statement of where the commission itself is in terms of its attitude to this legislation.
I should give the House a little background. When the coalition came into office in 2010, there were many criticisms of the EHRC, some justified. Since then the organisation has been refocused, restructured, given a new board and a new leadership in the person of the noble Baroness, Lady O’Neill, who I am pleased to see in her place. During my time as a Minister at the Ministry of Justice I became involved with the EHRC on two fronts: first, in attempting to regain A-list status at the UN, which we had lost; and secondly, regaining Britain’s place on the UN Human Rights Committee. With the help of the FCO and the DCMS, particularly the then Minister Maria Miller, we were able to achieve both. We were able to do that, however, by stressing the independence from government and the integrity of the Equality and Human Rights Commission.
As noble Lords will be aware, Clause 88 places a legal duty on regulators to have regard to the desirability of promoting economic growth when exercising regulatory functions. The EHRC, as I said, supports that principle. However, when the Joint Committee on Human Rights looked at the matter, it opined that the Bill,
“raises serious questions about the EHRC’s independence from the executive”.
It concluded that the matter could easily be dealt with,
“if the proposed new duty did not apply to the EHRC”.
The committee went on to ask that the EHRC and the Government should continue to negotiate to see whether such a settlement could be reached. As I indicated, no such settlement has been reached. The noble Baroness, Lady O’Neill, has gone on record to express her concern about this matter, particularly the threat to our hard-won A status.
Baroness King of Bow (Lab)
My Lords, I am speaking in support of Amendment 44 in the name of the noble Lord, Lord McNally, in place of my noble friend Lady Thornton. On these Benches, we are very pleased that the noble Lord has brought this matter back to the Floor of the House. We fully support having the EHRC’s exclusion from the list of regulators included in the Bill, and the noble Lord has already explained the importance of doing so—it is what he described as a copper-bottomed guarantee. We really cannot see why the Government would not want to support this. Essentially, as the noble Lord says, it would just ensure that the Government’s good intentions actually hold up regardless of what a future Administration might wish to do. We are also in no doubt that even the risk that the EHRC might be included in the regulations in future could have an adverse effect on its A status as a UN accredited national human rights institution—an NHRI. That, in turn, might impact on the UK’s compliance with European Union law.
However, the real issue here is around the independence of the EHRC. The UN International Coordinating Committee has said to the UK Government that independence from government is an essential element of a national human rights institution. In considering whether an NHRI is independent, the ICC looks at all the ways in which the particular institution in question is subject to control or direction. Although the Deregulation Bill may not intend to affect the independence of the EHRC, attaching an additional duty could be seen as competing with or limiting its existing duties, and may have that effect on its decision-making. Being subject to ministerial direction and the possibility of legal challenge could have a detrimental effect on the EHRC’s ability to make decisions in relation to upholding human rights. When combined with the existing connections and accountabilities to the British Government, these clauses will raise questions about the compliance of the EHRC with the UN Paris principles—the principles which uphold the protection of human rights by national institutions.
The real point here is that it would be a shame if—when we are all agreed that the EHRC should have that independence, and we all want to see that status maintained by the UN—we were yet again to pass the law that we pass most often here, the law of unintended consequences, and thereby damage the ECHR’s prospects when it goes through the process of UN reaccreditation. The accreditation process, when the UN considers whether an NHRI will retain its accreditation, takes place around once every five years. I am sure the Minister will be aware that the EHRC is up for that process this year. Given that, is this not the worst possible time for us to introduce uncertainty? The way to remove that uncertainty is, as we are all aware, to put the amendment on to the face of the Bill.
We know that the Minister will say that the Secretary of State for BIS has written to the EHRC to say that the Government have decided to,
“fully exclude the EHRC from the growth duty”.—[Official Report, 20/11/14; col. GC229.]
If the Government want to do that, they will accept the amendment because it delivers the Government’s aims. This is a matter of huge importance and we assume from what the noble Lord said in introducing the amendment that he will press it to a vote. However, if for any reason he decides not to do so, we on these Benches certainly will. It would be an extraordinary own goal to limit the perceived independence of the EHRC and it is something that we should not allow to happen, even if only inadvertently or by accident. I hope that the Government and indeed the House will accept the amendment.
Lord Wallace of Saltaire
My Lords, the noble Baroness has given us a lot of hypothetical, “If a future Government were to”, and so on. The Government have made it entirely clear and said publicly that they intend the EHRC to be excluded from the growth duty. No Parliament can bind its successors. I cannot imagine that any major party or minor party that might be part of a future Government is likely to want to do this, and as I say, no Parliament can bind its successors. Indeed, if that were to happen we would encounter heaven knows what. At the present moment the Government have taken the clear decision to exclude the EHRC from the growth duty in order to remove any threat to its international standing. We have provided the commission with a reassurance of that decision and, as has already been said twice in this debate by my noble friend Lord McNally and the noble Baroness, Lady King, the Secretary of State for Business, Innovation and Skills wrote to the EHRC in November to confirm the decision. We have also reaffirmed the commitment to exclude the commission from the duty in the recent consultation document on extending the growth of the duty.
The Government Equalities Office, which is the EHRC’s government sponsor, does not see a significant threat to the commission’s A status by not excluding it on the face of the Deregulation Bill, and the GEO has advised the commission to accept those reassurances.
Baroness King of Bow
When does the Minister expect that these regulations would actually be brought forward?
Lord Wallace of Saltaire
My Lords, my understanding is that it is going to be very difficult to bring them forward before the election. However, I will take that back and will be sure to write to the noble Baroness with any exact dates for the regulations.
No specific regulatory functions of any other particular named body are listed on the face of the Bill, and it is not necessary to do so in relation to the regulatory functions of the EHRC. The regulatory functions to which the growth duty is to apply will be set out in secondary legislation, as I have said before. Meanwhile, the Government have given a range of assurances that the EHRC is outside the scope of the growth duty and will be excluded.
Baroness O'Neill of Bengarve (CB)
My Lords, I had not intended to speak because, as chair of the EHRC, it is difficult for me to do so, but before the Minister sits down, I think I can allow myself to say one factual thing. This is an unusual regulatory body in that it is subject to international inspection and rating—which will be done by the ICC. Unfortunately, as a matter of timing, all the evidence that the ICC requires will have to be submitted in June this year, and I think the Minister has just informed us that it will not be possible to lay the statutory instruments that exclude the commission from scope before that time.
Lord Wallace of Saltaire
My Lords, I would simply reply that we are of course well aware that this is not the only body for which there are a range of international complications and obligations. Indeed, the RSPB briefing, which some Members will have seen, raises questions about EU legislation. We are very conscious that everything we do in this area, biomedical issues included, carries international implications.
Lord Jones of Birmingham (CB)
My Lords, before the Minister sits down, could I just draw on two aspects—
Lord Gardiner of Kimble (Con)
My Lords, we are on Report, and the Companion is very clear about Report stage. I suggest that the noble Lord may not be in a position to speak.
Lord McNally
Another gem is lost to us from the noble Lord, Lord Jones. Let us not confuse this issue: the protection of a statutory instrument is not the same as the protection afforded by being in primary legislation. It is that protection of primary legislation that I want to give to the Equality and Human Rights Commission.
I have no doubts about my noble friend’s commitments, but we live in strange times. For most of my life, the concept of the Universal Declaration of Human Rights has been accepted as part of our world governance. We live in an age when people think of the concept of human rights as somehow a western imperialist invention, but I believe that this country’s role in championing human rights since the Second World War has been a very great one, of which we should be proud. David Maxwell Fyfe drafted the European Convention on Human Rights, and when Eleanor Roosevelt launched the Universal Declaration of Human Rights, she called it a Magna Carta for all mankind. There was no need for a translation of what she meant.
This is an exceptional case that I am arguing. I know all the objections of the barrack-room lawyers and draftsmen to specifics in primary legislation, but by putting this in primary legislation, I believe we will be keeping faith with our tradition of protecting human rights and be giving the EHRC the strength to carry on its excellent work. As I have indicated, I would like to the test the opinion of the House.
Lord Tunnicliffe
“( ) Section 88 shall only apply to a person exercising a regulatory function in so far as it is consistent with the proper exercise of their existing regulatory functions.”
Lord Tunnicliffe (Lab)
My Lords, the Labour Party, despite rumours put about by the Benches opposite, is pro business. We see business as central to our society: it is essential, and thriving industry is good for us. We are also pro growth. We might have slightly different views about its distribution: we think that growth should go to the many as well as to the few. That would have been a point of difference until the recent conversion of David Cameron to a belief that firms should be paying their staff more. This we applaud, and therefore we so far have consensus. Because we are pro business and pro growth, we support the generality of Clauses 88 and 89, but with reservations. I was almost talked out of supporting the two clauses by the Minister, who pointed out that the 2006 Act apparently does what these two clauses do anyway. Life might have been easier if the Government had not brought forward these clauses at all.
However, just as we are pro business and pro growth, we are pro good regulation. Once again, I am absolutely delighted that we are not alone in this. Oliver Letwin, the Minister of State for Policy, indicated at the beginning of this Bill in the other place that he, too, was in favour of good regulation. Good regulation protects the citizen from the overly powerful, be it overly powerful commercial interests, the state or other large bodies. It protects consumers, workers, patients, the old and those with disabilities, while other regulatory bodies protect the environment, the built environment and many other areas of our lives. The challenge is to create a balance between legislation that is pro growth on the one hand and protects the citizen on the other. We think that Clauses 88 and 89—and I think Clause 90 as well—go too far, and that is why we are moving Amendment 44A.
Just stand back for a second and see how these clauses are going to promote growth, and look at the guidance material that we have already received—and discussed at some length in Committee. They divide into two areas. A great deal was said about the bureaucracy of regulation, the same form coming twice and different inspectors coming on different days. The essence of much of the illustration of the value of these two clauses was about regulators being much more efficient at bureaucracy, more sensitive to the needs of business and much more business-friendly. We could not agree more. It is absolutely sound that that should be true.
The other potential for the two clauses is to have an impact on protection itself and actually diminish it. We are very concerned about that. We discussed this at some length in Committee, and the Minister very kindly arranged a number of meetings. We thank him for doing that. Those meetings were very much the same. They were very much the curate’s egg—good in parts. They almost always started with the Minister present stating fairly flatly that these clauses were not meant to diminish protection. The Minister would say that they did not have an impact on safety. Then, towards the end of the meeting, the Minister would float back into perhaps that being the area where they could impact.
At the end of this, we had two letters, including a very useful letter from the HSE. I shall not quote it at any length, but the HSE is a much derided body. It is an excellent organisation that has matured greatly under the chairmanship of Judith Hackitt. In many ways, its maturity is reflected in the letter. Essentially, the HSE does not say that it does not need the provision, but it is sort of saying that in practical terms it will not make a difference to protection because the essence of the 1974 Act—one of the best pieces of legislation around, which has survived to this day largely unamended—is that it had a sense of proportionality about it. It said,
“so far as reasonably practicable”.
We were very satisfied with that letter.
Then—not exactly sequentially—the Minister wrote to us to assure us. His letter had more of the history of British Raj about it, almost: “On one hand”, and then “On the other”. Early in the letter, he says:
“I can assure you that the duty will complement existing duties and will not override or reduce the protection of the public”.
I had a little trouble with “complement”. If you look it up, it seems to mean “add to” or even perhaps “enhance”, but where in the Bill is it clear that the duty will not override or reduce the protection of the public? It is clear in his assurance in this letter, but it is not clear in the Bill. This is where in the meetings we had the same sense of floating away. The letter states that: “This duty sits alongside”—so one is now having words of equal weight—
“any other factors that a regulator must consider … As experts in their relevant areas, it is the regulators themselves who are best placed to decide how much weight it is appropriate to afford to the desirability of economic growth in the relevant circumstances; in order that economic growth is considered whilst public protections are maintained. Indeed, it would not be appropriate for Government to dictate how growth should rank in relation to other factors which regulators also need to consider”.
We do not agree. It is appropriate for government and this House to give clear guidance in the Bill about how the growth duty ranks with the other duties of the regulators involved.
Once again in this balanced approach we get to where he says:
“I might also add that if a regulator has had regard to, and considered growth, and can justify its decision, then a business cannot expect to successfully challenge that decision, nor can it use the duty to escape legitimate compliance costs”.
One of the ways to understand a sentence like that is to reverse it. It would then read: “I might also add that if the regulator has not had regard to and not considered growth and cannot justify its decision, a business could expect to successfully challenge that decision and could use the duty to escape legitimate costs”. In other words, each of the three conditions—“have regard to”, “consider growth” and “justify”—have to be met for the challenge not to be made. Clearly, the person who drafted this letter envisaged that challenges could be made, and those were the three conditions that had to be met.
Why am I so concerned with what might seem like a nuance? The whole problem with regulation is that, frequently, balance is achieved very much in the matter of the nuance. I come from a very regulated back- ground—originally aviation, then railways, then nuclear, and so on. In a high-hazard background you sit down and consider killing people and how much you are going to spend to avoid that, to mitigate that risk. Those are very difficult decisions, but they are taken. When you edge or nuance protection, ultimately you are talking about harm and about people getting killed. I worked in an industry where, sadly, we killed people every year. You cannot carry 800,000 passengers a year without killing some of them. We abandoned the whole idea that it was just an accident; we took the view that every death was our responsibility. That meant that every death was analysed so we could establish how much we could have spent or sensibly should have spent to mitigate that death.
Those are the sorts of decisions small and big companies take. We know that they take those decisions, perhaps most famously from the BP Texas City explosion in 2005. The examination of that event uncovered that BP head office had demanded cuts in costs. There was no mitigation on safety and no qualification; cuts in cost had to be made. Sadly, 15 people died in that event. We know that BP did not learn its lesson, because the Gulf of Mexico spillage happened five years later, in 2010.
What, then, is our remedy to avoid this now? It is the amendment to which I speak:
“Section 88 shall only apply to a person exercising a regulatory function”—
that is the growth duty—
“in so far as it is consistent with the proper exercise of their existing regulatory functions”.
That makes it clear that the protection—the balance—in the present regulatory structure should be unaltered. It makes it clear that in the nine areas which we have talked about, particularly the bureaucratic areas, let us get rid of the bureaucracy—yes, great—and if you look at the impact assessment, you will see that that is where virtually all the money is. However, it protects us from any erosion of the protection of the current regulatory regime.
My nuance may be unfounded—it may be that all firms take their safety and other protection responsibilities seriously. However, sadly, I have seen too much evidence of the opposite. I have been in rooms where people have said, “Compliance with this regulation is too expensive. How can we avoid it or reduce it?”. We have to maintain the present regulatory balance while introducing the growth concept. We want noble Lords to support this amendment to protect citizens from the bad guys, which of course will leave a level playing field for the good guys.
Baroness Andrews (Lab)
I rise to support my noble friend’s amendment and congratulate him not only on the way he exposed the ambiguities in the Bill but on how he introduced the argument on protection and balance. That is an argument I want to pursue. The amendments that we have just debated have totally exposed the fact that the language of the Bill is a morass of ambiguity. I am thinking of terms such as “have regard to” or “not automatically”, and the suggestion that it should be up to the regulators to interpret the Bill as will suit their best purposes.
In this amendment, we are giving the Government an opportunity to do what they say that they want to do: to have a clear intention of purpose with regard to regulation; to put in the Bill exactly what they mean by their expectations of regulators; to show that they understand what regulators do, can do and should do; and to put clarity into the Bill that leaves no one in any doubt about the limits to what they can do.
I want to talk about balance and growth in another context—in relation to the built environment and the protections that surround our environment. That is a parallel argument to the one that my noble friend made. One danger of the ambiguity is that it introduces an additional requirement for growth, although the Government say that it is complementary. Will that additional requirement sit alongside or above the existing growth duties that regulators have to implement and which they are bound by law to do? With the National Planning Policy Framework, the Government very wisely embraced the advice of statutory bodies such as English Heritage, which retained the essential point about planning law—that it is a balance between development and protection of landscapes and precious spaces, the ancient and characterful environment with which we all live.
The need for appropriate development in the right place and time is not in dispute, but it is balanced with the need to protect and sustain what this country is uniquely known for. We already have a presumption of growth in the National Planning Policy Framework; in short, we have a duty to promote growth. But that is balanced by a requirement to protect our precious landscapes and the heritage of our built environment. The balance has worked well, and it was very gratifying that, after a lot of discussion, when the National Planning Policy Framework was introduced, it repeated and reflected those traditional, tested balances that had been in the previous planning law. The statutory agencies know how to do that, in the full knowledge that there must be scope for development and a response to housing pressures and the need for infrastructure, but there is also a prior duty to protect what they are there to protect.
All this amendment does—I urge the Government to think about this, because they will get themselves out of a real problem if they do—is to make clear beyond doubt that the duty to promote growth must be consistent with the proper exercise of existing regulatory functions. Everything that I have heard the Government say, in their letters, suggests that it is what they want. So what is the difficulty about putting a clear, unambiguous, crisp statement in the Bill? It is vital that we have that assurance, because it will tell all the practitioners and the country as a whole that the Bill does not change or challenge that balance, and it does not override the scope of the functions of protection. It does not create an unnecessary diversionary distraction in the shape of another growth duty.
If the amendment is not accepted, that will send the opposite signal. It will send a signal to the developers, for example, that there is an imperative of growth, which is undefined—we have perhaps lost the argument that sustainable growth should have been specified; that would have been infinitely more acceptable and sensible—and that that imperative can be taken to override the other protective functions.
I think that there will be a chilling effect on regulators, because if it is up to them to try to interpret what is meant by a duty to “have regard to” something in the exercise of their proper functions, they will always be looking over their shoulder. They will always know that there will be a challenge from people who think there is a higher imperative— in many cases, an inappropriate economic imperative.
The local and national authorities will suffer from the same fear—that they are getting it wrong. They will be faced with a further layer of confusion. We all know that what the planning system needs above everything else is certainty. This provision will introduce another layer of uncertainty, and will have perverse consequences. It will cause further delays while people argue about whether the regulator has had proper regard to something. For that reason, it would hand greater scope and power to developers. My great fear is that the balance, which the noble Lord spoke about in relation to health and safety, will also be compromised or lost in relation to the protection of the environment.
We have had a very successful planning system to date, which has been supported by all Governments. The regulatory bodies are extremely experienced, well intentioned and well practised in their duties. Without the simple and incontrovertible logic of the amendment, which spells out what the Government themselves want to achieve, we will introduce more confusion and delay. So I hope that the Minister will listen seriously to the arguments for it.
The Earl of Lindsay (Con)
My Lords, in speaking to the amendment moved by the noble Lord, Lord Tunnicliffe, I should note my current involvement with the Better Regulation Strategy Group, the independent body that advises the present Government on better regulation. I should also note, as it is relevant to my perspective on the amendment, my former involvement in the two predecessor bodies that advised the previous Government—the Better Regulation Commission, of which I was vice-chairman, and the Risk and Regulation Advisory Council.
Based on my experience of those three independent bodies advising government on better regulation, I question the need for Amendment 44A. If the proposed duty as set out in the Bill were to override regulators’ powers of protection, compromise their decision-making or supersede their existing regulatory duties—or if there were any ambiguity about those three important assessments—I would wholly understand the need for the amendment. But in my judgment that is not the case.
The proposed growth duty will not override or cut across regulators’ powers of protection. It is simply an additional factor for regulators to take into account when they are making their decisions. It will not compromise their decision-making and, as I understand it, it will not supersede regulators’ existing duties. It will not remove the responsibility of businesses to comply with what the law or regulations require of them. The duty will therefore not compromise the independence of regulators. They will continue to have decision-making autonomy, exactly as they do now. Regulators will therefore remain free to decide how best to incorporate the duty into the decision- making involved in performing their primary statutory functions.
I have been looking at the published draft guidance that the Government issued in January, and I believe that it makes very clear many of the points that I have just mentioned. I understand that the guidance is continuing to be developed in discussion with the regulators so that it can be finalised before the policy comes into force. That guidance makes it clear that the proposed duty does not encourage regulators to reduce protections or to ignore non-compliance.
For the benefit of noble Lords who have not seen the published draft guidance, Non-economic Regulators: Duty to Have Regard to Growth, I draw their attention to the beginning of chapter 2, on page 5, which sets out the purpose of the duty. The very first sentence reads:
“Regulators exist primarily to protect people or achieve other social or environmental outcomes”.
That is an important headline sentence, which reminds us of the principal duty that regulators must subscribe to. The second paragraph on that page says:
“The duty requires that economic growth is a factor”—
not the factor, but a factor—
“to be taken into account alongside regulators’ other statutory duties … The duty does not set out how economic growth ranks against existing duties as this is a judgment only a regulator can and should make … The duty does not oblige the regulator to place a particular weight on growth”.
Those are only a few extracts from one page of the draft guidance, but they set out a clear proposition in terms of the importance of maintaining the balance between regulators having regard, as appropriate, to growth and their maintaining protections. As I see it, the proposed duty will complement existing duties and will not override or cut across regulators’ powers of protection, nor their responsibilities for ensuring protection. It will be for a regulator to weigh up the desirability of economic growth against each of the other factors it must consider, and tailor its approach accordingly.
In some circumstances those factors will sit well together; in others the regulator will need to decide how much weight to afford to each factor for the best outcome. On the basis of the wisdom that was developed through the Better Regulation Commission, the Risk and Regulation Advisory Council and so on, I believe that the regulator’s expertise means that it is best placed to decide what weight it is appropriate to afford growth in the relevant circumstances.
I therefore disagree with the insistence of the noble Lord, Lord Tunnicliffe, that only Parliament can rank those factors. In a good regulatory regime there should be discretion for the regulators to make judgments between parallel factors, because they can take account of the exact circumstances in which they are regulating. Therefore, although the growth duty clause as drafted requires that growth be put on the same footing as other duties—in other words, it enables regulators to have regard to growth—it also ensures that essential protections are maintained.
We should not lose sight of the importance of the new growth duty and the benefits that will flow from it. Regulators spend some £2 billion each year on regulatory activities, and still to this day more than half of businesses see regulation as a barrier to their success. The duty is required to clarify the fact that growth is an important factor for regulators to take into account, and it will ensure that regulation is delivered in a way that best supports growth. It will also ensure that the protection intended to be given by regulations is still delivered. On those grounds, although I understand the motives behind the amendment, I genuinely believe that it is unnecessary, and that the balance will be not only maintained but enhanced by the Bill as drafted.
Lord Wallace of Saltaire
My Lords, we have heard three excellent and very sober speeches on the amendment, for which I thank noble Lords. There is only a small difference between the noble Lord, Lord Tunnicliffe, and myself, on behalf of the Government. We are talking about balance—the balance among a range of factors that we wish regulators to consider.
Lord Tunnicliffe
My Lords, I thank noble Lords who have taken part in this debate. I thank the noble Baroness, Lady Andrews, for explaining how the point we are making has a wider application, particularly as regards a chilling effect. Some of these regulators are quite small, some have very tight budgets and some may face very large organisations, particularly in the planning world. The chilling effect on behaviour takes place over time.
I respect the experience of the noble Earl, Lord Lindsay, in this field—it is interesting that we have ended up with two regulators and a regulatee in this debate—but I am afraid that I do not share his view. The duty we are discussing may not cut across others but certainly has the potential to be considered on an equal footing. He quoted the draft guidance, which is now over a year old. The Government have not thought fit to revise it; I wish that they had. I do not find the draft guidance clear. Indeed, it is a wonderful topic to debate as, rather like the works of Karl Marx, you can find anything to justify anything. It contains as many words of assurance—which the noble Earl found—as of discomfort, which I found. The noble Earl mentioned a figure of £2 billion, which I believe the department subsequently withdrew. I believe that the £2 billion represents the gross sum of the regulatory bodies but does not cover just their regulatory work. I believe that a figure emerged that was half that sum.
The comments of the noble Lord, Lord Wallace, in many ways reflected what was said in various meetings. I am not accusing the Government of a conspiracy here. I do not think that the Government want to roar through the countryside, throwing out regulation all over the place by means of this clause and I am very persuaded by the bureaucracy point, which was well made in the regulations and the supporting documentation. However, the issue of protection worries me. If noble Lords do not agree with my amendment, they are implying that the exercise of the function we are discussing could be inconsistent with the proper exercise of the existing regulatory functions. For that reason, I wish to test the opinion of the House.
Lord Ahmad of Wimbledon
“Tenancy deposits: provision of information by agents
(1) The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (S.I. 2007/797) is amended as follows.
(2) In article 2 (prescribed information relating to tenancy deposits), after paragraph (2) insert—
“(3) In a case where the initial requirements of an authorised scheme have been complied with in relation to the deposit by a person (“the initial agent”) acting on the landlord’s behalf in relation to the tenancy—
(a) references in paragraphs (1)(b), (g)(iii) and (vii) to the landlord are to be read as references to either the landlord or the initial agent;(b) references in paragraphs (1)(d), (e), (g)(iv) and (vi) and (2) to the landlord are to be read as references to either the landlord or a person who acts on the landlord’s behalf in relation to the tenancy.(4) In any other case, references in paragraphs (1)(d), (e), (g)(iv) and (vi) and (2) to the landlord are to be read as references to either the landlord or a person who acts on the landlord’s behalf in relation to the tenancy.
(5) Section 212(9)(a) of the Act (references to landlord include persons acting on landlord’s behalf) does not apply for the purposes of this article.”
(3) After article 2 insert—
“3 Article 2(3) to (5): transitional provisions
(1) Paragraphs (3) to (5) of article 2 are treated as having had effect since 6th April 2007, subject to the following provisions of this article.
