House of Commons

Tuesday 3rd March 2015 Commons Chamber

Tuesday 3 March 2015

The House met at half-past Eleven o’clock

Prayers

Tuesday 3rd March 2015 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Tuesday 3rd March 2015 Commons Chamber

The Secretary of State was asked—

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

1. What criteria the Government will use to determine the right time for the UK to recognise Palestine as a state.

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

We want to see the establishment of a sovereign and independent Palestinian state, living in peace and security alongside Israel. We have been clear that the UK will recognise a Palestinian state bilaterally at a time when we judge it best to help bring about peace.

[Ms Ritchie]

I thank the Minister for his answer, but does he not see that constantly saying that the UK recognition of the state of Palestine should be conditional on negotiations between Israel and Palestine in effect gives Mr Netanyahu or his successor a veto over the UK’s sovereign decision to recognise Palestine, especially as that Prime Minister is making a very divisive speech in Washington today? How can this be right?

[Mr Ellwood]

Although I understand the hon. Lady’s passion—we have debated this matter in the House on a number of occasions—I hope she appreciates that such recognition is not simply a tick-box exercise but a strategic tool, which will have consequences when implemented, and which is therefore best used at a time when it will advance the process and leverage positive change.

[Crispin Blunt (Reigate) (Con)]

The previous Foreign Secretary said that we were in the last chance saloon for the two-state solution. If the Government wait long enough, there will be no opportunity for a two-state solution and the question will then be completely irrelevant.

[Mr Ellwood]

I am sad to say that I agree with my hon. Friend, as many of the ingredients that we witnessed in the build-up to last summer’s conflict are beginning to re-emerge. If we are to avoid another significant and punishing conflict, all parties must come together immediately after the Israeli elections are complete and a new Government are formed, to address these grave challenges.

[Ian Austin (Dudley North) (Lab)]

There is no legalistic or bureaucratic route to Palestinian statehood and it cannot be imposed from outside. We will see a viable Palestinian state—the two-state solution that we all want—only as a result of proper negotiations between the Israelis and the Palestinians, which Britain should be doing everything it can to foster. We need to see the demilitarisation of Gaza, Iran no longer sending rockets to Hezbollah and Hamas, and Britain promoting organisations such as Project Cherish, the Parents Circle-Families Forum and Middle East Education Through Technology to bring together people on both sides who want peace.

[Mr Ellwood]

I am not sure that was a question, but I certainly agree with the spirit of the hon. Gentleman’s comments. We want the Palestinian Authority to assert itself in Gaza, not just have a technocratic Government. We want the Palestinians to end the political stalemate with Hamas, as he implies, but we also want Israel to allow the free movement of people, particularly the politicians, into Gaza, and to increase trade between Gaza and the west bank.

[Duncan Hames (Chippenham) (LD)]

The Minister is right—we have debated the subject a number of times. The House also voted by an overwhelming margin in favour of recognising a Palestinian state. Under what circumstances does he consider that the timing of such an announcement should be at odds with the sovereign will of the House?

[Mr Ellwood]

As I said in my initial reply, this is not just a tick-box exercise. It is not something that we debate in Parliament and then move on to the next subject. There are real consequences of when we choose to recognise the Palestinian state. We want to be part of that process and to advance it. When we can leverage positive change, we will do so.

[Jeremy Lefroy (Stafford) (Con)]

2. What recent discussions he has had with his counterparts in North Africa on the political and security situation in Libya.

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

The political and security situation in Libya remains a concern. We call on all parties to agree to a ceasefire, to engage with the UN dialogue process to find a lasting solution, and to unite to defeat the Islamist extremism which is establishing a foothold in that country. I speak regularly to my Egyptian counterpart. I visited Algeria on 19 and 20 February for discussions which were dominated by the situation in Libya.

[Jeremy Lefroy]

I welcome the Egyptian Government’s response to the terrible murder of 21 Egyptian Coptic Christians in Libya and especially the bridge building shown by President Sisi and religious leaders to the Coptic community. What more can the UK do to support Egypt in its vital role in working for stability in Libya?

[Mr Hammond]

My hon. Friend is right that Egypt will play a vital role in the solution in Libya, as all European countries, many of which are very concerned about the situation there, and the United States recognise. Similarly, there are still significant challenges in the human rights situation in Egypt. We were very pleased with the clear statement that President Sisi made on the rights of religious minorities in Egypt. However, as with many other elements of the Egyptian constitution, we now need to see that being delivered on the ground.

[Mr Nigel Dodds (Belfast North) (DUP)]

Following engagement with ourselves, the Prime Minister appointed the National Security Adviser to engage with the Libyan authorities on reconciliation and finding ways forward for compensation for victims of IRA terrorism that was sponsored by the Gaddafi regime. Will the Foreign Secretary update the House on what progress the National Security Adviser has made in that work?

[Mr Hammond]

I regret to have to tell the right hon. Gentleman that the reality on the ground in Libya is that there is no authority to engage with. I am afraid that at the moment I can report no progress on those measures. The urgent need now is to see a Government of national unity created and for the Libyan people to deal collectively with the threat to their society that is posed by the establishment of ISIL cells. Once we have such an authority in place, we will of course re-engage with that agenda.

[Sir Malcolm Rifkind (Kensington) (Ind)]

As the United Kingdom was one of the leading countries that helped the Libyan people overthrow Colonel Gaddafi, do we not have both a political obligation and a political interest to help all the democratic forces in Libya trying to create a new, decent country? While I recognise that the Government do indeed have a priority in that respect, I urge my right hon. Friend to ensure that the British Government do all within their power—perhaps even more than they are doing at the moment—over the crucial weeks and months that will determine whether Libya does indeed become a moderate, secular force or continues to be a hotbed of anarchy and potential terrorism.

[Mr Hammond]

I agree with my right hon. and learned Friend that the next few weeks and months will be crucial for Libya. Would that it was as simple as getting behind the democratic authority in Libya—it is not clear that there is a democratic authority behind which we can get. We need a coming together. I do not want to overplay the prospects, but the UN Secretary-General’s special representative, Bernardino León, is making some progress, and the Prime Minister’s envoy, Jonathan Powell, is also working hard. We will continue to engage, because having a stable Government in Libya is vital to our security.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

The Tobruk-based Government have agreed to return to the UN talks, but on the condition that they are recognised as the only authority that can take part in those negotiations. What is the view of Her Majesty’s Government? Do they support the Tobruk-based Government?

[Mr Hammond]

Our view is that both the Tobruk regime and the Misratans, and indeed the regime in Tripoli, must attend the talks with the UN Secretary-General’s special representative on a no-preconditions basis and on the terms he proposes in order to discuss how they can form a Government of national unity of some kind so that we can begin to rebuild Libya, which could be a prosperous and successful country, and one whose stability is vital to our own interests.

[Sir David Amess (Southend West) (Con)]

3. What recent assessment he has made of progress with the middle east peace process.

[Mr Hammond]

I have to be candid with my hon. Friend: progress has stalled pending the Israeli general election on 17 March. The British Government strongly supported US Secretary of State John Kerry’s efforts to reach a final status agreement and were disappointed that the parties did not make more progress in 2014. I have discussed many times with Secretary Kerry, most recently when we met in London on 21 February, what the next steps will be. We will press the US to revive the initiative and all the parties to resume serious negotiations as soon as possible after the Israeli elections, and I urge them to be ready then to step up and show the bold political leadership that will be necessary to achieve peace.

[Sir David Amess]

I am glad to hear that my right hon. Friend will join me in asking for renewed international pressure on Hamas to disarm and renounce violence. Does he agree that unless that happens it is difficult to envisage a unified and prosperous Palestinian state existing alongside Israel?

[Mr Hammond]

My hon. Friend is right that for an enduring solution Hamas must disarm and be prepared to accept Israel’s right to live in peace, but Israel must also stop making illegal settlements in the Occupied Palestinian Territories. We need to keep up the pressure on both sides if we are to get a sustainable solution.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Does the right hon. Gentleman agree that one of the most positive possibilities for advancing peace in the middle east would be the success of the international negotiations with Iran on its nuclear projects? Will he take this opportunity to make it clear that any attempt to disrupt those talks by the Israeli Prime Minister when he addresses the United States Congress later today would be bad for the whole of the middle east and bad for Israel too?

[Mr Hammond]

My reading of the US Congress is that it probably does not need much encouragement to instinctively be very sceptical about the process of dialogue with Iran on the nuclear dossier. However, some small progress is being made there, and I would very much regret any attempts to destabilise or derail that process. On the wider question, settling the Israel-Palestine issue is the big roadblock to a more enduring peace in the middle east.

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

Does the Foreign Secretary think that peace will not be forthcoming until Hamas renounces violence and can speak with a single voice? In Israel, we have seen the emergence of a moderate centre ground. Does he think that either condition is going to happen?

[Mr Hammond]

I am going to be slightly careful about the second part of my right hon. Friend’s question because Israel is two weeks away from a general election, so I do not want to speculate about different parts of the political spectrum. What is clear is that there needs to be a broad-based movement within Israel that seeks peace, understands that trade-offs are required in order to achieve peace, and places the greatest premium on getting an acknowledgement of Israel’s right to live inside peaceful pre-’67 borders in perpetuity.

[Angus Robertson (Moray) (SNP)]

Is it true that Tony Blair is still a so-called middle east peace envoy? What progress has he secured on the ground, and do the UK Government still have confidence in his efforts?

[Mr Hammond]

It is true that Tony Blair remains the Quad envoy to the middle east. Mr Blair has made a large number of visits to the region; most recently he has been in Gaza. He continues to engage, and I have no doubt that his role will be kept under constant review.

[Sir Menzies Campbell (North East Fife) (LD)]

May I take my right hon. Friend back to the question of settlements, which it is accepted throughout this House are wholly contrary to international law? More to the point, the continual encroachment by the Israeli Government makes it impossible for East Jerusalem to become the capital of a Palestinian state. Can he conceive of any circumstances where a leader of the Palestinians would be able to accept a peace arrangement based on giving up East Jerusalem?

[Mr Hammond]

I think that is highly unlikely. As my right hon. and learned Friend knows, the Government’s position is that that should not be the case. I have said in this House before and I will say again that settlements are just buildings. Buildings can be built and buildings can be removed, and we must not allow illegal building to stand in the way of a sustainable solution if it can otherwise be found.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

I am sure that the Foreign Secretary agrees that the middle east peace process will be more difficult to restart if reconstruction in Gaza continues to proceed as slowly as it is currently. What further efforts, if any, will Ministers be making to speed up the delivery of aid, including British aid, that was promised by the international community at the Cairo conference, before they hand over the challenge to this Front Bench on 8 May?

[Mr Hammond]

If I may say so, I think that the hon. Gentleman is getting a little bit ahead of himself there.

We have a good track record on the delivery of our aid pledges in respect of Gaza. A number of other countries have made very forward-leaning aid pledges but they have not yet been followed through. So there is a problem with money, but there is also a physical problem of being able to get materials into Gaza and get works progressed. That is caused partly by the security situation in Sinai and the Egyptian response to that, and partly by the situation between Israel and the Palestinians in Gaza. I do not think, honestly, that we are going to get much progress before the Israeli general election, but as soon as that election is out of the way, this has to be a major priority.

[Michael Fabricant (Lichfield) (Con)]

4. Whether he has had discussions with the Argentinian Government on the future of the Falkland Islands; and if he will make a statement.

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

There have been no discussions between the UK and Argentina on the future of the Falkland Islands during the course of this Government. Any such discussions will take place only when the Falkland Islanders wish them to, and they have made it clear that they do not.

[Michael Fabricant]

My right hon. Friend will be aware that the Argentinian Government have brought out new bank notes showing the Falkland Islands as part of Argentina. I think that we have all received a letter from the Argentinian ambassador and a book, “Malvinas Matters”, complaining that there has not been any dialogue. May I reiterate what the Minister has just said? We should not have any negotiations with Argentina on sovereignty until the Falkland islanders want to leave the United Kingdom.

[Mr Swire]

I am aware that a number of right hon. and hon. Members have received that book, which seeks to discredit the Falkland islanders’ right to their own future. It ignores the inconvenient truth that some people on the islands can trace their Falklands ancestry back through nine generations, which is longer than the current borders of Argentina have existed. On the issue of the 50 peso bank note, we cannot stop the Argentinian Government doing these stunts. It is worth a whopping £3.72, according to today’s exchange rate—I think it probably has the equivalent political value.

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

5. What plans officials of his Department in Argentina have to mark the 150th anniversary of the founding of the Welsh community in Patagonia.

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

Our embassy in Buenos Aires, in co-ordination with the British Council in Argentina and Wales, will facilitate official visits to Argentina for the celebrations in July to mark the 150th anniversary of the arrival of Welsh settlers in Patagonia. It will also work hard to promote Wales in Argentina through cultural and other events.

[David T. C. Davies]

The Minister will surely be aware that the 25,000 Welsh speakers in Argentina have a very special place in the hearts of everyone living in Wales. Does he agree that this important anniversary—notwithstanding other matters that, with amazing timing, have just been raised—perhaps offers the opportunity to rebuild a more friendly relationship? Will he come to a photographic exhibition on the Welsh colonies in Argentina, which I hope to organise in the House later this year if all kinds of other events allow?

[Mr Swire]

I would be delighted to continue in this role after the May election, but that is up to the Prime Minister. We should all celebrate the great story of the arrival of 153 Welsh settlers in Chubut in 1865. I am pleased that the First Minister of Wales will go to Argentina, and I am delighted that the National Youth Choir of Wales, the London Welsh choir and the National Orchestra of Wales will all visit Patagonia this year. I hope that they will concentrate on Welsh relations with Argentina, rather than anything else.

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

The history of the Welsh settlement in Patagonia is an incredible story of tenacity, innovation, fortitude and triumph over adversity, with a thriving Welsh-language community in Chubut province today. Will the Minister ensure that the FCO Argentine mission has an obligation to strengthen relations between Patagonia and Wales?

[Mr Swire]

We have absolutely no problem with the people of Argentina. We enjoy extraordinarily good relations with them, and the Welsh factor is enormously important. When the Welsh Affairs Committee visited last year, it was presented with a declaration on the Falklands, and I expect similar stunts this year. I hope that right hon. and hon. Members and the Argentinians will remember that the members of the Welsh community chose to emigrate and have become Argentine citizens by choice. By comparison, the Falkland islanders have exercised their own right of self-determination and, frankly, it is hypocritical for Argentina selectively to ignore that.

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

6. What assessment he has made of the success of recent diplomatic initiatives relating to peace and security in eastern Ukraine.

[Roger Williams (Brecon and Radnorshire) (LD)]

10. What steps his Department is taking to ensure a lasting ceasefire between Russia and Ukraine.

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

We support all diplomatic efforts that aim to bring about a peaceful resolution to the crisis in Ukraine. Since the latest Minsk agreement was signed on 12 February, Russian-backed separatists have seized control of the strategically important town of Debaltseve. It is not yet clear that Russia has any intention of honouring the commitments it made in Minsk. I held talks with Secretary Kerry last weekend, and I will discuss Ukraine with EU Foreign Ministers on Friday in Riga. In all such discussions, we will continue to argue for a strong and united response to Russia’s actions until such time as we see full compliance on the ground.

[Mr Bain]

I am sure that the House will want to take this opportunity to send its condolences to the friends and supporters of Boris Nemtsov, following his horrific murder last weekend.

The death toll in eastern Ukraine has reached 6,000 according to the UN Office of the High Commissioner for Human Rights. It also detects an escalation in hostilities, despite the signing of the ceasefire agreement. Does the Secretary of State agree that the EU standing together on tougher sanctions is the only way we can make it clear to President Putin that Russia’s actions in Ukraine are unacceptable?

[Mr Hammond]

I of course share the hon. Gentleman’s view on the appalling murder of Nemtsov in Moscow.

The hon. Gentleman asked about stepping up sanctions in response to Russia’s failure to comply with Minsk. The Minsk agenda runs until the end of this year, so it will not be until the end of December that Ukraine will regain control of its border with Russia, even if all the milestones are complied with. We believe that the tier 3 sanctions should be extended to last until the end of the year, so that we have a tool with which to ensure compliance. We can always suspend or partially suspend the sanctions if the milestones are being met, but we need to have the tool in place right the way through the programme.

[Roger Williams]

Many of my constituents have asked me why, when President Hollande and Chancellor Merkel met Putin, there was no senior British political presence or representation. When will Britain play its full part in protecting the sovereign nations of Europe?

[Mr Hammond]

I do not recognise the premise of the hon. Gentleman’s question. We are playing our part. While Mrs Merkel and President Hollande have done a good job of negotiating the Minsk implementation agreement under the Normandy process, which always involved the four countries of Germany, France, Ukraine and Russia, our role has been, is and will remain to stiffen the resolve of all 28 EU members to be united and aligned with the United States in deploying what has proved to be a powerful sanctions weapon.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

I certainly echo the sentiment of the Foreign Secretary’s final remarks. At this difficult and dangerous moment, it is vital that Europe and NATO stand united in ensuring that the Minsk agreement is implemented in full. However, may I bring him back to his remarks about tier 3 sanctions? Does he believe that new EU restrictive measures should be on the table at the next European Council meeting, as opposed simply to the roll-over and extension of existing measures that he described in his answer?

[Mr Hammond]

The European Commission has been tasked to look at a menu of possible additional measures that could be taken. As I have indicated, I think that we need two tools. We need an extension of the existing tier 3 measures through to the end of December. Putin has been telling oligarchs around Moscow that the sanctions will be over by the end of July: “Just hold your breath and it’ll all be fine.” We need to show him that that will not be the case. Alongside that, we need a credible set of options that we can implement immediately if there is a failure to comply with milestones in the Minsk implementation agreement or a serious further outbreak of conflict in the region.

[Mr Alexander]

I welcome the Foreign Secretary’s answer, but let me return to the appalling murder of Boris Nemtsov on Saturday in Moscow, to which he has referred. Clearly, the priority needs to be a thorough and impartial investigation into the murder. President Putin has a personal responsibility to show that the Russian authorities are willing and able to identify Mr Nemtsov’s killers and to bring them to justice. Will the Foreign Secretary confirm whether he has raised this matter with the Russian authorities, and give his assessment of the steps that have been taken by the Russian authorities to begin investigating the case?

[Mr Hammond]

We have heard a lot of noise from Moscow, but we have not yet seen any serious action. The omens are not promising. I heard just this morning that some countries’ intended high-level delegations to the funeral have not been able to obtain Russian visas. That probably tells us all we need to know.

[Mr Christopher Chope (Christchurch) (Con)]

The intransigence of the Russians is exemplified by the fact that they still hold in custody two Members of the Ukrainian Parliament, both of whom are members of the Parliamentary Assembly of the Council of Europe. When will my right hon. Friend get tough and insist on expelling Russia from the Parliamentary Assembly and the Council of Europe itself?

[Mr Hammond]

We do not have plans to take that step at this stage, but I assure my hon. Friend that we raise the matter regularly—indeed, the Minister for Europe raised it with the Russian ambassador only last week. I am going to Kiev later this week, and we will continue to work with the Ukrainians to try to secure the release of those two Ukrainians, as well as the Estonian border guard who was captured by the Russians six months ago.

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

7. What reports he has received on displacement of Bedouin in southern Israel.

[Mr Andy Slaughter (Hammersmith) (Lab)]

9. What representations he has made on the potential demolition of the village of Umm al-Hiran in Negev.

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

We are deeply concerned about proposals to demolish Bedouin villages. We are monitoring the situation closely, including talking regularly to organisations that work with those communities.

[Mr Cunningham]

In an earlier answer to an Opposition Member, the Foreign Secretary said that we were talking only about buildings in relation to the peace process. He forgot to say that in order to facilitate the peace process, we have to get people out of those buildings, and that is the big issue. May I push the Minister a little further? There are a number of impending demolitions of villages to make way for Israeli settlements. Will the Minister discuss that issue with the Israeli Government, urge them to reconsider the upcoming evictions and demolitions due for next month, and instead consider villages co-existing side by side in the spirit of peace?

[Mr Ellwood]

I agree with the hon. Gentleman, but the displacement issues in southern Israel, and the potential demolition of the Umm al-Hiran villages, are not in the occupied Palestinian territories but in green line Israel. That is a slightly separate debate or concern—if I can put it that way—to the illegal settlements that have been put forward, but nevertheless we are concerned and are having a dialogue with Israel about that.

[Mr Slaughter]

I welcome the Minister’s words, but may I urge on him a sense of urgency and purpose—urgency because the demolition order for Umm al-Hiran may be given in two weeks’ time, and purpose in the sense that action is needed? Will he ask the British ambassador to visit the village, and will he invoke the EU-Israeli association agreement that makes favourable trade relations dependent on Israel’s respect for human rights?

[Mr Ellwood]

As I clarified, that is a different matter from the debate about the occupied Palestinian territories, but nevertheless we want a robust planning process that adequately addresses the needs of the Bedouin communities. We must keep pushing for that dialogue.

[Sir Bob Russell (Colchester) (LD)]

Will the Minister confirm that the displacement of the Bedouin constitutes ethnic cleansing?

[Mr Ellwood]

Again, I reiterate the difference between the two issues: one concerns the illegal settlements, and the other is a planning matter that we have raised concerns about. I visited the E1 area, which is where much of the attention is currently focused, and we have discouraged the growth of settlements in that area. Were the plans to go ahead, we would have a break between the Hebron and Bethlehem conurbations, and that would effectively end the middle east peace process.

[Sir Tony Baldry (Banbury) (Con)]

Is the displacement of the Bedouin from the E1 area contrary to international humanitarian law—yes or no?

[Mr Ellwood]

It is contrary to international law in that sense, and any nation has obligations when dealing with occupied territories and their occupants. We are discouraging Israel from further build, but the land swaps will be integral to any future long-term peace agreement. That is why we are in this quagmire.

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

8. What recent assessment he has made of the extent of Iran’s financial and material support for Hamas and Hezbollah.

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

We have serious concerns about Iran’s support for militant groups, including Hezbollah and Hamas. That includes financial resources and training, as well as the supply of military equipment.

[Rehman Chishti]

I thank the Minister for that answer. As part of our talks with Iran on its nuclear programme, will there be a specific condition on Iran to stop sponsoring and harbouring terrorism, whether that is supporting the Houthis in Yemen, interfering in Syria, interfering in Iraq with its militias against the Sunnis, or supporting Hezbollah, to ensure that we have a long-term solution, not a short-term fix?

[Mr Ellwood]

Discussions around a nuclear solution are separate to those other matters, but my hon. Friend is right to raise the issue. Iran is having a destabilising effect in the region, and that is a violation of UN resolution 1747 which makes illegal the export of weapon systems and armaments from Iran.

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

Iran arms Hezbollah in Lebanon and Hamas in Gaza, and it now threatens to arm Palestinians on the west bank who currently support President Abbas. In view of the Minister’s previous reply, what specific representations have the Government made to the United Nations about that flagrant breach of UN resolutions?

[Mr Ellwood]

The hon. Lady will be aware that the Prime Minister had his first meeting with the Prime Minister of Iran at the United Nations General Assembly and very much put those points down. She is right that Iran must question its role in the region. It must ask itself whether it wants to be a part of the problem or a part of the solution. We have spoken about Hamas and Hezbollah. Hezbollah is effectively propping up the Assad regime, because he is losing the officer class, which is depleted because of the war.

[Alistair Burt (North East Bedfordshire) (Con)]

Next week, as chair of the British Group of the Inter-Parliamentary Union, I will be welcoming the first delegation of Iranian parliamentarians to visit this country for some time. Will my hon. Friend welcome that development? He knows not only that the House will give full and appropriate courtesy to parliamentarians from Iran, but that it will take the opportunity to engage them in the full and frank discussion of matters between us, which is the only basis on which parliamentarians can build a relationship.

[Mr Ellwood]

My right hon. Friend is absolutely right. It is through full and frank engagement that we can get our message across. Dialogue with Iran has increased. We must ensure that Iran not only talks the talk, but that its actions speak as loud as its words.

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

11. What assessment he has made of the level of public demand for a renegotiated settlement between the UK and the EU.

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

I assess that mainstream opinion in the UK is that the EU is not currently delivering for Britain. We need to fix that problem, and only the Conservatives have a clear plan to do so. We will negotiate a new settlement with our EU neighbours, and one that works for Britain. We will then put that new settlement to the British people in an in/out referendum before the end of 2017. Only a Conservative Government will make that commitment. Labour and the Liberal Democrats do not want change, and UKIP cannot deliver it.

[Mrs Gillan]

The Conservative party is the only sane and significant party to guarantee, following a renegotiation, an in/out referendum on our membership of the EU. How many countries has the Foreign Secretary visited to discuss that renegotiation, what levels of engagement has he had, and is there a positive desire for change in other states that matches ours?

[Mr Speaker]

I am grateful for the right hon. Lady’s three questions. The Foreign Secretary is a specialist in providing a pithy answer on a postcard.

[Mr Philip Hammond]

Thank you, Mr Speaker, for that vote of confidence.

I have currently visited 23 of our partners in the European Union. In a nutshell, there is a very strong view that all member states want Britain to remain in the EU, an understanding that that can happen only if there is significant change in the EU, and a clear willingness to engage with us, particularly on our demands for improved competitiveness in the EU, which all member states want.

[Sir Hugh Bayley (York Central) (Lab)]

19. The Conservative manifesto at the last general election states:“European countries need to work together to boost global economic growth, fight global poverty, and combat global climate change. The European Union has a crucial part to play…A Conservative government will play an active and energetic role in the European Union to advance these causes.”Will that be the Conservative party’s policy in the next Parliament?

[Mr Philip Hammond]

That is exactly what we are doing. The hon. Gentleman seems to subscribe to the view of the world in which Britain sits isolated on the edge. We are a major player in Europe. We have the second largest economy in Europe. We are leading the way in so many areas within the European Union. We have to seize this opportunity to shape the European Union in a way that works for Britain. It went off the rails somewhere over the past 20 years, and we must take this opportunity of reform and renegotiation to get it back on the rails. Crucially, we must then let the British people have the final say on whether the package we have negotiated is good enough or not.

[Stephen Hammond (Wimbledon) (Con)]

16. Like you, Mr Speaker, I have complete confidence in the Foreign Secretary. I am sure he has sensed not only that there is increased public demand for renegotiation, but that there is absolutely no movement in public demand for that referendum. Is that his assessment, and will he commit to a referendum prior to the end of 2017?

[Mr Philip Hammond]

I reiterate the commitment that the Prime Minister has already made that there will be a referendum by the end of 2017 if there is a Conservative Government. There is virtually no movement in polling evidence in the demand for a referendum. I will say something else to my hon. Friend: by creating the referendum we have—I will use the phrase again—lit a fire under our partners in Europe. They now know that they have to deliver change that is substantive and meaningful; not some backroom political deal, but something that will satisfy the British people in a referendum. That is what is driving the debate.

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

It is clear that the European Union needs to reform to create more growth, more jobs and more competitiveness, so what is the Minister’s reaction to the warning issued this morning from the executive vice-president of Ford, Mr Jim Farley, who said, on the prospects of “Brexit”,

“We really hope that doesn’t happen and we believe that the UK being part of the EU is critical for business”?

Why does the Conservative party call for the march of the makers in one breath, yet pursue a policy that poses a direct threat to manufacturing jobs, manufacturing investment and trade? Is it that the Foreign Secretary does not see the contradiction, or is it instead a complete and utter absence of leadership when it comes to the European Union?

[Mr Philip Hammond]

It is that we need to resolve this issue. Of course, most people in this country recognise the value of the single market to Britain’s economy, but that comes at a price and it is a price we pay in loss of sovereignty and loss of control over many of our own affairs, including some that we do not need to lose control of. The debate will be on the correct balance between what is done at national level and what is done at European level, on the accountability of the European Union institutions to the people of the European Union, and on the European Union’s ability to drive economic growth across all our economies. That is what people in this country want resolved, and by resolving it we will create a more certain climate for business in the future.

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

The Foreign Secretary has kindly shared with us that he has spoken to 23 other member states and that they all support the United Kingdom’s remaining in the European Union. Can he tell us whether he supports Britain remaining in the European Union? Does he understand the damage that his policy is doing to British business and British interests in order to maintain a temporary peace in his party?

[Mr Philip Hammond]

What would cause continuing damage to British industry is not resolving this issue once and for all. The only way to do that is to have a frank and open discussion about the problems in the European Union, to renegotiate the package and to put it to the British people—and then we have settled it for a generation.

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

12. What steps he is taking to secure the return of the UK citizens who were aboard the MV Seaman Guard Ohio when she was detained by the Indian authorities.

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

We have regularly raised this case at the most senior levels of Government, and have pressed for the legal process to be resolved as soon as possible. My right hon. Friend the Foreign Secretary will be raising the issue yet again when he visits India next week. Last month, following requests from three of the men, we issued emergency travel documents. The men will still require permission from the Indian authorities before they are able to leave the country.

[Mr Reid]

I thank the Minister for that answer, but it is now eight months since an Indian court quashed the charges against my constituent Billy Irving. He, and the other UK citizens, are still unable to leave India because the legal process has ground to a halt. Will the Foreign Office redouble its efforts to persuade the Indian authorities to conclude the legal process quickly and get these men home?

[Mr Swire]

The hon. Gentleman knows that we have raised this again and again at the highest possible level. Indeed, I am meeting him, and other Members who have been assiduous in raising this with us, in the next couple of days to update him. What we cannot do, however, is simply ignore the Indian judicial process or interfere with it. That is not to say that we do not share hon. Members’ frustrations about the pace of progress.

[Ian Lavery (Wansbeck) (Lab)]

These six British soldiers all fought for the British Army on the front. They feel utterly betrayed by the Government because of what they see as a lack of assistance in their hour of need. They were all acquitted and freed on 10 July last year. We must be able to do something to get these people home. We must redouble our efforts.

[Mr Swire]

My right hon. Friend the Prime Minister raised this with Prime Minister Modi in November 2014. The Deputy Prime Minister did so on his visit to India in August, as did the Foreign Secretary when he met his counterpart in October. I have done so numerous times at ministerial level and with the high commissioner here, and most recently British officials in Delhi raised concerns with the Ministry of External Affairs on 16 and 23 February. Members have been right to raise this again and again and we have kept Members informed. This has taken up a huge amount of time, but, in the management of expectation, I say again to the hon. Gentleman—I say it slowly and clearly—that we cannot ignore the Indian judicial process. We are dealing with a sovereign country, but we share the frustrations about the pace of progress.

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

13. What his priorities are for the 28th session of the UN Human Rights Council in March 2015.

[The Minister for Europe (Mr David Lidington)]

Our priorities include the renewal of UN mandates on Syria, Burma and Iran, increasing international attention on Libya, Ukraine and the Democratic People’s Republic of Korea, responding to UN reports on Gaza and ISIL activity in Iraq, and thematic resolutions on freedom of religion or belief, combating religious intolerance, and privacy. My right hon. and noble Friend Baroness Anelay is representing us at the session.

[Bridget Phillipson]

I am grateful to the Minister for his answer, but does he not see that Government attempts to undermine the European convention on human rights damage our international reputation on this issue and diminish our influence on human rights?

[Mr Lidington]

No, and if the hon. Lady looks at our record, particularly when this Government held the chairmanship of the Council of Europe, she will see that, on the contrary, we upheld the standards and values embodied in the convention and successfully negotiated sensible, pragmatic reforms to the way in which the convention is implemented that are in the interests of all states.

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

22. What does the Minister think this session’s high-level panel on the death penalty can achieve, particularly when so many Human Rights Council members use the death penalty?

[Mr Lidington]

It is true, of course, that many of the members of the Human Rights Council, who have been elected by the membership of the United Nations generally, still have the death penalty. The United Kingdom, both at the UN Human Rights Council and in our bilateral and multilateral relationships of all kinds, continues to stress that we regard the death penalty as completely unacceptable.

[Jeremy Corbyn (Islington North) (Lab)]

Will the Minister use the opportunity of the Human Rights Council to raise the human rights crisis in central America, in particular in Mexico? Will he also raise these matters with President Peña Nieto during his visit and tie any future trade developments with Mexico to improvements in its human rights record and dealing with those who killed, probably, the 43 students—but also thousands of others who have died—and the forces that have acted with impunity in that country?

[Mr Lidington]

The hon. Gentleman will recall from the recent debate in Westminster Hall, in which he and I spoke, that we have a strong relationship with Mexico. We use that to seek improvements to Mexico’s human rights record and to give Mexico practical help in trying to improve its judicial and police systems in particular. That work will continue.

[Mark Pawsey (Rugby) (Con)]

14. What steps the Government have taken since 2010 to increase British influence around the world.

[The Minister for Europe (Mr David Lidington)]

Despite the very tight spending environment, this Government have since 2010 opened nine new diplomatic missions in emerging countries and fast-growing economies and upgraded a further six posts. We have opened an FCO language centre and a diplomatic academy, and shaped the international agenda, including through groundbreaking conferences on the preventing sexual violence initiative, cyber-security and Somalia, and hosting successful summits of NATO and the G8.

[Mark Pawsey]

My constituents certainly recognise the increased standing of this country across the world under this Government. The Government have rightly made a priority of ending the practice of rape and sexual conflict as a tactic of war and addressing the shameful failure to bring perpetrators to justice. Will the Minister update us on this important initiative?

[Mr Lidington]

It is a cause of pride for this Government and this country that the FCO, particularly under the leadership of my right hon. Friend the Leader of the House, has for the first time got the international community to take seriously the scandal of the sexual abuse during war and conflict of countless numbers of women and, let us not forget, many men as well. We are now seeing the fruits of that, in the way in which countries such as Nepal, Bosnia, the Democratic Republic of the Congo and Kosovo are taking up the challenge to put right the wrongs of the past and amend their practices for the future.

[Mr John Spellar (Warley) (Lab)]

When this question was handed out, I was not sure that the Government would be aware that US General Ray Odierno would express concern about our defence capability, following Government cuts, or that the British General Sir Richard Shirreff would describe the Prime Minister as “a bit player” in the Ukraine crisis. When will the Minister recognise how much this Government have marginalised Britain?

[Mr Lidington]

I wish the right hon. Gentleman could talk to the leaders of countries such as Poland, Latvia, Lithuania and Estonia, who have been grateful for the resolute political leadership this Government have given, and for the very practical contribution we have made to Baltic air policing and NATO training exercises to defend their security. The—[Interruption.]

[Mr Speaker]

I think the right hon. Gentleman is in the middle of his sentence.

[Mr Lidington]

I think that the right hon. Gentleman should reflect on the record of his Government and the state of decay in which they left the Foreign Office after their stewardship.

[Henry Smith (Crawley) (Con)]

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

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

This week, we are delighted to welcome the President of Mexico and Senora Rivera on their state visit to the United Kingdom. Indeed, right about now, they should be being received by Her Majesty on Horse Guards parade. The UK and Mexico enjoy an excellent bilateral relationship, and we look forward to broadening and deepening that partnership this week.

My three key priorities continue to be Russia and Ukraine, the struggle against violent Islamist extremism and our plans for the reform of the European Union. Later this week, I will visit Ukraine to discuss the situation on the ground and to assess implementation of the latest Minsk agreement. I will then travel to Warsaw and on to Riga to meet my EU counterparts over the weekend.

[Henry Smith]

As part of the Mexican state visit, it is good to see the flags of the British overseas territories flying in Parliament square today. I am encouraged to hear that London and Madrid are talking about better relations over Gibraltar. I seek assurances from my right hon. Friend, however, that there will never be any discussions over the future of Gibraltar’s sovereignty so long as the people of Gibraltar wish to remain loyal to this country.

[Mr Hammond]

That is our position, and I confirm that it will remain our position so long as there is a Conservative Government.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

Last year, 2014, was dominated by news of horrendous violence against those of different faiths, from Boko Haram abducting Christian girls in Nigeria to the attacks by ISIL against Christians, Yazidis and other religious minorities within Iraq. In the light of those developments, does the Foreign Secretary agree that a global envoy for religious freedom, reporting to the Foreign Secretary should be appointed? If this Government choose to act, we will support them; if they do not, a Labour Government will act.

[Mr Hammond]

Our general approach is to try to get things done using the mechanisms we have. We have an extensive diplomatic network around the world, and we have large amounts of soft power at our disposal, including the leverage that our large aid budget gives us. I do not think simply creating new posts and ticking a box delivers in the way the right hon. Gentleman and the previous Government seem to think it will.

[Steve Brine (Winchester) (Con)]

T4. The Minister will know that the UN has delayed by six months its report on human rights in Sri Lanka. A number of Sri Lankan constituents in my constituency are waiting for this report and are actively contacting their MP about it. Will the Minister push for the urgent release of this document, and will he please update us?

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

We have worked closely. I have been to Sri Lanka and met the new President, the new Foreign Minister and the new Prime Minister, and the new Foreign Minister has been here. We recognise the concern of all the victims. We remain firmly committed to the Geneva process. This will not be an indefinite deferral; the report is due by September. The extra time recognises the changed political context in Sri Lanka, and it will allow the new Government to deliver on their commitment to engage with the high commissioner and establish their own credible accountancy process.

[Yasmin Qureshi (Bolton South East) (Lab)]

T2. The persecution of the Rohingya by the Burmese Government still continues, and the appalling humanitarian situation they, and especially the refugees, face continues, too. Will the Foreign Secretary speak to Ban Ki-moon and ask him to go to Burma and personally to negotiate unrestricted humanitarian access for the Rohingya in the Rakhine state?

[Mr Swire]

Ban Ki-moon chairs a Friends of Myanmar meeting in New York, which I have attended. He is fully aware of what is going on in Burma. We remain extremely concerned about the plight of the Rohingya, not least the white card issue that has just emerged, and we continue to lobby the Government in Burma on that basis.

[Charlotte Leslie (Bristol North West) (Con)]

T6. The ongoing crisis in Ukraine and our relationship with Russia have real implications for the United Kingdom’s energy security. Many might say that, had energy security been a more key component of strategic foreign policy for successive European Union Governments, we might now have more room for manoeuvre with Putin. Can the Foreign Secretary assure us that full consideration of our long-term energy security is currently at the forefront of, and central to, our response to the evolving situation in Ukraine?

[Mr Philip Hammond]

Yes, it is a key agenda item. I can reassure my hon. Friend that the United Kingdom is in a much better energy security position than many of our European Union partners. However, as our non-military response to Russia essentially depends on EU unity, we often find that we are as weak as the weakest link in that chain. There is an urgent need to ensure that the European Union as a whole improves its energy security over the coming years, both for reasons of competitiveness and for the sake of our own national security.

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

T3. What work will the Foreign Secretary do with his international counterparts to build on the progress that was made at the United Nations climate change conference in Lima last December? What role does he think that the Commonwealth has in that regard, given the vulnerability of a number of small island states?

[Mr Swire]

We are strongly committed to seeing a successful outcome to this year’s Paris meeting, and we played a leading role in the EU discussions on securing a forward-looking EU position. We will use our Commonwealth membership and our bilateral relationship with the Commonwealth countries to reach out to the nations to which the hon. Gentleman refers, so that we can seek the ambitious global agreement that I think Members on both sides of the House would like to see.

[Mr David Burrowes (Enfield, Southgate) (Con)]

T9. There is another country in Europe that has been occupied and divided for not just one year, but 40. What priority are the Government giving to solving the Cyprus problem?

[The Minister for Europe (Mr David Lidington)]

We continue to give strong support to the efforts of the United Nations envoy, Espen Barth Eide, to bring the two communities in Cyprus together. A settlement would be in the interests of all communities there. I was very pleased that yesterday the Foreign Office re-hosted a meeting at which the chambers of commerce of both Greek and Turkish Cypriot communities were represented by their presidents, both of whom spoke eloquently about the way in which a settlement would increase the prosperity of everyone on the island.

[Lilian Greenwood (Nottingham South) (Lab)]

T5. There is huge frustration among my many constituents who have roots and family ties in the disputed territory of Kashmir. Little progress has been made for decades, and the region still suffers as a result of militarisation, violence and human rights abuses. What recent discussions has the Secretary of State had with India and Pakistan, and what hopes has he for a better future for Kashmir in which account will be taken of the views of Kashmiri people?

[Mr Swire]

My right hon. Friend the Foreign Secretary raised the issue with Nawaz Sharif when he was here recently, and will raise it again when he travels to India. We are encouraged to note that some talks appear to be taking place between India and Pakistan, because we know how much concern there is throughout the country.

[Mr John Baron (Basildon and Billericay) (Con)]

Given our admission that we were unsighted over Russia and Crimea, and given that we were short of Arabists following the Arab spring, is there not a case for spending more on our foreign policy capabilities? Would that not only ensure that we were better sighted, but reduce costs in the longer term because we would be able to avoid making further mistakes?

[Mr Lidington]

The Foreign Office makes a huge effort, in difficult fiscal times, to focus our resources on key elements of policy analysis and capability, including those involving the middle east and Russia, which, as my hon. Friend suggests, are particularly important. About 170 of our officers are now registered as having ability in Arabic, and a similar number are registered as having ability in Russian.

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

T7. We know that 163 Palestinian children are being held in Israeli military detention, and that many are being held inside Israel in direct violation of the fourth Geneva convention. What representations is the Secretary of State making to the Israeli authorities with a view to ending that brutal aspect of the illegal occupation?

[Mr Philip Hammond]

We routinely make representations to the Israelis on all aspects of illegal conduct—of which that is just one example—and we will continue to do so.

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

As the Government prepare for renegotiating the European treaties, will they give their full support to the Swiss in their efforts to change their terms of free movement of people as a sign of their sincerity and a symbol that free movement of people is not an unchallengeable part of the European state?

[Mr Hammond]

As everybody knows, Switzerland is outside the European Union and has negotiated terms for access to the single European market, as has Norway, but those terms require the Swiss and Norwegians to accept wholesale the body of EU law without having any say in the making of it, to contribute financially and to abide by the principles of free movement. The Swiss have sought unilaterally to change that arrangement and they have been firmly rebuffed by the EU.

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

T8. Does the Secretary of State agree with his fellow Conservative and counterpart in Norway Vidar Helgesen that with the single market needing bold leadership for its completion and with Europe facing its biggest security crisis since the cold war, it would be a disaster for Britain to sleepwalk out of the EU?

[Mr Lidington]

I had another very good meeting with Vidar Helgesen when he was in London last week, and he is quite open in saying, as my right hon. Friend the Foreign Secretary has just said to the House, that Norway has access to the single market but has to contribute to the EU budget, implement EU law and accept freedom of movement without any say in how those decisions are made, which is why my view is that this country is better off in a reformed EU, rather than adopting the kind of status Norway has.

[Sir Hugh Robertson (Faversham and Mid Kent) (Con)]

Is the Foreign Secretary able to update the House on any progress in the Syrian peace talks and in particular, if it remains the Government’s ambition to remove President Assad, what progress we have made in building up an alternative Government capable of taking on IS?

[Mr Philip Hammond]

I have to tell my right hon. Friend candidly that the co-ordination between the civilian Syrian opposition and the moderate armed opposition is still disappointing. It is one of the areas on which we and our allies are working. We are committed to taking part in the programme of training and equipping members of the moderate Syrian opposition outside Syria, and that programme is beginning to gather pace now.

[Barry Gardiner (Brent North) (Lab)]

Was it the UK that first offered, or was it Ukraine that first requested, the presence of British military advisers, and can the Foreign Secretary assure us that their presence is more likely to lead to a peaceful settlement, rather than an escalation of the process?

[Mr Lidington]

There has been a discussion between the Ukrainian Government and ourselves and a number of other European Governments and the United States about various types of assistance, including non-lethal military assistance, and there was agreement among those different allied Governments to supply help to Ukraine. We think that the training will enable the Ukrainian army to operate more effectively than it has been able to do up until now, and that that offer of training would have been justified irrespective of the Russian intervention in the east.

[Dr Matthew Offord (Hendon) (Con)]

Recent reports emerging from Iran say the regime has been secretly enriching uranium since 2008 at an underground plant in suburban Tehran named as Lavizan-3. What assessment has the Foreign Secretary made of this concerning news, and does he agree that no deal should be signed with Iran until the International Atomic Energy Agency has unfettered access to all the nuclear programme?

[Mr Philip Hammond]

My hon. Friend is right that this is a new piece of information. We have no corroboration of that report at the moment, but he is absolutely right that we will need to look into it and be clear before we reach any conclusion with Iran in the nuclear negotiations.

[Fiona Mactaggart (Slough) (Lab)]

The Minister, the hon. Member for Bournemouth East (Mr Ellwood), earlier said that he did not feel it was right to do anything about the Israel-Palestine situation until after the Israeli election, yet given that none of the major parties in that election is committed to withdrawal from the occupied territories, is not now the time to say that Britain intends to recognise Palestine?

[Mr Hammond]

If only it were that simple. I understand that the hon. Lady’s point is well made, but I can tell her exactly what any such statements now will do: they will play to the hard right in the Israeli elections. That will not make a settlement more likely; it will make it less likely.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Foreign Office questions are a box office hit, and demand always exceeds supply. Last but not least, I call Mr Andrew Stephenson.

[Andrew Stephenson (Pendle) (Con)]

Pendle is home to a number of Pakistani Christian families, whose concerns I raise in the House. Given our long-standing cultural and economic ties, and the support that we provide to Pakistan via the Department for International Development, what more can my ministerial colleagues do to ensure religious freedom and tolerance there?

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)]

My hon. Friend raises an important issue. The Pakistani diaspora in this country is a large one and we have a very strong relationship with Pakistan, but we are concerned about the misuse of blasphemy laws there. I have raised the issue with the Prime Minister and through the parliamentary delegation that went to Pakistan only last week.



Royal assent

[Mr Speaker]

I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Acts:

Pension Schemes Act 2015

Serious Crime Act 2015.

Petition

Tuesday 3rd March 2015 Commons Chamber

Sir William Cash (Stone) (Con)

- Hansard - - Excerpts

This petition relates to the closure of the NatWest bank branch in Eccleshall in my constituency. It is supported by over 700 signatures and is accompanied by an Adjournment debate that I had today in Westminster Hall on the same subject.

The petition reads as follows:

The Petition of residents of the constituency of Stone in Staffordshire,

Declares that residents of Eccleshall object to the closure of NatWest branch in Eccleshall and further that this is the only remaining bank branch in Eccleshall.

The Petitioners therefore request that the House of Commons urges the Department for Business, Innovation and Skills to encourage NatWest to keep the Eccleshall branch open.

And the Petitioners remain, etc.

[P001440]

Child Sexual Exploitation (Oxfordshire)

Tuesday 3rd March 2015 Commons Chamber

12:35

[Mr Andrew Smith (Oxford East) (Lab)]

(Urgent Question): To ask the Secretary of State if she will make a statement on the serious case review into child sexual exploitation in Oxfordshire.

[The Secretary of State for Education (Nicky Morgan)]

I thank the right hon. Member for Oxford East (Mr Smith) for his question. No child should have to suffer what the victims of child sexual exploitation in Oxfordshire have suffered. The serious case review published today by Oxfordshire’s local safeguarding children board is an indictment of the failure of front-line workers to protect extremely vulnerable young people over a number of years. Reading the details of what happened to them has been truly sickening.

The serious case review makes it clear that numerous opportunities to intervene to protect those girls were missed, as police and social workers failed to look beyond what they saw as troubled teenagers to the frightened child within. I welcome the publication of the serious case review. It is only by publishing such in-depth accounts of what happened, and what went wrong and why, that children’s social care systems locally and nationally can address the failings that have betrayed some of our most vulnerable children. That is why this Government have insisted that serious case reviews be published, and in full.

The children’s Minister, the Under-Secretary of State for Education, my hon. Friend the Member for Crewe and Nantwich (Mr Timpson), has also written today, with Ministers from the Home Office and the Department of Health, to the Oxfordshire safeguarding children board requesting a further assessment of the progress being made, and we will send an expert in child sexual exploitation to support the board this month.

Sadly, Oxfordshire was not alone in failing to address the dangers of child sexual exploitation. We now know from Professor Alexis Jay’s and Louise Casey’s  reports into Rotherham and the report by the hon. Member for Stockport (Ann Coffey) in Manchester that child sexual exploitation has been a scourge in many communities around the country. This Government have been determined to do everything within their power to tackle child sexual exploitation, and that is why we are today publishing an action plan setting out the action we have already taken to strengthen our approach to safeguarding children from sexual exploitation, along with the further steps that we think are necessary to address the culture of denial; improve joint working; stop offenders; support victims; and strengthen accountability and leadership.

We are setting up a national centre of expertise into tackling child sexual exploitation, to support local areas around the country, and there will be a new whistleblowing portal so that anyone can report their concerns. We have also prioritised child sexual exploitation as a national threat, so that police forces will now be under a duty to collaborate across force boundaries, and we will consult on extending the criminal offence of wilful neglect to children’s social care, education professionals and elected members.

This afternoon, I will be joining the Prime Minister, the Home Secretary and other Secretaries of State in Downing street to discuss with local and police leaders how we will collectively take forward the actions set out in today’s plan. The experiences of the children set out in this serious case review should never have happened. We are determined to do everything in our power to stamp out this horrific abuse and to bring the perpetrators to justice.

[Mr Smith]

I thank the Secretary of State for her response. Does she agree that the victims, the 370 other children identified as at risk, their families and the public, who are horrified that these sickening crimes were allowed to continue for so many years, are owed answers to crucial questions which the serious case review could not address? How was it that there was a culture in the county council and the police whereby such serious incidents were not escalated to senior officers? How was it that a professional tolerance of under-age sexual activity developed, as the report says, to the extent that it contributed to the failure to stop the abuse?

Who takes responsibility for the catastrophic failings? The chief constable and the council chief executive have apologised, but they did not know what was happening. The chief constable is moving on; the former directors of social services and of children and families have left; the former leader of the council retired; the lead member for children’s services was reshuffled; and the chief executive of Oxfordshire council saw her position made redundant at the end of January, only for the council leader last week to admit that they had made a hash of it and so the situation has to be reviewed.

Does the Secretary of State agree that the highly commendable work done by the council, the police and other agencies to improve protection and prosecution since Operation Bullfinch cannot distract from the horrors of what went wrong? We saw failure to act on clear evidence of organised sexual exploitation; failure to provide protection to children; failure to draw serious issues to the attention of senior management; failure to heed the concerns of junior staff; chaotic arrangements for child protection; unminuted meetings; and a professional disregard for the illegality of young girls being forced to have sex with older men.

Should there not be wider, independent scrutiny of the internal management reviews which underpinned this serious case review? Do the public interest and redress for victims not dictate that those responsible for these failings should be fully held to account? Will the Government set up an independent inquiry into what went wrong and who made the mistakes that enabled this depraved exploitation of vulnerable girls to go on for so long, so that the lessons are learned from these awful crimes and from the failure of public bodies to provide the protection that it was their duty to provide to children who were suffering such unspeakable abuse?

[Nicky Morgan]

I thank the right hon. Gentleman very much for his questions, and I fully respect the emotion and passion with which he and other Members will be discussing these matters—these very serious matters, as he has set out. He talks about failures and he is right to do so. He is also absolutely right to say that at the heart of this are the young people who have been utterly let down by the system and whose lives have been blighted. It is important that we think about all the victims and their families, and I am pleased to confirm that part of today’s summit and the announcements thereof is a £7 million fund to support those who have been victims. Clearly, however, there is much more that we all need to do.

The right hon. Gentleman asks how the culture arose and why things were not escalated. He also mentions the so-called professional tolerance of these crimes and asked who takes responsibility. On accountability, he set out the position of various people working within Oxfordshire, some of whom are still in their positions and some of whom have moved on. It is not for me to apportion blame—that is a matter for Oxfordshire county council, the police and the health agencies locally—and the purpose of this serious case review is to understand what went wrong and why, and to ensure that we learn the lessons for the future. He is absolutely right to highlight another point, which Maggie Blyth, the independent reviewer, talked about this morning when she said that although

“there was no disregard of clear warnings at top level and no denial by those in charge, their lack of understanding of what was happening on the front line caused unacceptable delays. This allowed offenders to get away with their crimes. The review describes a culture in Oxfordshire where the value of escalation to the top was not understood.”

The review also contains some heart-rending comments from the victims. One that particularly stands out was:

“If a perpetrator can spot the vulnerable children, why can’t professionals?”

The right hon. Gentleman is absolutely right to say that many more questions will need to be answered.

The right hon. Gentleman asks about future reviews and inquiries, and the letter signed today by Ministers from my Department, the Home Office and the Department of Health makes it clear that we are proposing that the local safeguarding children board leads a specific piece of work on the impact of the multi-agency approach to tackling child sexual exploitation in Oxfordshire. We have appointed Sophie Humphreys to work alongside Oxfordshire county council to gather the evidence on the effect of its reforms to front-line practice.

The right hon. Gentleman correctly highlights the fact that the council has taken action since these allegations all first came to light. As has been recognised by the serious case review, there has been tremendous investment in services to support children at risk of sexual exploitation, including the establishment of the specialist Kingfisher team, a multi-agency front-line service for victims of child sexual exploitation; the training of thousands of front-line staff in raising awareness; and an increase in the number of front-line staff as a whole. The right hon. Gentleman is absolutely right to highlight the fact that lives have been blighted by these crimes. Questions need to be answered, some of which will be addressed this afternoon in the Prime Minister’s summit in Downing street.

The right hon. Gentleman says that lessons need to be learned, which is a phrase that is often used in these sorts of cases. But that is not enough. We want action. It was very clear that those who came across this information, not just in Oxfordshire but in other authorities, did not act on it—and that is unacceptable.

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

Nothing more distressingly demonstrates how completely local agencies failed in this area than the words of survivors. One victim said, “I turned up at a police station at 2 am or 3 am with blood all over me, soaked through my trousers to the crotch. They dismissed me as being naughty and a nuisance. I was bruised and bloody.” Another victim said, “Social services washed their hands. ‘It is your choice’, I was told.”

We must not only pay tribute to the victims for their bravery in coming forward, but recognise that such serious abuse has long-term and complex consequences. I ask the Education Secretary today to make it a personal priority to ensure that these survivors get the long-term and sustainable support that they need.

[Nicky Morgan]

I thank my hon. Friend for her remarks. I know that she, as an Oxfordshire MP, has been deeply involved in these matters, and I pay tribute to her for her work. I can assure her that my Department and all relevant Departments will do all we can to help and support the victims of these crimes. She is absolutely right to talk about the culture of denial, and the unwillingness to look at the signs of physical and mental abuse inflicted on the victims, which will undoubtedly affect them for the long term. That is why dealing with these issues and ensuring that the front-line professionals take action is so important.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

After Rochdale and Rotherham comes an account of the horrific events in Oxford. Let us be clear that it is the heinous crimes and the callous wickedness of Mohammed and Bassam Karrar, Akhtar and Anjum Dogar, Kamar Jamil, Assad Hussain and Zeeshan Ahmed that needs to be condemned again today. They are the ones responsible for the sadism, the grooming, the abuse and the torture that was inflicted on vulnerable girls in Oxford, robbing them of their adolescence, their health and their sense of worth. The serious case review report also reveals that both Thames Valley police and Oxfordshire county council completely let down those victims. In the words of one victim,

“The police never asked me why”

I went missing;

“I made a complaint about a man who trafficked me from a children’s home. He was arrested, released and trafficked me again.”

As we saw in Rochdale, the voice of victims was not listened to and prejudicial thinking around lifestyle choices blocked detailed investigation. These were young girls, exploited teenagers, suffering terrible abuse. Once again, we need to ensure that care homes, the police, social workers and health workers eradicate any cultural tolerance of the abuse of young girls. As Maggie Blyth from the Oxfordshire safeguarding children board said, there were “repeated missed opportunities” that could have been “identified or prevented earlier.”

Government have a role to play, so let me put these questions to the Secretary of State. Is she satisfied that the safeguarding arrangements in place for children in Oxfordshire today are right and proper and will prevent more children from being vulnerable to child sexual exploitation? Do the Government now intend to establish an independent inquiry into Oxfordshire county council to see whether it has the capacity to safeguard its children? We know that the work of Alexis Jay and Louise Casey in Rotherham was instrumental in sorting out that council in its approach to child sexual exploitation. Will the same approach be taken with Oxfordshire? Will further action be taken against those agencies and individuals who are found to have failed these children?

The Prime Minister is today setting out new measures to end “wilful neglect”. What is the Government’s definition of “wilful neglect”? Is the Secretary of State satisfied that the definition places sufficient onus on individuals who come into contact with children to report signs of abuse? Will she and the Home Secretary now support stronger laws on child exploitation and abduction? Will she look again at child abduction warning orders and the specific offence of child exploitation?

Finally, will the Secretary of State now join the cross-party consensus—the Labour party, the Liberal Democrats, the Education Committee and all professionals in the field—and support age-appropriate statutory sex and relationship education to teach young people about consent and healthy relationships? We need to give young people the armoury and the education to know that this kind of sexual abuse is wrong and needs to be stripped out of British society?

[Nicky Morgan]

I thank the hon. Gentleman for his statement and his questions. I agree with his analysis that voices were not listened to. He points out that prosecutions have already taken place for crimes that have been committed. He is right to say that there should be no holding back on prosecutions because of the perpetrators’ background. As the Prime Minister rightly said this morning, that relates not just to Oxfordshire. There have been other terrible cases, as we have seen in the past few months, if not years. The Prime Minister said that a warped sense of political correctness had potentially prevented some investigations from taking place.

The hon. Gentleman asks about inspections. Ofsted inspected Oxfordshire children’s services last year and highlighted, as he did, the steps that had been taken in relation to Oxfordshire children’s services. I have already mentioned the letter sent by my right hon. Friends this morning in relation to the appointment of a senior children’s services expert to go back into Oxfordshire to look into the points raised in the serious case review.

The hon. Gentleman mentions the Louise Casey report. That was a wider report on council governance in Rotherham, in particular. In Oxfordshire we are looking specifically at the children’s services departments, but clearly this is an ongoing issue. He mentions the offence of wilful neglect, which we have said we will consult on. That concept is set out in the Mental Capacity Act 2005 and has been proposed by my right hon. Friend the Health Secretary in relation to the lessons and the consequences of the Mid Staffs issues. It is a failure to act by a person who has a duty of care, in this case to children and young people.

The hon. Gentleman refers to the offence of child sexual exploitation. There are already many offences under which the perpetrators have been prosecuted, including, clearly, sexual relations with children and child rape. He mentions the education of young people in schools. I am fully in favour of excellent PSHE, sex and relationship education and education on consent, but it must be excellent. It cannot just be about ticking boxes. He talks about young people perhaps not knowing that what was happening to them was wrong. I think he knows that that is not the case, given the quotes from the victims in the serious case review. They knew that what was happening to them was wrong. They asked for help but they did not get it.

[Sir Tony Baldry (Banbury) (Con)]

Does my right hon. Friend agree that every police officer, council official and social worker should consider whether a youngster is a child, and if they may be a child, they should be regarded as a child, listened to as a child and protected as a child, and that any professional who fails to provide that protection should risk disciplinary and criminal proceedings?

[Nicky Morgan]

My right hon. Friend is right. The offences in this case and in many others were committed against children. There can be no doubt that children of the age involved cannot give their consent to what was perpetrated against them. That should have made it much clearer to those who received reports or should have taken action that they needed to do so, and they were professionally incompetent for not doing so.

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

Does the Secretary of State agree that these ghastly crimes against children are a blight on any civilised society and that we must stop them occurring? Does she further agree that it is too often too easy to provide a fast knee-jerk response and get it wrong? Let us look very carefully at the evidence and consider how to respond. Let us look also at the way in which we are shrinking childhood in this country. Personally, I would like to see the age of consent raised. I oppose votes at 16 because that will bring the end of childhood closer. There is too much pressure on childhood and we as a society must look carefully at the preciousness of the childhood years.

[Nicky Morgan]

The hon. Gentleman is right that what we have seen in Oxfordshire and elsewhere are abhorrent, sickening crimes, and they are crimes. He is right to say that any of us in any position of authority feels that those are a stain on our society and must be eradicated. He is right to say that we do not want to rush into responding, but where immediate action must be taken, it is important that it is taken. That is what we have seen in Rotherham, for example, with the appointment of the commissioners. The Secretaries of State have been meeting since last autumn to discuss the Government’s response to Rotherham in particular, which will be announced at Downing street this afternoon. We have taken time and there will be further consultations coming out of the response. We have already announced reforms to children’s social work practice, and that is a long-term response about improving training. He will understand that there needs to be a mixture of responses to something as sickening as this.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

We must do everything we can to reduce the vulnerability of the young people we have heard about today. Further to the question from the Opposition spokesman and the Secretary of State’s response, my Committee agrees about the need for excellent sex and relationship education in schools precisely to give resilience to young people, to enable them to talk about consent in a meaningful way, as one witness put it, and to tell them about age gaps and predatory behaviours so that they start to recognise those. We wrestled with how we would get the curriculum time and the investment in teacher quality if we do not make such education statutory—reluctantly, because we do not want to impose further duties on schools. We came to the conclusion that that had to be made statutory if we are to deliver it. If the Secretary of State thinks it should not be statutory, will she tell us why, or tell us what else could be done in lieu of what we suggested to make these things happen?

[Nicky Morgan]

I thank my hon. Friend the Chairman of the Select Committee for his remarks. The Committee produced an interesting report and I know that the Minister of State, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb), gave evidence to the Committee. We will consider the conclusions carefully. In relation to consent, it is important to know that the victims in these cases knew that they had not given consent. There was no question about consent being given. They knew that what was happening to them was absolutely wrong. Sex and relationship education is already compulsory in secondary maintained schools. Most academies and free schools also teach it, and I suspect that many primaries do so in an age-appropriate way. I was at Eastbourne academy last week talking to the students there about what they call SPHERE, which is like PSHE. The academy taught it in a fantastic way. It did not need to be told to do so; it did not need such teaching to be statutory. It was doing it because, exactly as the Chairman of the Select Committee said, it was preparing young people to be resilient.

[Helen Jones (Warrington North) (Lab)]

The whole House will be appalled at what has happened in Oxfordshire, but does the Secretary of State understand that we are appalled also that individuals who preside over these failing systems are not held to account? If there was a council where junior social workers have not referred these things up the system, where senior officers and senior councillors were unaware of them, that is a sign of a failing system within a council, and a proper independent outside inquiry is needed to get to the heart of why that system failed and to put it right, as was rightly done in Rotherham. Will the right hon. Lady explain to us why that is not happening now?

[Nicky Morgan]

The serious case review is an important step in what the hon. Lady calls for. It identifies the fact that, as she said, in Oxfordshire’s case there were junior people who were producing reports but those did not reach a senior enough level. There are other councils, as we know, one of which is Rotherham, where junior people did put in reports which were raised at a senior level, and the people at a senior level chose not to act on them. I have sympathy for the hon. Lady’s point about accountability and people taking responsibility. It will clearly be a matter for Oxfordshire county council, the police and others to think about who needs to take responsibility for these matters. We have already seen that in Rotherham my right hon. Friend the Secretary of State for Communities and Local Government has appointed a whole new set of commissioners to run that council. There are other councils where those in charge have taken responsibility and have resigned.

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

I welcome the measures announced today and the Secretary of State’s indication that child sexual exploitation is now seen as a national threat, which shows the scale of abuse that I think is suspected. Thames Valley police suffered from many failings, but they have made some progress since 2013—I believe that 47 offenders have been successfully charged with 201 child sexual exploitation offences. What can she say at this stage about the support that she and her colleague in the Home Office, the Minister for Policing, Criminal Justice and Victims, will give to police officers and those on the front line who have to deal with these terrible offences?

[Nicky Morgan]

My right hon. Friend is absolutely right that child sexual abuse will now be prioritised by every police force in England and Wales as a national threat, just like serious and organised crime, which means forces will now have a duty to collaborate to safeguard children, including through more efficient sharing of resources, intelligence and best practice. They will also be supported by specialist regional CSE police co-ordinators. I think that the national policing lead will be at this afternoon’s summit, where I expect to hear about much better training for all police officers.

[Kevin Barron (Rother Valley) (Lab)]

Sadly, this report echoes many of the examples of child abuse we have heard about in my own borough of Rotherham and elsewhere. I have two things to say to the Secretary of State. First, Ofsted also carried out an inspection in Rotherham and gave it a clean bill of health when that clearly was not the case. Secondly, she is right to say that Louise Casey’s report on governance went wider than child protection, but it was set up specifically because of the child abuse taking place in Rotherham. Is the Secretary of State satisfied that the scrutiny by elected members in Oxfordshire is up to the standard necessary to protect our young children? It clearly was not in my borough, and people are rightly having to take responsibility for that. Is she happy that that is being done in the elected Oxfordshire county council as well?

[Nicky Morgan]

The right hon. Gentleman is right to say that Ofsted inspected Rotherham before the issues came to light. The Ofsted framework has since changed, so the inspection carried out in Rotherham was based on a different framework and asked different questions from those of the inspection that we see today and the one that was carried out in Oxfordshire last summer. He is right to raise the issue of elected members, which is one of the questions that we will continue to go back to in Oxfordshire. He will be aware that the proposals on wilful neglect that the Prime Minister announced this morning will also apply to elected members.

[John Howell (Henley) (Con)]

I, too, pay tribute to the victims of these appalling crimes. Has the Secretary of State taken into account the fact that Operation Bullfinch, which brought the perpetrators to justice, has transformed the legal landscape in which cases can be heard? Have the good points that were brought out from Operation Bullfinch been taken into account across the country?

[Nicky Morgan]

I thank my hon. Friend, who is absolutely right to put support for the victims at the heart of all this. He is right that things have moved on as a result partly of Operation Bullfinch and partly of other operations and lessons learned from other cases. It is a different landscape but, as he will appreciate, that does not take away from the harm done to the victims.

[John Mann (Bassetlaw) (Lab)]

I called for the immediate removal and resignation of the Labour leadership of Rotherham council. Will the Secretary of State join me in calling for the resignation of the political leadership of Oxfordshire county council?

[Nicky Morgan]

I think that is a matter for the leaders and elected members of Oxfordshire county council to consider. The serious case review obviously covers failings from 2004 to 2011. We have today asked for a further locally led assessment of child sexual exploitation in Oxfordshire and for Sophie Humphreys to continue that work. Let me say to the hon. Gentleman that this work is ongoing.

[Sir Paul Beresford (Mole Valley) (Con)]

Two weeks ago I was with the Metropolitan police jigsaw unit and paedophile unit, and they will be delighted to a degree to hear her statement on education, because they feel that that is the answer, but they want it to be slanted more towards prevention. Teach what is normally taught, but also teach children about prevention, particularly on the internet. The Metropolitan police used to have a very good scheme that certainly worked for children and teachers, but it seems to have disappeared.

[Nicky Morgan]

My hon. Friend is right about the importance of education. It is all about the quality of the teaching materials and of the teaching that goes on in schools. There is no point having some sort of lip service paid to lessons about consent or anything else if the lessons do not sink in. The Government have invested in the PSHE Association, supporting improved teaching materials and improved guidance on consent.

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

May I press the Secretary of State on the need for an independent inquiry? If the cultural issues that led to complaints and concerns not being escalated have not been addressed, why should there not be an independent inquiry?

[Nicky Morgan]

As I said earlier, the serious case review is an independent inquiry and, under this Government, it will be published in full so that we can all see what has been said. As I have said, we propose that there should be a specific piece of work led by Oxfordshire’s safeguarding children board on the impact of the multi-agency approach to tackling CSE, and we are appointing a children’s services expert to work alongside the council and gather evidence of the reforms it has already made to front-line practice.

[Damian Green (Ashford) (Con)]

I know that many police officers at all levels of the service are appalled at the policing failures that led to the wider failures in this terrible set of cases. I appreciate that this does not fall within the Secretary of State’s ministerial responsibility, but does she share my view that the key thing in the training of police officers now is to change the culture of disbelief so that they treat vulnerable young women no longer as a problem but as victims of crime?

[Nicky Morgan]

My right hon. Friend is right to point to the culture of denial and disbelief. As we heard from the right hon. Member for Oxford East (Mr Smith), there was sometimes a reluctance to believe allegations, even when victims presented themselves in a state at a police station. The Minister for Policing, Criminal Justice and Victims is sitting alongside me, and I know that he is as appalled as we all are about this. As we have learned, there are lessons for the police that will be picked up at today’s summit.

[Fiona Mactaggart (Slough) (Lab)]

The Secretary of State earlier said, “We on this side of the House are concerned”. May I take this opportunity to remind her that all Members on both sides of the House are united in their determination to drive out child sexual exploitation? I ask her to look at two particular proposals to increase resilience to such exploitation among children: first, to feed into the Home Office review of child advocates the lessons from this review; and secondly, to take up a suggestion made by worried mums in my constituency for parents’ PSHE so that they can better protect their children.

[Nicky Morgan]

The hon. Lady will appreciate that I cannot speak for Opposition Members, but I think that the tone of remarks from the shadow Education Secretary and others has shown that Members on both sides of the House are appalled by what has happened to the victims, and sadly not only in Oxfordshire, but in other local authorities. She will be well aware of what has happened to Slough’s children’s services and of the work that has been done there to set up the trust over the years. I understand her point about child advocates, which has already been taken up, and what she says about parents, whether in relation to PSHE or anything else. In this case, however, looking again at the serious case review, there were parents of victims also saying that they needed help, but they were not believed. That makes this case even more appalling.

[Andrew Stephenson (Pendle) (Con)]

As my right hon. Friend has said, child sexual exploitation has been a scourge in many communities across the UK. I am pleased that Lancashire police have taken a lead on those issues for a number of years now and regularly update me on local prosecutions. Will she say more about the level of support she can provide for the charities and non-statutory bodies that are doing such fantastic work to support victims but find themselves under increasing pressure at this time?

[Nicky Morgan]

Although many statutory agencies will be responsible for dealing with these issues in supporting victims and their families, my hon. Friend is absolutely right to pay tribute to the charities and the voluntary and community sector, which provide that support as well. This afternoon, for example, representatives from the National Society for the Prevention of Cruelty to Children, Barnardo’s and Rape Crisis are attending a summit on this. I know from my role as Minister for Women and Equalities—the policing Minister will appreciate this too—that smaller organisations often find very valuable support in communities. We absolutely want to help them to do their job.

[Bill Esterson (Sefton Central) (Lab)]

When the Education Committee carried out a year-long inquiry into child protection, we found that more needed to be done to support professionals in responding effectively and consistently to the early signs of neglect. Neglect causes long-term damage to thousands of young people every year. Therefore, should not prevention of neglect be as much of a priority as finding the perpetrators and supporting the victims, which the Secretary of State has talked about, and should that not include support for professionals, as recommended by the Committee and accepted by the Government two years ago in their response to our report?

[Nicky Morgan]

The hon. Gentleman talks about the need to deal with neglect, and I entirely agree. Sadly, there are many vulnerable children across our country. I am sure that we see them in our role as constituency Members of Parliament and work with them and their families. I mention to him the work that this Government have undertaken through the troubled families programme, which is turning round the lives of thousands of children. We also have the new knowledge and skills statement for children’s social workers that has been prepared by the chief children’s social worker, Isabelle Trowler, who does a fantastic job in my Department, and the wider reforms that I have announced in training for children’s social work. It all very well to have lots of children’s social workers, but it is also very important to ensure the quality of their training and of the work that they do in supporting vulnerable children and families.

Yarl’s Wood

Tuesday 3rd March 2015 Commons Chamber

13:11

[Keith Vaz (Leicester East) (Lab)]

(Urgent Question): To ask the Home Secretary to make a statement on Yarl’s Wood immigration detention centre.

[The Parliamentary Under-Secretary of State for the Home Department (Karen Bradley)]

Detention is an important part of a firm but fair immigration system. It is right that those with no right to remain in the UK are returned to their home country if they will not leave voluntarily, but a sense of fairness must always be at the heart of our immigration system, including for those we are removing from the UK. That is why the allegations made by Channel 4 about Serco staff at Yarl’s Wood are serious and deeply concerning, it is why they required an immediate response to address them, and it is why the Government have ensured that that is being done.

All immigration removal centres are subject to the detention centre rules approved by this House in 2001. Those rules, and further operational guidance, set out the standards that we all expect to ensure that the safety and dignity of detainees is upheld. No form of discrimination is tolerated. In addition to the rules, removal centres are subject to regular independent inspections by Her Majesty’s inspectorate of prisons and by independent monitoring boards that publish their findings. The chairman of the independent monitoring board for Yarl’s Wood is Mary Coussey, the former independent race monitor. The most recent inspection by Her Majesty’s chief inspector of prisons found Yarl’s Wood to be a safe and respectful centre that is continuing to improve. The last annual report of the independent monitoring board commented positively on the emphasis placed on purposeful activities within the centre and the expansion of welfare provision, and raised no concerns about safety. None the less, the Home Office expects the highest levels of integrity and professionalism from all its contractors and takes any allegations of misconduct extremely seriously. As soon as we were made aware of the recent allegations, Home Office officials visited Yarl’s Wood to secure assurances that all detainees were being treated in a safe and dignified manner.

The director general of immigration enforcement has written to Serco making our expectations about its response to these allegations very clear. We told Serco that it must act quickly and decisively to eradicate the kinds of attitudes that appear to have been displayed by its staff. Serco immediately suspended one member of staff who could be identified from information available before the broadcast, and has suspended another having seen the footage. The company has also commissioned an independent review of its culture and staffing at Yarl’s Wood. This will be conducted for Serco by Kate Lampard, who, as the House will be aware, recently produced the “lessons learned” review of the Jimmy Savile inquiries for the Department of Health. However, more needs to be done. The Home Office has made it clear that we expect to see the swift and comprehensive introduction of body-worn cameras for staff at Yarl’s Wood. In addition, we have discussed with Her Majesty’s chief inspector of prisons how he might provide further independent assurance.

This Government have a proud record of working to protect vulnerable people in detention. We have reviewed the Mental Health Act 1983 and set out proposals for legislative change as a result; held a summit on policing and mental health, highlighting in particular the concerns of black and ethnic minority people; and commissioned Her Majesty’s inspectorate of constabulary to undertake a review of vulnerable people in police custody that will be published shortly. Before these allegations were made, the Home Secretary commissioned Stephen Shaw, the former prisons and probation ombudsman for England and Wales, to lead an independent review of welfare in the whole immigration detention estate. We will of course invite him to consider these allegations as part of that overarching review.

This country has a long tradition of tolerance and respect for human rights. Detaining those with no right to remain here and who refuse to leave voluntarily is key to maintaining an effective immigration system. But we are clear that all detainees must be treated with dignity and respect. We will accept nothing but the highest standards from those to whom we entrust the responsibility of their care.

[Keith Vaz]

I thank you, Mr Speaker, for granting the urgent question and the Minister for her answer and her explanation of why the Minister for Security and Immigration is not here today. I am very pleased to see the two local MPs, the right hon. Member for North East Bedfordshire (Alistair Burt) and the hon. Member for Bedford (Richard Fuller).

Channel 4’s film on Yarl’s Wood, shown last night, revealed shocking footage about the detention centre, which has been under heavy criticism for the treatment of its 400 detainees since 2001. What was uncovered was deeply disturbing. Serious questions were raised over standards of health care in Yarl’s Wood. What was detailed included examples of self-harm by detainees, including three women who jumped from the stairs and people slashing their wrists in an attempt not to be removed. It took a freedom of information request to reveal that there were 74 separate incidents of self-harm needing medical treatment at the centre in 2013. Guards who appeared in the footage merely dismissed information about people harming themselves as “attention seeking”. Will the Minister explain why her ministerial colleague, Lord Bates, told Parliament on 24 February that there had been no serious incidents of self-harm taking place in the past two years?

Arguably the most concerning element was the contempt that was shown for detainees through the use of racist, sexist and generally abusive and degrading language. We saw a guard advocating violence towards a person who was detained there. One guard said:

“Headbutt the bitch…I’d beat her up.”

Another was recorded as saying:

“They’re animals. They’re beasties. They’re all animals. Caged animals. Take a stick with you and beat them up.”

These are appalling statements that should never be tolerated by anybody, particularly from employees of a company in receipt of millions of pounds of taxpayers’ money. Yarl’s Wood is not a prison but an immigration centre that has a duty to protect some of the most vulnerable, who are in most cases escaping violence and instability in their countries of origin in search of a better life. Frankly, some are there because the Home Office has taken such a long time to deal with their cases. Instead of being protected, detainees are verbally abused and poorly treated.

