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Oral Answers to Questions
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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, 8 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, 8 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, 8 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, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Compulsory Jobs Guarantee
(9 years, 8 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, 8 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, 8 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, 8 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, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Delegated legislation
(9 years, 8 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, 8 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.