(2) Paragraphs (3) to (5) of article 2 do not have effect in relation to—
(a) a claim under section 214 of the Act or section 21 of the Housing Act 1988 in respect of a tenancy which is settled before the commencement date (whether or not proceedings in relation to the claim have been instituted), or(b) proceedings under either of those sections in respect of a tenancy which have been finally determined before the commencement date.(3) Paragraph (5) applies in respect of a tenancy if—
(a) proceedings under section 214 of the Act in respect of the tenancy have been instituted before the commencement date but have not been settled or finally determined before that date, and(b) because of paragraphs (3) to (5) of article 2, the court decides—(i) not to make an order under section 214(4) of that Act in respect of the tenancy, or(ii) to allow an appeal by the landlord against such an order.(4) Paragraph (5) also applies in respect of a tenancy if—
(a) proceedings for possession under section 21 of the Housing Act 1988 in respect of the tenancy have been instituted before the commencement date but have not been settled or finally determined before that date, and(b) because of paragraphs (3) to (5) of article 2, the court decides—(i) to make an order for possession under that section in respect of the tenancy, or(ii) to allow an appeal by the landlord against a refusal to make such an order.(5) Where this paragraph applies, the court must not order the tenant or any relevant person (as defined by section 213(10) of the Act) to pay the landlord’s costs, to the extent that the court reasonably considers those costs are attributable to the proceedings under section 214 of the Act or (as the case may be) section 21 of the Housing Act 1988.
(6) Proceedings have been “finally determined” for the purposes of this article if —
(a) they have been determined by a court, and(b) there is no further right to appeal against the determination.(7) There is no further right to appeal against a court determination if there is no right to appeal against the determination, or there is such a right but—
(a) the time limit for making an appeal has expired without an appeal being brought, or(b) an appeal brought within that time limit has been withdrawn.(8) In this article “the commencement date” means the date on which the Deregulation Act 2015 is passed.”
(4) The amendments made by this section to the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 (S.I. 2007/797) do not affect a power to use subordinate legislation to amend or revoke that Order.
(5) In subsection (4), “subordinate legislation” has the same meaning as in the Interpretation Act 1978.”
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)
My Lords, I will speak to Amendments 45 and 45A before moving on to Amendment 46. Amendments 45 and 45A have been tabled in response to a recent court case, Charalambous v Ng 2014, and an unreported county court case, Cooper v Collins, which have created uncertainty in the private rented sector.
Amendment 45 clarifies that, where a letting agent has received a deposit on behalf of a landlord, the letting agent’s contact details can be given in the prescribed information instead of the landlord’s details. It makes detailed amendments to the Housing (Tenancy Deposits) (Prescribed Information) Order 2007—the order that lists the prescribed information that a landlord must give to a tenant—to make absolutely clear when a letting agent’s details may be provided instead of the landlord’s. The amendments to the order are retrospective, making clear that it is and always has been the case that a letting agent’s details may be provided in the prescribed information instead of the landlord’s. In speaking to these amendments and those that follow, I declare my interest as a landlord.
To ensure fairness, provision is also being made that would prevent the reopening of out of court settlements or court cases that have been finally determined on the basis of this issue. The amendments will apply in cases where legal proceedings are under way at the time the provisions come into force, but tenants will be protected from paying their landlord’s legal costs where the court subsequently decides against the tenant in the light of these provisions. This strikes the right balance between ensuring that tenants do not suffer financially as a result of the retrospective legislation and ensuring that landlords are not penalised where they have followed government advice.
Amendment 45A has been tabled in response to the Court of Appeal’s judgment in the case of Charalambous v Ng 2014, which concerned a landlord who received a tenancy deposit prior to the coming into force of the tenancy deposit legislation in 2007. The tenancy in question became periodic prior to the date that the tenancy deposit legislation came into force and has continued as such ever since. The court ruled that the tenancy deposit legislation should apply to all landlords in this position and that they would therefore need to protect deposits if they wished to rely on the no-fault ground for eviction known as Section 21. It was never the intention, either in 2007 or following amendments made to the tenancy deposit legislation in 2012, that it should apply in this way. The amendments that we propose will make absolutely clear that, although landlords affected by the judgment will need to protect deposits if they wish to rely on Section 21, they will not be at risk of financial penalties should they fail to protect.
Moving on to Amendment 46, I thank the noble Baroness, Lady Hayter of Kentish Town, for her desire to clarify “prescribed information” in relation to lettings, to which I have just spoken. Her amendment makes provisions along similar lines to those that I just outlined on Amendment 45. While the Government agree with the noble Baroness on this point, we believe that Amendment 45 addresses the issues in a more detailed way than Amendment 46. I hope that the noble Baroness will be sufficiently satisfied not to move her amendment.
The Government’s amendments will make welcome clarifications to the tenancy deposit legislation. I beg to move.
Baroness Hayter of Kentish Town (Lab)
My Lords, I thank the Minister for that. He will not be surprised that I am delighted that the Government have seen sense and tabled their amendments, which are in far more correct language than I managed. They implement the amendment that I moved in Committee, which, as he said, appears in the Marshalled List as Amendment 46.
In Committee the Minister said that my amendment was unnecessary but, to be fair to him, he ensured that discussions took place with the tenancy deposit scheme, which had raised concerns about whether having the letting agent’s name in the paperwork, rather than the landlord’s, was sufficient. Clearly, those discussions persuaded officials that the change was necessary. I congratulate the Minister and the draftsmen on producing Amendment 45 in time for Report. For obvious reasons, we heartily support this and I will not move Amendment 46 when called.
Lord Ahmad of Wimbledon
“Tenancy deposits: non-compliance with requirements
(1) Chapter 4 of Part 6 of the Housing Act 2004 (Tenancy Deposit Schemes) is amended as follows.
(2) In section 214 (proceedings relating to tenancy deposits), in subsection (1) after “shorthold tenancy” insert “on or after 6 April 2007”.
(3) In section 215 (sanctions for non-compliance)—
(a) for subsection (1) substitute—“(1) Subject to subsection (2A), if (whether before, on or after 6 April 2007) a tenancy deposit has been paid in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy at a time when the deposit is not being held in accordance with an authorised scheme.
(1A) Subject to subsection (2A), if a tenancy deposit has been paid in connection with a shorthold tenancy on or after 6 April 2007, no section 21 notice may be given in relation to the tenancy at a time when section 213(3) has not been complied with in relation to the deposit.”;
(b) in subsection (2A), after “Subsections (1)” insert “, (1A)”.”
Lord Ahmad of Wimbledon
“Preventing retaliatory eviction
(1) Where a relevant notice is served in relation to a dwelling-house in England, a section 21 notice may not be given in relation to an assured shorthold tenancy of the dwelling-house—
(a) within six months beginning with the day of service of the relevant notice, or(b) where the operation of the relevant notice has been suspended, within six months beginning with the day on which the suspension ends.(2) A section 21 notice given in relation to an assured shorthold tenancy of a dwelling-house in England is invalid where—
(a) before the section 21 notice was given, the tenant made a complaint in writing to the landlord regarding the condition of the dwelling-house at the time of the complaint,(b) the landlord— (i) did not provide a response to the complaint within 14 days beginning with the day on which the complaint was given,(ii) provided a response to the complaint that was not an adequate response, or(iii) gave a section 21 notice in relation to the dwelling-house following the complaint,(c) the tenant then made a complaint to the relevant local housing authority about the same, or substantially the same, subject matter as the complaint to the landlord,(d) the relevant local housing authority served a relevant notice in relation to the dwelling-house in response to the complaint, and(e) if the section 21 notice was not given before the tenant’s complaint to the local housing authority, it was given before the service of the relevant notice.(3) The reference in subsection (2) to an adequate response by the landlord is to a response in writing which—
(a) provides a description of the action that the landlord proposes to take to address the complaint, and(b) sets out a reasonable timescale within which that action will be taken. (4) Subsection (2) applies despite the requirement in paragraph (a) for a complaint to be in writing not having been met where the tenant does not know the landlord’s postal or e-mail address.
(5) Subsection (2) applies despite the requirements in paragraphs (a) and (b) not having been met where the tenant made reasonable efforts to contact the landlord to complain about the condition of the dwelling-house but was unable to do so.
(6) The court must strike out proceedings for an order for possession under section 21 of the Housing Act 1988 in relation to a dwelling-house in England if, before the order is made, the section 21 notice that would otherwise require the court to make an order for possession in relation to the dwelling-house has become invalid under subsection (2).
(7) An order for possession of a dwelling-house in England made under section 21 of the Housing Act 1988 must not be set aside on the ground that a relevant notice was served in relation to the dwelling-house after the order for possession was made.
(8) Subsection (1) does not apply where the section 21 notice is given after—
(a) the relevant notice has been wholly revoked under section 16 of the Housing Act 2004 as a result of the notice having been served in error,(b) the relevant notice has been quashed under paragraph 15 of Schedule 1 to that Act,(c) a decision of the relevant local housing authority to refuse to revoke the relevant notice has been reversed under paragraph 18 of Schedule 1 to that Act, or(d) a decision of the relevant local housing authority to take the action to which the relevant notice relates has been reversed under section 45 of that Act.(9) Subsection (2) does not apply where the operation of the relevant notice has been suspended.
(10) References in this section and section (Further exemptions to section (Preventing retaliatory eviction)) to a relevant notice served, or complaint made, in relation to a dwelling-house include a relevant notice served, or complaint made, in relation to any common parts of the building of which the dwelling-house forms a part.
(11) But subsection (10) applies only if—
(a) the landlord has a controlling interest in the common parts in question, and(b) the condition of those common parts is such as to affect the tenant’s enjoyment of the dwelling-house or of any common parts which the tenant is entitled to use.(12) In this section and section (Further exemptions to section (Preventing retaliatory eviction)) a reference to a complaint to a landlord includes a complaint made to a person acting on behalf of the landlord in relation to the tenancy.
(13) In this section and section (Further exemptions to section (Preventing retaliatory eviction))—
“assured shorthold tenancy” means a tenancy within section 19A or 20 of the Housing Act 1988;
“common parts”, in relation to a building, includes—
(a) the structure and exterior of the building, and(b) common facilities provided (whether or not in the building) for persons who include one or more of the occupiers of the building;“controlling interest” means an interest which is such as to entitle the landlord to decide whether action is taken in relation to a complaint within this section or a relevant notice.
“dwelling-house” has the meaning given by section 45 of the Housing Act 1988;
“relevant local housing authority”, in relation to a dwelling-house, means the local housing authority as defined in section 261(2) and (3) of the Housing Act 2004 within whose area the dwelling-house is located;
“relevant notice” means—
(a) a notice served under section 11 of the Housing Act 2004 (improvement notices relating to category 1 hazards), (b) a notice served under section 12 of that Act (improvement notices relating to category 2 hazards), or(c) a notice served under section 40(7) of that Act (emergency remedial action);“section 21 notice” means a notice given under section 21(1)(b) or (4)(a) of the Housing Act 1988 (recovery of possession on termination of shorthold tenancy).”
Lord Ahmad of Wimbledon
My Lords, it is always a pleasure to act on behalf of my noble friend Lord Wallace of Saltaire, in whose name this amendment stands. I may be doing a bad impersonation of him but it is always a pleasure to respond in his name.
A number of amendments relating to retaliatory evictions have been grouped together. For clarity, I will address government Amendments 46A to 46J before moving on to Amendment 52 and, finally, Amendments 46AA, 46AB, 46BA and 46HA.
The private rented sector is an important and growing part of our housing market. It has overtaken the social rented sector in terms of size and is now the second largest tenure with 1.9 million properties housing 4 million households throughout England.
The quality of privately rented housing has improved rapidly over the past decade. The Government are committed to promoting a strong, thriving professional private rented sector where good landlords can prosper and hard-working tenants can enjoy decent standards and receive a service which represents value for money for their rent. However, the behaviour of a small number of rogue landlords has a detrimental impact on tenants. Also, some tenants do not act responsibly, and it can be difficult and time-consuming to evict such tenants where it would be legitimate to do so—for example, because of mistakes made when serving a Section 21 eviction notice.
This amendment to the Bill is designed to be a balanced package of measures that will benefit both tenants and landlords. It covers four areas, which I shall go through briefly. First, it will protect tenants against the practice of retaliatory eviction where they have raised a legitimate complaint about the condition of a property and a local authority has issued a notice confirming that the repair needs to be carried out to avoid a risk to health and safety.
Secondly, the amendment will ensure that tenants are always given at least two months’ notice before they have to move out of their home. This will be done by providing that a Section 21 notice may not be given in the first four months of the tenancy and by introducing an expiry date after which a Section 21 notice ceases to be valid if possession proceedings have not been brought. The purpose of this measure is to deal with an approach adopted by, I stress, a small minority of landlords and letting agents in which they serve an eviction notice at the start of a tenancy. This disreputable practice can result in a tenant having to vacate a property with virtually no notice.
Thirdly, the amendment will make the eviction process more straightforward for landlords where the tenant can legitimately be evicted. It does so through the introduction of a prescribed notice to reduce errors and by removing the need for the date specified in a notice served under Section 21(4)—which relates to the notice to be given in relation to a periodic assured shorthold tenancy—to be the last day of a period of the tenancy, while retaining the requirement to give two months’ notice. We estimate that this measure alone will deliver savings to landlords of about £3 million a year.
The fourth element is to provide that, where a landlord has failed to comply with certain legal obligations, the tenant cannot be evicted using the Section 21 procedure. We envisage that this will apply to existing legal obligations such as the requirement to provide a new tenant with an energy performance certificate and to obtain an annual gas safety certificate. This restriction on the service of an eviction notice would be lifted as soon as these documents were provided.
While some of these changes will involve small one-off costs to landlords, primarily due to the need to familiarise themselves with the legislation, we estimate that this provision will deliver savings to landlords of, as I said, about £3 million per year.
The first part of the amendment introduces much needed protection for tenants against a very small minority of unscrupulous and rogue landlords who knowingly rent out unsafe and overcrowded accommodation and then evict any tenant who makes a complaint about the condition of the property—as I have said, a practice known commonly as retaliatory eviction. The amendment provides that a tenant cannot be evicted for a period of six months where they have requested that a repair is carried out to their home and the local authority confirms that the repair is necessary to prevent a possible risk to the tenant’s health and safety. The landlord will also be required to ensure that the repairs are completed.
As noble Lords will know, this amendment originally started out as a Private Member’s Bill in the other place. The amendment is very similar but there are some differences, which I wish to highlight. One is that we have decided to remove hazard awareness notices from the list of documents that can confirm a health and safety risk. The other notices are an improvement notice and a notice of emergency remedial action. A hazard awareness notice is a document that alerts the building occupier to a potential minor hazard—for example, a cracked window or uneven steps on a staircase.
We took the decision to remove hazard awareness notices from the list as they are normally issued only where there is a relatively small risk to the tenant’s health and safety—for example, in the case of uneven steps on a staircase. It does not require the landlord to actually do anything to rectify the problem. Local authorities will not be prevented from issuing hazard awareness notices. However, doing so would not give a tenant the protection against eviction that they would get if an improvement notice or a notice of emergency remedial action were issued. Local authorities would be aware of that and could be expected to take that fact into account when deciding what action to take following an inspection.
The local authority will also have a crucial role to play more generally. The protection against eviction which this amendment introduces will apply only if the local authority has confirmed that there is a potential health and safety risk. In addition, the tenant must have requested a repair before the serving of a Section 21 eviction notice. The amendment will not cover situations where a landlord serves an eviction notice and the tenant subsequently requests a repair. In addition, the amendment will not apply where a local authority determines that the issue being complained about has arisen because the tenant has breached their duty to use the property in a tenant-like manner. These measures will help to ensure that unfounded complaints are kept to an absolute minimum.
However, we want to ensure that landlords, and indeed tenants, are not left waiting for months and months for a local authority to inspect a property, which I know to be a concern. Therefore, the amendment provides that, by the time that the possession case comes to court, a local authority will need to have carried out an inspection or, where it has carried out an inspection, will need to have decided whether there is a defect that poses a risk to the tenant’s health and safety. If the local authority fails to do so, a tenant will not have a defence to the proceedings on the grounds of retaliatory eviction.
This should not be an onerous burden on local authorities. A tenant must be given at least two months’ notice of eviction under the Housing Act 1988. Typically, it would take a further two months for a possession case to go to court. So, on average, a local authority will have four months to carry out an inspection and decide whether the complaint by the tenant is legitimate. This should be ample time.
Retaliatory eviction is wrong and its continued practice is unacceptable. No tenant should face eviction because they have made a legitimate complaint to the landlord about the condition of their home. These are important amendments which introduce protection for tenants against rogue landlords, but they also contain provisions which we believe will benefit landlords and make it more straightforward to evict tenants in legitimate circumstances.
I move on to other amendments in this group. Amendment 52 is very similar in parts to the Government’s Amendments 46A to 46J. The amendment would protect tenants against the practice of retaliatory eviction where they had raised a legitimate complaint about the condition of a property and a local authority had issued a notice confirming that the repair needed to be carried out to avoid a risk to health and safety. The amendment would introduce protection for tenants against a small minority of unscrupulous and rogue landlords who knowingly rent out unsafe and overcrowded accommodation and then evict any tenant who makes a complaint about the condition of the property.
The amendment provides that a tenant cannot be evicted for a period of six months where they have requested a repair to be carried out on their home and the local authority confirms that the repair is necessary to prevent a possible risk to the tenant’s health and safety. Amendments 46A to 46J are designed to tackle exactly this problem, and in fact they go much further by introducing changes in several related areas. First, they ensure that tenants are always given at least two months’ notice before they have to move out of their home. A small minority of landlords and letting agents have adopted the practice of serving the eviction notice at the start of a tenancy—a point that I made earlier. This disreputable practice can result in the tenant having to vacate a property without notice.
Secondly, as I have already said, the eviction notice makes the process more straightforward for landlords in situations where the tenant can be legitimately evicted. It does so through the introduction of a prescribed notice to reduce errors and by removing the need for the date specified in a notice served under Section 21(4) to be the last day of a period of the tenancy, while retaining the requirement to give two months’ notice. The Government are keen to ensure that we take forward a balanced package of amendments that will help both landlords and tenants.
Thirdly, the amendments provide that where a landlord has failed to comply with certain legal obligations, a tenant cannot be evicted using the Section 21 procedure. We envisage that this will apply to existing legal obligations, as I have already mentioned, in relation to energy performance certificates and the annual gas safety certificate. The government amendment provides protection for tenants against retaliatory eviction. It also, as I have explained, delivers a range of other benefits for landlords.
Amendment 46AA would require tenants to wait for up to 28 days before they could expect their landlord to simply respond to a request by the tenant for repairs to be carried out to the property. At that stage the landlord would be required only to inform the tenant what, if anything, he proposed to do in response to the request. The Government have set a time limit of 14 days for the landlord to respond. In our view this strikes a fair balance between ensuring that landlords are given a reasonable time to respond to a complaint while not expecting tenants to put up with the disrepair in their property for an unreasonably long time. Renting out property is a business transaction and tenants, like any other consumer, have a right to expect their landlord to respond promptly to a request for repairs. In our view, 14 days is a reasonable period in which to require a response. Indeed, in many cases, a much earlier response could and should be expected—for example, if there is a leak in the property or a problem with the heating during the winter months.
There may be situations where a landlord is genuinely unable to respond within that timescale, but even if that is the case, that does not mean that the landlord would automatically be prevented from evicting the tenant for a period of six months. The local authority would still have to inspect the property and determine whether there was a potentially serious health and safety risk. However, it would be open to the landlord at any stage, before the inspection is carried out, to contact their tenant, assess what work needs to be done and arrange for it to be completed. If that has happened by the time of the inspection, and as a result there is no longer a potential risk to the health and safety of the tenant, the local authority will no longer have any role to play. In that scenario, the proposed restrictions on the service of a Section 21 eviction notice would not apply.
Amendment 46AB has the potential to reduce the length of time during which a tenant would be protected against retaliatory eviction. The Government propose that a tenant should be protected against eviction for a period of six months starting from the date that the local authority has determined that a property contains significant health and safety hazards, and has issued either an improvement notice or a notice of emergency remedial action. However, this amendment would reduce that time. Local authorities have a lot of competing demands on their time and it is very unlikely that they could inspect a property instantly, as soon as they have received a complaint from a tenant. If, for example, a local authority did not inspect a property until two months after it had received a complaint, even if a serious health and safety hazard was discovered, a tenant would then be protected against eviction only for a period of four months. That reduction would significantly weaken the protection that the Government have decided tenants must be given against the actions of the very few rogue landlords.
On Amendment 46BA, we are absolutely clear that tenants should pay their rent on the date that it is due. The Government’s proposals do not in any way undermine this central principle. When a tenant has fallen behind with their rent, landlords can use the procedures under Section 8 of the Housing Act 1988 to evict the tenant. Those procedures will remain unchanged and will not be affected in any way by the proposed restrictions on the use of a Section 21 order of the 1988 Act. We do not believe that a tenant should be denied protection from a retaliatory eviction when there are already adequate provisions in existing legislation for dealing with non-payment of rent.
Finally Amendment 46HA would apply to a situation when a tenant is entitled to repayment of any rent they have paid in advance for a period when they no longer occupy the property because the landlord has served a Section 21 eviction notice. It provides that the amount of rent repaid will be offset by an amount equal to any money that may be owed by the tenant to the landlord. The amendment is unnecessary, as there is nothing in the Government’s proposed legislation that would prevent a landlord offsetting any debts owed to them by the tenant against rent that they are liable to repay to the tenant. Therefore, I commend Amendments 46A to 46J and hope that, in the clarifications and assurances, noble Lords who have tabled Amendments 52, 46AA, 46AB, 46BA and 46HA will be minded not to press them.
Amendment 46AA (to Amendment 46)
Lord Howard of Rising
Lord Howard of Rising (Con)
In moving the amendment I will also speak to Amendments 46AB, 46BA and 46HA. These are all amendments to the amendments proposed by my noble friend the Minister. Before so doing, I must declare an interest as an owner of rented-out residential properties.
Amendment 46AA would allow for a landlord to be away when a letter of complaint arrives. He or she may be absent for whatever reason—business, holiday, et cetera. In spite of what my noble friend said, I believe that it would be sensible to allow for this possibility when imposing a time limit. There may also be a need to seek professional advice to be able to give an adequate response to a complainant, so the time period should be adequate to allow for those items.
Under Amendment 46AB, the situation would be avoided when a tenant makes a written complaint and the local authority does not react promptly, say for four months, and the authority then issues a relevant notice, and when that relevant notice is issued a new six-month period begins. In effect, the ability to issue a Section 21 notice will have been blocked for 10 months—four months starting with the tenant’s written complaint, which was not acted on by the authority, followed by the six months starting with the issue by the local authority of a relevant notice. I do not believe that that was what was intended. I may have misunderstood it but perhaps my noble friend can make that clear.
That point becomes particularly relevant when I come to Amendment 46BA. It allows a Section 21 notice to be served if a tenant is in arrears of rent for two or more consecutive payment dates, even if the tenant has made a written complaint. My noble friend referred to Section 8 of the Housing Act but I understand that the only method of controlling the situation would be the issue of a Section 21 notice. Any tenant not wishing to pay his rent only has to put a complaint in writing to the landlord, and the tenant has security of tenure without paying any rent for the next six months—or if the local authority delays in its actions, an even longer period. This creates a situation that is open to abuse, and although most tenants would not dream of doing so, there will be occasions when such action is taken deliberately. It could be argued that my amendment is too lenient because, in effect, sanctions against non-payment of rent are taken away the moment a complaint is issued.
Amendment 46HA allows any money owing to a landlord to be deducted when returning rent to a tenant. Frequently a deposit is taken to cover damage by tenants over and above normal wear and tear. These deposits are regulated and held by a third party. It is only fair that where there is a reasonable claim for dilapidation, that is deducted from any rent due to be repaid to a tenant.
Finally, I would be grateful if my noble friend will say what is to happen when a landlord does not have the resources to make necessary repairs or improvements quite reasonably asked for by the tenant. In this context my noble friend might like to consider that where I live and rent out properties a full repair costs on average 16 times the annual rent, and a minor refurbishment five years’ rent, and that does not allow for any tax. That makes it difficult for many people to finance repairs. I am not trying to say that they should not make repairs but the Minister should consider what happens when people cannot pay.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I support Amendment 46A, as well as Amendments 46B, 46C to 46H and Amendment 46J in the group. In supporting this amendment, I pay tribute to my colleague, Sarah Teather MP. On 28 November, she secured a Private Member’s Bill, the Tenancies (Reform) Bill, to deal with the problems caused by retaliatory evictions. Sadly, some Members in the other place that day were landlords and did not share the ethos of the Bill, and they talked it out. It is a great privilege for me to support the essence of the Bill in this amendment and to help to protect vulnerable tenants.
This amendment is not about penalising conscientious landlords; nor is it about protecting bad tenants who do not respect the property that they are renting. It is about protecting the rights of both groups and giving security to tenants who, when reporting a fault which affects their ability to live happily in their home, will not dread an eviction notice landing on the doormat as a result. It will give a clear signal to those landlords who currently ignore the state of their properties that this is no longer acceptable and that, if they engage in a regular programme of maintenance, they are likely to have a much better relationship with their tenants. Costly tenancy turnover will be lower and they will be less likely to face expensive repair bills for major incidents, such as collapsed ceilings due to persistent leaks, later.
I am sure that we can all give examples of where tenants have lived with poorly maintained and damp properties but have been too afraid to report this to the landlord. They may have seen other tenants who complained suffer eviction. Such evictions put pressure on local authorities, housing associations and others in the rented sector, and cause expensive, temporary accommodation solutions. These are a potential burden on the council tax payer and bring misery and uncertainty to families and children.