This is not the first time that Yarl’s Wood has been the subject of parliamentary criticism. The Home Affairs Committee has been highly critical of the centre’s performance following damning reports of sexual misconduct and excessively long detentions. Of course I welcome the suspension of one of the people involved, and the fact that an independent inquiry is to be established, but the Minister is absolutely right that more needs to be done. We need a timetable for that inquiry. Will she send in her inspectors not just to visit but to write a report having spoken to detainees?

Has the Minister spoken to Rupert Soames, the chief executive of Serco, to express the Government’s concern? Serco’s right to bid for other contracts should be suspended pending any review. Despite reports of catastrophic failings in November last year, Serco was awarded an eight-year, £70 million contract at Yarl’s Wood. Will the Minister look at her procurement processes? All of Serco’s contracts should be reviewed immediately. The Select Committee has recommended in the past that those who fail the taxpayer should be put on a register and should not be given any other contracts. Only a few months ago, the Lord Chancellor sent in the Serious Fraud Office in order to discover why Serco had overcharged the taxpayer by £70 million.

I agree with the Minister that this treatment is inhumane. The United Kingdom has a reputation as a world leader in human rights—that is clear from the number of people who risk their lives to come here—and we simply cannot allow this behaviour to continue in a centre that has a duty to protect them.

[Karen Bradley]

I thank the right hon. Gentleman, the Chair of the Home Affairs Committee, for all that he and his Committee have done over many years to highlight problems in immigration detention centres. In 2009, his Committee reported specifically on UK Border Agency immigration detention centres, and this Government legislated to implement its recommendations.

The right hon. Gentleman is absolutely right. We are all shocked and appalled by the evidence we have seen, and action must be taken. Hon. Members should be under no illusions: this Government are breathing down the neck of Serco, and we want to see action swiftly.

The right hon. Gentleman said that one person has been suspended. In fact, one person was suspended before the broadcast. We were unable to see the programme before it was broadcast, but on the basis of evidence available before the broadcast, one person was suspended. Another has since been suspended, and I know that Serco will shortly look at whether to suspend others.

The right hon. Gentleman referred to a comment about self-harm by my colleague the noble Lord Bates in the other place. In fact, Lord Bates said that there were no cases of suicide or attempted suicide in Yarl’s Wood, and that is correct. There is evidence of self-harm, which we take extremely seriously, but there have been no suicides or attempted suicides.

The right hon. Gentleman said that the language and behaviour of the staff is completely and totally inappropriate. Hon. Members should be in no doubt that this Government and this House take that very seriously. The message to Serco is that this needs to be sorted out and needs to be sorted out quickly.

[Alistair Burt (North East Bedfordshire) (Con)]

I spoke this morning to the chair of the independent monitoring board at Yarl’s Wood, and she is shocked and horrified about what was shown on television last night. There is no justification for what we saw, and the action taken by the Government and Serco is quite right. What bothers me is that we are here again: this is not new. I am also bothered by the disparity. The Minister was quite right to refer to a series of reports from the chief inspector of prisons, Nick Hardwick, whom we all know, and to the report of Mary Coussey of the independent monitoring board, but those reports are at odds and at variance with such individual incidents. These incidents keep happening, and I do not know who is missing what.

As the review takes place, as it must, I urge the Minister to look at this point in particular. Over a period of time, I have pleaded with the Government to allow proper journalistic access to and transparency in Yarl’s Wood—if the press cannot get in one way, they will get in another. There is also the refusal to allow the UN rapporteur the opportunity to go in. The regime in Yarl’s Wood is completely different from the one originally set up by the previous Government. I have seen it change over many years, but there is no way to convince people of that unless they can get in. As well as dealing with this incident, will she look at the disparity between the reports and such incidents, because we should not have to meet in the Chamber and discuss this again in future?

[Karen Bradley]

I pay tribute to my right hon. Friend for all his work, as the local constituency MP for Yarl’s Wood, in highlighting problems in the past. I am sure he agrees that to have a fair immigration system, there comes a point at which some form of detention is needed for people who refuse to leave the country voluntarily, but they must be detained with dignity and fairness to ensure that they are treated with respect.

My right hon. Friend will know that Stephen Shaw is carrying out a review of the whole immigration detention estate, and I look forward to that report. He will also know that the independent monitoring board has the keys to Yarl’s Wood: it can access Yarl’s Wood at any time. Knowing that, and given the review that is taking place, we will look at everything to make sure we have certainty and can be confident that detainees are treated with dignity.

[Lisa Nandy (Wigan) (Lab)]

The revelations on Channel 4 were shocking, but they were not at all new or even surprising for many of us who have worked with people in Yarl’s Wood over the years. It is eight years since I worked with a 13-year-old girl who attempted suicide in Yarl’s Wood and was taken to Bedford hospital, where she was shackled to her bed by prison guards. Since then, we have had numerous reports from charities and independent monitors about sexual abuse, sexual exploitation, self-harm and mental health problems left untreated. This is not just about isolated individuals.

I would say to the Minister that a system run for profit and to targets leaves very little room for compassion or humanity. Although it is absolutely right that individuals are prosecuted and brought to justice for the shocking things that we saw on Channel 4 last night, it is about time that we got a grip on the system. Will she make sure that the review of detention includes the impacts of private sector, for-profit involvement in detention on some of the most vulnerable people in this country?

[Karen Bradley]

The hon. Lady talks about having worked in this area for many years, including things she saw eight years ago. I agree that things were wrong and that they need to improve. This Government are proud of the measures we have taken—for example, on stop-and-search and mental health in custody—and the review we have instigated from Stephen Shaw is the next step in a natural progression to ensuring we safeguard people while treating detainees with appropriate dignity. I do not think that the question is about whether that is done through the public sector or the private sector; the question is about how we make sure that people in detention are treated with the dignity that they should rightly have. We are all shocked by what we have seen, and we need to make sure that it is rectified.

[Sarah Teather (Brent Central) (LD)]

I have chaired a cross-party inquiry on the issue of immigration detention, and our report was published this morning. The panel’s concern is that if the response to the scandal at Yarl’s Wood focuses only on conditions, it is likely to tackle just symptoms, rather than the underlying causes. The Minister says that the question is about how people are treated in detention, but our question is why some of these people are in detention in the first place. Our evidence suggests that most of the problems arise because we detain too many people for far too long and inappropriately.

Will the Minister commit the Government to responding in full to our inquiry? In particular, will she look at the international evidence we have presented, which suggests that there is a cheaper, more humane and more effective way of operating by making better use of community alternatives?

[Karen Bradley]

My hon. Friend has worked tirelessly and ceaselessly on this issue, and I pay tribute to her and her committee for the report. I have a copy of it, and I have to say that it is quite lengthy. I have not had a chance to get through all its points, but I assure her that I will look at it, and I will make sure that we respond to it.

My hon. Friend talks about the fact that more people are detained. It is important to make it clear that we have taken measures so that when people arrive clandestinely in the UK, we can be certain who they are—their nationality and identity—and ensure that they pose no risk to the British public. I do not apologise for putting the safety and security of the British public first and foremost when someone arrives clandestinely by making sure that they are who they say they are, while treating them appropriately.

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

Women in Yarl’s Wood are detained on the instruction of the Home Office, and the Home Secretary is therefore responsible for ensuring that they are treated humanely. There is a history of problems at Yarl’s Wood going back many years, but we were told that it had been dealt with.

Yet in September 2013 it was reported that women at Yarl’s Wood had been sexually assaulted by guards from Serco, which the Home Secretary had contracted to manage the centre. I called on her to set up an independent inquiry, but she did not. In March 2014, a woman died in Yarl’s Wood. I asked an urgent question in the House, and again called on the Home Secretary to set up an independent inquiry. She would not come to the House, and she did not set up an inquiry. In May, more allegations came out, including that another vulnerable woman was sexually assaulted, and that a woman who poured boiling water over herself was left for hours in a state of shock. I called on the Home Secretary to set up a proper independent inquiry, and I again called on her to do so at the end of last year.

The Home Secretary has repeatedly refused to establish an independent inquiry, refused to investigate allegations of rape and sexual abuse, refused to let even the UN rapporteur visit and refused to come to this House to answer for it.

Instead, in November, the Home Secretary renewed Serco’s contract. She gave the company whose guards stand accused of abuse a contract for another eight years. We called on her to have an inquiry before she renewed the contract and she refused. Last month, she said that she would review the policies and procedures in detention centres. Again, that should have been done before the contract was renewed.

Here we are again with even more serious allegations. A pregnant woman was left to have a miscarriage without getting all the medical support she needed. Guards are calling women “animals”, with one saying,

“Take a stick with you and beat them up.”

Those are the Serco guards to whom the Home Secretary gave the contract just a few months ago. There is no point in Ministers pretending to be shocked at the news of abuse—it is not news. Even now, Ministers have not set up an independent inquiry; Serco has. We are leaving it to the company to set up the independent inquiry that should have been set up by the Home Office.

The Home Secretary should have come to the House today to answer this question. What has been happening is an utter disgrace, as is the continued failure to look into it. The Minister has been sent out to defend the indefensible. She should go back and tell the Home Secretary to take some responsibility for a change, to stop pregnant women and victims of sexual violence being held in Yarl’s Wood, and to hold a proper independent inquiry, because this is state-sanctioned abuse of women on the Home Secretary’s watch, and it needs to end now.

[Karen Bradley]

It is very disappointing that the right hon. Lady comes to this House, not having called for the urgent question, and makes comments about the Home Secretary not being here. She knows that the Home Secretary is at No. 10 at the moment dealing with child abuse—something that we all agree is an incredibly important, urgent matter that needs to be dealt with.

It is also disappointing that the right hon. Lady talks about abuses at Yarl’s Wood. Let us remember what the report on the announced inspection of Yarl’s Wood immigration removal centre in 2008 said. Let us remember who was in government at that time. The report stated:

“we were dismayed to find cases of disabled children being detained and some children spending large amounts of time incarcerated.”

It said:

“Escort vehicles with caged compartments were inappropriately used to transport children.”

It is this Government who have legislated to end the detention of children for immigration purposes.

In 2008, just 68% of detainees said that most staff treated them with respect. The figure is now 84%. The report said:

“Not enough was done to communicate with detainees who spoke little English”.

It said:

“Women complained about the food. Healthcare needed further improvement, particularly to address mental health and child health needs.”

That was the report in 2008 under the right hon. Lady’s Government. It is this Government who have looked to ensure that those things are dealt with.

We have set up the review. We have set up the review into the whole immigration detention estate that is being led by Stephen Shaw. I am confident that he will uncover the abuse.

The right hon. Lady asked about the renewal of Serco’s contract. Let us remember what the policy is. The rules that determine the renewal of contracts were drawn up by Parliament in 2001. That is a rigorous and robust process, and it was set up by her Government. We will take no lessons on this matter from the Labour party. We have a proud record and we will root out the abuse.

[Richard Fuller (Bedford) (Con)]

The individual employees at Yarl’s Wood let down their colleagues, their company and their country with their vile comments, which were exposed on Channel 4. However, the issue is not just individual people; it is the policy of the overuse of detention in managing immigration. That policy was introduced by the last Labour Government and has been continued by the coalition Government. When will the two Front Benches wake up and smell the coffee? Immigration detention is costly, ineffective and unjust. It costs millions of pounds a year. Some 70% of people who go into immigration detention go back into the community. These experiences in Yarl’s Wood are a stain on the conscience of this country.

[Karen Bradley]

I thank my hon. Friend for his question and for the work that he has done as the constituency Member of Parliament for Yarl’s Wood. He is right that the individuals in question have let down many people. He is also right that it is not just about the individuals. We need to get to the bottom of what is going on there and to understand it exactly. The measures that we have insisted that Serco undertake urgently, including the use of body-worn cameras by all staff, will make a difference by exposing where there is abuse.

My hon. Friend talked about people being in detention for too long. I agree that people have been kept in detention for too long. That has happened because the previous Government’s immigration system allowed up to 17 appeals. The Immigration Act 2014, which we brought in, brings that number down to four. I hope that we will see a difference in the length of time people spend in detention. It is not something that any of us want to see, but it is a necessary evil if we are to have a fair, robust immigration system.

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

I am disappointed that the Minister is reacting in the way that she is. This is a very important issue. It is a stain on our country’s reputation for human rights. Does she agree that we all have to learn from the tradition of using these big, monopolistic companies? G4S let us down at the Olympics, Serco is involved in this case, Capita was involved in the tagging of individuals and now the Government are putting our probation service out to one of these companies. When will we learn that these companies have poor management, the wrong ethic, the wrong culture and the wrong priorities? It is about time we changed all that.

[Karen Bradley]

I think it was the previous Government who used private contracts. Private companies are not necessarily bad; they just have to be properly managed.

[Dr Julian Huppert (Cambridge) (LD)]

Yarl’s Wood has been a disgrace for well over a decade. It was a disgrace under the last Government and it is a disgrace under this Government. When children were detained there, they were left at serious risk of harm. We now have adults being left at serious risk of harm. That is completely unacceptable. Yes, the individual employees were at fault; yes, the company is at fault, but changing that will not fix the system. Getting in a new company, a new organisation and new employees will not solve the problem. What we have to do, as is suggested in the report by the panel that was chaired so well by my hon. Friend the Member for Brent Central (Sarah Teather), is completely rethink the system. No other country in Europe has indefinite detention and holds people for years on end. I hope that the Minister will look at that again. I hope that the Minister and the shadow Secretary of State will look at the report and change their policy.

[Karen Bradley]

My hon. Friend referred to children being treated badly in Yarl’s Wood. He will know that this Government have taken action and stopped that. I will look at the report, as I have said. I look forward to seeing what suggestions have been made. It is worth repeating that we have reduced from 17 to four the number of appeals a detainee can make against their removal. It is also worth saying that 63% of detainees are released within 28 days. We need to get that percentage up, but we also need to ensure that the system is fair for those who play by the rules.

[Kate Green (Stretford and Urmston) (Lab)]

I have been sickened by and ashamed at the reports about the treatment of detainees at Yarl’s Wood that we have seen this week and on so many previous occasions. I am also ashamed of some of the partisan comments that have been made in the discussion this afternoon. They are of absolutely no interest to the women I have met who have spent time in Yarl’s Wood and who have emerged incredibly distressed. I ask that we all think about the tone in which we conduct this discussion.

May I ask the Minister a specific question about the investigations and reviews that are taking place? In the past, there have been reports that women who have evidence to give or victims of abuse have been deported before their cases could be properly investigated. What assurances will she give that that will not happen, that all the evidence will be gathered in, and that those who have a story to tell will be heard and will remain in this country to tell it?

[Karen Bradley]

The hon. Lady is right to say that this is about the people—I absolutely agree with her about that. It is the victims of abuse that we really need to think about and put at the forefront of what we are doing. She will know that, through the Modern Slavery Bill, we are introducing new protections for victims of trafficking, including those who come to light in detention. I heard a horrific story recently about somebody who had been treated as a victim of domestic abuse, but it was only when her immigration status began to be questioned and she ended up in an immigration detention centre that she came forward and said that she was a victim of trafficking as well. It is absolutely paramount that front-line staff receive training to make sure that they can identify those victims so that we can get them into the national referral mechanism, give them the support they need and catch the evil perpetrators of those crimes. I totally agree with the hon. Lady that that must be at the forefront of what we are doing.

[Andrew Stephenson (Pendle) (Con)]

Detention is part of the immigration system, but we must ensure that all detainees are treated in a safe and dignified manner. On Sunday, I met a local family who are very concerned that a family member with mental health issues will shortly be detained before being deported. Although I appreciate that the Minister cannot comment on individual cases, will she say more about what is being done to ensure that those with mental health issues are safely detained if they need to be detained?

[Karen Bradley]

As my hon. Friend says, I cannot comment on the specifics of that case, but it clearly sounds like a heart-rending situation. We have taken action to make sure that those suffering from mental health conditions are not detained in police custody, and we are taking steps to ensure that they are not detained in immigration detention.

[Fiona Mactaggart (Slough) (Lab)]

The Minister has said that about two thirds of the women in Yarl’s Wood are there for more than a month. Overwhelmingly, these are people who have not been convicted, or even accused, of any crime, but who are put in administrative detention for extended periods. What is the Minister doing to make sure that they have the high-quality legal advice and representation they require to make sure that their case is properly heard before she organises their removal?

[Karen Bradley]

To correct the hon. Lady, she said that two thirds are held for more than a month, but 63% are discharged within 28 days and either removed or released. The issue with the length of time for which people are detained is that the system that we inherited had too many layers, too many procedures and too many appeals, which meant that we could not get to the bottom of whether somebody was right to claim asylum or whether they should be returned to their home. By reducing the number of appeals to four, I hope we will see a shorter time period.

[Mr John Leech (Manchester, Withington) (LD)]

The managing director of Serco’s home affairs business has said that an independent review was required because the

“public will want to be confident that Yarl’s Wood is doing its difficult task with professionalism, care and humanity”.

Given the catalogue of shame and controversy over many years, is not the only way to regain public confidence to strip Serco of its responsibility for running Yarl’s Wood?

[Karen Bradley]

I do not think that the answer is to strip Serco of its responsibility; the answer is to make sure that we get to the bottom of what has happened. My hon. Friend is right to say that any form of abuse is an embarrassment. We need the public not just to see that there are no problems, but to believe that there are no problems. We need them to be happy that detainees are being treated in an appropriate and acceptable way. We are holding Serco’s feet to the fire: I want to see action, we are making sure that it takes action, and we will take action against it if we need to.

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

In her opening remarks, the Minister said that a recent inspection had found Yarl’s Wood to be safe. Clearly, it is not. Could she explain the discrepancy between the reality and the inspection report, and what is she doing about it?

[Karen Bradley]

As I said in my opening comments, there have been a number of inspections of Yarl’s Wood by Her Majesty’s chief inspector of prisons and the independent monitoring board, which, as I have said, has the keys to Yarl’s Wood and can go in any time it wants. We have found no evidence that anybody is at risk. However, the allegations made in last night’s programme are very serious and we need to get to the bottom of them and take action.

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

The recent footage was disturbing, but, unfortunately, allegations of sexual abuse of vulnerable women and abuse at the centre are not new. Given the apparent gulf between official reports, what the Minister has said today and life at Yarl’s Wood, and given that we have seen so many repeated failures over such a long time and the reluctance of Ministers to act so far, can we be confident that change will really happen?

[Karen Bradley]

It is not fair to say that Ministers have been reluctant to take action—we have taken significant action. This urgent question follows an urgent question about Oxfordshire county council, and a summit on child sexual abuse is taking place at Downing street today. There needs to be a sea change in how all people in authority and all bodies treat allegations and victims. We all have a responsibility to take this seriously.

Maternity Services (Morecambe Bay)

Tuesday 3rd March 2015 Commons Chamber

13:45

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

With permission, Mr Speaker, I would like to make a statement on the independent investigation into the care of mothers and babies at the University Hospitals of Morecambe Bay NHS Foundation Trust, which is being published today.

I commissioned this report in September 2013 because I believed there were vital issues that needed to be addressed following serious incidents in maternity services provided by the trust dating back to 2004.

There is no greater pain for a parent than to lose a child, and to do so knowing it was because of mistakes that we now know were covered up makes the agony even worse. Nothing we say or do today can take away that pain, but we can at least provide the answers to the families’ questions about what happened and why, and in doing so try to prevent a similar tragedy in the future.

We can do something else, too, which should have happened much earlier—and that is, on behalf of the Government and the NHS, to apologise to every family who have suffered as a result of these terrible failures. The courage of those families in constantly reliving their sadness in a long and bitter search for the truth means that lessons will now be learned so that other families do not have to go through the same nightmare. We pay tribute to those brave families today.

I would especially like to thank Dr Bill Kirkup and his expert panel members. This will have been a particularly difficult report to research and write, but the thoroughness and fairness of their analysis will allow us to move forward with practical actions to improve safety, not just at Morecambe Bay, but across the NHS.

I know that before we discuss the report in detail the whole House will want to recognise that what we hear today is not typical of NHS maternity services as a whole, where 97% of new mothers report the highest levels of satisfaction. Our dedicated midwives, nurses, obstetricians and paediatricians work extremely long hours providing excellent care in the vast majority of cases. Today’s report is no reflection on their dedication and commitment, but we owe it to all of them to get to the bottom of what happened so we can make sure it never happens again.

The report found 20 instances of significant or major failings of care at Furness general hospital, associated with three maternal deaths and the deaths of 16 babies. It concludes that different clinical care would have been expected to prevent the death of one mother and 11 babies.

The report describes major failures at almost every level. There were mistakes by midwives and doctors, a failure to investigate and learn from those mistakes and repeated failures to be honest with patients and families, including the possible destruction of medical notes.

The report says that the dysfunctional nature of the maternity unit should have become obvious in early 2009, but regulatory bodies including the North West strategic health authority, the primary care trusts, the Care Quality Commission, Monitor and the Parliamentary and Health Service Ombudsman failed to work together and missed numerous opportunities to address the issue.

The result was not just the tragedy of lives lost, but indescribable anguish for the families left behind. James Titcombe speaks of being haunted by “feelings of personal guilt” about his nine-day-old son who died. “If only”, he says, “I had done more to help Joshua when he still had a chance”. Carl Hendrickson, who worked at the hospital and lost his wife and baby son, told me that he was asked to work in the same unit where they had died and even with the same equipment that had been connected to his late wife. Simon Davey and Liza Brady told me that the doctor who might have saved their son Alex was shooed away by a midwife, with no one taking responsibility when he was tragically born dead.

In short, it was a second Mid Staffs, where the problems—albeit on a smaller scale—occurred largely over the same period. In both cases perceived pressure to achieve foundation trust status led to poor care being ignored and patient safety being compromised, and in both cases the regulatory system failed to address the problems quickly. In both cases families faced delay, denial and obfuscation in their search for the truth, which in this case meant that at least nine significant opportunities to intervene and save lives were missed. To those who have maintained that Mid Staffs was a one-off “local failure”, today’s report will give serious cause for reflection.

As a result of the new inspection regime introduced by this Government, the trust was put into special measures in June 2014. The report acknowledges improvements made since then, which include more doctors and nurses, better record keeping and incident reporting, and action to stabilise and improve maternity services, including a major programme of work to reduce stillbirths. The trust will be re-inspected this summer when an independent decision will be made about whether to remove it from special measures. Patients who use the trust will be encouraged that the report says it

“now has the capability to recover and that the regulatory framework has the capacity to ensure that it happens”.

The whole House will want to support front-line staff in their commitment and dedication during this difficult period.

More broadly, the report points to important improvements to the regulatory framework, particularly at the Care Quality Commission which it says is now

“capable of effectively carrying out its role as principal quality regulator for the first time…central to this has been the introduction of a new inspection regime under a new Chief Inspector of Hospitals”.

As a result of that regime, which is recognised as the toughest and most transparent in the world, 20 hospitals—more than 10% of all NHS acute trusts—have so far been put into special measures. Most have seen encouraging signs of progress, with documented falls in mortality rates. There remain many areas where improvements in practice and culture are still needed. Dr Kirkup makes 44 recommendations—18 for the trust to address directly, and 26 for the wider system. The Government received the report yesterday and will examine the excellent recommendations in detail before providing a full response to the House.

There are, however, some actions that I intend to implement immediately. First, the NHS is still much too slow at investigating serious incidents involving severe harm or death. The Francis inquiry was published nine years after the first problems at Mid Staffs, and today’s report is being published 11 years after the first tragedy at Furness general hospital. The report recommends much clearer guidelines for standardised incident reporting, which I am today asking Dr Mike Durkin, director of patient safety at NHS England, to draw up and publish. I also believe that the NHS could benefit from a service similar to the air accidents investigation branch of the Department for Transport. Serious medical incidents should continue to be investigated and carried out locally, but where trusts feel that they would benefit from an expert independent national team to establish facts rapidly on a no-blame basis, they should be able to do so. Dr Durkin will therefore look at the possibility of setting up such a service for the NHS.

Secondly, although we have made good progress in encouraging a culture of openness and transparency in the NHS, the report makes it clear that there is a long way to go. It seems that medical notes were destroyed and mistakes covered up at Morecambe Bay, quite possibly because of a defensive culture where the individuals involved thought that they would lose their jobs if they were discovered to have been responsible for a death. Within sensible professional boundaries, however, no one should lose their job for an honest mistake made with the best of intentions; the only cardinal offence is not to report that mistake openly so that the correct lessons can be learned.

Recent recommendations from Sir Robert Francis on creating an open and honest reporting culture in the NHS will begin to improve that, and I have today asked Professor Sir Bruce Keogh, medical director of NHS England, to review the professional codes of both doctors and nurses, and to ensure that the right incentives are in place to prevent people from covering up instead of reporting and learning from mistakes. Sir Bruce led the seminal Keogh inquiry into hospitals with high death rates two years ago that led to a lasting improvement in hospital safety standards and has long championed openness and transparency in health care. For this vital work he will lead a team that will include the Professional Standards Authority for Health and Social Care, the General Medical Council, the Nursing and Midwifery Council, and Health Education England, and he will report back to the Health Secretary later this year.

The report also exposed systemic issues about the quality of midwifery supervision. While the investigation was under way, the King’s Fund conducted a review of midwifery regulation for the NMC, which recommended that effective local supervision needs to be carried out by individuals wholly independent from the trust they are supervising. The Government will work closely with stakeholders to agree a more effective oversight arrangement, and will legislate accordingly. I have asked for proposals on the new system by the end of July this year.

For too long the NMC had the wrong culture and was too slow to take action, but I am encouraged that it has recently made improvements. Today it has apologised to the families affected by events at Morecambe Bay, and it is investigating the fitness to practise of seven midwives who worked at the trust during that time. It will now forensically go through any further evidence gathered by the investigation, to ensure that any wrongdoing or malpractice is investigated. Anyone who is found to have practised unsafely or who covered up mistakes will be held to account, which for the most serious offences includes being struck off. The NMC also has the power to pass information to the police if it feels that a criminal offence may have been committed, and it will not hesitate to do so if its investigations find evidence to warrant that. The Government remain committed to legislation for further reform of the NMC at the earliest opportunity.

The report expresses a “degree of disquiet” over the initial decision of the Parliamentary and Health Service Ombudsman not to investigate the death of Joshua Titcombe. I know the Public Administration Committee is already considering these issues, and will want to reflect carefully on the report as it considers improvements that can be made as part of its current inquiry.

Finally, I expect the trust to implement all 18 of the recommendations assigned to it in the report. I have asked Monitor to ensure that that happens within the designated time scale, as I want to give maximum reassurance to patients and families who are using the hospital that no time is being wasted in learning necessary lessons. We should recognise that despite many challenges, NHS staff have made excellent progress recently in improving the quality of care, with the highest ever ratings from the public for safety and compassionate care. The tragedy we hear about today must strengthen our resolve to deliver real and lasting culture change so that these mistakes are never repeated. That is the most important commitment we can make to the memory of the 19 mothers and babies who lost their lives at Morecambe Bay, including those named in today’s report: Elleanor Bennett, Joshua Titcombe, Alex Brady-Davey, Nittaya Hendrickson and Chester Hendrickson. This statement is their legacy, and I commend it to the House.

13:58

[Andy Burnham (Leigh) (Lab)]

I thank the Secretary of State for his well-judged statement, and echo entirely the sentiments he expressed. Families in Barrow and the wider Cumbria area were badly let down by their local hospital and by the NHS as a whole. The Secretary of State was right to apologise to them on behalf of the Government and the NHS, and today I do the same on behalf of the previous Government.

It is hard to imagine what it must be like to lose a child or partner in such circumstances, but to have that suffering intensified by the actions of the NHS is inexcusable. Bereaved families should never again have to fight in the way that these families have had to fight to get answers. The fact that they have found the strength and courage to do so will benefit others in years to come, and I pay tribute to them all, and particularly to James Titcombe.

This report finally gives the families the answers that they should have received many years ago. It explains in detail what went wrong, the appalling scale of the failings and, as the Secretary of State said, the opportunities missed to identify those failings and put them right.

I echo the Secretary of State’s praise for Dr Bill Kirkup, his investigation team and the panel that assisted them. The report’s analysis is thorough, and its recommendations are powerful but proportionate. The Opposition support all the recommendations made today. I understand that the Secretary of State will want to take time to consider each individually, but he can rely on our full support in introducing them at the earliest opportunity.

People’s first concern will be whether local services are safe today. The report identifies the root cause of the failures as a dysfunctional local culture and a failure to follow national clinical guidance. There are suggestions in the report that that culture has not entirely disappeared. The report finds:

“we…heard from some of the long-standing clinicians that relations with midwives had not improved and had possibly deteriorated over the last two to three years…we saw and heard evidence that untoward incidents with worryingly similar features to those seen previously had occurred as recently as mid-2014.”

I am sure the fact that problems have been acknowledged means that there has already been significant improvement, but will the Secretary of State say more about those findings, and about what steps he is taking to ensure that the trust now has the right staff and safety culture?

After safety, people will rightly want accountability, as the Secretary of State said, not just for the care failings, but for the fact that the problem was kept hidden from the regulators and the public for so long. When information came to light, it was not acted on. Lessons were not learned, and problems were not corrected. The investigation recommends that the trust formally apologises to those affected. The whole House will endorse that call, and will want it done both appropriately and immediately. Further, will the Secretary of State ensure that any further referrals to the GMC and NMC are made without delay? Will he also ensure that any managerial or administrative staff found guilty of wrongdoing are subject to appropriate action? A number of staff have left the trust in recent years, many with pay-offs. Will he review those decisions in the light of the report and take whatever steps he can to ensure that those who have failed are not rewarded?

One of the central findings of the investigation is on the challenges faced by geographically remote and isolated communities in providing health services. The investigation warns of the risks of a closed clinical culture in which

“practice can ‘drift’ away from standards and procedures found elsewhere”.

Is not the report right to recommend a national review of maternity care and paediatrics in rural and isolated areas, and will the Secretary of State take that forward? Alongside that, there are concerns about the sustainability of the Cumbrian health economy. My hon. Friend the Member for Copeland (Mr Reed) has today written to the chief executive of NHS England to call for a review of the specific challenges it faces. I hope the Secretary of State will be sympathetic to that call.

On the CQC, the role of the regulator has always been to oppose poor care and challenge practice, but it is clear that it failed in its duty in this case. Given what was known, the decision to register the trust without conditions in April 2010 was inexplicable, as was the decision to award foundation trust status later in 2010, as was the decision to inspect emergency care pathways but not maternity services—in so doing, it failed to act on specific warnings. As the report states, there was and remains confusion in the system over who has overall responsibility for monitoring standards, with overlapping regulatory responsibilities. The Opposition support moves to make the CQC more independent, but does the Secretary of State agree that the journey of improvement at the regulator needs to continue, and that there is a need for further reform? Will he ensure that NHS England draws up the recommended protocol on the roles and responsibilities for all parts of the oversight system without delay, and does he agree that the CQC should take prime responsibility?

I want to close by focusing on two proposals that I believe get to the heart of the matter before us. I have thought carefully about how we truly do justice to the families’ campaign and learn the lessons of both this investigation and the Francis report. In my view, the answer is a much more rigorous system of the review of all deaths in the community and in hospitals than currently exists.

First, is the reform of death certification and the introduction of a new system of independent medical examination well overdue? The Kirkup report echoes findings that go back as far as Dame Janet Smith’s inquiry into the Shipman murders, which were repeated recently by Sir Robert Francis in his two reports on Mid Staffordshire. The previous Government legislated for those reforms and made provision for the independent scrutiny by a medical examiner of all deaths that are not referred to a coroner. That has been piloted and proven to be effective. The investigation says that those reforms could have raised concerns at Morecambe Bay before they eventually became evident.

The second point is that we need a better system for scrutinising deaths in hospital. The report recommends mandatory reporting and investigation of serious incidents of all maternal deaths, stillbirths and unexpected neonatal deaths. Is there not a case to go further, including by looking at moving to a mandatory review of case notes for every death in hospital, and at how we can use a standardised system of case note review to support learning and improvement at every trust?

To help to guide the Opposition’s new approach to quality improvement, Professor Nick Black has agreed to advise us and inform the review, which will be concluded by the end of the month. In our view, that reform is much needed, because rather than looking at a sample of deaths to avoid harm, we would look at every single death to learn lessons, which means that every single person matters. Ideally, the review should be cross-party. I hope the Secretary of State feels able to endorse the review I have announced, which will make recommendations that the next Government can act on immediately. Is that not the best way to do justice to the issues that the families have fought to raise, and to ensure that the legacy of their campaign is to ensure that no others go through what they have gone through?

[Mr Hunt]

I thank the right hon. Gentleman for his measured tone. I am sure he is absolutely sincere in wanting to learn from this tragedy. I thank him for his moving words and for his apology. He will understand that there is nervousness among the families because, in the past, when the Government have talked about rooting out poor care, we have been accused of running down the NHS. We have had a different tone today, and I welcome it.

To answer the right hon. Gentleman’s specific points on the quality of care at the hospital currently, the best person and people to make that judgment are the new CQC and chief inspector of hospitals, Professor Sir Mike Richards. He has said that, in his view, the care at the maternity unity in Furness general hospital is good, and indeed safe—it is more than safe; it is good. That should reassure many people who are using the hospital. He is also very clear that there are many, many improvements to make, and his overall rating for the trust is not good. The report highlights many areas that still need to be addressed, but it is important to give that reassurance.

On death certification, I assure the right hon. Gentleman that we fully support that policy. As he knows, it was recommended in January 2005, so it has taken a long time for both Governments to address. We fully support the policy and have had successful trials. We are committed to introducing it as soon as possible and we want to go further. There may be some common ground, because we, too, have been talking to Professor Nick Black about case note reviews. The latest advice I have had is that it would be technically very difficult to review the case notes of all the 250,000 deaths every year in NHS hospitals, because of the resource implications and the doctors’ time it would take. I asked whether it would be possible to do that. I was advised that, if we looked at case notes hospital by hospital, there would be a risk of trusts getting into big disputes about whether or not a death was avoidable. I asked Professor Black to help me to devise a methodology so that we can assess the level of avoidable deaths by hospital trust. We would be the first health economy in the world to do that. I hope we will have his full support as we take that forward.

On the decision to give the trust foundation trust status, the report makes it clear that Ministers were advised that they had no locus to intervene, because the process had already been set in train—the decision had been deferred but not stopped, so they were not able to intervene. It is clear that the level of knowledge in the Department of Health, as in the rest of the system, was wholly inadequate given what was happening in that hospital.

I should like to make one other point, on a comment made by Labour this morning that the report would say that the failings were very localised. In fact, the report says the opposite. I want to read what Dr Kirkup says in the introduction to the report:

“It is vital that the lessons, now plain to see, are learnt and acted upon, not least by other Trusts, which must not believe that ‘it could not happen here’.”

It is important that we take that lesson from the report extremely seriously.

I would like to finish on a note of consensus. I appreciate that it is not always easy for Oppositions to support the Government publicly as they put right policy mistakes that they have inherited, but I think there is one thing where we can make common ground: the need for culture change in the NHS. Policies can be changed over one Parliament, but culture change takes a generation. What the families who have suffered so much want to know more than anything else is that Members on all sides of the House are committed to that, so that we never again go back to the closed ranks and institutional self-defence that piled agony on to their tragedies, and that, once and for all, we all make the commitment that patients will always come first.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

As a Member of Parliament for an area covered by the trust, I assure the Secretary of State that many thousands of workers in the NHS in my area do a really good job in very difficult geographical circumstances.

I was newly elected to Parliament in 2010. My experience, alongside that of colleagues whom I see in the House, as a constituency MP dealing with the huge institution that is the NHS has been that it is difficult to find out who is responsible, where and for what. Like everybody else, my heart goes out to the parents. I do not know how they have struggled on, with their loss and with being confronted with what almost seems like a professional or administrative closing of ranks and doors to their pleas for some information on what happened. It is just unbelievable.

My constituents do not understand why—this is mentioned in the report—a major incident in 2004 was not looked at. There were five more major incidents in 2006-07 and another five in 2008, yet still nothing was done. What will the Secretary of State do to reassure my constituents that when a major incident happens again—as presumably it could in any NHS hospital across the country—it will be acted on?

[Mr Hunt]

I am happy to do that. In fact, I can not only tell my hon. Friend what we are going to do, I can tell him what we have done. The main purpose of the new CQC inspection regime, with a chief inspector of hospitals and a special measures regime, is to make sure that these issues come to light much more quickly. The new regime has been very active: 20 trusts—more than 10% of all trusts in the NHS—have gone into special measures. We have seen dramatic improvements.

I would like to make a broader point to my hon. Friend’s constituents. He speaks very wisely when he says that this is not about the dedication and commitment of front-line staff. He is absolutely right. The Royal Lancaster infirmary is not the main focus of the Kirkup report, but of course as part of the same trust it suffered from the same management failings. There are Members of this House who have had problems at the Royal Lancaster infirmary and found that they were not listened to when they made complaints, because proper management was not in place. That will have affected his constituents. I hope they will take encouragement from the changes that have happened recently in that regard.

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

I thank the Secretary of State for the dignified and fitting way in which he was able to name some of the grieving parents and the babies they lost. We cannot escape the painful conclusion from the report that our hospital was compromised by some shocking failures in care and a deeply inappropriate defensiveness from certain individuals. Does he agree that the scale of failure laid out in the report may well serve to reopen the criminal investigation? Will he support the healing process that is now needed in our community, with resources if necessary, so that we can move on from this? Finally, will he set out a timetable by which he will look through all the recommendations and report back to the House on whether the Government will accept them? Will that be before the election?

[Mr Hunt]

I do not know the answer to the last question because we have received the report only very recently, but we will do this work as soon as possible. Indeed, if we have cross-party support, it may be that we can expedite the process. The hon. Gentleman worked very closely with James Titcombe and is absolutely right to talk about the seriousness of what happened. As with the Francis report, however, I would caution against the idea that this problem will be solved if a few more nurses are struck off. We need accountability—that is incredibly important—and where there is wrongdoing, people must be fully held to account. The big lesson is the lack of openness, transparency and trust. It is quite possible that the reason some people did not speak out about poor care is that they were frightened of the consequences of doing so. They thought they would not be listened to. Other industries, such as the nuclear industry in which James Titcombe worked or the airline industry, have managed to create a culture of trust where people on the front line who make mistakes feel able to speak out and be supported if they do so. That is the most important lesson we need to learn from today’s report.

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

I, too, want to the thank the Secretary of State and the shadow Secretary of State for their entirely appropriate contributions, both the statement and the response, on this immensely sensitive and deeply personally upsetting series of circumstances. I want especially to pay tribute to the families who lost loved ones as a result of what Dr Kirkup referred to as

“serious failures of clinical care”.

He refers to the report as a damning indictment.

The dignity and determination of parents such as James Titcombe and Carl Hendrickson have led to this awful truth being laid bare today. Those parents are an inspiration to me, and they should be to all of us. I want to pick up on one point in particular that was raised during the Secretary of State’s statement. Dr Kirkup expresses disquiet that the NHS and the parliamentary ombudsman chose not even to investigate what has now been shown to be the needless deaths of at least 11 babies and at least one mother. May I press the Secretary of State to go further than he has in his statement and do everything in his power to ensure that the watchdog for patients is not a lapdog for senior managers? Patients need a powerful, effective independent investigator who listens to those who grieve, like the Morecambe Bay families, and not one who dismisses them without even an investigation.

[Mr Hunt]

My hon. Friend is absolutely right. There were, clearly, very serious flaws in the way the Parliamentary and Health Service Ombudsman operated, particularly in the case of Joshua Titcombe. My hon. Friend will know that the PHSO is accountable to this House through the Public Administration Committee, and not through the Government and the Department of Health. The Public Administration Committee is considering this issue in a great deal of detail to see what lessons need to be learned. I think one of the issues is the level of expertise within the PHSO and, with the greatest of respect, a certain lack of confidence in its ability to understand when there has been a clinical failure. I think everyone agrees that one of the things we need to do is to ensure that it can draw on medical expertise. It needs to make sure that its culture is as open and transparent as the culture it would like to see inside the NHS.

[Kevin Barron (Rother Valley) (Lab)]

The Secretary of State said that the fitness to practise of seven midwives is currently being considered by the National Midwifery Council. Given that this matter goes back over a decade, were any health professionals, either doctors or nurses, referred to their regulatory bodies during any of the incidents he outlined earlier?

[Mr Hunt]

I am not aware that they were. If that turns out to be the case, that would be extremely worrying. Since Dr Kirkup started his investigation, he has been in touch with the regulatory bodies throughout the process. He has not waited until today to refer back to them any names of people where he thinks there may be a concern.

[David Morris (Morecambe and Lunesdale) (Con)]

I thank my right hon. Friend for his deep and meaningful statement. In my constituency, the effects of what has happened in our trust have been deeply felt. I would also like to reach out to my hon. Friend outside the Chamber, the hon. Member for Barrow and Furness (John Woodcock). We have to put everything behind us. In my constituency, there is a campaign which says that the hospital is closing. The staff and the new management are beside themselves on this particular issue. Does my right hon. Friend agree that this has now got to stop? Hospitals and A and Es were never going to close down. At the end of the day, the staff are the only people who are going to suffer in all this.

[Mr Hunt]

I think this is a time when the whole House needs to unite behind the staff in that trust, who are working very hard to turn the situation around; indeed, they have made great progress. I had to call Nicola Adam of The Visitor to reaffirm the point that there are absolutely no plans to close the hospital. I hope the whole House will recognise that statement for what it is and that hon. Members will reiterate it in all their communications with their constituents.

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

I thank the Secretary of State and my right hon. Friend the Member for Leigh (Andy Burnham) for the tone of the statement and the Opposition’s response. I want to ask the Secretary of State about the point he made in his statement about the relationship between clinicians and midwives, which Dr Kirkup identified as having deteriorated over the last two or three years. He said that there was evidence of untoward incidents, with worryingly similar features to those that had previously occurred, as recently as last year. The Secretary of State mentioned extra numbers, but is he confident that the relationship between midwives and doctors is now resolved and that we have safe care at that hospital and elsewhere?

[Mr Hunt]

I think we can trust the CQC’s view that the care in the maternity unit is safe, but the hon. Gentleman is absolutely right to draw attention to the issue of the barriers between doctors and midwives, which is striking. That goes back a very long time: there seemed to be a kind of macho culture among the midwives to do with not letting the doctors in, which probably led to babies needlessly dying, which is the great tragedy. Making sure that that culture is changed, so that the patient’s needs are always put first, is obviously a massive priority. I know that the trust has made great strides in that area, but we all understand too that it takes time to change culture, and we need to support it as it goes on that journey.

[Dr Sarah Wollaston (Totnes) (Con)]

I join the Secretary of State in paying tribute to James Titcombe and all the families who have fought so long for answers. I also thank Dr Kirkup for his excellent report. I welcome the action that the Secretary of State has announced today, but can he add to that list by saying whether we can bring forward having medical examiners to look into the cause of death before the end of this Parliament and, if not, say what the barriers to introducing that much overdue reform are? Will he also touch on recommendations 20 and 21 in the report, which refer to the need for a national review of maternity and paediatric services in areas that are remote, isolated and hard to recruit to? Indeed, the report goes further and says that the problem extends beyond those services. This is an issue we need to address to improve safety without deterring recruitment in these areas.

[Mr Hunt]

I am afraid I can only commit now to us introducing independent medical examiners as soon as possible. We are wholeheartedly committed to this. It is incredibly important for relatives, because where they have a concern about a death and possibly a mistake being made in someone’s care in their final hours, the availability of an independent examiner has been shown in the trials we have run to be very effective, so we are committed to doing that.

I should have answered the shadow Health Secretary on the point about a review of maternity services, because he raised it as well. NHS England is doing that review; we have already announced that to this House. Today it is publishing the terms of reference of that review. That is important, because there has been a big debate inside the health service—a debate with which many people will be familiar—about what the minimum appropriate size for maternity and birthing units is, and we need to get to the bottom of the latest international evidence.

[Ann Clwyd (Cynon Valley) (Lab)]

During the period when I was writing the report on complaints in hospitals, I met Mr Titcombe. I was impressed by his persistence, because persistence is what anyone who is trying to tackle a complaint needs. I understand what he means when he says he is haunted by personal grief: I think of all those parents and relatives who have waited all this time to try to get some answers to their questions. The length of time it takes to answer people’s complaints is still not satisfactory. I myself have waited over two years and three months and I still do not have answers—I know that is not in his bag, but it is generally true of the whole of the United Kingdom. I support what my right hon. Friend the shadow Secretary of State said in calling for the medical scrutiny of all deaths that are not referred to a coroner. That is an important point. I want to ask the Secretary of State again: will he ensure that achieving the highest standard of complaints handling is included in the next NHS mandate?

[Mr Hunt]

No one has done more than the right hon. Lady to try to improve the standard for complaints, with the excellent work she did with Professor Tricia Hart. We are in the process of implementing her recommendations, but as the right hon. Lady knows, with the fifth largest organisation in the world, it is one thing to make a commitment in this place, but another to make it happen on the ground. There is definitely much work to do.

I also agree with the right hon. Lady’s comments about James Titcombe. This is a man who gave up his job working in the nuclear industry to come down to London and work in the CQC so that he could actively be part of the culture change that he wanted to see in the NHS. I do not think anyone could have done more than that. It is truly remarkable.

As the right hon. Lady has mentioned Wales, let me say that we have put 20 trusts into special measures in England and it is inconceivable that there will not be trusts with similar problems in Wales. I urge her to encourage the Labour party in Wales to look at introducing a special measures regime and a chief inspector of hospitals in Wales, because that has had such a powerful effect on improving standards of care in England.

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

I thank my right hon. Friend for his statement and Dr Bill Kirkup for his excellent report. Let me reassure him and the House that the Public Administration Committee is also preoccupied with the failings of the parliamentary and health service ombudsman in the conduct of these cases. I, too, have met James Titcombe on many occasions and have been extremely impressed by his extraordinary commitment to making sure that he is heard so that so many others can be heard.

May I also point out that the report reeks of the confusion that exists between CQC and the PHSO about what their respective responsibilities are? If we are talking about accountability, what we need is an organisation that is accountable for investigating clinical incidents in the NHS, whether they are down to particular local problems or broader systemic problems—by which we mean not that that is an excuse for what goes wrong; rather, it is so those systemic problems can be put right. I therefore very much welcome what my right hon. Friend has mooted will be the task of Sir Mike Durkin: to look at how that capacity can be developed, in the same manner, perhaps, as the air accidents investigation branch of the Department for Transport.

[Mr Hunt]

Dr Mike Durkin will be delighted that he has been promoted and given a knighthood for his wonderful work on patient safety, but it has not happened yet, even though he certainly deserves it. I thank my hon. Friend for his understanding of the complexity of these issues and the importance of the need for culture change. The work of his Committee has not been to scratch around the surface; it has tried to think hard about the solution. He is absolutely right that we need to end regulatory confusion. We now have a strong CQC, which is doing incredible inspections and is trusted across the system. However, we need a system in which people can get independent external advice quickly, which is why he was right to alert me to the potential of an air accidents investigation branch equivalent. I hope that is something that could be helpful for the ombudsman as well.

[Liz McInnes (Heywood and Middleton) (Lab)]

I am pleased that the Secretary of State has declared his intention to implement the medical examination review. The president of the Royal College of Pathologists, Dr Suzy Lishman, has said that introducing such a system would

“improve patient care whilst reducing harm and saving money”.

She went on:

“If bereaved relatives get the answers that they need around the time of death, if all their questions are answered then, then they don’t feel the need to sue the NHS to get the answers they deserve.”

She has also said that it is “incomprehensible” that the recommended changes have not been implemented. Will the Secretary of State explain why there has been so much delay? From his answer to a previous question, I understand that he is not able to commit to implementing the reforms during the time of this Government.

[Mr Hunt]

With the greatest respect, I say to the hon. Lady that if she is suggesting that we have done nothing on this important issue over the last few years, nothing could be further from the truth. We have been trialling the right system; we think the trials have worked; and we want to make sure that we implement this in a way that is consistent with the many other things we are doing to improve patient safety, including proper case-note reviews of deaths in order to understand the level of avoidable hospital deaths and what we can do to bring the rates down. This is a priority for the Government, and we remain wholly committed to it.

Ebbsfleet

Tuesday 3rd March 2015 Commons Chamber

14:30

[The Minister of State, Department for Communities and Local Government (Brandon Lewis)]

Hon. Members will be aware of the Government’s ambition to create a new garden city at Ebbsfleet and of our intention to establish an urban development corporation to drive forward its development and delivery. I would like to take this opportunity to update hon. Members on the progress we have made.

This country has faced a shortfall in housing for many years, with young people and families struggling to find the homes they want and need, particularly in the south-east. We are committed to increasing their chances, and our programmes to accelerate house building are already seeing results. Our £1.5 billion large sites programme is expected to unlock 100,000 homes by the end of this month, and a further 200,000 homes could be unlocked as we take the programme forward. This is in addition to the plans in place to create housing zones on brownfield sites across the country.

Last year, we published our prospectus for locally led garden cities, and we are now working closely to support the development of a new garden town at Bicester, with a capacity to deliver up to 13,000 new homes. Our approach is locally led. We invite local areas to come forward, without any top-down, centrally imposed requirements. This approach will help make new garden cities acceptable locally—and, as such, to make them a reality.

With close transport links and large areas of brownfield land, the Ebbsfleet area has huge potential as a place to deliver a substantial number of new homes. It has long been identified—in fact, as far back as the last Government’s sustainable communities plan—as an ideal location for major development. Despite these ambitions, progress has been slow, and Ebbsfleet remains largely undeveloped. Our plans for Ebbsfleet aim to change that and to drive forward this historic development opportunity.

In last year’s Budget, the Government announced plans to create a new locally led garden city at Ebbsfleet, Kent, capable of providing up to 15,000 new homes predominantly on brownfield land or former quarries. The Government are seeking not only to increase the pace of development, but to create high-quality development. We want to build homes that are supported by local employment opportunities, green space and the necessary infrastructure, so that Ebbsfleet becomes a place where people want to live, work and raise their families.

To help realise this vision, the Government have announced that up to £200 million of infrastructure funding will be made available to support delivery. We also announced that a new statutory body—an urban development corporation—would be formed to bring real focus on driving forward delivery. Since then, we have been working closely with each of the three local authorities and other partners on the preparatory work to establish the urban development corporation and to set the scene for the future garden city. I put on record the fact that I welcome the cross-party support that the Opposition have given to these proposals.

I am pleased to report that house building is already under way in some parts of the proposed garden city. Last October, I opened the first phase of housing being led by Ward Homes at Castle Hill. Just today, Land Securities exchanged contracts with Persimmon Homes for the next phase of 170 homes at Castle Hill. Much remains to be done to increase the rate of development at Ebbsfleet, but this is welcome progress none the less.

In August last year, we consulted on the proposal to set up an urban development corporation. We set out the powers that we propose the corporation should have, including compulsory purchase powers, the transfer of the planning management powers that are currently exercised by the local authorities and, of course, the ability to invest money to secure the regeneration of the area.

In our consultation, we asked for views on the area in which the urban development corporation would operate, on the planning powers it would be granted, and on the composition of the board. The consultation was supported by an active engagement campaign, and the results demonstrated overall support for the proposal to create a development corporation for Ebbsfleet. In December last year, we published our response to the consultation, which confirmed our intention to continue with the proposal to establish a development corporation at Ebbsfleet.

Although supportive, the consultation did highlight some areas of concern, such as the impact of development on existing infrastructure. These issues were not unanticipated, and we announced in the autumn statement that there would be a review of the transport provision for the Ebbsfleet area. The Government also announced in the autumn statement the provision of the first £100 million to fund infrastructure and land remediation to kick-start development—obviously subject to due diligence. We are working closely with local partners to understand the scale of the infrastructure required and how best to accelerate delivery.

We want to ensure that, on establishment, the urban development corporation has in place the tools necessary to enable it to hit the ground running. It is crucial that the urban development corporation is able to pick up the reins from the local authorities and deliver its objectives seamlessly, without causing any unnecessary uncertainty among local communities and local businesses.

In August last year, we appointed Michael Cassidy as the chairman designate. He was the chairman of the City of London property investment board, and has extensive experience in a range of roles across the business and industry sectors. Since his appointment, he has actively engaged with local partners and the major landowners to develop a shared understanding of the work required to drive forward development.

More recently, we launched the recruitment process for a permanent chief executive. However, as this post will take some months to fill, we are appointing key interim personnel to maintain momentum and continuity. These interim posts will, in the meantime, continue to drive forward not only the set-up of the urban development corporation, but progress on the work to develop a shared strategy for the garden city.

We have made progress, too, on the process to recruit, through open competition, the remainder of the urban development corporation’s board members. Some 90 applications were received and interviews are under way. These will be in addition to the local authority representatives from Dartford, Gravesham and Kent who, as we have already made clear, will have a seat on the board.

The urban development corporation will develop a shared vision and master-plan for the locally led garden city that reflects the views of the local people. Much can be done in the meantime to set in place the foundations for this work, and to provide a platform from which the urban development corporation can work. We are progressing with the production of a development framework for the area. This will provide critical baseline data and act as the starting-point for the design of the future Ebbsfleet garden city.

In parallel, we are preparing the procurement process for a full master plan, which can then be taken forward by the urban development corporation. We want the design of the garden city to be as collaborative as possible. We will therefore use this preparatory work to make sure that future master planning is carried out in a way that encourages the full participation of the local communities and local businesses.

We recognise that there is likely to be a transition period between the establishment of the urban development corporation and the point at which it will be fully resourced to operate as the local planning authority. We are therefore working closely with the local authorities to agree and put in place a service level agreement, which will enable the local authorities to administer the planning service for the urban development corporation for a transitional period to ensure a smooth handover and to develop a partnership to deliver a locally led garden city. We are pushing forward with the final key stages of the physical set-up of the urban development corporation, putting in place the accommodation and technical facilities needed to ensure that the UDC is fully resourced and equipped to undertake its objectives.

Hon. Members will be aware that the Government tabled in the other place an amendment to the Deregulation Bill to change the parliamentary approval procedure from affirmative to negative for the establishment of urban development areas and urban development corporations. This amendment was accepted, and is now part of the Deregulation Bill. I should like to place on record my thanks to the hon. Members for City of Durham (Roberta Blackman-Woods) and for Wolverhampton North East (Emma Reynolds) and the shadow Secretary of State for their participation in discussions about how to proceed on this matter. I know that they share my wish to see this proposal make progress. The Government intend, subject to parliamentary approval, to lay a negative statutory instrument immediately following Royal Assent to establish the urban development corporation. A separate order to grant the corporation planning functions, making it the local planning authority responsible for the development of the area, will be laid at the same time.

I trust that that update will reassure Members of the Government’s commitment to creating a locally led garden city at Ebbsfleet that will be fit for the 21st century.

14:40

[Emma Reynolds (Wolverhampton North East) (Lab)]

I thank the Minister for his statement, and for giving me advance sight of it. As he said, there is cross-party support for the development at Ebbsfleet, and Labour Members support it strongly. I agree with him that Ebbsfleet has huge potential to deliver a substantial number of homes and an outstanding new community.

Having been to Ebbsfleet, I have seen with my own eyes not just the opportunities that it offers but its terrain, which presents significant challenges. We want to see a new generation of garden cities and new towns, and we believe that Ebbsfleet could make an important contribution to such a programme. That is why, as the Minister said, we have sought to work with the Government constructively and on a cross-party basis to deliver the UDC. As the Minister also said, my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) participated actively in the discussions with the Government, and is strongly committed to the delivery of a new generation of garden cities. She has spoken about the subject eloquently, in the House and elsewhere.

We naturally welcome the forming of an urban development corporation to drive this development forward, but we are concerned about the use of UDCs to deliver a full programme of garden cities. As the Minister knows, they are not set up to deliver garden city principles, which is why we pressed for the inclusion of a sunset clause. I am pleased that agreement was reached on that.

Although I welcome the Government’s initiative in establishing the UDC over the past five years, it would be remiss of me not to mention the number of mixed messages that we have received in regard to both Ebbsfleet and garden cities more broadly. In 2011 the then Housing Minister, the right hon. Member for Welwyn Hatfield (Grant Shapps), spoke of rebooting garden cities, and in 2012 the Prime Minister announced that he would publish a consultation on garden cities by the end of the year. Six months later, the Deputy Prime Minister said that some lively debate was taking place within the Government, but promised incentives that would deliver projects that were “big and bold”. In December 2012, the Government announced that Ebbsfleet would be the site for a large-scale development of 20,000 new homes.

Subsequently, however, rather than seeing the “big and bold” projects that had been promised, we saw reports in the newspapers that the Prime Minister was suppressing a document and had gone cold on the idea. Later that year, the Housing Minister said that he was not aware of a report that was supposed to have been published, but the Deputy Prime Minister said that there was a prospectus, and that the Government should be honest about their intentions. The Secretary of State then contradicted his own Housing Minister, saying that his Department had told him that there was a report, but not a report from the Department for Communities and Local Government. We were a little bemused by all that. However, a prospectus for garden cities was finally published, and in last year’s Budget statement the Chancellor of the Exchequer announced that there would be a new garden city at Ebbsfleet containing 15,000 homes—5,000 fewer than had been promised in 2012.

Given the scale of the housing crisis and the evident cross-party support for garden cities, I should like to know what is behind the Government’s stops and starts on the Ebbsfleet initiative and on garden cities more generally. I should also like to know where the additional 5,000 new homes have gone. That seems to be something of a mystery.

I welcomed what the Minister said about infrastructure. The Government said last year that, once established, the Ebbsfleet UDC would be expected to identify sources of additional funding, further to the funding for basic infrastructure that had already been announced. Will the Minister tell us how much additional funding he and his Department think might be necessary to get the Ebbsfleet project moving, and whether its source in either the private or the public sector has been identified?

The garden city movement, which was founded by Ebenezer Howard, has a long and proud history of promoting and providing outstanding places for people to live in. Although I support what the Minister has said today, I am anxious for the founding principles of the movement to be respected, albeit in a modern setting. Perhaps the Minister will explain why he did not mention affordable housing, and why his predecessor told my hon. Friend the Member for City of Durham in a written parliamentary answer that

“The Government do not impose a particular level of affordable housing for housing schemes.”—[Official Report, 9 April 2014; Vol. 579, c. 239W.]

Can the Minister reassure us that the master plan will include a commitment to a significant proportion of affordable homes? If it does not, I fear that there will not be much garden to the garden city. The Government’s garden city prospectus invited communities to come up with proposals, or “big and bold” projects, as the Deputy Prime Minister called them. Will the Minister tell us how many bids have been submitted so far?

Let me end by echoing what the Minister said about securing the Ebbsfleet development. This is a long-term project that presents significant challenges but also has huge potential, and, as such, it requires a long-term approach from Members in all parts of the House. On that basis, I welcome the fact that we have reached cross-party agreement.

[Brandon Lewis]

I thank the hon. Member for Wolverhampton North East (Emma Reynolds) for expressing what could broadly be described as cross-party support. She did, however, ask a couple of questions, and mentioned the pace at which the garden city programme had proceeded. She was absolutely right to refer to the terrain at Ebbsfleet. I think that anyone who watches our exchanges, or reads the Hansard report, and wonders why it has taken so long for us to reach this point needs to be aware of a couple of facts. I shall explain in a moment how the programme has been structured in the past, but there is no doubt that the terrain is an important element. Ebbsfleet is an astonishing place to visit: a map simply does not do justice to its contours and topography.

At one point, the hon. Lady asked how much garden there would be in a garden city. We want to deliver something of which we can all be proud. We need to have a vision of the way in which not just community housing but real communities should be built. That means ensuring that there is the right mix of residential, retail, commercial and open space for people to enjoy, so that they can get to know their neighbours and be part of a strong community. The community must be at the forefront of this project.

We opted for an urban development corporation in this case—with Opposition support—because three local authorities and various landowners were involved. In fact, the Government have a small landholding interest. That makes the position very complex.

The hon. Lady said that it had taken several years for us to make progress. As she knows, we have been dealing with a legislative process over the past few months, since last year’s Budget statement. I found her comments slightly ironic. Let me politely suggest that she might like to stand up and name some of the eco-towns that have not been built since they were announced by the last Government.

We are now able to deliver on the garden city principles, at Ebbsfleet, at Bicester—which I visited again just last week—and in other areas because ours is not a top-down approach. We are not making decisions from on high; local authorities are coming to us and saying that they want to develop on the basis of those principles. It takes time for authorities to get organised and prepare to submit their proposals to the Government, but I think that that is right. The longevity of delivery that the hon. Lady rightly mentioned enables long-term plans to be developed properly, and to be locally designed, locally supported and locally proposed.

The hon. Lady referred to funding more generally, and to affordable housing. I repeat that ours is not a top-down approach. Once the urban development corporation has been set up, it will become the planning authority, and levels of affordable housing and section 106 agreements are a matter for planning authorities. On the basis of localism, we let the local authorities deal with such matters, and I trust them to do so. Some agreements are already in place, and are delivering substantial infrastructure and section 106 agreements for the area.

In terms of the total cost of development at Ebbsfleet, developing a prioritised infrastructure list will be one of the first tasks the development corporation will be taking forward. In advance of it even being established, we have been working with partners to identify the key items of infrastructure needed to support development. We do not yet have a total cost for the infrastructure because there will be many items that partners would want us to consider and include, and the development corporation needs to be the body that looks carefully both at what infrastructure is needed to support the garden city development and who should pay for it. Of course, much of the infrastructure building work will be paid for by developers, not by the Government or the development corporation directly. That is where the section 106 agreements that are already in place, and those that are developed for the major developments with outline planning consent, will take us forward.

[Gareth Johnson (Dartford) (Con)]

Ebbsfleet in my Dartford constituency is home to some very ambitious housing projects. The full potential of the area will not be realised without proper investment and commitment to the infrastructure, not just of the garden city but the surrounding area. The Minister mentioned that the Chancellor announced £200 million of investment at the last Budget. Will the Minister give my constituents a guarantee that the Government are still committed to that and that local people will have an input into how that money will be spent? It appears that the Opposition want another 5,000 homes in the garden city. Does the Minister agree that we do not judge a good housing project on the number of homes we are able to cram into a particular area?

[Brandon Lewis]

My hon. Friend has been a strong proponent not just of Ebbsfleet more generally but, as I saw on a couple of visits with him to his area, of making sure that this development is done in a way that is conducive to, works with and delivers for, the local community, recognising not just the community we want to build, but the communities and local authorities that are already in the area within the constituencies of my hon. Friends the Members for Gravesham (Mr Holloway) and for Dartford (Gareth Johnson). My hon. Friend the Member for Dartford has also worked closely with the local authorities who have their own affordable housing policies, which will be what govern the development of that area. Both of those authorities are clearly looking to secure a level of 30% of affordable housing, and I can assure my hon. Friend that today’s statement does not change what was said at the Budget last year or the finances announced in the autumn statement—I know that he has worked hard on that with his local residents and authorities. It stays in place, as was. What we are doing today is giving an update, in particular on the development and the incorporation of that corporation.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

In welcoming the statement as the MP for Letchworth garden city, the world’s first, may I wish Ebbsfleet well? Does the Minister agree that the principles of garden cities—mixed tenure, a scheme of building that maintains garden city features over time, the features themselves, with allotments, space, commons, an agricultural area nearby, and separation of areas between residential, employment land and retail—can be applied not just to larger communities of 15,000 or 20,000, but to smaller communities too? In Hertfordshire we are looking at—the MPs are anyway—possibly pushing North Herts district council to go for a garden city or town that might be smaller than 10,000. Does the Minister agree that almost any size of community can be planned on garden city lines?

[Brandon Lewis]

My hon. and learned Friend makes a very good point. One point I have made at various recent events is that we must make sure as we move forward that we build good-quality design, not just lots and lots of housing estates. There are two reasons for that. If we want people to be more accepting of development, not only have we got to make sure that people are involved in that through local plans and neighbourhood planning, but the development they see in their area must be of good quality. That requires good-quality design not just of the properties but the overall master plan. My hon. and learned Friend is absolutely right that having even small areas developed where, when possible and appropriate, there is a good mix of retail, commercial and residential, with good open space and good community areas, bringing people together, does not just deliver good-quality homes for people to live in and good-quality places for people to raise their families, but also builds good, strong, long-lasting communities, and that is something I wholeheartedly support.

[Sir Tony Baldry (Banbury) (Con)]

Ebbsfleet is blessed in that there is already a Bishop of Ebbsfleet, which must be the first time that the bishop has come before the city, rather than a city creating a bishop. I want to raise two points. We will not need an urban development corporation for Bicester. All the land for it lies within the area of Cherwell district council, and we are determined to make a success of it, and to make a garden town for the 21st century of which the country can be proud. What we will need, however, is the Ministry of Defence to surrender every square foot of MOD land that it does not need as speedily as possible. As evidence that Cherwell district council is determined to get on with this as speedily as possible, as my hon. Friend the Minister will know but the House may not know, Cherwell had acquired land to build 1,900 self-build homes. This is an incredibly popular project. Local development orders are now in place. Queues of people are coming, wanting to acquire these plots for self-build homes. May I suggest that this project, witnessed by the Prime Minister yesterday, could be rolled out to other parts of the country, because there is clearly a large appetite among the public for building their own homes, as we have seen in Bicester?

[Brandon Lewis]

My right hon. Friend has been a loud and strong proponent of the fantastic work being done in Bicester and of development on those garden city principles, and he is absolutely right. I visited Bicester last year and I visited again last week to see the excellent work done in just a few months, and the progress made to deliver the development in a good, strong, community-built way. He is right that this shows it does not have to be just one type of tenure. We can also develop the custom and self-build opportunities, which the hon. Member for Wolverhampton North East (Emma Reynolds) and I have agreed on in the House—there is cross-party agreement—in the last few months.

I would say, however, that we do not do well enough in this country in sharing best practice. I advise people across local government who are looking at developments and how to develop to look at what is happening in places like Bicester and to talk to those involved. They are strong proponents, they are happy to talk to people, and they have done some excellent work that they can share with others about how good-quality development can help build strong communities of which we can all be proud.

Housing Ombudsman (Power to Settle Disputes between Neighbours and Tenants)

Tuesday 3rd March 2015 Commons Chamber

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

14:56

[Nick de Bois (Enfield North) (Con)]

I beg to move,

That leave be given to bring in a Bill to provide for a discretionary power to enable the Housing Ombudsman to attempt to resolve disputes between occupants of neighbouring properties in cases where nuisance is caused by tenants; and for connected purposes.

Members will know that houses in multiple occupation —so-called HMOs—are a growing feature of our towns and cities. Last year there were almost 200,000 in London alone, which was a growth of over 10,000 on the previous 12 months. There are now more than 1,000 HMOs in my borough of Enfield. Why have we seen this growth? Often HMOs offer cheaper and flexible accommodation. They are already a key component of our housing tapestry. HMOs are also an attractive prospect for private landlords. As the website of one property management firm puts it:

“If you have a large property and are renting it out to just one tenant, consider transforming it into a HMO or hostel. This gives you the ability to take on more tenants and thus increase your potential for profit.”

However, as the website also says:

“If you want to turn your property into a hostel or HMO, there are certain responsibilities you need to consider”,

most of which relate to the condition and safety of the premises. My Bill seeks to add to those responsibilities, particularly in the field of antisocial behaviour, without the heavy hand of regulation imposing greater burdens.

Some weeks ago a constituent came to me who lives next to one of the HMOs managed by the property management firm to which I have referred. Some of the tenants, who admitted that they smoked too much marijuana which made them behave erratically, made my constituent’s life a nightmare: scratching their car; constantly playing loud music; knocking on the doors well beyond midnight; and on one occasion smashing up their property. The police and the council batted the problem between them. My constituent could not, of course, over a period of time even build any relationships with the HMO residents, as they are often transient. The constituent, who prefers to remain anonymous for reasons the House will understand, has attempted to resolve the matter themselves. My constituent and their family are responsible, decent and hard-working, and do not immediately look to others, including the state, to solve their problems, but after weeks of discussion with the occupants and the landlord agent, they saw no progress. The state failed to solve the behavioural issues, and the agent simply recycled the tenants.

In a final attempt to resolve the problem, my constituent tried to contact the landlord. The agent would not disclose the landlord’s details. As far as we can tell, they made no effort to arrange a meeting between the neighbours and the landlords. In desperation, my constituent turned to their local MP, and I turned to this Bill. Clearly, the standard rules surrounding antisocial behaviour in private rented accommodation are simply not enough when dealing with packed HMOs. For example, the lengthy process for a neighbour to get a noise abatement notice against a single tenant is often too little, too late. Indeed, Mr Deputy Speaker, you will appreciate better than anyone the difficulty of controlling antisocial behaviour in a crowded House with many unruly occupants, but at least the boundaries here are clear.

Selective licensing of houses in multiple occupation acknowledges the unique issues and allows local authorities to crack down on antisocial areas, but as we have heard, many have failed to do so. However, authority-wide licence zones mean more costs for all landlords, not just the rogues. We need to give neighbours themselves the tools to hold landlords responsible, when appropriate. Put simply, when other steps fail to deal with the problem, or when landlord agents simply remove tenants and replace them with other challenging occupants, there is at present no recourse to the landlord. Landlords do not answer to neighbours for the consequences of contracts they have entered into with agents and tenants.

As we know only too well, antisocial behaviour is often treated as a problem for the victim, and there is no workable process to deal with the negative externalities that result from contracts being formed. However, the mediation that I propose, initiated by the ombudsman, would offer another solution. The Bill sets out a means of giving neighbours the right to seek mediation with the landlord, if the housing ombudsman agrees. At present, the ombudsman can instruct mediation only between a landlord and a tenant. Indeed, the advice from the ombudsman states:

“The first person to tell about a problem with housing is the landlord. They might be able to put things right.”

I could not agree more. I think that the same applies to antisocial behaviour next door, but at the moment, it is extremely difficult to locate and identify a landlord. Indeed, it is almost impossible when a landlord wishes to protect their identity.

The Bill would provide a means of dealing with the disturbing practice of recycling antisocial behaviour, which frankly takes too long for local authorities to sort out. I want to put a stop to the practice by giving neighbours who are the victims of antisocial behaviour the right to deal with the landlord of the property in question. I believe that that will help to resolve the problem in a timely fashion. The vast majority of landlords are good landlords, and they will want to stop bad behaviour when they are made aware of it. If there are landlords who do not care, the Bill will force them to take action. In many cases, the neighbours believe that the landlord is not even aware of the problems in the property that they have let out.

This change must be made, however, without getting the ombudsman involved in more generic neighbourhood disputes. This is not about disputes over high hedges, parking or planning. The Bill is not about interfering with the growth in HMOs. It does not confer rights on neighbours to object to the use of premises as HMOs. Rather, it is about easing the path of reconciliation by setting out clearly the right to take concerns directly to landlords when other reasonable steps taken by the victims have failed. The Bill would hold absentee landlords responsible for antisocial behaviour without having to introduce a special licence or blocking the HMO.

Who has not had constituents in their surgeries telling them that they are facing intolerable quality-of-life issues because of neighbours from hell? The House should seek to remedy that situation and make it easier for our constituents who do the right thing, the decent thing, and who wish to try to solve the problem for themselves. If we can facilitate that for them, we will be taking a great step forward. I commend the Bill to the House.

Question put and agreed to.

Ordered,

That Nick de Bois, Mr David Burrowes, Jim Fitzpatrick, Sarah Newton, Bob Blackman, Sir Bob Russell, Mike Freer, Mr Lee Scott, Mrs Mary Glindon, Sir Roger Gale, Graham Stringer and Ms Gisela Stuart present the Bill.

Nick de Bois accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 27 March, and to be printed (Bill 179).

Estimates Day

Tuesday 3rd March 2015 Commons Chamber

[3rd Allotted Day]

Estimates 2014-15

Tuesday 3rd March 2015 Commons Chamber

Housing Costs (Reformed Welfare System)

Tuesday 3rd March 2015 Commons Chamber

[Relevant Documents: Fourth Report from the Work and Pensions Committee, Session 2013-14, Support for housing costs in the reformed welfare system, HC 720.]

Motion made, and Question proposed,

That, for the year ending with 31 March 2015, for expenditure by the Department for Work and Pensions:

(1) further resources, not exceeding £910,407,000 be authorised for use for current purposes as set out in HC 1019,

(2) the resources authorised for use for capital purposes be reduced by £6,689,000 as so set out, and

(3) a further sum, not exceeding £2,183,111,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Dr Thérèse Coffey.)

15:07

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

I shall continue the theme of housing: we have had a statement and a ten-minute rule Bill on housing, and this debate is about the Work and Pensions Select Committee’s report on support for housing costs in the reformed welfare system. There are two important debates scheduled for this afternoon, but given that we have had two urgent questions and two statements, our deliberations might have to be somewhat curtailed.

Our report dealt with the series of reforms to housing benefit and other support to meet housing costs that the Government have introduced since 2010. The report was published in April last year, and strangely we have been granted a debate on the Floor of the House today without having received the Government’s response to it. Normally, we would expect a Government response to a Select Committee report to be published before any such debate is granted. We have been waiting for almost a year to receive the Government response.

As I have said, our report was published in April 2014. We have still not received the Government response almost a year later, but that is not for want of trying. In September last year, the Minister for Welfare Reform, Lord Freud, wrote to me to apologise for the delay, saying that although the response had been prepared, the Department for Work and Pensions was still in the process of seeking “cross-government clearance” for it. I do not know whether that means there is a major split in the coalition over the report; perhaps the Minister could fill us in on why the Government’s response has still not made it out of the DWP and into the light of day.

As we still had not received a response by December, I wrote, with the Committee’s agreement, to the same Minister to ask that a response be submitted as a matter of urgency, but I have still not received a reply to that letter. As you know, Madam Deputy Speaker, effective Select Committee scrutiny is hampered if the Government fail to abide by the agreed process. I appreciate that today’s Minister is not the one I have been writing to, but I hope he will engage fully with the detailed and specific recommendations in our report—the Government have failed to do that for nearly a year. The recommendations are important and we hope the Government are taking them seriously.

The report covered a wide range of issues relating to housing costs and the welfare system, but perhaps the most controversial was “social sector size criteria”. We called it that to try to make it sound more neutral; any other form of words can be emotive, because it is called the bedroom tax, the removal of the spare room subsidy or the under-occupancy penalty, depending on one’s political view. However, it is the charge that has meant that social tenants deemed to have more bedrooms than they need have had their housing benefit reduced. The Government said that the aims of the reform were to reduce benefit expenditure, make use of the social housing stock and incentivise people to enter work. We actually agreed that using housing stock more effectively and reducing overcrowding were understandable goals. The question was: were the Government achieving them?

Although it is true that some reduction in housing benefit has resulted, it is not because people have moved house and are now more appropriately housed; it is because many people caught by the bedroom tax—the social sector size criteria—have merely had to subsidise their housing costs from other benefit or other income, and so of course it has saved the Government some money. However, we found that many people whom we genuinely believe the Government did not want to be caught by the bedroom tax were being affected by it, and many of them are vulnerable people. As many as 60% to 70% of households in England affected by the bedroom tax contain somebody with a disability.

The whole idea was that tenants would move to smaller houses, but we found that not enough smaller houses were available across the country. Some people might have been able to move into the private rented sector, which might have been more expensive for them, but even in that sector not enough suitable accommodation was available. Others of the vulnerable group were not able to respond by finding work, because of their illness and their disabilities. We also found that a significant number of people caught by the bedroom tax had specifically adapted homes, which means that it is difficult and expensive for them to move to smaller accommodation. Whoever came up with the idea that they could do so clearly has not been through the process, as I have, of trying to find a home that is easily adapted or has been adapted.

The only option for many people was to remain in their homes and so have their housing benefit reduced. All they could do was make up the shortfall. DWP research has shown that that often meant cutting down on household essentials or borrowing money from family and friends. The reduction in housing benefit was not insignificant for those who had no choice but to pay up—a 14% cut where the tenant was deemed to be under-occupying by one bedroom and a 25% cut where under-occupation was deemed to be by two or more bedrooms. In addition, the deduction is made on the basis of the total rent paid, without regard to the level of housing benefit actually received. Therefore, those in partial receipt of housing benefit would have to pay more proportionately.

The Government’s statistics show that by the end of November 2014 the reduction had been applied to nearly half a million claimants and that the average reduction was nearly £15 per week. We found that this reform was having a particular impact on people with disabilities, including those I have mentioned already: those who have adapted homes; and people who need a room to hold medical equipment or to accommodate a carer—often a family carer. We recommended that anybody living in a home that has been significantly adapted for them should be exempt from having their benefit reduced. We also called on the Government to exempt all households that contain a person in receipt of higher level disability benefits—disability living allowance or the new personal independence payment.