I am grateful to Citizens Advice and Shelter for their tireless efforts to bring the plight of those who are suffering from the injustice of retaliatory evictions to the notice of a wider audience. These and similar organisations have done all that they can to alleviate the suffering and uncertainty of those affected in our communities. It is often those on the lowest incomes and with the least options who are the most penalised in the housing market. They frequently have no choice but to turn to the private sector for accommodation.
It is long overdue that we seek to protect this section of our community and to give them some security, as well as decent homes to live in and in which to bring up their children. At the same time, we must protect those landlords who are assiduous in maintaining their properties. Without these landlords there would be an extreme shortage of properties to let around our cities and countryside. This amendment is all about establishing and maintaining a balance between the tenant and the landlord, and I am pleased to support it.
Baroness Noakes (Con)
My Lords, I support the amendment to the amendment, moved by my noble friend Lord Howard. In principle, preventing retaliatory evictions is a very good idea for all the reasons that have been given by my noble friend and the noble Baroness. I want to focus on two aspects, one of which my noble friend raised in one of his amendments; that is, the 14-day limit provided for under subsection (2)(b)(i) of the new clause proposed under Amendment 46A. I query with my noble friend the Minister whether 14 days is a reasonable timeframe. I declare an extremely modest interest as a landlord of one property.
I just cast my mind to what might happen. I often go on holiday for more than 14 days. If, God forbid, one were ever in a dispute with a tenant—I have no current expectation that I would be in that position—it would be quite easy for a tenant seeking to make use of these provisions generally to cause trouble and to take advantage of one’s being out of the country and not being available for 14 days. As my noble friend’s amendment suggests, 28 days seems more reasonable on that basis.
The second thing I want to raise with the Minister is what would be an “adequate response”, as provided by subsection (2)(b)(ii) in the amendment, which is defined in subsection (3). I ask my noble friend the Minister: how will the adequacy of the response be judged? What is a “reasonable timescale” and who will judge what that is? I could not see in the amendments how any disputes about this process were capable of being dealt with. There needs to be certainty about how the processes will work. It is not entirely clear to me that a response can be quickly identified as being adequate or not, given the wording in subsection (3) of the amendment.
Lord Best (CB)
My Lords, I support this group of government amendments. I declare my interests as on the register, in particular as chair of the council of the Property Ombudsman, which handles complaints about property agents—traditionally about estate agents but today more about letting and managing agents in the private sector. I am grateful to Shelter and the British Property Federation for helpful briefings.
I want to address the concerns raised by some representatives of private landlords that this effort to end retaliatory evictions in private rented housing could become a charter for mischievous tenants to prolong their tenancies when they know that the landlord wants them to leave. I want to answer the question: could tenants raise spurious complaints about their property unnecessarily, unfairly or even maliciously, in order to frustrate their landlord and to secure an extra six months or so of occupation? If that was the outcome from that measure, it is argued that it would deter investment, put off potential buy-to-let landlords and slow the growth of this sector.
The private rented sector has more than doubled in size over recent years and we now have some 1.5 million private landlords. Properties that in times past would have been sold to home buyers have instead been snapped up by buy-to-let landlords. Some observers would welcome a slow-down in this shift from owner-occupation to private renting. However, outlawing retaliatory evictions seems very unlikely to put a break on this phenomenal growth. Only the minority of really hopeless—or actually criminal—landlords will be affected.
These measures will bite only where the landlord has not only ignored a request from the tenant for rectification of a serious problem but has also ignored the local authority when it has spelt out that the landlord is in breach of their legal duties. Local authorities will have to visit the property and be satisfied that there is a serious breach of the requirements and that the property is not safe and not free from grave health hazards. The council will then have to issue a formal improvement notice, not a simple hazard awareness notice. That is not an action that is taken lightly by local authorities and they will do so only if the landlord has failed to do anything to rectify the problem. Only after the whole process has been concluded and the landlord has done nothing will the tenant gain an extension to the tenancy. These are pretty extreme circumstances and it would take a truly obdurate or completely incompetent landlord to fail to do what is required by the council.
Nor can the Bill be used as a last-minute delay to hold up an eviction. If the tenant is challenging an eviction notice, they will have to prove that they made the complaint about conditions before the eviction notice was issued. The tenant will lose the ability to challenge the eviction notice if they do not do so within the two-month notice period, and the Bill specifically prohibits renters from raising any issues that are their own responsibility. Environmental health officers are well trained in assessing whether a defect has been exaggerated or manufactured by the tenant. Prior to serving formal notice, the landlord will be given time to address the problem, and proper law-abiding landlords will act before matters reach the stage of the local authority serving the improvement notice which would delay the eviction.
This measure can catch out the shameless landlord of a slum property seeking to remove a tenant who complains in order to find someone else who is prepared to tolerate extremely poor conditions, but it does not provide any help to the tenant who tries to use this as an opportunity to fend off a perfectly valid eviction notice. I think that it is a modest change in the law and there should be no anxieties that unscrupulous tenants can use it to make mischief. There may be some tweaks to be made to the small print which would improve the amendment, and I would not stand in the way of modest changes, but the core components of the measure represent a positive step forward. In combination with the other important new requirements in this set of amendments to enforce proper standards, this measure will support the process of driving out criminal landlords.
Regrettably, among the hundreds of thousands of new landlords in recent years, there are indeed some who lack not only competence but the financial resources to keep their properties in a decent condition, let alone to engage professional agents to manage the lettings for them. Frankly, these landlords are not up to the job, and if this measure flushes out even a handful of them, it will have been worth while. For the great majority of proper landlords these changes are good news because they target unfair competitors who undermine the reputation and the public’s perception of this very necessary sector. I strongly support this group of government amendments.
Earl Cathcart (Con)
My Lords, I should declare that I am a landlord in the private rented sector, which is larger than the social rented sector and is still growing. I am firmly against any landlords who engage in retaliatory evictions. I have never had to resort to issuing or have even come close to issuing a Section 21 notice, so this is all slightly unfamiliar territory to me. But it seems that what we are dealing with in this group of amendments is the bottom of the barrel as far as landlords are concerned and, indeed, the bottom of the barrel as far as some tenants are concerned.
There are two improvements in these government amendments over the others which have been tabled and over the amendment moved by the noble Baroness, Lady Hayter, to the Consumer Rights Bill. The first is that the tenant must make a complaint to the landlord in writing and give the landlord time to rectify the problem before involving the local authority. It seems obvious, but it was not in the other amendment, so it is welcome. The second improvement is that regulations will require landlords to provide tenants with the details of their rights and responsibilities, which is also welcome.
I would now like to talk to the amendments tabled by my noble friend Lord Howard. I agree that 14 days is not long enough for the landlord to respond. If the Minister is unable to accept the period of 28 days suggested by my noble friend, perhaps 21 days would be a happy compromise. My noble friend’s Amendment 46BA addresses the case where a tenant has failed to pay rent for two or more consecutive due dates. Let us suppose that a tenant does not pay the January rent, but says to the landlord that he will deal with it. The February due date for rent then comes along, and he does not pay that either. On the morning when the February rent is due, the tenant writes a letter to the landlord with some sort of excuse and saying that something needs to be repaired. In the afternoon of the same day he writes to the local authority saying, “I have written to the landlord. He has done absolutely nothing about it, so can you come and serve your notice on him?”. If the local authority does that, the landlord has missed out on the January and February rent and will then miss the next six months as well. That cannot be right.
The bad tenant, the one at the bottom of the barrel, may not have actually sent the letter to the landlord even though he has a copy in his file. The poor landlord, who may not live close by because he is in another county, does not know that any of this is going on, yet the tenant has not paid the rent and will not be paying the rent for eight months. My point is this. Should there not be a duty in the Bill on the local authority to contact and/or write to the landlord saying that the tenant has made a complaint and asking what the landlord intends to do about it? As I have made clear in my example, this may be the first occasion that the landlord becomes aware that there is a problem.
I shall move on to the government amendments. There is a significant omission because the Bill makes no provision for what happens where a landlord responds adequately to a complaint from a tenant within the time allowed. The Bill does not provide for any kind of moratorium to prevent the local authority taking action. The local authority can still serve a statutory notice on the landlord even though he is dealing with the complaint in a responsible manner. This has two consequences for the landlord. The first is that this is potentially serious for a landlord who does not serve a Section 21 notice at the time and who has no intention of retaliating. However, if the landlord is served with a notice by the local authority, he is then automatically precluded from relying on Section 21 for six months. Even if the landlord does not serve a Section 21 notice following a complaint, should he have cause to do so within the next six months following the service of the local authority’s notice, he would not be able to serve it even though a perfectly good but unconnected reason for eviction may subsequently have arisen. It may be because the tenant has gone into rent arrears or has otherwise broken the terms of the tenancy, perhaps through anti-social behaviour.
The second problem arises because a notice served under Section 21 after the written complaint is invalidated. Again, no distinction is made between the bad landlord who is acting in retaliation and the responsible landlord who has a good reason unconnected to the complaint made by the tenant to evict him. The landlord may wish to obtain possession under Section 21 for good reasons and not in retaliation for the complaint. For example, the landlord may have received complaints about serious anti-social behaviour or there may be significant rent arrears. The local authority may want the landlord to evict the tenant because of the anti-social behaviour, but the amendment would mean that the authority could not do anything about it. The solution is to add a provision to the Bill stating that as long as the landlord replies in time and in an adequate way, the local authority should be precluded from serving a statutory notice unless the landlord fails to carry out the work on time. Likewise, in a case where the landlord has responded in time, has addressed the complaint and ensured that the work has been satisfactorily completed, the moratorium on serving a Section 21 notice should be lifted.
I have another point here. Can the Minister clarify what happens if by the time the local authority inspects the property, the original complaint has been dealt with satisfactorily but, on inspection, the local authority finds some other, second problem or complaint meriting the service of a relevant notice? Would the local authority be said to be acting “in response to the complaint”? It could be said that the complaint occasioned a visit which gave rise to the issue of the relevant notice even though it was for good reason. Clarity on this point is requested. It would seem to me that if the original complaint had been satisfactorily dealt with, but a second problem had been found, then a further 14 days should be available for the landlord to provide an adequate response within a reasonable timescale to this second problem, so that the local authority should not issue a statutory notice.
I may have raised one or two issues that the Minister is not able to respond to today. If so, perhaps he could do so in writing.
Lord Stoneham of Droxford
My Lords, I was not going to speak in this debate, because I think there is a need for us to move on, but in the light of a couple of speeches on this side of the House, the Minister needs to make it absolutely clear that there is no intention in these amendments to interfere with landlords’ rights in the situation of arrears. Most disrepair issues are sorted out between the tenant and the landlord, but where the relationship has broken down, and tenants need to get legal advice or local authority action, it is not surprising that some landlords may seek to regain possession.
There is an abuse of power here that we need to correct. These amendments are about getting that balance right. That is the purpose of the legislation and I give due credit to Sarah Teather and indeed the Department for Communities and Local Government, for actually allowing us to put these amendments through and for putting down an amendment that tries to make an acceptable reform in this area. The vast majority of landlords will not be affected by these amendments. They already ensure that they comply with the required health and safety standards and they will retain the freedom to issue Section 21 notices. However, the amendments will inhibit rogue landlords flouting their legal responsibilities. That is why this reform is needed.
The Earl of Caithness (Con)
My Lords, I declare my interests. I was an estate agent and am a consultant to an estate agency. I also piloted the 1988 Act through the House. The Act was introduced by my late noble friend Lord Ridley of Liddesdale when he was Nick Ridley and Secretary of State, and I am delighted that it has been so successful. It was controversial and was criticised quite heavily at the time, but it has achieved what it set out to do, which was to improve the private sector rented market and to give more people a choice of tenancies.
I have two concerns of principle with these amendments. One is the timing. This is Report stage, and this is a technical issue. I understand very well that the Liberal Party has put a great deal of emotion and faith into these amendments, and I do not blame them at all: technical points have been raised which need to be discussed. However, we can speak only once, and there is no way that this amendment is going to be discussed in any detail in another place. We are the only Chamber of Parliament that can actually get into this, but we are now limited to Report and Third Reading. The noble Lord, Lord Best, whose opinion we all respect, said that there could be some tweaks, but he did not tell us what the tweaks were. Those are the sorts of things that we ought to be looking at but which, under the procedure, we cannot. I mildly chastise my noble friends on the Liberal Benches for not introducing this in Committee. I understand why they did not: because there was a Private Member’s Bill in another place. But that did not stop them, and we could have had a much better discussion than we are having now. I would have hoped that my noble friend on the Front Bench might have taken this back into Committee, particularly for this purpose.
Baroness Hayter of Kentish Town
My Lords, we are very happy to support the Government’s amendment. That is hardly surprising given that, as the noble Earl, Lord Cathcart, reminded the House, my noble friend Lord Stevenson of Balmacara and I tabled a very similar amendment to this—Amendment 50E to the Consumer Rights Bill—precisely to protect tenants against retaliatory eviction. Indeed, had the Government accepted it in principle at that stage, we would have had lots of time to discuss any tweaks and details. Furthermore, of course, that was the appropriate piece of legislation for it. It is exactly something that lives in a Consumer Rights Bill. It is quite hard to think why it should be in the Deregulation Bill but anyway it is here and we welcome the fact of it, and it is clearly the way the Government prefer it.
It is good to see the change of heart because when we moved that amendment in November, the noble Baroness, Lady Neville-Rolfe, who was dealing with it, said that the Government did not think it was necessary because it would not,
“add anything further to the guidance that is already available”.—[Official Report, 24/11/14; col. 761.]
To be fair, she supported the Private Member’s Bill in the other place and the Government have now decided to introduce this legislation, albeit perhaps not in the best vehicle, given that the Consumer Rights Bill is still in Parliament.
It is a shame that the Liberal Democrats who have added their names to the amendment did not share our concerns earlier. The noble Baroness spoke in favour of one of my other amendments, but it would have been nice to have their support when we tried to make letting agents belong to an ombudsman scheme. We got it through but without their help; nor did they support my attempts to get letting agents to put tenants’ rent into protected bank accounts, which would have safeguarded landlords as much as—if not more than—tenants, because when letting agents go walkies with the money it is usually the landlords who pay, but of course it is the tenants’ money that goes. But hey, I guess there is an election coming so now they are on the side of the tenants, and we welcome that support, belated though it might be.
We particularly welcome the Government’s view on this and their bringing forward these amendments. We know that it will please those who have campaigned a long time for this, including Crisis and Shelter, which have been mentioned, and the Brighton and Hove “Home Sweet Home” campaign, which has been working for a better and fairer private rented sector. Its members campaign on behalf of local tenants who are often too scared to speak out or to ask their landlords for repairs because they fear losing their homes. In places such as Brighton, that is not a joke; it does happen. As for the idea that there are rogue tenants—actually, the experience we have is of landlords mistreating their tenants.
These amendments give much-needed protection to tenants, as landlords will no longer be able to evict them in response to a valid complaint about their home. Tenants will no longer have to choose between living in poor conditions and losing their home. Unfortunately, revenge eviction has become a major cause of insecurity, not just in Brighton but elsewhere where there is a lot of pressure on the private rented sector. We want people to feel safe and secure in their own home, creating a fairer system for both tenants and landlords. We believe that these amendments will help achieve that.
We have one slight disappointment. As the noble Lord, Lord Ahmad, said, the hazard awareness notices are not included in these amendments, although they were in the Private Member’s Bill. We have some concerns that without these the protection risks being patchy. Some extra assurance on that would be welcome.
We are also pleased that, from what the Minister said in his introduction, the Government do not seem minded to accept Amendment 46AA in the name of the noble Lord, Lord Howard of Rising, which would extend the period that a tenant can wait before contacting the council from 14 to 28 days. Twenty-eight days is too long for a tenant to wait before legitimately contacting the council. None of us would wait that long if it was our home, especially if it was over Christmas. Therefore, where there is a serious problem that needs seeing to, we agree with the Minister that 14 days is the right balance.
I also pay tribute to the noble Lord, Lord Best, who has saved me from having to give a very robust response to those who fear that these amendments will achieve things that are too much in favour of the tenants and not of the landlords. We think that it is a fair deal between the two sides—although often, as people have said, they are not sides; it is a good relationship.
Meanwhile, given that the Government have decided—perhaps a bit late—to do something to help “generation rent”, it is a shame that it is not part of a wider strategy to ensure that tenants get a fair deal from landlords. We have undertaken to legislate for three-year tenancies, to give renters a stable home and landlords the confidence to invest. We will also stop letting agents charging fees to tenants, which we tried to do in the Consumer Rights Bill, but sadly that bit has not been brought over. However, I should not be churlish. We are delighted with the amendments that the Government have brought forward and we have pleasure in giving them our full support.
Lord Ahmad of Wimbledon
My Lords, I thank all noble Lords who have participated in this debate. Again, it demonstrates the great expertise and interest in your Lordships’ House in this important issue. I will seek to answer all the questions that have been raised but if there are specific, technical questions, I add the caveat that I shall of course review all contributions and write accordingly to cover any points that perhaps I have not been able to cover in my response this evening.
I, too, thank the noble Lord, Lord Best, for his support for the government amendments. He always speaks with great expertise on housing issues across the board, so his support is most welcome. I hope it continues for the later part of the evening but we shall come to that shortly. I also thank my noble friends Lady Bakewell and Lord Stoneham for their support for the Government’s position. In thanking other noble friends who perhaps have not been totally supportive, I of course recognise the concerns that have been expressed across a range of issues and hope that I can address most of them in my response.
My noble friend Lord Howard asked about tenants who stop paying rent once they have made a complaint. I assure my noble friend that in this regard the amendment under no circumstances permits the tenant to stop paying rent, and the tenant will be obliged to pay. It provides that a Section 21 eviction notice can be invalidated only if a tenant’s complaint is supported by confirmation from the local authority. Indeed, if a Section 21 eviction notice cannot be served for a specified period, the tenant is still contractually obliged to continue paying rent. Failure to do so, as I said in my opening remarks, would leave them liable to eviction under Section 8 of the Housing Act 1988.
Lord Ahmad of Wimbledon
“Further exemptions to section (Preventing retaliatory eviction)
(1) Subsections (1) and (2) of section (Preventing retaliatory eviction) do not apply where the condition of the dwelling-house or common parts that gave rise to the service of the relevant notice is due to a breach by the tenant of—
(a) the duty to use the dwelling-house in a tenant-like manner, or(b) an express term of the tenancy to the same effect.(2) Subsections (1) and (2) of section (Preventing retaliatory eviction) do not apply where at the time the section 21 notice is given the dwelling-house is genuinely on the market for sale.
(3) For the purposes of subsection (2), a dwelling-house is not genuinely on the market for sale if, in particular, the landlord intends to sell the landlord’s interest in the dwelling-house to—
(a) a person associated with the landlord,(b) a business partner of the landlord,(c) a person associated with a business partner of the landlord, or(d) a business partner of a person associated with the landlord.(4) In subsection (3), references to a person who is associated with another person are to be read in accordance with section 178 of the Housing Act 1996.
(5) For the purposes of subsection (3), a business partner of a person (“P”) is a person who is—
(a) a director, secretary or other officer of a company of which P is also a director, secretary or other officer, (b) a director, secretary or other officer of a company in which P has a shareholding or other financial interest,(c) a person who has a shareholding or other financial interest in a company of which P is a director, secretary or other officer,(d) an employee of P,(e) a person by whom P is employed, or(f) a partner of a partnership of which P is also a partner.(6) Subsections (1) and (2) of section (Preventing retaliatory eviction) do not apply where the landlord is a private registered provider of social housing.
(7) Subsections (1) and (2) of section (Preventing retaliatory eviction) do not apply where—
(a) the dwelling-house is subject to a mortgage granted before the beginning of the tenancy,(b) the mortgagee is entitled to exercise a power of sale conferred on the mortgagee by the mortgage or by section 101 of the Law of Property Act 1925, and(c) at the time the section 21 notice is given the mortgagee requires possession of the dwelling-house for the purpose of disposing of it with vacant possession in exercise of that power. (8) In subsection (7)—
(a) “mortgage” includes a charge, and(b) “mortgagee” includes a receiver appointed by the mortgagee under the terms of the mortgage or in accordance with the Law of Property Act 1925.”
Lord Ahmad of Wimbledon
“Notice to be provided in relation to periodic assured shorthold tenancies
In section 21 of the Housing Act 1988 (recovery of possession on termination of shorthold tenancy), after subsection (4) insert—“(4ZA) In the case of a dwelling-house in England, subsection (4)(a) above has effect with the omission of the requirement for the date specified in the notice to be the last day of a period of the tenancy.””
“Time limits in relation to section 21 notices and proceedings
(1) Section 21 of the Housing Act 1988 is amended as follows.
(2) After subsection (4A) insert—
“(4B) A notice under subsection (1) or (4) may not be given in relation to an assured shorthold tenancy of a dwelling-house in England—
(a) in the case of a tenancy which is not a replacement tenancy, within the period of four months beginning with the day on which the tenancy began, and (b) in the case of a replacement tenancy, within the period of four months beginning with the day on which the original tenancy began. (4C) Subsection (4B) does not apply where the tenancy has arisen due to section 5(2).
(4D) Subject to subsection (4E), proceedings for an order for possession under this section in relation to a dwelling-house in England may not be begun after the end of the period of six months beginning with the date on which the notice was given under subsection (1) or (4).
(4E) Where—
(a) a notice under subsection (4) has been given in relation to a dwelling-house in England, and(b) paragraph (b) of that subsection requires the date specified in the notice to be more than two months after the date the notice was given,proceedings for an order for possession under this section may not be begun after the end of the period of four months beginning with the date specified in the notice.”(3) In subsection (6), for “subsection” substitute “subsections (4B)(b) and”.”
“Prescribed form of section 21 notices
In section 21 of the Housing Act 1988, after subsection (7) insert—“(8) The Secretary of State may by regulations made by statutory instrument prescribe the form of a notice under subsection (1) or (4) given in relation to an assured shorthold tenancy of a dwelling-house in England.
“(9) A statutory instrument containing regulations made under subsection (8) is subject to annulment in pursuance of a resolution of either House of Parliament.””
“Compliance with prescribed legal requirements
After section 21 of the Housing Act 1988 insert—“21A Compliance with prescribed legal requirements
(1) A notice under subsection (1) or (4) of section 21 may not be given in relation to an assured shorthold tenancy of a dwelling-house in England at a time when the landlord is in breach of a prescribed requirement.
(2) The requirements that may be prescribed are requirements imposed on landlords by any enactment and which relate to—
(a) the condition of dwelling-houses or their common parts,(b) the health and safety of occupiers of dwelling-houses, or(c) the energy performance of dwelling-houses.(3) In subsection (2) “enactment” includes an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978.
(4) For the purposes of subsection (2)(a) “common parts” has the same meaning as in Ground 13 in Part 2 of Schedule 2.
(5) A statutory instrument containing regulations made under this section is subject to annulment in pursuance of a resolution of either House of Parliament.””
“Requirement for landlord to provide prescribed information
After section 21A of the Housing Act 1988 insert—“21B Requirement for landlord to provide prescribed information
(1) The Secretary of State may by regulations require information about the rights and responsibilities of a landlord and a tenant under an assured shorthold tenancy of dwelling house in England (or any related matters) to be given by a landlord under such a tenancy, or a person acting on behalf of such a landlord, to the tenant under such a tenancy.
(2) Regulations under subsection (1) may—
(a) require the information to be given in the form of a document produced by the Secretary of State or another person, (b) provide that the document to be given is the version that has effect at the time the requirement applies, and(c) specify cases where the requirement does not apply.(3) A notice under subsection (1) or (4) of section 21 may not be given in relation to an assured shorthold tenancy of a dwelling house in England at a time when the landlord is in breach of a requirement imposed by regulations under subsection (1).
(4) A statutory instrument containing regulations made under subsection (1) is subject to annulment in pursuance of a resolution of either House of Parliament.””
Lord Ahmad of Wimbledon
“Repayment of rent where tenancy ends before end of a period
After section 21B of the Housing Act 1988 insert—“21C Repayment of rent where tenancy ends before end of a period
(1) A tenant under an assured shorthold tenancy of a dwelling-house in England is entitled to a repayment of rent from the landlord where—
(a) as a result of the service of a notice under section 21 the tenancy is brought to an end before the end of a period of the tenancy, (b) the tenant has paid rent in advance for that period, and (c) the tenant was not in occupation of the dwelling-house for one or more whole days of that period. (2) The amount of repayment to which a tenant is entitled under subsection (1) is to be calculated in accordance with the following formula—
where— R is the rent paid for the final period;
D is the number of whole days of the final period for which the tenant was not in occupation of the dwelling-house; and
P is the number of whole days in that period.
(3) If the repayment of rent described in subsections (1) and (2) has not been made when the court makes an order for possession under section 21, the court must order the landlord to repay the amount of rent to which the tenant is entitled.Nothing in this section affects any other right of the tenant to a repayment of rent from the landlord.””
Lord Ahmad of Wimbledon
“Application of sections (Preventing retaliatory eviction) to (Repayment of rent where tenancy ends before end of a period)
(1) Subject to subsections (2) and (3), a provision of sections (Preventing retaliatory eviction) to (Repayment of rent where tenancy ends before end of a period) applies only to an assured shorthold tenancy of a dwelling-house in England granted on or after the day on which the provision comes into force.
(2) Subject to subsection (3), a provision of sections (Preventing retaliatory eviction) to (Repayment of rent where tenancy ends before end of a period) does not apply to an assured shorthold tenancy that came into being under section 5(2) of the Housing Act 1988 after the commencement of that provision and on the coming to an end of an assured shorthold tenancy that was granted before the commencement of that provision.
(3) At the end of the period of three years beginning with the coming into force of a provision of sections (Preventing retaliatory eviction) to (Compliance with prescribed legal requirements) or section (Repayment of rent where tenancy ends before end of a period), that provision also applies to any assured shorthold tenancy of a dwelling-house in England—
(a) which is in existence at that time, and(b) to which that provision does not otherwise apply by virtue of subsection (1) or (2).”
Lord Best
My Lords, I apologise for speaking to two consecutive amendments—your Lordships will be tired of the sound of my voice. Amendment 46K endeavours to ensure that standards of accessibility in new homes—where there has been important progress in recent years—do not now go into decline. The amendment would remove from the Bill a new power for the Secretary of State to set additional conditions before a local authority can start or continue to require housebuilders to build homes to disabled-friendly lifetime homes standards. By the removal of Clause 31(4), the threat of central government dictating lower standards than councils want, and some currently require, is removed.
The amendment comes with support from many organisations, including Age UK, the Royal Mencap Society and the Town and Country Planning Association among others. I declare my interest as president of the Local Government Association, and this body is also supportive of the approach taken by this amendment. In moving the amendment, I thank the noble Lord, Lord Wallace of Saltaire, for arranging a helpful meeting for me, the Leonard Cheshire Disability charity and experts from within the relevant departments and outside. Following that session, my amendment is intended to enable the Minister to place on record assurances that will clear up some misunderstandings and remove some doubts and misgivings about the legislation.
While everyone knows it is imperative that the quantity of new homes be increased to address acute national shortages that are wreaking havoc for almost all households under the age of 40, we must also be mindful of the quality of these homes. The UK is currently building the smallest flats and houses of any EU country—and, of course, in comparison with the USA, Canada, Australia and so on. Much of this new housing in the UK is storing up problems for the future. So often, the accommodation has no space for a family to sit down to a meal together, and a spare room is becoming a thing of the past. More far-reaching is the problem that new homes are not designed for an ageing society or accessible to those with a mobility problem, let alone a wheelchair user. Yet by spending only a little more on each new home we build from now on and achieving the so-called lifetime homes standards, our housing stock would gradually become suitable for us all in our older age, as well as for the young parent with a baby in a pushchair—and for any of us who become temporarily or permanently disabled, from the teenager who breaks a leg to the soldier returning home with a serious injury.
Clause 31 contains the power to remove the freedom for local planning authorities to impose obligations on housebuilders to achieve standards relating to space, security, energy, sustainability and accessibility. Instead of local discretion, standards are to be set centrally. This would have the positive effect of saving time and money for building firms that operate over several areas. The arrangements will also have the advantage for consumers that the new standardised standards covering accessibility, when determined by government, would then be enforced through building regulations by building inspectors. This would prove a more reliable mechanism than just a planning requirement for making sure that the standards are actually met.
The concern is that instead of promoting an optional higher level of accessibility which so many organisations, including Leonard Cheshire Disability and Habinteg Housing Association, as key campaigners, believe should be applied universally, the new centralised system will stop councils insisting on these lifetime homes standards. The fear is that instead of accelerating the healthy trend towards these higher standards, central government pressure will prevent councils going for the optional category 2, which would undermine those already requiring these standards. I hope the Minister will waylay those fears, which revolve around two key hurdles for planning authorities: first, to prove that there is a need for accessible homes; and secondly, to show that the extra cost of £500 to £1,400 per home does not undermine the viability of a development—that is, it will allow the housebuilder a profit of at least 20%. Moreover, when I moved this amendment in Committee, noble Lords raised the problem of local authorities being able to require the new optional higher standard only when they adopted a new or revised strategic local plan, a process which can take years.
I therefore ask for answers to the following questions. First, I know that the DCLG intends to provide guidance on good practice to local authorities, but can the Minister confirm that this is intended to raise the aspiration for all new homes to be built to accessible standards in the years ahead?
Secondly, and more narrowly, will the new test of need for accessible housing in each area be satisfied by the statistics which, throughout the UK, demonstrate that the ageing population is a universal fact and disability is ubiquitous? Bearing in mind that London has the lowest proportion of older people of any English region but that the GLA aims for all new homes to achieve the lifetime homes standards, is it logical to argue that other areas of the country could fail the needs test in this regard?
Thirdly, how will the viability test be satisfied? Ultimately, viability relates to the price paid by the developer for the land. Higher standards, if required by the planners, will simply lead to the landowner getting a little less. When, if ever, could the modest extra costs of achieving optional higher standards—calculated by consultants for the DCLG to be no more than £1,400 per home, and usually much less—prevent accessible, disabled-friendly standards being met?
Baroness Wilkins (Lab)
My Lords, I speak in strong support of this amendment, so expertly and comprehensively moved by the noble Lord, Lord Best. When all the evidence points to the dire need for more accessible, future-proofed housing, surely the coalition Government will not insist on additional conditions to be met by local authorities before they can require housebuilders to build homes to disabled-friendly standards.
I apologise to the House for not being able to take part in previous stages of the Bill but I was spending time in hospital, in a spinal injury unit where I met far too many people whose homes had suddenly become inaccessible to them. They had gone out as usual one morning but had an accident, become paralysed and then found that they could never go back to their home again. All the clutter of their daily life was as they had left it; they have to rely on someone else to sort it out. Their families have to start the endless search for an accessible house or flat. They probably have to leave their much loved own home and change the children’s schools, while the patients themselves face long months in hospital long after they are ready for discharge. Is it surprising that relationships break down? Had the lifetime homes standard become universally applied soon after it was developed, probably none of that would be necessary.
Surely the coalition Government will not insist on this short-term reaction to the housing crisis, which will lead to far fewer accessible homes being built. It would mean that they are knowingly legislating to increase the pressure on health and social care budgets at a time when both are in crisis. I urge the Minister to readily give the noble Lord, Lord Best, the reassurances that he seeks.
Lord Shipley (LD)
My Lords, I should declare that I am a vice-president of the Local Government Association. I support the amendment, because I think it is true that new subsection (4) in Clause 31 could result in making it harder for a local council to deliver the lifetime homes and wheelchair accessibility policies that we need. I therefore seek the reassurance of the Minister on this matter.
As we have heard, there is currently a very serious shortage of homes that are suitable or can be easily adapted for those with mobility difficulties. The solution to this problem, as we have heard, is to build new homes to a lifetime standard. This matters greatly and will matter even more in the future because people who develop mobility problems usually prefer to stay in their own homes, where any essential adaptions can be undertaken.
This Bill puts lifetime home standards and wheelchair-accessible standards on to a statutory basis, and that is to be welcomed. The problem is that councils will then be required to produce a raft of evidence to prove that there is a need for those lifetime and wheelchair-accessible homes. Definitions of future need might be hard to prove, when common sense tells us that we should build more accessible homes now for an ageing society to prevent serious problems arising in 10 to 20 years’ time.
Until now, local councils have been able to implement very progressive policies, such as requiring all new homes to be built to lifetime home standards or ensuring that a reasonable number of new homes—perhaps 10%—are built with wheelchair access as part of large-scale developments. In supporting new building standards, which improve things, and in believing that we want to encourage local planning authorities to take them up, and while I accept that the creation of new standards could be a significant step forward, I am still very concerned that we might be weakening existing planning powers of councils. I hope, therefore, to hear from the Minister clear confirmation that nothing in the Bill will get in the way of enabling planning authorities to deliver the extra lifetime and accessible homes that we need now and are going to need in the future.
Baroness Gardner of Parkes (Con)
My Lords, I strongly support the amendment, and I declare an interest in that I have a daughter who has multiple sclerosis and is a board member of the Habinteg Housing Association. It does marvellous work in providing lifetime homes.
The importance of this has been so stressed by so many people tonight that I do not really need to comment on it. I have other amendments to speak on and noble Lords will be tired of listening to me. However, I strongly support everything that the noble Lord, Lord Best, and other speakers have said and hope the Government will see sense on this.
Lord McKenzie of Luton (Lab)
My Lords, we should be grateful to the noble Lord, Lord Best, for moving this amendment, which we wholeheartedly support. If there were any doubt as to whether we were going to support it, praying in aid Nye Bevan just about did it for us. I welcome my noble friend Lady Wilkins back to the House and acknowledge her knowledgeable contribution on an issue on which she has campaigned over a long time. It is good that the noble Lord, Lord Shipley, and the noble Baroness, Lady Gardner, are on the same page as well.
We support the review of housing standards: a lot of good work has come out of it. However, one of the consequences, as we have heard, was that lifetime home standards and wheelchair-accessible standards have become optional extras. That is really the issue before us today. The noble Lord, Lord Best, has probed with a series of questions and I hope that the nature of those questions means that the Minister has ready and satisfactory replies to them all.
I draw the Minister’s attention to a couple of paragraphs of the housing review document. On page 6, paragraph 14, it says:
“Unlike other Building Regulations requirements the optional requirements described in the Approved Documents will not be mandatory. They will only be applicable where a local planning authority has put a plan policy in place specifically triggering the application of the optional requirement or nationally described space standard in particular circumstances. Neighbourhood Planning Bodies (and Neighbourhood Development Orders) will only be able to apply the space standard, and not optional requirements”.
Will the Minister tell us why that is the case? Perhaps more importantly, paragraph 21, which looks at applying optional requirements and nationally described standards, states:
“The first step is for a local planning authority to stipulate that an optional requirement or the nationally described space standard applies in that area. As stated already, this must be set in plan policies, which have been subject to normal Plan Examination processes. It would not be appropriate to apply optional requirements or the space standard through supplementary planning guidance, since this is not subject to a sufficient level of scrutiny”.
Have the Government moved on from that, or is that still applicable?
I have one small observation in relation to financial viability and cost. If the additional cost is £500 to £1,000, that is one or two weeks in a care home invested in a home on lifetime standards now. That obviously obviates that, going forward. I hope the Minister can satisfy us on those requirements, because it would be a great shame, given all the progress that has been made on lifetime home standards—particularly in London—if these developments were to push those backwards.
Lord Ahmad of Wimbledon
I thank all noble Lords, particularly the noble Lord, Lord Best, for raising this issue. As he is aware, we have been in regular correspondence on this issue. Before going any further, however, I would like to join the noble Lord, Lord McKenzie, in welcoming back the noble Baroness, Lady Wilkins, to her rightful place in your Lordships’ House. I, too, welcome her contribution here this evening.
The noble Lord, Lord Best, has rightly set out his concerns about the way in which the proposed building regulations’ optional requirements will operate, particularly in relation to issues of access. Let me say that the Government understand these concerns. I have written to the noble Lord with reassurances about the clause, explaining how the evidence gathering will work. I assure your Lordships that we will be issuing planning guidance shortly, to help authorities assemble evidence to use the new optional requirements. I hope that the letters that I have written to the noble Lord, Lord Best, have provided that level of reassurance, but I think it is important that I summarise some of the key points that have been raised in his questions.
Let me just put the amendment into context. In this particular context, we believe that the amendment is not needed, because Clause 31(4) is merely a general fallback power, a reserve power enabling the Government to use regulations to set out conditions for the way in which optional requirements should be used, but only if necessary. They might be necessary, for example, if the system is being misused in some way, or used without sufficient rigour; or if there are problems applying the new regulations. It could be that the guidance proposed does not have the effect expected or is not followed. The new system is based on an approach no different from how local planning authorities gather evidence to justify planning policies now. For the benefit of noble Lords, I will set out the key points about how it will work.
Optional requirements will allow local authorities to set building standards that are higher than those in the building regulations. They are a new concept in building regulations, and are widely supported following our consultation on this matter. They are an important new tool, which I am sure noble Lords will agree should be used appropriately. For the first time ever, we have put a series of housing standards into the building regulations, such as on lifetime homes and wheelchair housing. Giving these areas the full force of building regulations is a major new step that I hope will be welcomed by all noble Lords.
However, because not every new home needs to be built to such standards, and because it is costly to do so, we will let local authorities decide how to target the standards based on local needs, provided the standards do not make local housing developments unviable. The Government intend to issue planning guidance on matters to be taken into account by local authorities to work out their local needs, such as the proportion of older or disabled people. We consulted on the matters to be covered in that guidance. This will mirror the approach taken with planning guidance which supports the National Planning Policy Framework.
Lord Best
My Lords, I am very grateful to all noble Lords who have spoken, beginning with the noble Baroness, Lady Wilkins. Everyone has welcomed the noble Baroness back into the Chamber and it is great to see her back again. She has brought personal testimony of the value and importance of accessible housing for all, which is part of a campaign she has been running for at least 10 years, for which I am deeply grateful.
I greatly appreciated the support of noble Lords from all around the House including the noble Lords, Lord Shipley and Lord McKenzie of Luton, and the noble Baroness, Lady Gardner of Parkes. The noble Lord, Lord McKenzie of Luton, made the fundamental point that spending a little bit upfront is recouped later on. It is such an essential point to make because that little investment can be paid back in spades later when people do not have to go into residential care and can return from hospital. Our A&E crisis can recede because people can get home safely and it will be satisfactory when they get there. I am very grateful to noble Lords for all their support.
I am also grateful to the Minister for putting on the record a number of points that we have corresponded about. It is clear that this will be a reserve power, a fallback power. That is good news. There was even a hint that it might never be used, which was helpful. If it is to be brought forward, there will be full consultation. That is good. Local authorities will receive firm guidance from government about the way in which evidence is going to be collected by them. Advice on that will be helpful, particularly in relation to the so-called needs test. I was not absolutely sure where we stand in relation to the overlap between the requirements for accessibility that local authorities want to lay down and their local strategic plans and the neighbourhood plans that the community brings together. I think we are still in the process of negotiating on those points, and I hope to be part of those negotiations.
Finally, the Minister confirmed that further research will take place on the impact of these new measures, and I hope that they will prove to be satisfactory and will show an expansion, not a contraction, in the number of new accessible homes that will be built in future. On that basis, I beg leave to withdraw the amendment.
Baroness Gardner of Parkes
My Lords, I remind the House that I have declared my interests in the register and have spoken to that effect a number of times as I am the owner of some leasehold flats, which I have let on a long-term basis.
The topic of short lets needs to be addressed in detail. Excellent contributions were made in Committee by the noble Lords, Lord McKenzie and Lord Mawson, the noble Baroness, Lady Donaghy, and my noble friend Lady Hanham. The answers from the Minister were not adequate. It is scandalous that we have not seen the proposed new regulations in print before this Report stage of the Bill. I have asked questions on that matter and made clear the need to consider the regulations before Royal Assent. I am now informed that we will be aware of them only after Royal Assent. That is not good enough. That is too late.
It came as a surprise to me that this issue was to be in the Deregulation Bill at all. When the Delegated Powers and Regulatory Reform Committee considered the draft Deregulation Bill in great detail, this clause was simply not included and therefore received no scrutiny at that stage. It has been slipped in since. Further, I have been told that although deregulation is proposed, new regulations will be required. I find the claim that it is a deregulation issue curious. What is “deregulation” about “reregulation”?
The Minister has said that there was a degree of confusion during the Olympics, and for that reason I think it perfectly fair for the Secretary of State to have complete control at times of great national events. However, I oppose Clause 33 as it stands, and that will be covered later, in Amendment 51. Most local authorities in London tell me that there was no confusion during the Olympics and everyone was perfectly happy with the arrangements that were made. My views on the main issue are largely due to past and current experience. I was a member of the Greater London Council when this legislation was considered and put forward. It was important then to protect Londoners, and it is even more necessary now. London is a special case, and is a drawcard for tourists.
My husband served for a good many years on the London Tourist Board. I have always supported initiatives to boost tourism, but not at the expense of destroying the way of life for long-term residents, particularly in blocks of flats where they can be more vulnerable to the nuisance created by different groups appearing every week, or every two weeks, to occupy the same flats and cause massive disturbances in these blocks. The Government’s view that people should be able to let their homes while they go away on holiday, for not more than 90 days a year, could be quite workable.
With the availability of instant online bookings for flights and accommodation, it is important to keep up to date. I consider 21 days pre-application excessive, and that if local authorities wish to offer a registration system for visitors and short-let tenants, they should be able to develop a fast-track system, enabling people to make better use of available accommodation on offer for a short visit.
Some local authorities, such as Westminster, are very keen to retain controls, and actively use their present system. They would be prepared to adjust to a faster pace of life for processing. They consider that registration, knowing who will live in a place, and for how long, are essential. On the other hand, Kensington and Chelsea tells me that it does not actively pursue anyone who is simply letting their own home, but that it wishes and needs to be able to take action against others who are making life hell for long-term residents.
The block in which I own two flats has 15 flats in all, three of which have been let for well over a year on a short-term basis. Every two weeks, a different 10 people arrive to occupy each of the one-bedroom flats. They abuse long-term tenants, and in some cases threaten them. They leave the door to the street open, as well as all fire escape doors, which means that there is no security at all in the block, as a means of access is available to anyone in the street. These short lets increase anti-social behaviour and fear of crime, and destroy the community carefully built up by the long-term residents.
As this already happens in some central London boroughs, no doubt the practices in central London will spread to other local authorities. As time progresses, the situation will change, as some boroughs wish to maintain high security and ensure that standards of short lets are enforced. As that happens in some boroughs, there will be a spreading from the centre of London into other boroughs. Why do the Government not leave the detail of administrative powers to the local authorities?
In these times of heightened security, the local authority must know who is occupying the property and for how long. Someone has to take responsibility, and in the event of action being needed to protect others in a block, the local council is greatly disadvantaged if it has no idea of who the occupants are or for how long they will be there. The noble Lord, Lord Ahmad, in discussions on the Bill, made clear to me that he views any control as unnecessary bureaucracy. That may be the view of someone who does not want to put themselves out to notify anyone when they go away, but it is certainly not fair to residents in these blocks.
Lord McKenzie of Luton
I hope the noble Baroness will forgive me, but I was a little unclear as to whether she was speaking just to Amendment 47, which has been degrouped, or more generally to the raft of amendments that we will consider. If the noble Baroness is able to clarify that, it would help us to determine how we will proceed.
Baroness Gardner of Parkes
I will be happy to clarify that. There seems to have been a slight muddle in that the last amendment I had on Clause 33 was meant to be degrouped, but instead only one was degrouped. I am therefore turning this into a slightly longer and wider field because I lost the opportunity to do that on the previous amendment, which was my original intention. I hope that your Lordships will understand that.
Everything is supposed to be perfect until you do it, then you find—well, I advise noble Lords to read it for themselves. It is from Monday 2 February, in the Evening Standard. There is another whole page on the other side about the woman behind the “unhotel revolution” and pseudo hotels—so it is quite a wide issue. It is interesting that the fraud teams are being brought in to look into the whole issue. I had a reply from the treasury officer when I asked him what of these lettings would be tax free. The answer was, “Nothing, except the right to sublet a room in your own house to a lodger for a sum of £4,000 and something—less than £5,000”. That would be the only free opportunity. It is very interesting that the Serious Fraud Office attended a meeting that we had in the House of Commons in January, partly on this issue but on property in general. There is such an opportunity for fraud that it will be very interesting to know who declares what, with no one able to check on anything at all as to who is in these places, with risks of terrorism and fraud or whatever else is going on. People tell me that they find it almost unbearable, the smell of drugs being smoked in the flat above them, because it becomes so intense to have 10 people in one room. Again, are there no restrictions on how many people can fit into one bedroom? I find it hard to believe that you can have 10 people—and this is in three different flats.
I could go on and on, but I do not intend to, because it is late and the House has had a very busy time, with more to follow. I hope that the Minister will be a bit more open about things, as I am very dissatisfied that Questions for a Written Answer have simply not been replied to. I beg to move.
Baroness Hanham (Con)
My Lords, with my noble friend Lord Tope, I have three amendments down on this matter. To start with, I point out to the House that this is a very small clause with a very large impact. It consists of six subsections, four of which require regulations. As my noble friend said, not only have we not seen any sight of these regulations but, apart from the Written Ministerial Statement that appeared on Monday, we have no clue what direction the Government take on this, other than that it is a complete liberalisation of the situation as it stands.
My noble friend Lady Gardner laid out in her usual elegant way some of problems with the legislation before us. We have a slightly different view on the emphasis to be placed on this, but we are all agreed—my noble friend Lord Tope, myself, my noble friend Lady Gardner and the local authorities—that this cannot just be allowed to rip. Local authorities have not paid any attention to people letting out their homes for short times. It has been illegal ever since the Greater London Council (General Powers) Act came in in the 1970s but, by and large, there has been a very sensible attitude taken about this—that if it is your home and you can get money in for a fortnight or so, it will not be a matter that a local authority will bother itself with. However, once it is acknowledged or admitted that the situation has been happening but that it is against the law and always has been, somebody does something about it.
London is different from everywhere else. Although the Written Ministerial Statement says in a rather patronising way that these measures, whatever they are going to be, will draw London into the 21st century, we should all recognise that London has actually been living in the 21st century since the 20th century—or halfway through it. We live with a great deal of problems, not only those which my noble friend described about people who come to live in a property for a short time and cause trouble. Another problem is that a lot of the housing now being built is investment property for rent and, unless there are some controls on who can let out accommodation on a holiday let, all hell will be let loose and there will be rentals all over London taking place in an entirely illegal way.
The laws have up to now been broken and there are now companies, some of which my noble friend mentioned, which, unwittingly or not, have enabled people to do that. But a business is building around all this, and there can no longer be any suggestion that this is just people having a one-off whim to go on holiday for a fortnight in New York or whatever and to earn a bit of money on the way. That is not the reality. The reality is that agencies are already set up to deal with people who want to let their houses short term. Some of them will be very good and some will already have measures in place to let houses in a way that means that they are properly managed, they are cleaned up afterwards, they are looked after and their tenants do not cause problems—and there is some security aspect about who those tenants are. However, let us not delude ourselves that that is what will happen. As the business builds, more and more businesses will be built around it. Unless there is some regulation as to what is and is not allowed, we can say goodbye to quite a lot of accommodation that we are pleased to describe as permanent accommodation at the moment.
My amendments do three things. One says that there must be at the very least a fine-touch registration system with the local authority. It can be done quite easily and uniformly across London, with a website—and I have spoken about the royal borough, to which my noble friend has already referred. It can be done securely on a website. What can be discussed subsequently is whether people have to register before they go away or whether they have to register annually and say that they may be going away and letting their property under those circumstances. It requires some indication as to how many days they will be able to do that for, and the Written Ministerial Statement suggests that it should be 90. I do not know about you, but I am jolly lucky to get 90 days’ holiday a year. It seems to be quite a lot—and I think that most families would find 90 days quite a lot to go away. There will have to be a balance between 30 days, which I think has been promoted, although it is very hard to know as we do not have any regulations before us, and the 90 days being proposed by the Government.
There must be some way in which the local authority knows that the property may be let by the permanent owner, and it must have some idea of how long they will be entitled to do that—and for a very good reason. If the local authority gets complaints about that property, it is very helpful for it to know, for enforcement action to be taken, that it is being let by the owner. There are plenty of examples. My noble friend could give spiels of examples of where a property has been abused and people’s lives have been made a misery by lettings such as this and longer term. That would bring the planning authority back into the situation. At the moment, it has been completely chucked out. The provision in the Greater London Council (General Powers) Act goes and is amended with a few regulations that we do not know about and have not seen.
There is what I hope is an unwitting tendency at the moment to keep downgrading London. A later clause in the Bill on waste amends the London Local Authorities Act and this clause amends the Greater London Council (General Powers) Act. London is always going to be different and will always have different pressures and requirements. If every time local authority legislation goes through some of the measures get thrown out, that is not at all helpful or supportive. I think we would all hope that this clause would go away—at least until we have had an opportunity to sort out what the regulations are going to be, and how much regulation, even if it is light-touch regulation, we can put back in. My amendments try to achieve that. It is essential that the Government take note of the concern on this subject and do not try to pretend that London is some doolally maiden of two centuries ago with no idea of how anything works. They must recognise that London is an exceptional place, with great pressure on it from all sorts of sources, such as development, investment and the general movement of people in and out of the city.
I believe that our amendments are proportionate. I apologise to my noble friend the Minister for the fact that it is me—as well as my noble friend Lady Gardner—who is leading the attack from behind him, but I beg the Government to go back and take note of the concerns of London Councils. I should have declared my position as a co-vice-president of London Councils. It represents every local authority in London and it is absolutely against all these provisions.
Lord Tope (LD)
My Lords, for the avoidance of doubt, I should say that we are now discussing two groups of amendments together, and not, as stated on the groupings list, simply Amendment 47, which relates solely to major sporting and entertainment events. It is helpful to be able to discuss the whole issue at the same time. I support my noble friend Lady Hanham; as she said, Amendments 49ZA, 49C, 50A and 51 have my name on them, and we have worked together on this issue for what feels like a very long time. Indeed, it has been a very long time.
I express many thanks to Onefinestay, the short lets company, which has been very helpful and willing to come and discuss issues, to London Councils, which my noble friend Lady Hanham has mentioned, and particularly to Westminster City Council. I have had a lot of contact with Westminster. It is the London authority with the most experience—even greater than that of the Royal Borough of Camden—of the effects of the huge growth in this market. Indeed, it has a team entirely devoted to the enforcement of the legislation on short lets.
I particularly want to put on the record my grateful thanks, and those of my colleagues, to the Covent Garden Community Association, which contacted me shortly before we discussed this matter in Grand Committee; indeed, I referred to what it had to say when I spoke there. Since then we have been closely engaged, and it has worked hard to liaise with other community associations and amenity societies in central London. I am grateful to the Covent Garden Community Association for its interest—perhaps it is self-interest, but it is understandable self-interest—for the work that it has done, and because it has brought home to me and to others the effects of what is happening here on people who live every day with the situation.