Hon. Members should note our use of the word “exempt”; we wanted those groups of people to be exempt. The Government’s response is to say, “Oh, but they don’t have to pay in any case because they have access to discretionary housing payments.” Given the number of people who are reliant on DHPs, there must be something wrong with the original policy if so many people have to rely on some kind of “transitional” arrangement. But it is not transitional, simply because there are not the houses for these people to move to or they cannot move because of the kind of accommodation they require which does not fit the criteria set down by the Government.

The Government say, as they have been saying for the whole year we have been waiting on their response, that the protection is available through the DHPs. It is true that the Government have substantially increased the funding for DHPs, but those payments are awarded by local authorities to people facing hardship in paying their rent, including tenants affected by the bedroom tax and by the benefit cap, and they are still discretionary. Of course, they are also not meant to be long term, as this is a transitional protection. The other problem is that DHPs are awarded on the basis of eligibility criteria, which each local authority can set itself. That can create a postcode lottery, and we felt it was important that the granting of a DHP should be based on access to the help needed, rather than being dependent on where a claimant lived. As we often say, any benefit or award should be based on need, not on somebody’s postcode.

We were also concerned that some local authorities are taking income from disability benefits into account in the means tests they apply for determining eligibility for DHPs. It may be that individual households would qualify normally for a DHP based on just the raw criteria, but when the means test is taken into account they do not get it. Members in this House have said that it did not matter whether an individual or a family was subject to the bedroom tax because they would always get the money reimbursed or they would be helped out by a DHP, but for a large number of families that did not happen because of the application of this second means test. The benefits that were being taken into account were things such as disability living allowance and personal independence payments, but they are paid to people who are long-term sick and to disabled people to help them meet the extra costs of their disability. They are not meant to subsidise their housing costs. Those extra costs do not go away just because someone has to contribute something towards their rent because their housing benefit no longer covers the full amount.

We recommended that the Government should issue revised guidance to local authorities, making it clear that disability benefits should be disregarded in any means tests for DHPs. As yet, we do not know whether that has happened, and I hope that the Minister can tell us whether that sensible and modest request by my Select Committee has been put in place.

There is also the problem that DHPs were meant to be temporary and transitional. They were never intended to provide a long-term solution, which is why we hoped that certain categories of claimants would be exempt. That makes far more sense than having claimants apply every six months, or every year, for a DHP, or for help towards their housing costs. We are talking about long-term problems. If a claimant cannot move house or find work, why is it that they still have to apply for a DHP?

Local authorities seem unwilling to make longer term awards, so claimants often end up having to re-apply every six or 12 months. Each time a family has to apply for a DHP, they go through anxiety and uncertainty, and they never know whether they will get the award this time round.

We concluded that if DHPs are to continue to be used as the main way of mitigating the hardship that the reforms are causing, substantial levels of funding will be needed for the foreseeable future. Claimants need to be given certainty that long-term awards are available. During our inquiry, we visited some people who were caught in that particular Catch-22 situation and they really were worried about the future.

There is also the question whether there is sufficient funding for DHPs. Although central funding was increased to £165 million in 2014-15, it will go down again to £125 million in the next financial year—a drop of £40 million. During our inquiry, the Government argued that DHPs were sufficient because local authorities had not bid for the full amount of funding that was available, but we believed—this has been borne out by later evidence—that that was because the reforms were at an early stage. Local authorities were still trying to adjust to the changes, and claimants were often not aware that DHPs were available. The DWP’s own research found that 56% of people who had not applied for DHPs were not aware that they existed, but they were as likely as other claimants to report difficulty in paying the rent or being in arrears.

We recommended that the Government should review the whole DHP provision when more detail was available, which it must be by now, and increase the funding, but we now know that that will be reduced. Obviously, there has not been a proper review and, as a result, it will be harder and harder for local authorities to continue to meet the costs of the DHPs that their own criteria say they should be paying out.

I would be interested to hear from the Minister what the evidential basis is for reducing DHP funding next year. Does the funding level take account of actual assessed levels of hardship arising from reduced housing benefit, or is it based only on the amount of DHP that local authorities have been able to distribute so far? What steps are the Government and local authorities taking to inform vulnerable claimants that they can apply for DHPs to help them make up their rent shortfalls?

Another aspect that has arisen as a result of the changes to housing benefit is the introduction of a cap on the total amount of benefits that a household can receive. The current limit is £26,000 a year. It is relevant to housing costs because it is the claimant’s housing benefit that is reduced when they hit the cap.

It is worth noting that almost everybody affected by the cap either lives in an area of the country with expensive rented accommodation, such as London, or are being placed in temporary accommodation because they are homeless. Local authorities often have no option other than to put homeless people in temporary accommodation because of the lack of other rented housing in the area. That problem is getting more and more acute in a number of areas, but temporary housing is normally more expensive than permanent accommodation and claimants can then fall within the scope of the benefit cap.

Local authorities often end up paying the shortfall between rent levels and housing benefit for those affected by the cap through DHPs, so there is in fact no overall saving to public funds. We recommended that the Government should exempt all households in temporary accommodation from the benefit cap, because it seems particularly unjust for those claimants to be affected when they had no choice over where they were housed. We also found that the benefit cap was having an adverse impact on disabled persons and their carers, and that is a particular problem when the carer lives with the disabled person—usually as the parent of a child, but it could be as the adult child of a disabled parent—but they are not considered, for benefit reasons, to be part of the same household. We recommended that the Government should exempt from the benefit cap all recipients of carers allowance in that situation. The Government said that the benefit cap was not intended to push carers into work, but that may well be the effect unless the recipients of carer’s allowance are exempted from the cap. I do not think that the Government anticipated that carers would be caught by the bedroom tax.

We also looked at the local housing allowance, which is the former housing benefit for tenants in the private rented sector. The Government announced reforms to the LHA in the June 2010 Budget, and the Committee published a report that year highlighting our concerns about the implication of the changes. Our 2014 report assessed the impact of the reforms. We concluded that there was a growing discrepancy between average rents and the amount of local housing allowance that households can claim. We found that, as a result, private sector landlords are increasingly reluctant to rent to LHA recipients. Evictions and non-renewals of tenancies are increasing, and the properties that do remain available to claimants are increasingly of poor quality and there are fewer and fewer of them.

We also looked at the impact on homelessness. We noted that, despite homeless statistics being down overall, rises are occurring in areas where demand for housing is high, and that homelessness among those not deemed to be “in priority need” had increased by 9% between 2012 and 2013. In order to qualify as priority need, households need to be vulnerable in some way. We are talking about single mothers or victims of special circumstances, such as a fire or flood, so many homeless people are excluded from the definition. It is therefore not surprising that many people who are homeless are not necessarily showing up in the figures.

We were also concerned about younger people affected by the changes to the shared accommodation rate, which is the housing benefit paid to claimants without dependants who live in private rented accommodation. Basically, it means that they cannot rent a complete flat or house of their own; they can afford to rent only a room. The benefit had previously applied to claimants under 25, but from April 2012, as part of the LHA reforms, the Government extended the SAR to any single claimant under the age of 35 without dependent children. We found that in many areas insufficient accommodation at this level of rent was available. We heard evidence of possible adverse impacts on people with mental health problems and on parents with non-resident children, who would no longer have room to accommodate their children when they came to stay.

We concluded that the extension of the shared accommodation rate to single claimants up to the age of 35 might well have reduced the availability of safe, appropriate accommodation for younger people, some of whom may be vulnerable. We recommended that the Government should assess the impact of this change to the shared accommodation rate. If there was evidence that the change was resulting in some vulnerable young people having to live in situations which were inappropriate or put them at risk, we thought that the Government should consider introducing exemptions for vulnerable people and doing more to increase the provision of appropriate accommodation.

On the face of it, the introduction of universal credit may seem unlikely to affect housing costs, but housing benefit is one of the six benefits that will form part of universal credit. The biggest change in respect of housing benefit is that it will be administered by the DWP directly as part of universal credit, rather than by local authorities, as is the case at present. Universal credit, including the housing costs element, will generally be paid direct to claimants once a month, although exceptions can be made.

For some time now most claimants in the private rented sector have received their housing benefit direct and paid rent to their landlords. However, for social housing tenants, this represents a huge change, as their housing benefit has always previously been paid to their landlords and they have not been faced with handling the significant sums that housing benefit sometimes involves, especially when it is paid once a month.

In a report that we published in 2012 we looked at how universal credit would affect vulnerable claimants. One of the key issues that we considered was the challenge that some vulnerable people would face in coping with direct monthly payments of UC which included their housing costs. To test the impact of direct payment of housing costs on social sector tenants, the Government set up direct payment demonstration projects in six local authority areas in 2012. The findings from the research showed a distinct and significant drop in rent payment rates when tenants first migrated to direct payment. As a result, rent arrears increased, as did the number of tenants falling into arrears. Although tenants adjusted to the new system over time, much of the arrears that had built up in the early stages were not repaid, so total arrears continued to rise. Overall, tenants who went on to direct payment paid 95.5% of all the rent owed, compared with 99.1% who were not on direct payment.

The Public Accounts Committee last week published a report on universal credit that concluded that these findings show that the DWP needs to reflect on how it will tackle the potential problems of paying the housing benefit element of universal credit directly to claimants. As we said about universal credit in 2012, it may work well for the majority of claimants, but it is the vulnerable minority who need special attention and extra support. This is particularly the case when it comes to housing costs because they often represent the largest proportion of a household’s benefit payments. If people fall into arrears and lose their homes, there can be all sorts of dire consequences, particularly for children.

What I have said so far applies predominantly to England and Wales. Since we published our report there has been a referendum in Scotland and the setting up of the Smith commission to look into further devolved powers. My Select Committee has not had time to look at the implications of the Smith agreement and how that might impact on the way in which housing benefit is administered and paid in Scotland. Nevertheless, our report was wide ranging. I have not touched on all the important issues that it covered, but colleagues from the Committee are in the Chamber and they may do so.

In conclusion, we continue to be disappointed that the Government have not been able to provide a response to the very important matters that we raised nearly a year ago. Many of the issues that we identified in April 2014 still exist in the system and some have been exacerbated with the passage of time. I look forward to the Minister’s update on the progress that has been made in addressing some of the concerns that I have raised.

15:33

[John Hemming (Birmingham, Yardley) (LD)]

I am pleased to follow the hon. Member for Aberdeen South (Dame Anne Begg), the Chair of the Select Committee. She raises a number of interesting points that were debated in the private Member’s Bill introduced by my hon. Friend the Member for St Ives (Andrew George), the Affordable Homes Bill, which proposed a number of changes to the social sector criteria—the bedroom tax, spare room rent or whatever one wants to call it. One of those changes would, under certain circumstances, automatically exempt people with disabilities from being required to pay for a spare room.

In law as it currently stands, under article 14 of the European convention on human rights, there is a legally enforceable right to get hold of discretionary housing payments. I have achieved that in Birmingham in a couple of cases, by using the threat of it rather than making the application to court. My constituency experience is that in the cases in which we should get DHP, in general we have got it. I agree that we should have an automatic exemption from paying for spare rooms for those people who need them because they have a disability, which is obvious, and those whose homes have been adapted. However, we have managed to get DHP in those cases, and we are getting longer DHP awards following the changes that defined the budget for two-year periods, so some progress is being made.

The other change proposed in the Affordable Homes Bill was that people who said that they wanted to move would not have to pay. Of course, that is between 10% and 20% of people. In fact, I think that the figures for Birmingham show that roughly half those who were originally having to pay for spare rooms no longer have to, although obviously people are flowing in and out of the system. I find it rather sad—perhaps the Minister will take note of this point—that although the Department gets monthly statistics from all local authorities on what is going on with awards of DHP and the like, spare room rent and so on, we do not get up-to-date figures on the situation.

One of the changes introduced in April 2013 was to enable people in the social rented sector to benefit in the same way as those who own their own homes if they want to let out a spare room to a lodger or boarder. Not only would they not have to pay for the spare room, but they could keep up to £20 a week of the additional money. Given that the applicable amount for a 25-year-old is currently around £71.70, £20 a week is quite a lot of money. I believe that only a handful of people in Birmingham have taken that up, but I think that is because people do not know that they can benefit.

I had a meeting last night with care leavers, during which we discussed housing, because it is absolutely critical for them. We discussed how tight their budgets are when they have to live on means-tested benefits, because they have to pay water, gas and electricity bills, so there are great merits in people sharing property in certain circumstances. I advise young people to consider sharing, rather than trying to live alone. They raised a concern that even though they got some priority as care leavers, they were still given only one choice of property—take it or leave it. I think that varies from local authority to local authority, but perhaps more could be done in that regard.

In my constituency advice bureau I get people who are very upset. The last person who was in tears was a constituent who was in overcrowded accommodation; they could not live comfortably in the two-bedroom flat they had. I find it sad that we are still not managing to deal with those who are under-occupying and those who are over-occupying in such a way that councils can resolve the issue. I recently had a case in which a pensioner wanted to downsize from a house but the council was being exceedingly difficult about it, saying, “When you took the house, certain adaptations were made, so we want you to reinstate them before we move you.” Obviously he is not paying the spare room rent, but he is still occupying a house that could be occupied by a family. I do not think that there is the urgency that there should be in local authorities to try to deal with overcrowding.

[Dame Anne Begg]

Actually, there is a need to ensure that people are appropriately housed and that they move, but very little of that responsibility lies with local authorities. The wrong way to go about it is just to take money from people who are over-occupying and would love to move but are not in a position to do so.

[John Hemming]

I personally think that it would be harsh to go around evicting everybody who is under-occupying, although that happens when people try to succeed to a tenancy; they are told that they cannot do so because the property is too big. I do not think that overcrowding is taken sufficiently seriously. Malcolm Wicks highlighted in his memoirs how he argued, when a Labour Housing Minister, for the need to bring in something akin to the current situation.

[Sheila Gilmore (Edinburgh East) (Lab)]

The hon. Gentleman should acknowledge that the proposals from the late Malcolm Wicks involved incentives to move, not financial penalties to be applied immediately whether or not houses are available.

[John Hemming]

I thank the hon. Lady for that intervention, but my reading of all the documents, including those memoirs, is different from hers. It was not about an incentive to move, which I do not think anyone would criticise. I think that his proposals were very similar to those that have been adopted by this Government, as seen in the written parliamentary questions.

[Mr Mark Spencer (Sherwood) (Con)]

I am grateful to the hon. Gentleman, who is being generous in giving way. Does he also recognise that it is wrong to distinguish between individuals on the basis of who their landlords are? Whether their landlord happens to be in the private sector or the public sector should make no difference to the level of support they get.

[John Hemming]

The hon. Gentleman makes a valid point. The scheme for working out how much space people need and paying them for it was introduced in the private sector many years ago. The Opposition will make the valid point that they did not make it retrospective, but the Government then say that if we want to deal with overcrowding and the like, this is one of the difficulties. Speaking personally, I would rather not do any of these things, but we do not have the finances for that. If we had chosen to take the Greek approach and said, “Can’t pay, won’t pay”, and then run out of money, we would not have had to do a lot of these things, but sadly we have to try to bring the books into balance over time.

[Sheila Gilmore]

The fundamental problem with this whole policy—I think the hon. Gentleman is taking this position as well—is whether it is about saving money or making better use of houses. The amount being saved even on the Government’s own initial estimates was not enormous, and when we factor in discretionary housing payments and all the other things that have to be taken into account, the savings diminish even further. This is not really something that will save a lot of money. [Interruption.]

[John Hemming]

From a sedentary position, the Minister says, “£1 million a day”, which is about the order of magnitude that we were talking about. A policy can have more than one objective. It can be designed to save money and also to deal with overcrowding. This year, I have not had anyone in my office complaining about social services criteria, but I often get people complaining about being overcrowded.

[Helen Goodman (Bishop Auckland) (Lab)]

Is the hon. Gentleman aware that when the bedroom tax was introduced, 19,000 people in his constituency were already on the waiting list, of whom 8,000 wanted one-bedroom flats? There was already a long queue of people before the bedroom tax was introduced,

[John Hemming]

In my constituency, I was aware of a family of four living in a one-bedroom flat who wanted to transfer out of that into better accommodation.

[Mr Spencer]

I am not familiar with Birmingham, Yardley, but I wonder whether the fact that the lists were so long is a symptom of the legacy of the previous Government’s inability to build single-bedroom accommodation for the hon. Gentleman’s constituents to move into.

[John Hemming]

The hon. Gentleman makes a valid point. Social landlords have had a relatively simplistic approach to designing property to suit the demands of the market. That creates a difficulty, in as much as one should recognise that there are real difficulties in the financial costs of living alone, including paying rent. The hon. Member for Aberdeen South said that the changes to universal credit mean that people have to keep money aside for rent in a social housing property in the same way as they have had to in a private rented property, the logic being that it makes for a seamless move into work and therefore they are not frightened about getting a job.

In my constituency, I have worked with 6 Towns credit union, which is based in West Bromwich, to extend its service to Yardley, as it has done. It allows someone to be a preferred creditor. Basically, the housing element of universal credit or housing benefit is put to one side and made available for the landlord, be that a social housing landlord or a private landlord. It is important to do that, because we need to make sure that people do not end up in a mess. The idea is that budgeting is done through the bank account rather than the housing benefits system. That creates a situation in which people do not find themselves in great difficulty with budgeting as soon as they get into a monthly paid job.

There have been proposals to cash limit housing benefit by giving it all to the local authorities. I think that the Institute for Public Policy Research proposed something along those lines. That would lead to a situation where potentially many more tenants in social housing would have to pay towards the rent for their accommodation. I would be concerned about that, because it would put them in a situation that they could do little about. I favour the current process, which supports people with the housing costs they need to pay so that they can cope on a day-to-day basis.

This is a difficult area, and the Government have done many things that I would have preferred them not to do, one of which is the change to housing benefit, which it would have been nice to do gradually. However, we have to bring the books into balance, because if we do not, the interest rates on sovereign debt will go up and the amount of interest that we would then have to pay means that the cuts or tax rises that are necessary would become a lot greater than would have otherwise been the case.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I appreciate that there is a feeling the House is not very busy and that the whole afternoon and evening stretches before us, but another debate is scheduled to take place after this one. If everyone follows the example of the hon. Member for Birmingham, Yardley (John Hemming) and speaks for approximately 10 minutes, all Members who have indicated that they wish to speak will have the opportunity to do so. I will not impose a time limit at the moment. The hon. Gentleman has set a good example, and I hope that everyone will follow it.

15:45

[Teresa Pearce (Erith and Thamesmead) (Lab)]

I am pleased to have the opportunity to participate in this debate. It was very well opened by my hon. Friend the Member for Aberdeen South (Dame Anne Begg), who is a dedicated and inspirational Chair of the Work and Pensions Committee. I want to put on the record my thanks to her for the way in which she has chaired the Committee and for all the things I have learned from her. She is the epitome of the iron fist in a velvet glove, and she manages to be both reasonable and radical at the same time.

I am speaking in this debate because I am a member of the Select Committee, and the Chair has already gone through some of the recommendations in our report. Given the importance of the report, it is disappointing that, a year on, we are still waiting for the Government response. I hope that the Minister will address that matter.

It is indisputable that we are the middle of a housing crisis. House building is down, homelessness and rough sleeping are rising, and houses are unaffordable for many people. The lack of social housing means that those with legitimate claims and in desperate need are deemed ineligible or not in priority need as local authorities try to implement housing strategies to manage demand with a only very few houses to allocate.

The private rented sector has filled the vacuum caused by the lack of affordable and social housing. As a result, the private rented sector in London has grown by 75% in the past 10 years. In my constituency, it is now common for families to live in private rented accommodation, although they previously either owned their own home or lived in social housing. Yet the ever-growing private rented sector is still failing to meet the demands of renters. It is easy to reduce discussions about housing costs to an evaluation of numbers and statistics, but the truth is that covering housing costs is crucial to securing a stable home life and a stable society. Affordable housing costs give families certainty and freedom from the fear of eviction, and help to foster communities.

Costs are spiralling out of control. The cost of renting has soared while wages have dropped. The lack of regulation in the private rented sector and the limited supply of housing in comparison with demand mean that private landlords are currently free to set their own prices. The cost of renting privately has increased consistently since 2009, and rents reportedly increased in London in 2012-13 by nearly 8%.

It is not surprising that so many people, both in and out of work, require help with paying their housing costs and have to resort to housing benefit. The number of in-work housing benefit claimants rose from 439,000 at the end of 2008 to more than 1 million in May 2014. The latest statistics also show that there were just under 4.9 million housing benefit claimants at the end of November 2014—increased from 4.2 million in November 2008—of whom 67% were in the social rented sector, but the rest were in the private rented sector.

The Committee’s report illustrated that the cost of housing benefit is rising, while the most vulnerable are failed when they rent privately. Over the past year, as a constituency MP, I have seen a spike in the number of people contacting my office who have been told that they are ineligible for social housing, but cannot secure private rented accommodation. That is due to a combination of factors, but one that has made things very difficult for people is the change in local housing allowance. Constituents tell me that when they go to the local authority, they are just given a list of private letting agents. The problem is that nearly all those on the list say that they do not take any tenants on benefits. Constituents are spending time and resources searching for suitable properties only to be told that they cannot be helped. That means that a large section of the private rented sector is unavailable to claimants, and that they are often forced to take poor, substandard property that fails to meet their needs.

[John Hemming]

We have found in the west midlands that private landlords are often willing to take people on housing benefit if they have a 6 Towns type of account that reserves the funds. There is a solution in the system as it stands. Perhaps that needs to be investigated. Obviously, 6 Towns does not operate across the country, but perhaps there are solutions that can be found within the current policy.

[Teresa Pearce]

It is true that solutions can be found. Sadly, no one seems to have found them yet in my part of south-east London.

The Work and Pensions Committee looked at the problems that are faced by people on housing benefit. They are discriminated against when looking for private rented accommodation. For families, that makes trying to find a roof over their heads an uphill struggle. Given that tenancies typically last for six to 12 months, private renters often have to move just as they have settled in. Children who live in such places have their life chances restricted and their education disrupted, and are often not registered with a doctor. That cannot be acceptable.

Private landlords may be reluctant to rent accommodation or provide temporary accommodation to claimants for a number of reasons. It might not just be general discrimination, but might be due to constraints that are imposed by mortgage lenders, who say that they are not allowed to provide longer tenancies, or due to fears that local authorities will fail to allocate housing benefit in a timely manner. Giving private renters the option of allowing the housing benefit component of their universal credit payment to go directly to their landlord might allay those fears and enable private renters to control their finances more easily. The Government must work with private sector landlords to address their concerns about universal credit and offer greater support to those who rent property to housing benefit claimants. That work must start now.

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

I grateful to my colleague on the Work and Pensions Committee for giving way. I met my key local social housing provider on Friday. It said that there was a 15% gap in rent collection between those on universal credit and those not on universal credit. That is manageable over a year or so, but over the longer term it will create huge problems. I wonder whether my hon. Friend wants to comment on that point.

[Teresa Pearce]

That is a valid point. It is something that we all encounter locally when we talk to housing providers. It needs to be addressed, so I thank my hon. Friend for her intervention.

Another problem for private renters is that the change to local housing allowance is further restricting their access to the widest selection of available properties. Local housing allowance rates match only the 30th per- centile of homes within a broad rental market area. The Government reduced that from the 50th percentile. I believe that that needs to be re-evaluated urgently, especially in London. Rents have risen, but the local housing allowance was frozen in 2012-13 and uprated by 1% in 2014. There has been a reduction in the number of homes that can be rented out at that rate.

An analysis by Crisis shows that across Britain, one in 10 local housing allowance rates for 2015-16 is 5% or more lower than the estimated 30th percentile of local rents. Those include 77 rates that have already benefited from an additional increase due to the targeted affordability fund. As was outlined in the Select Committee’s report, analysis by the Institute for Fiscal Studies shows that rent levels did not decline as a result of the cap. In fact, the most recent rental figures show a 1.8% rise across the stock in England and a rise of 2.4% in London. That is well above the recent 1% cap and means that additional properties will fall out of the reach of those on benefit.

Private renters should not have to choose between having a roof over their heads and eating, but increasingly that is becoming a daily choice for many people in my constituency. The Government should consider increasing LHA rates by more than 1% annually in more pressured areas. Although the Committee welcomed the introduction of the targeted affordability fund as a means of increasing LHA levels in areas of higher rents, some areas may see rents rising by more than the maximum of 4% a year. The Government should amend the targeted affordability fund so that it can be paid at higher levels in areas where rent increases are greater than 4%. It should also use available rents rather than stock rents as a measure for the rental increase.

Rents are currently unaffordable across the private sector. In 2012, the Money Advice Trust stated that rent arrears were the fastest growing debt problem it had encountered and that the number of calls it received on the issue had risen by 37% on the previous year. At the end of 2014, the National Landlords Association reported that almost a third of private landlords had seen arrears that year. There were a record number of evictions of renters across the social and private sector in 2014 as a result of a combination of factors, including the bedroom tax, benefit sanctions, increased numbers renting with the reduced LHA rate, and rising private sector rents.

Recent figures from Crisis have also shown that the No. 1 leading cause of homelessness now is eviction from a private tenancy. The figures highlight not just the lack of affordability for renters when having to manage competing living costs, but how unsustainable rising rents will be for the private rented sector without Government intervention.

The Government must continue to monitor homelessness levels and take action to mitigate the impact on households and local authorities. The Department for Communities and Local Government reported that rough sleeping increased by 14% in autumn 2014. I am regularly contacted by constituents who tell me that they cannot be housed by their local council because they are not in priority need and that they have no option but to live in overcrowded accommodation with family members or to couch-surf, which is code for sleeping on the floor of a friend’s house. If they can be housed, they have been told that their only option is temporary accommodation. In my local area of Bexley, people are often temporarily accommodated in Manchester and Bolton, which means having to uproot their children from school and leave their support networks behind.

It always worries me greatly that, while a number of landlords are reputable, a number of others are not. There are private landlords in my constituency who line their pockets while renters struggle to pay their rent. I wrote to Her Majesty’s Revenue and Customs and the Treasury in November to ask about the Let Property campaign, which was launched in September 2013 to target the residential property letting market. Specifically, I wanted to know whether it had been successful in closing the tax gap on let properties, but the responses I received were not encouraging. They said it was too early to tell, but one of the figures they did give me was an estimate that the tax gap on letting income was just over £500 million. It is absolutely disgraceful that public money is going to landlords who do not then pay their way or their tax. We need to address that urgently.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Before the hon. Lady addresses any further points. She may have been able to count, but she has now spoken for 12 minutes. I trusted her to speak for 10 minutes, so I trust that she is going to wind up very soon.

[Teresa Pearce]

I will finish by saying that I think this is a most urgent issue. I do not usually quote from Conservative manifestos, but the 1951 Conservative manifesto said:

“Housing is the first of the social services. It is also one of the keys to increased productivity. Work, family life, health and education are all undermined by overcrowded homes.”

That was true then, and it is true now.

15:58

[Chris Heaton-Harris (Daventry) (Con)]

It is a pleasure to take part in this debate. I am sorry that I missed the first couple of minutes of the speech by the hon. Member for Aberdeen South (Dame Anne Begg), because she speaks very sensibly on this issue and many Government Members listen to what she has to say about it. I will pick up on a couple of points she made.

The hon. Lady has spoken in the past about the amount that we spend on housing benefit. It was a matter of concern to us all that the housing benefit budget seemed to be getting out of control in the run-up to the last general election. In fact, the housing benefit bill was forecast to rise over the current Parliament from £21 billion to more than £26 billion. This Government’s reforms have only pegged back that increase by about £2 billion a year, which, given the potential growth in the budget, is not very much at all.

The hon. Lady spoke about how the spare room subsidy has been working in practice. Like the hon. Member for Birmingham, Yardley (John Hemming), my constituency surgeries were visited by many people when the policy was first mooted, perhaps because they were scared by stories that were being circulated at the time about how it would affect them. There was a general lack of knowledge about discretionary housing payments and who can receive them for. I am pleased that we were able to help every person who came through the door of my constituency surgery advice centre seeking help in that area, and all received discretionary housing payments.

Interestingly, Daventry and District Housing, which serves a huge area of my constituency, saw the policy change coming down the line. It is a good housing association in many ways because it talks to its tenants on a regular basis and gets to know them, and it therefore made sure that they were ready for the change. Most tenants in Daventry and District Housing accommodation knew that the change was coming, and knew that discretionary housing payments were available and how to access them.

I sit on the Public Accounts Committee, which discusses these matters—I will mention the report that the hon. Member for Aberdeen South spoke about in moment—and it is fairly obvious that different parts of the country, different housing associations, and different councils have acted in completely different ways over this change. They have probably acted in their best local interests, which is fine, but it has led to different outcomes in various parts of the country that all have remarkably significant and different pressures on them.

In one of my first years on the Committee, its Chair, the right hon. Member for Barking (Margaret Hodge), took us to see a primary school and surrounding housing estate in her constituency. We had been talking about health and housing inequalities, and the trip was to see how primary education was working. I acknowledge that the pressures on housing in Erith and Thamesmead, or in Barking and Dagenham, are completely different from those in my constituency, and that is why local experts and housing associations in that area know their tenants well.

The interesting background to this debate concerns an area of spending that was constantly growing and needed to be brought under control—however we paint the picture, the Government’s moneybags were not particularly full when they came to office in May 2010, and although they are a bit better now, there are still tough decisions to be made. Such decisions must be based on fairness—I know that some Opposition Members do not consider this measure to be fair at all—and we must consider how we change a policy that is already enacted for those in the private rental housing sector but not for those in the public rental sector.

At this point I should say that I rent out a house. My private property in Lincoln is noted in the Register of Members’ Financial Interests and I rent it to a private sector tenant who to my knowledge is not on any type of benefit. There is a proper debate to be had about this issue, which was started in no uncertain terms by the previous Government.

This Government brought forward their proposals with the safety net of discretionary housing payments. I do not want to disagree with the hon. Member for Erith and Thamesmead (Teresa Pearce) because she will know her local area much better than I will, but perhaps I misheard her. She was talking about warrants for evictions, and perhaps she meant from the private rental sector.

[Teresa Pearce]

indicated assent.

[Chris Heaton-Harris]

She did. I know from Ministry of Justice figures that warrants for evictions for public sector rental tenants were down over the period in question by 6%. An issue in the private rental sector might well need to be addressed, and that is probably in the south-east of the country rather than elsewhere, given the housing pressures that London might have.

My concern was the treatment of carers and those who are disabled. As the hon. Member for Birmingham, Yardley said, it would have been wonderful to exempt everybody from the change, but it was impossible to do so, and therefore discretionary housing payments were introduced. In my experience in my constituency, DHP has been granted for disability and caring in every single case it has been asked for. I pay tribute to Daventry and District Housing, the citizens advice bureau and the local council for the way in which they have dealt with those cases. The patch—I admit that it is a patch, and that I would much rather have seen it done in a much more solid way—seems to work. The extension of the term of DHP seems to have given people a better sense that they will be able to live in their property for a long period.

I conclude with comments on the Public Accounts Committee report on universal credit, which was published only a couple of weeks ago, and which the hon. Member for Aberdeen South mentioned. As she outlined, an interesting part of universal credit and one of the benefits that it will eventually wrap in—for many new claimants, that has started—is housing benefit. Housing associations up and down the country have had concerns about how that might affect them and how they will get their rents from tenants. However, the report shows how a change in the Department for Work and Pensions has been introduced—it has been seen as controversial by many, although a universal credit that aims to get as many people as possible into work and to make work pay better than benefits ever will is in fact policy on both sides of the House—how the programme has improved things and how it is now beginning to deliver what it was meant to deliver, and on scale across the country.

The report was groundbreaking in many ways. The Public Accounts Committee is very critical of all Departments that come before us where money is spent. We raised some issues, as detailed by the hon. Member for Aberdeen South, but if Members read the report they will see for themselves that we are much more comfortable with how the universal credit programme is going—that it is now delivering on scale and will deliver the savings expected. No matter on which side of the House hon. Members sit, they will welcome it in future, because it does exactly what it says on the tin.

The interesting paragraph is paragraph 6. The hon. Lady mentioned the potential problems of paying housing benefit elements of universal credit directly to claimants—the question was whether housing associations and others could maintain their incomes. I know from initial reports that her statistics are correct, but I would like to hear from the Minister, because I am pretty sure that new stats prove that there is not as much of a problem as she says.

[John Hemming]

rose—

[Chris Heaton-Harris]

I had better sit down and shut up, otherwise I will get the stare from Madam Deputy Speaker, which I never want to receive.

Things are improving. We would expect that because when something changes, there is always upset at the beginning. Things are on the right track, but I would like to hear about it from the Minister.

16:08

[Sheila Gilmore (Edinburgh East) (Lab)]

Hon. Members agree that there are serious problems when payments of housing benefit rise so high. We disagree on our analysis of how it came about and what we should do about it. Unless we tackle the underlying issues, we will simply trim the edges, to the detriment of many households and families. As the Office for Budget Responsibility says in its review of spending on benefits and pensions, the main drivers for the increase in housing benefit are increases in rents and the number of people on low wages who have to claim housing benefit to make ends meet. The OBR was concerned that those two things would continue to be drivers in the coming decade unless action was taken. There is very little—I would say virtually nothing—in the steps that the Government have taken since 2010 to tackle those problems. Indeed, they may have made them worse.

We were told by Ministers during the passage of the Welfare Reform Bill that the private rented sector had become so intrinsically dependent on the housing benefit market that rents would fall as a result of the changes. Rents have not fallen. In many places, they have risen considerably above inflation. That is certainly true in my city, in the city represented by the Chair of the Select Committee and in London. The DWP accepts that this is the case. For the private rented sector, it has introduced additional payments in some areas to top up the local housing allowance—after it previously made reductions—because it accepts there is a growing gap between the actual rents available to people who want to rent and need housing benefit, and the payments they would otherwise receive. The promises that rent would fall as a result of the policy have not come about. I hope that in looking to see what savings are supposed to have been made, those additional payments will be factored in.

We are repeatedly told that this policy is about saving money. I think the Minister from a sedentary position said, “Oh, it’s about £1 million a day,” but that was based on the Government’s original statement that the policy would save about £500 million a year. Other experts said, at a very early date, that it would be lucky to be somewhere nearer £350 million, and that does not take into account the very high cost of discretionary housing payments, which are a cost to Government and so detract from any savings made. It is therefore not correct for the Government to say what they say.

For individuals, households and families, the impact is extremely serious. This is not the same, as is often said, as what happened previously in the private rented sector, dating back to about 1998 when size was taken into account. This is an impost on people now, whether they can move or not and whether there is anywhere for them to move to or not. One of the amendments tabled during the course of the Welfare Reform Bill by the Opposition—it was followed up through the House of Lords and incorporated into a private Member’s Bill that was not allowed to progress in this House recently—proposed that if people were offered a suitable alternative house and did not take it, then the cut in their benefit could apply. For many people, however, that just is not practical. I have just checked yet again, as I do constantly, the number of houses available for social rent in my city. This week, there were 54 in the whole city. Of those, 31 were one-bedroom, but eight were sheltered. The people affected by the bedroom tax are by definition under pension and retirement age, and so would not qualify for those eight.

[Debbie Abrahams]

That is not just the case in my hon. Friend’s city. In Oldham in my constituency, 2,048 people are affected by the bedroom tax and there are only 50 properties for them to move into.

[Sheila Gilmore]

I thank my hon. Friend for her intervention.

In Scotland, the priority given to people who are homeless—a much wider definition of homelessness has been adopted by the Scottish Government—means that there is real competition for smaller houses. The majority of people who present as homeless are single people, so they too need the small houses that other people are trying to fit into.

[John Hemming]

I refer the hon. Lady to the answer that the then housing Minister, the late Malcolm Wicks, gave to a question from the hon. Member for The Cotswolds (Geoffrey Clifton-Brown):

“We hope to implement a flat rate housing benefit system in the social sector, similar to that anticipated in the private rented sector to enable people in that sector to benefit from the choice and flexibility that the reforms can provide.”—[Official Report, 19 January 2004; Vol. 416, c. 1075W.]

If he said that then, why is it now such a bad idea?

[Sheila Gilmore]

It is interesting that the flat-rate housing allowance for the private rented sector should be raised. What the hon. Gentleman mentions was discussed as a possibility during the Labour Government. I was very much involved in housing, as the convenor of a housing committee in my council, and I remember that being discussed, but it was not implemented and there was a lot of opposition to the idea of doing that for the social rented sector, for all sorts of reasons. However, what the bedroom tax does is immediately say to people, whether they can move or not and whatever their circumstances are: “You may have to pay this extra money.”

To argue that discretionary housing payments are sufficient is not good enough. Even in Scotland, where the Scottish Government eventually agreed that extra money for the discretionary housing pot should kick in, there are still people who either do not know about making a claim or make a claim and do not get it, and who have to keep making claims. What the Select Committee said—I do not think this was unreasonable; we are a cross-party Committee—was that if we take the view that disabled people who have substantially adapted houses will receive long-term discretionary housing payments, which is what is always said, it would be simpler to exempt them. It would be administratively simpler, because there must be administrative costs in taking forms from people, processing them and working out whether they are still eligible. I do not think that was an unreasonable proposition. As the Government have taken so long to read our report—presumably considering it and working out whether it is workable—I hope that the Minister will stand up today and tell us that they have accepted that reasonable proposition. If he did that, we would all be extremely glad.

I want briefly to say something about the housing benefit cap. If a lot of people—this was the evidence to our Committee—are in temporary accommodation, it is utterly unreasonable to stop their benefit suddenly because they find themselves in that position. The Government are fond of saying that, as a result of the cap, people have moved out of temporary accommodation, but I suggest that it is likely that they are moving from temporary accommodation to permanent accommodation. There is a movement of people in and out of the scope of the household benefit cap, but the amount that some people are losing is very significant indeed. Again, I fear that the legislation was more symbolic than something that seriously addressed the underlying issues. If we have a lot of people receiving high amounts of benefits overall—because, for example, they are living in very expensive temporary accommodation—we need to build more affordable houses.

This is an issue north and south of the border. The Scottish Government have not been building sufficient low-cost affordable homes. The number completed in my city last year was the same as it was in 2007, which was the year that the current Scottish Administration took office. They have not been building low-rent affordable homes at an increased rate, even though they may sometimes try to say that they are. Without those homes, people will be paying excessive rents in the private rented sector, and not just in temporary accommodation. That is the issue we need to tackle.

16:18

[Helen Goodman (Bishop Auckland) (Lab)]

I begin by congratulating the Select Committee, in particular the Chair, on an excellent and extremely useful report. It is a thoughtful and well-informed cross-party report, so I hope that the Minister will be able to explain why, after a whole year, the Government have not been able to respond to it.

As the report points out, the Government set themselves three targets for their welfare reform programme and changes to housing benefit: reducing benefit expenditure, improving incentives to work and making the situation fairer. It is quite clear that the first test has been failed. The Office for Budget Responsibility shows that expenditure on housing benefit in 2009-10 was £20 billion. In 2013-14, the last year for which we have full statistics, it was £24 billion; and the OBR is predicting that by 2018-19, the spend will be £27 billion.

I was particularly struck by the table at the beginning of chapter 2 on the local housing allowance, which sets out the maximum amounts payable. For a one-bedroom flat or shared accommodation, the maximum amount payable is £250 a week. Everybody here will know, however, that a £1,000 monthly payment sustains a mortgage of £200,000. In my constituency, that would buy a four-bedroom house. The average cost of a new social housing unit is £120,000. How much better it would be if we could shift the finance from benefits to bricks and spend the money on building new homes.

The problem with this Government’s policy is that it has made life more difficult for many people, while the benefits bill has continued to rise. As my hon. Friend the Member for Edinburgh East (Sheila Gilmore) said, that has happened because the Government have not addressed the underlying issues. The OBR shows that while housing benefit to unemployed people has fallen and is projected to continue to fall, housing benefit to those in work will rise steadily between 2012 and 2019. This is yet another indication of the cost of living crisis that people face, and it demonstrates that the new poverty is in-work poverty.

The Select Committee quotes Lord Freud as saying that the case load in the private rented sector is up

“by around 8% nationally and by around 5% in London”.

That is because rents are going up, even though the quality of housing is going down. I hope the Minister will be able to clarify the position on rents, since the Select Committee reported before the Office for National Statistics admitted that mistakes were made in the assessment of rents in London. In other words, more people are in the private rented sector today, and more of them are on housing benefit.

[John Hemming]

I am aware of the proposal to transfer housing benefit money to local authorities with a view to building more properties. Let me ask this: what pays the rent of the people who are already in tenanted accommodation while the new properties are being built with that money?

[Helen Goodman]

That, of course, is the great conundrum. I hope to come on to demonstrate to the hon. Gentleman how the Government have intensified the housing crisis rather than eased it by bringing about the happy day when we have enough homes. What is happening is that people are renting because they cannot afford to buy, and they cannot afford to buy because house prices are rising faster than they can save. Today, the average house price is eight times the average income.

Under this Government, we have had record lows for house building, which is now down at 1920s levels, as well as record lows for home ownership. No action has been taken to protect people from rip-off rent rises. That is why the Labour Opposition propose to address these problems, give security to renters and build five times as many homes as the Prime Minister promised yesterday. It is equally clear that something needs to be done about raising low incomes. I shall not detain the House with our proposals to strengthen the minimum wage, but it is absolutely clear that that is part of the equation.

The Select Committee made a number of sharp criticisms of the bedroom tax, which was described as “a blunt instrument”. It said that its effect was particularly harsh in rural areas, which is true. If people in rural areas have to move, they have to move a long way out of the community in which their children might be going to school. The Select Committee pointed out that the impact is worst in the north-east, the north-west, Yorkshire and Humberside. It said that people in social housing often have no real choice when it comes to which accommodation they rent. It also said that the Department for Work and Pensions has adopted a much tighter definition of space than the one used by the Department for Communities and Local Government. It would be helpful if the Minister explained that as well.

However, what worries the Committee most is the impact on people with disabilities. We know that two thirds of those affected are disabled themselves or have a disabled family member. The Committee says that people are being pushed out of their homes when public money has already been spent on adapting them, and its Chair, my hon. Friend the Member for Aberdeen South (Dame Anne Begg), made that point today.

The criticism is justified. In answer to a parliamentary question, the Department for Communities and Local Government informed me that in 2013-14, local authorities had adapted 42,000 properties and provided an average grant of £4,227. The Department also said that the Government would spend £1 billion on adapting properties between 2011-12 and 2015-16. That is commendable, but the Government’s investment in disabled people’s living space is being undermined by the bedroom tax, because they are now being pushed out of those homes. The policy is hitting an estimated 100,000 people whose homes in the social sector have been adapted. That is disrupting lives and driving hardship, and it is a prime example of welfare waste. The Committee recommends the abolition of the bedroom tax in cases in which people have adapted their homes or are receiving the higher level of disability living allowance or personal independence payments, and the Opposition wholly support that recommendation.

The Committee also refers to the impact of the bedroom tax on carers, 60,000 of whom who have been very badly hit. It recommends that those who cannot share a room with a disabled partner, or who live in adapted homes, should be exempted from the tax. It also points out that carers are particularly badly affected by the benefit cap. I cannot help thinking that that is extremely unfair, because carers are doing the socially responsible thing. The Committee estimates that the free care that they offer is saving taxpayers £18,000 a year per person. The bedroom tax comprehensively fails the fairness test that the Government set themselves, and hits those who, through no fault of their own and through force of circumstance, cannot go out to work, so it is not meeting the “incentives to work” criterion either. That is why the Opposition are pledged to abolish it.

In most areas, people have not been able to move to smaller accommodation because of a shortage of smaller units and because of pre-existing waiting lists. The Government knew that when they introduced the bedroom tax, which is why they were able to forecast savings. That shows what a deeply cynical measure this has been.

The Committee also points out that the diversion of resources to dealing with the bedroom tax has involved a great deal of time, energy and expenditure on the part of the housing associations. It says that, according to the National Housing Federation, the costs associated with communicating with tenants, supporting them and tackling rent arrears will be equivalent to the amount that could be spent on building 17,500 new properties every year. That is why I say to the hon. Member for Birmingham, Yardley (John Hemming) that this is a perverse policy. It is a perverse diversion of resources from tackling the housing crisis to punishing the most vulnerable members of society. It is in fact another example of Tory welfare waste. This is before we even get on to the fact that if this Government are re-elected the average bill for a family, in terms of the bedroom tax, will be £3,800 over the lifetime of the Parliament, and we know from the Government’s own statistics that a further 1 million people will be caught in the net of the bedroom tax and 6.5 million people are at risk of having to pay it. The fact is that the Select Committee—an all-party Committee—recommended significant changes to the bedroom tax. The Government have failed to respond. People are looking forward to the general election when they can have a Labour Government who will abolish the bedroom tax.

16:30

[The Minister for Disabled People (Mr Mark Harper)]

I will try to respond to the points raised in the debate but I will also endeavour to observe your strictures, Madam Deputy Speaker, to keep my remarks relatively brief so that the House also has time for the second important debate today. I will do my best to balance the two competing tensions.

First, I will respond to the point made by the Committee Chairman, the hon. Member for Aberdeen South (Dame Anne Begg), about the lack of a response. The Government have the greatest respect for the parliamentary process and engage with the Select Committee. She will know that, with the exception of this report, no response by my Department has taken longer than six months, but I fear that there is a very simple and straightforward answer as to the reason for the delay and I am afraid it will not mean an early response. The Committee report spends quite a bit of time talking about the removal of the spare room subsidy—as we have done today—and the Government response responds to the various points made. As the hon. Lady will know, we have a coalition Government—something I hope will not be necessary after the election—and that, despite our coalition partners having agreed on this policy all the way through the Parliament, they now towards the end of it do not agree. Unfortunately therefore, despite the fact that the response is broadly ready to go, we have not been able to secure agreement across the Government. I am afraid harmony has not broken out and, until it does, the Government will not be able to respond to the Committee. I am probably just as disappointed about that as the hon. Member for Erith and Thamesmead (Teresa Pearce).

[Dame Anne Begg]

While I can appreciate there may be problems on the bedroom tax, would it be possible for the Government to publish a partial response to our proposals, addressing all the other points on which there presumably is agreement across Government? Our Committee had a lot of very interesting things to say on a whole range of other issues.

[Mr Harper]

That is an interesting point. Let me take it away and see whether it is possible to do that in the time remaining. I have explained the reason for the lack of response to the Committee and, as I have said, it is the only report from the Select Committee that the Department has not responded to within six months. I am sorry about that, but the blame does not lie with the Conservatives in the Government; it lies elsewhere. [Laughter.] I am just being honest here at the Dispatch Box.

[John Hemming]

I think the Minister accepts that the Liberal Democrats believe there should be automatic exemptions for some of the people currently receiving discretionary housing payment, and does he not accept that if we automatically exempt people who are currently getting DHP the net effect on the public purse is zero?

[Mr Harper]

No, I do not, and I just remind the hon. Gentleman that the Liberal Democrats agreed to this policy and it remains the Government policy. I am sorry they have not stuck to it because I think it is a very sound policy. Let me set out why.

I was not going to spend a lot of time on this because the Committee did not, but I am afraid that the hon. Member for Bishop Auckland (Helen Goodman) made a lot of rather ridiculous assertions about welfare spending and I must take her to task on them. Being accused by the Labour party of wasting money on welfare is extraordinarily rich. The last Government increased spending on the welfare budget by 60%, costing every household an extra £3,000. The increase in welfare spending over this Parliament is going to be the lowest since the creation of the welfare state, and we will have made cumulative welfare reform savings of nearly £50,000 million over this Parliament, benefiting people across the country. In-work spending is stable and forecast to fall next year, even with employment at a record high. The out-of-work benefit bill is back to pre-recession levels, at 2.2% of GDP, and real spending on housing benefit fell between 2012-13 and 2013-14, for the first time in a decade. The overall case load has fallen, and housing benefit reforms have saved more than £6 billion during this Parliament, compared with what would have happened if we had continued with the policies of the Labour party. So I am afraid that the hon. Lady needs to go back and look at the record. If she does so, she will see which party has wasted money on welfare—and it is not the party of which I am a member. She needs to look in the mirror before she makes those kinds of silly accusations.

[Helen Goodman]

I should like to draw the Minister’s attention to the numbers provided by the Office for Budget Responsibility, which show total welfare spending in 2012-13 of £213 billion, and in 2015-16 of £219 billion. All the numbers that I quoted to the Minister were OBR numbers.

[Mr Harper]

I am not resiling from the numbers. Welfare spending has gone up over this Parliament, but it has done so at the lowest rate since the creation of the welfare state. The reforms that we have made to various welfare policies will have saved £50 billion over this Parliament compared with what would have happened if we had not made those reforms, and I think that that is sensible.

We have dealt with some of the issues that we inherited from the Labour party, and our changes are largely supported by the public. One such change is the benefit cap, and public support for that is very clear. The Opposition are not so enthusiastic about it, but 73% of the public support it and 77% of them agree that it is fair that no out-of-work household should get more than the average working household. In terms of fairness, that seems a pretty unremarkable policy, and it is one that we support even if the Labour party is unenthusiastic about it.

Our reforms to housing benefit, including the removal of the spare room subsidy, are dealing with some of the issues relating to using the housing stock more efficiently and dealing with overcrowding. My hon. Friend the Member for Birmingham, Yardley (John Hemming) drew our attention to overcrowding, and to the fact that not all local authorities are good at dealing with situations in which smaller families want to move to a smaller property while other properties are overcrowded. He made a sensible point.

[John Hemming]

I tried to intervene on the hon. Member for Bishop Auckland (Helen Goodman) to ask her whether Labour would reduce under-occupation by adopting a policy that involved evicting people living in under-occupied accommodation. Does the Minister accept that if we do not remove the spare room subsidy, the only alternative open to Labour if it wanted to reduce under-occupation would be to go round evicting people from under-occupied properties, which does happen in certain tenancies?

[Mr Harper]

The Opposition clearly do not have a sensible policy. I will comment on this briefly, because I want to move on to address some of the points made by the Chairman of the Committee and others. Labour’s policy to remove the removal of the spare room subsidy would cost about £0.5 billion a year. The Opposition have set out three ways in which they would pay for that, and when we had an Opposition day debate in December, I went through them in some detail to demonstrate that they simply would not work. They say that their proposal to ensure that the building trade paid its fair share of tax would raise £380 million, but we have already dealt with those changes in the 2013 autumn statement, so that policy would raise no money. Their proposed change to the stamp duty reserve tax, which they characterise as a tax cut for hedge funds, would actually fall on pension funds and retail investors—in other words, on people who are saving for their retirement. Their third proposal is to end the employee shareholder scheme, but that would save no money in 2015-16.

The shadow Secretary of State, the hon. Member for Leeds West (Rachel Reeves), has said that the first thing she will do when she walks into the Department for Work and Pensions as Secretary of State will be to change our policy on the removal of the spare room subsidy. If she did so, however, she would have to find £0.5 billion to pay for it and at the moment she has not set out how she is going to do that. The first thing her officials are going to say to her is, “Secretary of State, where are you going to find half a billion pounds?” Labour is unable to answer that question at the moment.

Hon. Members also referred to universal credit, with my hon. Friend the Member for Daventry (Chris Heaton-Harris), an experienced member of the Public Accounts Committee, being very supportive of that. He asked me a specific question, picking up on a point made by the Select Committee Chair; this was about rent arrears, with reference being made to a specific set of pilots. My understanding is that the difference was that for direct payments, where the money was being paid to the landlord directly, 99.1% of rent owed was paid, but the figure fell to 95.5% where people were managing the payments themselves. Over time, however, the impact of direct payments lessened significantly; half the arrears occurred in the first month, and by the 18th payment the figure for tenants who were being given the money and making those rent payments had risen to 99%, which is more or less the same as for direct payments to landlords.

That is important, because a key point of universal credit is about putting households on out-of-work universal credit in the same position as they will be in when they are in work: taking responsibility for paying the rent themselves. I listened carefully to what the hon. Lady said, because she made the comparison with the position in the private sector, where that is already the case, and then referred to the fact that in the social rented sector it was a change. It is a change, but the vast majority of the people who rent properties in the social rented sector are perfectly capable of managing their money, being given responsibility for it and paying their rent, just like everybody else. Some people will need some budgeting support and some support to move from the position they are in now to taking that responsibility, and that support is going to be delivered through our universal credit support delivered locally. A small minority of claimants may be unable to do that, and we have put in place alternative payment arrangements for them. That approach has been developed as we have rolled out universal credit carefully without our “test and learn” approach. She will know that we have also put regulations in place to enable us to share with social housing landlords the fact that someone is in receipt of, or has made a claim for, universal credit, so that they are able to put in place the appropriate support for vulnerable tenants.

A number of Members also referred, in the context of the removal of the spare room subsidy, to the amount of discretionary housing payment. That is one area where we are able to deal with some of the specific issues, for example, on significantly adapted accommodation. A specific amount of the discretionary housing payment, about £25 million, is for local authorities to enable people to stay in adapted accommodation. Of course, where properties have been specifically adapted for tenants with mobility needs, it does not make sense to insist that they move. That is exactly why we have made the money available to enable councils to deal with that, and I trust local authorities to make those sensible decisions. They have the facts at their disposal, will know the circumstances of people locally, will know the facts about the disabled adaptation grant that has been paid and are in the best position to make those decisions locally. I believe in localism and in trusting local authorities to make the decisions. Sometimes they might make decisions that people will characterise as wrong, but I am prepared to trust them to make sensible decisions.

On the availability of properties, it is also worth saying that in the social rented sector there are 1.4 million one-bedroom properties, with more than 130,000 new lets a year. So there is a significant amount of turnover; about 10% of the one-bedroom properties turn over each year. So if social landlords are properly managing and prioritising their housing stock, that should enable them, over a period, to enable people to move into smaller properties. Some 60% of social sector tenants are either single people or childless couples and require only one bedroom. Landlords are starting to respond to that, and we are seeing local authorities and housing associations now properly designing their housing stock to meet the demographic need of their potential tenants.

[Helen Goodman]

On a point of clarification, were those overall numbers that the Minister was quoting to the House inclusive of old age pensioners or not?

[Mr Harper]

Those were 1.4 million one-bedroom properties across the social rented sector, with 130,000 new lets. I think that that is the total number of properties that are available.

[Mr Spencer]

I know that the Minister is very busy in his Department and in the Forest of Dean, but I was wondering whether he would join me on Friday when I will be cutting the ribbon on some new properties built by Newark and Sherwood Homes in the village of Bilsthorpe. If he were able to come, I would be more than happy to let him take the scissors off me. If not, perhaps he could praise Newark and Sherwood Homes for the work it is doing in developing new homes in Sherwood and Newark.

[Mr Harper]

I will have to stick to praising Newark and Sherwood Homes, and to allow my hon. Friend to retain control of the scissors, which he is more than capable of doing, so that he can open that new development on Friday. I am afraid that, at this point in the parliamentary cycle, one’s diary is quite full.

If we look at the affordable homes programme, 77% of approved homes are one and two-bedroom properties, which is up from 68% in the last round. New house building is now following that approach.

Finally, let me turn to the point about local housing allowance raised by the hon. Member for Erith and Thamesmead and others. The allowance was intended to exert a downward pressure on rents. That means not necessarily that rents will go down but that the pressure on rents will be less than it otherwise would have been. In other words, it might mean that rents do not rise as much as they would otherwise have done. The hon. Lady specifically asked about parts of the country where the pressure is higher. As she said, there is something called targeted affordability funding, which means that where rents are significantly diverging from benefit rates, we have increased LHA rates by up to 4%, which is, I think, the right approach.

I will conclude now as I am conscious of the time. I have set out for the Chair of the Committee the reasons why we have not responded to the report, and I have addressed a number of concerns, which was a challenge given the amount of time that I had. Our policies are working. They have driven the lowest rise in the welfare bill since the creation of the welfare state, and they are also helping to get people back into work, which is why we are seeing a record number of men and women across the country in work, and that demonstrates the success of our long-term economic plan.

Question deferred (Standing Order No. 54).

Department of Health

Child and Adolescent Mental Health Services

Tuesday 3rd March 2015 Commons Chamber

[Relevant Documents: Third Report from the Health Committee, Children’s and adolescents’ mental health services and CAMHS, HC 342, and the Government response, HC 1036]

Motion made, and Question proposed,

That, for the year ending with 31 March 2015, for expenditure by the Department of Health—

(1) further resources, not exceeding £866,629,000 be authorised for use for current purposes as set out in HC 1019,

(2) the resources authorised for use for capital purposes be reduced by £635,000,000 as so set out, and

(3) the sum authorised for issue out of the Consolidated Fund be reduced by £679,772,000 as so set out.—(Mark Lancaster.)

16:47

[Dr Sarah Wollaston (Totnes) (Con)]

It is a pleasure to open this debate on our report into child and adolescent mental health services. For the record, I am married to a full-time NHS adult forensic psychiatrist who is also the chair of the Westminster Parliamentary Liaison Committee for the Royal College of Psychiatrists. I thank the many organisations and individuals who have contributed to our report, my fellow Committee members and the Clerk of our Committee, David Lloyd for his exemplary leadership and work over the course this Parliament.

May I start by setting the scene? This report was launched in part because of the number of children and young people who were being admitted to hospitals many hundreds of miles from home when they were in mental health crisis and needing the highest level of support.

During the course of our inquiry, we identified serious and deeply ingrained problems with the commissioning and provision of child and adolescent mental health services, and we found that they ran throughout the whole system from prevention and early intervention services to in-patient services for the most vulnerable children and young people.

We welcomed the setting up by the Government of the Children and Young People’s Mental Health and Wellbeing Taskforce, and many of our recommendations were directed at that taskforce. I am sorry that it has not yet reported, but I understand that it is to report very shortly, and we look forward to seeing its recommendations. The taskforce knows that it is a matter not just of tweaking the CAMHS system but of fundamental change. I hope that it will clearly set out how that will be implemented. We have legislated for parity of esteem, we have written it into the NHS Mandate, but all that counts for nothing if it does not translate into better services for children and young people.

The key recommendation in our report is about the importance of prevention and early intervention. However, services cannot be planned without knowing the extent of the problem. It is a matter of great regret that the five-yearly prevalence survey was cancelled under the previous Government. That means that our data are 10 years out of date. I very much welcome the reinstatement of that survey. In his response, will the Minister give further details of the extent? I know that he has already announced that the funding has been identified, but many professionals are waiting to hear further detail about exactly what will be included. That would be very welcome.

While we wait for the prevalence data to appear—it would be nice to hear the expected time frame in which we will hear the results—we all acknowledge that there has been an alarming rise in the level of distress and need reported by all those who work in the field, including those in the voluntary sector, in teaching and in CAMHS. There are unprecedented levels of demand at a time when, unfortunately, 60% of local authorities that responded to a survey from YoungMinds report cuts or a freeze in their CAMHS budget. That is where the front line of prevention should be.

The compelling evidence that we heard throughout our report was that early intervention prevents children from presenting when they have become more unwell, so that is where we need to focus our resources. Clearly, the Government were right and everybody welcomes the investment in 50 extra beds in the areas of greatest need—some of which are in my area—but it costs around £25,000 a month for a child or young person to be treated in an in-patient setting. For every young person who is in one of those beds, we have to ask whether they would have needed to be admitted to hospital in the first place had those resources been properly directed to prevention services. We need double running. If we just keep investing in in-patient beds at the expense of prevention, we will fill those beds and there will be a demand for more.

I hope the Minister will recognise the need for double running so that we focus relentlessly on prevention and early intervention. As he will know, if we are looking at in-patients and admissions, the very last place that any young person should be at a time of mental health crisis is in a police cell. I pay tribute to all those who, over a number of years, have campaigned on that. The problem is not new. I am one of the few MPs—or perhaps not so few—who has been inside a police cell at night, because for many years I was a forensic medical examiner. It was always profoundly shocking to think that children as young as 12 or 13 across the west country were being taken into police cells under section 136 of the Mental Health Act 1983—an horrific experience.

It is sometimes an individual case that finally brings an unacceptable practice to an end. I pay tribute to Assistant Chief Constable Paul Netherton of Devon and Cornwall police for highlighting the awful case in Torbay of a child who was detained in a police cell, and I pay tribute to Chief Constable Shaun Sawyer because they have taken steps to bring the practice to an end. Although as a Committee we called for this to be a “never event” within the NHS, in effect the procedures that will be put in place will be equivalent. Finally, on this Government’s watch, we will see this unacceptable practice coming to an end. That is long overdue and very welcome.

In focusing on the need to keep that timely support for children and young people, I also hope that the taskforce will set out what can be done to address some of the perverse financial incentives in children and young people’s mental health services. For example, a child who is admitted to hospital no longer has to be funded by the clinical commissioning group—in other words, they are handed over to specialist commissioning— creating all sorts of inappropriate decision making in the system. It also means that children are more likely to be readmitted because there are no step-down services. Therefore, a focus on active intervention to try to prevent that admission and keep children at home is very important. I also look forward to hearing the taskforce’s recommendations on how that can be done consistently across the country, because another issue we raised was the extent of variation in practice.

I will now turn my attention to volunteers. If we are to retain a focus on the earliest intervention and prevention, we have to recognise the value of our volunteers. I would like to pay tribute to a number of volunteers in my constituency. I am a patron of Cool Recovery, a charity that provides mental health support to carers and those affected by mental health problems across south Devon. There are many such organisations working directly with young people. Representatives from Spiritulized, which supports young people in Kingsbridge, recently came to Parliament after being shortlisted for an award for the work it is doing in mental health first aid out in the community. In Brixham there is the Youth Genesis Trust and volunteers from The Edge. Work is also being done in schools. Representatives from South Devon college, which is based in my constituency, recently came to Parliament after it received an award for its work in student well-being and prevention of mental health problems.

Those organisations are reporting that both the demand for their services and the level of complexity have never been greater. Part of the reason for that, as the Minister will know, is the increasing waiting times for CAMHS. That means more young people are becoming much more unwell before being seen in the CAMHS setting. I hope that in his response he will be able to say exactly how we can balance that across the whole system. I very much welcome the investment in services for eating disorders and self-harm and early interventions in psychosis, and of course the Improving Access to Psychological Therapies programme. However, as he will know, fundamentally the issue comes down to funding. We will never achieve parity of esteem for mental health unless we address the funding inequality, with 6% of the mental health budget going to services for children and young people, and that budget itself is an inappropriately small slice of the overall funding pot for the NHS. How will we actually drive change in increasing funding?

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

I agree with everything my hon. Friend has said and very much welcome her Committee’s report. I agree on the need to address the funding issue. In particular, it is critical that we achieve what I call an equilibrium of rights to access between mental and physical health in order to address the awful problem on waiting times, and that must include children’s mental health services.

[Dr Wollaston]

I thank the Minister for that intervention. It is very welcome that we now have waiting time targets as a right for people with mental health problems, alongside those for people with physical health problems, but the challenge is not so much about the budget for children and young people’s mental health services, but what we take that from, because there are no areas of slack in the mental health budget, as he will know. I think that the mental health budget overall must achieve some parity. Again, if we look at prevention and the really small amounts of money, in relative terms, that are required to keep excellent voluntary services running in our communities, we see that it would be the greatest waste and tragedy to lose those vital services in our communities for the want of what are really quite small sums. When children, young people and voluntary services came to give evidence to our inquiry, we heard time and again that what they need is stable, long-term funding. They do not require a great deal of money, but they are currently limping from one short-term budget to another. Another issue raised was that if funding is available, it often gets directed to a new start-up project, not towards a project in the same community that may have proven value.

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

The hon. Lady is no doubt aware that some of the small, really good charities will find that a bigger charity that is very good at filling in application forms will get the funding and then subcontract the work back to the small charity that was doing it before, having taken a cut of the funding as well.

[Dr Wollaston]

I absolutely agree. The other problem is that sometimes those larger national charities may have no local presence or understanding.

We need greater flexibility so that commissioners within health and local authorities are able to provide stable, long-term funding and to set the priorities for these new pots of money. It is always easy to announce new projects, but we must allow funding to be directed at existing services that have a fantastic proven track record. The value for money that we get from these services is extraordinary, as is the value that young people place on them. Young people have told me—this applies particularly to a rural constituency such as mine—that it is no good having a CAMHS service in a neighbouring town if they cannot get to it because there is no transport. That is why voluntary services are so particularly valued.

I was going to discuss our comments on schools, but my hon. Friend the Member for Brigg and Goole (Andrew Percy), as a former teacher, is far better placed to talk about that, so I will leave it to him to elaborate. I just want to touch on the new challenges that young people face with cyber-bullying, sexting, and image sharing. This is a 24-hour pressure; there is no safe haven for them in these circumstances. I welcome the fact that the taskforce will comment on not only the challenges but the opportunities that the internet may give us to assist young people.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

My hon. Friend is making some important remarks, as has her Committee. Somebody who suffers from a condition such as depression or anxiety, and has already been taught coping techniques, often finds it helpful to have a mentor. Perhaps apps, mobile phones or the like could reinforce those coping techniques at times when life seems difficult. That is an important part of the picture.

[Dr Wollaston]

I thank my hon. and learned Friend.

In using the internet, one of the challenges is how to know which of the sometimes thousands of resources that will pop up as a result of a search are valuable and to be trusted. It would be useful to have a mechanism for directing people to those that have the best evidence base behind them, and have been rated by young people as being the most helpful. While these kinds of resources may be welcomed by some people, they will not be the most appropriate for everybody. We need to have choice and a range of resources. That also applies to IAPT—improving access to psychological therapies. Cognitive behavioural therapy has an evidence base behind it, but it does not necessarily work for everybody. Those who do not find CBT helpful must have other avenues they can go down, including longer-term support where that is appropriate.

In closing, I draw the Minister’s attention to another area of early intervention—perhaps the earliest of all. Does he have any encouraging points to make on the provision of perinatal mental health services? I look forward to his response.

17:00

[Paul Blomfield (Sheffield Central) (Lab)]

It is a pleasure to follow the hon. Member for Totnes (Dr Wollaston), whose very thoughtful and incisive speech drew on both her own rich experience and the Select Committee’s excellent report.

In the September recess each year, I organise a series of consultation meetings across my constituency. The one I enjoy most is that with young people. It is organised with a range of youth groups, such as Members of the Youth Parliament, and brings together a good number of young people aged from 18 to their early 20s. It is really sparky and lively, and they pull no punches in raising issues. When I ask them what are the top priorities that I, as their Member of Parliament, ought to take up on their behalf, it has been very striking just how high mental provision has come in the past couple of years. That would not have been the case when I was young.

The fact that young people themselves put such a high priority on mental health as an issue should send us a very clear warning signal. That does not only apply in Sheffield. Following ballots of tens of thousands of young people across the country, the Youth Parliament has made mental health one of its two priority campaigns this year. If it is so important for young people and they are pressing us on the issue, we should be deeply concerned.

In advance of today’s debate, I have been in contact with three of the groups I work with in Sheffield: CHILYPEP —the Children and Young People’s Empowerment Project; Young Healthwatch; and STAMP—Support, Think, Act, Motivate, Participate—which is a group of 14 to 25-year-olds who have come together with the specific objective of improving mental health support for other young people. They are concerned about the current state of provision, or what they would describe as the lack of provision, and they fear for the future and the impact of cuts on an already desperately inadequate service.

The groups have identified three key problems. The first is that reductions in funding are taking place at a time of increasing need. The second, which very much echoes the points made by the hon. Lady and the report, is about the lack of early intervention. The STAMP young people’s manifesto states:

“Act now, tomorrow could be too late!”

That indicates the severity of what we are talking about. The third is that young people are abandoned at 16.

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

On the issue of resources, budget cuts have been inflicted on local authorities, such as Coventry. Some of them have had to find about £3 million or £4 million, which is an extra burden. The Government hope that local authorities can somehow resolve that situation, and then they wonder why they have problems with young people.

[Paul Blomfield]

My hon. Friend makes a very important point. Such a matter is close to my heart in Sheffield, where funding from central Government will halve over the lifetime of this Parliament. That is putting an enormous strain on all the related services and support for young people that can play a broader role in alleviating some of the difficulties. In Sheffield, we are very conscious that our position is in sharp contrast to that in wealthier parts of the country.

The first point is about cuts at a time of increasing need. We know that budget cuts to front-line services are difficult and can be devastating at any time, but cuts to child and adolescent mental health services are being made at a time of increasing need. From 2011-12 to 2013-14, Sheffield CAMHS saw a 36% increase in referrals, and a 57% increase in initial appointments. If we are serious about reducing stigma, talking openly about mental health problems—we have made enormous advances in doing that—and having parity of esteem, we should welcome those referrals. However, that demand comes against the background of what has effectively been a 4% budget cut, disguised as a requirement to drive efficiency savings. That has had severe consequences for the level of support that young people are receiving. There has been a stark increase in waiting times.

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

It is certainly true that councils are faced with really tough decisions, given the 40% cuts to local government budgets. My understanding is that within the overall mental health budget of £14 billion, only £0.8 billion goes on child and adolescent mental health services. That seems to be a disproportionately small sum of money, given the scale of the problem.

[Paul Blomfield]

My hon. Friend makes a powerful point. It is a relatively small sum of money. Perhaps that indicates that a relatively small level of resource intervention could make a significant difference.

As I was saying, the consequence of the rising demand and falling resource in Sheffield is that some 18% of young people—almost one in five—wait over 13 weeks for treatment. The cuts not only impact on young people up to the age of 17, but have a knock-on effect on adult mental health services and on acute and emergency provision.

[Robert Flello]

Although demand is rising, there is still a current of demand that does not even present itself. There is a huge level of unmet demand, simply because people do not present themselves to systems such as CAMHS, but try to self-medicate or whatever.

[Paul Blomfield]

I am very grateful to my hon. Friend for that intervention. While on one level we have seen enormous progress in the openness with which we confront mental health issues and the willingness of people to come forward, we must be deeply conscious that there is still a wider problem of people who do not present. The absence of resource and the inability of the system to support people with needs when they do seek help sends out a powerful message, because young people are very well networked. Those who might be on the tipping point of coming forward to seek help will get the message from their friends, “What’s the point, because you have to wait so long?” That is an important point.

That brings me to the second point that young people raise with me, which is the importance of early intervention. Again, that was emphasised by the hon. Member for Totnes. In the words of STAMP:

“Act now, tomorrow could be too late!”

I want to share the harrowing words of one 18-year-old young woman who is involved in the STAMP project in Sheffield:

“Sometimes I think, do I have to kill myself to get help? I probably do. It happens all the time. People are desperate for help, the only way they can get it is if they are at harm, so people harm themselves or attempt suicide just to get put on another waiting list. It just shouldn't be like that.”

She is right; it clearly should not be like that. Nobody should have to reach crisis point before receiving the support and care that they need, and certainly not our young people.

At a time of increasing need, we need to look at how we can do more with less money. Early intervention is a way of doing that. The hon. Member for Totnes made that point powerfully.

[Robert Flello]

I appreciate my hon. Friend’s speech very much. He has put a thought in my mind about a point that the hon. Member for Totnes (Dr Wollaston) also raised about early intervention. Given that the cuts to other local authority front-line services have been worse than decimated in places such as Stoke-on-Trent, those services that would have been early intervention-type services—and, indeed, pre-early intervention services—are just not there any more.

[Paul Blomfield]

I thank my hon. Friend for making that powerful point. The situation in Stoke, Sheffield and Coventry underlines his point that there used to be a hinterland beyond the NHS of youth groups, activities and support networks, many of which were supported by local government funding in combination with funding that was often raised within communities. The withdrawal of that funding, as local authorities have increasingly had to focus on statutory services, has put many of those groups at a tipping point and left the support that is available very weak.

The third point that young people have made to me is about being abandoned at 16. Historically, CAMHS in Sheffield have worked with people up to the age of 16, leaving those beyond that age—before they turn 18 and become part of adult provision—to fall through a hole. Things looked a bit brighter for 16 and 17-year-olds when the clinical commissioning group committed just £300,000 a year to a service for them, although I am not sure why it did not include 18-year-olds as well. However, budgets are squeezed and it has since been announced that the funding will be cut by a third. That is another example of the budget pressures being experienced and it is happening within the NHS as opposed to local authorities, which we have discussed.

In effect, £200,000 allows the service to work with little more than 100 young people aged 16 to 17 in a given year. On funding relative to need, there are 12,627 young people aged 16 to 17 living in Sheffield and it is estimated that 10% of them have some sort of mental health challenge. That leaves more than 90% of those we could expect to need support with no service at all. We cannot keep talking about reducing stigma, eradicating stereotypes and parity of esteem between physical and mental health without funding services properly when people—especially young people—need that help. We have serious questions to answer on the challenges posed to us by the issues raised with me by young people in Sheffield and those raised by the Youth Parliament.

We know that, nationally, mental health problems account for 28% of morbidity, but only 13% of expenditure is committed to mental health. Where is the parity in that? I hope the Minister will address that when he responds to the debate. We need to put our money where our mouth is. I am pleased that Labour has committed to increasing the proportion of mental health spend on CAMHS, which is currently a tiny amount of 6% even though three quarters of adult mental illness begins before the age of 18.

[Norman Lamb]

I agree with the hon. Gentleman about the need to increase resource in children’s mental health services. Is the proposal he mentions designed to increase investment in mental health or to shift resource from adult mental health to children’s mental health?

[Paul Blomfield]

I am sure my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on the Front Bench will come back to this issue. My understanding is that our proposal is both to increase the overall resource available in the NHS and to shift resource within the service towards supporting CAMHS.

We will also train NHS staff and teachers to spot problems sooner. We will expand talking therapies and work towards a 28-day waiting time standard for access to both adult and young people’s talking therapies. That is crucial, given what I have heard from young people. Moreover, as I said a moment ago, we will invest an additional £2.5 billion in the NHS to fund extra nurses, doctors and other health workers, to relieve pressure on the service. We owe it to our young people to respond to their calls and I am pleased to have had the opportunity to articulate some of their concerns.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Let me give Members guidance about how long we have for this debate. The wind-ups will start at 6.30 pm, so I do not think it necessary to have a time limit as long as Members take about 10 minutes each, including interventions. If everyone takes 15 or 16 minutes, we will not fit every Member in. We do not need a time limit just yet, but if those speaking could aim for 10 to 12 minutes, including interventions, that would be helpful.

17:20

[John Pugh (Southport) (LD)]

I will certainly observe that time limit, Madam Deputy Speaker, and I congratulate the hon. Member for Totnes (Dr Wollaston) on the report from the Health Committee, which was interesting and important reading.

I want to make a few remarks about adolescents. If we had to be reincarnated, I doubt that anyone in this room would choose to be reincarnated as an adolescent. They are neither fish nor fowl; they are attached to one family but dominated by their peers. They are going through new states of mind and body, which are exciting and disturbing in equal measure. They are no longer a child but are not quite an adult. They are advancing in knowledge and understanding, but hormonally and emotionally confused. It is probably the most difficult stage of anybody’s life to negotiate, and I believe it is quite hard to be genuinely and consistently happy. In a society without clear norms and rites of passage, it is probably doubly difficult.

Should we therefore be surprised that adult mental illness is on the rise—the hon. Lady called it an alarming rise—or does that indicate that we are in a pathogenic, sick-making society? Are we simply getting better at diagnosis, or are we applying clinical language to describe the mood swings of adolescents, which are more normal than we like to believe?

I find the figure of one in 10 surprising, although there are undoubtedly some troubled youngsters out there who will not get back on track or lead a normal life without extensive help. There are those in the early stage of psychosis or in the grip of a debilitating neurosis, or the depressively suicidal—I know a fair deal about that. As hon. Members have said, it is crucial that good services exist for such people, and nobody would disagree that diagnosis should be early and treatment sensitive and effective. I applaud—as does everybody—the new commitment and resources, the drive for parity of esteem, people speaking out and so on.

However, I have one problem with the current enlightened mindset and what I call the myth of the normal. Probably no one here would claim to be in perfect physical health—at least not for long—and we generally cope with the ailments, aches and pains of ordinary life, seeking help only when something dramatic happens or our own immune system cannot cope. I do not see why that should not apply to our perspective and our take on mental health. It is not a black or white issue—it is not an either/or. The world does not divide into those who have mental health issues and those who do not; there are simply those whose lives have been disabled by their mental health issues, and others who, by and large, have coped.