This is not the happy situation that the Government sometimes allude to, when somebody simply goes on holiday for a couple of weeks and lets their flat for a little bit of income. It is very big business. We have heard innumerable horror stories, both collectively, from the Covent Garden Community Association, and from a number of individuals who have contacted me—and, no doubt, other noble Lords—to describe their day-by-day experiences. There are short-term lets where no one knows who is there from day to day and the people who are there do not know what the rules of engagement are, or how they should be living, and all the dangers that go with that.
My noble friend Lady Gardner has referred to the unsatisfactory way in which the Government have dealt with this situation, and I agree with her. As my noble friend said, the provision was introduced on Report in the other place; it was certainly in the Bill when it came to us for Second Reading. I expressed concern about it then—as long ago as 7 July. That is why lots of people on all sides started to contact me about it. We had a considerable debate about it in Grand Committee on 30 October, but still the Government were not clear about exactly what they were going to regulate.
My noble friend Lady Gardner said that she has consistently asked Ministers what will be in the regulations. On 8 December, in answer to one of her questions, the noble Lord, Lord Ahmad, said:
“In order to provide greater certainty before new legislation comes into force, we will issue guidance shortly that will clarify the Government’s view on planning and short-term letting in London”.—[Official Report, 8/12/14; col. 1593.]
That was on 8 December. Your Lordships know that the word “shortly” can mean many things in this House, but I am certain that on 8 December the noble Lord, Lord Ahmad, did not believe that we would have to wait until 6 February, just a few days before we had to deal with this on the last day of Report, before we had any indication from the Government of their intentions.
Why does this matter? It matters because the clause as it stands simply gives the Secretary of State the power to make regulations. However, it gives no indication of what may or may not be in those regulations. It is, in effect, a blank cheque. If those regulations were to be made by the current Government—as, presumably, was the intention when we had Second Reading back on 7 July, or even in Grand Committee on 30 October—that would be all well and good. However, for whatever reason, we have now got to the stage where there is simply not enough time for those regulations to receive parliamentary approval before the general election. I hope that when the Minister responds, he will confirm that that is the case. The regulations clearly cannot be laid until Royal Assent is received, which I guess will probably be mid-March. They then have to lay for 40 sitting days, during which time they can be prayed against, before the approval, or otherwise, of each House of Parliament can be obtained. There simply are not 40 sitting days left to achieve that.
I hope that the Minister will tell us whether it is this Government’s intention to lay the regulations immediately on Royal Assent before Dissolution, so that we at least know at last what the Government will, or will not, put in the regulations; or are we simply being asked to hand a blank cheque to whomever may form the next Government, and whomever may then be the Secretary of State, to do with as they wish? That could not be a much more unsatisfactory situation for anybody, whatever their view and whomever forms the next Government. Why we have taken nine months to get to this position, I do not understand. I do not envy the Minister having to try to explain it because I know that, whoever’s fault this is, it is most certainly not his. I thank him for trying very hard indeed to get some clarity on this. I suspect that had it not been for his very considerable efforts last week, we would not even have seen the policy guidelines last Friday.
We are now where we are. My noble friend Lady Hanham outlined the amendments we have tabled to suggest what should and should not be in the regulations. They have been drafted to reflect our views but with help from London Councils representing all the London boroughs, and most particularly following not daily but hourly discussion with Westminster City Council.
In short, the amendments want five safeguards to be built into the system. First, the premises must be the principal London residence of the owner offering the let. We seek a definition of “principal residence” and “owner”. Secondly, the owner must notify the council and let it know how long the stay will be. That means having a simple—we stress that word—and easy-to-use registration system. Otherwise, local authorities will have no possible way of enforcing whatever the regulations may state. Thirdly, the total lets in any one calendar year should not be more than 30 days. If we are talking about people being able to let their home for short periods while they go on holiday, 30 days in a year is not an unreasonable holiday entitlement. Fourthly, the council can request the Government to provide for local exemption from these provisions where there is a strong amenity case to do so. Finally, residents would not be allowed to continue letting if they were the subject of one successful enforcement action against a statutory nuisance. Our amendment defines the process for determining a statutory nuisance. I think I am right in saying that the Government intend to introduce those last two conditions; I hope that the Minister will confirm that that is the case.
Amendment 51 seeks to leave out Clause 33 entirely. When this issue was innocently put into the Bill on Report in the Commons last summer, I am certain that Ministers—and, I suspect, their officials as well—had no idea of its scale and complexity; I am sure that the Minister will not confirm that. It has been brought home to all of us who have dealt with it over the months that it is a very difficult and complex issue, and is one that is growing and spreading rapidly. At the moment, it principally affects a number of central London boroughs. This issue relates only to London because it relates to a London local authorities Act. However, the concerns and issues arising from short-term lets are spreading across the country. Popular visitor areas are already experiencing difficulties, perhaps not on the scale of Westminster, Kensington and Chelsea and Camden, but demand is growing so fast in this country and throughout the world that it can only be a matter of time before that is the case elsewhere. So this is clearly an issue that the Government have to tackle. They have to tackle it particularly in London for the reasons that we have given, but I suggest that they need to look at it in relation to the country as a whole.
We have got to the stage where we are being asked to give a blank cheque to the next Government to determine whatever they may or may not wish to put in regulations. As we are where we are, I urge the Government to say, “Right, we have got to this stage, and we really need to pause and have a careful think about all this”. Above all, we need to consult the companies working with short lets which are not against regulation but clearly have a rather different view from those who have to enforce the regulations. However, they should all be consulted. The leader of Westminster City Council issued a public letter dated 3 February—last week—in which she clearly says:
“There has been no engagement with this local authority either at a political or an officer level on the detail of the regulations that are intended to follow this Bill”.
Those were the words of the leader of Westminster City Council in a letter to Ministers last week—I repeat, last week.
Therefore, much though I regret that we have reached this situation, the best thing would be for the Government to concede and say, “We will withdraw this clause, consider further and consult fully, and we or whomever the next Government are will come back after the election with carefully considered, thought-out and consulted-upon regulations that properly tackle the issue”.
The Earl of Lytton (CB)
My Lords, I support this group of amendments and declare an interest as a professional involved with property, and in particular as having some involvement with commercial and residential management—although not, by and large, in Greater London, I hasten to say.
This matter seems to have started from what might be described as a once-in-a-lifetime event, the Olympics, and the implications of a London-specific piece of legislation; namely, Section 25 of the Greater London Council (General Powers) Act 1974. I follow the point made by the noble Baroness, Lady Hanham, that London appears to be a special case. Why else would that piece of legislation be on the statute book in the first instance?
We are dealing with the potential impacts on the amenity of existing residents. The question of short-term lettings introduces the concept of “churn”—the turnover of occupants, the cleaners, the services, the deliveries, and the implications for security and people coming and going, possibly at odd times of the day and night. With that, there is the natural local authority concern and the issue of public interest in matters of safety and security, including overcrowding, the maintenance of standards, fire precautions and so on. Beyond that, there is the ability to police whatever is put in place to ensure compliance. I have a particular problem with that because, for every block of flats to which such circumstances might apply, if they happen to be in a particularly accessible area near somewhere in our metropolis where there are constant events, one can easily see that a certain proportion could be on this “churn” at any given time. There might be a real question regarding compromising the peace and tranquillity of those who wish to live, work and do all the normal things that normal residents do.
I support the argument that there needs to be knowledge and a degree of control in the hands of the local authority through its planning, building regulations and environmental control functions. London is a special case; there is always something going on there, and that is why it is particularly important to have special regard for it. A less than 50% response—a minority of London boroughs responded—is not exactly an endorsement of what is being proposed by the Government. The noble Baroness, Lady Hanham, who has enormous experience from her involvement with an inner London borough, and the noble Lord, Lord Tope, who has great experience from a little further out, know that these are the issues, and their voices should be listened to. The noble Lord, Lord Tope, had a quick dig at the Minister about what the term “shortly” might mean. I was brought up in the west country, where there were two terms: one was “shortly”, and the other was “directly”. It was important to know that “directly” meant that there would be a quicker response than “shortly”. I hope that no one with west country roots will come back and tell me that I am wrong, but that is what I understood by those terms.
I apologise for continually referring to the noble Baroness, Lady Hanham, but she made a number of good points. I also pay tribute to the noble Baroness, Lady Gardner, for introducing the amendment in the first place and for being assiduous and persistent in plugging the general point. The noble Baroness, Lady Hanham, referred to the fact there is an increasing amount of investment property in London. That means that it is not necessarily governed any more by the wishes of those who live, work, shop and raise children in our metropolis. If we are not careful we will get to a tipping point, where the social profile and how to enforce and govern it get altered to the point of being something other than for those who live and work there. After all, they are the people with the democratic vote.
If we are not careful, this will go right to the heart of the structure of society. Of course, that erosion will be that much more rapid in areas with what we might call continual ongoing attractions, which might attract these short-term lettings—they will be cut most severely. To look at London as a composite whole is wrong. The noble Lord, Lord Tope, identified this as a phenomenon occurring elsewhere. For all I know it might affect areas near Glastonbury, the Hay-on-Wye Festival or any other place where these events go on in the countryside.
We are dealing with a class of lessor—people who allow their homes to be used as short-term lettings by others—who, it must be said, by and large lack the knowledge and expertise of renting in this sector. I do not think that many of them have the slightest idea of what is involved in the wear and tear on the property, what the critical capacity is of the hot water system for their block, or in any of the other matters that might be involved, such as the security at the front door when a large number of people, checked and unchecked, have access to the code to come and go.
I do not see what the Government are proposing as a deregulatory measure as at all deregulatory. It opens up a raft of potential further regulation. If it goes through without further ado I predict that we will be back again in not very many months, trying to patch over the cracks and deficiencies where things have started to go seriously wrong. They will go seriously wrong in the most critical areas of our capital, not in the relatively decentralised areas. There is a real question of how communities, local government or residence associations—or, for that matter, landlords or their agents—will be in a position to control this.
We need regulation, especially as some of the main players operating internationally on the web do so in an almost entirely unregulated environment, as far as I can see. That is putting aside the stories one hears of, which cause immense difficulties: about unpaid local taxation, problems of double booking and things like that, of people apparently thinking that they have a holiday let yet the owner knows nothing about it. All those have come to my attention. I do not know whether they are all completely apocryphal; I think they are probably not. We need some regulation, which really ought to be before this House.
I hope that the Minister will think again. I hope he will realise that, although one would have every wish to ensure that there were means whereby people could capitalise on, for example, Wimbledon fortnight by letting their homes to the wealthy from elsewhere, it would need to be done without it having a negative effect on other individuals, on those whom one might call normal residents and on the whole process of due diligence and the regulatory environment. In general, I am entirely in sympathy with Amendment 47 and the amendments in the group that follows it.
Baroness Gardner of Parkes
I am now rising to speak very briefly to the group—
Baroness Garden of Frognal (LD)
I apologise to my noble friend but I think that under the rules of the House we are still on Amendment 47 and Amendment 48 has yet to be called. There has obviously been some confusion in that people are speaking to two groups of amendments. I think that Amendment 47 is still being debated.
Lord McKenzie of Luton
My Lords, we have got terribly confused tonight. I thought that we were speaking to the generality of the amendments and that that was the noble Baroness’s position. If that is the case and the noble Lord, Lord Leigh, wishes to make his contribution now, I will happily follow him.
Lord Leigh of Hurley (Con)
I thank the noble Lord. I was planning to speak to Amendment 48, so my comments are directed to that group of amendments rather than to the specifics of Amendment 47. I declare my interests both as an investor in residential property and as president—
Baroness Hanham
I hesitate ever to come in on a point of principle but my noble friend Lady Gardner said that she wanted Amendments 47 and 48 to be grouped, and that is what we have done. Have we spoken to Amendment 47 separately? Is there any way in which we can get this settled? I have spoken to the group commencing with Amendment 48, not Amendment 47. I was waiting for the noble Lord, Lord McKenzie, to come in and speak to his amendments. It seems to me that my noble friends Lord Tope and Lord Lytton have also spoken to the group starting with Amendment 48. I am sure that there must be a quick way of getting this sorted so that we are all speaking to the group commencing with Amendment 48.
Lord Ahmad of Wimbledon
My noble friend makes a totally valid point and I apologise—there should have been some closure with regard to Amendment 47. Perhaps I may suggest that I respond specifically to the issues around Amendment 47 and then we can move on. I understand that the amendment, having been called, will need to be withdrawn. Therefore, if my noble friend Lady Gardner is minded to speak to Amendment 48, perhaps she can, first, withdraw Amendment 47, as that will be a useful way of moving on to the more substantive debate.
Lord Avebury (LD)
My Lords, I hope that we are not going to have another speech from the noble Baroness, Lady Gardner, on Amendment 48 when she has already spoken to it.
Lord Ahmad of Wimbledon
Unless other noble Lords suggest anything else, what I propose may be the most practical way forward. If my noble friend is minded to withdraw her amendment, we can move on to the substantive debate. Because of the confusion, I suggest that that is what she does. If she wishes to speak to Amendment 48, that is her choice, although I think that many of her points have been covered. However, this is a self-governing House and it is for the House to agree to that. I ask her to withdraw Amendment 47 to allow us to move on to the substantive debate, but of course I succumb to the will of the House on that.
The Deputy Speaker (Lord Geddes) (Con)
The noble Baroness has to indicate that she wishes to withdraw her amendment.
Baroness Gardner of Parkes
I thought that the Deputy Speaker had to put that to me before I sought leave to withdraw the amendment. I apologise. I am happy to beg leave to withdraw Amendment 47 on the grounds that it has been very well debated. It was intended to be a separate issue and I shall wish to speak to Amendment 48.
“( ) Regulations under subsection (1)—
(a) must not include circumstances where the premises in question have been used as temporary sleeping accommodation for more than 30 days in that calendar year; (b) must require persons renting out premises under those regulations to provide the local planning authority with the following information at least 7 days before each use as temporary sleeping accommodation commences—(i) the date the short-let stay will commence,(ii) the date the short-let stay will end,(iii) the names and permanent addresses of the persons temporarily occupying the property, and(iv) written evidence that the owners of the property (where applicable) have been notified and given their written consent;(c) may permit local planning authorities to vary the requirement in paragraph (b) by establishing a fast-track procedure to enable persons renting out premises to provide the specified information with less than 7 days’ notice;(d) may permit local planning authorities to levy an administrative fee on persons providing information under this subsection.”
Baroness Gardner of Parkes
I shall speak very briefly to this. Amendment 48 sets out the terms that local authorities believe are essential to be able to control things. Although it says “7 days” they are quite willing to introduce a 48-hour or even a 24-hour system to do that. That is all I need to say. It is a matter of the Government negotiating but we should have an option. Amendment 50 would enable local authorities to recover costs because enforcement procedure of any sort is terribly expensive and, of course, falls back in the end on council tax payers, or people do not get the service at all because it cannot be afforded. As for Amendment 51, I feel very strongly that Clause 33 in its present form is not good and I would be very much in favour of leaving it out.
Baroness Gardner of Parkes
Before I move my amendment I would like to thank others who have covered so many points that I therefore do not need to. I beg to move.
Lord Leigh of Hurley
I think I am speaking to Amendment 48. If not, I am sure that noble Lords with much greater experience will stop me. Before so doing, I declare an interest as the owner of residential property and as the president of Westminster North Conservative Association.
Clearly, we need Clause 33 because there is a significant problem out there at the moment. Noise and anti-social behaviour from short lets are in the top three complaints we receive when canvassing in Westminster North, and there is an undoubted problem with nomadic communities which make it very hard to plan resources—for example, schooling, rubbish collection and so on. Residents not knowing who their neighbours are increases security problems and we have ended up with a situation in which Section 25 of the GLC Act 1973 is ignored. There is hardly ever any action or prosecutions on it. We have ended up in the worst of worlds where there is a thriving business that is largely underground and a black market, whether housing benefit-funded tenancies or otherwise, run by organised criminals for the benefit often of other criminals.
Having said all that, I am very much for deregulation. I served on the deregulation task force of the DTI in 1995 and would like to see something done to facilitate Londoners legally to enable their properties to be let out to tourists and others to the extent that they are away. We acknowledge that the market for short lets is strong and that people should be able to do what they want with their properties, and in the process take the opportunity to cut out these criminal middle men and try to legitimate the whole business. We need a pragmatic solution. I agree, as has been said, that one of the biggest concerns is where individual flats within blocks of flats are on short let. There needs to be an arrangement whereby leaseholders can all agree collectively on what they want to do on short lets, so that owners and occupiers are not suddenly blindsided by one or two flats being turned into short lets, where some, not all, are used for purposes for which they were certainly not intended. That has led to problems that have been commented on, particularly in the New York market.
Freeing up the market but protecting residents must be done, possibly by creating some sort of opt-in. Tenancy agreements must clearly list expectations and responsibilities. One of the major problems has been in respect of flats let without any gas safety certificates or fire-retardant furniture. Curiously, where people decide to let out rooms in their flat, as can be done, one can only imagine how that will lead to all sorts of unfortunate incidents.
Although Amendment 48 helpfully suggests that the restriction is 30 days, which is reasonable, I am not sure that the proposal requiring seven days’ notice “before each use” is practical. I just cannot imagine that it would work, and it would rather defeat the object of people wanting an immediate short stay.
I will spare your Lordships’ time in going through each of the amendments but I do not think that they are necessary. I wanted to preface my remarks by explaining that I am as fully aware as anyone of the problems and issues in the London market. When I canvass in Westminster North I see it regularly, but I believe that it is possible within the forthcoming regulations for our concerns to be resolved. I take this opportunity to encourage the Minister to come to the House with those regulations as early as possible so that we can see that they reflect the issues about which we are all so concerned.
Lord McKenzie of Luton
My Lords, I shall speak to Amendments 49A and 49B in this group. In doing so, I draw attention to my declaration in the register of interests as an owner of leasehold property. At this hour, I wish that it was not let out and was available, but there we are. These amendments would put in the Bill the right for individual local planning authorities to exclude from the deregulatory provisions of Clause 33 particular residential premises or residential premises situated in a particular area.
I thank the Minister for making time available in recent weeks for a series of meetings to seek to resolve the range of issues opened up by this clause. We are conscious that a variety of views have been pressed on the Government from Members of your Lordships’ House, operators in the market, London Councils and community groups, including the Covent Garden Community Association. As the noble Lord, Lord Tope, said, we should also thank onefinestay for spending time with us to explain the business that it has built and the steps that it goes through to seek to avoid loss of amenity in the areas in which it operates.
The concerns with the proposed deregulation have been most comprehensively described by London Councils in its current briefing. This might be summarised as the potential loss of residential properties because of movement into the more lucrative short-term let sector, increased problems with noise and anti-social behaviour, loss of community identity, increased crime and fire safety risks, and challenges of continual enforcement—indeed, the effect of “churn”, which was spoken to by the noble Earl, Lord Lytton.
Westminster Council estimates that at least 3,000 properties in its borough are being used for short-term letting accommodation. Apparently, there has been a rise of 37% in just three months in Camden. Even if not experienced across London, we recognise that these are very real problems which afflict some areas under the current arrangements, let alone any further deregulation.
It might be helpful if I restate our position. We see no objection to individuals and families letting their homes for short periods, perhaps when they go on holiday, without the need for planning permission for so long as this activity does not prevent the residential premises from intrinsically remaining their home. This is also provided that the scale of the activity does not adversely change the character or amenity of the local neighbourhood.
We have at last before us a policy paper from the Government. Like the noble Baronesses, Lady Hanham and Lady Gardner of Parkes, we regret that this has come somewhat late in the day. It is their long-awaited response to last year’s consultation. It is a pity that we do not have draft regulations but have to accept reluctantly that this is all we are going to get during this Parliament. The paper captures many of the representations we have received over recent weeks. As the Minister will doubtless explain, the intention is to limit short-term letting to 90 days in a calendar year, have clear enforcement arrangements to protect amenity and address concerns over nuisance, with the flexibility being withdrawn if there is successful enforcement action against statutory nuisance, a provision for local authorities to request the Secretary of State to agree targeted localised exemption where there is a strong community case to do so, and a requirement that the property in question must be liable for council tax. Clearly, the devil is still in the detail, but all in all the Government have moved from their starting position and we should thank them for that.
We can support the flexibility applying only to someone’s home and for a limited period in each year. London Councils is seeking a limit of 30 days a year while the Government are proposing 90. We are inclined to the view that 30 days could be unduly restrictive when taken together with other safeguards, although back-to-back periods of 90 days means that a short-term let could extend for half a year, which in our view is too long. The Minister may want to say more about how it is envisaged that enforcement will operate, but we consider that while it is not for primary legislation, there should be at least an annual notification requirement from the householder to the local authority, I think along the lines suggested by the noble Baroness, Lady Hanham, when the first short-term let commences. This need not be an overly bureaucratic process, but it would help local authorities more readily understand the scale of such activity locally and may also be used to signify a possible income tax liability. London Councils seeks a broader safeguard by requiring notification of how long it is to be presumed that each stay will last. The “one strike and you’re out” approach, which we support, would seem to satisfy the difficulty expressed by London Councils over continually having to undertake enforcement procedures.
Where we part company with the Government, and hence our amendment, is on the right of local authorities to override the new flexibility. We do not consider that this should be subject to the agreement of the Secretary of State. Local authorities are in a better position than the Secretary of State to determine what is happening in their individual boroughs and the impact on the local neighbourhood. The use of the term “strong amenity case” suggests that the bar would be set high by the Secretary of State. That is not to say that local authorities can act in an arbitrary or capricious manner. Public policy should prevent this, and in any event, regulations could include the criteria which local authorities should take into account in applying an exemption.
It seems that we are very much in the era of the Minister declaring his support for localism. It was only yesterday in an exchange at Question Time when the noble Lord said:
“I am disappointed. Certainly, on this side of the House, we believe in localism, and this is about devolving responsibility to local authorities”.—[Official Report, 10/2/15; col. 1103.]
That followed an answer given the previous day when he said:
“As we said we would, we have stressed localism and local empowerment, and we have delivered on that”.—[Official Report, 9/2/15; col. 1019.]
I suggest that this is a chance to deliver further.
There is the beginning of some convergence on the different positions, and it is to be regretted that the manner and timing of the issue means that there is limited time to resolve the remaining differences. That is why we are strongly of the view that the safeguard we need to put in the Bill is the right of individual boroughs to pursue exemptions from whatever deregulation eventually emerges. It makes them the final decision-makers.
Perhaps I may comment briefly on some of the other amendments, in particular to Clause 33. Unlike the noble Lord, Lord Leigh, I would say that if the Government had not opened the box, it might be argued that matters should be left alone, particularly as the timing prevents this Parliament seeing things to a conclusion. There may be a case for now starting from scratch and leaving this to the next Parliament, but there is no certainty of the priority it would get. Having opened up the issue, there are clearly matters to address. The extent of short-term lettings in some areas, the nuisance it causes and the difficulty of enforcement arises now. The regulation of differing levels of enforcement by individual boroughs determined sometimes by capacity issues rather than policy is not a comfortable place to be. The twilight zone in which businesses operate is also unsatisfactory, at least for those operators who want to do the right thing.
In some of the other amendments, there are references to the nature of the residential property, for example with the terms “principal and permanent residence” and “principal London residence”. Our starting position was to think that this should apply only to somebody’s principal private residence. We thought about it a bit more and if you have the protection of a limited number of days, particularly if it is 30, that does not seem to matter too much, so long as it is clearly and demonstrably somebody’s home. How many homes you can have in London is an interesting question, but we are less concerned perhaps about that precise definition of residence. However, it seems to me that we do have a convergence on some issues. It is just a great pity that the delay in dealing with some of these issues means that we cannot reach a satisfactory conclusion during this Parliament.
Lord Ahmad of Wimbledon
My Lords, first, I thank all noble Lords who have taken part in the debate, but make special mention of my noble friend Lady Gardner. I know that she had a fall yesterday and I am glad to see her in her rightful place today. We were concerned that on such an important issue we might not see my noble friend in her place. Much as some of the questions she has posed are challenging, I wish her well in any subsequent recovery. As we have seen again today, she has put forward some very compelling arguments in respect of her position.
I will also say from the outset that I of course understand that noble Lords are keen to ensure that any relaxation of legislation governing short-term letting in London is available only to residents, so that they can make their property available when they are away for a limited duration, not to allow non-residents to use property almost or exclusively for short-term letting. I confirm that this is exactly the aim of the Government’s proposals. We clarified our intentions for the reform of legislation on short-term letting of residential accommodation in London in a policy document that was shared with your Lordships, as my noble friend Lord Tope said, on 6 February. I am sure we can come up with varying definitions of “short” and what have you, but it is late in the day, so I will not dwell on that too long.
Section 25 of the Greater London Council (General Powers) Act 1973 provides that the use of residential premises for temporary sleeping accommodation for less than 90 consecutive nights is change of use, for which planning permission is required. London residents face a possible fine of up to £20,000 for each offence of failing to secure planning permission. There are currently, as I am sure noble Lords appreciate, thousands of London properties advertised on websites for use as short-term accommodation. However, each potentially is in breach of Section 25 as it stands.
In response to our Review of Property Conditions in the Private Rented Sector, the new policy document that I referred to sets out the Government’s approach to modernising the legislation so that residents can allow their homes to be used on a short-term basis without unnecessary bureaucracy. The Government have carefully considered the views put forward in responses, and I thank the noble Lord, Lord McKenzie, for acknowledging the time that I have certainly sought to take to respond to some of the concerns of noble Lords on this issue. In bringing forward our reforms, we will therefore seek to make provision for safeguards to protect London’s housing supply and residential amenity and provide the ability for local exemptions to be made which would exclude specified premises or areas from the changes.
The Government want to enable London residents to participate in the sharing economy and to enjoy the same freedom and flexibility as the rest of the country, without the disproportionate burden of requiring planning permission. This policy is aimed at helping residents, not at providing opportunities for change of use from residential to business premises. In order to address the issues raised and to respond to some of the concerns, the Government intend to restrict short-term letting of residential premises to a maximum of 90 days in the calendar year, so that properties cannot be used for short-term letting on a permanent basis throughout the year.
I also confirm that we intend to include the requirement that properties must be liable for council tax, to exclude business premises. I also assure my noble friend Lord Tope that the new flexibility can be withdrawn following a successful enforcement action and that, in exceptional circumstances, local authorities will be able to request that the Secretary of State agree to small localised exemptions from the new flexibility, where there is a strong case to do so. In response to the issue around regulations, I say to noble Lords that the Government intend to consider the matters I have just mentioned in deciding the most appropriate way to bring these measures forward into law.
For completeness, it is appropriate for me briefly to mention Amendment 47, which sought to restrict the ability to let residential property on a short-term basis, without planning permission, to those times that coincide with,
“a major national or international sporting or entertainment event”.
It would be extremely challenging to define such events in a way that would exclude many other sporting or entertainment events that occur in London on a weekly or even daily basis; for example, European or international football matches and major concerts at venues such as Wembley and the O2 arena. I am grateful to my noble friend for withdrawing that amendment.
I will respond to some of the questions that have been raised. My noble friend Lady Gardner raised some concerns about Parliamentary Answers. It has been confirmed to me that I provided Written Answers to her Questions. Perhaps they were not as complete as she expected but I have checked the records; those Answers were provided and referred to the policy document and the fact that this would be made available before Report, which I hope has indeed been done.
My noble friend Lord Tope raised the issue of not consulting, in particular with Westminster Council. I assure my noble friend that my officials have met with London Councils officials and representatives from a number of London boroughs, including Westminster.
My noble friend Lady Gardner raised the issue of tax liability. We expect people to pay tax where they are liable. The “Rent a Room” scheme to encourage people to take in lodgers provides a tax allowance on income received from renting out a room; it is a long-standing provision. My noble friend also talked about subletting in Camden. To confirm, a tenant will need to check with their landlord whether under the terms of their tenancy they can sublet. We do not seek to discriminate between people who own their property and tenants.
Amendments 48 and 49ZA would restrict the ability to let properties on a short-term basis, without planning permission, to no more than 30 days a year, as my noble friend Lady Hanham said. Amendment 48 would also prevent hosts being able to accept bookings from overnight guests at less than seven days’ notice, and would require them to notify the local authority of every single letting. It would allow local authorities to establish a fast-track notification process and introduce an administration fee. Amendment 49C would also require notice of short-term letting, and its intended duration, by the property owner.
We want to deregulate in order to provide the ability to let property on a short-term basis for 90 nights per year. This will provide residents with meaningful and proportionate freedom and flexibility in how they use their property. The Government believe that a limit of 30 nights is unduly restrictive. One of the major advantages of the internet is the ability to make transactions quickly and flexibly, and we want our reforms to facilitate this. A requirement for seven days’ notice would unreasonably limit the ability of hosts to offer accommodation to customers seeking to book at shorter notice.
Baroness Hanham
My Lords, for clarity, my amendment said 30 days. In speaking to it, I did not support the situation about the seven days’ notice, nor did I do anything other than say that we would want a short, light-touch registration, which could be up to as much as a year—very much supporting what the noble Lord said. It is important to get the nuances, which are slightly different, and I tried to make them clear but we were in a muddle about where we were.
Lord Ahmad of Wimbledon
The noble Baroness is always well placed to clear up muddles, as she has done so again. I fully accept that she spoke specifically to the issue of the 30 days.
Amendment 49, which would restrict the deregulation only to those properties which are the principal and permanent residence of the owner, and Amendment 49ZA, which would restrict the deregulation to the principal London residence of their owner, are unnecessary and overbearing. They would unreasonably prevent tenants carrying out short-term letting, which may be permitted within the terms of their lease. It would also prevent people short-term letting who may have another residence outside London, even though the London property would be viewed very much as their home.
Amendments 49A and 49B would remove the ability of the Secretary of State to direct that specified areas should be exempt from the changes. The Government want to be able to grant exemptions but only in exceptional circumstances and where a strong case has been made by the local authority. Otherwise, we want to be clear that our aim is to provide the same rights for all Londoners in all local authority areas.
The amendments would create different regulatory approaches across the capital, potentially resulting in differences between local authority areas. Residents would find that their near neighbours had either greater or lesser freedoms to short-term let their property, without any apparent justification.
Amendment 49C would remove the deregulation measures where a relevant enforcement process had taken place. It would also require the Secretary of State to make regulations for local exemptions where there were strong amenity grounds. I can assure noble Lords that we intend to provide that the new flexibility can be withdrawn following a successful enforcement action and that, in exceptional circumstances, local authorities will be able to request that the Secretary of State agree to small localised exemptions from the new flexibility where there is a strong case to do so.
Amendment 50 is also unnecessary in the Government’s view. It is already the case that anyone carrying out illegal short-term letting risks a planning enforcement fine of up to £20,000. It is already possible for local authorities to apply for costs in the event of unreasonable behaviour during an appeal against enforcement action.
I assure noble Lords that the Government’s intention is only to deregulate Section 25 to allow residents occasionally to let out their property on a short-term basis; for example, when they are away on holiday. We are not seeking to create new opportunities for short-term letting on a permanent basis. Our policy document shows how we intend to achieve this in a way which balances the reasonable aspirations of residents to let out their homes temporarily with safeguards to prevent abuse of our reforms.
For these reasons, it is the Government’s belief that Clause 33 should remain part of the Bill. I fully acknowledge that differing views have been expressed by noble Lords, but I think that it is the shared intention of the Government and your Lordships to allow letting of property for residents but not on a commercial basis. I hope that some reassurance has been provided by what I have said and I urge noble Lords not to press their amendments.
Baroness Gardner of Parkes
My Lords, I thank the Minister for his reply. He said that he doubted that his previous replies were negative or non-existent, but he should just check his Written Answer dated 7 January in response to my Question referring back to his earlier Answer—my original Question was for oral answer. There was simply no reply at all to Written Question HL3615, which was then repeated. I have gone back on it yet again and there is still no answer.
Lord Ahmad of Wimbledon
I will review those Answers with officials and get back to my noble friend specifically on them. If there are other points that she wishes to make, perhaps we could move on.
Baroness Gardner of Parkes
My other point is that I am hoping that the Minister will be able to give us some comment or offer to enable us to be sure that the Government are willing to consult local authorities on this matter. That is a big hole in the argument. I notice that the noble Lord, Lord Leigh, drew attention to the seven-day notice period, but I point out to him that, earlier in the discussion, I drew attention to the fact that Westminster Council and, it believes, other councils are willing to offer 48-hour or even 24-hour registration to enable people to come, but it makes the point strongly that unless it knows who is there and for how long, it cannot police it. The Government’s suggestion of 90 days in a year will require officers to go for 91 days, on separate occasions, to be sure that no one exceeds the 90 days. That is totally unrealistic. It would be far better and simpler to have an online registration system to register your interest, then everything would be in order and you would know exactly who was in the place.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
Is the noble Baroness seeking to withdraw her amendment?
Baroness Gardner of Parkes
I am waiting for the Minister to reply before I do.
Baroness Garden of Frognal (LD)
I hope my noble friend will agree that the Minister has already given his reply.
Baroness Gardner of Parkes
I am sorry to hear that, because he really has given no reply on so many points. I find that unsatisfactory but at this time of night, and with so few people here, I would not think it at all fair to test of the opinion of the House. I therefore beg leave to withdraw my amendment.
Lord Ahmad of Wimbledon
“Designation of urban development areas: procedure
(1) Section 134 of the Local Government, Planning and Land Act 1980 (urban development areas) is modified as follows in relation to an order under subsection (1) of that section designating any area of land in England as an urban development area that is contained in an instrument laid before Parliament on or before 31 March 2016.
(2) The section has effect as if after subsection (1) there were inserted—
“(1A) Before making an order under subsection (1), the Secretary of State must consult the following persons—
(a) persons who appear to the Secretary of State to represent those living within, or in the vicinity of, the proposed urban development area;(b) persons who appear to the Secretary of State to represent businesses with any premises within, or in the vicinity of, the proposed urban development area;(c) each local authority for an area which falls wholly or partly within the proposed urban development area; and(d) any other person whom the Secretary of State considers it appropriate to consult.”(3) The section has effect as if for subsection (4) there were substituted—
“(4) A statutory instrument containing an order under subsection (1) is subject to annulment in pursuance of a resolution of either House of Parliament.”
(4) The duty to consult under section 134(1A) of the Local Government, Planning and Land Act 1980 (inserted by subsection (2) above) may be satisfied by consultation before this section comes into force.”
Lord Ahmad of Wimbledon
My Lords, the Government’s aim is to promote and support the regeneration of brownfield land and the creation of new, locally led garden cities. This is not news, nor is the fact that Urban Development Corporations can play a key role in driving forward the delivery of large-scale development. This is especially true in areas where previous ambitions have failed to progress.
Urban Development Corporations—UDCs—are statutory bodies which are established under the Local Government, Planning and Land Act 1980, whose objective is to regenerate designated urban development areas. Urban development areas and corporations are established by affirmative orders, which, if held to affect private interests, can be declared to be hybrid by the House and therefore become subject to the hybrid instruments procedure. Once declared hybrid, the order is open to allow private interests to petition. This has happened in respect of all previous urban development areas and Urban Development Corporations.
A hybrid procedure is time-consuming and can be costly for all parties, involving processes of representations and hearings over what can be a substantial time. The formation of an urban development area or an Urban Development Corporation does not, in the Government’s opinion, impact on the private rights of individuals and businesses in the area. The powers available to Urban Development Corporations are already available to local authorities, notably in development management planning powers and, where necessary, compulsory purchase. We therefore do not consider that the creation of an urban development area or corporation gives rise to a loss of rights. It is the Government’s view that the hybrid procedure is not necessary in the case of statutory instruments establishing urban development areas and corporations, provided that there is proper consultation with individuals, businesses and local authorities in the area concerned before the statutory instrument is presented to Parliament.
The Government propose to create a statutory duty to consult. It would require the Secretary of State to consult,
“persons who appear to … represent”,
residents and businesses, local authorities and anyone else who the Secretary of State considers appropriate. The proposed duty to consult would increase the level of public scrutiny that proposals of this nature must undergo. It would ensure that anyone who wishes to can respond to a consultation and express their views and concerns.
Under the current legislation, there is no statutory duty to consult on the creation of an Urban Development Corporation. When the 1980 Act was passed, the affirmative and hybrid procedure was the only express means for local residents to influence government policy. Establishing a statutory duty to consult provides people with an opportunity to participate early in the policy-making process and voice concerns at the point at which they arise, rather than waiting for a chance to petition once a statutory instrument is laid before Parliament.
The way in which people engage with government has improved and changed greatly in recent years. The advent of new technology means that it is now quicker, easier and cheaper for members of the public to raise their concerns through consultation—more so than by bringing a petition in front of your Lordships’ House. Replacing the hybrid procedure with a statutory consultation duty would reflect this change in the way people now interact with government and the policy process. The Government therefore remain of the view that the negative procedure, subject to a statutory duty to consult, is the appropriate procedure for establishing UDCs.
I should like to place on record my particular thanks to the noble Lord, Lord McKenzie, for his participation in discussions on how to proceed on this matter. I know he shares my view that we want to see progress in taking this proposal forward. The inclusion of a 12-month sunset provision, with an expiry date of 31 March 2016, demonstrates our commitment to the regeneration of areas where development is waiting to happen. Any statutory instruments establishing an urban development area or Urban Development Corporation, if laid after 31 March 2016, would revert to the current, affirmative, procedure. It would be for a future Government to propose longer-lasting changes beyond the sunset date, and for the Parliament of the day to debate and decide on such changes. The Government have previously argued that such a change would be appropriate for all the reasons I have described, but we recognise that this issue will not be resolved in the current Parliament.
If the changes we are proposing to the Bill are approved, then, following Royal Assent, the Government will lay a statutory instrument establishing an urban development area and corporation for Ebbsfleet. The Government have already consulted on this proposal, and have published a report demonstrating the support expressed for our proposals in the consultation responses. Given the progress that has been made in recent weeks and months, and the strong case for an Urban Development Corporation at Ebbsfleet, it is perfectly reasonable that we should now move forward with establishing the Ebbsfleet Development Corporation as soon as possible. I therefore hope that this amendment carries your Lordships’ support, and I beg to move.
Lord Avebury
My Lords, if the provisions regarding short-term lettings were unsatisfactory, these provisions coming before your Lordships at this stage of the Bill are unsatisfactory in spades. The amendments that we are now looking at are in substitution of the new clauses reducing the power of Parliament over the order-making power to designate land as urban development areas and to establish Urban Development Corporations. The Delegated Powers Committee received those amendments originally on 25 October, and a memorandum explaining the nature and purpose of the proposals on 26 October, giving it time to report at lightning speed on 29 October. The report severely criticised the original proposals as a breach of the undertaking in the consultation document to obtain express parliamentary approval for these proposals, and called on the Government to withdraw them before the next stage in Committee.
The amendments were accordingly withdrawn but, unfortunately, as the Delegated Powers Committee pointed out in its further report published yesterday, the two new clauses that we are now considering still provide for parliamentary approval to be via negative, rather than affirmative, resolution until 31 March 2016. This means that until that date, interested parties would not have the right to petition against orders designating UDAs and establishing UDCs, as has always been the case in the past, leading to the hearing of evidence in a committee on the matters raised in the petition. The Government recognise that your Lordships would need time to consider and debate such a major reduction of our powers of scrutiny, but are insisting that in the case of Ebbsfleet—the only proposal likely to be affected by these amendments—they must pre-empt a more general debate.
I understand that in the consultation, some three-quarters of the respondents were in favour of this new town and one-quarter of them were against. That does not tell us whether any of the antis would have gone to the length of petitioning, but any who were minded to do so have been deprived of their rights although, as the Delegated Powers Committee points out, the Government gave no indication of this in the consultation. I am keen that Ebbsfleet should go ahead rapidly, but I regret the Government’s assumption that they could trample on the rights of scrutiny and the rights of private interests to be heard. They should have started the Deregulation Bill earlier in the Session or, at the very least, they should have found time for a debate on the proposal in the Minister’s letter that the negative procedure is appropriate for all UDC proposals, subject to a statutory right to consultation. I make no comment on the Government’s argument in the memorandum they submitted to the Delegated Powers Committee that the affirmative procedure leads to uncertainty, delay and a loss of business confidence which acts as an impediment to the process of regeneration that the UDCs are expected to deliver.
We are talking here about taxpayers’ expenditure of £1 billion on the infrastructure of these new towns, the first at Ebbsfleet in Kent, followed by others at Bicester, Ashford, Oxford and Northstowe in south Cambridgeshire. If the advice of David Rudlin, the winner of the Wolfson Economics Prize is being followed, they are the precursors to a further 35 similar new towns, giving a total of some 600,000 new dwellings, that will,
“take a confident bite out of the green belt”.
Ebbsfleet is entirely brownfield, as we have discussed, but that cannot be true of all 40 new towns that are planned. How do the Government intend to amend the National Planning Policy Framework to avoid inconsistency between the NPPF’s severe restrictions on development in the green belt and the new towns policy of taking a confident bite out of it? Or do they intend to make ad hoc decisions in each case as it arises?
Will the Minister say how the new towns will make a proportionate contribution towards meeting the dire national shortage of affordable homes? In the case of Ebbsfleet, Land Securities says that it has plans to develop up to 10,000 homes, but is there not a Section 106 agreement for the company to make a contribution towards infrastructure costs in lieu of any obligation to ensure that a given proportion of the homes are affordable? In his helpful letter of 9 February, my noble friend said that the UDC will not have plan-making powers but will have to determine applications within the context of the affordable housing policies set out in the Dartford and Gravesham local plan core strategies, both of which require private housing developers to deliver 30% of the units as affordable housing.
Land Securities is not building any houses itself, but will reach deals with housebuilders on parcels within the site. The Section 106 agreement that the company reached with Dartford Borough Council does not require any affordable homes, the money being allocated to schools. The local MP, Gareth Johnson, says it would be wrong to suggest that there will not be any affordable homes and that it would be a matter for the local development corporation, but surely that is not the way it works. Since all the land is owned by a single company and its objective will be to maximize returns for its shareholders, the LDC will have no say in the matter, unless it uses its compulsory purchase powers. Will there be anything in the rules of the LDC that will encourage it to use those powers to achieve a proportionate mix of affordable housing? How else does the Government think that Ebbsfleet and the other new towns will make any provision for people who cannot afford to buy?
I also asked my noble friend last week how the Government would ensure that LDCs would provide appropriate accommodation for caravan-dwelling Travellers, whose needs are even less likely to be a priority for developers. My noble friend said that they would be required to plan for the needs of Travellers in the same way as local authorities. Does that mean that they have to start from scratch with a needs assessment? Would it not be simpler for them to reach agreements with the local authorities contributing to their area to assume responsibility for a proportion of the needs that have already been identified and assessed by those councils?
Lord McKenzie of Luton
My Lords, we have agreed to support Amendments 51A and 51B despite the 17th report of the Delegated Powers and Regulatory Reform Committee. We opposed the original amendments in Committee and sought a rethink from the Government, which has come in the form of a sunset clause which would bring the provisions of these clauses to an end by 31 March next year so their use would be strictly limited.
We remain unconvinced that the negative procedure accompanied by a statutory duty to consult is the appropriate procedure for establishing a UDC, but agree that there is little time left in this Parliament properly to explore and debate this issue. We are also not unsympathetic to the strong points raised by the Delegated Powers Committee. We will not, however, stand in the way of the Government for this limited period, but we wish to see a revised approach for the future. A new generation of new towns and garden cities is essential to tackling our housing crisis, and the Government’s handling of the development of Ebbsfleet has fallen far short of what is needed to address the problem.
After many years of delay the Chancellor finally announced support for 15,000 homes at Ebbsfleet in his 2014 Budget, although that figure was significantly lower than the over 22,000 homes that had been planned for as recently as 2012. Even now, Ministers have failed to make clear how they intend to support development in light of a funding shortfall of well over £1 billion. Moreover, there is no commitment, as we have heard, to ensuring a minimum number of affordable homes.
My colleague the shadow planning Minister, Roberta Blackman-Woods MP, sought to amend the Bill to update the remit of new town development corporations to ensure that they are fit for purpose for creating a new generation of garden cities, but the Government voted that down and have taken a very short-sighted approach to planning garden cities.
The TCPA has argued strongly against taking forward this development by way of a UDC, which risks confusing the real differences in the nature of the challenges of regenerating existing places and that of building new communities. We have made clear that in government we would not go down the UDC route; as recommended by the Lyons review we would support the delivery of a new generation of garden cities delivered by garden city development corporations based on updated new towns legislation. However, having given the Government their way on this issue for this limited time, we hope that they will now make progress in delivering at Ebbsfleet.
Lord Ahmad of Wimbledon
My Lords, I am grateful both to my noble friend and to the noble Lord, Lord McKenzie, for their contributions. I will briefly answer some of the questions raised by my noble friend Lord Avebury, and will of course write to him on what I am unable to cover. He asked a question on Gypsy and Traveller provision within Ebbsfleet. The responsibility under the Housing Act 2004 rests with the local housing authority, and it will be for the Ebbsfleet Development Corporation to discuss, with both Dartford and Gravesham Borough Councils in the context of their respective local plans—which remain the development plans for Ebbsfleet—and their Gypsy and Traveller accommodation assessments, what provision may be needed in the UDC area.
My noble friend also asked a question—to which I also responded to him in writing—about whether there will be any element of affordable housing. The development corporation will not have plan-making powers and will, therefore, as I said to him earlier, work within the context of affordable housing policies set out in the local authorities’ existing development plans. He also asked about Section 106 and land securities. There is a Section 106 agreement in place. He also raised issues about the DPRRC’s report. I am grateful for the advice that we have got from the DPRRC. I have written directly to my noble friend Lady Thomas and am happy to share this letter. On the substance of the proposals, I know that my honourable friend Brandon Lewis proposes to make a Statement in the House on the substance of progress at Ebbsfleet, as parliamentary time allows.
I am grateful to the noble Lord, Lord McKenzie, for allowing us to reach a sensible way forward on this. Based on that, and just for clarity, I commend the amendment to the House and hope that the new clause will be inserted into the Bill.
Lord Ahmad of Wimbledon
“Establishment of urban development corporations: procedure
(1) Section 135 of the Local Government, Planning and Land Act 1980 (urban development corporations) is modified as follows in relation to an order under that section establishing an urban development corporation for an urban development area in England that is contained in an instrument laid before Parliament on or before 31 March 2016.
(2) The section has effect as if after subsection (1) there were inserted—
“(1A) Before making an order under this section, the Secretary of State must consult the following persons—
(a) persons who appear to the Secretary of State to represent those living within, or in the vicinity of, the urban development area;(b) persons who appear to the Secretary of State to represent businesses with any premises within, or in the vicinity of, the urban development area;(c) each local authority for an area which falls wholly or partly within the urban development area; and(d) any other person whom the Secretary of State considers it appropriate to consult.” (3) The section has effect as if for subsection (3) there were substituted—
“(3) A statutory instrument containing an order under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”
(4) The duty to consult under section 135(1A) of the Local Government, Planning and Land Act 1980 (inserted by subsection (2) above) may be satisfied by consultation before this section comes into force.”
Lord McKenzie of Luton
(a) by a notice fixed to the vehicle;(b) by a notice handed to the person appearing to be in charge of the vehicle at the time; or(c) where the enforcement officer is prevented from serving the notice by either of the methods in paragraph (a) or (b), by post,in respect of a parking contravention on a road in a civil enforcement area in England”
Lord McKenzie of Luton
My Lords, in moving Amendment 53, I shall speak also to our other amendments in this group, Amendments 54, 55 and 56. I am grateful for the support of the noble Baroness, Lady Hanham, and from the noble Lord, Lord Tope, on these amendments.
Local authorities as we know are precluded from using their civil parking enforcement powers to raise revenue. It is suggested that enforcement by CCTV is particularly unfair because a motorist might be issued with a ticket as a consequence of a camera. The ticket arrives at their home some time after the event when they have no opportunity to examine the location when the alleged contravention took place. However, the Government’s consultation on local authority parking last year acknowledged the benefit of CCTV in enforcing moving traffic congestion where cars use bus lanes, do not exit box junctions, and so forth.
Our amendments go further, particularly in relation to the use of CCTV around schools. This matter was addressed forcefully in Committee by the noble Lord, Lord Tope, who pointed out the nonsense of allowing CCTV enforcement for 10 metres around a school—the zig-zag lines—but not beyond. Amendments 54 and 55 would include in the Bill exemptions from the ban, some of which the Government have already conceded should be provided. This applies to contraventions for stopping at bus stops and bus lanes, school entrance markings and red routes on the grounds of safety and the needs of bus services.
It is understood the wording of our wider use of CCTV within 100 metres of a school entrance may not always be practical, depending on the configuration of the road and other junctions. For so long as the principle is accepted, however, the wording could be tidied up at Third Reading. The arguments for preventing parking on the zig-zag lines at pedestrian crossings are similar to those made in relation to school entrances. Cars parked on the white zig-zags on either side of pedestrian crossings can obscure motorists’ view of those about to cross, especially children, the visually impaired and wheelchair users. This is particularly dangerous at zebra crossings where there are no traffic lights and motorists slow down only on seeing a pedestrian starting to cross.
Amendments 54 and 55 would extend the exemption to clearways. Currently there are junctions and other parts of clearways where parking is prohibited to protect pedestrian cyclists and motorists themselves. It is unclear why the Government have chosen to exempt red routes but not clearways, given that the same safety considerations are our concern.
Amendment 66 will ensure that the provisions of Clause 39 cannot have an effect until the equalities impact assessment and a regulatory impact assessment have been undertaken. If the Government continue to argue that the former is not necessary, perhaps they would make clear why. As for the RIA, it has apparently asserted that the measures have no impact on business. However, the LGA says that it has heard directly from private companies contracted to enforce parking, which assert that it does have an impact. Do the Government refute that assertion? I beg to move.
Baroness Hanham
My Lords, I have added my support to all the amendments in this group. The anomaly between the treatment of zig-zag lines at school gates and those by pedestrian crossings is ridiculous. Both involve strong safety issues, and the Government should be able to see their way to including pedestrian crossings, at the very least. They also need to review the regulations about the amount of land taken up as a result of a school entrance. That aspect does not make sense; the amount is far too little compared with what is there at present. That is a technical matter that needs rearranging. The rest of the amendments all seem good common sense. I want to get rid of CCTV, but we cannot get rid of it completely if that will cause a safety hazard.
Lord Tope
My Lords, I too have added my name to these amendments, and I am sorry that the hour of the night that we have reached does not encourage us to give them the full debate that they deserve. I too am looking forward to the Minister’s explanation of why it is necessary to have CCTV enforcement on zig-zag lines outside schools, but apparently not on zig-zag lines by pedestrian crossings. I hope that he will say that the Government recognise that that is rather silly and, as they cannot find a sensible answer to the question why they are doing it, that there will be CCTV enforcement on zig-zag lines by pedestrian crossings.