Many years ago I used to teach adolescents about mental health in a Bootle comprehensive school, which was my own idea. I used to discuss the issue as a spectrum, and I hoped to encourage a degree of sensitivity. Children in the playground badly misuse mental health vocabulary. They call one another “psycho”, “mong”, “retard” and so on—the school yard can be an awfully cruel place. As part of our course we went to visit an old-fashioned mental hospital called Winwick in Rainhill. It was a large, relatively benign, caring and good institution of its kind—I had previously worked in a less good institution, Oakwood hospital in Maidstone. I basically wanted the children to understand what mental ill health was like, and for them to have a deeper sensitivity towards it. I vividly recall one episode in a corridor. An elderly and somewhat confused old lady approached the party. She was happy to see young faces reminiscent of her grandchildren. The boys—tough Bootle lads—backed away in fear. They did not know what to do or how they were expected to react. At that stage, I thought I had clearly failed to get something across. We are still failing to get quite a lot of things across. We have a myth of the normal and believe that the world divides into the sane and the insane, the normal and the well, and those with issues and those without.

That is still going strong. The House of Commons applauds with all the enthusiasm of a revivalist meeting when someone owns up to having mental illness, and we pat ourselves on the back for being enlightened. However, when a prominent Member of the House has a memory lapse on TV, which was a mental failing—he said it was an age thing—we scream like banshees, “Bill, Bill, Bill!” at Prime Minister’s questions. That is not a fine example of an atmosphere conducive to good mental health. It is worse than the school yard, but it will be repeated again at 12 noon tomorrow.

The terrifying thing about adolescent mental illness is that the individuals will never have had anything like it happen to them before. There is no frame of reference for what they are going through—it is all new. For them, as they grow up, a chasm opens up between those who can hack life and the small minority who cannot. The dread is that they are doomed to be in the latter category more or less for ever. That is the underlying and horrible fear. Successful peers will surround their failing selves. Their fear is that there will be future adults and future casualties, the copers and the failures.

Those young people buy, as do big chunks of society, into the myth of the normal—the belief that mental illness and frailty is not on a spectrum like physical illness, or something that touches everyone to some extent, but something abnormal, unusual, permanently blighting and for keeps. The truth is that mental illness is not that. Unless we get that across, we will make matters a whole lot worse.

17:26

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

It is a pleasure to follow the hon. Member for Southport (John Pugh) and his contribution to the debate. He made extremely good points.

I should like to refer to an experience I had some 12 or so years ago of running an organisation in Birmingham called Malachi Community Trust, which worked with young people with emotional, behavioural and mental health issues. More often than not, it also worked with their families, including parents and their wider families, to resolve their issues. We worked with qualified cognitive behavioural therapists and teachers—they were primary age children—in the school setting. It is interesting but deeply saddening that so many items in this extremely good report take me straight back to some of the conversations of 12 or 14 years ago.

I want to give a brief outline in the unfortunately few minutes that are available of what Malachi did—it is still going strong. It used musical theatre to engage with young people and as a tool to identify their issues. It enabled processes to be set up to work with those children and young people who had more profound mental health issues. Pertinently for today’s debate, it acted to stabilise the situation for children who were on waiting lists to see CAMHS staff. Back then, there were three, four and five-month waits, or longer. Malachi was not the only group that did that work, although it was and still is particularly good—I have fond memories of what it did. Malachi and other organisations were very good at that stabilisation. They were good at holding those young people in a place where they were not deteriorating while waiting for CAMHS workers. My fear then, and sadly now, is that an awful lot of children—some of our most vulnerable citizens—are waiting for CAMHS workers and their conditions are deteriorating, and their needs are getting worse and not better, because of the waiting lists.

One of the big issues we identified was family breakdown. Parental conflict and family breakdown is a very strong factor in mental ill health in children. A statistic suggests that one in four young people in Stoke-on-Trent are affected by family breakdown and divorce. That means that approximately 15,500 children in Stoke-on-Trent alone will be affected by parental breakdown and divorce. That does not immediately mean that those children will have a mental health issue, but it is a factor that makes them more vulnerable. To pick up on some of the comments made by the hon. Member for Southport, children need the skills and the ability to have resilience, so that if there are factors that might tip them into having mental ill health issues, they have the resilience to address them. Sadly, for all too many of our children there is not the ability to build that resilience.

My hon. Friend the Member for Sheffield Central (Paul Blomfield) referred to local authorities. The ability to gain that resilience from services such as those offered by local authorities is not possible in Stoke-on-Trent, where local budgets have almost been wiped out for some children’s services. I seem to be constantly talking to people who used to work for the local authority in children’s services, but have now gone off to do other things because they can no longer be afforded. The main thrust of what I want to say is that more than 10 years ago there was a shortage of access to CAMHS. We do not seem to have gone anywhere with that. It seemed to get better, but it is now getting dramatically worse.

Healthwatch Stoke-on-Trent helpfully brought to my attention a list of issues that they are concerned about. When I say “they”, I mean children, young people and the adults supporting them. It makes deeply saddening reading. The first item on their list of what they want is a single point of access for real-time professional advice and guidance that can refer them to mental health services with the support they need when there is a crisis. This was again being talked about more than 10 years ago when I was attending meetings in what was still then, despite the fact it had been going for 10 years, a fledgling CAMHS. Nevertheless, even back then there was talk about having a single point of access. We have come full circle on the need for a single point of access.

Those children, young people and the adults supporting them talk about information, options and guidance to navigate the range of services and pathways available to them, and evidence-based interventions that are appropriate to them, with follow-up support as needed—the right service, first time. It is sad that here we are, so many years later, without that service—or, where a service has been developed, it has gone because of the cuts. The Government are now having to undertake a review to take us back to the probably better work being done in the period leading up to 2010.

These people want a greater use of technology and access to online support. Technology has come a long way in the past 10 years, and I welcome that good suggestion from the children and young people themselves. They would like more support from schools and direct interventions on school premises in the school day, such as counselling, peer mentors and quiet spaces. There are quiet spaces in some of the good schools that I am blessed to have in Stoke-on-Trent. For example, St Thomas More school has a specific arrangement and understanding that young people who feel that they need to go out and get their head together can use the space that has been made available. I am sure other schools do that as well, but that example was highlighted to me. Malachi was doing innovative work on support in schools 15 or 20 years ago. I made the point in an intervention on the hon. Member for Totnes (Dr Wollaston) that when Malachi lost bids to big national charities, those charities would then subcontract back to Malachi, because they knew they had an in with the schools and could provide the service.

Going back to the list, those children and young people and the adults supporting them want clearer step up, step down work given that their mental health needs change and fluctuate, as well as more early support from non-mental health practitioners and their peers and/or older mentors. Their final point is that they do not want to be stigmatised when seeking and accessing help, which is so important. In addition to those things that the children and young people want, they have asked for clear referral routes and pathways through services, so that they get the intervention they need quickly, without being referred to multiple services—often waiting some time for an assessment—before finding that the service is not the right one for them anyway: having waited three or four months to get into the system, they then find that it is not what they needed and they have to start all over again.

The children and young people have also asked to be involved in planning their own care, to be part of setting their own outcomes and goals, to be consulted when changes are made to service provision and for their parents to be given support so that they can support them. The parents themselves, the carers, have asked for there to be clear access to services—that comes up time and again—and parenting support in the community that is easily accessible and non-stigmatising. Going back to my Malachi days, one of the hugely important things we did was to work with the parents, supporting and helping them, enabling them to take on a lot of the work of maintaining and helping their own children.

There are a few more items on the list, but I am conscious that I will rapidly run out of time if I am not careful, so I want to move on to a few of the risk factors. Again, they are not new, but things that we have come across too often, and it is important to raise them in the context of Stoke-on-Trent. In a report on this, the first factor listed among those that will have an impact on children and young people’s mental health is—this comes up time and again—deprivation and poverty:

“The close association between mental disorder”—

as it is termed—

“and economic disadvantage was clearly illustrated by income analysis in the Mental Health of Children and Young People in Great Britain in 2004 survey”,

so this is not new evidence. That is a huge problem in places such as Stoke-on-Trent, where we still have such high levels of deprivation—indeed, they have been made worse recently.

I have mentioned parental conflict and breakdown, but there is also communication/speech and language delay. In Stoke-on-Trent there is a huge problem with language delay. Fantastic projects such as Stoke Speaks Out are addressing it, but if a child is having difficulty expressing their needs, how much more difficult will it be for that child—that young person—to be able to eloquently, or indeed adequately, put across what they want from the system that is trying to help them? Attainment in education is still an issue, despite the dramatic improvements that we saw in Stoke-on-Trent. Then there is housing and homelessness; and again, the poor standard of so much housing still in Stoke-on-Trent is a tragedy.

I want to make an observation about children in care and some of the organisations. The local authority in Stoke-on-Trent has seen a rise in the number of children in care in just a short period. From July 2010 to June 2013, there has been an increase of 38% in the number of children needing support in care in Stoke-on-Trent. That is a massive increase in the number of young people in the care system, which is a huge risk factor for mental ill health.

I close by observing a couple of things about Stoke-on-Trent. There is, as I have mentioned, Healthwatch Stoke-on-Trent and the good work it does. There are other organisations doing fantastic and excellent work, including Young Carers—part of North Staffs Carers Association. I have had the huge privilege on a number of occasions to meet the young people from Young Carers and hear about the amazing things that they—children—are called upon to do, quite often looking after their parents, and the huge impact that has on their mental health. Finally, there is another scheme, whose details I have unfortunately lost in the pile of papers in front of me. Home Start has been running in Stoke-on-Trent for about 30 years. Sadly, because the local authority is so strapped for cash and has had to cut its budget, after all that time and after helping thousands of families, Home Start is now closed. It is gone. It is another resource that is no longer there to help the people of Stoke-on-Trent.

That is the backdrop to the report by the hon. Member for Totnes and to what the Minister is doing with his investigation, both of which I welcome. It saddens me so much, however, that we seem to have gone nowhere in 10 years. Let us try to make sure that we do something about this in the coming months rather than in the years ahead.

17:40

[Sir Oliver Heald (North East Hertfordshire) (Con)]

In listening to the hon. Member for Stoke-on-Trent South (Robert Flello), I recognised some important themes that were also evident in the speech of the Select Committee Chairman, my hon. Friend the Member for Totnes (Dr Wollaston). Both touched on what we can do to help people with mental health problems through volunteering, mentoring and bringing services together so that we have a more substantial whole that will help to tackle the fragmentation between different services and make something more rational and more joined up.

I was a governor of a residential school for young people with emotional and behavioural difficulties in the 1980s—Shaftesbury House in Royston. It was an Inner London education authority school, which did extremely good work with some very troubled young people. At that time, however, there was a different understanding of mental health issues from what we saw a few years later in 2001 when I was my party’s spokesman on mental health. By that time, there was much greater recognition that deep-seated mental health problems start at ages much younger than adulthood. Previously, there was a feeling that some of these issues were emotional, behavioural and developmental, but they were not seen in their true context.

I thus slightly disagree with the hon. Member for Stoke-on-Trent South. I think our understanding of mental health issues and what they mean for children and adolescents has changed over the period that he spoke about—and certainly since 2001, we know far more about the onset of these illnesses and about how they should be treated. I agree with him, however, that we are seeing a great number of young people affected by these issues. The hon. Member for Southport (John Pugh) talked about the ups and downs of adolescence and whether there was such a thing as a normal period of adolescence.

I believe that issues such as family breakdown, drugs, social media, and domestic violence put considerable pressure on young people, and it gets to the point where some adolescents have a series of crises. They can be intermittent, but there is often a recognisable crisis for which help is needed. It is more than just highs and lows; it is something more serious. In those circumstances, the delays about which we have heard can be particularly acute.

Two young people contacted me recently to raise issues about how child and adolescent mental health is dealt with. They were both very unhappy with the current situation. I thank the Minister for meeting one of them—a young lady who has been through CAMHS —to talk through the issues. She was very appreciative of hearing about the taskforce that has been set up, and it does the Minister great credit that he was prepared to meet her and that he has accepted that there are problems in the system that need tackling. Delay is certainly one of them. Another is the amount of help available, and particularly whether there are sufficient numbers of trained staff—psychiatrists, community psychiatric nurses, therapists and so forth. We have never had the numbers we need, and I hope the taskforce will consider that issue.

The Hertfordshire Partnership Foundation Trust has a youth panel that is deliberately aimed at revealing concerns. The young lady who came to see the Minister had been on that youth panel. She had suffered from anxiety, bulimia and depression; she had been bullied, but got no proper response from her school. She waited nine months for CAMHS, and had still not been given an appointment when she attempted suicide. Even after she had been in hospital, she had to wait for six weeks. She had only five sessions of therapy in 20 months at a time when she was experiencing serious crises. Another young lady who has been in touch with me was taken into an in-care unit, and it was three weeks before she saw a psychiatrist, although she too had experienced a bad crisis.

[Grahame M. Morris]

I cannot disagree with what the hon. and learned Gentleman is saying or the examples that he is giving, but does he accept the general point that one of the problems when it comes to planning effective interventions is the lack of current and accurate prevalence data that would enable the relevant agencies to plan and commission services that meet local requirements?

[Sir Oliver Heald]

I agree. I am sorry that action to deal with that problem was cancelled some years ago, because such action is definitely needed.

I was talking about the young woman who was taken to an in-care unit. She said that the staff always seemed to be overworked, and she was given no opportunity to exercise. She felt that, although she had been placed in the unit, nothing was being done to address her condition. I think that a great deal needs to be done to improve child and adolescent mental health services.

On page 76 of its excellent report, the Select Committee refers to the Minister’s taskforce, and says that the “current fragmented commissioning arrangements” must change

“to allow rational and effective use of resources in this area, which incentivises early intervention.”

That is an extremely important point. On page 77, the Committee deals with education and GP services and makes another important point, namely that this is not just about specialist CAMHS, but about school-based counselling. It quotes Mick Cooper, professor of counselling psychology at the university of Roehampton, as saying:

“Due to its short waiting times, convenient location, and broad intake criteria, school-based counselling is perceived by many stakeholder groups as a highly accessible intervention. It is able to offer a wide range of young people professional therapeutic support in a direct and immediate way.”

I think it is time that we joined up those services, using schools as a platform. In my constituency, there is an initiative called the North Herts Emotional Health Support Service, which aims to make a start with that. It has estimated that one in 10 young people aged between five and 16 is likely to be affected by a

“clinically significant mental health problem”

at some point, and has calculated on that basis that 18,000 school-aged children in north Hertfordshire are affected, including about 6,000 with emotional disorders. It has looked at the schools in question, and says:

“Evidence suggests that vulnerable children, young people and their families find it easier to access services”

at a school. It has trained a team of mentors consisting of teaching assistants, teachers and volunteers, and has identified a

“bank of quality-assured local counsellors and…therapists”

who can provide the sort of art and drama therapy that was described by the hon. Member for Stoke-on-Trent South. It has two local lead therapists whose job is to oversee the training and supervising of the mentors. It speaks of the importance of “offering consultancy and training” and “co-ordinating”, and hopes to engage a “part-time administrator”. It has made considerable progress with that model, and, although it will need to be evaluated, I think that we should do something similar.

The service is harnessing the good will of people who volunteer, and there are people who will do that—when I was a mental health spokesman, I met people who volunteered to work for Rethink and MIND—but it also uses the skills of professionals to train the individuals concerned, under supervision. It is giving us a lot of coverage and an ability to help young people relatively cheaply. That is a consideration in these times. I therefore suggest to the Minister that looking at such initiatives and those described on that page of the report is a possible way forward.

Many young people spend a lot of their time using social media of course—thumbs clicking at great speed. This is not necessarily a bad thing. People with anxiety or depression or another mental health condition could find online services that could help them and they could reinforce the coping techniques that they have been taught. I hope the taskforce will look at that. I think it might be fruitful.

17:50

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

I am grateful to be called to speak in this debate after the hon. and learned Member for North East Hertfordshire (Sir Oliver Heald), who has ministerial experience in this sphere. I do not, but I have some experience in other spheres of finding money for it and I know how difficult that can be. I therefore congratulate the hon. Member for Totnes (Dr Wollaston), Chair of the Select Committee, on her report. We in Coventry find it very timely, and we look forward in due course to the Minister’s taskforce and its report, leading, we hope, to what the hon. Lady very precisely referred to in terms of improvements to services—better services for children and adults on the ground, which is where it matters. She also said she found having to grapple with out-of-date figures—it is rather surprising that we should have them—frustrating. I therefore thought I would take part in the debate in order to bring up one or two up-to-date figures on a particular aspect of young persons’ and adolescents’ mental health that is becoming more and more prevalent, and disconcertingly and alarmingly so in Coventry: self-harm.

We have seen a terrible and frightening increase in self-harm over the past five years. The first figures we had were back in 2010 and the figures for 2014 have just come out. They show an alarming increase from 50 referrals in 2010 to over 300 in 2014. That is a terrifying rate of increase. It has been going pretty steadily at over 20% year in, year out, and, as my hon. Friend the Member for Stoke-on-Trent South (Robert Flello) pointed out so tellingly, it points to the impact deprivation and poverty can have on children, as there is a fairly well-established causal link between pockets and areas of deprivation and poverty and the tendency among adolescents to self-harm and referrals.

Those referrals come on top of what we already know is a crisis in A and E. They are only exacerbating that, and leading to youngsters with terrible mental health problems being turned away—doors closed in their face. It is a situation that in Coventry has led to a clear and recognisable crisis, and to an emergency meeting of the scrutiny board to examine exactly what the situation is, to report on it, and to see what measures can be taken to deal with it.

It is often all too easy to blame lack of resources and the Government, but, as the Chair of the Select Committee said, there clearly is a lack of resources. Towards the end of my brief remarks, I will discuss the fact that mental health services have always been the Cinderella services of the health service. I think that is fairly well accepted both outside and within the NHS. If we are to embark on yet another reorganisation and integration of health services as a whole, I hope that the underfunding and the lack of past attention that has affected and led to the present situation in mental health services will not be overlooked. It is not as though all the services can be integrated equally or proportionately, but if certain services are not to be further damaged, they will need to receive particular recognition and get preferential priority in the integration—I do not like the word “reorganisation”—which all the parties agree needs to be done carefully. This should not be rushed. We do not want another reorganisation forced on the health service. It should be done sensibly and gradually, and with sensitivity to the individual needs of the services that are being integrated.

[Mr Jim Cunningham]

Does my hon. Friend agree that the Caludon health centre at the University hospital Coventry does a very good job in very difficult circumstances? Yesterday, I met some young people from Coventry college who told me about the pressures that they were under. They are worried about exams and about whether they will be able to get a job after their exams, because the number of young people out of work in the west midlands is extremely high. Does my hon. Friend agree that we need to consider all the pressures that young people face these days?

[Mr Robinson]

Yes, I do indeed. The pressure in the education system to achieve results at any cost simply adds to the problem, as do the deprivation and poverty to which other Members have referred. All those factors have resulted in a situation in which incidents of self-harm are increasing at the rate of 20% a year. Referrals in Coventry are going up, and that constitutes a crisis, given that our accident and emergency services are already overcrowded and hard pressed.

Let me explain what that crisis means in regard to the number of weeks involved. Normally, effective substantive intervention would be expected within 18 weeks, but in Coventry the average wait for a substantive intervention has been 44 weeks. That is in a sector in which early intervention is clearly the most effective route to the successful management and eventual elimination of a mental health condition. That simply is not good enough, and I put that to the Minister for consideration by his taskforce.

We have asked the local council what can be done. As my hon. Friend the Member for Coventry South (Mr Cunningham) has said, budgets have been heavily cut. According to current Government plans to reduce public expenditure to 1930s levels—from which I know the Minister of State, Department of Health, the right hon. Member for North Norfolk (Norman Lamb) has dissociated himself—Coventry would experience a further 50% cut over the next five years. There would be nothing left. Fortunately, however, that is unlikely to happen, as I am sure that there will be changes of one kind or another to those plans, or to those making the plans, in the very near future.

It is impossible for the councils to find more funds, because they are under tremendous pressure, but there has already been a £50 million cut in the budget for CAMHS. It has been cut from £766 million. I think that that relates to the £800 million figure quoted by my hon. Friend for Eastleigh—

[Grahame M. Morris]

Easington.

[Mr Robinson]

Easington. I beg my hon. Friend’s pardon. The CAMHS budget has been cut to £716 million, which is a cut of £50 million. That is an enormous cut.

[Adam Afriyie (Windsor) (Con)]

The hon. Gentleman is making a powerful case, particularly on resourcing. Clearly, we would all like to see more resources going into adolescent mental health challenges, but does he share my view that if we get this right, with proper standards, proper implementation and early intervention, there could be a net saving to the Exchequer overall?

[Mr Robinson]

I absolutely agree with the hon. Gentleman. I think the whole House would agree with his intervention, which was short and to the point. As in so many situations, prevention is better than cure. It is also a lot cheaper. We all know that, and there is a case for it in this context, but it will require investment up front. That is where the Government do not get it, because they usually take a short-sighted view of these matters.

I wish to make two points in closing. First, if local councils do not have the resources at the moment, we cannot look to them to provide these services and so they are likely to get overlooked. Lastly, will the Minister confirm something about the leak—I am sure he will have read about this in the press—from his taskforce, which speaks of the perverse incentives that have arisen, particularly in relation to mental health, from the Government’s reorganisation? Have they exacerbated the problem? As a result, is the real cost of that reorganisation to the mental heath services not £50 million, but possibly a much higher figure?

In any event, we all know from our constituency experience that we have had losses. Last night, I saw in a television programme that we have lost hundreds of doctors and thousands of nurses, and the prospect in the next few years is an accelerating trend on both. So the Labour party’s commitment for 20,000 new nurses and 8,000 new doctors is a bold one, but it is manageable. It is also absolutely necessary if we are to deal with any of our current problems. That is the message I would like to leave the House with. We need early intervention; a commitment to increase the number of doctors and nurses; parity of treatment—and even ahead of that— in the integration of mental health services; and the restoration of the CAMHS budget as soon as possible.

18:01

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

It is a pleasure to take part in this debate as a member of the Committee, and I associate myself with the kind words of our excellent chairperson, my hon. Friend the Member for Totnes (Dr Wollaston), about everyone who gave evidence, and about all the Clerks and House staff who supported the inquiry. It was one of the most important and far-reaching inquiries we have undertaken in the past few years, and I was proud to have been a part of it, because the issue is so important.

I wish to make a few general comments about this whole area and then to talk specifically about the role schools can play in mental health services for children and young people. I noted with interest the comments made by the hon. Member for Stoke-on-Trent South (Robert Flello). The comments today have generally been quite consensual, although something I will say a little later about funding may be less consensual. He pointed out that 10 years ago we were having many of these same conversations, but things have really moved on in the past 10 years, not least in this area; we heard in our inquiry about the increase in demand. Although many of the pressures young people faced 10 years ago are similar, a whole host of other pressures on young people now did not exist then, particularly those of a cyber nature, be it those arising from Facebook, Twitter or online bullying. When I started teaching in 2002 people did not have a great deal of understanding or expectation of any of those things, but they have now become so widespread that we have had a massive increase in demand in this area.

In addition, the way in which mental health services and care are delivered has changed beyond recognition during that period, and some would argue that it has not always been for the better. As we know, between 1998 and 2010 the number of mental health beds reduced from 35,000 to 25,000, and we have seen a continuing shift away from in-patient treatment units. What came out of this inquiry, and what I have seen in my constituency in mental health service provision for both young people and adults, is that although that more traditional unit-based, hospital-based, bed-based system of treatment has changed, what has replaced it has not necessarily always filled users with confidence or has even been consistent across the country. As our report makes clear, there is a lot more we need to do.

As I have said, I wish to focus on what we heard from young people. It was great that our inquiry had a session with young service users, including some from Hull, near my area, who came down to tell us about how they have engaged with local voluntary, local authority and, of course, school services. In our inquiry, we heard that the support schools offer young people is very patchy across the country, changing even within cities or within counties. Some young people we heard from, and some of the other evidence we took, made it clear that some of the best support they had received had come from dedicated teachers who understood mental health issues, really wanted to engage with those young people on them and help them access services. Having a teacher who was engaged and who understood what to look for in mental health really helped young people. Some pupils had different experiences. They felt that teachers either lacked the skills or were too uninterested to deal with the problem. Very often that can be because teachers are scared of mental health issues. In some cases, therefore, pupils experiencing mental health problems did not receive the support that they needed.

I started teaching in 2002. When I think back to some of the young people we had to deal with, I can see that many of them probably had mental health issues. At the time though, those pupils were dismissed as being badly behaved or as having background problems. As a practitioner, I was sometimes guilty of not understanding the signs that were being presented to me. However, teachers cannot be blamed for that; they work in a pressured environment. The pressures around school standards seem to get more intense every year and with every Government initiative.

What we did hear in our evidence was that 61% to 85% of schools are providing access to school-based counselling. Although that is a wide variation, it is a positive thing. We heard that some schools engage really proactively with the local authority and the NHS in this area. Unfortunately, though, we also heard of others that do not engage so well. Some schools seem to think that mental health issues are for health services and social services, but not for schools. When we talk about integration in all areas of health care, this area is one in which we need it the most and, potentially, it could have the biggest impact. My hon. Friend the Member for Totnes talked about early intervention. When we fail in that regard, the consequences are picked up by other services. That means that we have increased referrals and more behavioural difficulties in our schools, which leads to more exclusions. Those exclusions have consequences not just for the management of the school but for that young person’s life chances.

What can we do in schools to make a real difference? Increased collaboration among the services is vital. Although we talk about integration and greater collaboration, we need someone at some point to take responsibility for that and to be held accountable when that collaboration does not work. As we heard in our evidence sessions, some schools are keen to take the lead in that regard, and others less so. Clearly, this is an area where we need greater clarity.

The curriculum was raised by a number of young people, particularly around personal, social, health and economic education. They said, “We learn everything in PSHE. We learn about sexual activity, financial matters, career advice and career choices, but what we do not learn about is mental health and well-being.” Ofsted found that 40% of PSHE provision required improvements nationally and that one third of young people say that they want to know more about how to deal with stress and how to access help for eating disorders. Some 38% said that they wanted education around bereavement, which surprised me.

We have seen some good things happen with the curriculum. We heard in our inquiry that the ICT curriculum now contains a section on cyber-bullying. Clearly, some improvements have been highlighted but an awful lot more still needs to be done. The focus should be on young people as much as it is on teacher training. In our evidence sessions, we heard from the Secretary of State about how a great deal of effort has gone into providing teachers with the tools to deal with mental health issues and to improve training, and that is really important.

When I did my postgraduate certificate in education, I do not remember receiving a great deal of education about mental health and young people’s emotional well-being. Clearly, that needs to change, but the focus should be not only on equipping teachers better, but on ensuring through the curriculum that young people are able to understand mental health issues. The stigma needs to be removed through both teacher training and the curriculum, and young people who have had experience of mental health issues should be involved in developing that curriculum.

I wanted to say a little more about youth services, but I do not have a great deal of time. We have heard a lot about council spending reductions and the impact that that can have. The truth is that whoever was in power, we would be in this position, with council budgets having been reduced. In my area, I am very pleased that North Lincolnshire council has made a concerted effort to reverse the cuts to youth services instituted by the previous administration of a different party, which cut the services by £194,000. Even in these tough times the council has been able to put in an extra £100,000 of funding and over the next three years will add to that a further £300,000.

Local authorities can do that if they have the necessary vision. In the case of North Lincolnshire, the driver for that is a very good portfolio holder in the cabinet who understands that we have to get it right early. That means that we need proper investment in positive activities for young people, because that allows savings elsewhere down the line. Despite all the difficulties that we have faced in local government funding, where there is leadership and vision, people who understand the value of these services can find the money to invest in them. With that, I will end as I am conscious of time and I know that one of my colleagues wishes to speak.

18:11

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

I congratulate the hon. Member for Brigg and Goole (Andrew Percy), with whom I serve on the Health Committee, and the hon. Member for Totnes (Dr Wollaston), who so ably chairs the Committee. Although this report is the third report of the 2014-15 Session, I think it was the first report produced under the hon. Lady’s chairmanship, so it is quite an historic document. It is an important piece of work on a subject that has been neglected.

As time is short, I shall try to stick to a particular structure. I thank the Royal College of Paediatrics and Child Health for providing a briefing and for asking us to highlight some of its concerns about variations in services and funding for transition services and mental health care provision for prevention and early intervention. A number of right hon. and hon. Members have referred to those issues. I also want to make a few points from the perspective of local government. As we have heard and as the hon. Member for Brigg and Goole observed, this is an area of joint responsibility where local government, given the correct support and resourcing, can make a significant difference.

On the scale of the problem, it is a shocking statistic that 50% of mental illness in adult life, excluding dementia, starts before the age of 15, and 75% of mental illness starts before the age of 18. Apart from the mental health manifestations, there are often increased physical health problems associated with the deterioration in mental health. Disturbingly, since 1980, as others have mentioned, there has been no decline in the number of deaths caused by self-harm, suicide or assault, with more than 1,000 10 to 18-year-olds dying this way every year in the United Kingdom. The problem is particularly prevalent among boys.

An hon. Member spoke about the value of prevention and early intervention and alluded to a cost-benefit analysis, and he was absolutely right. Quite apart from the fact that it is the right thing to do, if we look at it purely in terms of the opportunity cost, we see that mental health problems that start in childhood and adolescence result in increased costs of between £11,000 and £59,000 per child annually, according to figures provided by the Royal College of Paediatrics and Child Health. Those are huge additional costs. With upstream interventions of the kind other Members have argued for, early identification of mental health difficulties should be established as a core capacity of all health, social care and educational professionals who work with children and young people, because the benefits would be considerable.

Another issue that has been talked about, and which I feel I must mention, is the provision of an evidence base on which to plan interventions. Indeed, the chief medical officer highlighted the lack of accurate prevalence data in evidence to the Committee. I fully understand that the Minister is carrying the can and making the arguments, but that survey had not been carried out for quite a few years. Although it has now been commissioned, my understanding is that the data will not be available for use until 2017. If we are to have a scientific or empirical basis on which to plan commissioning and resources, either in early years or in whichever tier is thought appropriate, we need an up-to-date and relevant evidence base of data.

[Sir Oliver Heald]

On the hon. Gentleman’s point about prevalence data, with which I agree, is not the real point that many of the contracts in mental health are block contracts, whereby a fixed amount of activity is purchased? If we do not know exactly what the prevalence really is, that is a bit of a shot in the dark.

[Grahame M. Morris]

I cannot disagree with that. I come from the perspective that we need to plan interventions on the basis of evidence, but how can we do that without current and relevant data on child and adolescent mental health? We certainly need that data. On the structure of the contracts, I am a firm believer in integration. There may well be issues with block contracts. The Health Committee received evidence from the south-west indicating that there are vast areas of the country where there is very little access to certain types of in-patient mental health provision, which is clearly unacceptable. One might have thought that a large block contract would make that less likely, but apparently that is not so. However, I am not an expert in commissioning; I am simply trying to identify the policy areas.

Having spent a number of years in local government, I have no doubt that local authorities wish to tackle some of the barriers that young people face in accessing mental health services. It is a complicated area, and we need to enable local areas—the hon. and learned Member for North East Hertfordshire (Sir Oliver Heald) just referred to larger block contracts—to commission better services, and perhaps that is better done on a more local level.

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

Does my hon. Friend realise that one of the problems with block contracts is that, because of their size, they freeze out small voluntary organisations that could deliver services on a local basis?

[Grahame M. Morris]

That is true. Some of the organisations that submitted evidence to the Health Committee and subsequently provided briefings made that point.

Another issue of concern is the complex commissioning landscape for CAMHS, which can result in poorly co-ordinated services and a lack of clarity about roles and responsibilities, leading to gaps in provision and poor transitions from child to adolescent and from adolescent to adult. The service is certainly underfunded. We often talk in this place about parity of esteem. As other Members have reported, CAMHS nationally is receiving about £1.8 billion of the £14 billion that is spent on mental health. Local authority-provided services, which are often having to bridge the gap, are facing huge financial challenges. My local authority, which I share with my hon. Friend the Member for North Durham (Mr Jones), has had to cope with cuts of £250 million over the lifetime of this Parliament. That is forcing councils to make extremely difficult decisions about which services are funded.

I fully understand the point made by the hon. Member for Brigg and Goole, but I also fully understand the difficult decisions faced particularly by authorities in the north that seem to be suffering disproportionate cuts. Councils are embracing their new public health responsibilities—

[Andrew Percy]

I hope the hon. Gentleman understands that both my local authorities are in the north of England; I would not want him to get his geography wrong.

[Grahame M. Morris]

I am certainly aware that some authorities are facing higher cuts than others. My area is one of relatively high deprivation, but we seem to be in a far worse position than some in the south that are more affluent and do not have the same kinds of pressures.

In rural areas, in particular, people face problems with travelling long distances, a lack of accessibility to specialist services, and long waits. One issue is the 12-week target for referral to CAMHS in cases where children and adolescents are referred out of their local areas. Transition between services varies from one area to another. In some areas it happens at 16, in some at 18, and in some at a point in between. These issues all need to be addressed.

Fundamentally, this issue comes down to funding. I welcome the establishment of the taskforce and the provision of £30 million over the next five years to improve services for young people with mental health problems. However, we must recognise that councils play a vital role in working with health services to target support and co-ordinate services, and they should play a key role in directing the funding.

18:23

[Adam Afriyie (Windsor) (Con)]

I apologise for not arriving for the first part of the debate; sadly, I was detained elsewhere. I wanted to say a few words about this excellent report. I commend the Chair of the Health Committee and its other members for producing a very well-balanced report that does not appear to be partisan in any way but does point to some of the problems that still exist in our child and adolescent mental health services, and to some of the possible solutions, if any future Government were to adopt its recommendations. The other impressive thing about the report is that it does not apportion blame. It merely observes that there are challenges, without attributing blame on a partisan basis or to a particular group or individual. It can often be hard to implement the recommendations in these reports if it is felt that a finger is pointed at a particular body.

Clearly, mental health challenges are widespread. As other Members have observed, they generally start when people are younger; it is unusual for a mental health challenge suddenly to appear out of the blue. That is why this report and looking at early intervention is very important if we want to tackle mental health services for citizens and mental health outcomes for our constituents. The mental health unit at Heatherwood hospital in my constituency has been transferred to Reading. It strikes me that that is very positive in many ways, because it enables more integrated services to be provided in a larger establishment, which has more resources and is better able to deal with the people who present themselves there.

I want to focus on a couple of positives that I very much welcome among the recommendations. One is the recommendation to develop, implement and monitor minimum standards. It seems to me that that is exactly what we do in every other area of health care. When I was shadow Minister for Science and Innovation, it was precisely what the Medicines and Healthcare Products Regulatory Agency and the then National Institute for Health and Clinical Excellence intended when it came to interventions requiring medical trials and proper evidence. Minimum standards are an absolute minimum, to put it that way, if we are absolutely serious about ensuring that care is consistent and does not fall below a well defined level in services and the way in which they are provided.

It is clear that the recommendations on intervention and recognition in schools and GP surgeries are already very well known among Members. In the 10 years that I have been here, I have heard debates in which such points have been highlighted. It is good to see a recognition in print that there needs to be more awareness in schools. I thank my hon. Friend the Member for Brigg and Goole (Andrew Percy), who was a teacher for many years before he entered this place, for his words on this subject. Without the relevant guidance, it is quite tricky to distinguish between children who, just from their background or families, one thinks are just being tricky, and children who are presenting with a diagnosable and observable emotional or clinical mental health condition.

On in-patient care for people under section 136 of the Mental Health Act 1983, times have moved on. The days when the idea was that somebody in such a unit should feel that it was akin to a prison must be well behind us. I very much welcome much of the work already done in the NHS and elsewhere to make sure that although such units are secure and can protect the vulnerable young people housed in them, they are developed not just as a location in which to keep them safe, but as a place with the services—the cognitive behavioural therapy, the psychiatrists and the psychologists—required to reintegrate them into society.

Without criticising the report, I would have liked it to go a little further on online resources and the digital world. It seems to me that we often see Twitter, social media and technology as a huge danger with all sorts of negative consequences, and that we seldom see the positive applications that could be made in the online and digital world. I very much welcome the acknowledgment of the extra stresses and burdens that social media place on young people in particular. I also welcome the allusion to how, perhaps with more resources and more proactive health care providers and more proactive people with an interest in mental health conditions, technology could be made part of the answer. When somebody is being bullied on Twitter or social media, technology could be used to create a little pop-up saying, “Hey. This looks like bullying. Would you like to analyse how you’re feeling about that?”

There could be all sorts of excellent uses of digital technology to help people through a process, through a partial process of CBT or in identifying the problems they face, and online resources could be exceptionally helpful in that regard. A lot of the process is about acknowledgment and recognition and then of leading people on to the next step, but if they do not feel that fulfilling the criteria for having a mental health challenge will be an embarrassment or that stigma will be attached to them, such technology could guide and lead them to getting additional help. When the Government look at the report, perhaps they could look even further into using the online world and digital technology as part of the cure.

As a former shadow Minister, I would like to say that if we had a pill that cured 50% of people of any illness or mental health condition that they had after six weeks, we would say that it was a miracle cure. Certainly for less acute mental health conditions among adolescents, cognitive behavioural therapy is that wonder pill. We need to see more investment in, further roll-out of and quicker access to such services.

18:30

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

I thank the Chair of the Health Committee, the hon. Member for Totnes (Dr Wollaston), and the other members of her Committee for their thorough and valuable report, and for giving us the opportunity to debate this important issue.

When we discuss complex commissioning and funding arrangements, as we are today, we must not lose sight of the people at the heart of the matter. I remind the House that we are talking about some of the most vulnerable children and young people, who are often scared and in states of high distress and trauma. They and their families deserve the very best care and support that our NHS can offer. However, as the Health Committee found, for too long they have been overlooked.

I think that anyone who has read the report would agree that it is damning in parts. It concludes:

“There are serious and deeply ingrained problems with the commissioning and provision of Children’s and adolescents’ mental health services. These run through the whole system from prevention and early intervention through to inpatient services for the most vulnerable young people.”

We have heard that Members from all parts of the House share the concerns that are expressed in the report. It was valuable and helpful to hear not only from members of the Committee, but from other Members who have experience from their constituencies and from before they came to the House.

Many Members in this debate and in previous debates in the House have raised horrifying and tragic cases involving their constituents. Most Members know all too well the pressure that too many parts of CAMHS are increasingly under. Sadly, the reports of children facing long waits for treatment, being sent hundreds of miles for a bed or not getting any help at all are too common. In my capacity as shadow Minister for public health with responsibility for mental health, I have received too many messages from young people across the country that paint a picture of services that are under immense pressure and of waits that pass the three month and six month marks. Indeed, we heard from my hon. Friend the Member for Coventry North West (Mr Robinson) about constituents who have waited 44 weeks.

The Minister is open about the scale of the challenge and acknowledges that there is much to do. The Government accepted in their response to the report that the mental health and well-being support that is offered to children and young people, as well as to their families and carers, often falls short. The Government accept that there is a need to improve the system. Today’s debate has been a much needed contribution to the parliamentary and public understanding of the challenges that the system is facing. It has been an opportunity for the House to hold the Government to account on their response and on the action that they must now take to get to grips with these challenges.

The shortage of beds, which the Select Committee highlighted, is of great concern to many Members. The Government response refers to NHS England’s commitment to commission 50 more beds. We understand that NHS England has opened the majority of those beds. I hope that in his response the Minister will confirm when the remaining few will open. Does he consider the additional 50 beds to be sufficient, in the light of the pressures that CAMHS is facing?

The system clearly is not working in some parts of the country. Members on both sides of the House will have been shocked to read in The Observer a few weeks ago that commissioners from NHS England sent out an e-mail on a Friday night to warn that there would be a national shortage of in-patient beds for children over the weekend and that it was likely that children would need to be placed on adult wards. Almost a year ago, the chief executive of YoungMinds said that the increase in the number of children placed on adult wards was entirely predictable following cuts to mental health services. I hope the Minister will say what more he can do to assess and reassess the situation.

Ensuring that we have enough beds to prevent children from having to travel hundreds of miles from home for treatment or to avoid being detained in police cells is, of course, critical, and Members have addressed that issue. However, as the Committee points out,

“commissioning extra inpatient capacity alone will not be enough to alleviate the current problems being experienced”

in relation to in-patient services.

I appreciate that some of the issues are long-standing historical challenges, but it is certainly fair to say that this Government’s reorganisation has exacerbated those challenges. The Committee’s report states:

“Despite the move to national commissioning over a year ago…NHS England has yet to ‘take control’ of the inpatient commissioning process, with poor planning, lack of co-ordination, and inadequate communication with local providers and commissioners.”

NHS England itself has acknowledged weaknesses in commissioning as a reason for bed pressures and patients being inappropriately admitted to specialised units. The Committee highlighted the concerns that professionals have been raising for more than a year about the new split in commissioning between tier 4 services, which are the in-patient beds commissioned nationally by NHS England, and lower tier services, which are commissioned by clinical commissioning groups. It does not take a genius to work out that that arrangement results in the perverse incentive for CCGs to refer children to tier 4 in-patient services, because they do not have to pay for them, rather than treat them in the community, where they have to fund the places. We know that treatment in the community can be so much better for many of those young people’s outcomes and their long-term recovery, but the current situation is exacerbating many issues and problems.

The Minister himself has said that current fragmented commissioning arrangements make “no sense” and are “dysfunctional”. It would be helpful to hear from him what more the Government plan to do to address the situation. In their response to the Committee, the Government said that their taskforce would look at determining a way in which commissioning can be sufficiently integrated. Given that we had to read about the taskforce conclusions on the pages of The Times a couple of weeks ago, perhaps the Minister will do us the courtesy of updating the House on what action the Government will take.

The Government have also announced that NHS England has funded eight pilots looking into collaborative joint commissioning arrangements for children and young people’s mental health, so it would be really helpful to have an update on the progress of those pilots.

The commissioning confusion caused by the NHS reorganisation would be a challenge in itself, but, combined with the cuts to local authority CAMHS and early intervention services, it is having a devastating impact. There has been £50 million-worth of cuts to CAMHS since 2010. There have also been cuts to local authority CAMHS and to early intervention in psychosis services, a reduction in social workers and a decimation of the early intervention grant in many parts of the country, which is putting pressure on in-patient services, particularly in areas with higher levels of deprivation.

I listened to the speech by the hon. Member for Brigg and Goole (Andrew Percy), but Liverpool’s budget has been cut by 56%. The idea that Liverpool city council is not interested in youth services could not be further from the truth, but the reality is that applying the funds available to it to youth services is incredibly challenging.

According to research by YoungMinds, two thirds of councils in England have reduced their CAMHS budget since 2010. When the charity asked NHS trusts and councils about other mental health spending targeted at children and young people, such as youth counselling or specific services for schools, it found that more than half of them had cut their budgets, some by as much as 30%. It is therefore unsurprising that the Committee reported that poor provision of lower tier services has likely been a key factor in the increase in the number of children and young people requiring admission to in-patient services.

In their response the Government refer to extra funding for early intervention in psychosis services and crisis care, but will that not merely take us back to where we were before these cuts? What proportion of the new funding that the Minister has announced will be directed towards services for under 18s? I am particularly interested in the work of the Government’s taskforce on ways to incentivise investment in early intervention—again, it would be helpful to have an update on that. Will the Minister match the Opposition’s ambition to increase the proportion of the mental health budget that is spent on children over time—again, that point has been raised by hon. Members on both sides of the House?

Schools are an obvious place for prevention work to take place, and I was interested to hear the intervention from the hon. and learned Member for North East Hertfordshire (Sir Oliver Heald) about the experience of schools in his area. The Committee found that in too many schools counselling services are unavailable, even though they can provide lower level preventive intervention that can stop problems subsequently becoming more serious. Again, will the Minister update the House on his work with colleagues in the Department for Education to improve that situation? Will he meet the Opposition’s commitment to produce a strategy to help local authorities with their local NHS and schools to work together, to ensure that all children can access school-based counselling or therapy if they need it? Does he agree that in future all teachers should have training in child mental health so that they are equipped to identify, support and refer children with mental health problems?

A few other issues were raised in the debate, although I am conscious that we want to hear from the Minister and I have just three minutes to respond. The work force were mentioned, as was ensuring that all GPs are trained in mental health. The Opposition have committed to ensuring that training for all professional staff in the NHS includes mental health. Does the Minister support that ambition? Data were mentioned by Members on both sides of the House, and up-to-date data and information are critical to provide safe and effective services that meet the needs of children, young people, their families and carers.

I share the Committee’s concern that the most recent data from the Office for National Statistics on children and young people’s mental health are now 10 years old, and the Minister said that CAMHS has been operating in a fog without that information. I welcome the commitment to a new national prevalence survey of child and adolescent mental health data, and that that is a priority. Again, it would be helpful to have an update on that. Can the Minister set out the time frame for work that will take place before February 2016 when we understand that that data set will start?

In conclusion, as we have heard, significant questions remain. Much of the Government’s response to the Committee’s report has referred to the work of the CAMHS taskforce, which the Minister has established and is yet formally to publish its report, even though elements of it have been leaked to the press. It would be helpful for the Minister to update the House on when the taskforce report will be published in full, and to say whether he intends to follow it with tangible action—I appreciate that there will be recommendations, but it would be helpful to know what the Government intend to do.

Children and young people are struggling with mental illness, and in some cases their illness is becoming so severe that they are turning up in A and E—just this week a response to a parliamentary question showed that young people are turning up in A and E with mental illness not just once but two, three, four or five times. They often wake up in hospital beds too many miles from their families and friends, and are simply not receiving any help at all. We are having this debate on their behalf, and I hope the Minister will tell the House what action he will be taking to put that situation right.

We must get to a point where a child can feel that it is as safe to talk about their mental health as about their physical health, and where all children feel that they can tell someone about their anxiety as easily as they can speak about their headache or a stomach bug. Crucially, when they do that they must get the help they need, when and where they need it. I look forward to the Minister’s response.

18:44

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

The debate has been undertaken in a rational way—we have not had the hurling of abuse from one side to the other. My hon. Friend the Member for Windsor (Adam Afriyie) said that the report is objective and that it analyses problems and seeks to come up with solutions. The debate has been conducted in that way, which I welcome.

I am grateful to the Health Committee for its work, and for the inspired leadership of my hon. Friend the Member for Totnes (Dr Wollaston), who speaks with great authority on the subject. She is a force for good in this place. I thank her for her leadership.

My hon. Friend said that the report was triggered by the awful practice of youngsters being shunted around the country in the middle of a crisis. The situation with adults is just as bad. That practice should not happen other than where there is a specialist need and a specialist service that cannot, with the best will in the world, be provided in every locality. We have sought to analyse the causes of out-of-area placements. We see enormous variation around the country. Many areas do not do it, but where it does happen, we believe that simple steps could be taken to stop it. In my view, they must be taken.

[Roger Williams (Brecon and Radnorshire) (LD)]

The Minister will be aware from his visit to my constituency that young people from Wales are being treated in Kent and Northampton. Does he agree that that will do nothing to provide decent service, care and treatment for them?

[Norman Lamb]

I agree. It is intolerable. One can only imagine the impact on the family having to travel such long distances. My hon. Friend and I had that discussion in Brecon with the family concerned. It is shocking that that practice continues. It must be a priority.

My hon. Friend the Member for Totnes said that the importance of early intervention is a central theme of the report. There is great scope for much more to be done on public mental health. It was revealed recently that a tiny proportion of public health budgets in localities is spent on public mental health, and yet we know—there is loads of evidence—that, if we invest in public mental health, we can achieve a significant return on it. I welcome the report.

The hon. Member for Sheffield Central (Paul Blomfield) talked about what young people had told him. It was great that they were given a voice directly in this place. I welcome his comments.

In a very thoughtful speech, as always, my hon. Friend the Member for Southport (John Pugh) talked about a continuum. Many of us are susceptible to poor mental health in certain circumstances. That makes the point about the importance of schools, which other hon. Members mentioned, in building resilience and keeping youngsters stronger so that they can cope with all the challenges they inevitably face these days.

The hon. Member for Stoke-on-Trent South (Robert Flello) talked about Malachi, an organisation he was involved with, and about the triggers that can cause mental ill health among youngsters. Family breakdown is one, but bereavement can have a significant impact, as can bullying at school, which another hon. Member mentioned.

[Robert Flello]

Will the Minister give way?

[Norman Lamb]

I am conscious that I need to get through quite a lot in the time available to me.

I thank my hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald) for his kind comments. He was absolutely right about the potential for online access. The hon. Member for Windsor made a similar point. There is enormous potential. One platform is called Kooth. Good evidence is developing about the impact that online access can have. Given that so many youngsters with poor mental health get no support at all, we can do a lot to increase access, not as a replacement for other services, but as a complement. He, too, talked about the importance of the role of schools.

I worked in Parliament as a junior researcher in 1980, for a Labour MP. I shared an office with the secretary of the hon. Member for Coventry North West (Mr Robinson). He is still here 35 years later. He is clearly the great survivor. He referred to the most appalling wait of 44 weeks in Coventry, which is totally unacceptable. I do not know what is going wrong in that locality, but that is not matched in many other places. There may be particular problems that need to be faced. In a way, that makes the case I have been making throughout my time as Minister that the same access and waiting time standards for physical health should exist for mental health. That is the big discrimination against mental health, and it has existed for a very long time.

[Ian Mearns (Gateshead) (Lab)]

Waiting times are so much more crucial for children and young people with mental health issues.

[Norman Lamb]

I totally agree. When I embarked on the mission to introduce waiting time standards in mental health, I was very clear throughout that they must apply equally in children’s services, as in any other service. One of the first two standards we are introducing from April this year is a two-week standard to start treatment for early intervention in psychosis, where there is a wealth of evidence that quick intervention can lead to good results.

My hon. Friend the Member for Brigg and Goole (Andrew Percy) talked about the absolute importance of youngsters learning about mental health at school. It ought to be part of the curriculum, and we would benefit a lot if that was the case. He also made the important point that although lots of areas of the country have seen really ridiculous disinvestment in mental health and children’s mental health, other enlightened areas have not done that. There is no necessity for it to happen; it depends on what the local priorities are. In his area they have done the right thing and made the necessary investment.

The hon. Member for Easington (Grahame M. Morris) talked about the horror of suicide. The husband of my hon. Friend the Member for Totnes is a psychiatrist in Devon. He has been a brilliant advocate of the case for a zero-suicide ambition. Every organisation within the NHS ought to be setting the same ambition that has been set in Devon.

The Government have prioritised improving mental health as part of our commitment to achieving parity of esteem, or, as I would prefer to call it, equality. I have been frank that the current system for supporting children and young people’s mental health is simply not good enough, but let us be clear that this is not a new problem. Previous reviews into CAMHS have identified similar issues to those that the Committee highlights, such as a lack of beds, complex commissioning and referral arrangements, poor practice around transition from children to adult services, and instances of children being treated far from home or on adult wards. These issues are deep-seated and hard to resolve. Lord Crisp was recently quoted in the Health Service Journal, when asked about parity of esteem:

“If something has developed over 40 or 50 years you don’t solve it in five minutes.”

I know a youngster who in the past decade was horribly let down by mental health services at that time. This is not something that has just emerged over the course of this Parliament. I fully recognise that too many areas of the country have disinvested in young people’s mental health. I firmly believe that the situation can and must improve. The Government have taken steps to do this.

It is worth saying that, as I have done this job, I have seen some really impressive services. There is a brilliant NHS team in Accrington providing the best possible service to young people. I visited South London and Maudsley, where there is a fantastic eating disorder service based on the quickest intervention, with specialist support for youngsters very quickly reducing massively in-patient admissions. That is the sort of service we need to see across the country. There is a brilliant in-patient facility in Colchester, where there is a great school in the mental health service so that youngsters do not lose out on their education while they are receiving support. There are some brilliant third sector organisations. MAC-UK is a wonderful organisation that takes therapy out on to the streets to support youngsters who get involved in gangs, rather than expecting youngsters in those circumstances to visit traditional services. MAP—the Mancroft Advice Project—in Norwich is a brilliant service supporting youngsters in a non-stigmatising way.

Since 2010, we have raised the profile of children and young people’s mental health to unprecedented levels. We have produced the mental health and suicide prevention strategies, set out the top 25 priorities to help to achieve parity of esteem in the “Closing the gap” document last year, and we have worked, through Time to Change, to reduce the stigma attached to mental health issues. The 2014-15 mandate to NHS England sets it a clear objective to deliver equality and parity of esteem, and in 2014 we published our five-year vision for mental health. At its heart was a radical change: an ambition to set access and waiting time standards for mental health—just as they exist for physical health—including children and young people’s mental health, for all services by 2020. That is a landmark step in rebalancing our health and care system and achieving equality.

[Mr Robinson]

It is good to hear that the Government are setting those targets. Will the Minister have a look at the situation in Coventry and explain to me why it has happened? Can he also confirm that the targets he has set will be achievable, despite the £50 million cut that has been made?

[Norman Lamb]

I am very happy to look at Coventry if the hon. Gentleman wants to send me a note about that.

I make the case that there needs to be more investment in mental health, and my party has argued for £500 million of additional investment a year in mental health in the next Parliament. Investing £54 million for the children and young people’s IAPT—improving access to psychological therapies—programme has started to transform existing services, and it now covers 68% of the nought to 19-year-old population, which exceeds the original target of 60% by 2015. NHS England continues to plan for nationwide roll-out, as set out in the mandate, which should be achieved by 2018.

As part of the autumn statement, the Deputy Prime Minister and I announced £150 million of investment over the next five years to deal with eating disorders. This will help to ensure that any young person can get the help they need, no matter where they live, and will allow the development of waiting time standards for eating disorders from 2016. This is a condition that can kill, so it is so important that we get early access. We have invested £3 million in MindEd, a digital resource to help people who work with young people and children. It is an online platform designed to give them the help that they need in the work that they do.

The prevalence survey is being undertaken—we have secured the money for it—and we plan for it to be ready by 2017. The aim is for it to cover children and young people from two years to 19 years, which is a wider range than in the original survey. That should be widely welcomed.

As for the taskforce, although there has been much progress, the Government have been open about the scale of the challenge and acknowledged that there is still much to do. As the Committee is aware, I set up the taskforce last summer. It is chaired jointly by the Department and NHS England and brings together a whole load of experts from outside Whitehall and listens to the voice of young people as well. This is a massive opportunity fundamentally to modernise the way children and young people’s health services operate, embracing the role of the voluntary sector and the potential for online support for youngsters, and sorting out this ridiculous, fragmented commissioning. The problem has been there for a long time, but things need to be made much simpler, so that we can have coherent services that are easily understandable for children and their families. If we can grasp this opportunity, we can make a massive difference for young people.

Let me say a word about crisis care. In a way, this is the area where the gap between physical and mental health is greatest. The Torbay case that my hon. Friend the Member for Totnes mentioned was a shock to the system, although we have already seen considerable reductions in the number of young people going into police stations. We are on course to see a reduction of about 30% this year, but it needs to be much greater than that. In my view, we need to legislate to end the practice completely. It is surely completely unacceptable that young people under the age of 18 end up in police cells rather than in a hospital. That practice simply has to come to an end.

I applaud everyone who has participated in this debate on a really important subject. I think we have an opportunity massively to improve things.

[Mr Speaker]

We thank the Minister, whose sense of timing is almost immaculate. I know that he intended that this debate should finish at seven o’clock, which it has done.

Question deferred (Standing Order No. 54).

19:00

The Speaker put the deferred Questions (Standing Order No. 54).

Estimates 2014-15

Department for Communities and Local Government

Resolved,

That, for the year ending with 31 March 2015, for expenditure by the Department for Communities and Local Government:

(1) further resources, not exceeding £752,206,000 be authorised for use for current purposes as set out in HC 1019,

(2) the resources authorised for use for capital purposes be reduced by £607,860,000 as so set out, and

(3) the sum authorised for issue out of the Consolidated Fund be reduced by £1,092,985,000 as so set out.

Ministry of Defence

Resolved,

That, for the year ending with 31 March 2015, for expenditure by the Ministry of

Defence:

(1) the resources authorised for use for current purposes be reduced by £618,573,000 as set out in HC 1019,

(2) further resources, not exceeding £426,760,000 be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £426,834,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.

Department for Work and Pensions

Resolved,

That, for the year ending with 31 March 2015, for expenditure by the Department for Work and Pensions:

(1) further resources, not exceeding £910,407,000 be authorised for use for current purposes as set out in HC 1019,

(2) the resources authorised for use for capital purposes be reduced by £6,689,000 as so set out, and

(3) a further sum, not exceeding £2,183,111,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.

Department of Health

Resolved,

That, for the year ending with 31 March 2015, for expenditure by the Department of Health:

(1) further resources, not exceeding £866,629,000 be authorised for use for current purposes as set out in HC 1019,

(2) the resources authorised for use for capital purposes be reduced by £635,000,000 as so set out, and

(3) the sum authorised for issue out of the Consolidated Fund be reduced by £679,772,000 as so set out.

The Speaker then put the Questions on the outstanding Estimates (Standing Order No. 55)

ESTIMATES 2015-16 (NAVY) VOTE A

Resolved,

That, during the year ending with 31 March 2016, a number not exceeding 35,850 all ranks be maintained for Naval Service and that numbers in the Reserve Naval and Marines Forces be authorised for the purposes of Parts 1, 3, 4 and 5 of the Reserve Forces Act 1996 up to the maximum numbers set out in Votes A 2015–16, HC 1054.—(Mel Stride.)

ESTIMATES 2015-16 (ARMY) VOTE A

Resolved,

That, during the year ending with 31 March 2016, a number not exceeding 108,430 all ranks be maintained for Army Service and that numbers in the Reserve Land Forces be authorised for the purposes of Parts 1, 3, 4 and 5 of the Reserve Forces Act 1996 up to the maximum numbers set out in Votes A 2015–16, HC 1054. —(Mel Stride.)

ESTIMATES 2015-16 (AIR) VOTE A

Resolved,

That, during the year ending with 31 March 2016, a number not exceeding 35,870 all ranks be maintained for Air Force Service and that numbers in the Reserve Air Forces be authorised for the purposes of Parts 1, 3, 4 and 5 of the Reserve Forces Act 1996 up to the maximum numbers set out in Votes A 2015–16, HC 1054.—(Mel Stride.)

ESTIMATES, EXCESSES, 2013–14

Resolved,

That, for the year ending with 31 March 2014:

(1) resources, not exceeding £564,553,000, be authorised to make good excesses for use for current purposes as set out in Statement of Excesses 2013–14, HC 1021, and

(2) resources, not exceeding £153,000, be authorised to make good excesses for use for capital purposes as set out in Statement of Excesses 2013–14, HC 1021.—(Mel Stride.)

SUPPLEMENTARY ESTIMATES 2014–15

Resolved,

That, for the year ending with 31 March 2015:

(1) the resources authorised for current purposes be reduced by £20,682,028,000, in accordance with HC 965, HC 977, HC 1019, and HC 1052,

(2) the resources authorised for use for capital purposes be reduced by £6,371,917,000 as so set out, and

(3) a further sum, not exceeding £9,727,334,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Mel Stride.)

ESTIMATES, VOTE ON ACCOUNT 2015–16

Resolved,

That, for the year ending with 31 March 2016:

(1) resources, not exceeding £222,417,912,000 be authorised, on account, for use for current purposes as set out in HC 917, HC 966, HC 1020, HC 1048, HC 1051, and HC 1063,

(2) resources, not exceeding £26,520,287,000, be authorised, on account, for use for capital purposes as so set out, and

(3) a sum, not exceeding £219,606,746,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund, on account, and applied for expenditure on the use of resources authorised by Parliament.—(Mel Stride.)

Ordered, That a Bill be brought in upon the foregoing Resolutions;

That the Chairman of Ways and Means, Mr Chancellor of the Exchequer, Danny Alexander, Mr David Gauke, Priti Patel and Andrea Leadsom bring in the Bill.

Supply and Appropriation (Anticipation and Adjustments) Bill

Presentation and First Reading

Andrea Leadsom accordingly presented a Bill to authorise the use of resources for the years ending with 31 March 2014, 31 March 2015 and 31 March 2016; to authorise the issue of sums out of the Consolidated Fund for the years ending with 31 March 2015 and 31 March 2016; and to appropriate the supply authorised by this Act for the years ending with 31 March 2014 and 31 March 2015.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 180).

Business without Debate

Tuesday 3rd March 2015 Commons Chamber

Delegated Legislation

Tuesday 3rd March 2015 Commons Chamber

[Mr Speaker]

With the leave of the House, we shall take motions 10 to 18 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Childcare

That the draft Childcare Payments (Eligibility) Regulations 2015, which were laid before this House on 13 January, be approved.

Employment and Training

That the draft Industrial Training Levy (Engineering Construction Industry Training Board) Order 2015, which was laid before this House on 21 January, be approved.

That the draft Industrial Training Levy (Construction Industry Training Board) Order 2015, which was laid before this House on 21 January, be approved.

Local Government

That the Local Government (Transparency) (Descriptions of Information) (England) Order 2015, dated 7 January 2015, a copy of which was laid before this House on 12 January, be approved.

Capital Gains Tax

That the draft Community Amateur Sports Clubs Regulations 2015, which were laid before this House on 19 January, be approved.

Terms and Conditions of Employment

That the draft National Minimum Wage Regulations 2015, which were laid before this House on 27 January, be approved.

Rating and Evaluation

That the draft Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2015, which were laid before this House on 14 January, be approved.

That the draft Non-Domestic Rating (Shale Oil and Gas and Miscellaneous Amendments) Regulations 2015, which were laid before this House on 23 January, be approved.

Transport

That the draft Renewable Transport Fuel Obligations (Amendment) Order 2015, which was laid before this House on 14 January, be approved.—(Mel Stride.)

Question agreed to.

Sittings of the house

Ordered,

That this House shall sit on Friday 20 March.—(Mel Stride.)

Closure of NatWest branch in Eccleshall

Tuesday 3rd March 2015 Commons Chamber

19:03

[Sir William Cash (Stone) (Con)]

This petition relates to the closure of the NatWest bank branch in Eccleshall in my constituency. It is supported by over 700 signatures and is accompanied by an Adjournment debate that I had today in Westminster Hall on the same subject.

The petition reads as follows:

The Petition of residents of the constituency of Stone in Staffordshire,

Declares that residents of Eccleshall object to the closure of NatWest branch in Eccleshall and further that this is the only remaining bank branch in Eccleshall.

The Petitioners therefore request that the House of Commons urges the Department for Business, Innovation and Skills to encourage NatWest to keep the Eccleshall branch open.

And the Petitioners remain, etc.

[P001440]

International Endangered Species

Tuesday 3rd March 2015 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mel Stride.)

19:04

[Norman Baker (Lewes) (LD)]

I welcome the opportunity to discuss this important matter. I note that the debate falls on world animal day, which is a fortuitous coincidence. If the mysteries of your office had anything to do with it, Mr Speaker, I am very grateful.

This is the second debate on endangered species that I have introduced since becoming a Member of Parliament, the first having taken place on 1 May 2002. On that occasion, I told the House that, according to a figure that I had been given by the Born Free Foundation, there were 2,155 critically endangered species. I am sorry to say that, according to the foundation, the figure has risen to 2,510 in the intervening years, and that it includes 213 mammals, 213 birds, 174 reptiles and 518 amphibians. Appallingly, 26% of known mammal species are now threatened with extinction, and the number of wild animals on earth has halved in the last 40 years.

I could continue to give figures indefinitely, but let me instead give one or two examples to support my case. In 1900 or thereabouts, there were 100,000 tigers in the wild, but there are now more tigers in United States zoos than there are in the wild. Central Africa has lost 64% of its elephants in just 10 years, and 50,000 were slaughtered in 2013 alone. In our oceans, 73 million sharks are being killed every year for their fins. All eight pangolin species are close to extinction, and 1 million have been traded over the last decade. Sadly, as they near extinction, the desire of hunters to find them increases rather than decreases.

What is the reason for all that? It comes down to money. According to research carried out by the International Fund for Animal Welfare, the illegal trade in endangered species is worth $19 billion a year. That is a huge amount of money for people who are involved in criminal activity which, of course, can also be brutal and mercenary. When I was a Home Office Minister, I heard a story about an African country where rangers were trying to protect the animals. A helicopter landed, full of very well-armed individuals who simply mowed down all the rangers and all the animals. Apparently, that was not particularly unusual.

The good news is that the coalition Government has been leading on this matter. I particularly congratulate the former Foreign Secretary, the right hon. Member for Richmond (Yorks) (Mr Hague), on the leadership that he has provided. I was very pleased to co-chair a section of the February 2014 conference which led to a London declaration and 41 countries signing up to a course of action. There will be a follow-up when the Botswana conference takes place later this month, and I pay tribute to Foreign Office officials for the work they are doing in preparing for that event. Let me also acknowledge the work that is being done by Border Force. When I was a Minister, I had an opportunity to observe its superb work at Heathrow in identifying those who trade in endangered species, and the expertise that it has developed.

What must we do? I am pleased to say that the Government is already taking some action, but more is needed. First, we must reinforce the help that we are giving to developed countries to protect their animals. That means giving them military help, financial help, and help with economic planning, so that tourism, for example, can provide them with a valuable alternative income stream. At the London conference that I attended last year, one of the key “asks” was for Land Rovers to enable rangers to travel around more quickly. I hope that the Government has noted those points, which may seem small, but which are very important when it comes to helping developing countries.

I welcome the £5 million that has been allocated by the Departments for Environment, Food and Rural Affairs and for International Development, but I hope that, notwithstanding the current financial situation, the Government will be able to find more money to help to deal with this important matter, and will encourage other countries to follow suit.

Secondly, we need to engage with end markets. In particular, we must try to persuade China to cut off the demand for products such as ivory and rhino horn. They are used in so-called medicinal solutions, but I believe that they are medicinally worthless. I understand that rhino horn, for instance, is about as much use as a fingernail when taken in a attempt to cure a particular condition.

Thirdly, we need to deal with transportation measures and tackle how products are taken from A to B. I know the Leader of the House is dealing with this in a different capacity now. So there is a lot to do; I am pleased the Government is doing a lot, but there is still more that can be done.

In particular I ask the UK Government to look at the issue of online sales. We have to go further than we have done on that. IFAW investigators have found a total of 33,000 wildlife and wildlife parts and products from species listed in appendixes I and II of the convention on international trade in endangered species for sale in over 9,000 ads online. We should be requiring online marketplaces to alert users to the legal position. I should be grateful if the Minister responded to that point and told me whether the Government are considering that matter.

We also need to look at ensuring long-term funding for the national wildlife crime unit. I am happy to say that, partly when I was in office, the funding was extended to 2016, but it would be helpful if the Minister could say—notwithstanding the fact that we cannot tie the hands of a future Parliament—that the intention is to carry on funding that very important unit.

We must also reinstate a dedicated post for wildlife cyber-crime. This appears to have vanished and is terribly important, particularly if we are going to deal with the issue of online marketplaces. That may be just an unfortunate cut, but it is necessary to reinstate it. It may not even be about more money; it may simply be about a reallocation of individuals, but it is important that that post is filled.

We must also confirm that the trade is covered by the serious and organised crime strategy. I believe it is, but it will be helpful if the Minister can confirm that the Home Office strategy for serious and organised crime takes account of endangered species. I know from my time in office that the people who deal in endangered species may well be dealing in children one week or guns or drugs or something else. They do not really care; they are completely lacking in morality. All they are interested in is making money. This is not just about protecting endangered species, vital thought that is; it is also about making sure we interrupt these people in their activities, whatever they are dealing with at any particular time.

Finally, I ask the Minister to deal with the regulations on the control of trade in endangered species. I understand that it is the Government’s intention to update the regulations, which I welcome, but I would be grateful if the Minister confirmed that we will be able to do so before we reach purdah at the end of the month. It will be unfortunate if this matter rolls over. He knows as well as I do that when a new Government takes office—even if it is the same one—there are so many things to sort out that matters such as this can be shoved down the agenda. This is a simple matter that I think the Government is committed to. If we are able to deal with it before we end this Parliament, that will be very helpful. I hope the Minister is able to deal with those three or four points in his response to me.

The level of extinctions is terrifying. We are in danger of losing species in our lifetime—I say that even as someone who is middle-aged. I understand that the dinosaurs took 250,000 years to become extinct in the last mass extinction. We could lose the tiger and other species in 25 years. I do not want to be a member of the human race—and I do not think anyone in this House does either—who sees such species disappearing in our lifetime. So I urge the Government, not simply to carry on with what it is doing, which is welcome, but to redouble its efforts at Botswana and elsewhere to protect these endangered species, engaging with our colleagues in other countries to make sure we do all we can so that future generations can benefit from the wonderful species around the world, just as we have in our lifetime.

19:13

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

I congratulate the right hon. Member for Lewes (Norman Baker) on securing this most appropriate debate as today is, as he pointed out, world wildlife day. Individuals and organisations will be marking the day with events around the world, and I note that the right hon. Gentleman has been particularly busy highlighting the problems our wildlife face with the release of his “Animal Countdown” CD. Before this debate I went online to listen to it and it is not bad—it is pretty good and certainly does highlight this very important issue. On world wildlife day, we celebrate the intrinsic value of animals and plants, but we also highlight the severe threats that they face. Those threats range from habitat destruction and climate change to the illegal wildlife trade and poaching, which is threatening to decimate many species, as he pointed out.

Much of our ongoing effort to combat those threats is undertaken through work in the relevant international conventions, including the convention on biological diversity and the convention on international trade in endangered species. The UK Government provide direct support to countries that are rich in biodiversity but poor in financial resource. This includes work in our overseas territories through the globally respected Darwin initiative. More than 900 projects totalling around £110 million have been funded since 1992, supporting habitat and species from elephants to the mountain chicken, which is not actually a chicken but a type of frog native to the Caribbean islands of Dominica and Montserrat. The global tiger initiative has brought together all the tiger range states, as well as concerned Governments —including that of the UK—and academics and non-governmental organisations involved in the global tiger recovery programme. The programme aims to double the number of tigers in the wild by 2022, and the UK has committed funding equivalent to $500,000 to support that work.

This year’s theme for world wildlife day is wildlife crime. In recent years, it is the scourge of poaching that has focused many minds as it threatens some of the world’s most iconic species, including elephants, rhinos and tigers. There was wide recognition that more needed to be done and I am pleased to say that this Government are a global leader in efforts by the international community to tackle this issue, as the right hon. Gentleman acknowledged. The illegal wildlife trade not only threatens the future existence of whole species; it devastates already vulnerable communities co-existing with these species, drives corruption and undermines our efforts to cut poverty. The right hon. Gentleman gave an example of gunmen killing all the animals and all the rangers. Murder is being committed, and we should recognise the fact that many of the rangers who are trying to fight the scourge of poaching are putting their lives at risk. This illegal trade strikes at the very heart of our goals for good governance, for the protection of national and regional security, and for sustainable economic development.

The number of animals being poached is truly horrific. At least 20,000 elephant poaching deaths were recorded in 2013. In 2014, the Government of South Africa reported that 1,215 rhinoceroses were killed by poachers. That is a staggering increase, up from 13 killed in 2007. This wholesale slaughter is being driven by greed and by organised criminal syndicates. The price of ivory in China trebled between 2010 and 2014.

Recognising the rapidly deteriorating situation, in February last year the Government hosted the London conference on the illegal wildlife trade. High-level representatives from 41 countries and 10 international organisations came together to agree a set of urgent actions. The conference delivered an ambitious political declaration containing 25 commitments to take action on, for example, reducing demand for illegal wildlife products, ensuring effective legal frameworks and deterrents across the globe, strengthening law enforcement and supporting sustainable livelihoods. Those 25 commitments included Governments committing for the first time to renounce the use of any products from species threatened with extinction, and Governments supporting the CITES commercial prohibition on international trade in elephant ivory until the survival of elephants in the wild is no longer threatened by poaching. Governments also committed to treating poaching and trafficking as a serious organised crime in the same category as drugs, arms and people trafficking.

In December last year, we announced funding for 14 projects as part of the illegal wildlife trade challenge fund, worth almost £4 million. That will help developing countries to tackle the illegal wildlife trade, and it is in addition to the five projects that we funded earlier in 2014. This means that we are now supporting 19 projects with a value of more than £5 million over the next four years.

There is also some evidence that other countries are starting to follow our lead. Over the past year, there have been many positive examples of countries taking action to deliver the commitments made in the London declaration. As the right hon. Gentleman pointed out, just last week China announced a 12-month immediate ban on the importation of carved ivory, in support of its efforts to protect elephants in Africa. His Royal Highness the Duke of Cambridge is currently in China as part of his visit to the far east. He is undertaking engagements there in support of his work to combat the illegal wildlife trade and support wildlife conservation. In addition, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs raised the issue of illegal wildlife trade during her recent visit to China at the beginning of this year. In Vietnam, the penal code is being amended to incorporate stronger and more deterrent sanctions against environmental crimes, including the illegal trade in endangered species.

UK enforcement bodies play an active role in combating wildlife trafficking, and I commend the excellent work of the national wildlife crime unit and the UK Border Force. The right hon. Gentleman asked about the future funding of that unit. Like him, I have been passionate about supporting it, and DEFRA certainly made funding available to it up until 2016. Having been in government, he will be familiar with the way in which funding works, and we will have to wait until the next spending review period before we can make specific commitments on it. I hope he will accept that in recognising the unit’s good work, I am sending a strong signal in support of its efforts to tackle this difficult problem. Hon. Members may recall a case last year of an interception at Heathrow of very rare San Salvador rock iguanas being smuggled from the Bahamas. We were able to return 12 of these critically endangered species to their natural habitat. Sadly, one of the iguanas died, but I am pleased to say that the criminals responsible received 12-month custodial sentences. The success of that operation was due to the excellent work carried out by the Border Force CITES enforcement team based at Heathrow.

As the right hon. Gentleman pointed out, there is more to be done on intercepting smuggling during transportation. I therefore welcome the creation of an international taskforce to examine the role of the transportation industry in the trafficking of illegal wildlife products. His Royal Highness the Duke of Cambridge launched that in December 2014, and my right hon. Friend the First Secretary of State and Leader of the House—the right hon. Gentleman also mentioned him—has agreed to chair that important taskforce. The taskforce, including representatives from the global transport industry, will develop industry-wide protocols for the sector to strengthen measures it can take to help to eliminate this trafficking. Through the illegal wildlife trade challenge fund, the Government are supporting work such as the border point project, stopping illegal wildlife trade in the horn of Africa. We are also providing funding to the Born Free Foundation to improve enforcement by sending experts to border points to increase the knowledge and skills of local officials.

The right hon. Gentleman finished his speech slightly sooner than I thought he would, so my officials have been working overtime to ensure that I have answers to some of his questions. He asked about the serious and organised crime strategy, and I can confirm that it does cover the illegal wildlife trade. I have covered the point about the national wildlife crime unit; we support the work it does, but, obviously, we are bound by the fact that we have to await the next spending review before making any final commitments on that front. He also asked for an update on any progress being made on updating the CITES regulations. The Government are continuing to take forward the review of CITES regulations, and consultation on proposed changes is taking place. We recognise that the remaining time is limited within this Parliament, but it remains this Government’s intention to progress as far as we can the laying of that updated legislation before the House.

[Norman Baker]

Just before the Minister concludes, will he say something about the issue of online trading and what steps the Government can take to alert buyers to the potential illegality of their purchases?

[George Eustice]

I have answered parliamentary questions on that matter, and my understanding is that that is something the National Crime Agency was doing. There used to be a designated person dealing with that matter. The fact that that post no longer exists does not mean that the work is not being done. It simply means that there is not a single designated person doing it. I am happy to write to the right hon. Gentleman about this matter. As he will know, this specific issue is within the portfolio of my noble Friend Lord de Mauley, and I will ask him to clarify the position on online crimes.

The Government are strongly committed to protecting our world’s endangered species, and in particular to supporting the international community to tackle poaching and the trafficking of wildlife. As the follow-up to the London conference, the Government of Botswana are hosting a second conference in Kasane. That conference is an opportunity to recognise the progress that has been made globally on combating the illegal wildlife trade, and importantly to maintain the priority and focus directed towards this issue achieved at the London conference.

The UK has worked closely to support the Government of Botswana in developing a range of ambitious outcomes. We expect Governments to commit to actions that build on the London declaration. That is likely to include strengthening work to reduce the demand and supply sides for illegal wildlife products, and action to tackle money laundering and other kinds of financial crime associated with the illegal wildlife trade. Those are the sorts of action that we need to take. As an international community, we need to do everything possible to ensure that these magnificent and yet sadly—in some cases—endangered species have all the protection that humanity can offer.