The noble Lord, Lord McKenzie, will recall the debate—if that is the right word—that we had in Grand Committee, when we had only just received the draft regulations. I think that we all, including the Minister who replied on that day, recognised that the problem outside schools is rather more on the roads adjoining the zig-zag lines. I do not understand why the Government seem unwilling to allow CCTV enforcement on yellow lines adjacent to zig-zag lines outside schools, where there really is a problem. I would like to see a Minister go to a school in my former ward and explain to the people there that the rules cannot be enforced by CCTV on the yellow line, but can be on the zig-zag line. I remember my ward fondly, and I am certain of the answer that both the residents and the parents would give that Minister if he were brave enough, or stupid enough, to go and offer that explanation.
Amendment 56, to which the noble Lord, Lord McKenzie, has referred, deals with impact assessments. As he said, the LGA wants clarification of the grounds on which an EIA—equalities impact assessment—is not to be done, because it understands that one is required under equalities legislation. The noble Lord also mentioned regulatory impact assessments. As he said, the Government say that they have not produced one because they do not believe that their proposals would impact business.
However, I have in my hand a letter addressed to Eric Pickles, dated 30 January, from 11 companies that say that,
“these proposals DO directly affect our business and as such the government should conduct a Regulatory Impact Assessment in accordance with its own procedures”.
Some of those 11 companies are recognised as major companies in the parking industry, and they all say that this will have a significant impact on them, and call for a regulatory impact assessment. It is probably no small feat to get 11 companies all to affix their signatures to a letter, and we all look forward to the Government’s reply to the debate.
Baroness Oppenheim-Barnes (Con)
My Lords, I shall speak very briefly in support of Amendment 53. I am holding in my hand a piece of paper received by somebody very close to me regarding a parking contravention on 30 December 2014. It was received for the first time this morning. It says that the notice was issued on 15 January and that the penalty needs to be paid. However, it had been sent in the post and was not received, and neither was the first notice received. As a result, the fine is now £200.
It would be quite wrong for me to use the Floor of your Lordships’ House to make a complaint on my own behalf were it not for the fact that so many people have complained about this sort of thing happening and because I happen to know, and have heard the Secretary of State say, that this is an important issue of human rights as far as photography of people or cars in relation to parking contraventions is concerned. It is already the law, certainly in the state of California in the United States, that such photography is a breach of human rights. I hope that my noble friend will be able to reassure me on this point. Incidentally, the person concerned was me.
Baroness Williams of Trafford (Con)
My Lords, as regards the use of CCTV generally in parking enforcement, it is clear that the operational guidance on parking issued by the previous Government in 2004—that is, that CCTV should be used only where parking warden enforcement is impractical—has been largely ignored. It is now used on an industrial scale. For people such as my noble friend Lady Oppenheim-Barnes to be issued with a penalty charge way after the event is simply unfair. Independent parking adjudicators have also agreed that it is unfair. Such practices also undermine the revitalisation of high streets and shops and cross the line of public acceptability. If parking is too expensive or prohibitive, shoppers will drive to out-of-town supermarkets or simply shop online, leading to ghost-town high streets.
The point was raised about exempting the zig-zag lines on a pedestrian crossing as opposed to those outside a school. High streets, where pedestrian crossings are generally situated, are well patrolled by both police and enforcement officers. In any event, parking on a zig-zag line is not just a breach of parking regulations but incurs three points on your licence. That is why, in terms of differentiating between schools and high streets, the safety issue outside schools led the Government to think that the latter case was a suitable exception.
The first amendment in this group concerns the serving of parking tickets. There may be occasions where it is impossible for a civil enforcement officer to physically stick a ticket on to a vehicle or serve a notice at the scene of the incident. The Government are aware of this and have made provision in draft regulations to ensure that service by post is possible in such circumstances. On that basis, I hope that the noble Lord is content to withdraw that amendment.
Noble Lords are also seeking to increase the number of areas where local authorities can continue to use CCTV to enable the issuing of tickets by post. I have given a couple of examples of where the Government have made exemptions, or indeed where they have not. I think that noble Lords and all interested parties will have their own views on where CCTV should or should not be used. The Government accept that sole reliance on CCTV evidence to enforce on-street parking regulations is suitable in certain circumstances. However, if we accepted every argument for increasing the exemptions, we would be back where we started. We have given careful consideration to the list of exemptions and based our decisions on the views of those who responded to the consultation, one being on the issue of the safety of children outside schools.
The noble Lord also offers a new definition of the term “around schools”. This definition would be neither appropriate nor practical. The 100 metres specified in the amendment, or any specified distance, would be arbitrary. Within that distance, it is likely that roads will bend or side roads will branch off the school road. It is unclear how this will be dealt with. Any definition needs to be practical as well as reflect policy concerns.
Amendment 56 would make these powers subject to impact assessments before they were brought into force, which is both unnecessary and undesirable. The Government are proud of the stance they have taken to reduce the impact of rules and regulations on businesses and policymakers. Government guidance published in 2013 clearly states that impact assessments are required only for measures that regulate or deregulate business or concern the regulation of business. This clause applies only to local authorities that carry out parking enforcement, and no impact assessments are therefore required.
This whole issue is a matter of principle for the Government, not of balancing impacts. Drivers often receive a parking ticket through the post several weeks after the alleged contravention. They are given no opportunity to examine the parking location at the time the incident is alleged to have taken place, thereby making it difficult to challenge the alleged contravention. That is fundamentally unfair, and the Government strongly believe it should be remedied. I urge noble Lords to withdraw or not move their amendments.
Lord McKenzie of Luton
My Lords, I thank the Minister for that reply and thank other noble Lords who have participated in this debate. Given the hour, I shall not prolong the matter, except to say that I am still unclear as to which of proposed paragraphs (a) to (g) in Amendment 54 the Government support and which they do not. I acknowledge that my description regarding the inclusion of CCTV around schools perhaps needs to be refined, but the principle holds.
The impact assessment was not the issue. It was that parking enforcement may be a responsibility of local authorities but in many instances it is contracted to the private sector—hence the list that the noble Lord, Lord Tope, referred to. I thought that the Minister said that the issue of whether there should be an equalities impact assessment was a matter of principle for the Government. I am not sure that I heard her correctly, but it would be a rather strange explanation if she did so. I remain unclear as to why an equalities impact assessment is not to be forthcoming. However, given the hour, perhaps we should read the record and follow up in correspondence. I beg leave to withdraw the amendment.
Lord Low of Dalston
“Prohibition of parking on verges, central reservations and footways
(1) The Road Traffic Act 1988 is amended as follows.
(2) After section 19 (Prohibition of HGVs on verges, central reservations and footways) insert—
“19A Parking on a road anywhere other than on the carriageway
(1) A person who parks a vehicle wholly or partly—
(a) on the verge of an urban road,(b) on a footway comprised of an urban road, or(c) on any other part of an urban road other than on the carriageway,is guilty of a civil offence, subject to the provisions of subsection (3).(2) An offence under this section shall be treated as a traffic contravention for the purposes of Part 6 of the Traffic Management Act 2004 and regulations made under it.
(3) Subject to subsection (6), a highway authority may by resolution, or in the case of the Secretary of State by such notice as appears to him to be appropriate, authorise, from a date specified in the resolution or notice, the parking of vehicles on or over a footway or any part of a footway as referred to in subsection (1).
(4) Nothing in this section shall apply to any road within Greater London.
(5) In this section—
“carriageway” and “footway” have the same meanings as in the Highways Act 1980;
“urban road” means a road which—
(a) is a restricted road for the purposes of section 81 of the Road Traffic Regulation Act 1980;(b) is subject to an order under section 84 of that Act imposing a speed limit not exceeding 40 miles per hour; or(c) is subject to a speed limit not exceeding 40 miles per hour which is imposed by or under any local Act;“vehicle” means a mechanically propelled vehicle or a vehicle designed or adapted for towing by, or to be attached to, a mechanically propelled vehicle but does not include a heavy commercial vehicle within the meaning of section 19 of this Act.
(6) The Secretary of State may make regulations as to any exemptions from the prohibition contained in subsection (1).”
(3) The Traffic Management Act 2004 is amended as follows.
(4) In Schedule 7, after paragraph 4(2)(g) insert—
“(ga) an offence under section 19A of the Road Traffic Act 1988 (parking on a road anywhere other than on the carriageway);”.”
Lord Low of Dalston (CB)
My Lords, I rise at 10.05 pm to move the amendment. I am most grateful to the noble Lord, Lord Tope, who moved it for me in Committee, when I was unable to be present, and to all other noble Lords who spoke in favour of it then. It would introduce a general prohibition on pavement parking outside Greater London, where this has been the rule since 1974, with a power for local authorities to make exemptions on a street-by-street basis. After the noble Lord moved the amendment much more ably than I ever could, there is not a lot more to be said. It seems to be a no-brainer but, for the benefit of noble Lords who were not in Committee—there cannot be many of them left by now—I shall summarise the arguments briefly, given the lateness of the hour. That was not, I fear, a consideration that seemed to trouble many of the previous speakers, who have spoken unusually expansively for the time of night.
Five points need to be made. First, pavement parking is dangerous for pedestrians, especially parents with pushchairs and prams, wheelchair users and other disabled people who are forced into the road in the face of oncoming traffic, which, in the case of blind and partially sighted people, they cannot even see.
Secondly, it is costly. Pavements are not designed to take the weight of vehicles, so they crack and the tarmac surface subsides in consequence. This is also a hazard to pedestrians, who may trip on broken pavements, especially if they cannot see what has happened. Local authorities spent more than £1 billion on repairing kerbs, pavements and walkways between 2006 and 2010. Some £106 million was also paid in meeting compensation claims from people tripping and falling on broken pavements during the same five-year period.
Thirdly, the present legal position is extremely confusing. Parking is regulated by local authorities issuing traffic regulation orders under the Road Traffic Regulation Act 1984, prohibiting parking in specific areas. This has led to a patchwork of different approaches being taken by different local authorities, which is very confusing for motorists. We need the consistency of a standard regime throughout the country. Given the hazardous nature of pavement parking for pedestrians, and the fact that a general prohibition with local power to exempt seems to have worked well in Greater London, it seems sensible that this should be the rule that prevails throughout the country.
Fourthly, an amendment along these lines has massive support outside this Chamber. Some 69% of 2,552 adults in England, Scotland and Wales surveyed by YouGov in March 2014 supported a law on pavement parking, as do some 20 organisations, including those representing local government, pedestrians, motorists and transport interests generally, as well as disabled and elderly people. The status quo presents challenges for drivers as well as pedestrians and cyclists. The British Parking Association and the RAC Foundation support the call for change. Some 78% of local councillors believe that there should be a ban on pavement parking. It would be hard to think of any other amendment that united such a diversity of interests that are normally at loggerheads.
Finally, as I said, the regime that this amendment would introduce appears to have worked perfectly well in Greater London for more than 40 years.
In Committee, the main objection to the amendment seemed to be that it was better to leave the question of pavement parking to local discretion. However, I have already pointed out the huge objections to this in terms of cost and consistency. I think the Government’s objections were principally founded on the fear that the amendment would take away all local discretion, but this is not the case. All the amendment does is reverse the presumption as between national standard and local discretion.
The Minister expressed reservations about this on the grounds that introducing the new regime would be costly and disruptive. But, as I have argued, the present system is costly in terms of repair bills and legal costs. Traffic regulation orders cost between £1,000 and £3,000 to introduce, when account is taken of consultation, signage and advertising. A national law on pavement parking would give local authorities the discretion to act as they see fit in a more cost-effective way.
As I said, the case for the amendment is strong. I beg to move.
Lord Tope
My Lords, I added my name to the amendment with great pleasure. Indeed, as the noble Lord said, I moved it in Grand Committee in his unavoidable absence. I did that in particular because of the experience that I had for 40 years as a London borough councillor. As it happens, my council chose to start enforcing the ban in our area in my first year as leader of that council. The area that was most directly and strongly affected by that happened to be the town centre ward that I represented for those 40 years. Many of the properties in my ward were built before the motor car was invented, and certainly before it was ever envisaged that anybody living in the houses in those roads would ever own a car, let alone two cars. Many of the streets were too narrow to allow cars to pass in both directions without parked cars being on the pavement, so we had to deal with all the exemptions, many of them in the ward that I represented.
Therefore, I support the amendment, particularly for the reasons given by the noble Lord, Lord Low, but also because, as a councillor, I have had many years’ experience of the implementation and enforcement of this ban. As the noble Lord made clear, it is not a blanket ban; it permits sensible exemptions that then have to be properly marked on the pavement and with a sign. Therefore, I support the ban enthusiastically. I know that it can work where there is a will, and I know that it has worked for many years in the area that I know best. We really should be moving to a situation where, just as in London, the presumption is that parking on pavements and verges is illegal unless it is specifically exempted. Motorists would then know that they should not park on a pavement, for all the reasons that the noble Lord, Lord Low, has given, unless it was clear that they were permitted to do so. That is the opposite of the presumption that exists in the country outside London at the moment, and it is an extremely important road safety and pedestrian safety measure that we should implement.
The Lord Bishop of Worcester
My Lords, I support the amendment, whose importance has been ably and eloquently demonstrated by the noble Lords, Lord Low and Lord Tope. It is quite clear that the present situation is costly and complex, as has been said. I should like very briefly, given the hour, to demonstrate how in Worcester—one of the few cities in the UK that has tried to tackle the problem of pavement parking —there have been difficulties because of the current situation.
As is well known, the history of parking enforcement is complicated. Parking on pavements was made a criminal offence under the Worcester City Council Act 1985, but under the Road Traffic Act 1991 it was decriminalised, so that could no longer apply. Despite that, Worcester City Council has continued to try to tackle the problem, and in January 2014 civil enforcement officers began enforcing the most serious cases using existing traffic regulation orders. Worcestershire County Council was originally asked for a city-wide traffic regulation order, but this would have required hundreds of street signs wherever parking on pavements took place, and that was considered untenable. That simply demonstrates how difficult the present situation is. The county council suggested that the city council should look at the issue on a street-by-street basis and generate individual traffic regulation orders, but the city council thought that this approach would be untenable as well.
It seems to me that all that demonstrates the need for a national system. It is worth bearing in mind that those who are blind and disabled feel particularly strongly about this. A blind Paralympian who lives in Worcester said recently that walking down the city’s clogged-up streets is like playing Russian roulette.
Lord McKenzie of Luton
My Lords, we must all be aware of the dangers and inconvenience of parking on pavements and the risk that this can pose for pedestrians. These risks can be especially acute for those with a sight impairment or those who have a mobility difficulty and rely on using wheelchairs or buggies. The problems are compounded, too, for those who have responsibility for children and who try to navigate the pavements with prams. The consequence is that all too often pedestrians are forced to navigate busy and dangerous roads instead. For some, of course, pavement parking can restrict their right of way completely. As the noble Lord, Lord Low, said, we need to be mindful that pavements are not generally constructed to carry the weight of heavy vehicles and pavement parking can cause the break-up of the surface, adding further hazards, even when the offending vehicles are not present. This amendment seeks to address those concerns outside London by making it an offence to park wholly or partly on a verge, footway or any other part of an urban road. But this blanket ban can be overridden by resolution of the highway authority or by the Secretary of State.
We acknowledge the weight of opinion and the power of the argument which supports this approach. We share the need to address inconsiderate and dangerous parking and to seek to restore to pedestrians their right to proceed unimpeded. But at the same time, we have to recognise that there are some streets where some pavement parking may be inevitable—to maintain the free flow of traffic, to allow loading and unloading, or to allow for vulnerable passengers to be disembarked. Moreover, the premise of the amendment is that all people who park their car on the pavement are doing the wrong thing and should be made guilty of a civil offence. We do not accept that.
If we are to redress the balance and tackle the problem of inconsiderate pavement parking, how is this best achieved? We need to work through how it can be delivered in practice. We are keen to empower councils to tackle problem parking. If there are any barriers or bureaucracy preventing this we would be keen to look at ways we can change the legislation so that that is not the case. We do not think that the blanket ban is the best way to go. We consider that individual authorities, which know their areas best, are better able to determine the extent and timing of any ban. For some, an initial blanket ban may be the immediate answer, but others may want something more selective which addresses the most urgent problems first. In some cases, there will need to be liaison between authorities so that approaches are co-ordinated. We support the thrust of what the noble Lord is seeking to achieve, but we think there is another approach so, with regret, we are not able to support him today.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have contributed to the debate on the amendment. It demonstrates that there is no perfect system to allow traffic and pedestrians to move around entirely satisfactorily.
I shall start with the points made about London. Pavement parking in London is banned but people still do it. Enforcement of properly targeted local bans outside London would be more effective than a blanket ban that does not reflect local circumstances. On the more general points, local authorities already have the power to introduce footway parking restrictions where they consider it appropriate. They are in the best position to decide on local parking restrictions and need to consider all road users when taking such decisions. A national ban of the type proposed would require local authorities to remove all existing restrictions, then renew their urban areas where footway parking should nevertheless still be permitted, consult the community and erect new signage and markings. There could be a significant burden on local government.
The amendment proposes banning footway parking but would allow authorities to permit it where it is desired by simple resolution. Circumvention of the traffic regulation order—TRO—process would take away important protection for the public. The statutory TRO process requires authorities to undertake consultation and advertise their proposals before councils take final decisions. A noble Lord made the point about the TRO process being expensive and cumbersome. It is not true to say that the process is a barrier. Some local authorities make up to 200 orders a year for a variety of traffic management purposes with an average authority making between 50 and 60 orders per year.
The Department for Transport’s guidance to local authorities makes it clear that during the appraisal of their parking policies an authority should consider whether pavement parking is problematic in any part of that area. If it is, and it is not covered by an existing traffic regulation order, the authority should consider amending the existing order or making a new one. The noble Baroness, Lady Kramer, wrote to all English traffic authorities on 27 June to remind them of their existing wide-ranging powers to prevent people parking on the pavement where it is a problem.
The noble Lord, Lord Low, made a point about damage to pavements. The Government are committed to investing in our local highways, including the footways. We are providing local authorities in England with more than £3 billion over four years from 2011-15 for the roads and footways for which they are responsible. In addition, in June 2014, the Government announced that they were committed to providing just under £6 billion for local highways maintenance over the six-year period from April 2015 to March 2021. This equates to £976 million per year to local authorities for highway maintenance.
In conclusion, the Government have concerns about the burden on local authorities of managing a change of this scale, a point to which the noble Lord, Lord McKenzie, alluded, especially when those authorities have comprehensive powers to ban footway parking. I have undertaken to have a discussion with the noble Lord, Lord Low, before Third Reading but I would at this stage ask him to withdraw his amendment.
Lord Low of Dalston
My Lords, I am very grateful to the Minister for her reply and to all noble Lords who have spoken, in some cases with very telling illustrations of the workability of the amendment. It certainly is not the belief of those who support this amendment that all pavement parkers are behaving anti-socially. The amendment’s inclusion of scope for local discretion to exempt specific areas from the general ban recognises that. I am sure that with good will we can find a formula which caters for the concerns both of those putting forward the amendment and the concerns which have been expressed about the erosion of local discretion. In response to the Minister’s indication that she is happy to have a discussion before Third Reading, at which I hope we can work together to find that formula, I am happy to withdraw the amendment.
“Civil enforcement of traffic contraventions
(1) Part 6 of the Traffic Management Act 2004 (civil enforcement of traffic contraventions) is amended as follows.
(2) After section 87A, as inserted by section 39(3) of this Act, insert—
“87B Use of an approved device in car parks
Nothing in this Act shall prevent the use of an approved device in a car park which is the subject of a civil enforcement order where the intention of such use is to better manage space turnover and user convenience.””
Lord Tope
My Lords, I will try to be brief. The same amendment was tabled in Grand Committee but did not really get any debate. I have brought it forward here at the request of the British Parking Association to have it on the record and to have the Government’s response on the record.
Local authorities, through the use of camera technology, including CCTV and automatic number plate recognition, want to provide new solutions for customers using their car parks. This includes an option either to operate barrier systems automatically by using ANPR and improve access for people with disabilities or to remove barriers altogether and improve traffic flows at these important locations. These systems can also better monitor space turnover, provide customers with more flexible payment opportunities, such as park now and pay later, and reduce the need for enforcement action.
This amendment would bring local authorities into line with other private sector car park providers, which are already using it, making it easier for all motorists to use any car park. ANPR technology, with its customer service benefits, such as pre-booking at airports for example, has been available for some years in private sector car parks and its use for enforcement action on private land, such as supermarkets and motorway service areas, was legitimised by the Government in their Protection of Freedoms Act 2012.
The British Parking Association understands that two of its local authority members are seeking a judicial review of the Government’s recent decision not to allow this new technology. The amendment would eliminate the need for such action by protecting motorists from any attempt by a “rogue” local authority, should there be such a thing, to use technology simply to raise revenue, as the conditions for use which it sets out must be to help space turnover or customer convenience.
We actively support the introduction of new technologies, including cameras and ANPR, when managing parking in regulated car parks. The Government themselves have a “digital by default” policy and new technologies and innovation are opening up significant opportunities for customer services and other improvements for motorists in the way parking services are managed and provided. This amendment would put publicly owned car parks on the same basis as privately owned car parks. I beg to move.
Baroness Williams of Trafford
My Lords, I should make it clear right from the outset that the measure in this Bill is about on-street parking, which is the preserve of local authorities. The issue of ANPR is totally separate and the Government are not going to regulate companies in a Bill that seeks to deregulate.
The noble Lord’s amendment seeks to introduce a new clause which would ensure that measures in the Traffic Management Act 2004 do not prevent local authorities from using an approved device in their off-street car parks. The amendment would apply to the entire Traffic Management Act. The Traffic Management Act sets out the framework for local traffic authorities to manage all aspects of their parking policies. To disapply the entire Act in relation to car parks would create an impossible situation where the legislation that prescribes how local authorities should operate is undermined by itself.
I think that the noble Lord may in fact be concerned about the specific measures in Clause 39 and is apprehensive that these will be extended to local authority off-street car parks. I can assure him again that the measures in this Bill apply only to on-street parking. The Government are not seeking to extend these provisions to off-street parking and have no plans to do so. It would be unnecessary to set out in primary legislation policy areas that the law should not apply to.
Permitting local authorities to manage their off-street car parks with camera technology is something that I know some organisations are keen to see happen. However, the Government have not set out their position on this. We have brought forward a range of parking measures designed to help local shops, support drivers and give communities a greater say on parking policies. These proposals have been established for 18 months and have been consulted on. At no point have we indicated any intention to legislate on off-street car parks.
To bring into the Bill at this late stage measures on a different aspect of parking policy would not give sufficient opportunity for people to consider their implications or to offer an opinion. We believe that this is something on which we should consult before any changes are made to the law, and I would urge the noble Lord to withdraw his amendment.
Lord Tope
Well, my Lords, I take it that that is a no. I am grateful to the noble Lord, Lord McKenzie, for his support, and who knows, in the months to come he may have an opportunity to indicate that.
I am rather disappointed with the reply from the Minister, who perhaps in part through her briefing has not wholly understood the points being made here. I note her point about the impact on businesses, but that did not seem to matter on the previous amendment when we actually had a letter from 11 businesses talking about the impact it would have on them. However, I will of course beg leave to withdraw the amendment and I will consider the issue further.
Lord Prescott
Lord Prescott (Lab)
My Lords, is it my impression that the Minister is not here to reply to his letter and my debate in Committee about the safety of passengers and seafarers on vessels? This is a clause about safety on ships and inquiries, and I will seek to show that the “Marchioness” disaster was due to the negligence of the Department of Transport in dealing with that sad loss of 51 people. I mean no insult to the noble Baroness who will be replying, but I hope that I can record my argument, even given the lateness of the hour. The Minister then might, when he wakes up, read what has been said today because presumably there will be another opportunity to look at it when the Bill comes back at Third Reading.
My objection is a strong one relating to safety—this is not about parking, cars or whatever else, it is about safety on our seas and, in particular, on that river outside, the River Thames. The current proposal suggests that any rehearing into the loss of a ship, which may have occurred years ago, will now be at the discretion of the Minister and not be a duty. We are replacing a department’s duty and obligation to hold a hearing into the loss of a ship with a discretion. Evidence shows that discretion is not the best way if you want to get the best out of an inquiry.
Other ships have been lost and taken a long time to be found, such as the “Derbyshire”, which I mentioned in Committee, the fishing trawler “Gaul” and the “Marchioness”. Each time, particularly with the “Marchioness”, the Government refused to have an inquiry. It was normal practice and, indeed, the duty at the time when the “Marchioness” went down to hold a public inquiry as to the causes. So that we are in no doubt about it, all I am saying has been confirmed by the Thames Safety Inquiry report by Lord Justice Clarke. I should know, because when I became the Secretary of State I appointed him to meet the demands of the relatives who died on the vessel in the Thames that there should be a proper public inquiry. He spells out the reason for a public inquiry in the report, referring in turn to the report into the “Herald of Free Enterprise”:
“In every formal investigation it is of great importance that members of the public should feel confident that a searching investigation has been held, that nothing has been swept under the carpet and that no punches have been pulled”.
That is precisely what happened with the inquiry set up by the Department of Transport, headed at that time by Mr Cecil Parkinson. The ship went down and the normal cry came out for an inquiry, as had happened in a number of other cases. However, the Government made the decision that there would not be a full public inquiry or examination of the facts. They chose to use the maritime investigation board, which is under an obligation in law to investigate immediately the loss of a ship and then to report and act. It does not examine the circumstances of the loss. The Government insisted that it should be this maritime body that investigated, and it was the only inquiry that they implemented. What I find difficult about that is that the Government’s argument at the time was, “Look, we have the maritime inquiry; we cannot have a public inquiry because that might interfere with any public prosecutions or criminal actions that may be undertaken”. However, that does not fit with what happened with “Piper Alpha” or with other ships that went down, where they immediately set up a public inquiry and made clear that that did not matter. It was the same with the King’s Cross fire—the same department, almost in the same period, said, “We are having the inquiry, and are not stopping it simply because of any criminal investigations”. So I then think, “Why is the department doing it in certain circumstances but not in this one?”. To be truthful, it was in the process of changing the regulations for inquiries, but the duty that was imposed on the department still existed when the “Marchioness” went down and 51 people died.
The first question must be: why did the department not use the powers that were there and the duty on it to investigate and hold a public inquiry? That was all people were asking for. The department refused, constantly. It refused for 10 years to have a public inquiry. That started right at the beginning, which I will come to in a few minutes. So I ordered an inquiry.
Ministers, including the noble Lord, Lord Gardiner, wrote to me after Committee—this is why I am particularly annoyed—protesting that I had said that they had hidden the truth about the loss of a vessel. That is a serious charge, so I invited them and the Secretary of State, who wrote to me as well, to read the Lord Justice Clarke report and come and discuss it here in the Lords when we debate these issues. I am a bit surprised that they did not turn up. I have a feeling—I do not know him too well—that he sat on that Bench for a few minutes and then presumably shot home to have a little sleep and not attend this debate. Perhaps he was not here, perhaps it was not him; it did look like him—another good-looking fella like the guy at the end there. The point is, he is not here for the debate. My accusation is a serious one and everything I say is backed up by Lord Justice Clarke’s safety inquiry. He started his inquiry wondering why there had not been an inquiry under the previous Administration. There is a chapter called, “Should a Public Inquiry Have Been Ordered?”, which gave me the quote I have just read. Another chapter asks, “Was This a Suitable Case for a Public Inquiry?”, and he said it certainly was: 51 people died; King’s Cross was less than that and they had a public inquiry. Lord Justice Clarke came to the conclusion that there should have been inquiry, there was good reason to have an inquiry, and the report contains a chapter called, “Why Was a Public Inquiry Not Held?”. That is the question.
At the heart of this debate is the argument of discretion. The department exercised discretion—in this case without carrying out the duty; it was to change some months later but it did not do the inquiry—so Lord Justice Clarke looked at the reasons given by the department. All the evidence was given and he looked at the papers. He was told by the legal department that you could not have an inquiry. That is exactly what the civil servants said to me when I came in in 1997, and it is referred to in this report. I held the inquiry. I did not take the advice of the department. I made a decision. I said it was the duty to do this. What happened then? He said that the department took the view that the criminal inquiry prevented it from having an inquiry. Lord Justice Clarke said that it did not. He examined it all in detail and said that it did not make any difference. There was a duty on the department to have an inquiry. It had been done before.
That is critical because the clause that I am seeking to remove is about not every vessel but those vessels that are found a number of years later, such as the “Derbyshire” and the “Gaul”. The amendment says if you apply to have a hearing into the circumstances—which we did for the “Derbyshire” and the “Gaul” but not for the “Marchioness”—you have to have the inquiry. But here the department chose not to recognise its obligation and duty. The amendment says I am changing the duty for a second hearing on the loss of a vessel to discretion.
I have to say to myself: does that make it better or worse? Does it make it easier, as deregulation is claimed to do, or does it mean you save money in case somebody else calls for an inquiry—as the families could—and the Secretary of State can say, “It’s my discretion, I will not do it”? But if you look at the circumstances of a loss, it is not only the safety, it is about the relatives who are left grieving and want to know what happened. The reality was, as Lord Justice Clarke showed, that compared to the maritime investigation, which took two years to be published when it should have been done immediately and made few recommendations, this inquiry looked at all the same circumstances and made 70 recommendations to improve safety on the River Thames. It said that the excuse of criminal law intervention was totally wrong and indeed had not been observed by the department before.
The coroner’s laws were reformed. It was discovered in the case of the “Marchioness” that the coroner had ordered that the hands and feet be cut off and therefore would not show the people the bodies. When the relatives said, “Can we see the bodies?”, he would not let them see them because he felt they would be upset. Well, I suppose they would be upset, but all those laws were changed by the Lord Justice and many others.
Lord Gardiner of Kimble
My Lords, I am reading from the Companion, and I am afraid that the noble Lord should sit down while I do so. It says:
“Arguments fully deployed either in Committee of the whole House or in Grand Committee should not be repeated at length on report”.
The noble Lord is on nearly his 17th minute and I think that we are starting to contravene what is in the rules of the Companion.
Lord McAvoy (Lab)
Will the Minister perhaps answer the point that we have repeatedly heard arguments tonight from Tory Peers which were quite clearly used in Committee for any length of time? They may not have taken as long as my noble friend has, so far, but collectively they have kept the whole thing going on their own particular interests.
Lord Prescott
I certainly agree with that. I have sat here all night and I now know more about parking, and God knows what. I am talking about the lives of people and the safety of our ships. I have to remind the Minister that we are an island nation. I would not have had to repeat what the Minister knows but the only reason that I have taken longer is that I think a noble Lord here in the House said that I should perhaps explain to the House what it was, because he was not there at the time. I have taken that choice and I have ended. I take the point, and I am sorry if I have caused any kind of problems with time, but quite frankly it is an important issue. I hope that the Minister will have the courage to turn up at the next stage in the House. He has that responsibility and he should face up to it.
Lord Greenway (CB)
My Lords, I declined to follow the noble Lord, Lord Prescott, down this route at Second Reading because I wanted to talk about other things and, unfortunately, when it was his turn to speak on this clause in Committee, I was chairing the All-Party Parliamentary Maritime and Ports Group upstairs. This is the first time that I have had a chance to speak on this subject and it looks as though I am third time unlucky, because I have been beaten by the clock as well, so I will be very brief.
The noble Lord, Lord Prescott, who did great things for British shipping in bringing in the tonnage tax when he was Secretary of State, speaks with enormous passion on this subject as a former seafarer. I, like him, share this passion for the sea and ships, which I have had all my life. However, in this instance my passion has been tempered by rational thought. We are looking here at something comparatively simple. This duty that is to be removed is the duty to reopen a maritime inquiry where new and important evidence has been discovered. In the case of the “Derbyshire”, which the noble Lord mentioned, there is no question at all that a Secretary of State would reopen an inquiry. However, there are occasions where it may not be such a good idea. After all, let us not forget that such inquiries cost £6 million to £8 million. They tie up busy people such as lawyers and maritime experts for quite a considerable time. In the fiscal circumstances in which the country still finds itself, if we can save any money then we should look at that quite seriously.
I will not go into the safety aspect because safety is in some ways an entirely different matter. Thankfully, the need to reopen these inquiries has happened on only three or four occasions. The need has got less since the Marine Accident Investigation Branch was set up in 1989. It has reduced the need for these inquiries. The whole system of looking into maritime affairs has been changing quite rapidly over the last 20 or 30 years. We have a different system in place and, in my opinion, I feel very happy that Clause 41 should remain part of the Bill.
Lord Tunnicliffe
My Lords, it is my responsibility to respond for the Opposition Front Bench on this issue. In order to save time, I carefully studied the debate in Committee. Having listened to my noble friend Lord Prescott, we continue to support his position.
Baroness Williams of Trafford
I start by thanking the noble Lord, Lord Prescott, for his enormous patience here this evening. He had to listen to several debates on parking before we came to his issue. I think that the Minister who should have responded to him might have been a woman—
Baroness Williams of Trafford
It was not—okay, I stand corrected. I hope he will not be too disappointed by my response.
The purpose of this clause is very straightforward. It is to give the Secretary of State discretion in whether to reopen a formal investigation into a marine accident when new and important evidence that was not available at the time of the original investigation becomes known. Given the wide-ranging discussion that we have had, perhaps it is worth setting the clause in its broader context to dispel any fears that it will adversely affect maritime safety. That is obviously the prime concern of the noble Lord, Lord Prescott, as he said at the beginning of his speech.
Prior to 1989, if there was a marine accident, the Secretary of State could choose to order a preliminary inquiry and, whether or not a preliminary inquiry was held, to order a formal investigation. The latter was a kind of public inquiry, and as well as seeking to identify why an accident had occurred and how to improve safety at sea, it could also apportion liability and blame, and impose penalties on those at fault. Whereas the Secretary of State had the discretion to decide whether to order a formal investigation, he was obliged to reopen a formal investigation if either of the following was the case: if new and important evidence that was not available at the time of the original investigation became known; or if there appeared to be grounds to suspect a miscarriage of justice.
These arrangements had been in place under the Merchant Shipping Act 1894 and were largely re-enacted in the Merchant Shipping Act 1995. However, by the time of the 1995 Act, the normal arrangements for investigating marine accidents had changed considerably. In July 1989, the Marine Accident Investigation Branch was established. The Marine Accident Investigation Branch is functionally independent of the Department for Transport. This removes the conflict of interest identified in the “Herald of Free Enterprise” formal investigation, which was that the department had been both the regulator and investigator for the maritime industry.
All marine accidents must be reported to the Marine Accident Investigation Branch and although it must investigate the most serious of these, the chief inspector has the discretion to investigate others too. Virtually all shipping accidents investigated since 1989 have had only a Marine Accident Investigation Branch safety investigation. The entirely separate formal investigation process remains available should it be deemed necessary. Since 1989, it has been used only twice, once being the formal investigation into the “Marchioness” disaster, called by the noble Lord, Lord Prescott, in February 2000, as he has told us. Because of the near-universal reliance on the highly regarded Marine Accident Investigation Branch investigation process, when the need to reopen a formal investigation has arisen, the accidents concerned have been increasingly historic.
Three reopened formal investigations have been called since 1997. The first concerned the “Derbyshire”. Twenty years had elapsed since the loss of the ship when its report was published. In the most recent case, that of the “Trident”, 35 years had passed. As there have been so few formal investigations in recent years, any reopened now would be about an accident that occurred at least a quarter of a century ago. In fact, the likelihood is that that any new and important evidence that might be found today would relate to an accident of 50 years ago or more.
Over that time, the design of ships and their equipment, and industry crewing and operating practices, are likely to have changed significantly. The chances of there being any relevant lessons to learn for the benefit of today’s seafarer would be much reduced. Again, considering the reopened formal investigations since 1997, the “Derbyshire” report made 24 safety recommendations and the “Trident” just one. Given the changes that have taken place in how we investigate marine accidents, the duty to reopen a formal investigation when new and important evidence is found is simply much less relevant to maritime safety than it was when it was on the statute book in 1894. For the vast majority of accidents, the exemplary work of the Marine Accident Investigation Branch—identifying the causes of accidents and issuing recommendations without fear or favour—ensures the future safety of mariners and the protection of the marine environment.
Clause 41 has absolutely no bearing on these Marine Accident Investigation Branch safety investigations or whether their findings should be reviewed if new evidence is found. For exceptional cases, where a thorough public airing and examination of the facts is needed, it is right that the public inquiry-style process provided by formal investigations and reopened formal investigations remains available for Secretaries of State to use. It will remain available under Clause 41. Indeed, I reiterate the position of Her Majesty’s Government that if similar circumstances as applied in the case of the “Derbyshire” arose again, we would strongly expect to reopen the investigation. Clause 41 simply enables the Secretary of State to take a considered view on the likely benefits of reopening a formal investigation in circumstances where new evidence comes to light, just as she has discretion in whether to open a formal investigation in the first place. On that note, I urge the noble Lord to withdraw his amendment.
Lord Prescott
Given the circumstances I have explained, I will go through the practice of withdrawing the amendment at the moment. I beg leave to withdraw the amendment.
Lord Wallace of Saltaire
Lord Wallace of Saltaire
“( ) section (Tenancy deposits: provision of information by agents);”
“( ) section (Tenancy deposits: non-compliance with requirements);”
“( ) sections (Designation of urban development areas: procedure) and (Establishment of urban development corporations: procedure);”
Lord Wallace of Saltaire
Lord Wallace of Saltaire
My Lords, when we come to the end of the scrutiny of any Bill, we come to issues of consequential amendments, territorial extent and commencement. On Clause 94, the question of territorial extent for some of the clauses of the Bill needs negotiation with the devolved Administrations. Some of those negotiations and consultations are still under way, so I take the opportunity to commit to bring back at Third Reading any changes needed to the territorial extent subsections where discussions with the devolved Administrations are not yet complete.
Several government amendments seek to amend Clause 95 on the question of the commencement provisions. The clause specifies, as usual, which provisions are to come into force on the day the Act is passed; which provisions are to come into force, in this case, two months after that day; and which provisions are to come into force by order made by the Secretary of State. It also provides for certain clauses to come into force on Royal Assent for the limited purpose of switching on the power in those clauses to make subordinate legislation.
Amendments 57C to 58B are consequential on new clauses added to the Bill in the course of its consideration. Other amendments move some existing clauses from one part of Clause 95 to another to reflect the department’s current commencement plans. There are also a number of consequential and drafting amendments linked to the other changes in the clause. I hope these amendments are acceptable to the House. I beg to move.
Lord Wallace of Saltaire
“( ) section 44 and Schedule 12;”
“( ) section 28;”
“( ) sections 69 and 70;”
Lord Wallace of Saltaire
“( ) Where a provision of a Schedule comes into force in accordance with subsection (3)(o) to (s) or (5), the section to which that Schedule relates comes into force (so far as relating to that provision) at the same time.”
Lord Wallace of Saltaire
Stamp Duty Land Tax Bill
(9 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newby
That the Bill be read a second time.
Relevant document: 16th Report from the Delegated Powers Committee
Lord Newby (LD)
My Lords, the Chancellor’s Autumn Statement last December announced an important and comprehensive reform to stamp duty land tax—SDLT—on residential property. With effect from 4 December, the structure, rates and thresholds of stamp duty land tax have changed for residential properties, and stamp duty has moved from a “slab” to a “slice” arrangement. Each new SDLT rate is now payable only on the portion of the property value that falls within each band. That is in contrast to the old system, under which tax was due at one rate for the entire property value.
Stamp duty land tax is an important source of government revenue: it raised £6.5 billion in 2013-14 to pay for the essential services that government provides and supports. However, the old system was increasingly seen as unfair and inequitable, especially for those looking to move on and up the housing ladder.
Under the new structure, no buyer purchasing a property will pay any SDLT at all for the portion of the property up to £125,000. Buyers will be charged 2% for the portion from £125,000 to £250,000, and 5% for the portion from £250,000 to £925,000. Those buying a house worth over £925,000 will be charged 10% for the portion of the price between £925,000 and £1.5 million. From £1.5 million onwards, buyers will pay 12% SDLT for the proportion of the price above that threshold.
Moving from a slab to a slice arrangement is right in terms of fairness and economic efficiency. The new arrangement will cut SDLT for 98% of people who pay the tax; and no one who buys a home worth up to £937,500 will pay more compared to the previous system.
The stamp duty system as it then stood was a flawed system. It had been criticised by policymakers, industry and think tanks. The “slab” system created a significant hike in taxes at particular thresholds. It created the absurd situation where if you paid £250,000 for a house you would end up paying £2,500 in stamp duty, but if you paid £250,001 you would have to pay £7,500—three times as much. In reality, of course, nobody did. In 2013-14, there were over 30 times as many sales between £245,000 and £250,000 as between £250,000 and £255,000. That represented a significant distortion in the housing market, given the average UK house price of around £275,000, and one which is removed by the Bill.
Not only does the Bill eliminate the previous flaws in the stamp duty system, but it does so in a way which gives a helping hand to those at the bottom of the housing ladder. A family buying a Help to Buy property at the average cost of £185,000 will be £650 better off—a significant sum, especially at a time when cash is most likely to be tight. As I said, nobody buying a home worth up to £937,500 will pay more SDLT under the reformed system, and many will be left with substantial sums in their pockets. Overall, 98% of purchases nationwide will pay the same SDLT or less. That is 99% in Scotland, Wales and Northern Ireland, and 91% in London.
These reforms came into force at midnight on 4 December, to avoid creating undue distortions in the housing market. This stand-alone Bill was introduced in the other place on 4 December, and its provisions have had statutory effect under the Provisional Collection of Taxes Act since the end of the Autumn Statement debate on 3 December. The Government ensured that if a person had exchanged contracts before 4 December but completed on or after that date, transitional arrangements were in place to ensure that they would not lose out.
We also paid particular attention to how this change would affect Scotland. From 1 April 2015, land and buildings transaction tax is due to replace SDLT in Scotland. However, up until that point, these reforms apply to all residential property transactions in the UK, including Scotland. That will ensure that home buyers in Scotland do not miss out on a potential tax cut before their own tax comes into operation.
This change was met enthusiastically by industry, with the CBI labelling it,
“a shot in the arm for families and growing firms”.
It sits as part of a wider scheme of government policies that are designed to boost home ownership and homebuilding, relieving the pressures on the housing market and helping to make people’s aspirations a reality. I beg to move.
Lord Northbrook (Con)
My Lords, first, I declare my property interests as per the register of interests. The Stamp Duty Land Tax Bill proposals set out in the Autumn Statement are broadly welcome. Stamp duty was an area that was ripe for reform to assist first-time buyers and all those purchasing at below average or, where relevant geographically, average prices. As has been said, the new rules give a useful saving in duty if the house that is being bought is less than £937,500 in cost. Also welcome is the axing of the so-called slab system and its replacement by a progressive income-tax style levy. According to the Financial Times Lucien Cook, residential director of estate agency Savills, said that buyers of average homes outside London would pay “much lower” levels of stamp duty. He said:
“In particular, first time buyers and second steppers will find it easier to raise the deposit needed to obtain mortgage finance, removing one of the major hurdles in the current market”.
Mortgage brokers said that reforms would stimulate sales around the current stamp duty thresholds in particular. As already stated by my noble friend Lord Newby, above the level of £937,500, the total rate of stamp duty will increase. At the higher end of the market, it will tend to tilt the balance towards foreign ownership even more. As one estate agent, David Adams of John Taylor, told me, a buyer from Hong Kong who pays income tax at only 15 per cent is unlikely to be deterred in his London purchase, whereas the UK buyer at, say, the £2 million price level may be put off from making a purchase due to the extra stamp duty.
Does it matter that there is more foreign ownership of our housing stock? If it means that there are fewer transactions by UK buyers, a problem can filter down to lower levels of the market. UK residents may prefer to improve their existing house rather than fork out extra stamp duty on a new one, thus creating a logjam in the market. While the changes will encourage first-time buyers, it remains to be seen how they will affect the housing market as a whole. If house prices continue to rise, which is a distinct possibility due to low interest rates, particularly in London and the south-east, it could put pressure as well on the private rental sector, since potential purchasers will continue to be priced out of the market.
The cost to the Exchequer of the change is estimated to be £4.1 billion over the next few years, but other measures in the Autumn Statement cancel it out. As Paul Johnson, IFS director, has also queried, why has the same slab structure not been applied to non-residential property?
By this Bill, the Chancellor sensibly hoped to put pressure on the Labour Party to abandon its plans for a mansion tax. The legislation increases the rate of duty markedly to 10 per cent for house prices above £925,000 and 12 per cent for the amount above £1.5 million. However, the Opposition seem determined to press on with their mansion tax policy, which has been criticised by many of their own side. The policy could mean people having to sell their properties to pay the tax, which is a particularly vindictive form of taxation, so we could end up with higher stamp duty and a mansion tax.
One further area that I feel the Government should tackle is where UK properties owned by foreign individuals remain underoccupied. There is a strong case in my view for operating a version of the Swiss taxation system whereby these owners can pay a lump sum based on a quintuple of the rent assessable on the property. Can the Minister pass on this idea to HM Treasury? While effectively a mansion tax is charged on property purchases by offshore companies, there should be some similar levy on domestic UK properties bought by non-domiciled individuals who leave their house empty for a huge portion of the year.
The Government should also consider more tapered taxation rules in other areas, such as capital gains tax where, as has often been suggested by my noble friend Lord Lee of Trafford, short-term gains should be taxed at a higher rate and long-term gains at a lower one. That could actually increase the yield on the tax, which has fallen considerably since it was increased to 28 per cent for individuals. Such a move could mean more transactions in the property market, where secondary residences are involved, and a higher tax yield to the Government.
Finally, might it not have been better, from a government revenue viewpoint, to insert more council tax bands? This year the Centre for Economics and Business Research published some research stating that adding three extra brackets for high-end properties would generate an extra £4.7 billion a year in tax revenue, rather than a predicted stamp duty revenue loss of £4.1 billion over six years. If the Government did this, and in future reduced stamp duty rates, there could be more transactions, thus increasing revenue and freeing up the market.
None of the above would solve the problem of housing supply, which is beyond the scope of this debate. Overall I welcome the Bill, and I hope that an increased volume of transactions will reduce the cost to the Exchequer. The reduction in duty is welcome in a key area of the housing market.
Lord Tunnicliffe (Lab)
My Lords, I thank the Minister for introducing this Bill, which, as he says, turns the “slab” system into a “slice” system. I will not dwell further on that. The old system created anomalies and distortions, particularly around the thresholds. The OBR carefully avoids saying too much about what the behavioural changes will be. There will certainly be significant behavioural changes around those thresholds, but what the overall effect will be is less clear. Nevertheless, the old system was in need of reform. I welcome these measures, and we are happy to support them.
I also welcome the fact that, through these stamp duty reforms, the Government are accepting that high-value properties are undertaxed. Labour would, in office, go further and introduce a mansion tax, which would raise around £1.2 billion—an estimate with which the Chief Secretary to the Treasury agrees. Labour’s mansion tax will apply only to homes worth £2 million or more. The vast majority of houses, even in London, are worth far less than this: the tax will apply to less than 0.5% of the homes in the country. The £2 million threshold will rise in line with the average rise in prices of high-value properties worth more than £2 million, so the number of properties paying the tax will not increase. If prime property prices continue to rise, by the time we are able to introduce the tax the starting point will be higher than £2 million.
Labour’s mansion tax will also protect those who are asset rich but cash poor. People in high-value homes who do not have high incomes—those who do not pay the higher or top rate of tax, and earn less than £42,000 a year—will have the right to defer the mansion tax until their property changes hands. Labour’s mansion tax will be progressive. Those owning properties worth £2 million to £3 million will pay only an extra £250 a month through this new tax—the same as the average top band of council tax. We think that owners of and investors in properties worth tens of millions of pounds should make a much bigger contribution.
In office, we will look at asking overseas owners of second homes in the UK to make a larger contribution than people living in their only home. It cannot be right that the foreign buyer who bought a £140 million flat in Westminster earlier this year will pay just £26 a week in council tax—the same as the average-value property in that council area.
Labour’s mansion tax will use a simple banded system. Valuations will not be needed for most properties: it will be clear which band they fall into. The Government’s new tax on properties bought through companies relies on owners submitting self- valuations to HMRC; so will the mansion tax.
We have a housing crisis in this country, and it can be addressed only if many more homes are built than are being built now. Labour will give our communities the powers they need to get Britain building again, ensuring that there will be at least 200,000 new homes a year by 2020—almost double the current number. We will also tackle land banking, so that developers with planning permission have to use it, and we will give local authorities powers to ensure that local first-time buyers can take advantage of new homes that are built in their area.
This Bill reforms a bad tax. We welcome that, but we urge the Government to go further and introduce a mansion tax, as we propose to do.
Lord Newby
My Lords, I am grateful to noble Lords who have taken part in this debate.
The noble Lord, Lord Northbrook, asked me several questions. He started by asking whether this change would have the effect of increasing foreign ownership at the top end of the market. It is far too early to tell how it will affect the market more generally. A number of suggestions have been made but we must see how things turn out before we can draw any firm conclusions about that. The noble Lord asked why we had not adopted the same approach to non-residential property. The Government think that the market for non-residential property is very different from that for residential property. For example, the data show that the current non-residential SDLT structure has less of a distortive effect around the rate thresholds than the old residential SDLT rules, non-residential properties also have a higher value on average and many have large leases and small premiums, which is rare for residential properties. Because of these differences, we do not think it follows that a reform to non-residential SDLT should accompany the reform that we are talking about today.
The noble Lord raised the Swiss system of dealing with under-occupied properties. I will, of course, happily pass that on to my colleagues in the Treasury. He suggested that we should insert more council tax bands at the top end. I thought for a moment that he was advocating Liberal Democrat policy, but then I discovered that he wanted to do that instead of the changes proposed in the Bill rather than in addition to them. We feel that, through the Bill, we are dealing with a system that has widely distorted the market over a long period and have replaced it with something which is more progressive and less distorting.
The noble Lord, Lord Tunnicliffe, pressed on the House the Labour Party’s proposal for a mansion tax and the need to build more houses. The election will include much debate on the mansion tax and I do not think I would serve a very useful purpose by entering into it this evening. On the noble Lord’s second point, while I agree, and the Government definitely agree, that we need to build more houses, I would point out that the Government have taken significant steps to support housing supply, including introducing the new National Planning Policy Framework, investing £7.8 billion to deliver 335,000 new affordable homes between 2011 and 2018, which is the most ambitious affordable housing programme for 20 years and being done in very difficult economic times, and providing £3.6 billion to facilitate access to finance for SME builders. The Autumn Statement includes a raft of further measures which will substantially boost housebuilding.
I am extremely grateful to noble Lords who have spoken in favour of the principles of the Bill and therefore I ask that it be given a Second Reading.
Counter-Terrorism and Security Bill
(9 years, 9 months ago)
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