Question put and agreed to.

19:26

House adjourned.

Westminster Hall

Tuesday 3rd March 2015 Westminster Hall

Tuesday 3 March 2015

[George Howarth in the Chair]

Local Pharmaceutical Services

Tuesday 3rd March 2015 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Damian Hinds.)

09:30

[Mr George Howarth (in the Chair)]

Before I call the first speaker, it might be helpful if I point out that the time display has been the subject of a technology failure. Although it is telling the correct time, it is saying that the speech time is already 7 minutes 29 seconds. I say that not because I anticipate any pressure on time, but to prevent anybody who is wondering how long they have been speaking from thinking it is 7 minutes 29 seconds longer than they had anticipated.

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

It is, as ever, a pleasure to serve under your chairmanship, Mr Howarth. I appreciate your pointing out the clock to me. I might have thought I had got stuck in some sort of time warp and was forever on 7 minutes 29 seconds.

I want to put on the record my thanks to Mr Speaker for granting this debate on the essential small pharmacy local pharmaceutical services scheme, which has played and continues to play an important role in supporting small community pharmacies up and down the country. Pharmacies are an essential part of our health care system, and pharmacists play a key role in providing quality health care. They are experts in medicines and they use their clinical expertise and practical knowledge to ensure that medicines are safely supplied to and used by the public.

Over the past few years, a much greater emphasis has been placed on the role of the pharmacist. People have been encouraged to use their local pharmacy as the first port of call for the minor ailments—coughs, colds and skin rashes—that afflict us all from time to time. Pharmacists also play a significant role in programmes such as smoking cessation and emergency contraception, and they do great work with medicine reviews and in ensuring that people use their medicines properly and effectively. They play a huge role in the winter by providing flu jabs efficiently and cost effectively. If I recall correctly, my hon. Friend the Minister supported Westminster flu day last year. Your interest in diabetes is well known, Mr Howarth, and you will be aware of the important role that pharmacists play in helping those with long-term conditions to manage their diseases.

[Andrew Stephenson (Pendle) (Con)]

I congratulate my hon. Friend on securing this important debate. I am a huge supporter of the role of local pharmacies, and I am kept regularly updated about developments by a number of Pendle pharmacists, including Mark Collins of the Barkerhouse road pharmacy in Nelson and Matthew Leedam of Leedams’ pharmacy in Colne.

Does my hon. Friend agree that expanding the crucial role of pharmacies to enable them to better care for patients with long-term conditions, help people to get the best from medicines and offer people the support and advice they need to live independently and stay healthy would benefit not only patients but our local communities and our NHS?

[Caroline Nokes]

I absolutely agree with everything that my hon. Friend said. Small community pharmacies often know their patients well, so they are at the forefront of helping people to manage their conditions and know whether they are taking the right amount of medicine. They are often a useful place for people to go for an informal chat about the conditions that affect them.

Community pharmacies are at the heart of our communities. They dispense advice as regularly as medicine, and they help people to make healthier lifestyle choices. Pharmacy Voice, the organisation formed from the three largest community pharmacy associations, strongly advocated the role of the community pharmacy as part of the solution to pressures on accident and emergency and GP services. It has encouraged people to think, “Pharmacy first”, and it has described community pharmacy teams as being perfectly placed to care for patients with common winter ailments. We are coming out of winter and into spring, but pharmaceutical services are there all year round. They are just as adept at dealing with allergies, stings and hay fever as they are at dealing with winter colds.

Last year, Pharmacy Voice identified that up to 8% of A and E visits could have been dealt with by a high street pharmacy, and approximately one fifth of GP visits could have been avoided by visiting the pharmacist. Last year, NHS England reinforced the role of the community pharmacy with the “Feeling under the weather?” campaign. Many Ministers, including my hon. Friend the Minister, have emphasised in responses to written and oral questions that pharmacists have a great role to play in helping people to manage long-term conditions and in helping people with their medication.

None of the pharmacists I spoke to prior to this debate is sure when the role of the essential small pharmacy was first recognised, but I can say with certainty that the essential small pharmacy in the village of Wellow in my constituency has benefited from support, reflecting its small scale and relative remoteness from other pharmacies, since it opened in 1990. The national contract for such pharmacies was first introduced in 2006, and it has been extended a number of times since then. About 100 pharmacies receive support from the essential small pharmacy local pharmaceutical services scheme. Many are located in relatively remote rural areas, but some operate in inner-city communities. Over the years, they have provided services that have been relied upon by residents for their health care as well as their dispensing needs.

The current pharmaceutical needs assessment, published in 2011, supports the continuation of the scheme. It states:

“ESPLPS pharmacies are used to ensure that access to pharmaceutical services is achieved in certain locations in line with the model of access to pharmacy services in ‘Healthy Horizons in Primary Care’.”

Rural bus services are being reduced and it is increasingly difficult to access other pharmacies by public transport, so small pharmacies can easily be described as essential to local communities. Certainly, that is true of Wellow pharmacy.

What is the problem, and why have I requested this debate? These arrangements have existed for many years and have provided modest support for small pharmacies, where they are needed for patients, but where they might not otherwise be economically viable. The national contract was introduced in 2006, and negotiations by the Pharmaceutical Services Negotiating Committee have seen it extended a number of times. But what is an essential small pharmacy? The criteria for eligibility are that the pharmacy must be dispensing fewer than 26,400 items a year and must be more than 1 km from the next nearest pharmacy. Their benefit to communities was deemed to be so great that a minimum level of remuneration was set. It is currently just under £80,000 a year. From the pharmacy global sum, a top-up payment would be permitted to ensure the continued viability of the pharmacy. However, NHS England confirmed last autumn that it is not possible to continue national arrangements, leaving individual pharmacies to negotiate with their own NHS area teams. Support has been available from the PSNC, but many local pharmacists have found those negotiations difficult, time consuming and stressful. Although some have been successful, other area teams have not been able to provide certainty.

[Sarah Newton (Truro and Falmouth) (Con)]

I am grateful to my hon. Friend for securing this important debate. She is describing the situation faced by an essential small pharmacy in St Mawes in my constituency. We had a public meeting on 5 February with NHS England local area teams, and hundreds of people showed their support for that pharmacy, which is vital in serving the Roseland peninsula. We have not yet heard from NHS England about whether that funding is secure, but the pharmacy applied for an LPS contract. My hon. Friend is right to highlight the continuing uncertainty that the situation is causing for pharmacists and the communities that they serve.

[Caroline Nokes]

My hon. Friend has accurately outlined the situation in her constituency, which I am sure is mirrored across the country. I have received representations from community pharmacists, who have said that they are struggling with short time scales and no certainty from their NHS area teams.

[David Simpson (Upper Bann) (DUP)]

I think the hon. Member for Truro and Falmouth (Sarah Newton) may need to go to the pharmacy. Is the main problem for smaller pharmacies purely the finance, or is it the facilities that they have?

[Caroline Nokes]

I thank the hon. Gentleman for that intervention. I will move on to finance, but it is not my contention that finance is the problem; we just require the local area teams to manage these contracts and get them in place before the deadline of 31 March is reached.

As I was about to say, the contract for Wellow pharmacy, in line with those for every essential small pharmacy across the country, will expire on 31 March. When the contract comes to an end, my constituent Mr Sharma is gravely concerned that his pharmacy will not be able to continue providing these services, unless the local NHS area team decides to renew it, making specific arrangements under the local pharmaceutical services scheme. As yet, he has not received a decision.

Many other pharmacies are similarly affected, and I know that the Secretary of State for Education, my right hon. Friend the Member for Loughborough (Nicky Morgan), who cannot be here today, has expressed concerns about the pharmacy at Loughborough university and the one in the village of Wymeswold. I think that perfectly illustrates the diverse localities that these pharmacies serve. It is not just small village pharmacies under threat, but one serving a university campus, where young people are living away from home for the first time and might be in a position to benefit most from the sage, experienced advice of a pharmacist for their front-line health care needs.

I completely understand the need for NHS England to have devolved these contracts to local area teams, but the reality is that 31 March is now exactly four weeks away and for many pharmacists, there is still no certainty. According to Pharmacy Voice, had NHS England renewed the contract, there would have been procurement and tendering issues, so it was devolved to the areas, but we now face a problem where few have confidence that when we get to the end of this month, they will have a new contract.

What are their options? Well, they are pretty stark. They can close immediately, with no notice to the local community, because the contract will have expired and therefore no notice period is necessary. They can try to struggle on, returning to the pharmaceutical list but facing an immediate drop in income, which was previously agreed by all to be necessary to enable them to provide essential services. Or, and I am sure that this is the option most will follow, they can continue to pursue the NHS area teams to prove their value and worth, when in fact that was already established a long while ago.

For small pharmacies, there is a real challenge in viability. Using Wellow pharmacy as an example, it currently issues in the region of 2,200 prescriptions a month. That is pretty close to the 2,400 prescriptions a month that would trigger what is known as an establishment payment, but it is not quite there. It has worked hard to increase business, but in small communities it is incredibly difficult to push numbers above that threshold. My constituent Mr Sharma describes the additional prescriptions needed as a gulf that he has been struggling for years to cross and has never yet achieved.

I do not intend to delve into the issue of dispensing GPs and what is often perceived as a conflict between pharmacies and those GPs who can dispense. That is quite separate from the immediate time pressure faced by these pharmacies, which have already been deemed essential. What my constituent and the other pharmacists who have contacted me have emphasised is the chasm between the number of prescriptions that they routinely issue and the number that they would have to reach in order to receive the establishment payment. For some, the gap is greater than for others, which means that the impact of losing the essential scheme will be felt differently by various pharmacies and that some might be forced out of business faster than others.

Most members of the scheme are already doing significant work to make sure that they are as accessible as possible to patients, including collection of prescriptions from nearby surgeries and free delivery of medicines to patients. As Mr Sharma puts it:

“This pharmacy is the only health care provider in the area of any type, and the nearest other pharmacies are over five miles away in Romsey. If a patient was to need an over-the-counter medicine, require a medicine free of charge for a child, need support for self-care, or have a minor injury, there is a significant risk that without the availability of my pharmacy, they would attend either the GP surgery in Romsey or the accident and emergency department of Southampton general hospital.”

What he wants, in common with pharmacists from across the country who have been in touch with me, is some certainty going forward.

As Has Modi, of Deanshanger in the constituency of the Economic Secretary to the Treasury, my hon. Friend the Member for South Northamptonshire (Andrea Leadsom), has said:

“These contracts have been left to the discretion of the area team of NHS England, to whom we are required to make a formal proposal.”

The primary care contracts manager of the area team is adamant that the proposal will not be supported unless it can be proved “value for money”. Without the financial support that that entails, this small pharmacy will undoubtedly have to close because the normal funding mechanisms are massively stacked against small pharmacies. It does not even receive various basic fees—which can be substantial—that are available to average and larger pharmacies. This is why the ESPLPS arrangements were put in place to safeguard small but essential pharmacies in the heart of the community.

I appreciate that the current arrangements cannot continue, and that because the Secretary of State has devolved the contracting of primary care services to NHS England, a further extension to the scheme is not possible. He has already extended it once, from 2013 to 2015, and he cannot devolve responsibility for commissioning and then interfere with how that same commissioning operates. Therefore, no extension will be forthcoming and I accept that.

As my hon. Friend the Member for Truro and Falmouth (Sarah Newton) has said, many pharmacies are actively negotiating with their area teams, but concerns have been raised about the responses they are receiving, including time-limited support, and requirements to demonstrate that they are providing value for money. However, those area teams with an essential small pharmacy service are receiving a top-up on their allocations, so the funding is already there and is ongoing from the global pharmacy sum. Any amounts allocated have to be spent on pharmacy services and cannot be redistributed to any other purpose.

Effectively, if the essential small pharmacies are not supported, the moneys will simply go to other pharmacies in locations that have not been deemed to be of such an essential nature. Presumably, they might be redistributed to the larger existing pharmacies, many in high street locations, some distance from the village where there once was a supported, critically important pharmacy.

Essential small pharmacies are working hard to ensure that their “pitch” to the area teams is as robust as possible. Many, such as Wellow pharmacy, are garnering support from the local community, from appreciative patients and from borough, county and parish councils. Local residents are filling in surveys, outlining the services that they use at the pharmacy and identifying what impact closure would have on them personally.

It seems to me a relatively simple proposition: if these pharmacies are essential, and successive Governments have agreed they are, what more can we do to make sure they are retained? I have three things that I wish to ask of the Minister today. First, we need some clarity over what constitutes an essential small pharmacy. Some 90 pharmacies historically receive payments under the scheme. It would be helpful if they could point to an incredibly robust set of criteria, so that it would be easy for the pharmacists then to identify to the area teams why they need the support that has been forthcoming for, in at least the case of Wellow, 25 years.

Secondly, we need some encouragement to NHS England area teams to ensure that the outstanding contracts, which are believed to be the majority of them, are resolved before 31 March, so that pharmacy services are not simply forced to stop in these communities. I know that some are resolved and that others are working very actively to make sure that they are in place before the contracts—and therefore the payments—expire, but from my e-mail inbox, I am acutely aware of how many are simply in a state of limbo, having no idea whether their business will be viable 28 days from now. I would welcome the Minister considering how best she might convey that urgency to NHS area teams.

Finally, we need closer investigation of what role NHS England could play in making sure, within the procurement rules, that pharmacies deemed over decades to be essential can continue to receive support, via the pharmacy global sum, so that there is no additional cost to the NHS area teams and that the top-ups that area teams receive remain in place. However, it should also be made very clear that those can only be used for pharmacy services and not distributed among the wider health care community.

As I said at the beginning, we all appreciate the very important role pharmacists play in our health care provision. They dispense advice and knowledge, as well as drugs. In those of our communities remote from other health care providers, 100 or so of them have been deemed to be essential—and we need to keep them.

09:49

[Kevin Barron (Rother Valley) (Lab)]

I think that this is the first time I have spoken when you are in the Chair, Mr Howarth. I hope that I do not receive a yellow card from you, given the rumour that is going around at the moment that the refereeing system from soccer will be brought into this place.

I do not have a constituency interest to declare inasmuch as the hon. Member for Romsey and Southampton North (Caroline Nokes) does. I thank her for securing this debate, but I represent urban Rotherham, which is a little different from some of the other constituencies represented here. My interest is that I chair the all-party pharmacy group, as I have done for nearly five years in this Parliament. I also have a personal interest in pharmacy and its development.

I am sure that most of us know that pharmacies provide services that are vital to some patients. Without financial support, we could lose them and patients would not be easily able to access other health services. The current system ensures that the benefits of access to pharmacy networks are spread widely. Furthermore, if small pharmacies have to close, local patients may find it harder to access and receive advice on medicines and support for healthy living services, such as stopping smoking or weight loss, that pharmacies have begun to offer.

The lack of a pharmacy in many areas could lead to additional strain on other parts of the NHS. The hon. Lady mentioned GP surgeries and A and E. We all know about the pressure on A and E: I think nationally 50% of people who attend A and E get no treatment whatsoever. Some of them may not need treatment, but what they should get could be provided by a pharmacy or dentist, not by the local hospital. I think last year we had 76 people turn up at Rotherham’s A and E with toothache. Quite frankly, we need to start educating the population a bit more about where they should go, but clearly the pharmacy has a major role to play.

Two of the four organisations who support the all-party pharmacy group are the PSNC and Pharmacy Voice, which have been highlighted by the hon. Lady, and I have talked to them briefly about this issue. The all-party group has not looked at that in the past four years, but we have looked at lots of issues and had many meetings with both Ministers and civil servants about pharmacy developments. Those organisations tell me that they certainly believe that sufficient funding is available in the NHS to support pharmacy, as has already been said, but they are concerned about the responses that some contractors have received locally.

PSNC has pressed NHS England to give this matter urgent attention, stressing the impact on contractor and patients of any delay. As was pointed out well, there are four weeks to go and there must be deep concern in areas where matters have not been settled that pharmacies may go under. Those two organisations also believe that NHS England needs to consider and confirm its position on each of the pharmacies urgently. The overwhelming majority have strong cases for continued funding.

There are many reasons why a pharmacy is a vital component of a community. Indeed, pharmacies lie at the heart of a community. Community pharmacies are the most accessible health care locations in the country: they are the more than 11,500 places in England where people can go to get their prescriptions dispensed and receive advice from experts on medicines and support to help them make lifestyle choices. Many community pharmacies offer extended opening hours and weekend services. Unlike many GP services, they are more available to the population than ever before.

In one of the last two meetings of the all-party group, we looked at the new medicine service that pharmacists are deeply involved in to help patients to adjust, if need be, to the medicines prescribed to them. Then, just last week, we had a round-table discussion with many organisations representing patients with mental health problems on whether issues such as mental health should come under that new service. That debate is ongoing, but it shows the potential for pharmacists to help people.

Community pharmacy also helps to prevent ill health and protect the public. The provision of smoking cessation services, which has already been mentioned, as well as health checks and, here in London, seasonal influenza vaccination programmes and emergency hormonal contraception are all examples of how pharmacies help to reduce public risk and mitigate potential downstream costs for the NHS.

This winter, the all-party group looked deeply at influenza vaccines. London is contracted to do that, unlike many other parts of the country, which is another area where we can take the burden off GP services. I have no doubt that we all read the e-mails we get constantly from the British Medical Association about the pressure on GP services, and measures such as professional pharmacists giving influenza jabs seem to be common sense to most people. We should look at expanding the London contract.

Committed, trained, competent pharmacists, pharmacy technicians, dispensers and counter assistants are often the first point of contact for the public. More than 1.6 million visits a day are made to community pharmacies, which is more than to any other primary care provider. Many years ago, I saw the real strength of pharmacies. I took my family of young children to Spain. One of them fell ill and I said in the hotel, “We may need a doctor,” and they said, “Well, just go up to the local pharmacist.” I have to say that I was impressed, not just that they could understand my Yorkshire accent—or English, if that is what it is—but by the advice we got, with no need to go and bother anyone else. It was clear that, years ago, other parts of Europe were using pharmacists as the great pillars of strength that they are. We now do that, but we should continue to do so. Indeed, that is one of that major reasons why I took over the chair of the all-party group.

At a time when the England’s high streets are under siege, it is important to remember that pharmacies employ local people and help to bring variety over and above betting and charity shops—another vital issue—with a network of premises reaching out into communities, especially deprived ones. There is no evidence to show that simply reducing the number of pharmacies will improve care for patients. Central to the future development of community pharmacies is supporting them to become hubs for health care in local communities, to be the first port of call for health advice to help people to manage their health and well-being, both in self-limiting common conditions and in supporting greater self-care in the management of long-term conditions.

We do have healthy living pharmacists up and down the land now. About 10% to 12% of pharmacists give people advice on lifestyle issues on a daily basis. I do not want to encourage the Front-Bench Members to start having a go at one another about the Health and Social Care Act 2012 that went through earlier in the Parliament. I did serve on the Bill Committee, and as the Minister has heard me say before, I supported some of the changes, particularly moving public health back into the community.

There are two things in that Act that have not been on people’s lips since. One was reducing health inequalities. It is essential to have local pharmacists, working in areas where we have known inequalities. The other one was population health. Again, we do not seem to be talking about not looking just at people who are ill. I have often said that the national health service has been a national ill health service in reality: it responds to people who are ill.

If we are to get public health right and improve health in this century, we must move away from the idea that the NHS is here as an ill health service and towards being proactive. Lifestyles are a bigger threat to public health than anything else. Population health is crucial and I see no better primary health care practitioners with better numerical access to the population than local pharmacists. Although that is not about the potential threat to pharmacies, which should be protected—quite right, too, in the circumstances—that will be a growing issue and pharmacies should become a proactive health service in years to come. To lose pharmacists through these changes, if they happen, will not help in any way whatsoever.

I will be interested to hear what the Minister has to say to some of the questions asked by the hon. Member for Romsey and Southampton North, particularly on the ticking clock, which stands at four weeks. If I was running a business such as a pharmacy now and I had got as close to that time as that, I would be deeply worried, as I would be for the people who work in the pharmacy with me.

09:59

[Mr Jamie Reed (Copeland) (Lab)]

It is a pleasure, as always, to serve under your chairmanship, Mr Howarth, and not for the first time. I extend my congratulations to the hon. Member for Romsey and Southampton North (Caroline Nokes) on securing the debate. She made an excellent case, and I could not disagree with a word that she said. I thank my right hon. Friend the Member for Rother Valley (Kevin Barron) for his typical insight. He will be reassured to know that I understood every single word.

With access to treatments under increasing pressure, with more people waiting in A and E and with GP appointments fully booked, it is right that we devote parliamentary time to discussing how we can increase the role of local pharmacy services in our communities, so I commend the hon. Member for Romsey and Southampton North on bringing the matter to the House. If we were not four weeks away from a general election and on a one-line Whip, I am sure that the Chamber would be packed. It is a shame that we are discussing a matter of such importance to colleagues from all parts of the House in this environment, because the subject is important to everybody who understands and cares about what is happening in their local health economy.

On 31 March 2015, as we have heard, the Local Pharmaceutical Services (Essential Small Pharmacies) Directions 2013 will be revoked. As a result, on that date, the essential small pharmacies scheme will come to an end. In contract negotiations in 2004-05, the Department of Health and the Pharmaceutical Services Negotiating Committee agreed that essential small pharmacies should be contracted under the local pharmaceutical services provisions. In discussions, NHS England has confirmed that it and the PSNC cannot negotiate a new arrangement to replace the existing contracts. Instead, that must be done locally. An NHS England document published in January this year states that contractors have two options available to them:

“1. To rely on any right of return to a Pharmaceutical List maintained under Regulation 10 of the NHS (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013 (“the Regulations”); or

2. To submit a proposal to provide Local Pharmaceutical Services (“LPS”) under Part 13 of the Regulations.”

In effect, they can either receive standard pharmacy funding as set out in the drug tariff, which would result in reduced incomes, or they can agree a new local pharmaceutical service contract with the local area team. The report by NHS England neglects to mention a third possible outcome, which is that pharmacies may be left with no option. Pharmacies on reduced incomes may no longer be viable, and they would have to cease to provide pharmaceutical services. The PSNC states that pharmacies that face having to close down will not have to give notice, because NHS England is aware of the termination of the contract, although it recommends contacting local area teams. I am sure we all agree that that could have a devastating impact on local services. Many people rely on their local pharmacy, and I am genuinely concerned that as a result of the plans, those people could be left without the pharmaceutical services that they need and rely on.

Can the Minister outline any transitional arrangements that have been made to ensure that pharmacies are not forced to close unnecessarily? Are any contingency plans in place to cope with difficulties? I would be grateful if she could outline the discussions that the Government had with industry representatives when the plans were drawn up. Notwithstanding any transitional issues, can she provide an estimate of how many pharmacies may be forced to close under the new arrangements? Pharmacies play a crucial role, especially in rural and remote communities such as mine. Pharmacies often provide key services, and the average person will visit their pharmacy more often than their family doctor—I certainly do. Such engagement is crucial in maintaining good health and well-being. My right hon. Friend the Member for Rother Valley spoke at length about the fact that community pharmacies provide services such as smoking cessation and dietary advice, and those services must be maintained.

I am sorry to disappoint my right hon. Friend, but I will mention the Health and Social Care Act 2012, because the Government’s NHS reorganisation has forced intense pressure on all parts of our NHS. That can clearly be seen, as I said at the outset, in the waiting rooms of our GP surgeries and in our A and E departments. According to the most recent GP patient survey, almost 6 million people could not get a GP appointment the last time they tried, and a further 7.8 million waited a week or more. GPs are under severe strain, and pharmacies can play a critical role in alleviating that pressure and expanding access. We also know from the GP patient survey that some 1 million patients went to A and E because they could not get a GP appointment.

More than 1 million people per day—I think the figure is 1.6 million—in England visit their local pharmacy, and the average person will visit their pharmacy 14 times a year. The GP patient survey has shown that GPs and A and E departments already struggle to cope with patient numbers, so they would simply not be able to manage if pharmacies were forced to turn patients away. The Government must make it clear that that will not happen under the new regime.

In a White Paper published in 2008, Labour made it clear how pharmacies can deliver more services to ease pressure on primary care. Pharmacies have a huge role to play in our NHS, and the service simply cannot afford for pharmacy not to play a key role. To address pressures in primary care, the Government should implement measures such as improving links between pharmacy and the NHS 111 service so that care is better co-ordinated. Can the Minister explain what steps the Government are taking to utilise pharmacy better within the NHS?

With those points in mind, I would be grateful if the Minister could outline how the Government will ensure that service coverage and access to pharmacies are not compromised by the upcoming changes. Further to that, will she explain how the Government will ensure that pharmacies provide more services to alleviate pressure on other parts of the system? That is a particular issue in remote, rural and isolated areas, as the hon. Member for Romsey and Southampton North has said, where there are no bus services worthy of the name and no other public transport. The hon. Lady made the case exceptionally well. Isolated health economies are already struggling and frequently achieving sub-optimal outcomes. Reducing access will only worsen those outcomes and increase acute service pressures. Many people rely on those services, and they will be worried that they could lose them. I hope that the Minister can address those concerns, and if my fears are misplaced, I hope that she will explain why.

I am reminded of the roll-out of NHS 111. That has nothing to do with the Minister, because she was not in post at the time, and she knows that I hold her in the highest regard. However, I ask the Government not to repeat the failings of the 111 roll-out when it comes to small pharmacies. Independent academic studies showed Ministers that 111 was not fit for purpose and not fit to be rolled out. Members from all parts of the House warned the Government that the 111 pilots had not worked. I warned the Government before the roll-out of NHS 111 that the scheme was not ready, but they ignored all the advice and rolled out a service that they knew was misfiring and that contributed to the worst A and E performance in more than a decade. That deterioration in patient care was avoidable. I urge the Minister not to repeat those mistakes, but to listen to, accommodate and respond to all the concerns raised today.

10:07

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

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate colleagues on their contributions, and I particularly congratulate my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) on securing the debate and highlighting some of the challenges facing local pharmacies. For me, as the Minister with responsibility for public health, the debate is also a welcome opportunity to place on record the wider contribution that pharmacies make. The right hon. Member for Rother Valley (Kevin Barron) singled out that contribution and emphasised the potential of pharmacies.

I hope that I can give some of the reassurances that the shadow Minister, the hon. Member for Copeland (Mr Reed), sought. Overall, the picture for pharmacy is positive, and it has the potential to play a greater role. I have talked about and, I hope, championed that on a number of occasions, and there is an awful lot more that we can do. I will talk a little bit about that wider point, but I will also address the specifics of the essential small pharmacies scheme and the challenges that face those pharmacies.

People understandably appreciate the ability to access pharmaceutical services near to where they live or work. Essential small pharmacies have, in the past, been valuable in securing and maintaining the community access that my hon. Friend the Member for Romsey and Southampton North has so ably described. NHS England’s five-year forward view makes it clear that our health services must evolve to cope with not only increasing demand but the different patterns of people’s lifestyles. Every part of the health system is now considering how best to engage with that challenge and how to allocate available resources most efficiently.

Although others have touched on it, it is worth revisiting the history of the essential small pharmacies scheme. It has been in existence since the 1960s as a way of ensuring access to services in local communities for patients and the public in locations where the viability of such pharmacies might have been uncertain. As others have said, that is often in isolated rural areas, but not exclusively; sometimes such pharmacies are in new residential developments, for example. The scheme operates against a backdrop that has changed a great deal since its inception in the 1960s, and I will perhaps touch on the ways in which the world around the scheme has evolved.

The scheme was reviewed as part of the new community pharmacy contractual framework, and became known by yet another snappy health service title: the essential small pharmacy local pharmaceutical services scheme. The contracts were not designed to be permanent; they were transitional arrangements. The shadow Minister mentioned transitional arrangements, and the scheme is coming to the close of quite a long transitional arrangement, as was flagged some years ago. Pharmacies admitted to the new scheme, which replaced the previous scheme in April 2006, had to be nominated by the then local primary care trust and agreed by the Department of Health. As in the previous scheme, pharmacies were required to meet certain conditions, the most important of which was that they had to dispense more than 6,000 and fewer than 26,400 prescription items per annum and be located more than 1 km from the nearest pharmacy by the nearest practical route available to the public on foot. There is no central definition of “essential” but, broadly speaking, it is as I have described. It is a case of considering the different schemes. Essentially, community access is at the heart of the definition of “essential.” The scheme closed, and no new pharmacies have been allowed to join since 2006.

The current scheme was intended to be temporary, but it was extended in 2012 for a further two years. That was done in the context of a new market entry system for pharmacies and the changes made to the NHS under the Health and Social Care Act, which the shadow Minister mentioned, with the objective of enabling NHS England to consider the options and to give adequate notice to affected pharmacist contractors. With four weeks to go, it is obviously a concern that we are debating the fact that some pharmacies do not quite know what is happening. I will address the efforts to resolve that, but hopefully this debate, if nothing else, will be a good spur to everyone engaged in those important discussions and negotiations, so that we can ensure that they are brought to a sensible resolution.

The end date of the scheme, as my hon. Friend the Member for Romsey and Southampton North mentioned, is 31 March 2015, which means that affected pharmacies have had two years to prepare for the changes since the scheme was extended. I stress that the ending of the scheme does not mean that affected pharmacies must close. It is obviously up to the individual contractor whether they wish to return to the pharmaceutical list and come under the terms of the community pharmacy contractual framework or submit a proposal to provide local pharmaceutical services. Many have done that, and I will touch on the numbers in a moment.

I appreciate that it has been a difficult time for contractors, such as the ones described by my hon. Friends the Members for Romsey and Southampton North and for Truro and Falmouth (Sarah Newton), because small businesses are often concerned with serving their communities and perhaps have a bit less time for protracted contractual negotiations. I hope and expect that they will receive appropriate support from local NHS teams. I give an assurance that, if a change in provision is needed, NHS England’s local area teams will work, and are working, with individual providers, but my hon. Friend the Member for Romsey and Southampton North has highlighted where she thinks that work needs a bit more energy to ensure that people in her community can continue to access services conveniently.

Of course, there are new ways of delivering dispensing services. We have internet pharmacies, and many pharmacies now offer delivery services to patients—members of my family have taken advantage of such services. People who are less mobile can have medicines delivered straight to their door, and I hope it reassures the House to know that 99% of the population can reach a pharmacy within 20 minutes by car, and that 96% of people can do so by walking or using public transport.

At the end of March 2014, there were 11,647 pharmacies in England providing NHS services, which is 18% more than in March 2006. That is a success story for pharmacies and not the opposite; it is definitely a growing story, and rightly so, for exactly the reasons that the right hon. Member for Rother Valley highlighted. Pharmacies have an essential role in supporting our public health system, as well as our NHS.

Some 226 pharmacies were accepted on to the ESPLPS pilot scheme in 2006 and, of those, 73 are still eligible to receive payments, which is less than 1% of pharmacies overall. Of those 73, 16 have reached an agreement or have a solution at a very advanced stage, and 47 have proposals under consideration, so the balance of around 10 are still working closely with area teams, which I hope gives Members at least some reassurance that the scale of the challenge is not huge. The challenge is important and serious for those who have not resolved the situation, and I urge area teams to work closely and give maximum support, but I reassure the House that this is not a large-scale problem across the country; it is a localised problem. None the less, it is important, particularly for local communities. People are probably most concerned about pharmacies where proposals are under consideration, because the clock is ticking. We want those proposals to be given serious and urgent consideration so that we can bring those discussions to some sort of conclusion.

I reassure members of the public that if their essential small pharmacy closes, they will still have access. I have given the assurance that many pharmacies will not close, but people nevertheless want to know that they will still have access. I have mentioned some of the ways in which people now have greater choice than in 2006, and NHS England has an absolute responsibility to ensure that communities can continue to access appropriate services and consider alternative local provision. That provision might be through new contractors, or through a service that is accessible as part of a larger retail offer somewhere nearby. That has become more popular in recent years, and it allows people to combine their weekly shop with a visit to the pharmacy, allowing them to take advantage of public health work through those outlets.

The closing of the scheme does not mean that affected pharmacies have to close; quite the opposite. The two available options have already been outlined. Pharmacies can return to providing NHS pharmaceutical services under the contractual framework and no longer receive the top-up payment, which I accept might be difficult for some, particularly very small businesses. Alternatively, pharmacies can make a proposal, and those proposals are now under consideration and being worked on. I cannot comment specifically on the case in West Wellow in the constituency of my hon. Friend the Member for Romsey and Southampton North, but the area team will know about this debate; we will follow up to ensure that the area team has a record of it and understands that Members were sufficiently concerned about the matter to bring it to the House’s attention today.

More broadly, on the subject of how much community pharmacies have changed since 2005-06, we now see pharmacies as places to go for much more than just getting a prescription dispensed and getting advice on medicines. Pharmacies are a valuable, and sometimes the most accessible, health resource in a local community. We have introduced new revenue streams, such as medicines use reviews and the new medicine service, which contractors can choose to provide to their local population, so there are other routes for local pharmacies.

Clearly, with my public health responsibilities, I am happy to take this opportunity to highlight the relevance of community pharmacies to providing public health services. The NHS document on its long-term sustainability, the five-year forward view, calls on the nation to get serious about public health as one way in which we can avoid spending billions of pounds on avoidable illness. Pharmacies have an important role to play. I have visited pharmacies that are rolling out pre-diabetes checks and other such things. It makes no sense for us, as a nation, to gear up to spend money to serve 4.5 million people with type 2 diabetes when we could do valuable preventive work to stop millions of them getting type 2 diabetes in the first place. Even if people can live with type 2 diabetes for a long time, we want people to live not only long lives but well lives. Living a long time with a number of co-morbidities is not a great quality of life, so there are all sorts of reasons for encouraging pharmacies to be on the front line of preventing illness and helping people to avoid such conditions.

As the right hon. Member for Rother Valley mentioned, there are now more than 1,000 healthy living pharmacies across the country, and there are many more in the pipeline. Those pharmacies utilise the skills of the whole team—not just the pharmacist, but those trained as health champions. I am conscious that the individuals who work in a pharmacy may be more approachable to many people, may understand the local community particularly well and may have insights to bring. I saw some good examples of that when I went around constituencies last Easter talking to pharmacists who knew their communities particularly well, many having grown up in them. They knew the individuals there and knew how to target leaders in the community. I am a great fan of pharmacists and their role in all public health promotion work.

More than 9,000 community pharmacies in England supported the smoke-free January campaign last month, giving out quit cards, and engaging with smokers in person, through their digital presence and on social media. More than 6,500 have signed up to support no smoking day later this month, and that number continues to grow. It is valuable work. Pharmacies have also delivered a large part of this year’s winter flu immunisation programme; more than 105,000 vaccinations have been provided through that route in London alone. Again, as the shadow Minister said, pharmacies are an important way to relieve pressure on other parts of the system, and they are recompensed for those services.

This debate has provided us with a valuable chance to put on record what tangible value pharmacies bring to our society, and particularly to our health system, of which they can sometimes be the unsung heroes. I applaud how they have supported and continue to support our public health ambitions. The five-year forward view had a whole chapter on prevention. Getting serious about public health is at the heart of the challenge of sustainability for our much-valued and much-loved NHS. We need pharmacies to play their part. Estimates suggest, as I think the shadow Minister mentioned, that 18% of GP consultations for common and minor ailments and about 8% of accident and emergency attendances could be dealt with by pharmacists, which emphasises their importance.

I appreciate the concerns that have been raised about this scheme. I hope that I have given the House some reassurance that although it is clearly a challenge for the pharmacy in the constituency of my hon. Friend the Member for Romsey and Southampton North and some others, we have now reduced the number of pharmacies with unresolved issues to a very small number. However, it is critical in these last few weeks before the transitional scheme expires that we resolve the remaining issues in a way that gives people a chance to plan for the future. Those essential small pharmacies have played an important role in the past, and NHS England area teams are ready to work with, and I hope are working with, any contractor who wants to continue providing a pharmacy service to their community. I will encourage them to continue to engage, to ensure that we can reach as many outcomes as possible, particularly for the benefit of local communities, which have been so ably championed by my hon. Friend.

10:22

Sitting suspended.

Fire Safety (Case of Sophie Rosser)

Tuesday 3rd March 2015 Westminster Hall

11:00

[Jonathan Evans (Cardiff North) (Con)]

May I begin by saying what a pleasure it is to be able to start this debate under your chairmanship, Mr Howarth? I know that it is usual and traditional to say that, but—as I just reminded you before we started—despite our first meeting more than 30 years ago in Cardiff, this is the first opportunity I have had to start a debate under your chairmanship in Westminster Hall, albeit in my last month as a Member of Parliament. It is a great pleasure to have you in the Chair.

Sophie Rosser was brought up in Cardiff, and her parents are my constituents. She was a bright and intelligent young lady with everything to live for. In her early 20s, she relocated to London to pursue a career in architecture and interior design. She lived with her boyfriend at Meridian Place, an upscale Docklands property that had been redeveloped, as so many have been over the past 20 years in that part of London.

Sophie came to national prominence in August 2012 when she faced the awful dilemma that most people will have thought about at some time in their lives. Faced with a building that was ablaze, would we risk our life to rescue a loved one? We are all well aware of the sound advice that we should follow, which is to act calmly and leave everything to the professionals, but at some time in our lives we must all have thought about how we might react were we faced with such awful circumstances. Sophie returned to her home and knew that her boyfriend was still in the building. She made the immediate decision to try to enter and save him—a decision that cost her her life.

Fireman Carter of the London fire brigade was attending his first actual fire at Meridian Place. He honestly informed Sophie’s inquest that he was frightened when he entered the building, even though he was a fully trained fireman with all the correct safety equipment, breathing apparatus and so on. He told the coroner that he was frightened. He was on his hands and knees, groping across the fourth floor of the building, when he found Sophie. She had been overcome by smoke and had clearly been disorientated before losing consciousness. Although she was removed from the building, she died shortly afterwards.

Sophie’s inquest was held in September last year. The coroner, Mary Hassell, highlighted a number of fire safety issues at Meridian Place: the fire alarm had not been working for two years; there were issues with the self-closing fire doors; the building had been constructed with inadequate smoke ventilation shafts; and there had been only one fire risk assessment since 1997. Nevertheless, I want to make it clear to the Minister that the purpose of today’s debate is to highlight general issues of fire safety that are of relevance given the circumstances of Sophie’s death. It is particularly important that I reiterate that because the London fire brigade is continuing its investigations regarding the tragedy and has not yet concluded as to whether any charges might be raised. For the avoidance of any confusion, I do not expect the Minister to comment on the specifics of Sophie’s case. I have said as much as I intend to say about that, but it sets the background and context for the fire safety issues that I want to raise.

My purpose today is to examine the adequacy of the current legislative framework as it relates to fire safety. I do so not only given my constituency interest, but in my role as chairman of the all-party group on insurance and financial services, which has held a number of meetings this Parliament on the issue of fire safety. I will touch on some of the other issues later in the debate, but the primary concern that has been expressed by Sophie’s parents, as well as by many professionals who deal with fire safety, is the lack of clarity about who is accountable for the implementation of fire safety laws. In large-scale developments, who has that responsibility? Is it the owner, the property management company, the residents’ association or the individual tenant? Responsibilities sometimes seem to overlap to such an extent that each party comes to believe that it is someone else’s job to ensure that fire safety rules are followed.

Three million new fire doors are bought and installed every year in this country. They are not just doors, but sophisticated pieces of engineering that are fundamental to fire safety strategy in buildings. Critically, they protect escape routes in communal areas. If they are to save lives, they must work correctly and be regularly inspected and tested. However, in a recent survey by fire risk assessors, it was found that no fewer than 80% of escape routes in buildings were obstructed—that is four fifths of all escape routes. Some 65% of fire doors, which are fitted with a spring to ensure that they close, were wedged open, and 85% had their self-closing mechanism disconnected. People see such examples every day; the surveys show that the failings are the norm. In fact, there cannot be one of us who has not seen many such instances in public buildings, even in the Palace of Westminster—I have seen such instances here. It is an offence to have a fire door wedged open, but who checks or enforces that? When failings are found, the lines of accountability are not clear enough.

Sophie’s father, Julian Rosser, fronted this year’s fire door safety week, an awareness campaign that is all about highlighting the issues and encouraging everyone to check the condition of fire doors and to report faults. The campaign is actually part of the Government’s own communication strategy on the matter—Sophie’s father was fronting a Government campaign, but he does not think that an awareness campaign goes far enough, or that such campaigns are ever likely to be enough, given the massive risks that we face every day from fire safety being compromised in the way that I have outlined. It is particularly troubling that new research published as part of fire door safety week showed that half of those surveyed who had legal responsibility for fire safety did not know that they had that responsibility or were unclear about what their responsibilities were.

In 2009, a major fire broke out at Lakanal House, a tower block in Camberwell in London. Six people lost their lives. Ten years earlier, the local council had scheduled the building for demolition because of what were believed to be fire risks, but that did not happen. Following the fire, the London Fire and Emergency Planning Authority set up the Lakanal House working group to consider the fire safety issues that arose from the tragedy. It formally completed its work last year.

The basis of fire safety management is the Regulatory Reform (Fire Safety) Order 2005, which radically changed the previous regulatory landscape. Following the receipt of the report from the Lakanal House working group, the London Fire and Emergency Planning Authority reached these conclusions:

“Nearly 10 years after the introduction of the…Fire Safety…Order…the Authority wishes to explore whether the regime is achieving all that is desirable. The Government has already undertaken some of this work in relation to business, as part of its wider deregulation and burden reduction strategy, but the extent of that work—

according to the planning authority—

“was limited.

Specifically, the Authority is concerned that there are issues about: complexity; understanding among responsible persons”—

in fact, the evidence that I have referred to highlights and endorses that concern. The authority also believed that there were

“contradictions or gaps in the total legislative framework…and that the system of devolved managerial and democratic oversight of fire safety protection activities is unsupported by common methodologies or performance measures. There are also issues about how well guidance is informing responsible persons”.

Accordingly, the planning authority has commissioned a study of the legislative framework, which is now under way. The study will consider, among other things, the general background to and the principles underpinning fire safety legislation, including who has responsibility for fire safety and, in particular, the impact in our capital city. My constituents want clearer definitions of who is responsible for fire safety in multi-occupancy lettings, and legislation to require regular fire risk assessments by properly certified people.

I indicated earlier that our all-party group has been looking at general fire safety issues as well. One of the matters to cause me deep concern was learning from many fire authorities that fire services do not respond to some 80% of fire alarms that go off in urban areas every day. The reason for that is that the fire services have come to believe that such alarms are most likely to be false ones. In fact, the fire brigade comes out when it has an individual physical report of a fire in addition to receiving information about a fire alarm going off. Without any such report, however, it does not follow that the fire brigade will attend. The all-party group was astounded to hear that information.

We also heard from the Glass and Glazing Federation about its concern with a lot of the improvements in building specifications, in particular as they apply to glass in buildings. I do not need to explain quite how critical that can be, especially given how glass can burst and, as a result, let air into a building to feed a fire. The federation wrote to me when it knew that the debate was to be held today. It referred to its previous meeting with the all-party group and drew attention to

“a general issue which should be of overall concern—that is insufficient attention given to provisions in the fabric of our buildings to protect against fire, which severely threatens levels of fire safety in practice (especially we note, built-in resistance against fire and its effects).”

I also want to draw attention to the recent argument from the deputy commissioner of the London fire brigade for sprinklers to be fitted into more buildings. I have a copy of a briefing note that he produced for the London planning authority only last year:

“There is clear evidence that sprinklers are effective at rapidly suppressing fires; in buildings fully protected by sprinklers they control 99 per cent of fires.

Sprinklers also greatly improve the safety of firefighters…they are effective in reducing the risks of flashover and backdraft conditions.

LFB believes there are opportunities for developers and building owners to save money, save property and protect the lives”,

by putting sprinklers into more buildings, not least because sprinklers are nowhere near

“as expensive as people think”.

Yet again, however, sprinklers are put forward as an awareness issue, rather than as a legislative one, and that is a matter of some concern.

I want to draw the attention of the House to what my constituents and many others regard as a gap in the existing legislation and practice. Are responsibilities and roles clear? Are they understood? Do they get discharged in practice? Such questions were posed to the London fire brigade by LFEPA when it set up the review. The specific answer came in paragraph 28 of the fire professionals’ response:

“In general terms, there must be some doubt that the answer to these questions is yes and the ability of the Brigade to comment on how well others are doing their job is constrained by the absence of the necessary tools, information and locus. As set out above, the legislative framework remains overlapping and complicated, some of it no doubt necessarily so (buildings like The Shard are not the product of simplicity)”—

a rather chilling line—

“but with worrying potential implications. It would not be against the grain of experience to conclude that these factors mitigate against success.”

That is not an opinionated individual, but a professional, reporting to the London planning authority for the fire services. That paragraph sets out the challenge not only for all of us, but for Government. My constituents hope that that challenge is one that the Government will embrace.

11:09

[The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)]

I congratulate my hon. Friend the Member for Cardiff North (Jonathan Evans) on securing the debate on behalf of the family of his deceased constituent Sophie Rosser, and on the clear way in which he put forward his views.

My hon. Friend said at the outset that he would talk about the generalities of fire safety, because an investigation by the London Fire and Emergency Planning Authority remains ongoing, and I will have to respond in kind by dealing with the building regulations and other requirements in force. I cannot comment specifically on the sad case that has led to our discussion this morning.

Never has the clear fire safety advice to get out, stay out and call 999 rung so true as in that case. Yet we must accept that with the best will in the world there is always the risk that individuals will not heed the advice. They will not always put their own safety above their concern for others. In Sophie’s case, she simply wanted to ensure that her fiancé was safe. I am sure that we can all understand that primary instinct to protect those whom we love, even, on occasion, in the extreme circumstances that faced Sophie on that tragic night.

The Government’s long-standing and well recognised Fire Kills campaign, which is run in partnership with the fire and rescue authorities, works hard each year to provide the public with advice and information on how best to protect themselves and their family and friends from the risk of fire in the home through sensible safety precautions. We believe firmly that fire prevention is always better than cure.

Fire Kills provides regular fire prevention advice and reminders to householders, irrespective of tenure. Advice given includes: to install smoke alarms on every level of the home and to test them regularly to ensure that they are working; to carry out a bedtime check, including shutting doors; never to smoke in bed and to ensure that cigarettes are put out properly; never to leave cooking or candles unattended; and to check electrical equipment and never use faulty products or appliances.

The campaign also provides clear advice on what action to take should householders be unfortunate enough to experience a fire in their home. They and their family should use a planned and practised escape route and, to repeat the exhortation, they should get out, stay out and call 999. Thankfully, in most cases such messages, repeated regularly through a variety of channels, have proved highly effective. Householders are increasingly safe from the risk of fire in the home and its tragic consequences: over the past decade the number of fire incidents has fallen by 64%, and the number of deaths in the home by 36%.

Of course, we can never be complacent. I understand why my hon. Friend has brought forward this debate. We must always be vigilant to make sure that advice, guidance and requirements are up to date. It is obviously right, especially given the distressing circumstances, that we expect that someone should be held to account for any fire safety failings that may have led to Sophie’s death or exposed other residents to an unacceptable level of risk. Fire and its causes, however, are always complex issues. Investigating what went wrong in a particular circumstance is of necessity a time-consuming and detailed process. It is vital that such work is done, both to ensure that lessons are learned, so that we prevent similar tragedies, and, crucially, to ensure that those responsible for any fire safety failures or shortcomings identified in an investigation are held to account.

There can be no doubt that in the case of residential blocks of flats there is robust legislation in place to ensure that landlords, freeholders and others who exercise a degree of control over the management or maintenance of a building take action to remove the risk of fire or reduce it to the lowest level that is reasonable. The principal means of regulation and control for residential properties, including those in blocks of flats, is the Housing Act 2004. Owners—whether landlords or freeholders—and housing authorities are responsible for ensuring the safety of the whole building; under the housing health and safety rating system, that includes fire safety. Local housing authorities have a clear responsibility to keep the condition of all housing in their area under review, and to take action to ensure that hazards to residents—whether in their flats or in the communal parts of a building—are removed or reduced to an acceptable level.

Under the Regulatory Reform (Fire Safety) Order 2005, all those responsible for workplaces and buildings to which the public have access are required to assess the risk from fire and to ensure appropriate fire precautions are in place and maintained in good working order. For new buildings, the building regulations in force at the time of construction dictate the range of fire safety measures that need to be installed and managed to afford an acceptable level of life safety in the event of a fire. For blocks of flats, the regulations require that walls, ceiling and doors be built of fire-resisting construction materials that ensure that, in most cases, a fire should not spread from the room in which it has started.

Following the Lakanal house fire, to which my hon. Friend referred, the coroner called on the Government to simplify the guidance in approved document B of the building regulations. My Department’s Secretary of State committed to a review, which will deliver a revised document in 2016-17; the intention is to simplify the guidance where possible and update and revise the technical content at the same time. My hon. Friend mentioned sprinklers. They are recognised as a highly effective fire protection measure. It is too early to say how they will fit into the revised approved document, but he should rest assured that the potential benefits will not be ignored.

[Jonathan Evans]

My hon. Friend is rightly setting out the legislative framework. Will he think for a moment about the disconnect between the structure of the legislation and what surveys tell us about whether the legislation is actually having an effect? I was astonished by the statistics I have shared with hon. Members today. Is he similarly concerned?

[Stephen Williams]

I was indeed disturbed by the survey findings to which my hon. Friend referred. When I was being briefed for the debate this morning, the requirement that doors to flats be fitted with self-closing devices was made clear to me. He mentioned that quite often those devices are disconnected or the doors are propped open; although it is dangerous to rely on personal observation or anecdote when debating or making policy—policy should be evidence-based—I have seen cases of that myself. That reinforces the need to re-emphasise the Fire Kills campaign every year. We normally do so as a Department when the clocks change; of course, that will be happening very soon, so perhaps he and I can do our level best to circulate that fire safety information to our constituents—they will still be our constituents when the clocks go forward—in Cardiff North and Bristol West.

As we were just discussing, the front door of a flat is clearly critical to the safety of the communal parts, as it will protect the escape route from filling with smoke should there be a fire in a flat. The building regulations require fire-resisting doors to be fitted with self-closing devices, as I have mentioned.

The Government fully support the British Woodworking Federation’s annual campaign to raise public awareness of the importance of fire doors. The campaign draws attention to issues of poor installation and maintenance, and encourages building owners and users to check their self-closing doors and, where necessary, take action so that those that are not satisfactory can be brought back into good working order. The Minister with responsibility for fire, my hon. Friend the Member for Portsmouth North (Penny Mordaunt), was pleased to add her voice in support of the federation’s efforts to encourage owners and occupiers to check that their fire doors are in good working order. That campaign should go some way to press home the message that the maintenance of fire precautions is a duty that should not be ignored.

I have heard concerns about the overlap between the provisions on residential buildings in the Housing Act and in the fire safety order, but the principle of safety lies at the heart of both. I am pleased to note that in 2011 the Government provided the Local Government Association with the funding it needed to bring together housing providers, including the National Landlords Association, and housing and fire enforcing authorities to develop specific detailed guidance to help those with fire safety responsibilities in blocks of flats ensure the safety of residents and comply with their regulatory requirements. That guidance discusses at length the importance of maintaining fire doors and offers advice on how that can be done. The LGA reviewed it in 2013 and concluded that it remains fit for purpose, although I am sure hon. Members would acknowledge that guidance is all very well; the issue here is the observance of such guidance.

In residential buildings, where there is no employer, regulatory fire safety responsibilities may be divided between the building owner and other organisations such as a resident management company or a managing agent with day-to-day management and maintenance responsibilities. The enforcing authorities—in the case outlined by my hon. Friend, the London Fire and Emergency Planning Authority and the local borough, Tower Hamlets—must be given sufficient time to investigate and unpick the extent of responsibilities to determine whether and against whom any further action should be taken. We will study the results of the investigation carefully. Under the fire safety order, the enforcing authorities have wide powers to take action against the full range of organisations whose actions or failures may have contributed to compliance failures. Let us be under no illusion: investigating is, by necessity, a complex and time-consuming process.

My hon. Friend has outlined a tragic case that illustrates the need for constant vigilance in this area. Whether Ministers or Back Benchers, it is our duty constantly to remind our constituents that guidance and regulation is there. We believe that it is fit for purpose, but if it is not followed, tragic consequences can result. Sadly, the tragedy he has outlined may have been the result of such a failure to follow guidance and regulations. We will have to wait for the results of the investigation and learn any lessons that can be learned when the investigation is complete.

11:28

Sitting suspended.

County Durham Plan

Tuesday 3rd March 2015 Westminster Hall

[Mrs Anne Main in the Chair]

11:19

[Phil Wilson (Sedgefield) (Lab)]

It is a pleasure to debate this important issue under your chairmanship, Mrs Main.

At the outset, I want to inform the Minister of the two main questions I want to ask this afternoon so she has plenty of time to think about her response. First, the planning inspector’s interim report into the County Durham plan states that one of the council’s options is to suspend further deliberation of the plan for up to six months so the fundamental issues in the report can be resolved in a positive and constructive manner. Will the Minister work with Durham county council to find a solution? It is in the Government’s interest to do so, because if a resolution cannot be found, the Treasury’s plans for economic growth in the region and in County Durham will be undermined.

Secondly, last Friday, the Chancellor of the Exchequer said that he wants 50,000 jobs to be created in the north-east of England by 2020. The North East local enterprise partnership envisages the creation of 100,000 jobs in the north-east by 2024-25. The County Durham plan lays down a firm foundation for the creation of 30,000 jobs in the county by 2030, so if the plan were followed 10,000 additional jobs could be created by 2020, which is 20% of the Chancellor’s target. The planning inspector said that the figure of 30,000 is unachievable, but where does that leave the job growth plans of the Government and the LEP, which are based on the same formula? Durham county council’s plans—wrongly, in my view—have been called into question.

The interim report supports the plan’s population and job growth projections, about which I will say a few things. The inspector endorses the council’s population projections, but questions the assumptions of the forecast. There is a difference between a projection and a forecast. A population projection establishes a baseline position for population growth and assumes that past trends will be carried forward into the future. A population forecast points to an alternative future based on a series of policy changes. The County Durham plan offers a series of policy changes. Durham county council’s population forecast was based on achieving economic success through two measures: first, increasing participation within the economy and achieving an employment rate of 73% in County Durham; and, secondly, increasing the size of the economy by 30,000 jobs in County Durham, 23,000 of which will be located in the county and 7,000 of which will be held by people who live in the county but cross the border to work elsewhere in the region.

The inspector endorsed the county council’s approach to the population projection in his interim report. He accepted the council’s methodology for developing population projections in paragraphs 29 and 30, and he accepted the council’s projection in paragraph 31, noting the trend-based outcome. Here, the inspector accepted the council’s projection and methodology as a basis for developing objectively assessed need for housing. He supported only the population modelling undertaken by Durham county council and rejected other approaches. In paragraph 43, he states:

“I have considered the alternative models and approaches to calculating OAN”—

objectively assessed need—

“put forward by other parties. These produce either significantly lower or higher estimates which I consider to be less robust than the work undertaken by the Council. For example, the FDGB’s”—

the Friends of Durham Green Belt—

“proposals do not use a recognised methodology whilst the house builders use unrealistic data inputs and assumptions.”

The inspector questioned the plan’s economic aspirations and concluded that there will be a low population in the county. He ultimately disagreed with Durham county council’s economic aspirations, which is why he proposed a lower number of houses.

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

My hon. Friend is talking about the growth of the economy in County Durham, which is very important. On a point related to the lack of extra housing, the existing population is getting older and less economically active, so it will not only have less economic impact on Durham but will require more services from the health service and local government.

[Phil Wilson]

I agree. My hon. Friend anticipates my next point, which is about job growth in the area. It is about not only attaining a 73% activity rate among people of working age, because if that continues and there is no jobs growth, the local economy will ultimately stagnate.

The inspector accepts the council’s methodology for developing population projections. The council wants to increase the participation rate in the economy, achieve an employment rate of 73% in County Durham by 2030 and create an additional 30,000 jobs. However, the inspector has come out against that. He predicted a lower rate of economic growth and the creation of only 18,000 jobs by 2030. However, Experian, which has done a lot of work on this issue for the county council, predicted the creation of something like 22,900 jobs, so the county council’s figure of 23,000 additional jobs is in line with that prediction. There is independent evidence to suggest that the county council is going in the right direction.

The one thing that the report misses out completely is Newton Aycliffe business park, which is now the biggest business park in the north-east of England and employs 8,000 or 9,000 people. There is no mention of it in the interim report. Hitachi is going to build a factory there, which will create 730 additional jobs. The county council has allocated something like 130 acres there for the anticipated job growth. The developers expect thousands of jobs to come to the business park, because Hitachi is acting as a catalyst and attracting manufacturers in other industries to the area. However, Newton Aycliffe was completely missed out of the interim report, which I find bizarre in the extreme.

What is Durham county council’s ambition? The County Durham plan is ambitious, inspirational and optimistic. It is full of confidence not only in the county council but in the people of County Durham. The history of Durham shows that the network of settlements in County Durham exists today because of the industrial revolution and the coal industry. We now need to diversify industry to sustain those local communities. That is why the county council wants an additional 31,000 houses to be built by 2030. It wants to set aside 399 acres of employment land and a further 41.5 acres of specific-use employment land. It wants a spatial strategy that seeks to fulfil the ambition of a thriving Durham city. Economic success will be delivered through the creation of jobs.

Let me give some background about why this issue is so fundamental to the people of County Durham and to industry in the area. Following the local government review several years ago, Durham county council made improving the economy its top priority. The local government review was a once-in-a-generation opportunity to bring together all partners to adopt an economic strategy to reverse Durham’s economic decline. The county has suffered from a decline in traditional industries, and the resulting increase in unemployment and lower skilled jobs has caused our brightest and best to move away to find economic prosperity elsewhere. To address that problem, the unitary council and its partners made the economy their top priority from day one. The council’s overarching priority is to improve the economic performance of County Durham. Through the County Durham partnership and the sustainable community strategy, it has recognised that better opportunities for employment mean better health and more choice in housing. To achieve that, it has recognised that a significant step change will be required. In the absence of economic investment, the size of the county’s working-age population will decline over the next 20 years, which is not in line with either the County Durham plan or the north-east’s aspirations. The focus on a thriving economy is not at the expense of other matters; indeed, developing a thriving economy will address many of the social issues present in the county.

County Durham’s pre-recession employment rate had been rising and was very close to the national average. Since the recession, the rate has been below the regional and national averages, although it has recovered significantly in recent months. To continue to close the employment rate gap and improve the county’s economic performance, the plan takes an approach that seeks to deal with the shrinking working-age population while trying to balance the needs of the economy and businesses in the county and wider region.

The targets are for 30,000 jobs and a 73% employment rate among people of working age. We also need to identify how many houses we need and how many acres of land need to be set aside for industry. Creating more and better jobs within the north-east economy is at the heart of the agenda for the North East combined authority and the North East local enterprise partnership, as well as for wider partners and investors, and—we believe—in line with the Government’s aspirations as laid out by the Chancellor of the Exchequer on Friday last week.

The inspector rejects the challenge presented by an ageing population and the associated implications for the prosperity of the county and the north-east. Addressing the job creation target is fundamental in the light of the projected reduction in the working-age population. The inspector’s report acknowledges that County Durham’s growth aspirations accord with regional economic aspirations. However, the inspector suggests that we are not working collaboratively to deliver these targets, which conflicts with the stated aim of the strategic plans in the area and the North East LEP, and the duty to co-operate, which is the Government’s recognised tool for cross-boundary discussions.

The inspector suggests, although without evidence, that the majority of the neighbouring authorities in the north-east are seeking similar aspirations to meet their objectively assessed needs, rather than seeking economic growth as suggested. We can draw out the inspector’s view of the county’s future from the assumptions outlined and observations made. Although none of those elements was articulated during the examination, the inspector’s vision becomes clear from a detailed reading of his report.

First, the inspector casts doubts on the shared economic ambitions of the local authorities within the North East LEP area, as agreed by the Government and outlined in the strategic economic plan. That is why it is fundamental for the Government to address this issue.

Secondly, the inspector’s vision for County Durham seeks to limit the county’s role within the wider regional economy. As someone from County Durham, I find that very hard to accept. He seeks to underplay Durham city’s established role and status within the wider region, in my view, and the council is clear that Durham residents will contribute towards the economic prosperity in the region. Durham residents will bring skills to our neighbours, working as part of a successful regional economy.

I turn to the economic impact of the alternative vision. In the absence of economic investment, the size of the county’s working-age population will decline over the next 20 years. The council’s approach seeks to deal with a shrinking working-age population, while trying to balance the needs of the economy and businesses in the county. The two measures of employment rate and labour force target work in tandem to support economic prosperity in Durham. In the context of an ageing population, an increase to a 73% participation rate would not in itself support economic growth in the economy. A participation rate of 73% as a single measure of success could be achieved in a stagnating or declining economy, as the size of the working-age population declines.

Although the inspector rejects the council’s approach, in his report, he goes some way towards setting out his own alternative economic vision. The inspector acknowledges that a 73% employment rate is within the realms of possibility but takes issue with the labour force target of 30,000 jobs. The preferred scenario that the inspector has come up with implies that only 18,500 jobs would be created over the plan period in County Durham. That is clearly not in line with the ambitions of either County Durham or the north-east and is contrary to most recent trends. The independent Experian forecast identifies that 22,900 jobs could be created in the county.

The inspector’s vision runs contrary to the region’s ambitions for growth. The labour force target is an established target for County Durham and addresses growth not only in the county, but in the wider region, recognising County Durham’s role in the wider economy, which is complementary to the role of other regional centres. For example, 40% of people who work at Nissan in Sunderland live in County Durham. The scenario suggested by the inspector implies only that some 18,000 jobs will be created, but the independent Experian forecast showed that 23,000 jobs can be created.

The report has implications for my constituency. For example, there would be a reduction in housing allocation in the village of Sedgefield. I know that there are issues there. There have been applications to increase the number of houses by 2,000. There is talk at the moment of housing developments of between 300 and 470 dwellings. Although at the moment, the County Durham plan seems to have been rejected by the planning inspector, it just leaves the door open for speculators to come along and start talking about developments in Sedgefield village that are not suitable. We could go back to a position in which developers who have thought of applications to increase the size of the village by 2,000 houses over a given time could come back in the absence of a strategic housing policy for the whole of the county.

The other issue is employment. The report neglects to mention the region’s biggest business park, which has been the generator and motivator for jobs. It also does not say very much about NETpark—the North East Technology Park—which is a science and innovation park that has recently received grants from the Government and the local growth fund. It has great potential, and I have seen the science park develop over the past 10 years. It now employs between 300 and 400 people and is based on a model in Durham-Raleigh, North Carolina. The business park there was set up in the 1950s and now employs tens of thousands of people. I am not suggesting that NETPark will get as big as that, but the model proves that that acts as a catalyst to attract high-value jobs.

[Helen Goodman (Bishop Auckland) (Lab)]

I am listening intently to and strongly agree with what my hon. Friend is saying about NETPark and Newton Aycliffe. Does he agree that the possibilities are really significant, because they are right next-door to Durham university and not far from Newcastle university, which are both excellent in the scientific and engineering fields?

[Phil Wilson]

I agree with my hon. Friend. It seems to me that the planning inspector is not taking into consideration the aspirations and ambition of the county and the potential for the county to go ahead and create high-value, strategic jobs that are important, not just to the economy of County Durham and for the region, but to the country. Last year, it was announced that the region’s first university technology college will be opened next year in Newton Aycliffe. We also want to see more apprentices for the area. For example, South West Durham Training in my constituency is doing very well. It is working closely with Hitachi to achieve greater numbers of apprentices.

None of this has been taken into consideration by the inspector, and I fundamentally believe that the reason why he has downgraded the economic forecasts for the number of jobs is ultimately that, if fewer houses are needed, there is less need to use the green belt. If there is any way that we can change the situation in relation to building on the green belt, then fine—perhaps we can talk about that in that six-month period—but from what I am being told, less than 4% of the green belt would be utilised for house building over the next 15 years. If the plan is to achieve the number of jobs that we require, that compromise is well worth considering.

Before I wind up, I want to give some quotes from business people up and down the north-east of England who support the County Durham plan. James Ramsbotham, the chief executive of the North East chamber of commerce, recently wrote to the Secretary of State for Communities and Local Government about this issue. He said:

“By creating an ambitious plan and vision for the future, Durham county council has made a clear statement that it is open for business; a statement that we fully support.

The inspector’s report, by ridiculing these ambitions, seeks to condemn the north-east to a future of low growth and aspiration. This flies in the face of the Government’s desire to stimulate growth in the north and to create a more sustainable, balanced economy. It also holds little regard for the current successes of County Durham businesses, many of which are world leaders in their sectors and are making considerable investments for the future.”

Sir John Hall said:

“It’s very, very, very, very, very, very important because it’s not just about the County Durham plan, it’s about the regeneration of the north-east and the County Durham plan is part of that. And here’s a council…when they spoke to a lot of us in the private sector when they were putting the plan together we said to them you’ve got to think outside the box now, you’ve got to take a lead, you’ve got to use the words enterprise and initiative. And this is what they’ve done and they’ve produced a plan which will put cranes on the skyline, which will bring money in from all these developments into all of the cultural side of the life in County Durham and they’ve been penalised for it. And we can’t let that happen. It’s too important for the region for Durham county council and the north-east. And in the business sector we support their efforts a hell of a lot, but…we’ve actually got to support them to get what we need: a rethink on this plan, but it’s very, very necessary, as I said, not just for Durham but for the north-east.”

He went on:

“We in the private sector will to work together to support the County Durham plan and its initiative”.

John Elliott of Ebac, a business in my constituency, said:

“The County Durham plan’s a good plan. We’ve got to be ambitious, we’ve got to move forward. County Durham’s always moved forward, we’ve got to keep doing it.”

Rory Gibson of Handelsbanken said:

“There’s a democratic decision here for me and it needs to be followed through. There’s absolutely excellent reasons why this plan has been put forward. It involves the council, it involves private sector, it’s the right thing for us to be doing, it’s looking forward, it’s thinking outside of the box and I think we need to give all our support to it.”

Harry Banks of the Banks Group, another well established County Durham firm, said:

“We see the role of the local authorities and Government to lay the platform for businesses to thrive and produce jobs and create employment. We felt that this plan was going a long way towards…that.”

Richard Bradley of Dyer Engineering said:

“Operating our business, we’ve had a business on that site for something like 37 years and we wouldn’t contemplate doing business anywhere else. We’re perfectly located to reach all of the UK and we have a fantastic, skilled workforce which…is in danger because of lack of investment, maybe even lack of a plan over the last 20, 30 years, which is why of course we’re behind the plan because we have to attract people, businesses into the region to ensure that we have the skills available for the next 50, 100, 200 years.”

Barbara Johnson of the Morritt said:

“for my business it’s going to bring people into the county and not just tourism, because the hotel is not just tourism; it’s very much based on business. And we’ve built a business up that is very interesting for the kind of people that this plan is going to encourage to come into the county”.

Geoff Hunton of Merchant Developments, which helped to attract Hitachi to Newton Aycliffe, said:

“We’ve been involved in Newton Aycliffe and the Hitachi project and we see it as working towards the future and Durham have been very supportive but also they’ve been very ambitious to look to the future and that’s the right way to move.”

Simon Henig, the leader of the county council, said of the inspector’s decision in The Journal on 27 February:

“He tells us that basically our jobs target should be lower. I still cannot see, looking at the plan, his justification for doing that. He just seemed to have plucked a sentence out of the air. Just one sentence on which the rest then turns because, obviously, if you have less jobs you don’t need so many houses or roads and so on. Effectively we have one inspector coming up from the south…saying ‘sorry, Durham, sorry north-east, I’m not going to allow you to have that target for jobs.’”

He continued:

“we are not talking about the next year or two. This is about the next 15 years and this is a very important document.”

Let us put that into context. At the same time that the inspector’s decision was made on the County Durham plan, the Chancellor and the Mayor of London made a statement on the future of London and what they wanted to see for the capital city. We all want to see a successful capital city, but it is interesting to note that, the day after the council received the decision, a six-point plan for London was announced that referenced no evidence or consultation. There is no suggestion that it comes with the support of business, residents or, indeed, developers, but it certainly does not lack ambition in terms of jobs and homes or the infrastructure required to get them.

That plan includes the ambition: to outpace New York’s growth; to create more than half a million extra jobs in London by 2020 by backing businesses; and to solve London’s acute housing problems, the No. 1 challenge facing the city, by building more than 400,000 new homes. The list goes on, which is fantastic. Why can we not have some of that for County Durham? We had to go through the strictures of the planning system, but that announcement did not require that.

I want to see a world-class capital city, but I also want to see a world-class region in the north-east of England. For too long, the people of the north-east suffered high levels of unemployment and deprivation. Some of those problems continue today and ultimately only the people of the north-east can solve them, with help from elsewhere.

Perhaps in the past, the people of County Durham have been cowed by the problems we faced. Now, the Labour-controlled council shows that we have the aspiration, ambition and confidence to move on from those days. We just want others to have the confidence in us; that is all we are asking for.

We are up for the job; we just want the tools to finish what we have started. That is why I call on the inspector’s final report to acknowledge that ambition, not to downplay the economic potential of County Durham, and let the plan go ahead. I ask the Minister to answer the two fundamental questions I asked at the beginning of my speech. We want the tools to do the job, because we believe in County Durham and we want to see it be a success.

14:57

[Pat Glass (North West Durham) (Lab)]

I thank my colleagues for coming together to get this debate, which is so important to County Durham and my constituency. It is a pleasure to serve under your chairmanship, Mrs Main.

The speech made by my hon. Friend the Member for Sedgefield (Phil Wilson) was incredibly good and detailed. I do not intend to give a speech anything like his; I will speak briefly about the impact on my constituency. I am really disappointed by the inspector’s interim report, given that, as we have heard in great detail, the County Durham plan has the support of businesses and many communities in the north-east. The concerns that I would like the Minister to address are twofold.

First, the inspector appears to have listened and acted on the concerns of those opposed to the plan, but paid little or no cognisance to those living in the county who were content with it. Therefore, he has made recommendations that appear to address the concerns of the objectors, to some extent at the expense of others in the county. Those people now affected have no further voice in the process.

Secondly, the inspector has failed to work closely with the county at all stages to improve the plan, as I was assured he would. I met the Minister with responsibility for planning, the hon. Member for Great Yarmouth (Brandon Lewis), and his team last year to discuss the County Durham plan, and in particular those areas of it that will impact on my constituency. I was accompanied by a planner from County Durham, and I was particularly keen to understand what weighting would be given to the plan at what stages. The meeting was helpful in that regard.

At that meeting, the Minister and his team agreed that the plan was one of the biggest plans that the Department for Communities and Local Government would have to consider, that Durham is one of the biggest unitary authorities in the country, and that the plan was comprehensive, covering areas such as economic, social and spatial development. We therefore knew that the plan was not only one of the biggest plans the Department would need to look at, but extensive in its remit. There was also recognition that it would need considerable revision as it went through the process. I came away from the meeting feeling quite confident that there was willingness to work with the county planners to ensure that, at every stage, concerns were addressed and amendments were made to avoid what has happened recently.

When drawing up the plan, the county had a number of major challenges, the main one being jobs—it is always about jobs in the north-east—and the second being the reducing working-age population in the county. I believe, as my colleagues do, that the county is right to be ambitious, optimistic and aspirational about economic development, and that the inspector has got it wrong. We have heard extensively about the details of that, so I will not concentrate on it.

I want to concentrate on the impact of the report on my constituency. The strong recommendation to withdraw the plan would have the biggest impact on my constituency, because to do so would remove the five-year supply of housing land defined by the council. That would leave housing development open to being assessed via the national planning policy framework and saved policies. The result will be a free-for-all on planning applications and a catastrophe for communities such as mine.

I will illustrate that by reference to two areas: Lanchester village and Consett town centre. The inspector has largely dismissed plans for building in and around Durham city but, seemingly out of the blue, he has recommended house building in a number of villages across the county, one of which is Lanchester. In doing so, he appears to have ignored all the evidence about flooding, increased traffic and the impact on services. Lanchester has a history of flooding, and it has had four one-in-100-year floods since 2002, but that does not appear to have been considered at all. I declare an interest because I live in Lanchester village. However, I live at the other end of the village, so none of this would have an impact on me personally.

[Mr Kevan Jones]

The situation is worse than my hon. Friend describes. In the north of the county, the inspector has completely ignored the housing allocation and referred to places in my constituency such as Sacriston, Stanley and Great Lumley, but he has failed to identify any potential sites. The county council has already looked at those places in its consideration of supply for the next five years, and the sites do not exist. Where does my hon. Friend think the inspector envisages that the houses will go?

[Pat Glass]

I do not think that the inspector has given any consideration to that at all. He has simply picked those villages out of the blue without looking at any of the evidence; at least, that is how it appears to me. The inspector has recommended the adoption of the Project Genesis master plan in Consett, which would create new out-of-town retail developments that are not within walking distance of the town centre. To date, all retail-based planning has been close to the town centre. It is far from perfect, but, overall, it has worked. The inspector’s recommendation appears to be in contravention of all previous and current planning. It would damage Consett town centre, and it would result in unsustainable urban sprawl. Worst of all, the people of Consett have been given no opportunity to challenge any of the plans.

I and my communities want to see the County Durham plan back on course as soon as possible, and I ask the Minister to use whatever influence she has to address the concerns that have been raised and to get the plan back on track. The inspector appears to have made recommendations outside the plan in communities outside Durham city without considering the evidence and without giving those communities the opportunity to have their say. I do not want to comment on the merits, or otherwise, of the objections made to the original plan by those living in and around Durham city. Their views should be, and have been, heard, but so should the views of people living in other communities. I understand that this is how the process works, in a sense. People object to the plan, and if they stay silent or they are content, they have no role in the process. In this case, however, the inspector has simply named villages, and the people who live there find that they will be severely disadvantaged but they have no opportunity for redress.

I went to a public meeting in Lanchester village on Sunday, which was attended by 150 people, who could all be bothered to turn out at 3 o’clock on a Sunday afternoon. That showed the depth of their concern that an unsustainable planning application, which was, in their view, adequately addressed by the County Durham plan, puts them and their village at much greater risk of flooding and unsustainable traffic and puts their schools and community facilities at risk. Those people have no say in the process. Why should the views of people in places such as Lanchester, Consett, Crook, Wolsingham, Stanley and Sacriston count for less than those of other people who live in the county?

I hope that the Minister can use her influence to ensure that the plan is put back on track as soon as possible and that the inspector, or whoever takes the matter forward, works closely with all communities in County Durham, as I was promised that they would.

15:04

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

I congratulate my hon. Friend the Member for Sedgefield (Phil Wilson) on securing the debate, which is timely given the importance of the county plan. I am delighted to stand together with my fellow County Durham MPs. Strangely, or perhaps not so strangely, virtually everybody—the business community, local authorities and community groups—seems to agree that the inspector’s decision is completely out of step and out of kilter. It seems rather bizarre to suggest that the County Durham plan, which we all feel is bold and ambitious in its expectations for the development of the region, is somehow overly ambitious. When my hon. Friend made his opening remarks, I thought about the comments of the right hon. Member for Surrey Heath (Michael Gove), who accused east Durham schools of lacking the ambition to produce people who would drive forward the regeneration of that part of the county. Here we have an ambitious plan that is completely achievable and realisable, but the inspector is apparently putting the brakes on it.

I will be interested to hear the Minister’s comments. I cannot anticipate precisely what she will say, but if her position is that the inspectorate is independent and Ministers cannot interfere in that process, there is a precedent for doing so. I represent a coalfield area in the east of County Durham, to the east of my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) and next door to my hon. Friend the Member for Sedgefield. The coalfield regeneration plan supported the idea of bringing new investment and employment into the coalfields, particularly in east Durham, but the inspector ruled against a retail development, which was the first phase of the Dalton Park development. The then Deputy Prime Minister, John Prescott, overturned the inspector’s decision. Again, he had tremendous support from the local authorities, from the community and from the business community. There is a precedent for overturning a decision of the planning inspector, and I hope that the Minister will think seriously about it.

I fully understand and share the concerns of the business community, which my hon. Friend the Member for Sedgefield has mentioned, after the inspector deemed the plan too ambitious in its aim to build more than 30,000 new homes and create 30,000 new jobs by 2030. As has been mentioned, the Chancellor visited our region just last week, and referred several times to his long-term economic plan and his ambition to create a northern economic powerhouse. That makes for good rhetoric, but it does not offer much in the way of practical support.

Although the Chancellor promised investment for transport links and skills, and said that he would back manufacturing and exports, it is worth noting that spending on transport infrastructure in the north-east is the lowest in the county at £223 a person, compared with £5,426 a person in London. For every £1 that is spent in the north-east, London receives £24.33. I know that London is the capital city, and that it has Crossrail and a huge population, but that disparity is huge. We need some practical support. Yes, we need ambitious plans put forward by the county council, but we need a Government who will correct some of the anomalies that exist. We do not need the inspector to reinforce and worsen the north-south divide. Revising down the plans for more jobs and homes—the estimates are empirically based—will not help to rebalance the economy.

My local authority, Durham county council, has transcended the rhetoric from the Government and the Chancellor. It has put forward ambitious plans for jobs and economic growth in the county, and it is wrong that the Planning Inspectorate should block those plans. We have suffered tremendously. I tried to calculate the number of jobs lost in my constituency over the last few years. They have been lost not just in the public sector, but at some quite large employers, including the Reckitt Benckiser factory in Peterlee, which I hope will reopen, and which used to employ 500 people; the Fin engineering company in Seaham; Cumbrian Foods; and Yearley, the refrigeration and transport company.

A number of substantial employers have gone, but we are seeking to diversify the economic base of Easington, in the east of the county, and indeed of the whole county. My hon. Friend the Member for Sedgefield referred to Hitachi locating in his area and to the positive spin-offs and benefits in the supply chain. I hope some of the engineering factories in my constituency—particularly in Peterlee—will benefit from that additional activity.

The Government have an opportunity to prove they are committed to creating a northern powerhouse, and that that is more than just idle rhetoric. I hope the Minister can give a real commitment to work with north-east MPs, and that we have common cause on this. I am not terribly familiar with her constituency, but we have been through the trauma of industrial closures, and thousands of jobs have been lost in Easington, and we have not had special measures, enterprise zones or a Minister for the area to argue for more investment. The Government is beholden to get behind the efforts we are making to generate economic activity and jobs and to improve the county’s collective well-being. Indeed, local businesses are rising to the challenge, raising their ambitions and expectations for the north-east economy.

I cannot accept the planning inspector’s assessment. If he is saying that our county should be less ambitious, that we should aim to create fewer jobs and that the north-east needs less investment in infrastructure, that is certainly not the case. The Government cannot allow the Planning Inspectorate to undermine the entire county plan and to stifle the ambition of people in the north-east to bring new investment, businesses, jobs and training opportunities to our region.

The north-east has a number of leading international businesses. The Government often cite Nissan, and Newcastle airport is another tremendous business that generates huge economic activity and benefit for the region. Shortly, we will also have Hitachi. In my constituency, we have world-class companies such as Caterpillar, NSK and GT Group. Between them, they employ more than 2,000 people, and they have huge export orders and huge potential. We need to do everything we can to encourage them and to grow our own companies.

We also need, however, to attract new businesses. Part of the plan is to have a centre of creative excellence in the north-east—a film studio or a Hollywood of the north. However, that requires a commitment from the public and private sectors. An area is set aside, and it requires some housing development if the scheme is to go ahead. Potentially, it could create 2,000 jobs and training places. As my hon. Friend the Member for Bishop Auckland (Helen Goodman) suggested, we could use all the synergies in our area—not just the tremendous location, with a terrific vista over the County Durham coast, but the skills base at our universities at Teesside, Durham and Sunderland, and the skills at our colleges—to get that enterprise going. We therefore have enormous potential, and I have complete confidence in the people I represent and in the commitment of businesses.

East Durham used to be a centre of not just coal mining, but the textile industry. A large number of factories were located in Peterlee and Seaham. Sadly, much of that business has gone offshore, but we have seen a bit of a revival with an embryonic business called AMA, which I met and helped to encourage. It has now expanded and won a major contract with Tesco, and we hope we can use some of our skills and potential to develop that still further and create more jobs.

We also have innovative training providers, such as Infinite Learning and Development and its welding academy. That is important, because we have Caterpillar and GT Group, and we need to give local people skills to address the shortage of highly trained welders in the region. Infinite Learning and Development was one of three finalists nominated at the national Semta apprentice awards, where it was in illustrious company, competing alongside the likes of Toyota UK, Tata Steel and Swansea university for the training partner of the year award. For a small training provider, that is some achievement and some recognition of its commitment.

I should also mention the East Durham Employability Trust, an employment charity in my constituency that helps those not in education, employment or training to secure sustainable employment through its Destination Employment programme. It has had tremendous results, with 94% of those completing the programme moving into employment. That is a terrific outcome.

We have tourist potential. With the right investment, we can create jobs. We can have the most magnificent coastline anywhere in the country, but if people cannot get to it, we cannot really develop its tourist potential, in terms of day visits or longer stays. We have one of the best-kept secrets in the country in the east Durham heritage coast—I know it is referred to as the County Durham heritage coast, but I like to call it the east Durham heritage coast, because that is where it is. We also have the coastal footpath and the newly announced nature reserve on the former Easington colliery site. Those tremendous assets are safeguarding and protecting our natural environment, as well as promoting tourism—it is possible to do both.

Last week, having been involved in the issue for some time, I was pleased to hear the owners of the Dalton Park development announce that work on a £45 million expansion is due to begin in May. That will create 600 retail jobs, with an estimated 400 jobs during the construction phase. That is welcome news. The first phase was in 1999-2000, when the initial planning consent was given. That is a welcome investment in jobs in the local economy. It will provide new amenities for the community, including a cinema, restaurants, a supermarket, a petrol station, a hotel and a family-friendly pub.

We are, however, looking to the Government and the Planning Inspectorate to work with the local community, the local authority and businesses to promote every sector of our economy in east Durham. My hon. Friend the Member for Sedgefield said we were trying to diversify our economic base. We need some practical assistance to do that, whether in manufacturing, light or heavy engineering, retail, the service sector or tourism. I do not want the planning inspector to talk the north-east down. I certainly do not want him talking Easington or east Durham down; and I do not want him to hold us back from transforming our communities. I will not go through the long list of business organisations that condemn the Planning Inspectorate for its decision. However, I share their concern that in rejecting the county plan, in not listening to the concerns of local businesses and elected representatives, and in rejecting the advice of the local authority, the inspectorate has itself shown a lack of ambition for the north-east.

Among the comments that have been made, one that my hon. Friend the Member for Sedgefield did not mention was from Jonathan Walker, of the North East chamber of commerce:

“We work alongside our public sector partners and encourage local authorities to be bold, ambitious and pro-growth in their budgets and local plans. We are shocked by what the inspector had to say and feel his recommendations not only stifle the ambitions of Durham, but, by implication, the North East as a whole.”

I do not want to underestimate the scale of the task. We certainly face challenges in county Durham—and more, perhaps, in Easington than anywhere else in the county. We need support to tackle that. The Government’s reduction of the local authority’s budget by more than a quarter of a billion pounds was certainly not helpful. We need more Government support, particularly with infrastructure, on which we get a poor deal. For example, the proposed railway station in Horden in my constituency is still in the pipeline—in the planning stage. It would be a considerable boost to tourism, employment and the mobility of labour, but instead the Government continue to focus on faster rail services, while in east Durham we need greater connectivity to existing lines. We have had a welcome announcement that Pacer trains are finally to be removed from the network.

County Durham should have our praise for its ambitious plans, and should not be chastised by the Planning Inspectorate. I urge the Minister to give the matter further consideration, look at the views of the business community and local representatives, and help us to get the Planning Inspectorate on board, so that we can move together for a better, more prosperous future for east Durham, county Durham and the north-east.

15:22

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

It is a pleasure to serve under your chairmanship, Mrs Main.

County Durham is a beautiful county and a great place to live, but it is not a delicate flower, to be protected in a glass case. Its history is one of economic development and change, going back to the early Normans who built Durham cathedral, and including the expansion of coal mining, and steel making at Consett, in the 18th and 19th centuries. Another example is the development, at Barnard Castle in Bishop Auckland, of the Bowes museum under the inspirational leadership of John Bowes. I wonder what would have happened if Harold Stephens had been around at those times in history. Would he have told the Normans that they were being too ambitious in building a beautiful cathedral that would stand for 1,000 years? Would he have told John Bowes that his idea of a French chateau in the Durham countryside, to celebrate his fantastic collection of art, would impinge on the green belt and be too ambitious for a county such as Durham?

The leader of the council, Simon Henig, summed things up well last week when he said that we do not want to live in a museum. I am proud of my constituency, which includes the fantastic Beamish open-air museum—but I do not want to live in the museum. It is important to remind us of our past, but we cannot live in the past. County Durham has never lived in its past; it has always moved forward. The county council’s ambitious economic plan is part of that tradition of trying to drive industry forward and making sure that the county grows. One of the most ambitious projects in county Durham’s recent history was the development of the new towns at Peterlee and Newton Aycliffe. It was a bold vision at the time, but we now acknowledge the foresight of those who brought it about. I see the county council’s current plan in that context.

I do not think that we could have achieved such a plan before the county’s unitary status. A unique aspect of County Durham as a unitary county is the way it has got everyone together behind its ambitious plan—not just the business community but people in politics, and communities. That could never have worked at the time of the district councils, because the two tiers would have fought one another. That is something unique about the plan.

Is the plan too ambitious? I do not think it is. It fits quite well with what is proposed in Tyne and Wear, and Teesside. We have had a little bit of a problem in County Durham in the past few years, in that Teesside and Tyneside have been seen as the region’s powerhouses. I am not for a minute under the illusion that we will emulate those regional powerhouses, but, as my hon. Friend the Member for Sedgefield (Phil Wilson) said, we can make a huge contribution to the growth of the economy of the north-east as a whole. To say that County Durham should be a rural backwater for those conurbations is not the way forward. It would not be good for the people who live there, and it would create generational problems. There was a huge problem in the 1980s—and earlier, in my part of the Durham coalfield, in the 1960s—when coal mining left. The economic reason for some communities went away overnight. We cannot recreate such industries in communities as they were then; but County Durham has put forward a plan on which it should be congratulated. It would at least try to develop industries and attract businesses, not necessarily directly to those same locations, but within striking distance—in the A1 corridor, for example.

As to the ambitions of County Durham, if someone had said five years ago that through the hard work of my hon. Friend the Member for Sedgefield it would attract Hitachi to invest as it has in Newton Aycliffe, most people would have wondered whether it was possible, but it happened, and that was down to the drive of my hon. Friend, the county council and local businesses.

[Phil Wilson]

Hitachi first came to the UK to look for a site to build a factory. It looked at 42 locations, and Newton Aycliffe was not one of them. Much of the reason it selected it was Durham county council.

[Mr Jones]

I agree. It has a can-do attitude—and that is what is behind the plan. To say that it is too ambitious is wrong. We cannot let our constituents down and think we can go along somehow, just tinkering at the edges, with time passing us by. There are communities in my constituency, as I have said, whose economic life blood went years ago. We need to provide them with industry, jobs and opportunities, within striking distance. My hon. Friend the Member for Easington (Grahame M. Morris) is right; things have changed. Instead of heavy industry there will be tourism, high tech and educational opportunities. The work atmosphere is very different from what it was, but the plan was at least going to deliver those things.

I want to mention two things that directly affect my constituency. One is the inspector’s removal from the plan of the development of housing at Lambton park. Lambton park is a result of County Durham’s history. It was built with wealth and proceeds from the coal mining industries, but it has been shut away for the past few years and has not really been accessible. The plan would provide executive housing on the site, but it would also open the parkland to public access. Cleverly, the development of executive housing, which is needed in County Durham, would be linked to providing affordable housing in the town of Chester-le-Street, but the inspector put a line through that and took it out completely. That creates a housing supply problem in Chester-le-Street, because with one fell swoop it knocked out 740 housing units from the 1,230 proposed for the Chester-le-Street area, which were identified in the strategic housing land availability assessment. That proposal was taken out, so we already have a shortfall. From my constituency surgeries I know the demand for affordable housing in Chester-le-Street. It also misses the point that the estate, which has sat idle for many generations, could be brought back into economic use, and not just for housing. There were also proposals to build offices and other developments in the area, but those proposals were taken out.

The other issue is the failure to agree the extension to the Drum industrial estate. I have two major industrial estates in my constituency: Drum and Stella Gill. The Drum industrial estate is important because it is located near the A1. To be fair, the county council has improved access to the A1, which has made the industrial estate more attractive to business. The extension would have allowed for growth, but it has been taken out. The Stella Gill industrial estate has been designated as the place where we need growth—it is the only industrial estate in the north of the county to be designated. Stella Gill is a small industrial estate that is not accessible to the A1, and it is not attractive to business. The decision will basically stifle job creation in my constituency.

My hon. Friend the Member for North West Durham (Pat Glass) mentioned the inspector’s arrogant attitude to housing allocation. I accept that there are people in the city of Durham who want to preserve the city the way they see it, and therefore they cannot have any housing at all, but the inspector basically said, “Well, if we are going to provide this housing, we can provide it elsewhere.” The inspector took no account whatever in his report of the strategic housing land availability assessment, because sites are not available in my constituency to take up that slack. If we do not agree the plan, there will be speculative development, as my hon. Friend said. People reacted in triumph last week, saying that they had saved the green belt, but they have done far from that. Without a plan in place, they have actually opened up parts of County Durham to speculation.

This is an ambitious plan, and it is a plan that is right for County Durham not only today, but for the future. As my hon. Friend the Member for Sedgefield said, the plan links into our wider ambitions for our region. County Durham cannot be kept out of those plans; it is an important part of the region. If we are to say to our constituents that we are doing our best to ensure that not only work but good quality housing is available locally, this plan must be implemented. Is there anything the Minister can do to get this moving? The report has been a slap in the face for County Durham as a whole and for the county council. I give credit to the county council—some people have not given the county council credit over the past few days—for its leadership on this issue, but we need the plan to proceed. We cannot stall the plan for several years to come, because there would otherwise be speculation and missed opportunities. There are businesses and housing developers out there that should come to my constituency and other parts of County Durham, but they will not come without the plan.

15:34

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

It is a pleasure to serve under your chairmanship again, Mrs Main. I congratulate my hon. Friend the Member for Sedgefield (Phil Wilson) on securing this debate, which puts me in the odd position of responding for the Opposition on a subject of direct relevance to my constituency. I will do my best to tread a careful path between those two roles.

My hon. Friend did an excellent job of highlighting the key issues for him and our colleagues in the inspector’s report on the County Durham plan. He did an excellent job of highlighting the need for a strong vision for County Durham and the need for ambitious targets for economic growth and new housing units. He spoke about the undesirability of reducing housing numbers in his constituency, and he pointed out that much more needs to be done to build on the Durham-Raleigh model of economic development, and I concur with him on that aspiration.

My hon. Friend the Member for North West Durham (Pat Glass) spoke passionately about the impact on her constituency, particularly the areas of Consett and Lanchester, if the plan were to be withdrawn. My hon. Friend the Member for Easington (Grahame M. Morris) made valid points about the need to improve infrastructure spending in the north-east and the need to have more than just plans in order to rebalance our economy. He also pointed out the need to support the diversification of our economic base. He strongly pointed out the need for investment in the centre for creative excellence, the idea for which has been around for some time and needs to be supported as soon as possible. He did such a good job of extolling the benefits of his constituency of Easington that I thought I must holiday there. He certainly highlighted Easington as a place on the up that we should all look at closely.

My hon. Friend the Member for North Durham (Mr Jones) highlighted the need to do as much as we can to promote economic development in the region and to see County Durham play an important part in ensuring that we get more jobs not only in County Durham but in the region as a whole. He pointed out the strength of investing in a concept, as Hitachi has, and our need for many more such developments.

As the Minister will realise, every Opposition Member has spoken about the importance of putting a plan in place as quickly as possible. Our view is that the council should take the inspector’s comments on board and seek to rectify the evidence base and other requirements as quickly as possible. I know from talking to people in the city of Durham who objected to the existing plan that they would welcome the opportunity to work with the council to get a plan in place. There are three areas where they want to see some movement.

First, they would like the council to adopt an acceptable economic development strategy. The key issues for me were set out clearly in paragraph 15 of the inspector’s report. On economic development, he wants the council to put more effort into a knowledge-based economy, with knowledge transfer not only from Durham university but from other universities in the region, so that we diversify our economic base. That is also reflected in the land use aspect of the County Durham plan. For example, we need to have start-up units close to the university, as well as more widely dispersed throughout the county. What can be done to support the county to adopt such an economic strategy? At the public inquiry I spoke at length about the need to have such a strategy in place. I was also pleased that the inspector picked up on our need for investment in the Leamside line. Again, I hope that the Minister will talk to her parliamentary colleagues about that.

The second issue that I wish to highlight is the need for a strong policy on how the city can develop student accommodation, particularly purpose-built student accommodation. Again, the Minister will know from paragraphs 102 to 104 of the inspector’s report that the policy proposed by the council is simply not fit for purpose, and that the council will have to go back and do a better job. Any support that her officials or others can give the council to ensure that a proper policy is put in place quickly would be welcomed not only by me but by my constituents and others.

Thirdly, people are keen to work with the council to get sites for additional housing in and around the city that meet the requirements of the national planning policy framework and the guidance on green belts. I say to my hon. Friend the Member for North Durham that I do not think people want Durham city to be preserved in aspic; they want it to develop in a way that builds on its amazing heritage, including a wonderful world heritage site. We need appropriate development.

The Minister will know that the inspector has given the county three options: to continue the examination on the basis of the current evidence, to suspend the examination or to withdraw the plan. I think that we all want to encourage the county to choose suspension and to go away, work on the issues that need work and issue a revised plan within six months that will be acceptable to everyone in the county. Again, what pressure can she put on the council to achieve that aim? If the plan is withdrawn, I am also interested to know what weight she thinks can be given to it, if any, and to its supporting policies.

Lastly, what does the Minister think about the wisdom of pursuing an approach geared so heavily towards development on the green belt, given what is stated in the NPPF and the recent guidance issued by her Department, which sets a high bar for securing development on the green belt?

15:42

[The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt)]

It is a pleasure to serve under your chairmanship for the first time, Mrs Main. I thank the hon. Member for Sedgefield (Phil Wilson) for securing this debate, which has afforded all of us the opportunity to discuss the issues in detail and his colleagues an opportunity to get their views firmly on record in response to the inspector’s report.

At the heart of this Government’s programme has been an unprecedented amount of support to enable growth across the country. To name but a few of our initiatives, we have established 24 enterprise zones, two of them in the north-east, agreed 39 local enterprise partnerships and supported an ambitious range of projects through growth deals, from which the north-east has secured just shy of £300 million.

It is worth pausing and reflecting on the second issue raised by the hon. Member for Sedgefield. Government would not invest such sums of public money in a process that is largely competitive unless we had confidence in those local plans; the ideas are generated locally, but they are tested. The private sector certainly would not invest the sums that it is investing if it did not have confidence in and share the ambitions for Durham and the north-east that have been articulated in this debate.

To answer the hon. Gentleman’s second point, I think that the ambition is right. It is good to see ambition, and we certainly think that the job numbers articulated by the Chancellor and mentioned by the hon. Gentleman, as well as the £4.5 billion of investment that we think will be levered into the area, are realistic sums. The question is how, and that is obviously what the detail of the plan considers.

We are fully committed to supporting growth, and I think we all agree that we want widely supported and appropriate plans in place that enable sustainable development. Plans play a central role in involving communities in determining what development is appropriate and where. We have supported authorities across the country in putting robust local plans in place.

[Phil Wilson]

The Minister mentioned £4.5 billion in investment. Can we make it clear that £2.7 billion of that is for the intercity express programme? The trains will be built at Newton Aycliffe, but that £2.7 billion is for maintaining the trains as well as building depots in Doncaster, Swansea, Bristol and London, and it is being made available over 27.5 years. Not all that investment is actually destined for the north-east of England.

[Penny Mordaunt]

I was referring to the inward investment that would come into the area. The point that I was making is that the private sector would not be investing in Durham and the north-east unless it had confidence that local businesses and the local community could deliver. It is important to put it on record that we have confidence in the local ideas being put forward.

This is an important point of principle. We have supported local plans and made that a focus. Nearly four times as many councils have now adopted plans than at the start of this Parliament, and more than 1,300 communities are doing excellent work bringing forward neighbourhood plans, 26 of which are in County Durham. It is an important point of principle that those plans should come from the communities, which know their local patch best.

I empathise with the situation that Durham county council is in. It has put considerable effort into producing a plan. I want to make it clear that although the inspector has some concerns, what he has set out are interim findings. It is important to note that he says that

“for the avoidance of doubt, this not does not set out a final view”,

The inspector has offered the council different options for how to proceed. They include the opportunity for the council to undertake further work to support their approach.

I must add a caveat to my response: given my ministerial role, I must limit how specific my comments are on certain aspects of the plan as it remains at examination, but I do not think that that will prevent me from answering any of the questions that hon. Members have posed. The argument is that the County Durham plan would enable strong economic growth, significant housing and infrastructure, and represents an approach that has broad local support. In headline terms, those are perspectives fully endorsed by the Government’s planning policy.

The national planning policy framework is clear that authorities should plan proactively to meet businesses’ development needs and base their plans on a clear understanding of those needs. Our policy sets out that authorities should plan to meet objectively assessed development needs and provide appropriate infrastructure as far as is consistent with the policies in the framework as a whole. The Government have made it clear that we accord great importance to the green belt, whose fundamental characteristics are openness and permanence, and that green belt boundaries should be revised only in exceptional circumstances through the local plan process.

Our policy is clear that local plans should as far as possible reflect a collective vision and set of agreed priorities for the sustainable development of the area. The Government’s commitment to sustainable development, green belt protection and community involvement in planning is not in dispute. I reassure hon. Members who have raised concerns, as the hon. Member for North West Durham (Pat Glass) did, that the absence of a plan will open the floodgates. Perhaps it would be helpful if I wrote to hon. Members in detail outlining some things that I think will give them comfort. There are clearly material considerations that need to be taken into account, even in the absence of a local plan.

I have mentioned the green belt and neighbourhood planning. A neighbourhood plan, of course, does not have to be ratified to have legal weight in the planning process. There is the “town centre first” policy—an issue that the hon. Member for City of Durham (Roberta Blackman-Woods) raised—and “infrastructure first”, which the hon. Member for North Durham (Mr Jones) mentioned. Perhaps it would be useful if I wrote to hon. Members to outline matters in detail; that may give hon. Members’ constituents some comfort.

I turn to the issues that the inspector raised. It is true that the plan would enable growth, but the inspector is not convinced, on the basis of the current evidence, that the level of growth proposed would be achievable, and that it would not adversely affect the council’s other city-centre strategies and the world heritage site status of Durham. The inspector is also of the view that more could be done to show how growth in Durham would interact positively or negatively with the growth being proposed by other north-east authorities. In summary, the inspector explains that, at present,

“the failure to fully assess the social, economic and environmental implications of lower growth options…is a serious omission”.

Let me be clear: that does not mean that the inspector has suggested that Durham should be less ambitious in its plan; it means that Durham needs to show clearly why the approach it proposes is the most appropriate strategy.

The plan clearly seeks to enable more housing than past trends would indicate, but the inspector has indicated that there are shortcomings in the methodology for establishing housing needs; for example, there is the question of whether the predicted in-migration levels are realistic.

In relation to housing provision, the inspector’s view is that the plan could do more to take into account the contribution that could be made to housing delivery by reusing brownfield land, potentially for around 2,000 homes; I hope that addresses the issue that the hon. Member for City of Durham mentioned. Based on these assumptions about housing growth, the plan allocates some 4,000 homes in the green belt. On this point, the inspector is clear that

“The process and evidence relating to the proposed amendments to the Green Belt boundary are flawed, particularly in relation to the release of sites to accommodate some 4,000 unnecessary dwellings...A full review of non-Green Belt sources of supply should be undertaken.”

The plan further advocates two relief roads in the green belt, but the inspector also has concerns about their justification and impact. Although planning inevitably involves difficult decisions that will not please everyone, the inspector points to significant concerns raised by a broad section of the public in relation to the proposed strategy.

The shortcomings identified in the current version of the plan may yet be resolvable at examination, as the inspector’s report sets out. I understand that the council is due to meet the inspectorate in March to discuss options for how to proceed, and I am pleased that the inspectorate is engaging openly with the local authority.

I can reassure hon. Members who have spoken today that the Planning Inspectorate is as pragmatic as possible when it comes to examining local plans. However, this is the crux of the matter: the inspector would not have arrived at his interim findings if there were not significant grounds for concern.

In summary, hon. Members who have spoken today have expressed their support for a plan that the inspector considers is not currently supported by robust evidence. In the absence of such evidence, the plan advocates a strategy that is potentially unrealistic or possibly detrimental to Durham, its sustainable development and in particular its green belt.

[Mr Kevan Jones]

I take exception to the Minister saying that, because what has been put forward is an ambitious plan. She seems to be saying that on the one hand we need economic growth for the north-east, but on the other the plan is not achievable. The problem is treating County Durham as a small market county; it is a large county. If housing is not put in my area, it will be put somewhere else, which means my area will suffer as part of this plan.

[Penny Mordaunt]

I thank the hon. Gentleman for that intervention. I am simply stating the concerns that the inspectorate has raised. Clearly, I hope that we have a local plan in place for his area sooner rather than later. However, that plan needs to be based on good evidence if it is to be successful. I hope that, if the dialogue with the inspectorate is successful, the plan that emerges at the end of the process will be stronger for it.

[Phil Wilson]

The objective of trying to generate 30,000 jobs between now and 2030 is in line with what the Chancellor said on Friday about generating 50,000 jobs between now and 2020. If the figures for the county over 15 years are out of kilter, so are the Chancellor’s figures. That is why the Government need to look at this matter closely; it affects not only the growth patterns for the county, but those for the whole of the north-east, as laid out by the Chancellor.

[Penny Mordaunt]

I will come on to answer the first point that the hon. Gentleman raised. In answer to his second point, there is no doubt that the ambition is the right one. The figures, both on jobs and the inward investment that we expect, are absolutely right. The issue at stake is how that growth in jobs and investment is achieved. I have just given one example. Based on current evidence, the inspectorate feels deeply that building on the green belt is not justified, and that the plan would benefit from a piece of work that examines the reuse of brownfield sites. We do not want to slow down progress; we want to keep up momentum on this issue. I am pleased that the inspectorate is due to meet the council.

Let me turn to the first point the hon. Gentleman raised, which was about Government assistance. I will write to hon. Members in detail about planning policy, which may give them some comfort. I will also follow up on the issue that he raised about the Hitachi business park and the science innovation park; I will certainly seek to get him some answers on that issue and will write to him about it. We have already been of assistance in setting up the meeting that is due to take place in March. We will assist in any way we can, not only in my Department but across Government.

There is one other area that is worth exploring. When I looked at the local plan that is being proposed, and mapped it to the plans and priorities of the local enterprise partnership, I saw that there is perhaps a job of work to do that would strengthen the position that the hon. Gentleman is setting out. I am one of a number of Ministers who could help to facilitate that work, which may yield further evidence to support the plan as currently set out. Of course, the Chancellor has also offered his assistance and offered to work with local stakeholders.

In answer to the hon. Gentleman’s first point, therefore, we are ready to assist in any way we can. Clearly, the area will benefit from having a strong, robust, evidence-based local plan, and I hope that we will see one before too long.

Children’s Palliative Care

Tuesday 3rd March 2015 Westminster Hall

15:59

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

I am grateful to have secured this debate and glad to have the opportunity to serve under your chairmanship, Mrs Main. I first became interested in this area through the work of Acorns children’s hospice in my constituency, which provides a valuable service to children and families from all over Birmingham. I cannot praise its work too highly.

I begin by acknowledging that I believe the Government are genuine in trying to establish a clear funding path for children’s palliative care and hospice services. I understand that the major change envisaged by the Government is the new per-patient funding system. It would be helpful if the Minister said more about how it will work and how he plans to ensure that it is properly monitored and reviewed. I also want to raise the issue of short breaks and bereavement care, as these elements are not included in the per-patient funding strategy.

The children’s hospice movement supports the principle of per-patient funding for children’s palliative care as a means of providing more sustainable, transparent funding through an NHS currency, commissioned by clinical commissioning groups and designed to complement NHS England’s commissioning of specialised children’s palliative care services.

I understand that the third strand of Government thinking is that local authorities should continue to be responsible for commissioning necessary elements of social care and that together this should create an overarching system where all elements of the care—clinical and non-clinical aspects, short breaks and bereavement support—are all provided for.

My purpose in seeking this debate is to address a genuine fear that the impending general election and uncertainty over the new system could lead to a funding hiatus that could have a damaging effect on the children’s hospice movement. If I have understood it correctly, the per-patient system is designed to reimburse providers according to the activity they undertake, and to incentivise both commissioners and providers to deliver palliative care in a child’s home, community or hospice setting, if that is consistent with the wishes of the child and the family, and clinically appropriate.

The idea of the currency is set out in NHS England’s 2014 document, “Developing a new approach to palliative care funding: A revised draft for discussion”, in which it is argued that the currency should make it easy for clinical commissioning groups to understand the specific needs of children with life-limiting conditions. It should also be possible for clinical commissioning groups to have a better understanding of what constitutes palliative care and of the potential cost drivers for commissioning.

What steps have the Government planned to ensure that those elements of palliative care not covered by the new per-patient funding system will be properly funded by local authorities and clinical commissioning groups? This new system is the product of hard work and, as I have indicated, the sector is generally favourable towards it, but it is worried about a number of aspects. For example, how will the costs incurred by providers during the transition be met, including costs of setting up new systems to record activity and of ongoing data collection demands?

The Government-commissioned palliative care funding review by Hughes-Hallett, Craft and Davies in 2011, was clear that introducing and implementing the new system should be cost-neutral to the sector. What support does the Minister envisage for the voluntary sector providers to enable them to implement this new approach?

It would be useful if the Minister outlined any plans to provide models of practice that show how the currency will work, especially in situations for children and young people subject to continuing care packages and personal budgets, as introduced by the Children and Families Act 2014. It would also be useful to understand how the data quality will be monitored and how comparisons of models of care and outcomes will be assessed.

It is not clear to me how the new system will deal with the issue of transition from child to teenager to young adult.

[Mr Robin Walker (Worcester) (Con)]

I congratulate the hon. Gentleman on securing this important debate. Acorns children’s hospice serves my constituency as it serves his. It has a fantastic hospice in Worcester. It has done some important work on transition space and supporting the many people who, because of advances in medicine, are living longer. Does he agree that it is vital that the Government engage with it on this work, to make sure that transition is properly supported by the future funding system?

[Steve McCabe]

Yes, I agree. That is exactly the point. It is fantastic that so many children now survive for so much longer. That creates new demands and service needs that have to be considered. I should be grateful if the Minister said what work is being undertaken, both within Government and the NHS, to ensure that these transition issues are being considered in any new funding plans. I concur with the hon. Gentleman on that. The Care Quality Commission report, “From the pond into the sea: children’s transition to adult health services”—that is its title, I kid you not—also indicated that this focus is important.

We are moving towards the election, so it would help if the Minister clarified where we are with all these plans. As I have said, I acknowledge that the intention is to create a fair and sustainable framework, but we are now in March—the projected launch date for the introduction of the new non-mandatory currency is March—and as yet, unless I have missed something, we do not know the Government’s intention. What I would really like to know, and what I think the hospices would like to know, is what is going to happen with the hospice grant? Is the intention that it should continue during 2015-16 and beyond? I am sure that the Minister appreciates that not knowing is a real source of anxiety and a blow to any attempts at long-term planning.

Almost 96% of children’s hospice organisations are worried, according to the Together for Short Lives survey, that CCG funding will be less than their existing grant and harder to access. That grant covered about 13% of the care costs incurred by children’s hospices and existing clinical commissioning group funding represents about another 12%. Uncertainty over almost 25% of previously guaranteed funding is a difficult basis from which to operate.

I am sure the Minister knows that these bodies rely massively on public generosity and fund-raising efforts, but they also need some core guaranteed funding. If the grant ceases and is not matched by equal funding elsewhere, 89% of children’s hospice organisations could be forced to reduce their services. Areas at risk include short-break services for 60% of users.

[Stuart Andrew (Pudsey) (Con)]

As someone who has spent 14 years working for the children’s hospice movement as a fundraiser, I am completely aware of the point that the hon. Gentleman is making. Short breaks are incredibly important, because they are not only a break for the child, but for the whole family. Often people arrive on a Friday looking utterly exhausted. Just being able to have some normal family time until Monday is a great relief for them. Is that not the importance of these short breaks?

[Steve McCabe]

I do not think we can in any way overestimate the importance of short breaks to families and to children. Both need space at times, and the hon. Gentleman is absolutely right. The survey suggests that more than 60% of users could lose that service. There is also a risk of a 35% reduction in family support work, which is connected with short breaks and enables many families to keep going in stressful situations. There is also a risk of a 23% reduction in the amount of end-of-life care support provided.

Short breaks provide respite for carers and families and should be funded by local authorities and the NHS under their respective legal short-break duties. Despite being key providers of short breaks, a third of children’s hospices are not recognised by local authorities as being short-break providers. Some 42% of children’s hospice organisations receive no funding from local authorities. Page 56 of the palliative care funding review report states that

“pre-bereavement support is an absolutely essential part of palliative care and should be fully funded by the state.”

The review goes on to state, however, that far from being universal, only 65% to 70% of local authorities have open access services. Without the children’s hospice movement, there will be a gaping hole in end-of-life care.

I am not here to criticise the Government’s intentions, but the combination of the election and a new system with many unanswered questions risks significant funding problems. As organisations try to tighten their belts and take on new responsibilities, there is a danger that they will fall back on what they know or believe they know. It will not help the children or families of children with life-limiting conditions if clinical commissioning groups fall back on a narrow, clinical model that focuses on the child’s health needs as defined by doctors. The currency should not be used as a top-up for the acute sector providers, who can access other tariffs to fund care for children with life-limiting conditions.

Palliative care for children with a life-limiting or life-threatening condition is an active and total approach to care, from the point of recognition or diagnosis through the child’s life to death. It embraces emotional, social and spiritual elements and focuses on enhancing quality of life. It also supports the family and includes managing distressing symptoms, providing short breaks and care right through to the point of death and bereavement. That more holistic understanding of palliative care is reflected in national policy documents such as NHS England’s “Actions for End of Life Care: 2014-16” and the 2014 Care Quality Commission handbook. I welcome the interest that the Government have shown in an often neglected area, but we now need some clear messages, actions and signals to ensure that valuable work is not wasted and that an easily avoidable funding crisis is not allowed to develop. Local authorities under significant financial pressures are highly unlikely to fund what they might see as additional services unless required to do so. NHS England’s draft currency for children’s palliative care should be accompanied by clear guidance to local authorities on funding short breaks and bereavement care.

I would like the Minister to give an assurance that the structure is clear and that the intention is to have a three-source funding arrangement, with NHS England commissioning specialised children’s palliative care and utilising the experience of the children’s hospice movement, with CCGs commissioning general children’s palliative care using the new per-patient funding system and working closely with children’s hospices and with local authorities required to commission social elements of palliative care, such as short breaks, bereavement care and support for siblings and other family members, and seeing it as their duty to work with children’s hospices. It is vital that all three funding sources complement one another. If not, there is a risk that local authorities will regard those services included within per-patient funding as the entirety of palliative care and avoid playing their part. NHS England’s specialised care could fall prey to a narrow medical model and never leave the acute hospitals.

The Government need to provide some specific distinctions between specialised and general palliative care, so that one side is not tempted to avoid its responsibilities by relying on the funding of the other. We also need to know that NHS and local authorities are clear about their duties under the Children and Families Act 2014. It places a duty on them to jointly commission care for children and young people with special educational needs and disabilities up to the age of 25. I urge the Minister to provide what answers he can today to a valuable sector, which eagerly awaits his response.

16:17

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

It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe) on securing this debate and for his gracious recognition of the Government’s commitment to, and good faith in, trying to get this right. I begin by paying tribute to the efforts of the thousands of people who work so selflessly for children’s hospices across the country. Without their efforts supporting the most gravely ill children and young people, we would not have our world-class hospices and palliative care services. I thank my hon. Friends the Members for Worcester (Mr Walker) and for Pudsey (Stuart Andrew) for their comments in support.

We are fully aware that the reliance of children’s hospices on volunteers and charitable fundraising reflects their comparatively recent historical development. They do not receive as significant a proportion of their funding from local health and social care commissioners as their adult counterparts. That is a long-standing anomaly that many in the sector perceive as threatening the sustainability of children’s hospices. Since taking office, the Government have taken that extremely seriously. As has been mentioned, we made a commitment in the coalition agreement specifically to place hospice funding on a more equitable and sustainable footing through the development of a new per-patient funding system for all hospices and providers of palliative care for adults and children. That would provide a transparent basis for local commissioning of palliative care services.

I am proud to say that that process has been accompanied by unprecedented direct investment in children’s hospices. We pledged in the coalition agreement to continue the annual allocation of £10 million to children’s hospices, and I am delighted to say that that was increased by 7% in 2012 to take account of new providers. Now allocated by NHS England, the grant has been increased again to £11 million. In addition, there were ad hoc grants of £19 million in 2010-11, and more than £7 million in capital grants in 2013 directly to children’s palliative care. We should not lose sight, however, of the fact that the annual allocation is a central grant in lieu of consistent, locally based commissioning, and it is to that which we need to move, not least because local commissioners have a better understanding of local need and how palliative care services can be integrated with other care.

The 2011 independent palliative care funding review highlighted the absence of good data on the costs of palliative care and proposed the collection of data on an unprecedented scale through a series of pilots, one of which looked specifically at children’s palliative care. Since the pilots concluded in April 2014, the considerable data generated, which cover all aspects of contact between someone being supported with care and the professionals delivering that support, have been analysed with the aim of identifying a currency that captures patients’ clinical and resource needs.

Hon. Members will understand that a useful currency has to group health care into units or packages that are broadly similar in terms of what is provided and the resources required, and that provide a common language for discussing the commissioning and delivery of palliative care. Ultimately, the aim is to give local commissioners the basis for discussions with providers about what is needed and how it is to be resourced, and clear, reliable data on the complex care that is provided to severely ill children. Good progress has been made in developing the currency, although none of the many providers and professionals that have been involved have been under any illusions about the complexity of the task or the importance of getting it right.

A document setting out currency units has been published and engagement has taken place with clinicians, providers and commissioners to test it out. The currency units are being developed into a currency framework that can be used locally by health economies for further testing. NHS England intends to make that available for 2015-16, along with supporting guidance. Hon. Members will note that we have not rushed into imposing a new funding system on the palliative care sector. We have worked extremely closely with many different providers in taking the work forward.

I know that unease is felt in some quarters about the prospect of a sudden transition to a new funding model. However, as we have previously placed on record—I am happy to do so again today—our aim is for the commissioning of children’s and adult hospices to be fit for purpose. That can be guaranteed only by testing the implications of a new funding approach with palliative care services themselves and by exploring locally how that would support more effective local commissioning, including how it must dovetail with other local services. There must be a planned and gradual transition to a new system, with clinical commissioning groups supported and able to take a strategic view of how palliative care for children fits into other services for children with complex needs, such as special educational provision and social care.

I entirely agree with the concerns that have been expressed about the commissioning of different services for children with life-limiting conditions and their families being integrated as much as possible, although we believe that there must be flexibility as to how different commissioners work together to co-ordinate provision. Supporting that joint working, and exploring how to effect the correlation of specialised and local commissioning of palliative care with social care, will be an important part of the guidance and other support made available during transition. It would be up to NHS England to consider what direct financial support might be necessary for hospices and other providers. That decision cannot be made before the thorough testing of the currency has enabled us to understand the implications. Clearly, appropriate guidance and case studies of good practice will be an important part of that, as the hon. Gentleman said.

On future allocations, just as we do not wish to see an abrupt transition to a new funding system, we do not intend to end abruptly the existing financial support provided to children’s hospices. We are committed to ensuring that children’s hospices are properly supported in a fair and sustainable way, which means ensuring that, when the time is right, there is a planned transition from a central grant to local funding. NHS England has responsibility for determining the future of the allocation to children’s hospices, and I know that that allocation has been prioritised as a commitment for 2015-16. Although it has not happened yet, when the route towards the implementation of the new currency is clearly mapped, I expect consideration to be given to the effect of transition on providers and how that might be reflected in any allocations made centrally during that period. A decision on programme budgets more generally is expected before the end of March.

The hon. Gentleman asked about transition. Of course, ensuring the sustainability of funding is not the only issue facing the children’s palliative care sector, as we have heard. My hon. Friend the Member for Worcester mentioned that as increasing numbers of young people with life-limiting conditions are benefiting from advances in medical science, allowing their condition to be stabilised, there is a growing demand for the more effective management of the transition to adulthood. Palliative care is not only about end-of-life care; it can provide vital support for living one’s life, but the setting must be age-appropriate and geared towards supporting the move to independent living, further education and employment. Typically, adult hospices do not provide the right environment for that, and children’s hospices are often not resourced to provide a separate and markedly different type of care for young adults, although I know that some people are developing facilities that cater for independent young people.

We know from the Care Quality Commission’s report that there is a pressing need for action across the NHS as a whole to improve how we meet the challenges of transition. Our system-wide pledge, “Better Health Outcomes For Children And Young People”, which the major health organisations signed in 2013, includes the ambition to secure care that is co-ordinated around the individual young person with complex needs in order to deliver a positive transition to adult services. There is undoubtedly more to be done, and it must be taken forward as part of a co-ordinated approach to meeting the needs of young people with complex needs.

There is increasing emphasis on the integrated commissioning and delivery of public services by the NHS and local government. We have recently introduced a new statutory framework for the integrated support of young people up to age 25 with special educational needs or a disability, which brings together the local authority and CCG to drive the co-ordinated assessment of need and planning for the individual child. Arguably, the role of palliative care for young adults should be fully integrated into such a framework of holistic support. It goes without saying that that would go beyond a narrowly medical model of care.

We would all agree that developing a new currency and a new funding framework for children’s palliative care is only part of developing more integrated services for children and young people. I would highlight that from 2011 to 2015-16 we have separately invested £54 million in the children and young people’s improving access to psychological therapies programme, which intervenes to help children and young people who have been affected by family bereavement.

The hon. Member for Birmingham, Selly Oak mentioned short-break services, which remain a key priority for the Government. We are very much aware of the invaluable support that they provide to disabled children and their families, including those who need palliative care. That is why, between 2011-12 and 2014-15, £800 million has been made available to local authorities through grants for short breaks. We have also introduced a short-breaks duty that requires all local authorities to provide a range of short-break services for disabled children and young people, and to publish a short-breaks statement explaining what is available locally and how it can be accessed. I would be happy to consider how we might ensure that local authorities are fully aware of the role of children’s hospices in acting as potential providers of short breaks.

In the final few minutes of the debate, I want to try to deal with all the questions raised by the hon. Member for Birmingham, Selly Oak. If I fail, perhaps I can undertake to write to him to address them properly. He asked what is going to happen to the hospice grant and whether it will continue. NHS England has made it a priority for next year. It has not yet formally agreed its programme budgets, but, going by the undertakings I have received, I believe we can be confident that it will continue as it is.

The hon. Gentleman asked about support for voluntary providers. It is clear that that will emerge from the testing of the currency—there is no dispute about it being included. He asked about plans to provide models of practice: yes, guidance on implementation will cover that. He asked about how data quality will be maintained: the testing of currency will include built-in quality assurance.

The hon. Gentleman also asked about whether we would commit to maintaining the NHS England children’s hospices grant until a new system is in place. I can guarantee that we will ensure that children’s hospices continue to be supported in their work. There is no question of the grant stopping before alternative arrangements are in place. NHS England has made it a priority, but has not yet agreed its programme budgets.

Finally, the hon. Gentleman asked about the new funding system for palliative care. We have published the currency document and commenced testing locally. We do not want to rush into a system that is not fit for purpose; we want to work with local providers and commissioners in order to empower them to have effective commissioning discussions.

I hope that I have provided some reassurance to the hon. Gentleman that the Government are firmly committed to seeing the children’s hospice sector supported. Given the strength of cross-party feeling on the importance of these issues, as highlighted today by the contributions of my hon. Friends the Members for Pudsey and for Worcester, I would expect any future Government to continue that and, in particular, to continue the work that we have commenced in providing a stronger local basis for the commissioning of children’s palliative care. I will happily write to the hon. Member for Birmingham, Selly Oak to respond to any points that I have not been able to address properly in this short debate.

Bank Closure (Stone)

Tuesday 3rd March 2015 Westminster Hall

16:28

[Sir William Cash (Stone) (Con)]

It is a great pleasure to serve under your chairmanship, Mrs Main.

Following the news of the decision to close the Eccleshall branch of NatWest bank, I called for a meeting with the head spokesman for Royal Bank of Scotland, which owns NatWest. Eccleshall is in my constituency, and I support my constituents to the hilt in this important matter, not least because the branch is the last bank in Eccleshall. I urge RBS to keep the essential facility open as a key service. My constituents in Eccleshall, including businesses, the elderly and the infirm, need access to bank services. They should not be made to travel, using cars and increasing traffic; their local banking facilities should be in the town where they live.

Eccleshall is a vibrant, attractive place with many small businesses, pubs and restaurants, and farmers nearby, all of whom need banking facilities daily. The bank will be keeping the ATM—I asked for how long—and has reached some agreement with the Post Office, but our local concerns in Eccleshall far outweigh any of that.

Accounting procedures within the bank’s internal systems remove large chunks of income, such as business, wealth management and mortgages, from the branch income measurement. As a result, only large city branches are likely to be shown as profitable. Were interest rates to rise again to a higher rate, would not small town branches such as Eccleshall become profitable again? Furthermore, banks go on and on about their good customer service, while often making huge losses—even when not in turmoil—but closing a bank in a place such as Eccleshall is the opposite of good customer service.

Stafford borough council’s letter on the matter followed an emergency motion and stated:

“The council expresses its disappointment at the decision by National Westminster Bank to close its branch in Eccleshall. This is the ‘last bank’ in Eccleshall and leaves all residents, particularly the elderly, vulnerable and those in remote areas without an adequate banking service.”

Such an emergency motion is a most unusual step for a borough council. It was also supported by 780 signatures on a petition and, indeed, I will be presenting a parliamentary petition after the debate.

Letters went from the council to the chief executives of RBS and NatWest, copying in the Chancellor, the Secretary of State for Communities and Local Government and the Secretary of State for Business, Innovation and Skills. In addition, I wrote to the Minister for Business and Enterprise. I asked and continue to ask RBS to review its decision in the light of those letters and the strength of feeling against the closure. In its letter to the NatWest chief executive, Stafford borough council requested that the bank review its decision. In 2010, RBS as a whole had committed to maintain a bank in communities where—I emphasise—it was the last branch in town, even identifying 168 communities where it was already the only branch in town. In 2014, however, at least 25 of those were closed, and Eccleshall appears to be facing the same fate soon. Through the Minister, I ask RBS not to close our NatWest branch.

In the past five years alone, 431 communities have lost their last surviving bank branch. The nearest alternative NatWest branches for Eccleshall residents are in Stone, which is a 12-mile round trip; Stafford, a 16-mile round trip; Trentham or Newport, each a 19-mile round trip; and Market Drayton, a 25-mile round trip. The banks seem to want to accelerate the rate of closure, especially in rural communities, in spite of the speech by the Secretary of State for Business, Innovation and Skills the other day, and what about the national NatWest pledge not to close the last branch in town? Why can RBS not branch-share, while maintaining the Eccleshall branch to achieve its existing targets? We only need the one branch. The fact that NatWest is part of RBS, with all its historic difficulties, only makes the proposed closure worse.

My broader personal interest derives from the fact that my family founded the Abbey National building society and the National Provident in the mid-19th century, and in my view and that of many of my constituents, banks also have a social purpose. NatWest data claim to show low usage of the Eccleshall branch, but the data is contrary to local reports. People have noticed that queues for the counter service are often extremely vibrant and visible.

The post office, which is intended to offer substitute services, according to the bank, can undertake a wide range of counter transaction services, but it does not have significant capacity to provide a real alternative. The queuing area in the post office is too small and it has only one full-time staff member and two counter positions. How long will the queues be when businesses pay in their weekend takings, especially the pubs and restaurants, on Mondays? As I said, there are plenty of pubs and small businesses in my constituency, so the banking of weekend takings will make things worse, especially for the disabled and elderly if coinciding with pension days and so on.

Banks offer a core service to all in the community, not only to individual people, but to businesses and groups, whether families, single people, the elderly, the infirm, farmers and so on—every stratum of society. If there is a mobile banking service limited to an hour, what happens if people cannot get to Eccleshall at that time? The post office has no disability compliance and wheelchair users cannot obtain access, while its standard paying-in maximum for business is £1,000 per day, which is far below what the pubs need to pay in each Monday. Also, the bank branch can amend or cancel standing orders, but the post office cannot.

On communications about the closure, I have been told that five NatWest Eccleshall business customers merely received a letter and that no meetings have been held. On internet banking, Eccleshall does not fit a pattern of internet-subscribed services and telephone banking. My constituents will be forced to use online or telephone banking services. Many do not have access to the internet and do not feel safe talking to people on the telephone about personal finance.

There has been no effective community involvement in the closure decision. If my constituents are to have a growing and diverse community in their local area, with local employment and services and increased housing, they need to be supported by a local bank in the community, rather than decision making being taken away from their people and business. The Eccleshall community is a caring one, and as I go around the town I know that people feel strongly about the issue. My constituents in Eccleshall value the local NatWest branch and want to retain it. The town is a small, vibrant community. I urge the Minister to intervene with RBS to recommit to maintaining the “last branch in town” policy commitment.

The chief executive of RBS, Mr Ross McEwan, wrote to me last week with the RBS 2014 full-year results. Part of that correspondence refers to a section in the results entitled “A better bank for customers”, in which he says that for too long UK banks have focused on “market share”, rather than “customer care”:

“It is why over the last year our people have worked hard to embed this ‘customer first’ mentality into everything we do as a bank…we are determined to reach our aspiration of being number 1 for customer service, trust and advocacy”—

by 2020—

“It won’t be easy, but I firmly believe it is doable.”

At the end of the letter, he says:

“We will continue to focus on doing what is right for our customers.”

All I have to say is: we shall see.

RBS has an operating profit of £3.5 billion, with an underlying operating profit that increased by £l billion in 2014, less the £2 billion in fines—the ones we know about. That is not good. Thus, in 2015, we might reasonably expect profits to exceed £5 billion, but what about my constituents and their service from the bank in Eccleshall? The chairman and chief executive both reiterated their “customer first” policy. The chairman stated that NatWest must become the No. l bank for trust, service and advocacy, with the chief executive adding that

“the customer has to come first in everything that we do”.

The chief executive met the Chancellor to discuss bank branch closures on the very same day that I was meeting NatWest executives to discuss the closure of the NatWest bank in Eccleshall. That was on Tuesday 27 January 2015. The Chancellor called for a minimum standard for managing any bank branch closure. That speaks for itself.

I also now have problems with closures by the Co-operative bank. It, too, has a poor history. I met with the head of branch network for the Co-operative bank last Wednesday to oppose its decision to close branches at Blythe Bridge, Cheadle and Stone in my constituency. The nearest alternative branch will now be in Longton, which is approximately eight miles from all the other branches. The branches are scheduled to close by the end of July. The Co-operative bank also claims that its customers are its main priority, but how can customers be its main priority if it is removing banks in such key local towns? It says it will write to affected customers to let them know about the changes and the alternatives available to them.

I understand that Bob Rickert, the chief operating officer tasked with helping restructure the bank, left it last week, and last October saw the departure of its chairman, Richard Pym. The Co-operative bank is struggling to turn itself around after facing a £1.5 billion financial black hole, which we have all heard about and was quite clearly self-induced. The bank is not expected to make a profit until at least 2017, and in December, it failed the Bank of England stress tests, designed to scrutinise banks’ ability to weather a downturn.

My constituents in Stone do not want the Co-op bank in their town to close. They banked with its predecessor for 30 years and want a full local branch. The post office is not a good alternative, as it could not offer a full service and the queues are long. The same applies in Cheadle and Blythe Bridge.

I call on the Minister to intervene by writing to the banks and to do everything possible to try to prevent the proposed Co-op closures in Cheadle, Stone and Blythe Bridge, as well as the closure of the NatWest branch in Eccleshall.

16:40

[The Economic Secretary to the Treasury (Andrea Leadsom)]

It is a great to serve under your chairmanship today, Mrs Main. I congratulate my hon. Friend the Member for Stone (Sir William Cash) on securing this debate and on presenting his case as compellingly as he always does. He has made good points to which I am extremely sympathetic. I well understand—I have my own constituency cases on the issue—how people feel when a bank in their area is to be closed. Bank branches are often felt to be at the heart of a local community. I appreciate that, as he said, the people of Eccleshall have produced a petition with close to 800 signatures expressing their concern at the loss of their bank branch. Each of those people, and those in the neighbouring communities in Blythe Bridge, Cheadle and Stone who are losing a branch of the Co-operative bank, will feel, quite rightly, that their town is losing a little piece of its identity.

Eccleshall has had a NatWest branch since 1970, and has had a bank branch operating since the 1870s on what I can well imagine is a well loved local site, so the situation must be unsettling for local people. I am deeply concerned about closures not just in my hon. Friend’s constituency but across the country. I therefore want to tell him a bit about what I and others in the Government have been doing to try to make sense of the situation and to protect the important local access to banking services that so many people need and want.

At the same time, my hon. Friend will appreciate that the way we bank is going through an unprecedented period of change. Customers are reducing their use of high street branches and embracing new online and mobile technology. Although we all recognise that decisions on where branches are located are commercial ones, I assure him that the Government can set the tone, stressing the importance of day-to-day banking services to everyone’s daily life. As Economic Secretary, I have made that a personal priority and have worked hard to make sure that the vital services that the banking industry provides remain as widely available as possible.

NatWest has set out its case that the number of transactions at its Eccleshall branch is low compared with the rest of its branch network, but I absolutely recognise the disappointment felt by customers more broadly in the local area at the news of the closure. People often feel that there is inadequate consultation with the community and local stakeholders who may be affected. NatWest has followed current best practice, giving customers a three-month notice period and contacting its most active and most vulnerable customers to help them find alternative ways to bank. However, if people are to feel that their concerns have been heard, and if local businesses are to feel that the services underpinning their livelihoods are safe, banks must go much further. That is why I have been working to encourage the industry to adopt a new protocol that each bank will undertake to follow so as to mitigate the impact of a local branch closure.

[Sir William Cash]

Did my hon. Friend hear the interview on this morning’s “Today” programme with the chief executive of Barclays bank, in which he talked about the amount of money he is earning and about bank bonuses, which are also under wider discussion? The chief executive and chairman of the Royal Bank of Scotland keep making statements about customer service—we have heard much the same sort of thing from the Co-op—but that does not help my constituents or anyone else in the country. They then find a little edge here or there with regard to the profitability of a particular branch. Does she agree that if banks want a reputation that is worth maintaining, it will involve making sure that people in communities such as Eccleshall have actual access to the kinds of services that the banks say they are offering in their annual reports and in the public arena—on radio and television?

[Andrea Leadsom]

I agree to a great extent with my hon. Friend. There is no doubt that banks are keen to restore their damaged reputations and that the big UK banks in particular are determined to show that they are there for their customers. I therefore agree with what he says about the need to make sure that they are addressing the needs of those customers and not looking only at commercial realities. Equally, however, I know he will agree that it is not for Government to intervene in private businesses to force them to retain completely unviable branches. We need instead to make sure that banks pay careful attention to the balance between commercial realities and the needs of local communities.

[Sir William Cash]

On Government activity, I seem to remember only a few years ago an extensive bail-out for RBS. There are also questions in relation to the Co-op. It seems to me that when banks want help—and by help, I mean monumental bail-outs—it comes from the Government and the taxpayer, yet when they say they are putting customer service first they close small but important branches in places such as Eccleshall, which needs its branch.

[Andrea Leadsom]

I am grateful to my hon. Friend for those further remarks. Again, I completely agree that banks have a long way to go to restore confidence that they mean what they say when they talk about customer service. However, again, he will understand if I do not say that a bank must open a branch in this place or that. Those decisions are commercial ones. The Government need to ensure that banks balance the needs of customers with commercial realities.

I mentioned that I have been urging and encouraging the industry to adopt a protocol that each bank would follow to mitigate the impact of a local branch closure. The protocol should not simply set out a series of steps for individual banks to take before they close a branch, but should raise the game of the industry as a whole, including how it listens to the concerns of its customers, and, crucially, how it responds. I am pleased to say that discussions on the protocol are at an advanced stage, and agreement is expected soon, thanks to the help of the trade body for banks, the British Bankers Association. We are hopeful that we will get something positive that will address some of the issues my hon. Friend raised.

My hon. Friend mentioned the availability of banking services through local post offices. I completely understand that for customers having a local post office is not the same as having a local bank branch. However, the services available through the Post Office offer most customers a real opportunity to continue to bank locally. We can and must do more to ensure that everybody understands and is comfortable with using the banking services available to them through their post office. For many customers, the Post Office can provide access to their bank account, including the ability to withdraw money, deposit cash and cheques and check their balance at all 11,700 of its branches throughout the UK—a huge network.

In some respects the Post Office can offer wider customer benefits. I know that a number of post offices, including in my constituency, have much longer opening hours than a typical high street bank and provide services seven days a week. Recently, I met the head of the post office network to talk about moves to improve the network, to provide more customer-facing space and more security, and to improve the range of financial services that it offers. The Post Office is working with its postmasters to ensure that facilities are upgraded and that appropriate security is put in place to enable customers to bank safely, and it is determined to do more to ensure that essential banking facilities remain available in as many communities as possible. The Government have committed almost £2 billion to protecting and modernising the post office network.

I believe that we can continue to improve the banking services that the Post Office offers and make them more consistent for customers, which is why I have encouraged the British Bankers Association and the Post Office to look at a standardised approach to counter banking services available through post offices. The Government expect a report on the progress of those talks in the near future.

My hon. Friend raised concerns about the future of banking beyond the traditional branch network, and about the services that will be accessible to all. It is vital that we ensure that vulnerable customers—particularly the elderly and those in rural constituencies—have suitable access. In Eccleshall, I believe that NatWest has made provision for a change to an existing mobile bank route, so a more traditional NatWest presence will still be available in the town.

A whole new world of banking is becoming available, and we should be excited about the opportunities that online and mobile technology can provide. The UK is positioning itself as a world leader in financial technology, and we can already see signs of the benefits that all the developments in financial technology can bring. For example, since April 2014, customers can securely transfer money instantly to other bank accounts using only their mobile phone number as identification, which means that they do not have to access a computer or travel to a branch to make a payment. From 31 July 2016, customers will be able to use their telephone to photograph cheques for payment into their bank account, making life easier for customers in remote areas. Several banks are taking action to help their customers use those new technologies with confidence.

We are also making progress on ATM provision. The number of free-to-use ATMs is at an all-time high, and 97% of withdrawals are now made free of charge. I understand that in Eccleshall NatWest will still provide an ATM in the local community. There are also two other free-to-use ATMs within 1 mile of the branch that is to close.

More generally, it is often the most isolated or disadvantaged communities that have the worst access to free-to-use ATMs, so the Government are working closely with the LINK network’s financial inclusion programme to subsidise free-to-use cash points in more than 1,400 remote and deprived areas across the UK. Importantly, members of the public can nominate their area for inclusion. I believe that the ATM network can play a more important role in addressing some of the concerns voiced by consumers whose local branch is closing.

On a trip to India last year as part of my job as Economic Secretary, I was impressed at the widespread use of smart ATMs, which have far greater functionality than those we tend to have in the UK. They allow customers not only to make withdrawals and deposits and check their balances, but to carry out a wider range of transactions, such as purchasing train tickets and bus passes. Progress in the UK could be made by simply ensuring that ATMs allowed customers to deposit cash. That facility would be particularly beneficial to local small and medium-sized enterprises if it were provided in a way that allowed depositors to feel safe and secure—for example, within the confines of a Post Office, a store or an e-lobby. I have raised that issue with the banking sector, and my officials are engaged with LINK to find a way forward.

In conclusion, although the Government recognise that individual branch closures are commercial decisions and must continue to be so, I fully understand the disappointment felt in Stone and other communities when local bank branches close. There is no doubt that customers’ usage of banking services is going through an unprecedented period of change, but it is vital that we ensure that vulnerable customers—particularly the elderly and those in rural constituencies—have suitable access.

I want to reassure my hon. Friend that it will continue to be my personal priority for the remaining weeks of this Parliament to ensure that the vital services that the banking industry provides remain as widely available as possible, wherever people live. I fully intend to make further progress on the initiatives to get banks to create a new protocol, to look at what services the Post Office provides, and to push further on using technology to provide solutions to businesses and customers in rural areas. Once again, I thank my hon. Friend for raising these important issues in this vital debate.

Question put and agreed to.

16:55

Sitting adjourned.

Written Statements

Tuesday 3rd March 2015 Written Statements

Tuesday 3 March 2015

Regulatory Policy Committee

Tuesday 3rd March 2015 Written Statements

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

I am pleased to announce that I have appointed Jonathan Cave, Alexander Ehmann, Nicole Kar and Jeremy Mayhew to the Regulatory Policy Committee, commencing on 16 March 2015. Term end dates of between three and four years have been set in order to ensure that knowledge is maintained by the committee in future.

Dr Jonathan Cave has been senior teaching fellow in economics at the university of Warwick since 1994. For more than 30 years, he also worked for the Rand Corporation most recently as senior research fellow at Rand Europe. He has previously been a visiting professor, research fellow and lecturer at several universities in the US, including UC Los Angeles. Before entering academia, he was an economist at the Bank of England and later the US Federal Trade Commission. Jonathan is a member of DEFRA’s science advisory council exotic disease subgroup. Jonathan holds no other public appointments and has not undertaken any party political activity.

Nicole Kar is a partner at Linklaters LLP, where she is a specialist in EC and UK competition law. Before joining Linklaters in 2001, Nicole was a solicitor of the Supreme Court of Queensland and a solicitor and barrister of the Supreme Court of Victoria. Nicole is also vice-chair of the competition committee of the City of London Solicitors’ Company, a trustee of the Mary Ward Settlement and a committee member of the Peace Brigades International’s alliance for lawyers at risk. Nicole holds no other public appointments and has not undertaken any party political activity.

Jeremy Mayhew is a senior adviser at PwC Consulting. His professional career has mainly been in the media and broadcasting industry, both at the BBC and as a consultant. Jeremy has served on the Regulatory Policy Committee since 2012 and holds a number of other appointments; since 1996, he has been an independent common councilman on the City of London corporation, where he is now chairman of the City Bridge Trust committee and a deputy chairman of the City’s policy and resources and Finance Committees. He is a former chairman of the Barbican Centre Board and has, previously, served on the boards of BBC Worldwide, the Strategic Rail Authority, and the London Development Agency and as a non-executive adviser to the Mayor of London’s Office for Policing and Crime. He is a member of the Conservative party.

Alexander Ehmann is head of UK public affairs at Tata Ltd, and represents the Tata business presence in the UK. This includes large businesses, such as Jaguar Land Rover, Tata Consultancy Services and Tata Steel as well as a number of UK-based small and medium-sized businesses. Previously, Alexander was deputy director of policy and public affairs at the Institute of Directors (2006-14), and external affairs adviser at PhonePayPlus, a telecommunications regulator (2004-06).

Alexander has been a member of the Regulatory Policy Committee since 2012 and holds no other public appointments. He is a member of the Liberal Democrat party and since May 2014 has been a councillor for St Margaret’s and North Twickenham ward in the Borough of Richmond upon Thames, London.

These appointments have been made in accordance with the Commissioner for Public Appointments code of practice (April 2012).

[HCWS326]

Insolvency (Practitioner Fees and Court Cases)

Tuesday 3rd March 2015 Written Statements

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

I am today laying regulations requiring insolvency practitioners to provide additional information to creditors about their fees and expenses. Insolvency practitioners are given strong powers by legislation to administer insolvencies. They take decisions and actions that can have a significant financial impact on those affected. Their fees are paid out of the assets in cases. It is important that there is confidence in the way that they charge fees.

After commissioning an independent review by Professor Elaine Kempson, we consulted interested parties on what measures should be put in place to address shortcomings in the current fee regime. Where insolvency practitioners’ fees are based upon time costs, they will be required to provide an up-front estimate of their fees for creditor approval, before they can take their fees. Insolvency practitioners will not be permitted to draw fees in excess of the approved estimate unless creditors give further approval. This will therefore act as a cap on fees.

These measures will increase transparency for creditors as they will have a much clearer indication of what the likely fees and costs of dealing with an insolvency will be. The provision of clear information, setting out what work will de done and what it will cost to undertake that work, will also give creditors more knowledge when agreeing fees and better equip them to challenge fees where they appear unreasonable.

The measures will give insolvency practitioners the opportunity to demonstrate to creditors what they do and the value they deliver in return for their fees.

Together with the measures contained in the Small Business, Enterprise and Employment Bill currently before Parliament strengthening the oversight regulation of insolvency practitioners, these steps should provide creditors with greater confidence in the insolvency regime through increased transparency and accountability.

The statutory instrument that will be laid today also amends how courts deal with insolvency cases. The new provisions will allow the High Court to transfer simple cases to the county court at central London so that the High Court can focus on more difficult complex cases. This will improve efficiency in the system.

[HCWS325]

Banking Reform

Tuesday 3rd March 2015 Written Statements

[The Economic Secretary to the Treasury (Andrea Leadsom)]

This Government have taken significant steps to reform the UK’s system of financial regulation.

In the Financial Services (Banking Reform) Act 2013 (“the Act”), we legislated to strengthen the accountability of bank senior management and to raise standards of individual conduct in the banking sector. I am now announcing the timetable for bringing the senior managers and certification regime (SM and CR) created by these reforms into operation. I am also announcing the Government’s plans for applying the SM and CR to foreign banks operating through branches in the UK.

The introduction of the SM and CR will be a major reform with significant implications for the firms concerned—banks, building societies, credit unions and investment firms regulated by the Prudential Regulation Authority (PRA) and for the individuals, particularly senior managers, who work in those firms. The Government have therefore decided, following discussions with the Financial Conduct Authority (FCA) and the PRA, that the SM and CR will come into operation on 7 March 2016. In order to facilitate an orderly transition from the existing approved persons regime, firms will be required to notify the regulators by 8 February 2016 of the approved persons who are to be senior managers under the SM and CR.

The Treasury will make the necessary commencement order (under section 148 of the Act) and a transitional provisions order (under section 146 of the Act) shortly.

The Government issued a consultation on whether to extend the SM and CR to UK branches of foreign institutions on 17 November 2014. The consultation closed on 30 January 2015 and the Government have been considering the responses received.

The Government have now decided to proceed with this measure. It will come into operation on the same date—7 March 2016—as the SM and CR applying to UK firms and foreign institutions will also have until 8 February 2016 to notify the regulators of the approved persons who are to be senior managers in their UK branches.

The Treasury must now make an order—subject to the affirmative procedure—under section 71A of the Financial Services and Markets Act 2000 to implement the measure. The Government intend to arrange the debates as early as possible in the next Parliament.

The PRA and FCA will shortly be consulting on additional SM and CR rules. These rules will help ensure that the SM and CR is applied in an appropriate and proportionate way to foreign institutions operating through branches in the UK.

The commencement order will also bring sections 36 to 38 of the Act into force from 7 March 2016. This means that the new criminal offence relating to decisions causing a financial institution to fail could apply to decisions taken by senior managers in UK banks, building societies and PRA-regulated investment firms—but not credit unions or any foreign institution—on or after that date.

[HCWS336]

UK-Senegal Double Taxation Convention

Tuesday 3rd March 2015 Written Statements

[The Financial Secretary to the Treasury (Mr David Gauke)]

A double taxation convention with the Republic of Senegal was signed on 26 February 2015. The text of the convention has been deposited in the Libraries of both Houses and made available on the gov.uk website. The text will be scheduled to a draft Order in Council and laid before the House of Commons in due course.

Attachments can be viewed online at: http://www.parliament. uk/writtenstatements

[HCWS335]

ECOFIN

Tuesday 3rd March 2015 Written Statements

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

A meeting of the Economic and Financial Affairs Council was held in Brussels on 17 February 2015. Ministers discussed the following items:

Investment plan for Europe

The presidency gave a state of play update on the Commission’s proposal for a regulation on the European fund for strategic investments.

Current legislative proposals

The presidency gave an update on current legislative proposals.

Annual growth survey 2015 and alert mechanism report

The Council adopted conclusions on the annual growth survey and the alert mechanism report.

Follow-up to the G20 Meeting of Finance Ministers and Central Bank Governors on 9 to 10 February 2015 in Istanbul

The presidency and the Commission debriefed the Council on the G20 meeting of Finance Ministers and Central Bank Governors in Istanbul.

Discharge procedure in respect of the implementation of the budget for 2013

The Council, on the basis of a report from the Court of Auditors, approved draft recommendations on the discharge to be given to the Commission in respect of the implementation of the general budget of the European Union for the financial year 2013. The UK, along with Sweden and the Netherlands, voted against the Council recommendations and submitted a joint statement expressing there had not been an improvement to the Court of Auditor’s error rate assessment.

Budget guidelines for 2016

The Council endorsed guidelines concerning the 2016 budget of the EU, which will be its overall reference for the budget year.

High-level group on own resources—first assessment report

The chairman of the high-level group on own resources presented the group’s first assessment report on the system of financing the EU budget, followed by an exchange of views.

[HCWS334]

Royal Borough of Greenwich

Tuesday 3rd March 2015 Written Statements

[The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins)]

On 29 January 2015 I explained to the House, Official Report, Column 28WS, the coalition Government’s commitment to protecting an independent free local press, and how the Government were seeking to take action on the practice by a small number of local authorities of publishing local authority newspapers, which given their frequency of publication, can push out and undermine that independent press. I also explained that each case would be considered on its merits, and that on this basis the Secretary of State had given the Royal Borough of Greenwich notice of a direction that he proposed to give requiring that council to comply with the provisions in the March 2011 code of recommended practice on local authority publicity which restrict the frequency of publication of the council’s newspaper.

Within the period of 14 days following the notice, as statute provides, Greenwich council has made a number of representations. These included that in the council’s view there is no evidence that its weekly newspaper has an impact on the local independent press in the area, that the proposed direction would be ultra vires, irrational, and procedurally unfair, and that in any event the council would not be able to comply with such a direction by the proposed date of 31 March 2015.

I can now tell the House that the Secretary of State has carefully considered these representations, together with other information available about the council’s publicity, the responses received to the Government’s 2013 consultation “Protecting the Independent Press from Unfair Competition”, and the Government’s response to that consultation. He has also had careful regard to the Department’s equality statement on enforcing the code of recommended practice on local authority publicity, and has considered afresh earlier representations that the council had made about proposals to direct its compliance with the code to restrict the frequency of publication of its newspaper. The Secretary of State has concluded that it would be lawful and appropriate in all the circumstances of Greenwich for him now to issue the direction as he had proposed.

Accordingly, the Secretary of State, in accordance with his powers under section 4A(1), (2) and (3) of the Local Government Act 1986, has today directed the Royal Borough of Greenwich council, in order to secure the council’s compliance with the requirements of the code, as follows:

to commission or publish no more than four issues of Greenwich Time, or any equivalent newsletter, newssheet or similar communication, in the period of one year commencing 31 March 2015, and in subsequent years; and

to ensure that the executive of the council within 14 days of the date of the direction will take the necessary decisions in order that the council will be in a position to comply with the requirement on publication from 31 March 2015 onwards.

With this direction not only must the council cease to publish its weekly newspaper, Greenwich Time, but it is also barred from outsourcing or contracting for the publication of any weekly newsletter, newssheet or similar communication by a third party to whom the council may make payment.

I will be placing in the Library of the House copies of the direction, a letter to the council setting out the Secretary of State’s reasons, the equality statement, and the representations of the council.

[HCWS337]

Marchwood Sea Mounting Centre (Preferred Bidder)

Tuesday 3rd March 2015 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

The House will be aware that in May 2014 I launched the process to grant a concession to manage, and exploit the commercial potential of, the Marchwood Sea Mounting Centre. Following a strong competition, I am pleased to announce that Solent Gateway Ltd has been selected as the preferred bidder. This will be a joint venture between David MacBrayne Ltd and GBA (Holdings) Ltd.

The concession is expected to generate significant value for Defence, in terms of both a share in the profits from commercial exploitation of the spare capacity at the port and a reduction in the cost of sea mounting. The commercial arrangement secures the delivery of Ministry of Defence’s routine and, importantly, surge requirements. The new port operator will also be providing a deployable reserve capability as part of the Army’s total support force.

We expect to conclude the transaction and sign a contract with the new operator over the coming month. The concession will commence in the autumn. At that time, around 40 civil service employees, subject to TUPE consultation, will transfer to employment under the winning bidder. As is normal, their existing employment rights will be preserved.

[HCWS330]

Fuel Poverty Strategy

Tuesday 3rd March 2015 Written Statements

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

Today I will be publishing the fuel poverty strategy for England as required under the Warm Homes and Energy Conservation Act 2000 following extensive consultation held from July to October 2014¹.

This new fuel poverty strategy, the first in nearly 14 years, aims to set a durable framework for future fuel poverty policies with an ambitious new legal target, accompanying milestones and a strong accountability system.

Tackling fuel poverty has been a major priority during this Government. While the numbers of fuel poor households rose rapidly from 2004 to 2010, they are now falling. In terms of energy efficiency, we have delivered over 1.8 million heating and energy efficiency measures in low income areas and households. In terms of incomes, we have permanently increased cold weather payments and continued support worth around £2 billion per year through winter fuel payments. And in terms of energy prices, we have ensured a downward pressure through retail market and tariff reforms.

The new fuel poverty strategy builds on this success.

The independent review of fuel poverty conducted by Professor Sir John Hills of the London School of Economics, held in 2011-12, demonstrated that the traditional way of measuring fuel poverty had been flawed. It underestimated the scale of the problem when energy prices were low and overestimated the scale of the problem when energy prices were high. The Hills review recommended a new approach—the low income high costs approach. That has been adopted and helps to ensure we prioritise people living in the deepest fuel poverty, above all by making their homes warmer through energy efficiency investments.

Over 320,000 fuel poor households in England live in properties rated below band an “E” level EPC rating needing to spend on average £1,000 a year more on energy to heat their home compared to a typical home. Through the Energy Act 2013, we established a new duty to adopt a fuel poverty target. The new fuel poverty target for England sets an ambition that as many fuel poor homes as reasonably practicable achieve a band C energy efficiency standard by 2030 and became law in December 2014².

Today’s strategy is our road map for meeting that target. It confirms the following interim objectives in the new fuel poverty strategy:

as many fuel poor homes in England as is reasonably practicable to band E by 2020;

as many fuel poor homes in England as is reasonably practicable to band D by 2025.

The new fuel poverty strategy sets out a number of recent and new initiatives that are being taken forward. With almost a fifth of our housing stock in the private rented sector, and a third of the fuel poor living in rental accommodation, a new minimum energy efficiency standard for the private rented sector is in the process of being introduced. DECC are partnering with the NHS to focus on the links between health and fuel poverty. A major focus is on fuel poverty in non-gas homes, with new data, new working groups and our new central heating fund. DECC is also looking at data sources to better identify of people in fuel poverty and new types of housing that appear to be badly affected such as park homes.

Today is an important milestone. With this new strategy now in place, DECC will continue to work with partners in central and local government, industry and the third sector to maintain a sustainable path towards cutting the cost of keeping warm for fuel poor homes.

I will today lay before Parliament and place a copy of the strategy in the Library of both Houses. It is also available online at: https://www.gov.uk/government/publications/cutting-the-cost-of-keeping-warm

^1. We published a consultation at: https://www.gov.uk/government/consultations/cutting-the-cost-of-keeping-warm-a-new-fuel-poverty-strategy-for-england. We also held a number of consultation events alongside our regular engagement and partnership activity.

^2. See http://www.legislation.gov.uk/uksi/2014/3220/made. Note there is also a specific methodology—the fuel poverty energy efficiency rating (FPEER) methodology—for measuring energy efficiency in relation the target. See https://www.gov.uk/government/publications/fuel-poverty-england-regulations-2014-and-methodology

[HCWS327]

Gifting of Equipment: Free Syrian Police

Tuesday 3rd March 2015 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

The Foreign and Commonwealth Office has today laid a departmental minute proposing the gifting of equipment to the Free Syrian Police.

The conflict in Syria remains catastrophic, with an estimated 200,000 people killed and more than half the Syrian population in need of humanitarian assistance. The UK will continue to do all it can to end the conflict through a political settlement, while also alleviating humanitarian suffering and protecting UK national security.

The UK is committed to working with the moderate opposition to help develop their capacity to meet needs on the ground and to reduce suffering and to save lives, thereby also helping reduce the space for extremists to operate. In line with this approach, on 6 February 2014, my predecessor, my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), laid before the House of Commons a departmental minute which set out our plans to expand a UK-funded pilot project to train and equip Free Syrian Police officers, enabling them to provide community policing. I am pleased to present a further UK contribution of practical support to the Free Syrian Police, aimed at furthering their work.

The UK is working with international donors to provide training, technical assistance, maintenance funds, and basic equipment to the Free Syrian Police operating in opposition-controlled areas of Syria. The UK is also supporting the development of greater community oversight and monitoring ‘of the police to help ensure that they are responsive to local needs. Through this support the UK is aiming to build community resilience and moderate governance to help counter the threat from extremist groups. Following the success of an initial pilot and subsequent phases, developing the capacity of community policing has become a core aspect of the UK’s ongoing support to the moderate opposition in Syria.

The departmental minute laid today sets out in more detail our plans to gift office and communications equipment, uniforms, non-armoured vehicles and other operational equipment to the Free Syrian Police. Subject to assessment under the consolidated EU and national arms export licensing criteria, it is proposed that this will include a limited amount of controlled equipment, namely body armour and helmets (for conducting vehicle checks outside towns), CS spray (small canisters for individual personal protection), handcuffs (for making arrests), and night-vision goggles (early warning system for approaching regime helicopters).

The goods will be procured, distributed and delivered by an implementing partner carefully selected through competitive tender. The total cost of the proposed gift is up to £750,000, which will be met by the Government’s conflict, stability and security fund (CSSF). The UK’s assistance forms part of an approach co-ordinated with other donors that will help deliver the best value for money. Other donors, including the US, Denmark and the Netherlands, are also contributing on a similar scale.

The gift forms part of a renewed comprehensive UK programme of training and technical assistance worth approximately £2.5 million in the current financial year, which will be delivered by implementing partners. The training aims to build the capacity of the Free Syrian Police including through developing their strategy, planning and management mechanisms and enhancing co-ordination between Free Syrian Police units, as well as strengthening the relationship between police actors and local communities.

The Free Syrian Police are responsible for providing basic civilian policing in large areas of opposition-controlled territory. Police actors, local administrative councils and the National Coalition’s interim Ministers have all underlined to us the need to improve policing and security, and we have worked closely with Syrian partners and other donors to design a comprehensive programme of support.

The gift is being scrutinised to ensure that it is consistent with export controls and complies with our international obligations. Recipients have been carefully selected to prevent equipment being given to those involved in extremist activities or human rights violations. All our assistance is carefully calibrated and legal, is aimed at alleviating human suffering and supporting moderate groups and is regularly monitored and evaluated. We have assessed the project for human rights risks, using the overseas security and justice assistance guidelines established by the Foreign Secretary in 2011 as part of ensuring these risks are effectively mitigated.

The Treasury has approved the proposal in principle. If, during the period of 14 parliamentary sitting days beginning on the date on which the departmental minute was laid before the House of Commons, a Member signifies an objection by giving notice of a parliamentary question or a motion relating to the minute, or by otherwise raising the matter in the House, final approval of the gift will be withheld pending an examination of the objection.

[HCWS332]

Gifting of Search and Rescue Equipment: Syria

Tuesday 3rd March 2015 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

The Foreign and Commonwealth Office has today laid a departmental minute proposing the gifting of search and rescue equipment to Syrian civil defence teams.

The situation in Syria continues to deteriorate. An estimated 200,000 people have been killed since the war began four years ago, many of them innocent civilians. The Assad regime continues to use the most barbaric military methods and tactics available, including the use of indiscriminate artillery fire, chemical weapons and barrel bombs. The UK remains committed to doing all it can to promote a political settlement to end the conflict, to alleviate the humanitarian suffering, and to protect UK national security through countering terrorist and extremist threats.

In January and May 2014, my predecessor, my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), laid departmental minutes before the House of Commons and issued written ministerial statements setting out our plans to gift equipment to civil defence teams operating in opposition-controlled areas of Syria. No objections were received to either gift and the UK distributed the equipment to civil defence teams along with comprehensive training packages. These defence teams have now saved over 10,000 lives by rescuing civilians trapped in damaged buildings, fighting fires and by providing emergency first aid. Our assistance has helped increase the legitimacy and capacity of local councils and supported communities in dealing with the aftermath of attacks. Other donors, including the US, Denmark and Japan, have also contributed to the civil defence initiative.

The UK intends to continue its support to this programme by increasing the communications capability and mobility of the teams, providing more medium-weight rescue equipment and equipping further emergency medical teams. The departmental minute laid today set out our proposal to gift £3.5 million in equipment to Syrian beneficiaries operating within civil defence. The proposed list of equipment includes cutting and rescue tools, personal protective gear including helmets and goggles, stretchers, medicines and medical supplies, radios, fire-fighting equipment and 4x4 vehicles. The programme will also increase co-ordination between the Syrian interim government and civil defence teams, and provide civilian outreach for the civil defence teams, improving the resilience of local communities. The programme is expected to cost £10 million and will be funded through the Government’s conflict, security and stability fund (CSSF).

The use of CSSF funds to cover the costs of the gift has been approved by members of the Middle East and North Africa strategic programme board from the Foreign and Commonwealth Office, Department for International Development and Ministry of Defence. The gift has been scrutinised to ensure that the provision of this equipment is consistent with export controls and complies with our international obligations. Recipients have been carefully selected to prevent equipment being given to those involved in extremist activities or human rights violations. All our assistance is carefully calibrated and legal, is aimed at alleviating human suffering and supporting moderate groups and is regularly monitored and evaluated.

The Treasury has approved the proposal in principle. If, during the period of 14 parliamentary sitting days beginning on the date on which the departmental minute was laid before the House of Commons, a Member signifies an objection by giving notice of a parliamentary question or a motion relating to the minute, or by otherwise raising the matter in the House, final approval of the gift will be withheld pending an examination of the objection.

[HCWS333]

Cluster Munitions (Prohibitions) Act 2010

Tuesday 3rd March 2015 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

The Government have today published a memorandum to the Foreign Affairs Committee and the Committees on Arms Export Controls on post-legislative scrutiny of the Cluster Munitions (Prohibitions) Act 2010.

The Foreign and Commonwealth Office has carried out the post-legislative scrutiny, which includes a preliminary assessment of how the Cluster Munitions (Prohibitions) Act 2010 has worked in practice, and has set out its findings in a Command Paper (Cm 9021) to the Committees.

Copies of the Command Paper are available from the Vote Office and Printed Paper Office.

[HCWS331]

Child Sexual Exploitation

Tuesday 3rd March 2015 Written Statements

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

Professor Alexis Jay’s report into child sexual exploitation in Rotherham and Louise Casey’s follow up report on the performance of Rotherham council both provide a terrible account of the appalling failures by the council, the police and other agencies to protect vulnerable children. The culture of complete denial that was uncovered by Professor Jay persists today. That is why immediate action has been taken to protect the children of Rotherham through the appointment of five commissioners to take on the full range of the authority’s executive functions and begin a rapid improvement programme; and the launch of an independent two-stage investigation into child sexual exploitation and abuse in Rotherham—Operation Stovewood run by the National Crime Agency.

I have been clear that the situation in Rotherham is only the tip of the iceberg. We need to confront these failures at a national level which is why in September last year I announced that I would chair a series of meetings with other responsible Secretaries of State to look at the failures highlighted in Professor Jay’s inquiry at the Prime Minister’s request.

I have chaired a number of these meetings with the Secretaries of State for Communities and Local Government, Education, Health, and Justice, and the Solicitor-General. Today the Government publish a report setting out the actions we are taking in response to Professor Jay’s and Louise Casey’s findings.

The actions will strengthen accountability and leadership in professions and local government; address the culture of inaction and denial that led to victims being dismissed and ignored; improve joint working and information sharing so that agencies intervene early; strengthen the protection of children who are at risk; reinforce law enforcement efforts to stop offenders; and provide greater support for victims and survivors. Among these actions are:

The establishment of a new independent taskforce, bringing together specialists in social care, law enforcement and health, which will be deployed in local authorities where child abuse is a concern. Linked to the taskforce, will be a new centre of professional expertise, which will develop better approaches to tackling sexual abuse.

The launch of a £1 million communications campaign, to promote a wider understanding of what people should do when they suspect a child is being abused. This will be accompanied with revised guidance, “What to do if you are worried a child is being abused”, for professionals, the public, and children.

The creation of a new single point of contact for child abuse related whistleblowing, which will monitor patterns of failure across the country. We will make clear that all organisations with safeguarding responsibilities should have internal whistleblowing policies.

A new system of multi-agency inspections, to examine whether local agencies are working in a co-ordinated manner, sharing information and taking joint decisions to protect children.

Failure of agencies to share information about children at risk was a critical element of what happened in Rotherham. Today, my ministerial colleagues and I have written to the leaders of every local authority, directors of children’s services, police and crime commissioners, local safeguarding children’s boards, health and wellbeing boards and GPs, making clear that there can be no justification for failing to share personal information about a child when that information could be used to protect that child’s life.

The Government are clear that child sexual exploitation must be stopped. Work is already under way to put into practice these and other proposals.

A copy of the Government’s response will be placed in the House Library.

I would also like to give an update on Home Office work in response to allegations in Professor Jay’s report that the Department had been made aware of the problems in Rotherham in 2002, but had failed to take action on this information. I gave an assurance that the Home Office would conduct an internal investigation to ascertain what happened, which Peter Wanless and Richard Whittam QC would then review to ensure it had been undertaken absolutely properly. My Department has been undertaking detailed searches of Home Office files and records of the time—and potentially relevant files and records across Government—to establish what information was passed to the Department about child sexual abuse in Rotherham and what action was taken as a result. Searches of the Department’s digital holdings are still ongoing and we expect to be able to provide the completed investigation to Peter Wanless and Richard Whittam QC in the next three months, subject to their availability.

[HCWS328]

Strategic Policing Requirement Refresh

Tuesday 3rd March 2015 Written Statements

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

The strategic policing requirement (SPR) sets out my view, as Home Secretary, of the national threats that the police must address and the national policing capabilities required to counter those threats. The national threats currently in the SPR are terrorism, civil emergencies, public disorder, cyber-security incidents and serious and organised crime. The SPR supports police and crime commissioners (PCCs) and chief constables in balancing local and national priorities effectively, and in driving improvements to their force’s response to serious and cross-boundary threats.

I am today issuing a revised and updated SPR which confirms the validity of the existing threats and, for the first time, makes child sexual abuse an additional national threat.

This will ensure that PCCs and chief constables prioritise an issue of growing national importance. It will encourage a collaborative approach to building the capability needed to tackle child sexual abuse, including efficient sharing of resources, intelligence and best practice, and deliver a more effective and integrated policing response.

The other changes in the revised SPR include:

Adopting the definition of a “national”—rather than “large-scale”—cyber-security incident, as set out in the Cabinet Office national cyber-security incident management policy, to achieve greater clarity and consistency in the articulation of the cyber-threat;

updating the definition of “cyber-crime” in line with the definition provided in the serious and organised crime strategy;

including references to regional and organised crime units (ROCUs) in recognition of the important role they play in tackling serious and organised crime; providing a national network of regional capabilities; and

widening the scope of the civil emergency threat to ensure that it is not limited to coastal flooding and includes all those contingencies that require an aggregated response across force boundaries.

My officials have had extensive engagement with police leaders and other partners to review and revise the SPR. PCCs and forces will be expected to have regard to the refreshed SPR when exercising their responsibilities to deliver the changes that have been introduced.

I have placed copies of the SPR in the House of Commons Library and an electronic copy can be found at: https://www.gov.uk/government/publications/strategic- policing-requirement

[HCWS329]

Grand Committee

Tuesday 3rd March 2015 Grand Committee

Tuesday, 3 March 2015.

Arrangement of Business

Tuesday 3rd March 2015 Grand Committee

Announcement

15:30

[The Deputy Chairman of Committees (The Countess of Mar) (CB)]

My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.

Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

15:30

Moved by

[Baroness Verma]

That the Grand Committee do consider the Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations 2015.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)]

My Lords, today we are considering three instruments that amend legislation that came into force last summer to implement electricity market reform, with the powers to make this secondary legislation found in the Energy Act 2013. This reform, as noble Lords will be aware, is designed to encourage the necessary investment into secure low-carbon electricity generation through two mechanisms: contracts for difference, or CFDs, which provide long-term price stabilisation to low-carbon plant, allowing investment to come forward at a lower cost of capital and therefore at a lower cost to consumers, and the capacity market, which provides a regular retainer payment to reliable forms of capacity in return for such capacity being available when the system is tight, and ensuring that enough is in place to maintain security of supply.

As noble Lords may be aware, the results of the first CFD allocation round were announced last week, with 27 contracts being offered to applicants, which could deliver more than 2 gigawatts of new renewable energy capacity. The allocation by competition has driven down costs to consumers, with this capacity costing up to £110 million a year less than it would have in the absence of competition. The first capacity market auction also completed in December, with 49.3 gigawatts procured for delivery in 2018-19. The below-expected clearing price of £19.40 per kilowatt in that auction is also great news for consumers, with costs driven down by competition between participants. I thank noble Lords for supporting the market reforms to allow us to reach this significant point.

In order to build on these successes, the Government are looking to make some small amendments to the mechanisms. This is in order to ensure compliance with state aid requirements, the successful remaining implementation of the scheme and that the legislation properly reflects the original intent. As well as the changes that I will describe, I inform noble Lords that the Government are committed to ensuring that the reforms remain effective and continue to represent value for money for the consumer. To this end, we are carefully evaluating and monitoring the measures implemented and will continue to do so.

Before we commence the debate, I will briefly describe each amending instrument in turn. First, the Electricity Market Reform (General) (Amendment) Regulations amend the original instrument that came into force last summer. This very minor amendment enables the Gas and Electricity Markets Authority to enter into arrangements with a CFD counterparty or the Secretary of State to carry out roles relating to the measurement and sampling of fuel. This ensures that generators are paid only for energy that is both renewable and sustainable, and applies to both those CFD contracts that have been signed by the Secretary of State and any future CFD contracts allocated under the enduring regime. The necessary expertise to carry out this work is held by the authority, and this amendment allows that provision of support.

The Electricity Supplier Obligations (Amendment and Excluded Electricity) Regulations, build on the supplier obligation mechanism that is already established. The supplier obligation will be levied on all licensed electricity suppliers in Great Britain from 1 April 2015, to meet the costs of the support provided to low-carbon generators under the CFD. This instrument does four things: it introduces an exemption from the supplier obligation levy for eligible imported renewable electricity; it introduces an exemption from the supplier obligation and operational costs levies for electricity supplied to eligible electricity-intensive industries; it sets the rate for the operational costs levy for the CFD counterparty for the financial year beginning 1 April 2015; and it makes a number of minor and technical amendments to the original regulations. As a condition of state aid approval for the CFD, the European Commission required that the eligible renewable electricity imported from other EU member states and supplied to consumers in Great Britain be exempt from the cost of CFD payments.

These regulations set out the proposed implementation of this exemption. This includes the way in which suppliers should submit their evidence of eligible imports to the CFD counterparty, how the amount of exempt eligible electricity is determined and how electricity suppliers’ liabilities for CFD payments will then be adjusted.

The regulations also set out an exemption from the supplier obligation for a proportion of the electricity supplied to eligible electricity-intensive industries. They set out the application process for the exemption, the criteria that will be used to assess eligibility, the proportion of electricity that will receive the exemption and the way in which the exempt electricity will be identified.

Thirdly, these regulations also revise the operational costs levy that electricity suppliers must pay to the CFD counterparty to allow it to recover its operational costs. The new rate will apply from April 2015. It is expected that this amendment of the operational costs levy will take place annually, alongside the setting of the operational costs budget of the capacity market settlement body, as both bodies’ operational costs change.

Finally, I come to the Electricity Capacity (Amendment) Regulations 2015, which amend the instrument that established the capacity market last August. This instrument amends the Electricity Capacity Regulations 2014 to enable electricity interconnectors to participate in the capacity market from 2015 onwards. It makes a number of minor and technical amendments and amends the Electricity Capacity (Supplier Payment etc.) Regulations 2014 to set the settlement costs levy that funds the budget of the capacity market settlement body from 1 April 2015. The main purpose of this final amending instrument is to allow electricity interconnectors to participate in the capacity market and to be eligible to receive one-year capacity agreements, if successful in a capacity auction, from 2015.

These amendments include a definition of a new category of capacity market unit, a requirement on the delivery body to provide more information on the capacity to be provided by individual interconnectors, and provision for a financial penalty to be imposed in the case of a new-build interconnector where the failure to reach a completion milestone can be ascertained only where the capacity agreement has already expired.

A further change mitigates the National Grid’s potential conflict of interest by allowing the Secretary of State to provide the derating factor for interconnectors. On this point, we have recently published further details on the derating methodology for interconnector CMUs in the capacity market which will be included in the capacity market rules.

We have also made a number of minor and technical amendments to the principal regulations, after consultation with external stakeholders. These include provisions to require a capacity provider to repay capacity payments if a capacity agreement is terminated on certain grounds. This instrument also amends the supplier payment regulations to revise the total amount of the settlement costs levy in order to fund the operational costs budget of the settlement body. The opportunity has also been taken to correct a minor drafting error in those regulations, removing the unnecessary duplication of a provision.

As a final point before we start the debate, I draw noble Lords’ attention to the Government’s intention to introduce further small amendments. They introduce an additional performance incentive scheme, designed to encourage developers to sign and deliver on their commitments under a CFD, and were laid before Parliament on 23 February. The amendments aim to deter speculative bidding in the CFD auction.

On the capacity market, we recently published a consultation on further minor amendments to the regulations and the rules, with a response intended to be published later this month. I look forward to the debates on these future changes in due course. I beg to move.

[Baroness Worthington (Lab)]

My Lords, I am grateful to the Minister for introducing these three statutory instruments. The first was correctly described as a minor and technical amendment to enable the certification of biomass. We are fully supportive of that instrument.

Moving on to the second and third instruments, I have some concerns about the policy that is being introduced to exempt heavy industrial emitters from the costs of the CFD. It is not really fair to describe this as a small amendment when it has quite a wide significance. We have sat in this Room and the Chamber debating the significance of the EMR over many months on the Energy Bill. It is a significant intervention into the markets. It introduces a level of intervention into those markets which will cause rather large sums of money to change hands between suppliers and the recipients of contracts for difference. Now we see that the distribution of that cost burden is being moved far more on to consumers and away from heavy industry, and I have a concern about that.

It was only last week that we sat in this Room and discussed fuel poverty, and the outrage that so many people currently suffer from poorly insulated homes and are unable to pay their bills. The inequality of the economy exacerbates their poverty, meaning that they are classed as fuel poor. Any Government ought now to introduce a test so that any policy change is thoroughly scrutinised for its impact on poorer communities. In fact, I see in the impact assessment that some attempt at acknowledging this is made. It says:

“As low income households typically spend a higher proportion of their income on electricity, lower income households are disproportionately affected by an electricity price increase”.

This move to insulate heavy industry and shift the burden will have an impact, which will grow over time as the potential sums of money being spent under the CFD mechanism grow. I seek reassurance from the Minister about what is to be done to compensate for the impact of this policy by improving the level of intervention we are making on fuel poverty. There ought now to be a rule that anything which puts the burden of decarbonisation disproportionately on to consumers must take into account the impact on fuel poverty. I note that there was obviously a consultation exercise and that papers say that 47 responses were received. How many of those were from consumer groups or those associated with the fuel poor? What did they think of this policy mechanism?

I am of course not blind to the reason behind the proposal, which is to try to ensure that we do not see the flight of industrial manufacturing jobs from this country. That is because of the fact that they are facing increasing costs for a number of reasons, not least the financial crisis raising the cost of capital. It means that there is a potential that we will see more jobs lost in the heavy industrial sectors as we face the pressure of globalisation, coupled with the need to invest in our energy infrastructure. There needs to be a solution but I am not convinced that simply handing out exemptions and compensation payments for evermore is going to give us that answer. The answer has to be in providing incentives for heavy industry to invest in decarbonisation. One of the problems with energy policy, at the UK and EU levels, has been that we have focused so much on the power sector, almost to the exclusion of the industrial sectors. This has left them in a situation where they face increasing costs, as a result of carbon prices, but have no incentive to invest in decarbonisation. I am sure that those who can will invest in CFDs if they have on-site power generation, but if they do not and are simply receiving electricity or process emissions and have a heat load, few incentives are available to them. There is no equivalent to the RHI that allows them to invest in carbon capture and storage. We have been very slow to realise that carbon capture and storage is a technology needed as much by the industrial sector as the power sector.

15:45

What is the department doing to ensure that we move quickly to provide incentives for industrial players properly to invest in decarbonisation? Otherwise, I fear that we will always be in a game of catch-up, where policies are introduced but exemptions have to be made, introducing great levels of complexity, form filling and definitions, which means that energy policy in the UK gets ever more complex and full of red tape. We should really be thinking about how we structurally help industry to invest in the UK in a new industrial revolution based on decarbonised energy systems. That has to involve CCS for industry.

Those are my concerns with that SI. Moving to the capacity mechanism regulations, it will come as no surprise to the Minister that I have concerns about the capacity mechanism, which I have raised on numerous occasions. I am pleased, however, to see that this intervention will allow interconnectors to be eligible to bid in the capacity mechanism. That was raised by noble Lords during the passage of the Energy Bill. A Lords committee report on interconnectors recommended looking at them with a higher degree of interest.

It is lamentable that this has come as an afterthought and as a result of the EU stipulating as one of its state aid qualifications that we must do it. The department was asked to do it a long time ago, but said it was impossible or dragged its heels. Finally, it is being introduced, but rather later than it need have been and only really as a result of the EU making it a condition of state aid. The provision is overdue, but I am pleased to see it there.

There is a general question mark about the capacity mechanism. The more we give away three-year contracts for old coal, as we did in the capacity auction in December 2014, the more we squeeze out cleaner and more enduring solutions. By that I mean interconnectors—and gas investments where they can be profitably brought on stream. If we are to continue to make changes to the capacity mechanism—I was interested to hear the noble Baroness refer to further reforms to it—we need to look again at how it interacts with our low-carbon objectives. It cannot be sensible to be giving old coal money to stay open at the same time as we are charging everyone money to close and replace coal. Something must be built into the capacity mechanism to prevent us locking into high-carbon infrastructure. We need to reconsider the provision of three-year contracts for coal.

There is also a question about small-scale gas generation. The noble Baroness will be aware that in the auction in December, a range of smaller gas-generating plant qualified for 15-year contracts. Those small gas plants are scaled exactly to avoid any form of carbon price, avoid entry into the ETS and therefore avoid any payment of carbon pricing of their externalities—of pollution. At the moment, the number bidding in totals about a gigawatt, which is not an insignificant amount of capacity. Will we see more of that? Will the next capacity auction see yet more small-scale gas bidding without a carbon price? That is distorting competition. If they are not facing a carbon price but other gas generators are, that is a distortion. Yet again, the capacity mechanism is not dovetailing with the other objectives of the Government’s energy policy. We need to look again at that.

It will also come as no surprise that I think we need to look at whether an energy performance standard needs to be applied to stations qualifying that would help us control their CO₂ . That concludes my comments on those three statutory instruments. I look forward to the response from the noble Baroness.

[Baroness Verma]

My Lords, I am extremely grateful for the contribution of the noble Baroness. Of course, she raises questions to which I need to respond but, as with all these things, if I do not respond today I will undertake to write to her.

The noble Baroness asked about the cost of EII exemption to consumers. To lay out the context, first and foremost we do not want to see our industry moving away from the UK because of what our policies will cost to other countries that do not take our commitment to reducing carbon emissions as seriously as we do. We have to make sure that we do not lose our heavy industry simply because we want it to be more compliant than industries in other nations. We want to make other nations follow what we are doing and ensure that they are helping to reduce carbon emissions on the same scale as us. I think that the noble Baroness understands that all of these things will have a cost implication if we are mindful to have a blanket look at trying to reduce our carbon emissions and work with member states to help them to reduce theirs.

The policy should benefit the consumer ultimately. Let us look at what the exemption does for heavy industry, and what its net cost is across the population. On balance, we think that this is the right approach. The noble Baroness was right to say that this was heavily discussed during the passage of the Energy Act. We need to put it in the context that it will be an increase of 0.3%, which is about £1.80 on bills in 2020. In overall terms, if we are to ensure that we do not lose heavy industry, keep competitiveness as part of the bigger equation, and ensure that consumers benefit and do not lose out, these steps have to be taken. I am as mindful of fuel poverty as the noble Baroness, and I know that both of us work closely to ensure that rising energy costs have the least impact on those who can least afford to bear those increases.

Ultimately we have to look at the market as a place of competition. During discussions on the Energy Act, the noble Baroness asked why coal was allowed to be part of the auction. It is because of energy security and the cost implications to the consumer. If we are genuinely serious about ensuring that the marketplace is open and offers best value, we have to take on board that, for at least the short to medium-term, coal will play a role. But the more we get the renewable sector to grow, strengthen and bring its prices down, the less dependent we will be on coal. We see it as eventually coming out of the marketplace. The noble Baroness is aware that we have been very supportive, through the measures taken in the Energy Act to ensure that the renewables sector has had the opportunity to work on a much more even keel alongside the more traditional fossil fuels. So I do not buy the argument that coal should not be there. It has to be there for the ultimate reason that I have always laid out: we cannot allow a focus not to be technology neutral. It has to offer the long-term benefit to the consumer in the end. That is the crucial point.

The noble Baroness spoke about carbon capture and storage, and we continue to support its development. We see it as very much part of the debate going forward. She is aware that £1 billion has been set aside to support it. I was desperately trying to remember the two projects that we are supporting following the competition that took place. Unfortunately, inspiration did not come forward and I cannot rack my brain to remember the names, apart from Peterhead. Again, I undertake to write to the noble Baroness on where we are with those two projects.

Overall, I think the noble Baroness accepts that these are difficult choices, but we have to make them on the basis that we constantly review what we are doing to make sure that the end-user—the consumer—ultimately gets the best value. If there are issues that she feels that I have not cleared up, I will read Hansard very carefully to ensure that I can give her a much more detailed response if she feels that I have not satisfied her thus far.

[Baroness Worthington]

What I am trying to get across is that we absolutely agree that we do not want to see the flight of industrial players in our economy. However, we cannot simply keep loading the responsibility for decarbonisation on to consumers and not put in place a positive policy for the decarbonisation of industry. The two CCS projects are Peterhead and White Rose, but they are power projects. I am talking about heavy industry: steel, cement, chemicals and oil refining. How will those enter into the CCS market? We need to get an incentive in to help them to do that and we need the EU to support us.

Overall, my fear is that the net effect of these instruments might be that we exempt green electricity from overseas, which will be able to come in without bearing any of the costs that we have in this country. We may see that UK plc simply bears the cost but does not see the investment that we need in our industries. I hope that we will continue this dialogue. This whole raft of policies and how they interrelate has to be kept under a close eye.

[Baroness Verma]

I agree with the noble Baroness that we have to keep a close eye on this. We constantly look at whether those policies have the positive impact that we expect them to have. I always have to restate the importance of balancing that with the fact that we need to make sure that we do not lose our industries to places that are less ambitious about the reduction of carbon emissions.

We need to work closely with business. We are working all the time to make sure that we are not disincentivising it from trying to make sure that it can reduce emissions. Ultimately, this is about what the public are prepared to pay. We have to be mindful of this balancing act of making sure that it is not a burden on the consumer, while making sure that we do not lose manufacturing and that we keep our manufacturing base strongly here, which generates jobs and allows the economy to grow. It is very much a balancing act, but I agree with the noble Baroness that this should be kept under review, and that we should constantly look at how we can ensure that the renewable sector plays a bigger role as we work towards a much more low-carbon economy.

Motion agreed.

Electricity Capacity (Amendment) Regulations 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

15:58

Moved by

[Baroness Verma]

That the Grand Committee do consider the Electricity Capacity (Amendment) Regulations 2015.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Electricity Market Reform (General) (Amendment) Regulations 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

15:58

Moved by

[Baroness Verma]

That the Grand Committee do consider the Electricity Market Reform (General) (Amendment) Regulations 2015.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Electricity and Gas (Market Integrity and Transparency) (Criminal Sanctions) Regulations 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

15:59

Moved by

[Baroness Verma]

That the Grand Committee do consider the Electricity and Gas (Market Integrity and Transparency) (Criminal Sanctions) Regulations 2015.

Relevant documents: 21st Report from the Joint Committee on Statutory Instruments, 25th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)]

My Lords, our liberalised energy markets, which are underpinned by robust independent regulation, are a critical part of the UK economy. Effective competition in the wholesale energy markets is a key driver of lower prices, which is why this Government are continuing to take steps to strengthen competition so that markets work more effectively for consumers. The Government have made clear their commitment to maintaining a strong and stable regulatory framework that delivers transparent and competitive markets and has the right penalties for those who step out of line. One component of this is having strong sanctions against those who abuse energy markets.

The UK wholesale energy markets are of great significance to the UK economy and to Europe as a whole. For example, trading on the GB wholesale energy markets has been estimated to be worth between £297 billion and £333.5 billion each year. In addition, a significant volume of trading of European energy products is done through London-based brokers. The UK acts as a hub for gas; the GB gas market is used as a reference price for gas delivered elsewhere in Europe and into the electricity market, where gas is a significant and sometimes marginal price-setting fuel. The large figures involved and the importance of the wholesale energy market for financial services, industry and UK and European consumers make the integrity of the market a matter of national and international importance.

The EU REMIT regulation has been in force since 28 December 2011. REMIT prohibits insider trading and market manipulation in wholesale energy markets across the EU. The wholesale energy market regulators in Great Britain and Northern Ireland have civil powers to deal with market manipulation and insider dealing in wholesale gas and electricity, including the ability to impose unlimited financial penalties, access to information and the power to enter premises. To strengthen this regime the Government set out the case for new criminal offences of insider dealing in and the manipulation of wholesale energy markets.

In June 2013, the Government made civil enforcement regulations for REMIT. They then signalled their intention in October 2013 to consult on strengthening this civil enforcement regime by creating new criminal offences in line with the prohibitions relating to market abuse in REMIT. That consultation ran through August and September 2014 and included a joint stakeholder event on the proposals with Energy UK which 30 industry organisations attended. Fourteen responses were received to the consultation from a range of organisations, including large vertically integrated energy companies, trade associations, sector services organisations, legal organisations, a small supplier and a private individual. Having considered views expressed through the consultation and stakeholder event, the Government have prepared and laid before Parliament these regulations under the powers in Section 2(2) of the European Communities Act 1972. These regulations would be enforced by Ofgem for Great Britain and the UK offshore marine area, and by the Northern Ireland Authority for Utility Regulation for Northern Ireland.

I think it would be helpful if I briefly set out for the Committee the effect of these regulations. Regulation 3 would make it a criminal offence for a person to breach the prohibition on insider dealing set out in the EU REMIT regulation. A person would be committing the offence if they intentionally or recklessly: used inside information to acquire or dispose of wholesale energy products to which that information relates, either on their own account or on behalf of others; disclosed inside information except in the normal course of their duties; or used inside information when recommending that another person acquire or dispose of wholesale energy products, or when inducing them to deal in wholesale energy products.

Similarly, under Regulation 4, a person would be committing a criminal offence if they breach the REMIT prohibition on manipulation of wholesale energy markets. A person who enters into a transaction or issues an order would commit the offence if they had the intention to send misleading signals or to secure the price of a wholesale energy product at an artificial level, or were reckless as to whether their actions would have that result. A person would also be committing this offence if they disseminated information with the intention of giving, or reckless as to whether it would give, false or misleading signals as to the supply of, demand for, or price of a wholesale energy product.

These behaviours are already within the scope of the existing civil penalties regime, but we believe that it is right to strengthen the enforcement regime because there is a real risk that, for a small number of organisations or individuals, civil sanctions alone may not have a sufficiently strong deterrent effect because, as I am sure we are all aware, there can be very strong incentives to break the rules. By framing these new criminal offences around the prohibitions in REMIT, we have ensured that these criminal offences cannot be wider than the matters subject to existing civil sanctions. This addresses one of the key concerns raised by industry during the consultation. Conduct that becomes a criminal offence under these regulations will remain covered by the civil regulations too, so that the regulators will have a choice of which regime to pursue offenders under. The regulators would be expected to act proportionately and take into account the seriousness of the conduct and all other relevant factors in choosing whether to prosecute or impose a civil penalty.

I would like very briefly to outline the effect of the other regulations. Regulations 5 and 6 will ensure that the regulators, Ofgem in Great Britain and the Northern Ireland Authority for Utility Regulation in Northern Ireland, are able to investigate these proposed offences. Regulations 7 and 8 ensure that, in line with the REMIT regulation, the regulators can pursue legal persons as well as natural persons if they have committed these offences. If an offence is committed by a legal person, such as a company, because of the commission or omission of an officer of that person, the regulators would also have the power to pursue prosecution of that officer. Regulation 9 would require the regulators, in consultation with others, to produce enforcement guidance about how they would propose to handle these offences.

Regulation 10 would enable the Serious Fraud Office and the Director of Public Prosecutions to institute criminal proceedings for these offences as well as the energy regulators. Regulation 11 sets out that the maximum penalty available to courts for breach of these offences is two years’ imprisonment. This is less than the penalty that is available for similar offences in the financial services industry. We have already indicated our intention to consider whether this discrepancy is right as financial services regulation develops.

I hope that noble Lords agree that this is a measured and sensible strengthening of our existing regulatory regime to address a small but real risk of serious abuse of wholesale energy markets. These new offences would mean that energy markets and the consumers that rely on them have similar safeguards to those in place in financial markets in which the relevant regulator has the ability to prosecute for criminal offences. I therefore commend these regulations to the Committee.

[Baroness Worthington (Lab)]

My Lords, I am grateful to the noble Baroness for introducing the regulation. This is a good example of why it is good to be part of Europe. Here we have some sensible interventions, with criminal offences being acted against by the European Union as a whole. It shows why the UK should be a strong and leading voice in Europe. My first question is: why has it taken us so long? The regulations in Europe were passed in 2011, and it is now 2015. The only other question, which is broader, is: given that there is a need for such regulation in the wholesale energy market for gas and electricity, does the Minister think that there is a case for us to apply our sights to the transport fuel sector? It would be interesting to know, whether at EU or UK level, whether the way in which the wholesale markets work in transport fuels has ever been explored. I have said this before, but I feel that there is a strong case for our energy regulator to look into the transport fuel markets, because energy is more than just gas and electricity.

[Baroness Verma]

My Lords, I am grateful for the noble Baroness’s support for this instrument. She asked a couple of questions. First, why not before? Although it is really good that Europe has come together on this, the remit does not set out how member states should create penalties. We went through that process for the benefit of the UK, and the provisions are now ready to be put in place, if approved. That sends a clear message that we will not tolerate any breach or any market manipulation but will take this very seriously, as we always have, but now the regulators will have the power to reel in any improper behaviour.

The noble Baroness also asked a question that completely escapes me. I should have written it down, but I have not. I may have to come back to her on that in writing after I have read Hansard. In the mean time, I commend the regulations.

Motion agreed.

Renewables Obligation Closure (Amendment) Order 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

16:13

Moved by

[Baroness Verma]

That the Grand Committee do consider the Renewables Obligation Closure (Amendment) Order 2015.

Relevant documents: 21st Report from the Joint Committee on Statutory Instruments, 26th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)]

My Lords, the renewables obligation, or RO, is a long-standing support mechanism to encourage the generation of electricity from renewable sources in the UK. It is designed to ensure that it provides effective support for the renewables sector as a whole and is managed within the department’s levy control framework. As noble Lords will know, that sets annual limits for the overall cost of the department’s levy-funded policies, enabling the Government to meet our renewable energy and decarbonisation targets while providing value for money to the consumer.

Solar PV is an important part of the renewable energy portfolio, and the sector has seen strong growth in recent years due to support from the RO and the small-scale feed-in tariff scheme. In 2013-14, we saw record levels of new capacity, with the industry maintaining strong levels of deployment at both domestic and large scales. Thirty-seven per cent of all RO accreditations by Ofgem were attributable to solar, amounting to more than 1 gigawatt of capacity.

16:14

Our solar strategy, published last year, set out the actions that we will take in partnership with the industry to ensure the sector’s ongoing success. Although in many ways this progress is good news, making a valuable contribution to our renewable electricity generation, noble Lords have raised concerns about its impact on the levy control framework budget and the need to introduce cost control measures. Back in 2013, when we published the Electricity Market Reform Delivery Plan, we set out a potential range of between 2.4 and 4 gigawatts for large-scale solar, a range assessed as being affordable which we expected to support through the RO and through contracts for difference by 2020. However, following our consultation last year, we now expect significantly more deployment and, without intervention, we estimate that between 6.6 and 10 gigawatts could be deployed. That poses a significant risk of breaching the levy control framework within the next two years, putting at risk our commitment to deliver value for money to consumers.

The draft order would amend the RO closure order to close the scheme early to large-scale solar—above 5 megawatts—across Great Britain from 1 April 2015. It would apply both to new generating stations and to existing stations that wish to add additional capacity that would take them over the 5 megawatt threshold.

As well as controlling costs, however, the Government are committed to protecting investors who have already made significant financial commitments. That is why the order provides for a number of grace periods that will enable new solar stations, and existing stations wishing to add additional capacity, to continue to be eligible for the RO after 31 March 2015 if they meet the eligibility criteria.

16:16

Sitting suspended for a Division in the House.

16:22

[The Deputy Chairman of Committees]

As the important players are back, perhaps we can make a start.

[Baroness Verma]

My Lords, I will continue from where I stopped and get my thread back.

The grace periods are not, however, designed to provide protection against the reductions in support that were set out in the last comprehensive banding review. The first grace period is for operators of generating stations that were granted preliminary accreditation by Ofgem on or before 13 May 2014—the day on which we published our consultation. The second is for generating stations where significant investments had been made on or before 13 May 2014. There was extensive engagement with the industry during the consultation period and we have listened and made changes to the eligibility criteria in response to its views. As a result, the requirements around grid connection, land rights and planning are now more aligned with the practical realities of solar PV project development processes and timelines.

The final grace period is for operators of generating stations that have been subject to grid connection delays that are outside their control. Again, the case for this grace period was made by the industry during consultation to reduce the risks to investments. It has been designed to align with that available to other technologies experiencing grid delays when the scheme closes to new generation in March 2017. This will enable Ofgem to take a consistent approach to the administration of the grace periods.

To benefit from one of those grace periods, the new generating station will need to be commissioned and accredited by 31 March 2016. To reduce the administrative burden, a decision on eligibility for both accreditation and the grace period will be taken at the same time by Ofgem. Similar grace periods for significant investments and grid connection delay will also apply to existing generating stations wishing to add additional capacity.

When the closure comes into force, we believe that there will still be a valuable route to market for large-scale schemes, with developers being able to apply for support under the contracts for difference regime. The announcement last week that five solar projects have successfully competed in the first auction round, all at less than £80 per megawatt hour—far below the support rate under the RO—indicates that the new allocation process can work for solar PV.

Those developers with projects at or below 5 megawatts are not affected by this closure and can continue to apply for accreditation until the scheme closes to all new generating capacity on 31 March 2017. That decision was taken on the basis of the available information, which suggested that they posed less of a risk to the levy control framework. However, consistent with our responsibility for managing RO expenditure under the levy control framework, we are closely monitoring deployment of sub-5 megawatt projects and will consider taking measures to protect it if deployment is growing more rapidly than can be afforded.

I am sure that noble Lords will agree that there is a need to avoid the kind of spending bubble we saw in the feed-in tariff scheme back in 2012, which still costs the levy control framework budget £300 million a year over and above what was originally planned to the solar PV sector. Our current assessment of expected deployment without intervention under the RO would cost up to £400 million a year more than our delivery plan projections and would cause us to exceed the levy control framework cap, putting at risk our commitment to deliver value for money to consumers. It is therefore important that we take steps now to ensure that large-scale solar PV remains affordable in the context of the RO and contracts for difference, not least because without action it is likely there would be little or no money for the early years of new contracts for difference, which has been shown to offer better value for money than the RO.

I commend the order to the House.

[The Lord Bishop of Chester]

My Lords, may I ask the Minister a general question about the role of solar PV in our energy strategy? Quite large amounts of electricity are being planned and spoken about, as the Minister told us. I assume it is the case that photovoltaic generation is available only during daylight and is negligible after dark. Therefore, I assume that this capacity will not be available when we have peak demand, which occurs after dark, typically in the early hours of darkness. Therefore, are we in a sense subsidising capacity that will not be available when we need electricity most?

[Baroness Worthington (Lab)]

My Lords, I am grateful to the Minister for presenting this order and for the comments from the right reverend Prelate. This is a very good example of a difficult balancing act; clearly, having intervened in the market to take on important decisions about where we put money, which technology to support, how much it should cost and at what volumes, it is challenging.

However, it is true in all of this that we have to think about investor confidence. Just today an article appeared in the Telegraph saying that a lack of clarity over UK energy policy is forcing the UK’s ranking in the green power league down; we are now at number eight, having dropped a place. Also, if you look at where we are in the ranking of renewable energy deployment in the EU, we are almost in the relegation zone, at the bottom of that league table when you look at energy across the piece, with a very modest deployment of renewable energy into all primary energy, with only the Netherlands, Luxembourg and Malta below us in that table in the EU.

16:29

Clearly, we cannot afford to throttle back completely on any success story. Although it is true that solar has a limited availability in winter peak moments, it is also true that the costs are coming down and that, in terms of least-cost decarbonisation, solar is potentially an important component of what we need to deploy to hit our targets.

The Minister has already referred to one of my questions—namely, that there is a fear that we will have a boom in investment and in applications, and that this will cause a repeat of what happened with the feed-in tariff. I think it is fair to say that the feed-in tariff process was pretty badly handled. My bigger question here is: what mechanisms are the Government using to track these potential bubbles? How can we signal in advance—as we do with the RHI, although I am no fan of it—a steadier approach to how the levy control framework funds will be deployed? It is not easy, and I do not think that there is a silver bullet or an answer to this. The long-term goal has to be to try to get this back more into the market so that we have to do less of this administrative handling. We understand the reasoning but we need to think again about how we are going to manage this because I suspect that we will come back to it again and again.

[Baroness Verma]

My Lords, I am extremely grateful to the right reverend Prelate and the noble Baroness for their contributions. The right reverend Prelate raised the wider issue of daylight peak capacity of solar. One has to look at this as a whole, and solar has to be part of the energy mix. We recognise that solar is a successful part of our energy mix. We do not want to see it drop out of the mix, given that we want to increase our usage of renewables as opposed to traditional fuels. While solar may have a downside, in that when there is no sunlight there is no solar production, we should not—I was going to say “excommunicate” but I think that is the wrong word—remove it from the mix simply because it is not a 24-hour supply. As I say, it plays a very important part in the energy mix.

With regard to the noble Baroness’s comments, we have to recognise that past mistakes enable us to learn lessons. However, we should celebrate the fact that solar has become a successful part of our energy mix and we are seeing costs come down. We are working closely with the solar industry to ensure that we do not impose great difficulties in this area, but at the same time we need to respond to the costs that will be imposed on the consumer. As with all these things, compromises need to be made and these are hard balancing acts to achieve. However, the noble Baroness is absolutely right that we should constantly review our responses to technologies that were new but are now maturing and are very much part of our framework.

However, the bigger issue is that we need to have greater consistency in what we mean by energy policy because our energy policy needs to instil confidence. Investors need to know that politically there will be no dramatic changes, so it is very important that we work towards a long-term consensus on what we want to deliver. It is true that over the past four years or so we have seen record amounts of investment coming to the UK renewables sector. We should celebrate the fact that investors want to invest and generate jobs in the long term, and that they view the UK as a good place to invest. However, that needs to be viewed against the backdrop of ensuring that the political landscape aligns itself with not uprooting very sensible policies when they are put in place, and we have a role to play in that. Overall, though, the fact that the noble Baroness has acknowledged that this is a good thing to do and that the right reverend Prelate by and large recognises—

[The Lord Bishop of Chester]

I wonder whether I can come back briefly. I would not want to excommunicate any form of renewable energy, or burn it at the stake for that matter. I would not want to sell indulgences either at too high a price, though, especially if we are selling them to generate electricity at times when it will not be available when we are facing peak demand. I have anxieties that two or three years down the line we may suddenly get exceptional winter weather and no electricity will be available from the continent at the level that typically comes in. I take the view that such indulgences as we sell—subsidies—should be available for electricity that will be available when we most need it. Is the Minister confirming that solar PV is not part of our calculation as to how we meet peak demand?

[Baroness Verma]

I do not want my views to be taken out of context. It is important to see solar as part of our energy mix. The capacity markets and auctions are there to ensure that we have the balance: when we need peak, other means of energy generation are available to us, but when we have tight periods we do not run the risk of the lights going out.

We need to be clear that we have a number of targets that we need to meet. Part of that is our carbon emissions, part is trying to strengthen the renewable sector and part is to ensure that there is not an unreasonable cost to the consumer when those technologies are maturing. The steps that we are taking recognise that. We will find technologies that, just as we are trying to displace coal, may one day displace some of the technologies that we see today as being far more effective. I hope I have allayed the fears of the right reverend Prelate, although I think not.

[The Lord Bishop of Chester]

I am a simple soul in a complicated world and, no doubt, speak as a fool. Still, there is a syllogism that solar PV is not available after dark but peak demand arises after dark, so solar PV capacity is not available at times of peak demand. It is a relatively simple logical proposition, and I wonder whether the Minister is denying or agreeing with it.

[Baroness Worthington]

That is a fair point. However, peaks may shift. We may have a summer peak, especially if we have very hot summers and need air conditioning, due to climate change. Summer peaks happen quite a lot on the continent. We have probably dealt with this question—we will have storage. There will be times when we have a great deal of solar power during the day going into storage to be used at night. These are engineering problems that can be solved.

[Baroness Verma]

The noble Baroness has answered the question as deeply as I would have done.

Motion agreed.

Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) (England and Wales and Scotland) Order 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

16:40

Moved by

[Baroness Williams of Trafford]

That the Grand Committee do consider the Proceeds of Crime Act 2002 (Cash Searches: Code of Practice) (England and Wales and Scotland) Order 2015.

Relevant document:18th Report from the Joint Committee on Statutory Instruments

[Baroness Williams of Trafford (Con)]

My Lords, these orders give effect to four codes of practice that provide guidance on the use of various powers under the Proceeds of Crime Act 2002—POCA. The amendments to the codes of practice are necessary purely as a consequence of amendments to POCA previously approved by this House. It is therefore important to note that we are not debating the powers themselves, but rather the content of the codes which give guidance on the use of those powers.

The codes provide an important safeguard and ensure that the powers in POCA are used in a targeted, consistent and effective way, thus providing vital reassurance to the public that the powers are being used appropriately. POCA stipulates that the Secretary of State must prepare and publish a draft of any new or revised code, consider any representations made and modify the draft as appropriate. I can assure the Committee that proper consultation has been undertaken on all the codes that I will refer to today.

The first of these codes, on cash searches, governs the use of powers to search for cash suspected to be the proceeds of, or intended for use in, crime. The second order gives effect to a new code of practice governing the use of search and seizure powers to prevent the dissipation of property that may be used to satisfy a future confiscation order made under POCA. The code also governs the use of the power to detain such property. The third order before the Committee gives effect to a revised code of practice providing guidance on the use of the powers of investigation by law enforcement officers under POCA.

POCA has been amended so that the Crown Court, rather than the High Court will deal with investigation powers relating to a detained cash investigation. Civil recovery investigation powers have been extended to cover persons as well as property, and provide for requests for evidence to be made overseas. The revised code addresses those changes. The Attorney-General put forward similar amendments to the code he made in relation to the investigation powers available to prosecutors in civil recovery cases.

The amended codes before noble Lords build on previous codes issued under POCA. They closely follow those issued more widely to police officers under the Police and Criminal Evidence Act 1984. The codes provide an important safeguard and ensure that the powers are used in a targeted, consistent and effective way, thus providing vital reassurance to the public that the powers in POCA are being used appropriately. The orders before the Committee will bring all the relevant codes of practice into effect, ensuring that effective and up-to-date guidance and safeguards are in place and enabling full commencement of the POCA amendments that I have described.

Once commenced, the new powers will give officers important new tools for the recovery of criminally obtained assets. This is a key pledge of our serious and organised crime strategy and this Government’s commitment to tackling all levels of crime. We are working towards a common commencement date for these new powers across Great Britain of 1 June 2015. Commencement of the powers in Northern Ireland will be slightly delayed, as we have only recently secured legislative consent for the Assembly to fully extend the NCA’s powers to Northern Ireland. However, we expect these new powers to commence in Northern Ireland before the end of the year.

The use of these powers will rightfully be guided by the codes of practice. They are an important safeguard to ensure the targeted, proportionate and effective use of these powers, balanced against the rights of individuals and communities. I therefore ask the Committee to approve these orders. I beg to move.

[Lord Rosser (Lab)]

My Lords, as the Minister has reminded us, we are not here to discuss the original legislation but the codes of practice. However, the question is just how successful will the codes of practice be in achieving the goal that is set out in the legislation. These draft codes of practice have been set out to guide law enforcement officers and accredited investigators in the exercise of their functions when conducting investigations under the relevant parts of the Proceeds of Crime Act 2002. Indeed, the codes go through many facets of the investigation of proceeds of crime, including search and seizure warrants, monitoring orders, interview conditions and obtaining evidence from abroad.

16:45

It was not that long ago that we made our thoughts known on the effectiveness of the recovery of criminal assets in the UK. Indeed, the Serious Crime Bill will update further the provisions that we are debating today. Amendments relating to POCA in that Bill were in part a response to the NAO report, which detailed the weaknesses in asset recovery in the UK. The report noted that only 26p out of every £100-worth of confiscation orders imposed by the courts is being taken back from criminals.

During debates on the Serious Crime Bill, we raised concerns about the levels of overseas co-operation and since the investigations code of practice touches upon obtaining evidence from abroad, I will again express our concerns about international co-operation in this area and the apparent lack of effective consultation on how to strengthen it. I think it is also the case that the pages of guidance for the investigations apply to the National Crime Agency. Can the Minister say how seriously or otherwise asset recovery under the Proceeds of Crime Act is taken in the light of the very recent admission from Mr Bristow, the head of the agency, that more than £1.3 billion owed by convicted criminals to the taxpayer is unlikely ever to be recovered? That is £1.3 billion out of a total of, I think, something like £1.46 billion outstanding from confiscation orders and waiting to be clawed back. Such an approach to asset recovery was described by the chair of the House of Commons Home Affairs Select Committee as “a little depressing”. Surely, few would disagree with that comment.

We are told that in order to implement these amendments to POCA—I think this is in the Explanatory Memorandum—including training as far as the codes are concerned, the National Crime Agency will require about £20,000 for training. We, of course, support the strengthening of legislation surrounding the investigation of proceeds of crime and the relevant codes, but the legislation and codes must not be made merely for show. They must be properly implemented to ensure that the Mr Bigs of this world are not getting away with it. I hope that the Minister will be able to provide some assurance that these codes are going to contribute towards a more effective operation in the areas of concern to which I have referred. Finally, can the Minister assure us that if we are to put further money into the National Crime Agency, the organisation will be in a position to adopt a more effective line in future on the recovery of ill gotten gains?

[Baroness Williams of Trafford]

I thank the noble Lord for his questions on these orders. He asked four main questions. If I leave anything out, I will be very happy to write to him subsequently.

His first point was on the level of recovery, and he said that the NAO report states that only 26p in every £100 of profits that criminals made was confiscated in 2012-13. We have never recognised that 26p figure. However, the Government have made it plain in the Serious and Organised Crime Strategy that more should be done to attack criminal finances. That is why we are seeking to amend the Proceeds of Crime Act to significantly strengthen sentences for those who refuse to pay off their orders, to enable restraint orders to be made more quickly and easily and to tackle third-party claims. These are quite important aspects in dealing with that point.

The Government’s approach is not restricted to legislation. The Criminal Finances Board, which is chaired by the Minister for Modern Slavery and Organised Crime, is also working across government, law enforcement agencies and prosecution agencies to improve performance and make it harder for criminals to move, hide and use the proceeds of crime. The noble Lord asked about international asset recovery, which is a very important aspect of recovering proceeds of crime. The UK does not require a formal international agreement to be able to co-operate with another country in respect of freezing, confiscating and sharing or repatriating the proceeds of crime because it has 37 bilateral mutual legal assistance agreements. However, as part of the cross-Whitehall asset recovery international strategy, the CPS has posted specialist asset recovery advisers to Spain and the UAE. Two further asset recovery advisers have taken up posts covering Europe and the Caribbean, and another asset recovery adviser will soon be in place in South Africa. We are also at the point of ratifying the most recent Council of Europe convention relating to money-laundering, confiscation and financial investigations.

The noble Lord asked about comments by the NCA director, Keith Bristow, and his expectation of only £124 million being recovered out of the £1.46 billion outstanding from confiscation orders. The Government are implementing a multiagency criminal finances improvement plan to recover assets more effectively, and to tackle the £1.5 billion stock of outstanding confiscation orders, including by concentrating enforcement action on the priority confiscation order cases, and we have recovered £40 million so far. We are working more closely with the financial sector and deploying specialist CPS asset recovery advisers to improve the recovery of criminal assets from overseas, while provisions in the Serious Crime Bill will substantially increase the penalties for those who refuse to pay their confiscation orders.

The Serious Crime Bill will make it easier for prosecutors to freeze assets earlier in an investigation and to take money held in bank accounts to satisfy confiscation orders. It will also require judges to consider imposing travel bans. Asset freezing and recovery is a very effective tool for disrupting organised crime groups. Performance is not just about the amounts recovered; it is about the amounts denied to criminals so that money cannot be used to further fund criminality.

The noble Lord’s fourth question was on training and monitoring. The proceeds of crime centre in the NCA trains and closely monitors all financial investigations. They are among the most closely regulated investigations. The staff have to undertake ongoing training, passing continuous professional development, and they are reviewed fully every two years. I hope that that answers the noble Lord’s questions. If there are any outstanding questions then I will write to him, but in the mean time, I beg to move.

Motion agreed.

Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) (England and Wales) Order 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

16:53

Moved by

[Baroness Williams of Trafford]

That the Grand Committee do consider the Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) (England and Wales) Order 2015.

Relevant document:18th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Proceeds of Crime Act 2002 (Investigations: Code of Practice) (England and Wales) Order 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

16:54

Moved by

[Baroness Williams of Trafford]

That the Grand Committee do consider the Proceeds of Crime Act 2002 (Investigations: Code of Practice) (England and Wales) Order 2015.

Relevant document:18th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors: Code of Practice) (England and Wales) Order 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

16:54

Moved by

[Baroness Williams of Trafford]

That the Grand Committee do consider the Proceeds of Crime Act 2002 (Investigative Powers of Prosecutors: Code of Practice) (England and Wales) Order 2015.

Relevant document: 21st Report from the Joint Committee on Statutory Instruments

Motion agreed.

Anti-social Behaviour (Authorised Persons) Order 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

16:55

Moved by

[Baroness Williams of Trafford]

That the Grand Committee do consider the Anti-social Behaviour (Authorised Persons) Order 2015.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments

[Baroness Williams of Trafford (Con)]

My Lords, I beg to move the order, which was laid before Parliament on 14 January 2015. The purpose of the order is to enable local authorities to authorise a housing provider to issue community protection notices under Section 43 and fixed penalty notices under Section 52 of the Anti-social Behaviour, Crime and Policing Act 2014, in Chapter 1 of Part 4 of that Act.

Along with other new powers under the Act, community protection notices came into force on 20 October 2014. They are intended to deal with particular, ongoing problems or nuisances which negatively affect the community’s quality of life by targeting those responsible. Community protection notices can be issued by local authorities, the police or police community support officers, where designated by their chief constable, or a person designated by the local authority to individuals over the age of 16, or to a business or organisation.

A notice may be given if the issuing body is satisfied on reasonable grounds that the conduct of the individual or body is having a detrimental effect on the lives of those in the locality, is persistent or continuing in nature, and is unreasonable—for example, noise nuisance, dog-related anti-social behaviour or environmental anti-social behaviour such as littering. Before a notice can be issued, a written warning must be given to the person committing the anti-social behaviour. The written warning must make it clear that if a person does not stop the anti-social behaviour, they could be issued with the notice. Enough time must be left between a written warning being given and the issuing of a community protection notice to allow the person to deal with the matter. The person can appeal against the issuing of the community protection notice to the magistrates’ court. The notice should give details on how an individual can appeal.

If a notice is issued it may impose requirements to stop doing certain things, to do certain things, or to take reasonable steps to achieve certain results to prevent the behaviour occurring in future. Failure to comply with a community protection notice without reasonable excuse is a criminal offence subject to a fixed penalty notice or prosecution. A person found guilty on summary conviction may receive a fine. However, a person given a fixed penalty notice may discharge any liability to conviction for the offence if they pay the penalty amount of up to £100 within 14 days.

As I mentioned, community protection notices can be issued by a person designated by the relevant local authority. Only persons specified in an order made by the Secretary of State may be designated in this way. As housing providers in England and Wales manage a vast number of dwellings and deal with thousands of complaints of anti-social behaviour every year, we believe that there is a formal role for them in using the community protection notice. The order will therefore allow local authorities to designate housing providers—namely, a housing trust, a housing action trust, a non-profit private provider of social housing, a landlord under a secure tenancy, or, in relation to Wales, a Welsh body registered as a social landlord—to issue community protection notices and fixed penalty notices in order better to protect communities from anti-social behaviour.

The order makes a relatively minor but important provision that complements the wider anti-social behaviour reforms introduced under the Anti-social Behaviour, Crime and Policing Act 2014, which gives front-line professionals faster and more effective powers to protect victims and communities, and I commend the order to the Committee.

16:59

[Lord Rosser (Lab)]

I have read the proceedings on this order, which took place in the other place on 23 February. The noble Baroness has just explained the purpose of the order. There is really only one issue that I want to raise, arising from the response given by the Minister in the Commons during the debate on the order.

The Minister in the Commons was asked to confirm the date by which she expected all the provisions in the Act to be fully enforced, particularly the injunctions to prevent nuisance and disorder, for which it was believed the regulations were still awaited. In reply, the Minister said that there was one outstanding provision,

“which is the civil injunction to replace the antisocial behaviour order”.

She went on to say that:

“While all the other powers were introduced in October 2014, except the one in the order”,

which they were debating and which we are debating today,

“the civil injunction is yet to be commenced. It has been delayed due to the need to consult and to make arrangements for legal aid changes to support its introduction. Agreement to publish the Government response to the legal aid consultation was delayed while the Home Office and the Ministry of Justice came to a final agreement on the costs of implementation and meeting additional costs arising from commencement. Subject to Parliament, we now expect the civil injunction to commence on Monday 23 March”.—[Official Report, Commons, Third Delegated Legislation Committee, 23/2/14; col. 6.]

The answer given by the Minister in the Commons during debate on this order related to the introduction of the injunctions to prevent nuisance and annoyance. Those injunctions have to be obtained through the Crown Court, albeit there is no criminal sanction for breaching them. The IPNAs have not yet been brought in and the answer from the Commons Minister suggested that there had been a bit of a difference of view between the Home Office and the Ministry of Justice over the cost of implementation and meeting additional costs arising from their commencement, presumably including legal aid, in the light of the Crown Court’s involvement.

Can the Minister give an assurance that this argument between two government departments, which the Minister in the Commons revealed, has definitely now been resolved? Can she say what the costs and additional costs to which the Commons Minister referred cover, and what they amount to? Can she also clarify the Commons Minister’s statement that subject to Parliament, “we now expect” the civil injunction to commence on Monday 23 March? Presumably, a further SI will be required to bring in the IPNAs. Can the Minister confirm whether that is the case, when that SI will be before this House and the House of Commons, and whether the Government are still saying that they expect the civil injunction to commence on Monday 23 March or are now saying that it will commence then, subject to Parliament? Finally, is there any likelihood that the IPNA will not commence prior to the Dissolution of Parliament, unless it is because Parliament has rejected the necessary SI?

[Baroness Williams of Trafford]

I thank the noble Lord for his comments. I am afraid that I cannot comment on differences between departments being referred to in the House of Commons, other than that they have been resolved and referred to normal discussions between government departments. The civil injunctions aspect will commence on 23 March. The noble Lord also asked whether that meant that the SI would be there in good time, before the Dissolution of Parliament. By inference, the answer would be yes. He also asked about costs. I do not have any costs before me; if it is okay, I will return to him on that.

Motion agreed.

Extradition Act 2003 (Amendment to Designations and Appeals) Order 2015

Tuesday 3rd March 2015 Grand Committee

Motion to Consider

17:05

Moved by

[Baroness Williams of Trafford]

That the Grand Committee do consider the Extradition Act 2003 (Amendment to Designations and Appeals) Order 2015.

Relevant document: 23rd Report from the Joint Committee on Statutory Instruments (Special attention drawn to the instrument)

[Baroness Williams of Trafford (Con)]

My Lords, the statutory instrument before us brings into effect a number of changes to the Extradition Act 2003. This order has two significant purposes. First, it makes several consequential amendments that are needed to bring into force the new appeals filter, which was agreed by Parliament during the passage of the Anti-social Behaviour, Crime and Policing Act 2014. Secondly, it adds to the list of territories designated under Part 2 of the Act, and amends some existing designations.

I shall briefly explain in a little more detail why these changes are being brought at this juncture and the effect that they will have on our extradition arrangements. Under the 2003 Act, UK extradition partners are designated under either Part 1 or Part 2. The territories designated under Part 1 are EU member states and Gibraltar, which operate the European arrest warrant. Territories are designated under Part 2 on the basis that they are parties to the 1957 European Convention on Extradition, parties to the Commonwealth scheme on extradition or have signed a bilateral extradition treaty with the UK.

Since 2004, from time to time, further territories have been designated for the purposes of Part 2 of the 2003 Act, for example, where territories have joined the European convention, where particular bilateral treaties have taken effect or where experience of extradition cases has shown that designations are required. It was only right, therefore, that in his review of extradition arrangements in 2010, Sir Scott Baker recommended that the Government periodically review Part 2 designations and their evidential requirements. The Government, in response to Sir Scott Baker’s report, undertook to conduct such a review and this order now draws on the findings of the first part of a two-part internal review of designations.

Specifically, in acting on the conclusions of the first part of this review, the Philippines is now being designated as a result of the negotiation and ratification of a bilateral extradition treaty. The existing designation for Serbia and Montenegro is being amended to reflect the fact that they are now separate countries. Kosovo is being specifically designated to reflect its status as a separate territory. The Dutch and Danish overseas territories are being designated because they are parties to the 1957 convention and we, therefore, have a legal obligation towards them. In addition, the British Overseas Territories are being designated following a court ruling that the existing arrangements which were put in place when the 2003 Act came into force did not apply in relation to requests from a British Overseas Territory to the UK. This order will resolve that anomaly.

The order also removes any requirement to provide prima facie evidence for the Dutch and Danish overseas territories, Monaco and San Marino when they make an extradition request to the United Kingdom. This reflects the fact that they are parties to the 1957 convention and our obligations therein. The order removes Monaco and San Marino from the list of territories that are afforded a longer than normal period in which to provide a full extradition request to the judge where a person has been arrested under a provisional warrant. The normal period of 45 days from arrest will now apply to those territories, again to reflect that they are parties to the 1957 convention. The order adds Saint Helena, Ascension and Tristan da Cunha to the list of those territories afforded 65 days to provide the relevant documents. This is because these territories are accessible only by sea and, as such, more time is required to send the original papers.

The second part of our internal review of designations will focus on UK extradition relations under the non-binding Commonwealth scheme for extradition. It will consider matters such as human rights and whether there has been a disproportionately long period of time since any request has been received from a territory, and the effect that that should have on its designation. If it is found to be appropriate to either designate or undesignate a territory or territories, both Houses will be afforded the opportunity to debate this by way of an order before Parliament.

Turning to the other purposes of this order, the Baker review recommended introducing an appeals filter to appeals against extradition under the 2003 Act. This was introduced by the Anti-social Behaviour, Crime and Policing Act 2014. The provisions before us will make amendments to the 2003 Act that are consequential on the operation of the appeals filter. The filter represents one of the major reforms to our extradition arrangements, and will apply to extraditions in both Part 1 and Part 2 cases, and to appeals made both by the subject of the request and by the requesting state.

At present, once extradition has been ordered, the person may appeal directly to the High Court. The Baker review found that very few appeals to the High Court succeed. The appeals filter, once it has been commenced, will make it clear that an appeal lies only with the leave of the High Court and should help avoid unmeritorious appeals clogging up the court.

Before the appeals filter can be commenced, a number of minor consequential amendments are required to be made to the 2003 Act. These technical changes will be made by this order in the interests of clarity and to ensure that the appeals filter operates effectively from the moment it comes into force.

I urge noble Lords to support these changes in the interests of efficiency and of ensuring that our extradition arrangements are clear and effective. I beg to move.

[Lord Rosser (Lab)]

My Lords, as the Minister has said, the Extradition Act 2003 provides for two distinct sets of procedures to apply to incoming extradition requests. Part 2 of that Act provides a system that includes ministerial involvement, unlike Part 1 of the 2003 Act. Part 2 is applied to territories that are not EU member states with which the United Kingdom has extradition relations. As the Minister has said, the Baker review of the UK’s extradition arrangements recommended that those territories designated under Part 2 of the Act should be intermittently reviewed, and this order now draws on the findings of the first part of a two-part internal review of designations.

I raise two or three pretty minor points. The Minister referred to the second part of the internal review, which, as I understand it, has still to take place. Can she estimate when it is likely to be completed? Paragraph 7.2 of the Explanatory Memorandum says that that second part of the review,

“will also consider whether there has been a disproportionately long period of time since any request has been received from a territory, and what effect that should have on its designation for the purposes of the 2003 Act”.

Are any of the territories specifically referred to in the Explanatory Memorandum likely to come into this category of the,

“disproportionately long period of time since any request has been received”,

or are we talking about different territories, so that none of the territories specifically referred to in this EM would come into the category being looked at under the second part of the internal review?

The Minister also referred to the change in the number of days addressed in paragraph 7.7 of the Explanatory Memorandum, where it says that,

“in provisional arrest cases involving Saint Helena, Ascension and Tristan da Cunha, the period in which the full papers must be provided to the judge is 65 days (rather than the normal 45 days)”.

I have not entirely understood why this situation arises. How many such cases are there each year from these territories? If the present requirement is 45 days, though I am not sure that it is, what are the actual difficulties that have been encountered? Have they meant that we have no alternative but to apply the 65-day period, since obviously the three territories have not only just become accessible by sea? Some would say that that situation may have existed for some time. As I say, I accept that my question may show that I have not fully understood the purpose for, or the reason behind, the change.

The Minister will be aware of what the Joint Committee on Statutory Instruments had to say about the relationship between the coming into force of Article 3 of the Act and the commencement of Section 160 of the Anti-social Behaviour, Crime and Policing Act 2014. The department commented that it would make the relationship more explicit in the final version of the Explanatory Memorandum when the order was made. Should the Explanatory Memorandum I have in front of me make the relationship more explicit, or is that an Explanatory Memorandum that is still to come?

17:15

[Baroness Williams of Trafford]

I hope the noble Lord will forgive me; I missed his last question because I was seeking clarification on something. If he would like to repeat it, that would be very helpful, or I could write to him.

[Lord Rosser]

I simply asked about the issue that was raised in the 23rd report of the Joint Committee on Statutory Instruments of the intended relationship between the coming into force of Article 3 of the Extradition Act and the commencement of Section 160 of the Anti-social Behaviour, Crime and Policing Act, which are all covered in the order and in the Explanatory Memorandum. In responding to that issue, the Home Office said that the department would make the relationship more explicit in the final version of the Explanatory Memorandum when the order is made. I was not entirely clear whether the Explanatory Memorandum that I have in front of me is the one in which the relationship should be made more explicit, or whether another Explanatory Memorandum will be provided that will make it explicit and meet the observation made by the Joint Committee on Statutory Instruments.

[Baroness Williams of Trafford]

I thank the noble Lord very much for repeating that. To answer the last question first, there will be another one.

The noble Lord asked about territories that had been identified for which a disproportionate period of time may have elapsed. None has yet been identified. He asked about St Helena and Tristan da Cunha. He is absolutely right that there has always been sea around them. There was hundreds of years ago and there still is; that has not changed. In fact, I am sure that I read somewhere about a bridge being built to St Helena. We are approaching this with a sense of reasonableness in terms of delay. There have been no cases from St Helena between 2003 and 2015, but I suppose that a reasonableness test may be applied to getting documents to us or to them.

The noble Lord asked about the date of the second part of the internal review. We are expecting that in the first Session of the new Parliament. I think that answers all his questions.

Motion agreed.

Committee adjourned at 5.19 pm.

House of Lords

Tuesday 3rd March 2015 Lords Chamber

Tuesday, 3 March 2015.

14:30

Prayers—read by the Lord Bishop of Norwich.

Royal Assent

Tuesday 3rd March 2015 Lords Chamber

14:36

The following Acts were given Royal Assent:

Pension Schemes Act,

Serious Crime Act.

Cyclists: Safety

Tuesday 3rd March 2015 Lords Chamber

Question

14:37

Asked by

[Lord Jordan]

To ask Her Majesty’s Government what is their assessment of the findings of the YouGov survey on cycling safety commissioned by the Royal Society for the Prevention of Accidents.

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

My Lords, I received the top lines of the YouGov report only late last week. The YouGov survey asked many useful and interesting questions about attitudes to cycling and is sufficiently data rich to stand more detailed analysis. One key finding, which we are pleased to note, is the evidence of considerable latent willingness to engage in more cycling, which justifies the Government’s strategy on supporting cycling provision.

[Lord Jordan (Lab)]

I thank the Minister for her reply and declare an interest as a vice-president of RoSPA. The RoSPA-commissioned YouGov poll has given us some compelling insights into the need for greater provision for cyclists. One-third of people think that cycling safety is one of the biggest transport issues we face; two-thirds back the idea of a network of cycle routes; and 78% say they would like to see separate cycle lanes. The Government have given money to certain cities, but with more than 100 cyclists a year being killed, what will the Government do now, given these findings, to accelerate the introduction of safe cycling provisions for all our roads?

[Baroness Kramer]

My Lords, one death from cycling is one death too many, so obviously we are very concerned with safety. Your Lordships will be aware that we launched a THINK! Cyclist campaign in 2012, and a third round of this is planned to run in 12 cities in March 2015—the original five cities and seven additional ones. We have made it easier for councils to introduce 20 miles per hour zones and 40 miles per hour zones in rural areas, and Trixi mirrors. The Deputy Prime Minister announced £100 million to improve conditions for cyclists and walkers, alongside and crossing the strategic road network. We have set up a task force with Transport for London to raise awareness of safety among HGV drivers and to take targeted enforcement against the minority of potentially dangerous operators, drivers and vehicles. We are always looking at more ways to make cycling safe.

[Baroness Sharples (Con)]

Would my noble friend care to comment on pedestrian safety?

[Baroness Kramer]

My Lords, I do not have any numbers with me on pedestrian safety, but I will be glad to write to my noble friend on that issue. Pedestrian safety is obviously a key consideration as well.

[Lord Scott of Foscote (CB)]

Does the Minister agree that a cyclist’s main protection should be his or her own eyes and ears? The eyes are there to warn against impending danger from the front and the ears ought to assist in identifying impending danger from behind. I cycle regularly from my flat in Camden to Westminster—it used to be Lincoln’s Inn, then it was the Royal Courts of Justice and now it is Westminster—and I am appalled by the number of cyclists who bicycle with earplugs in their ears listening to music. If they listen to music, they cannot possibly hear any danger approaching from behind. There are regulations to ensure the use of lights on bicycles in dark or dingy weather. Should there not also be a regulation to prevent the highly dangerous practice to which I have referred?

[Baroness Kramer]

My Lords, it is important that everyone does all they can to try to improve cycle safety. In London, many of the recent incredibly sad deaths have been related to collisions with HGVs. Europe has adopted, and we are enforcing, new rules on goods vehicles in consequence of that, and London is taking it further with its Safer Lorry Scheme, which will be more fully implemented in September. There is a whole variety of actions that we can take; London’s superhighways are another example. Much of the money announced today for the eight cycle cities may well go on segregated cycle provision.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, why are the Government so resistant to introducing 20 miles per hour limits for vehicles in cities and towns throughout the country?

[Baroness Kramer]

My Lords, it must be a local decision. There are some areas where decisions should be made not by government at the centre but by local government, which understands the local circumstances. Changes have been made to make it much easier for that to be implemented. Change in the rules on road layouts and changes in signage mean that it is now much easier for a community that wishes to have 20 miles per hour limits to make sure that they are in place.

[Lord Taverne (LD)]

My Lords, since three recent fatalities of cyclists in London have been caused by tipping lorries, and as most of the fatalities have been caused by heavy lorries, often turning left, is it not a top priority for the Government to see that heavy lorries are redesigned so that the driver’s vision is not restricted? As for road junction safety, is it not a scandal that, as revealed by the Mayor of London in response to a Liberal Democrat question, something like £50 million of the present budget available for cycling safety has not been spent in the current financial year?

[Baroness Kramer]

As my noble friend knows, central government made £15 million available to London to deal with some of the worst junctions. That has been important and I obviously want to see that implemented. We have a wide range of approaches to dealing with issues around HGVs, including new rules that will mean that cabs are safer and vision is better. We are working on the technical standards that will apply to those rules.

[Lord Butler of Brockwell (CB)]

My Lords, please will the Minister address the question raised by the noble and learned Lord, Lord Scott of Foscote, about the case for regulation to prevent cyclists cycling with earplugs in their ears?

[Baroness Kramer]

My Lords, enforceability is always absolutely crucial. I hesitate to tell cyclists exactly what they should do when there is so much scope for us to make improvements in other areas, and I suggest that we pursue those. Obviously, cycle training matters and addresses many of those issues, and we have invested a great deal in Bikeability.

[Lord Rosser (Lab)]

The noble and learned Lord, Lord Scott of Foscote, asked a question about headphones. I do not think that he got an answer to it and no doubt the noble Baroness the Minister will wish to respond. However, the Government’s Cycling Delivery Plan, published more than a year late, contains no specific targets on increasing the percentage of journeys undertaken by bike from the current level of 2% and no specific long-term funding targets for cycling. Bearing in mind that, following pressure from Labour and cycling organisations, among others, the Infrastructure Act included a requirement to produce a cycling and walking investment strategy, do the Government intend to update the Cycling Delivery Plan by including the specific targets that are currently lacking and to which I have just referred?

[Baroness Kramer]

My Lords, noble Lords will be aware that the Government have committed over £588 million to cycling—more than double the previous Government—and that has been absolutely crucial. The cycling and walking investment strategy will require a major piece of work, including a great deal of consultation, to design investment for the future, but our goal is to get to the £10 per head benchmark, which I think is widely accepted as the right number.

Schools: Academies

Tuesday 3rd March 2015 Lords Chamber

Question

14:45

Asked by

[Baroness Jones of Whitchurch]

To ask Her Majesty’s Government what advice they have issued to individual academy schools regarding the £2.5 billion held in their reserves.

[The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)]

My Lords, academies are independent, self-managing organisations. Academies cannot borrow, except in exceptional circumstances, and so can build up reserves in order to accommodate longer-term plans that reflect their success and popularity, such as capital investment to fund maintenance or expanding provision for greater pupil numbers. They also need to hold cash to pay short-term obligations such as salaries.

Comparing net current assets of academies with the closest equivalent measure in local authority maintained schools shows that academies have 51 days’ cash, whereas local authority maintained schools, which can obtain money for capital from their local authorities, have 25 days’—51 days is a prudent buffer.

[Baroness Jones of Whitchurch (Lab)]

I thank the Minister for that reply, but does he accept that most parents would be appalled to know that academies are stockpiling public money, averaging nearly £6,000 per school, rather than spending it on their child’s education? Does he not accept that the fact that academies feel the need to have these reserves is simply a damaging consequence of having thousands of individual academies being managed separately—many would say badly—by the Secretary of State?

[Lord Nash]

As I already said, we regard the cash management of academies to be very prudent. We see no reason why efficiently run schools should not be involved in careful financial planning. It may well be that the Labour Party would like to run the school estate like they ran the economy—borrow, borrow, borrow and nearly go bust. We do not think that that is a sensible approach and we do not think that we should penalise successful schools.

[Lord Storey (LD)]

My Lords, my noble friend will be aware that this works out at an average of £1.2 million per secondary academy and £1.8 million per academy chain school. He will also be aware of the suggestion that we are setting up schools to be run as businesses. Will he tell us, in no uncertain terms, that there never have been and never will be any attempts to run schools as profit-making businesses?

[Lord Nash]

My noble friend will know from his experience over 25 years as a primary head that all schools are facing cost pressures from national insurance and pensions, so any prudent school will have some level of cash reserves. I mentioned capital requirements for academies. The education sector has a lot to learn from the business sector in terms of efficiencies. We have found that when business people and educationalists work well together through the academies programme the effects can be quite dramatic. I cannot make promises for ever, but there are no plans as far as this Government are concerned to bring profit-making to the school system.

[The Lord Bishop of Norwich]

My Lords, some academies and other schools have secured private funding which they ring-fence to finance a chaplain, international links or some other good purpose. For the avoidance of doubt, will the Minister give an assurance that such funds are not to be treated as free reserves? Further, will he encourage academies to secure such funding?

[Lord Nash]

I entirely agree with the right reverend Prelate and I pay tribute to his very good work in the school system in Norfolk. We should welcome such funds into the school system. We should welcome people who bring these funds and give their time freely. It is a development that we should seek to encourage.

[Lord Faulkner of Worcester (Lab)]

My Lords, given the Minister’s statement a moment ago that he does not wish to penalise successful schools, will he look again at the imposition of VAT on sixth-form colleges, which was the subject of a Question that his noble friend answered the other day, to which, frankly, we did not get a satisfactory Answer? For £31 million, which is a tiny part of the amount held in reserves by the academies, the VAT burden could be lifted altogether. Is that not the right thing to do?

[Lord Nash]

The noble Lord is right that this is a difficult issue and it is one that we have been looking at. I assure him that we will continue to look at it.

[Lord Naseby (Con)]

Is it not enormously sensible for the governors of our academies to hold reserves at the end of a Parliament, when they have no idea what the policy may be in the future? We also have low inflation at this time, and I imagine that a fair number of them are preparing for capital works based on their reserves.

[Lord Nash]

I agree entirely with my noble friend, who makes the point admirably.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, would the noble Lord assist those of us who are, perhaps, not as clever as some other Members of this House and do not entirely understand the status of the money that is being held in these reserves? He said that academies are independent institutions and, of course, they are. However, they are publicly funded and the money held in those reserves is therefore, by most ordinary people’s calculation, public money. With reference to the answer he gave to the noble Lord, Lord Storey, could he explain in what way these funds are different from, say, the funds held in a charity? Are they to be used wholly and exclusively for the benefit of the institution? Can he assure the House that nobody else can benefit from them?

[Lord Nash]

I can give that assurance. They are there for the benefit of the institution, which in this case is the school in question.

[Baroness Farrington of Ribbleton (Lab)]

In the light of the reply he gave to my noble friend, would the Minister be prepared to state that the Government’s policy should be and is that any pupil or student—of any age, whether sixth-former or primary school pupil—is entitled to have an equivalent amount of money spent on their education, unless there is a special allocation because of special needs? Government Ministers lambast local authority maintained schools, including some church schools, for not spending money and yet claim that academies have this right.

[Lord Nash]

The noble Baroness will know that we have had a bit of a postcode lottery in school funding for many decades. This Government have gone quite some way to try and reduce the differentials but we should seek to do more in the future.

Police: Complaints

Tuesday 3rd March 2015 Lords Chamber

Question

14:52

Asked by

[Lord Scriven]

To ask Her Majesty’s Government what steps they are taking in the light of the number of complaints against police forces in England and Wales as reported by the Independent Police Complaints Commission.

[The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)]

My Lords, the Government see the effective handling of complaints as a cornerstone to trust in the police. We have undertaken significant policing reform, including reforming the IPCC to handle all serious and sensitive cases. We have consulted on reform to make the complaints and disciplinary systems independent, customer-focused and transparent. These major reforms will improve the public’s experience and the process. The Government will respond to the consultation during this Parliament.

[Lord Scriven (LD)]

I thank my noble friend the Minister for that Answer. However, will the Government, as a matter of urgency, set up an independent inquiry into South Yorkshire Police over its systematic failings and slow and inadequate responses and improvements in cases of child exploitation, particularly its handling of the Rotherham cases?

[Lord Bates]

My noble friend is absolutely right to highlight the appalling situation that has been uncovered in Rotherham and South Yorkshire. That aspect of the South Yorkshire Police is, of course, subject to review by Her Majesty’s Inspectorate of Constabulary, which undertook one review in 2013 and two in 2014. Reviews are now being undertaken by the National Crime Agency and Operation Stovewood. At this stage, we do not feel there is a need for a further independent inquiry but I would be very happy to meet my noble friend, as a very senior member of the community in that area, to see what more can be done to learn the lessons from that dreadful experience.

[Baroness Uddin (Non-Afl)]

My Lords, last year the family of a severely autistic man, Faruk Ali, alleged that he was victimised by the police outside his home in Luton. The IPCC is currently investigating the incident in which an officer has been recorded deriding Mr Ali for his developmental disability and using racist language. Can the Minister confirm what steps the Government are taking to eradicate discrimination of this kind, which arises time and time again in complaints against the police? In asking this question, I declare my interests as set out in the register.

[Lord Bates]

The Government’s position is that we have a zero tolerance of that type of conduct and behaviour. As regards the specific case raised by the noble Baroness, I hope she will understand that I cannot comment on an ongoing IPCC inquiry.

[Lord Avebury (LD)]

My Lords, is my noble friend aware that last week the Metropolitan Police and the Independent Police Complaints Commission reached an agreement on how complaints about stop and search and the confiscation of property at ports of entry should be dealt with. Can he tell us how long it will be before individual complainants against the conduct of the police at ports of entry receive an answer to their complaints?

[Lord Bates]

On the general subject of complaints, there is an ongoing consultation which will report shortly. However, I will have to write to my noble friend on the specifics of his question.

[Lord Elystan-Morgan (CB)]

Does the Minister accept that one disquieting feature of the report is that cases that were investigated locally in 2014 took on average 135 days to investigate completely while in the previous year they were dealt with in 125 days? Can he give the House an assurance that all necessary resources, financial and otherwise, will be projected at seeing to it that the situation at least does not deteriorate and instead of that improves?

[Lord Bates]

The noble Lord is absolutely right and we know that justice delayed is justice denied. We need to move quickly towards a result in this situation. The reality is that most complaints are dealt with satisfactorily by the constabulary and it is only the very difficult cases that find their way to the IPCC. Often they are more complex and thus more lengthy in their consideration. However, the noble Lord makes an absolutely sound point.

[Lord Clinton-Davis (Lab)]

Is the Minister surprised that complaints against the police, especially those on the beat, have increased and are bound to increase when police forces are being drastically reduced? Is he seriously asserting that in those circumstances the public are not being prejudiced thereby?

[Lord Bates]

I think that we have to look at this carefully. Certainly in terms of front-line policing, we try to preserve those numbers. The decisions are matters for the chief constable and the police and crime commissioner in a particular area. However, the acid test as to whether the police are effective on the ground is a twin point. One of those is that, yes, if complaints are rising then we should be concerned about that, but the other is that crime is falling to record low levels at the same time. That is something for which the police deserve our thanks and praise.

[Lord Brookman (Lab)]

My Lords, that is the very point I want to touch on. Let us not in our Chamber knock the police. The police are a vital organ of our society and they do a fine job. There may be the odd mistake here and there, as there is everywhere, but the police are first class.

[Lord Bates]

I could not agree with the noble Lord more.

[Baroness Smith of Basildon (Lab)]

My Lords, following on from those two questions, there is another point to be made. The Minister will know that we are concerned about the sharp rise in the number of complaints being made to the IPCC and he will also be aware of our view that a more effective police standards authority is needed to tackle the most serious cases involving corruption and force integrity. Have the Government undertaken any research to understand why the greatest number of complaints that have been made are about police neglect and failure of duty as well as about individual police officers being rude or intolerant? The points that have been made by my noble friends reinforce that. Since this Government took office, in my county of Essex alone, we have lost almost 600 police officers, with even more cuts planned of around 200 officers. When the Government planned such a dramatic cut in police numbers, was any assessment made of the impact that that would have on the quality of service that the police would be able to provide to the public?

[Lord Bates]

A couple of issues underline those questions. One is that some very high-profile, major systemic failures have been uncovered, not least the one raised by my noble friend Lord Scriven in his supplementary question. But we have two bits of evidence. One is that crime has fallen by 20% since 2010 while at the same time we have seen the level of complaints against the police go up. That is why we are having a review: to understand why that is and what more can be done while at the same time recognising the incredible job that our police forces do in keeping us safe.

Electoral Registration

Tuesday 3rd March 2015 Lords Chamber

Question

15:00

Asked by

[Lord Tyler]

To ask Her Majesty’s Government what steps they are taking to identify areas with underperforming electoral registration officers, and to issue directions to ensure the maximum possible number of eligible electors are registered.

[Lord Wallace of Saltaire (LD)]

My Lords, the performance of electoral registration officers is monitored and reported on by the independent Electoral Commission. The commission’s most recent assessment, in June 2014, showed that the large majority of EROs are performing well against the performance standards set. Where problems are found, the Cabinet Office and the Electoral Commission work closely with the EROs to ensure that they are implementing their public engagement and implementation plans for the transition to individual electoral registration.

[Lord Tyler (LD)]

My Lords, did my noble friend see that, yesterday, the chair of the Electoral Commission reported to the Select Committee in the other place that 2 million applications to register have been received since 1 December? The position is improving. But I hope he agrees that the situation is very mixed locally. Given those circumstances, are the Government looking at the proposal from the Electoral Commission that it should be in a better position to monitor and instruct electoral registration officers locally? The commission recommended:

“Should any ERO decide not to undertake such activity, the Commission will make a recommendation to the Secretary of State to issue a direction to require them to do so”.

Is it not time for the Government to respond to that recommendation? Indeed, is it not time to name and shame those local authorities and those EROs who are simply not doing their job?

[Lord Wallace of Saltaire]

My Lords, the evidence that a large number of EROs are not doing their job is not there. Five of the six EROs who were rated last year as not having achieved their performance standards were in Devon and Somerset, rather to my surprise, and not in Labour-held areas—in Devon and Somerset, it tends to be either Liberal Democrat or Conservative seats. The question of training is one that we are well aware of. The Electoral Commission works with the Association of Electoral Administrators and others to ensure that EROs are well trained and do their job as well as they can.

[Lord Maxton (Lab)]

My Lords, does the Minister agree that the best way of ensuring that we have full registration is a compulsory ID card with a biological identifier, which would then allow all people to be registered from the word go and to then vote electronically as well with that card? That would ensure the fullest participation in registration and in the election.

[Lord Wallace of Saltaire]

I agree with the noble Lord that there are some very large questions about how much data the Government already have about people who are or are not registered and how much they are allowed by current law to pull those data together. I very much hope that, in the new Parliament, we shall debate actively what changes in the law we need for that. Moves towards compulsory registration and the sort of unique individual identifier that he suggests—a lighter form of ID card—may be coming, but that is something that we all need to discuss very carefully.

[Lord Roberts of Llandudno (LD)]

Are the instruction and the training given to EROs of the more modern and imaginative type, as we have seen in relation to certain youth organisations in recent months?

[Lord Wallace of Saltaire]

My Lords, I have to say from having met a number of EROs during the past three years that they are a subculture of their own. I think that some of them would jib a little at the thought that they were entirely modern. They are committed to their task, which they find increasingly difficult. Gated communities and rapid turnover of people in rented housing make their lives more difficult. The refusal of people to answer letters when they are canvassed and the difficulty of canvassing on a house-to-house basis are all problems that they face, but all the evidence that I have is that most EROs are doing their job extremely well.

[Lord Kennedy of Southwark (Lab)]

My Lords, I declare an interest as the chair of the All-Party Group on Voter Registration. What is so frustrating about the Minister’s responses to these questions is that he repeatedly gives the impression that it is all fine and that there is nothing to worry about. When will the Minister and the Government accept that we have a crisis with people dropping off the register? Just over a week ago, the Electoral Commission reported that 1 million people had gone missing from the register up to 1 December last year. The closing date for registration is 20 April. The Government have about six weeks to do considerably more than they are doing at present. They have the power; they need to get working on it straightaway.

[Lord Wallace of Saltaire]

The Government are not complacent: we do not have a crisis. The figures for last December show that, under the transition, we are roughly at the level that we were at three years ago. That is not good enough—there were already 7.5 million people missing three years ago. We are continuing to work, and everyone here should be continuing to work, to encourage people to register. I saw in this morning’s Daily Mirror that it is running its own its own campaign with a bus, the cast of “The Only Way is Essex” and various others to encourage particularly vulnerable groups to come on board. We all have to work on that, and I am still confident that many of the missing young people will actually use their mobile phones to register online in the last two or three weeks before the deadline.

[Lord Cormack (Con)]

My Lords, whatever the case may be against compulsory voting—and frankly, I am moving in that way myself—what is the case against compulsory registration?

[Lord Wallace of Saltaire]

My Lords, we are asking some large questions about the relationship between the citizen and the state. The noble Lord, Lord Cormack, might stand shoulder to shoulder with the noble Lord, Lord Maxton, on a number of these issues.

[Lord Rooker (Lab)]

In one of the Minister’s earlier answers—I think it was in answer to his noble friend—he used the phrase “much to my surprise”. Will he tell us what evidence he has that caused him to have such a surprise?

[Lord Wallace of Saltaire]

I apologise if there was a slip of the tongue. We are, of course, very concerned that this process should go through successfully, and we have been working very hard to make it go through successfully. I pay tribute to all those involved in National Voter Registration Day, which led to nearly half a million registrations coming in in one week. We all have to work extremely hard. I suppose that the origin of my surprise is that I meet—as I am sure we all meet—a great deal of voter disengagement and unwillingness to engage with politics. Those are the people who do not register to vote. We have to get out there and persuade them to vote. I trust that all parties, and all of us as campaigners—those Peers who go into schools and into universities—are getting this message across all the time.

Electrically Assisted Pedal Cycles (Amendment) Regulations 2015

Tuesday 3rd March 2015 Lords Chamber

Motor Vehicles (Wearing of Seat Belts) (Amendment) (No. 2) Regulations 2015

Renewable Transport Fuel Obligations (Amendment) Order 2015

Crime and Courts Act 2013 (Consequential Amendments) (No. 2) Order 2015

Motions to Approve

15:07

Moved by

[Baroness Kramer]

That the draft regulations and draft orders laid before the House on 14 and 16 January be approved.

Relevant documents: 20th and 21st Reports from the Joint Committee on Statutory Instruments, 25th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 24 February.

Motions agreed.

Child Exploitation in Oxfordshire

Tuesday 3rd March 2015 Lords Chamber

Statement

15:07

[The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)]

My Lords, with the leave of the House, I shall now repeat, in the form of a Statement, the Answer given by my right honourable friend the Secretary of State for Education to an Urgent Question in another place earlier today concerning a serious case review of child sexual exploitation in Oxfordshire. The Statement is as follows:

“No child should have to suffer what the victims of child sexual exploitation in Oxfordshire have suffered. The serious case review published today by Oxfordshire Safeguarding Children Board is an indictment of the failure of front-line workers to protect extremely vulnerable young people over a number of years. Reading the details of what happened to them has been truly sickening. The serious case review makes clear that numerous opportunities to intervene to protect these girls were missed, as police and social workers failed to look beyond what they saw as troubled teenagers, to the frightened child within.

I welcome the publication of the serious case review. It is only by publishing such in-depth accounts of what happened, what went wrong and why, that children’s social care systems locally and nationally can address the failings that have betrayed some of our most vulnerable children. That is why the Government have insisted that serious case reviews be published and in full. The Minister for Children and Families has also written today, with Ministers from the Home Office and the Department of Health, to request from Oxfordshire Safeguarding Children Board a further assessment of the progress being made, and we will send an expert in CSE to support it in this month.

Sadly, Oxfordshire was not alone in failing to address the dangers of CSE. We now know from the report of Professor Alexis Jay and Louise Casey on Rotherham, and Ann Coffey’s report on Manchester, that child sexual exploitation has been a scourge in many communities around the country.

This Government have been determined to do everything in their power to tackle CSE. That is why, today, we are publishing an action plan setting out the action we have already taken to strengthen our approach to safeguarding children from sexual exploitation, and the further steps we think are necessary to address the culture of denial, improve joint working, stop offenders, support victims and strengthen accountability and leadership. We are setting up a national centre of expertise in tackling CSE to support local areas around the country. There will be a new whistleblowing portal so that anyone can report concerns about CSE. We have prioritised CSE as a national threat so that police forces will now be under a duty to collaborate across force boundaries. We will consult on extending the criminal offence of wilful neglect to children’s social care, education professionals and elected members.

This afternoon, I will join the Prime Minister, the Home Secretary and other Secretaries of State in Downing Street to discuss with local and police leaders how we will collectively take forward the actions set out in today’s plan. The experiences of the children set out in this serious case review should never have happened. We are determined to do everything in our power to stamp out this horrific abuse and to bring perpetrators to justice”.

That concludes the Statement.

15:10

[Baroness King of Bow (Lab)]

My Lords, I welcome the Government’s decision to view child sexual abuse as a national threat—clearly it is one. No one can be unmoved by the horrific sexual sadism inflicted on vulnerable young girls and boys, or, for example, the case of the 12 year-old girl who had to have a back-room abortion after being raped. In one of the trials, a social worker gave evidence that nine out of the 10 professionals responsible for one young girl’s safety knew what was happening but did nothing.

On this side of the House, we believe that stronger laws are needed to protect children. Does the Minister find it strange that just last week his colleagues voted against a new specific offence of child exploitation? Does the Minister feel the Government’s definition of wilful neglect does enough to ensure that individuals report signs of sexual abuse? Lastly but possibly most fundamentally, does the Minister recognise that if we want to stop dealing in disaster we desperately need age-appropriate and compulsory sex and relationship education in schools? Why will not the Government join the cross-party consensus of the Labour Party, the Liberal Democrats, the Education Select Committee and all the professionals in the field, and agree to introduce this immediately?

[Lord Nash]

As I have already said, we will consult on widening the offence of wilful neglect. I am sure that, as a result of that consultation, we will look again at all possible legislation and offences that we could bring into the piece. As no doubt the noble Baroness heard me say, sex and relationship education must be taught in all maintained schools and is taught in virtually all academies. We welcome the supplementary advice, Sex and Relationships Education (SRE) For The 21st Century, issued by the PSHE Association, the Sex Education Forum and Brook. They produce some excellent resources, which are available to all schools.

[Lord Laming (CB)]

My Lords, this is yet another thoroughly dispiriting report. Many of these young people were in the care of the local authority for their protection and safety. Will the noble Lord assure the House that he will continue to do everything that he can to persuade local authorities that when they assume parental responsibility for a child or young person, they have not only a legal duty but a moral duty to be a good parent to those vulnerable children?

[Lord Nash]

I entirely agree with the noble Lord. In the course of this Parliament, we have sadly intervened already in 50 local authorities. Doncaster’s facilities are going to a trust, as are Slough’s.

[Baroness Walmsley (LD)]

My Lords, my question is about the proposal to extend the offence of wilful neglect because there is evidence to suggest that that will not work. The BBC’s “Panorama” reported a case from the 1990s where a member of staff had sexually assaulted several boys. That was reported to the headmaster but the member of staff left and found another job, where he carried on abusing children. The police officer investigating the case, Alec Love, tried to bring a case of wilful neglect against the headmaster of the first school, but the judge threw it out. Mr Love said it was very hard,

“to prove the person wilfully set about to neglect the child or young person”.

Today, the serious case review report found that the authorities made mistakes and could have acted sooner but it found no evidence of wilful neglect or that the signs of exploitation were ignored. In the light of both these findings, why do the Government think that simply extending the offence of wilful neglect beyond the health service and adult social care will be effective?

[Lord Nash]

I am grateful to the noble Baroness for her comments. The Government do not think that simply extending this offence of wilful neglect will be effective in and of itself. It is obviously a high bar and, as a result of consultation, I am sure we will be taking advice on whether there is something else that we should do, in addition or instead. We have already committed to consult on the introduction of mandatory reporting.

[Lord Beecham (Lab)]

My Lords, in Rotherham and in Birmingham the Government instituted an independent inquiry into the local authority and have gone further in Birmingham’s case by requiring all-out elections. Will the Government now institute such an inquiry in Oxfordshire?

[Lord Nash]

The events and the serious case review took place some years ago, in 2011. Last year, Ofsted found that Oxfordshire was good, but the Children and Families Minister has today written to the Oxfordshire LSCB, asking it to carry out a further assessment of its work on CSE, specifically of work with the police and the health services, and will be sending in an expert on CSE, Sophie Humphreys, to help it.

[Baroness Howarth of Breckland (CB)]

I am the vice-chair of the Lucy Faithfull Foundation, an organisation that has worked in this area for many years. Of course, Lucy Faithfull was a well respected Member of the noble Lord’s Benches. I want to ask about local authority social work departments. How many vacancies are there in these departments? What are the Government doing to encourage social workers, who are feeling extraordinarily oppressed and dispirited at the moment? What do the Government know about the current level of case loads for social workers? How can we encourage local authorities to have the right resource to meet the programme? I have one more small question: what are the Government doing to work with voluntary organisations? The Lucy Faithfull Foundation had a prevent programme, which now runs in Wales, Scotland and Northern Ireland but was cut in England. Those sorts of programmes are essential to prevention.

[Lord Nash]

The noble Baroness makes some very good points, as one would expect from someone with her vast experience in this area. This Government are determined to try to raise the status of social workers and improve the practice of social work. We have had Sir Martin Narey’s report, as a result of which we introduced the knowledge and skills statement for social workers. We have an outstanding chief social worker in Isabelle Trowler and we are investing heavily in new training methods, such as Frontline, Step Up to Social Work and master’s qualifications for social work. I do not think we can do enough in this area.

[Baroness Hussein-Ece (LD)]

My Lords, the Minister referred to local authority councillors and how they should be at the forefront of making sure that this sort of practice is mitigated and investigated properly. Is he satisfied that local authority councillors are given proper training and made to understand that they have the responsibilities as corporate parents? I was a councillor in two London boroughs, and had approaches from staff and individuals when they were worried about cases of sexual abuse, and the staff were not doing enough about it, so they came directly to me. I took on the role to make sure that this went straight to the chief executive and that it was investigated properly. But I encountered time and again that a lot of local authority councillors do not understand that they are corporate parents and have responsibilities that they should take very seriously.

[Lord Nash]

I am sure that the noble Baroness makes some very good points. Sadly, in my job I meet a lot of local authority councillors in very difficult situations, so I may not have a particularly good cross-section. Her point about proper training for councillors is a very good one, and I will take it back and look at it.

[Baroness Kingsmill (Lab)]

My Lords, I have a small but telling point. Is the Minister aware of how he diminishes this issue by using the acronym, CSE? It is child sexual exploitation and it would be wise if the Minister said that in full, so that we may realise the real horror of what we are talking about.

[Lord Nash]

The noble Baroness makes an extremely good point, and I will attempt to do that in future.

[Baroness Butler-Sloss (CB)]

My Lords, will the Minister pick up two points made by the noble Baroness, Lady Howarth, about vacancies among social workers and resources? Vacancies and a lack of resources are major problems for social workers dealing with child sexual exploitation.

[Lord Nash]

I will have to write to the noble and learned Baroness on vacancies. On resources, through the innovation fund, we have funded a number of new methods of social work experiment, and we are investing heavily in terms of money, but I will write on that point, too.

[Lord Bichard (CB)]

My Lords, will the Minister reassure the House that, as a result of this further appalling tragedy, we will not just be placing the blame at the door of a local authority, local authorities or social workers but that government departments and Governments will examine their own conscience, look at their own practices and policies, and play their part in ensuring that, so far as possible, these things do not happen in future?

[Lord Nash]

I am very happy to give the noble Lord that assurance.

[Lord Patel (CB)]

My Lords, we all agree that we have to protect vulnerable children and young people. The UK is a signatory to the Lanzarote convention. Why has it not ratified it in legislation when 38 other countries, including most European countries, have done so and have brought forward legislation?

[Lord Nash]

This is slightly beyond my brief. I will have to write to the noble Lord.

Yarl’s Wood Immigration Removal Centre

Tuesday 3rd March 2015 Lords Chamber

Statement

15:21

[The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)]

My Lords, with the leave of the House, I shall repeat a Statement given in the other place by my honourable friend Karen Bradley.

“Mr Speaker, detention is an important part of a firm but fair immigration system. It is right that those with no right to remain in the UK are returned to their home country if they will not leave voluntarily, but a sense of fairness must always be at the heart of our immigration system, including for those whom we are removing from the UK. That is why the allegations made by Channel 4 about Serco staff at Yarl’s Wood are serious and deeply concerning. It is why they required an immediate response to address them, and it is why the Government have ensured that this is being done.

All immigration removal centres are subject to the detention centre rules approved by this House in 2001. These, and further operational guidance, set out the standards we all expect to ensure that the safety and dignity of detainees is upheld. No form of discrimination is tolerated. In addition to these rules and standards, removal centres are subject to regular independent inspections by Her Majesty’s Inspectorate of Prisons and by independent monitoring boards, which publish their findings. The chairman of the independent monitoring board for Yarl’s Wood is Mary Coussey, the former independent immigration race monitor.

The most recent inspection by Her Majesty’s Chief Inspector of Prisons found Yarl’s Wood to be a safe and respectful centre which is continuing to improve. The last annual report of the independent monitoring board commented positively on the emphasis placed on purposeful activities within the centre and on the expansion of welfare provision, and raised no concerns around safety.

None the less, the Home Office expects the highest levels of integrity and professionalism from all its contractors and takes any allegations of misconduct extremely seriously. As soon as we were made aware of the recent allegations, Home Office officials visited Yarl’s Wood to provide assurances that all detainees were being treated in a safe and dignified manner. The director general of Immigration Enforcement has written to Serco making our expectations in response to these allegations very clear. We told it that it must act quickly and decisively to eradicate the kind of attitudes which appear to have been displayed by its staff. Serco immediately suspended one member of staff who could be identified from information available before broadcast and suspended another having seen the footage. The company has also commissioned an independent review of its culture and staffing at Yarl’s Wood. This will be conducted by Kate Lampard, who the House will be aware recently produced the lessons learnt review of the Jimmy Savile inquiries for the Department of Health.

However, more needs to be done. The Home Office has made it clear that we expect to see a swift and comprehensive introduction of body-worn cameras for staff at Yarl’s Wood. In addition, we have discussed with Her Majesty’s Chief Inspector of Prisons how we might provide further independent assurance.

This Government have a proud record of working to protect vulnerable people in detention. We have reviewed the Mental Health Act and set out proposals for legislative change as a result. We have held a summit on policing and mental health, highlighting the particular concerns of black and ethnic minority people, and commissioned HMIC to undertake a review of vulnerable people in police custody, which will be published shortly. That is why, before these allegations were made, the Home Secretary commissioned Stephen Shaw, the former Prisons and Probation Ombudsman for England and Wales, to lead an independent review of welfare in the whole immigration detention estate. We will, of course, invite him to consider these allegations as part of that overarching review.

This country has a long tradition of tolerance and respect for human rights. Detaining those with no right to remain here who refuse to leave the country voluntarily is key to maintaining an effective immigration system, but we are clear that all detainees must be treated with dignity and respect. We will accept nothing but the highest standards from those to whom we entrust the responsibility of their care”.

My Lords, that concludes the Statement.

15:26

[Baroness Smith of Basildon (Lab)]

My Lords, I listened to the Government’s Answer with great care. We are told again that the most recent inspection found Yarl’s Wood to be,

“a safe and respectful centre which is continuing to improve”.

The Minister said, in repeating today’s response:

“As soon as we were made aware of the recent allegations, Home Office officials visited Yarl’s Wood to provide assurances that all detainees were being treated in a safe and dignified manner”.

How could they provide such assurances without an investigation? What was the evidence on which they based such assurances? Serious allegations of abuse are well documented, such as those from women who have had male staff enter their rooms when they are naked, in bed or even on the toilet. We have heard that a pregnant woman suffered a miscarriage without medical treatment and of guards referring to women as “animals”.

The Government’s response today refers to Serco’s response. What about the Government’s response? Yarl’s Wood is the Government’s responsibility. On 28 January, when I raised this issue in your Lordships’ House, the Minister said of the allegations about Yarl’s Wood that,

“if the information is supplied to us, it will be investigated very thoroughly indeed”.—[Official Report, 28/1/15; col. 197.]

Has such a thorough investigation—which must be independent and specific to the allegation at Yarl’s Wood—started? If not, why not?

[Lord Bates]

The noble Baroness is right to be concerned and shocked about this. I watched that documentary on Channel 4, and quite frankly I was sickened. I think most decent people will have been sickened by the attitudes that were on display there. That is the reason why we have had that immediate reaction to this, and why there is the Stephen Shaw review into the entire detention estate.

I have to say that this is a story which is not going to go away. There are a number of things coming. The first is the Stephen Shaw inquiry, which is coming down the path. The independent monitoring board will be publishing its latest report, and Her Majesty’s Inspectorate of Prisons will be visiting again for an independent review. We have had the very thought-provoking report from the all-party group published just today by Sarah Teather, and there is also the work being done for women refugees, which raises a great deal of concern. So we are very conscious that there is a lot of evidence building, and pressure is mounting on Serco. We are very much on their case and watching them like a hawk. I have to say to the noble Baroness that we are following a process here. Evidence has been produced; we will be acting; and we expect Serco to act in the interim.

15:29

[Lord Lloyd of Berwick (CB)]

Perhaps the Minister is aware that we are the only country in Europe which does not currently have a maximum time limit for detention in immigration cases. Can he comment on the report published only today by the APPG—of which I had the honour to be a member—in which we recommended that the maximum limit should now be set at 28 days? If that were adopted, would it not go quite a long way to solving the sort of problem which has arisen at Yarl’s Wood?

[Lord Bates]

I listen to what the noble and learned Lord says on this of course. This subject was debated in your Lordships’ House in the context of the amendment to the Immigration Act proposed by the noble Baroness, Lady Williams, in which she sought a cap of 60 days. We have to look at this, but we are making progress. One serious point—I am not making any cheap points here—is that it was not so long ago, in 2008, that children, even disabled children, were held at Yarl’s Wood. We have moved on from that. We are now focusing on pregnant women and the treatment of women there, and I expect us to continue to make progress in the way that we treat people who are in our care.

[Lord Bourne of Aberystwyth (Con)]

My Lords, we will hear from the government Benches next and then from the Opposition.

[Baroness Hamwee (LD)]

My Lords, I hope that the Minister will understand if I say to him gently that there is a sense in this Statement of the Government distancing themselves from responsibility. Will he also accept that there is an underlying issue, not just of practice but of policy? We are one of very few countries in Europe not to have a maximum time limit on detention. Internationally, there are a lot of good examples of constructive engagement and alternatives to detention rather than a focus on end-stage enforcement. Detention is so often not needed. I was a member of the all-party group inquiry, and the Chief Inspector of Prisons said to us that,

“at least a third, and getting on for half, of all detainees are released back into the community. And this poses the question: if they’re suitable to be released back into the community at that point, why do they need to be detained in the first place?”.

[Lord Bates]

The noble Baroness is right. Of course many people who have come here have entered this country clandestinely. We need to establish their identity, which sometimes takes some time to do. In the wider context of the security of the country, we need to make sure that if people come here clandestinely, we check out that they are who they say they are and their reasons for doing that before they are released into the community. I think people expect that. However, again, we need to look at this whole area. That is why we have asked Stephen Shaw to undertake his review. We will be studying the all-party report and, of course, the allegations that have been made against Serco very carefully and will come forward with responses to them.

[Baroness Bakewell (Lab)]

My Lords, I raised the issue of Yarl’s Wood in this House three years ago and was assured at that time by the noble Earl, Lord Attlee, that he would invite representatives of the Home Office to the House to discuss the issue, which he did. Officials came along here, and my noble friend Lady Kennedy and I discussed with them what changes were desired to make the lives of the women tolerable. That was three years ago. A report that came out earlier this year, which I and the Channel 4 programme drew on, was behind the Question I asked last week. In answering, the Minister said that there needed to be a higher quota of women working there. The Minister speaks of process and of more reassuring reports, but could he undertake to tell me how soon, and at what date, we will know that there are more women staff in Yarl’s Wood?

[Lord Bates]

There were to be 66%. Under its contract, Serco has to deliver that by 2015. We will make sure that it brings that forward. In addition, it has moved to ensure that there are body-worn cameras there, which can catch any incorrect activity and record it. That is a very good step. I will also take this opportunity to clarify something during that exchange on the Question the noble Baroness asked last week. The noble Lord, Lord Hylton, asked about the number of suicides and self-harm, but I heard it to be a question about suicides and said that there were none. Sadly, there are of course instances of self-harm, which are deeply regrettable and need to be investigated. I apologise for getting that wrong.

[Lord Morris of Handsworth (Lab)]

Can the Minister say what action is being taken to ensure that the children of detainees get a rounded education and are being treated fairly and properly?

[Lord Bates]

Children are of course not held at Yarl’s Wood but at a family detention centre, often the Cedars, which is run by Barnardo’s, where they receive education. However, I agree that it is very important that children in particular are carefully looked after in this respect.

[Lord Elton (Con)]

My Lords—

[Lord Avebury (LD)]

My Lords—

[Lord Ramsbotham (CB)]

My Lords—

[Lord Bourne of Aberystwyth]

It is the Cross Benches next, and then if there is time, the government Benches.

[Lord Ramsbotham]

When I was Chief Inspector 15 years ago, there was something wrong and rotten in the culture at Yarl’s Wood. I remember looking into it then and strongly recommending that the Home Office install a regular system of oversight of what was going on, no matter who was carrying out the contract. I understand that system of oversight still does not exist, and we still have complaints about Yarl’s Wood. When is that oversight going to be installed?

[Lord Bates]

I will look again at what the noble Lord said at that point. There is of course the independent monitoring board, which is headed by Mary Coussey, a former Independent Race Monitor. The immigration monitoring board has the keys to Yarl’s Wood and can go in and out at any point in time. Obviously, it will need to look very carefully at how it has undertaken its responsibilities, and the conclusions which it has drawn from its activities.

[Lord Avebury]

My Lords—

[Lord Elton]

My Lords—

[Lord Bourne of Aberystwyth]

We have heard from the Liberal Democrats, it is for the Conservatives next.

[Lord Elton]

My Lords, it has happened more than once in this and related fields that a monitoring body reports all is well, and shortly afterwards it is revealed that all is very far from well. Is it not an occasion for a rigorous examination and consideration of the methods used by the monitoring body itself? How often is that done?

[Lord Bates]

We need to look very carefully at that. We have had a report from HM Chief Inspector of Prisons and we have the independent monitoring board. I recognise that there are huge concerns, rightly so, in your Lordships’ House about the allegations which have been made and about what has been done up to this point. I also recognise that because of the limitations of time it is not possible for all noble Lords to get in. I am very happy to arrange an opportunity—perhaps in the next week—to meet with colleagues and to bring some Home Office officials so that we can hopefully provide some additional information about these very distressing concerns.

Small Business, Enterprise and Employment Bill

Tuesday 3rd March 2015 Lords Chamber

Report (1st Day)

15:37

Clause 3: Companies: duty to publish report on payment practices

Amendment 1

Moved by

[Lord Mendelsohn]

1: Clause 3, page 4, line 1, after “policies” insert “and performance”

[Lord Mendelsohn (Lab)]

My Lords, I shall speak also to Amendment 2, which is consequential to Amendment 1. I also ask the House to note the register of interests, which lists my interests in small businesses as an owner, worker and occupier and in other connections.

These amendments provide that companies must produce a quarterly statement that lists all the payments to suppliers which have been paid more than 30 days after the suppliers’ agreed payment terms without a formal query having been made. The amendments also confirm that in all those instances interest equalling the Bank of England rate, which is the base rate, plus 8% has been paid to compensate the supplier. Where interest has not yet been paid, it sets out a payment plan to ensure that compensation is promptly paid. The obligation is on the payer to pay. Finally, we are seeking assurances from the relevant auditor that the company is maintaining accurate and honest financial records and statements.

We are pleased that the Government have attempted to address late payments but unconvinced that their current approach is sufficient. The central thrust of government policy is to change the culture of late payments and to believe that that culture change will lead to a significant and speedy change in what has become current business practice. This is achieved principally through the Prompt Payment Code.

We support the measures in the Bill requiring large unlisted companies to publish information about payment performance and practices and to strengthen the Prompt Payment Code, which commits signatories to pay within agreed and clearly defined terms. However, late payment legislation already provides for a maximum 30-day period in which to quibble after receipt. Many shareholders are unsure that the additional legislation will achieve any real change. Small companies fear that they will be pressured into not levelling their potential claims or will be squeezed in other ways. One reason why we suggested in Committee that dates be introduced—and I see that the Government have responded to that in the Prompt Payment Code, which is to be welcomed—is that we already have a statement of dates. We were also encouraged that the Minister, at our urging, wrote to the FTSE 350 companies to suggest that they become members of the Prompt Payment Code. Our concern was, as expressed in the letter, that this was really about reputation, corporate social responsibility and obligations, which are all important in dealing with culture changes, but insufficient. This approach is not enough.

Our approach is to ensure that payments are made by placing the onus on the person paying and not the person chasing; it is not fair for the smaller supplier to be coerced or pressured or even to have to face potential consequences to make sure that they are paid on time. We asked for our alternative approach to be considered in the consultations on the duty to report and enforcement, which we believe were drawn too narrowly. As Henry Ford always said, if he had asked his customers what they wanted, he would have designed a faster horse. We do not need a faster horse; we need to invent something that is relevant, like the motor car, which deals with the problem.

Why do we believe that an alternative approach is essential? There are a number of reasons. The first is the sheer scale of the problem. In 2008, there was £18.6 billion outstanding in late payments; in 2014, according to many reports, the number had grown to £46.1 billion. In Committee, we had a number of estimates in excess of £50 billion and, today, estimates say that we are moving very close to going through the £60 billion mark. That is an extraordinary growth. Since the 2011 EU directive on late payments, which became law in this country in 2013, other reports that we have received suggest that the number has got even higher, even quicker. So these large rises have taken place even during the time when we have said that we are dealing with the problem. I fear that the large problem of late payments will not be addressed by the Prompt Payment Code, which has been co-signed by 1,700 firms. It needs a much more fundamental attack, and we argue that contracts should be void if they specify more than 60 days in the terms.

Although the Prompt Payment Code is of course a good thing, there are considerable limits to it; so the measures to strengthen it are positive. However, policy is too reliant on it. As I said, the code has approximately 1,700 signatories, made up of companies and public authorities. The number of large businesses—defined as those with more than 250 employees—stands at 7,000, so 1,700 signatories sounds like a jolly good number. However, companies employing between 50 and 250 employees add another 32,000, while those employing between 10 and 49 add another 195,000, with micro-businesses increasing the number by more than 5 million. Micro-businesses, which employ fewer than nine people, are included in this code. Out of a universe that is now in excess of 5 million companies, we have 1,700 signatories. I do not believe that this will ever grow sufficiently large to change the culture. Given that the code also includes public authorities, it is very hard to see how it can gain that scale.

Moreover, the stated intention of the code is to ensure that it remains a gold standard. If it is a standard for some to aspire to, that inherently means that others will not meet the standard and will therefore be excluded—and the culture will not inherently be transferred to them. To be perfectly honest, for those companies that see it as a badge of honour, you are dealing with suppliers that may think that the badge of honour is an important consideration, but I suspect that whether they have a serviceable need that a business addresses, or a route to market, is probably far more significant.

15:45

It is also the case that some of the signatories are part of the problem. There have been significant news reports about a number of the people currently signed up to the code in terms of their extended payments and late payments. The changes to the payment code which have been suggested—reducing the number of days and having the means to remove people from the code—have certainly not yet been adopted by all the members of the code. They are being written to, but all the responses have not come through.

I therefore suggest that the code is limited not only in its design but even in addressing its own recommendations on how to change the culture. I think I have been diligent in trying to make sure that I got to know as much as possible about the Prompt Payment Code. I looked at its website. As I say, we support the Prompt Payment Code. I appreciate that it identifies that co-signatories undertake to pay suppliers on time, give clear guidance to suppliers and encourage good practice.

I looked at those things. I looked at the clear guidance to suppliers because I thought that that was very relevant. It says that you must provide,

“suppliers with clear and easily accessible guidance on payment procedures”,

and that you may click to see the “Treating Suppliers Fairly” guide. Naturally, I clicked to see the guide. When I did, I was taken to the site of the organisation that runs the code, the Chartered Institute of Credit Management, and it says:

“We can’t seem to find the relevant information, you may be able to find the information you require using the menu above”.

I could not find it in the menu. I put it into the search mechanism and came back with two results:

“Business leaders believe late payment can be overcome”;

and,

“Credit managers urge Sir Alan to act promptly on late payments”.

That related to a statement made by my noble friend Lord Sugar in 2009, in his previous job as the enterprise champion, to address late payments. I do not think I need to say any more about the way in which this has been adopted.

We are relying on a code. Other countries in Europe have relied on legislation and have had much more success. We have a problem in that there is no evidence that the code will be able to address the ever increasing sophistication of the extended payment problems and the mechanisms used by companies. It is insufficient in its own right.

Finally, I shall give another reason why I think it insufficient to rely on a code. We all agree that growth in the economy is essential, that supporting small businesses is essential and that cash flow and the velocity of money in the economy are very important. As a measure to help trigger a more dynamic UK domestic economy, this is essential. Overseas suppliers who rely on letters of credit with guaranteed bank payments are better served than UK businesses as matters currently stand.

It was reported at the weekend that the Groceries Code Adjudicator was in receipt of complaints that Lidl has now extended its payment terms to 120 days. It was reported that that was in great contrast to the 30 days that it uses to pay in its home market of Germany. It is time to get serious in tackling late payments and in not placing UK small business behind others. We accept and support the code, but it is insufficient. We need to move much more in establishing that the payers need to pay on time and that the level of late payments needs to come down, since these take place on an enormous scale and are a huge drag on our economy. I beg to move.

[Lord Lea of Crondall (Lab)]

My Lords, I support this amendment and will take the illustration of the insurance industry. There are special features connected with the insurance industry. Hence, it has its own legislation. However, the Minister dealing with what was then the Insurance Bill, the noble Lord, Lord Newby, indicated that other steps and avenues would be pursued to see that the insurance industry could be brought within the scope of some statutory obligations on late payment.

The history of this, briefly, in the insurance industry is as follows. Lloyds of London has unilaterally been able to veto a strong recommendation from the Law Commission which was accepted by everybody else in the industry, including all the main insurance companies, that there be such a statutory duty in that sector so it could be brought into line.

Evidence from other sectors, including overseas parts of the industry, shows that the present arrangement, whereby London has no such guarantees against late payment, is doing serious reputational damage to that major industry. However, the rubric has it that one actor in that industry, namely Lloyds of London, which represents maybe 25% of the industry, which we all agree is not insignificant, can cast such a veto in its own interests against public policy, government legislation, simply by stating—this is the astonishing point—that it finds such a clause, recommended strongly and unanimously by the Law Commission, “controversial”. In other words, to deem a clause such as that to be controversial means that the Bill would fall.

Therefore, in Committee, some noble Lords who supported the amendment generally did not want to take that risk. However, the Minister in that context, in seeking the withdrawal of the amendment, undertook to pursue the issue on the basis that it was not going to be left there and that other means—other legislation—would be explored and pursued. This amendment is a good exemplar of how that commitment should be honoured.

[Baroness Harding of Winscombe (Con)]

My Lords, I rise to speak against these amendments. I must first declare an interest because I run a large public company, TalkTalk, which would clearly be subject to this legislation.

I agree with the Government’s prompt payment proposals, and it is worth us pausing to recognise how robust they are and how tough a reporting requirement this will be. To report quarterly in detail on your payment performance and policies is more detailed than the report I have to make on the financial performance of my company. I have an obligation to report in full on a half-yearly basis. I would not underestimate the power of transparency—of having to report this publicly and clearly. We see this in a whole range of compliance areas in business. Having to explain publicly to your customers as much as to your suppliers what you are doing acts as a strong brake on bad behaviour and is the beginning of the culture change in payment policy that I am sure that all sides of the House want to see.

I am not persuaded, however, by the Opposition’s amendments. There is a real danger that we try to overcomplicate and second-guess how businesses will wish to negotiate with each other. There are also a lot of unintended consequences—I am sure that they are genuinely unintended—in the Opposition’s amendments that will simply lead businesses to avoid the provisions and will create the very problem that they are seeking to avoid, which is the negotiation of much longer payment terms that meet all the requirements of a much more tightly defined code but actually do not enable small businesses to be paid faster.

It is therefore important that we support the Bill and the improvement in publicising and shining a light on poor payment policies and performance. But we in this House must not think that we can create culture change by specifying in ever more precise detail what businesses can and cannot do. That would have the opposite effect on the culture that we are trying to change.

[Lord Mitchell (Lab)]

My Lords, I start by coming back at what the noble Baroness, Lady Harding, has just mentioned. I know that she runs an exceptionally good company; I do not know what TalkTalk’s payment terms are, but I bet that they are good and that it pays on time.

However, there are many people out there, including many large companies, whose behaviour is quite disgusting. We have seen in the past few months egregious examples of big customers stuffing their suppliers. I will give a few examples. Diageo, the owner of Guinness and Johnny Walker, recently informed its suppliers that it would extend its payment terms from 60 to 90 days. AB InBev, owner of Budweiser, Stella and Boddingtons, has extended its terms of payment to 120 days. Heinz has doubled its payment terms—I wanted to say from Heinz 57 but it is not quite that—from 45 to 97 days, and the list goes on to include Monsoon, GlaxoSmithKline and Debenhams, to name just a few more. It is a common theme. These companies put the squeeze on their suppliers for two reasons. First, they want to accumulate as much cash as they can. That is understandable as they want to boost their balance sheets. More perniciously, they do it simply because they can. It is bullying.

Many of us have run small businesses and we know all too well the perils of cash flow management. We know what it is like to sweat while waiting for our big customer to make the payment. That is what keeps us up at night and what this amendment aims to rectify. According to the Institute of Directors, two-thirds of its members with fewer than 250 employees suffer from late payments. It is estimated that payments delayed over and above the contractual terms total—well, in my notes I have £40 billion but my noble friend Lord Mendelsohn says £60 billion. Whatever it is, it is a very large number. It is not just the supplier who suffers; it goes to the supplier’s own suppliers and to all the families who work with these companies that are now at risk. It permeates everything.

In this amendment we seek to introduce a radical change. Where a late payment occurs, an automatic interest rate penalty will kick in at the Bank of England base rate plus 8%. I can promise that if there is an outstanding payment with interest rates clicking up at 10% or 11%, it will gain everybody’s attention and will be paid.

I should like to make one more comment. Later this afternoon we are going to be addressing the issue of government schemes to improve finance for small business. I have no doubt that the best way to improve SME finances quickly and effectively would be to improve cash flows.

[Lord Stoneham of Droxford (LD)]

My Lords, I support the thinking of both the previous speakers because there is a problem with late payment. I know that the noble Lord, Lord Mitchell, has a lot of business experience of this, particularly working with small businesses—and the noble Baroness, Lady Harding, also has a lot of experience in the business world. The argument here is really that the Bill is a move forward. It is trying to open up the issue of what terms companies are offering and attempting to make sure that they are properly reported.

However, the Labour amendment is unduly prescriptive and there will be a lot of unintended consequences if companies are forced down from their current credit terms of 60 or 90 days to 30 days. There would be the bureaucracy of quarterly payments and quarterly reporting and the information that would have to be provided on what is in those quarterly reports. We have to be clear that this is a very prescriptive amendment, which to be properly considered would need a great deal of consultation with business, particularly small businesses, on its consequences—because they could be quite dramatic.

I suspect that first there would be a big jump in the number of invoices being queried; that would be bound to happen. This would inevitably damage the legislation’s attempt to make companies more accountable and for the first time properly report publicly what they are doing—instead of having the information just drift out as a result of complaints from suppliers. People will be able to see what companies are doing, and the companies can be held accountable. It seems that that is the first stage. If there are consequences we want to look at, it would be better to deal with them gradually, so that we get genuine improvement on payment terms, rather than setting up a very bureaucratic and prescriptive solution that could damage a lot of companies and even deter business.

15:59

[Lord Cope of Berkeley (Con)]

My Lords, I also have doubts about the terms of the amendment, both for the reasons that my noble friend has just given and because we have to consider who is laying down the payment terms. The amendment refers to the supplier’s payment terms as though the supplier—the small business that we are thinking of—is able to say that it wants payment within a certain time. However, in the instances that the noble Lord, Lord Mitchell, gave just now of large companies extending the terms in which they make payments, it is of course the customer who lays down the terms. If you do not like those terms—the extension to a larger number of days—then you do not supply. A big company in a powerful position in its market will be able to lay down its terms and that will drive a coach and horses through the amendment. Therefore, I do not think that this is the solution.

I do not for a moment say that there is no problem—of course there is. I entirely accept what was said earlier and in Committee about the difficulties of late payment, and these are not new difficulties; we have had them for years. I think that the amendment to the existing law proposed in the Bill is a step forward. I would like to see that come into law rather than the more prescriptive version suggested by the Opposition.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)]

My Lords, I thank the noble Lord, Lord Mendelsohn, for his amendments on the important matter of late payment and for the general support that he has given to the Bill’s provisions. I also thank him for his diligence and interest. I am grateful, too, to the noble Lord, Lord Lea, to my noble friend Lady Harding, and the noble Lord, Lord Mitchell, with their business experience, to my noble friend Lord Cope and to my noble friend Lord Stoneham for his perceptive and practical comments about the risk of unintended consequences—gleaned, I think, from his very careful study and attendance every day in Committee.

Before turning to the amendments, I want to reassure the House about the Government’s unwavering commitment to tackling late payment. The measures we are taking forward in the Bill form part of a comprehensive package of measures to bring an end to the UK’s late payment culture. The Government are absolutely clear that large companies should lead by example and pay their small suppliers within 30 days. We need to shake up corporate culture to drive home our message—that it is not fair and not right to pay your suppliers late or use unfair payment terms.

That is why we are taking action in the Bill to require the UK’s larger companies to report on their payment practices, and we have already consulted on the detail of what this might look like. We proposed that companies report quarterly against a comprehensive set of metrics, including the proportion of invoices paid beyond 30, 60, 90 and 120 days and the average time taken overall to pay invoices. Therefore, there is a real incentive to show that you pay promptly and on time, and an opportunity for companies to explain if payment is late. It is a strong brake on bad behaviour, as my noble friend Lady Harding suggested.

This reporting will be rigorously monitored, with a company director required to sign it off, and breaches will be sanctionable by a criminal offence. Importantly, we will require companies to make this information public, so there will also be the power of transparency. The new reporting requirements will mean that poor payment practices are exposed, and it is this transparency that will drive a fundamental change in corporate behaviour. I also highlight that on Monday the Government published a summary of responses to our consultation. While the Government are still considering the evidence received, I am pleased that a clear majority of stakeholders agreed with our overall approach, although there were concerns about some aspects, including our very rigorous reporting requirements.

Last week, my right honourable friend Matthew Hancock MP also announced significant changes to the Prompt Payment Code. I know that the noble Lord, Lord Mendelsohn, and others have encouraged us to strengthen this, and the code will now promote 30-day payment terms as standard and enforce maximum 60-day terms. The change will be rigorously enforced by the new code compliance board, which will include people from business representative bodies who will investigate challenges made against signatories to the code by their suppliers. The compliance board will remove signatories found to be in breach of the code’s principles and standards. This will shine further light on poor payment practices. The Government are also seeking views on how to provide business representatives bodies with additional legal powers to challenge grossly unfair contractual terms or practices, which will build on existing protections for small businesses.

The noble Lord, Lord Mendelsohn, highlighted the issue of Lidl. The Government are clear that large companies including Lidl, which is a leading German supermarket chain, should lead by example and pay their small suppliers within 30 days. It is neither fair nor right to use unduly long payment terms. As I said earlier, we are already taking action in the Bill to require such companies to report on their payment practices through very tough requirements, including the detailed metrics that I have already described.

The noble Lord, Lord Lea, talked about the situation in the insurance industry and I will certainly look at the points that he raised. The noble Lord, Lord Mitchell, gave us a list of companies reported to be squeezing suppliers. This is further evidence, frankly, of the need for change and the action we are taking in this Bill and in the regulations made under it. He mentioned Diageo, which is already being investigated by the Prompt Payment Code administrator. The Government are being tough for small business, and we will take the necessary steps to stamp out poor practices.

I turn to the specific amendments. I recognise the strength of feeling that has been expressed and I am pleased to say I have been persuaded by some of the noble Lord’s arguments. I can confirm today that we will table amendments at Third Reading to insert the word “performance” into Clause 3, which was a concern that the noble Lord pressed in Committee to which we have listened. I also commit that we will use this power to require companies to report on the amount of interest owed on late payment because we agree that this will help to exert the necessary pressure on companies to make sure that their suppliers are fairly compensated. We will make express reference in the Bill to interest owed and paid. We will introduce amendments on both these points at Third Reading.

I now turn to the proposal to require companies to prepare a compensation plan on each instance that they fail to pay late payment interest. I am afraid that, on this point, I continue to believe that introducing this measure would lead to unintended and undesirable consequences. For example, businesses could lengthen their payment terms to avoid accidently having to pay out. If they do get caught by the requirement, there could be debates about whether payment plans provided cover for delaying tactics. While we are committed to tackling late payment, we are equally committed to trying to incentivise prompt payment with as little bureaucracy as possible. The discussions that we had with stakeholders indicated support for this view. These discussions reinforced the findings from our 2012 consultation that introducing further penalties would not tackle the problem of late payment. Instead, respondents called for greater transparency on payment practices, which this Bill delivers.

The noble Lord gave us some interesting feedback on the website. He will be glad to hear that BIS has just awarded the Chartered Institute of Credit Management £50,000 to improve that very website, so he is on the money. The improved website will go live later this month and I can only thank him for identifying this issue and sharing it with the House. I shall take it away and ensure that it is addressed urgently.

It is clear that the noble Lord and I are united in our mission to tackle late payment, but we must make sure that any interventions will work to the benefit of the very small businesses that we seek to protect.

I turn to the question of ensuring the report’s accuracy. Our consultation proposed that the reporting frequency be quarterly, as companies’ ability to pay or practices in paying trade creditors can change quickly. Therefore, we are not proposing that companies report in their annual report. Instead, we propose that the report should be signed off by the company’s director, with breaches sanctionable by criminal penalties, using the power in the Bill to mandate reporting. The summary of responses we have published shows broad support for this proposal. Respondents clearly feel that these measures would suffice to ensure the report’s accuracy and I therefore do not agree that we should require further assurances from an auditor.

I am grateful to noble Lords for their significant contribution to the scrutiny of these provisions. We have considered very carefully the proposals set out in the amendment and I hope that, with my commitment to bring back some changes at Third Reading, the noble Lord will feel able to withdraw the amendment.

[Lord Mendelsohn]

I thank the Minister for her extensive response to these amendments. I shall go through a few issues and then come back to them. In general, I thank the Minister for her very constructive and open approach throughout to these issues and to making improvements to the Bill. We share a great interest in and concern for helping to develop small businesses and doing what we can for them.

I am very grateful to the noble Baroness, Lady Harding. I had the great pleasure of talking about her, and our close connection, when she made her maiden speech. She is a remarkable business figure and I will address a number of the issues that she raised. The criticism has been made that we are trying to change culture through legislation. That is not our approach; it is the Government’s. The noble Baroness talked about the limitations of this. I have no doubt there are benefits to it, which I support, but I do not find myself on the same side of the argument as her on that one. We are adding duties and obligations because we have come to the conclusion that that is the way to address the size and scale of the problem. It is certainly true that legislation rarely changes the heart but, as the phrase goes, it can restrain the heartless. There are times when you have to use legislation as a lever to make things happen. I agree that the reporting requirements are an obligation, but they are a necessary one, and I hope that her support for them is heard by many other people in business.

I do not think that the issue of how customers and suppliers contract with each other comes up until the next set of amendments. They are slightly more complex so I will address that issue then. I want to say to the noble Baroness that I have become a bit of a junkie on the website. I am grateful that it is to get a £50,000 refresh, and perhaps even an app. Having looked through the Prompt Payment Code, I noticed that TalkTalk is not a signatory to it. We are talking about changing the culture, but if someone sitting in this House does not yet have a sense of how that culture should change, it is an issue when we come to address business at large. It is my feeling that culture change is insufficient in and of itself.

The noble Lord, Lord Stoneham, talked about being overly prescriptive, and he raised those concerns in Committee. I listened carefully to what he said and I have done my research on it. I felt at the time that the point was insufficient because of the scale of the problem and the way it is growing. When we look at how other countries with far less significant economic problems, or even problems in how to deal with this issue, we can see that they are the ones that have been infinitely more prescriptive. We can look at Ireland, while legislation in Germany passed just last year shows how that country has moved forward. It is only by being more prescriptive that we get clarity and avoid unintended consequences, which are more likely to arise in circumstances where a variety of alternative payment terms or arrangements are allowed to be put in place.

The noble Lord, Lord Cope, raised similar issues in Committee. Again, I listened carefully to him and I decided to take my cue from the GOV.UK website on the question of how we look at the dates. The website explains when a payment becomes late. It states:

“If you haven’t already agreed when the money will be paid, the law says the payment is late after 30 days for public authorities and business transactions after either: the customer gets the invoice”,

or,

“you deliver the goods or provide the service”.

That is how we reach the point where this can be tested.

I am grateful to the Minister and we are encouraged by some of the changes that have been made. We feel that the areas of performance and being able to identify the interest payments are useful steps. However, I am bound to say that my noble friend Lord Mitchell made a powerful speech, going through yet again those companies that have good records in a variety of areas but allow themselves to do what has become far too natural and far too easy in the context of the UK. We stand out from others because we are not as strong as we should be on dealing with prompt payment and people who get into late payments. The prize is there. We are talking about close to £60 billion, so putting even a small proportion of that sum into the economy will have a huge accelerating impact. We on this side think that being on the side of small businesses means getting more money racing through the economy. The need to increase employment prospects requires us to press the amendments and push to see whether we can get the economy moving by getting these late payments to small businesses sorted out much sooner than would otherwise be the case. Therefore, I wish to test the opinion of the House.

16:16

Division 1

Ayes: 187

---

Labour: 142
Crossbench: 29
Independent: 5
Democratic Unionist Party: 2
Green Party: 1
Bishops: 1

Noes: 256

---

Conservative: 144
Liberal Democrat: 72
Crossbench: 33
Ulster Unionist Party: 2
Bishops: 1
Independent: 1

16:30

Amendment 2 not moved.

Amendment 3

Moved by

[Lord Mendelsohn]

3: After Clause 3, insert the following new Clause—
“Companies: dealing with suppliers
(1) The Secretary of State may make regulations—
(a) imposing a limit on the number of days after receipt of a supplier’s invoice a company can seek to challenge that invoice,(b) prohibiting the practice of a company seeking to change the payment terms of a supplier company unilaterally, and(c) prohibiting a company from requiring a supplier company to make a payment in order to join that company’s list of suppliers.”

[Lord Mendelsohn]

My Lords, I will also speak to Amendment 4. Our amendments deal with an entirely connected element of late payment and other sorts of payment practices. Amendment 3 addresses concerns about companies exceeding payment agreements, discounting for prompt payment and retrospective discounting. This proposed new clause gives the Secretary of State new regulation-making powers to impose,

“a limit on the number of days after receipt of a supplier’s invoice a company can seek to challenge that invoice”,

and to prohibit companies from,

“seeking to change the payment terms of a supplier company unilaterally”,

or requiring supplier companies to pay to join that company’s list of suppliers or remain on it. Amendment 3 takes forward some fairly straightforward measures on what I would describe as abuses but on which I think there is a fair degree of consensus. Amendment 4 is perhaps slightly more exotic. It makes provision for the Secretary of State to,

“make regulations prohibiting the practice of a company seeking to reverse fixed payments and apply retrospective rebates and charges to a supplier company”.

Companies looking to extend their payment terms still could be on the right side of a prompt payment code if they use a variety of other practices to provide extended payment and credit terms to themselves. They can also add unfair terms using the asymmetry of power and information. Across much of the rest of the Bill the Government’s proposals have done a somewhat reasonable job to start addressing that issue, which afflicts small businesses, but companies can still change terms unfairly or even force unfair terms on weaker companies. “Pay to stay” must be the most egregious such practice but it is certainly not the only one. A weak approach to late payments coupled with no action on unfair practices or terms will mean that small businesses are unlikely to gain much from this Bill, which will seriously affect their cash flow or make their ability to fund and finance themselves not as strong as we really need with our current economy.

I have also witnessed at first hand the inventiveness of large companies to obfuscate and stop meeting their obligations on other payments. I have even had the misfortune with one particularly large supplier of meeting someone called “supplier disputes resolution”; this really means that they are a lawyer from the legal team, there to cause more problems rather than resolve anything.

I must thank the many small businesses and their advisers and representatives who are providing us with information on this. They have told us strongly, chiming with my own experience, of just some of the wariness that they feel is associated with raising the problems of poor practices of other companies, and of the nature of some of the pressures that they are under. These problems could include larger companies withholding payments, imposing fines or even creating retrospective payments or charges.

One has only to talk to small businesses for a short period to understand the iconic nature of the Premier Foods controversy, where it was forcing suppliers to pay to stay on its supplier list, which is perhaps one of the more appalling practices. Others force businesses to pay to go on the supplier list, which distorts competition and tries to use market power against smaller companies. Our measures will ensure that the problems of late payments are not transferred to other practices. The amendments also have the benefit of addressing legitimately some of the terrible and detrimental practices that small businesses suffer from large companies which exceed their agreements and act retrospectively, leading to tremendously bad consequences for other companies.

Withholding payments or arranging debits on control invoices can be caused by disputes or by issues about quality. These should rightly be raised prior to any unilateral fine, debit, discount or withholding of payment, and swiftly resolved between the parties. We agree with the Government that when there are disputes the most important thing is to resolve them as swiftly as possible. These amendments give the Secretary of State new regulation-making powers to address these issues.

There are cases where businesses retrospectively, at the end of the year, impose cuts to meet the previously agreed supplier prices to meet their margins, with no regard for the established contract. This is levelled against many plcs. Recently, we saw Debenhams unilaterally conducting a 2.5% discount on supplier prices as a last-minute attempt to boost its failing profit margins. Sending retrospective debit notes is on the basis of investments made to provide benefits to suppliers—very supposed benefits indeed. This is not to say that they do not make for a plausible argument; but the manner in which these can be applied and that they rarely have any performance-reporting, a direct correlation to those benefits or even requirement of proof that they were spent on this show the ways in which companies also impose egregious practices.

The contract terms, conditions and price negotiations are really up to the parties. Commercial terms, such as marketing discounts, early-payment discounts, stock write-downs, rebates and charging for central distribution costs appear to affect more the long-term performance of the companies operating them, and distort their price negotiations. But those are within the gift of companies if they decide to use those sorts of practices and the matter is clearly up to them. These terms can be entered into by parties, but it should not be possible to impose them retrospectively or coercively by means of threats or market power.

I am looking forward to the Minister’s response to these amendments. In Committee, the Government understood some of the concerns and they have not been deaf to the many stories that they have heard about the application of practices of this sort and the problems they create. They also seemed to acknowledge that their initial responses were not sufficient. In Committee, their view was that in practice requests for changes of payment terms are not imposed unilaterally and that they are made with the agreement of both parties, even if the smaller party may feel that it has no option other than to agree. We patently know that that is not the case. We have seen many examples of where changes have been made unilaterally.

The late payment directive is explicit that unfair contractual terms and practices are not acceptable. I spent some time looking at the late payment directive, which I was assured had significant UK participation in its drafting. I have to confess that it is rather good. It talks about the way in which these sorts of changes are not acceptable and should not be acceptable and says that, even in circumstances when they are imposed on the smaller party, they should not be.

The Government argue that concern about doing something about “pay to stay” may have the unintended consequence of stopping supplier lists, which may be a good thing. We agree with them. This is not meant to stop supplier lists. It is important for companies to be able to manage supplier lists. The problem is the terms on which people join those lists. We suggest amendments which give the Secretary of State the ability to make those changes. We are not being prescriptive. We are broad in defining what they can address. It remains for future consultations, regulations and other things to implement them. What we are trying to get at is clear. It is also clear that we are doing something, which is not too prescriptive. I know that some noble Lords have concerns about that. In many ways we have taken, perhaps for the first time, the argument that the Government presented in Committee that “may” cannot become “must”—so rather than “must” we have said “may”. It is important for the Government to understand that these are some of the issues they should address. Given the scale and size of the problem, we can identify late payments, as opposed to poor and extended payment terms, as somewhere where we need action to help small businesses. I beg to move.

[Lord Mitchell]

My Lords, “pay to stay” and retrospective terms are examples of thuggish behaviour which large companies use to beat up their suppliers. I listened to what the noble Lord, Lord Cope, said on the previous amendment about suppliers having a choice about whether they want to supply large companies. I do not think it is quite that simple. The companies we are talking about—major supermarkets and the like—have tremendous power, and suppliers have no option but to supply them, so this is not a contest of equals but of David and Goliath, and in this case Goliath usually wins.

As my noble friend Lord Mendelsohn said, just before Christmas Premier Foods, the maker of Mr Kipling cakes and Hovis bread, told suppliers that they could lose their contracts unless they made cash payments to remain suppliers. That time, it misjudged the mood. The press took up against it, and very quickly it backed down. Perhaps that is a good example of shaming some of these companies about what they do. However, the practice still exists and our amendment gives the Secretary of State power to prohibit a company requiring a supplier to make a payment in order to join that company’s list of suppliers.

Even worse is the ability of companies to alter the terms of payments unilaterally. I have seen it personally in a family business and with suppliers to big retailers. A supplier fulfils all the terms of the contract and he waits and waits for a payment that never comes. Eventually the company contacts the supplier and says that payment could be made in a couple of days if only the supplier could accept a hefty discount. This is odious behaviour and in this amendment we seek to contain it.

16:45

[Baroness Neville-Rolfe]

I thank noble Lords for tabling these amendments on unfair practices and the noble Lord, Lord Mendelsohn, for sharing his experience, including points of agreement. Unfair payment terms and practices hit small businesses the hardest and are simply unacceptable. I consequently have considerable sympathy with the intention behind these amendments.

Our intention is to drive a fundamental shift in payment culture—a paradigm shift in UK corporate behaviour to stamp out poor payment practices. Obviously, the key question is how we achieve this. One option is to seek to tackle each and every harmful practice as we spot it, but I suggest that this is futile. As the previous debate suggested, if businesses want to exert undue pressure on their suppliers, they are likely to find ways to do so. Because banning individual practices only tackles the symptoms, it will not drive a change in underlying corporate culture. We are doing something different and using a new transparency to drive change in corporate behaviour. The power of the new reporting requirement should not be dismissed. It will subject companies’ payment practices to full public scrutiny, thereby allowing poorer-performing companies to be named and shamed. In so doing, it will exert significant pressure on companies to move away from unfair practices.

The noble Lord, Lord Mendelsohn, mentioned the case of Premier Foods, which I believe shows that transparency can successfully lead to swift change in practices. Following public scrutiny of its “pay to stay” practice, which the noble Lord, Lord Mendelsohn, rightly described as egregious, Premier Foods moved quickly to simplify its controversial supplier list scheme. The Government are clear that large companies should not be using their economic power to place further strains on already hard-pressed small businesses. The Secretary of State has already asked the Competition and Markets Authority to consider the available evidence on “pay to stay” clauses, which I hope will be welcome to the noble Lords, Lord Mendelsohn and Lord Mitchell. The new reporting requirement will also elevate poor payment practices to become a boardroom issue. We have proposed that a company director signs off the report to ensure it is taken seriously at the very top.

We have tested this proposition with stakeholders, and most have shown little appetite for greater regulation on specific practices. Businesses in the UK value the freedom of contract that has been built up over hundreds of years but they strongly agree with the Government that increased transparency will help us to take significant steps to address the current imbalance in economic power which noble Lords have described so graphically. That is why we must focus our efforts on getting transparency right by putting in place a comprehensive, robust reporting requirement for all the UK’s larger companies. Clause 3 is already drafted sufficiently widely to allow the Government to require reporting on the subject of these amendments through secondary legislation.

I turn briefly to the detail of the amendments. Late payment legislation already sets a maximum 30-day period to quibble after the receipt of relevant goods and services. We sought views on this issue during our recent consultation. There continues to be little appetite for legislation. Our stakeholders tell us that they are reluctant to use current avenues to challenge due to fears of damaging relations with customers—a point which has already been made. We also heard concerns that the change, as proposed, could result in unintended consequences, with companies starting to dispute more invoices as a means of gaining time to review them. Our stakeholders have instead called for increased transparency on dispute resolution processes. The Government will therefore require companies to report on these as part of the mandatory reporting requirement.

We also consulted on unilateral changes to payment terms. As a matter of contract law, unilateral changes cannot be imposed on a contracting party after the contract has been agreed. However, in reality, smaller companies, as has been said, may feel that they have no option other than to agree when such changes to an existing contract are proposed by bigger companies. A ban as proposed would not prevent this practice, as it would not prevent bigger companies from seeking changes and would not address the reasons why smaller companies feel unable to resist such changes—while effectively rewriting the core principles of contract law. Instead, therefore, our stakeholders supported increased transparency to shine a light on poor behaviour. I again propose to mandate reporting on this in our reporting requirement.

Charging suppliers to join or remain on supplier lists and seeking to reverse fixed payment and apply retrospective discounts and charges are deeply concerning practices. Although we could put in place a blanket prohibition on these practices, they are but two of the ways in which larger companies can seek unreasonable commercial advantage from smaller suppliers. Our stakeholders believe that bans on specific practices would be easy to sidestep.

Once again, increased transparency will help address the economic imbalance involved. Our stakeholders support increased transparency on the use of “pay to stay” clauses. I can commit to requiring companies to report on these practices in the reporting requirement. We also commit to holding further discussions with stakeholders to discuss whether reporting on other practices mentioned, such as retrospective discounts or charges, should be mandated in the prompt payment report—which, of course, we have the power to do. I hope the noble Lord agrees that I have sought to address his concerns through the medium of transparency and, on that basis, will feel able to withdraw his amendment.

[Lord Mendelsohn]

I thank the Minister for that reply, although I have to say that I remain extremely concerned about part of the approach. I know that the Minister shares a great deal of the concerns about this and that she is a very practical person who has looked at different ways to deal with it. Talking about transparency, culture and the possibility that there will be attempts to sidestep this is rather similar to closing the door after the horse has bolted. We are in that situation now. The Minister says that doing something more prescriptive will obviate what she is trying to do on culture, but I happen to think that it will work, while her approach will not.

I will give the example of a good friend of mine—perhaps they will not be after I have raised this—who is a senior member of a company that uses a method called central distribution charges, which is effectively “pay to stay” by another means. It uses it in the UK, but not in Germany, France or Italy. In the end, that is because it is not allowed to use it, as it is not a proper term. My concern is that we can say, “They will sidestep it”, but we are in that situation now.

Companies come to all sorts of arrangements. We hear great stories from companies such as Next, Dunelm or John Lewis, where the price you pay is the price you pay, but there are far too few of them. Many others use a variety of measures to ensure that they meet a margin way in excess of what they have agreed the contract should deliver. That is our concern. It is wrong to say we can do this using the means of the reporting mechanism, because there are other contract terms you can use to sidestep the reporting mechanisms that we have. A much better and more effective way of doing this and stopping every such method is to create the architecture and a framework to look at what you can stop.

A very famous online company has a 40 to 50-day payment period. At 90 days they send fines, which you then have to contest. There is no individual you can speak to—it has to be done online. Eventually, you will get your payment terms, possibly within 180 days. They extend it through a variety of mechanisms which would not be covered by the existing provisions or by the transparency arrangements. Those are the problems which we are still some way from meaningfully addressing. It is very important for us to consider how we go further on these asymmetries and poor practices and to look at the sorts of things which others, using more prescriptive means, have been able to address through legislation or regulation.

There is a strong case for these amendments. I am conscious that the Minister has made some progress, if it is somewhat glacial compared to what I would prefer. However, on the basis that we can get the Government to take these matters seriously and that they are prepared to deal with the most egregious examples and to start dealing with where companies and poor practice ends up, I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Amendment 4 not moved.

Amendment 5

Moved by

[Lord Stevenson of Balmacara]

5: After Clause 3, insert the following new Clause—
“Payment practices: retention of monies
(1) The Secretary of State may by regulations impose requirements on certain companies to publish information about their policies, practices and performance in holding, safeguarding and releasing sums withheld by, or on behalf of, a payer from monies which would otherwise be due under a contract, the effect of which would provide the payer with security for the current and future performance by the payee of any or all of the payee’s obligations under the contract (“retention monies”).
(2) The regulations under subsection (1) may prescribe—
(a) the companies or type of companies to which the regulations apply;(b) the information required to be published;(c) the intervals at which, and format and manner in which, publication must take place; and(d) the type of description of contractual provision to which the regulations apply.(3) The restrictions on regulations in section 3(3) shall apply to regulations made under subsection (1) of this section.
(4) The Secretary of State shall arrange a review of the operation of the type of contractual provisions mentioned in subsection (1) after a period of 18 months following the coming into force of the first regulations made under subsection (1), and shall lay a copy of the report of the review before each House of Parliament.
(5) The review provided for under subsection (4) may make recommendations for requirements and obligations to be imposed upon certain types or descriptions of companies in relation to the practice of retaining monies as described in subsection (1).
(6) After public consultation, the Secretary of State may by regulations impose such requirements and obligations on prescribed companies as were recommended by the review, in whole or in part and with such amendments as the Secretary of State believes to be required in order to—
(a) ensure that the practice of withholding retention monies does not give rise to unfair treatment of payees;(b) provide assurance that retention monies are held securely; and(c) ensure that the position of a payee company from whom retention monies are being withheld is protected when a payer company becomes insolvent.”

[Lord Stevenson of Balmacara (Lab)]

My Lords, Amendment 5 is in my name and that of my noble friend Lord Mendelsohn. I declare an interest in that my wife is a practising solicitor who deals with construction contracts. When we raised this issue in Committee I made the following points. Recent research shows that about £3 billion is outstanding within the construction industry, and only in that industry, by way of cash retentions; that the practice unfairly enhances the working capital of the party deducting them; and that most of those who retained moneys openly accepted that they added cash retentions to their working capital or actually reinvested them. The effect is that bodies that are commissioning work are also in effect borrowing from the small firms that are carrying out the work. This is counterproductive to good economic activity at a time when such firms are also having major problems in accessing finance.

The key issue is that cash retentions are being deducted from payments already earned. However, there is no statutory protection for the retained moneys that will ensure that they will in fact be available for release if, in the event, there are no uncompleted remedial works that need to be done. There is a good case for any retention funds to be kept separate from working capital, perhaps within an escrow account—as is now used for government contracts—or a separate trust account.

When the Minister responded to the debate, as well as outlining the new but still rather patchy approach to payments being adopted by the Government, she agreed that there were a number of issues of concern with the payment culture in the construction industry. But she said that the current statutory framework governing contractual terms on payment—which was introduced in 2011—with a prohibition on “pay-when-paid” clauses and a right to adjudication, would be sufficient to see out this unfortunate practice. She added that since 2014, the Government have been working with the industry to implement a payment charter that contains 11 commitments, including one specifically aimed at removing the need for retentions, with the intention of moving by 2025 to a position where retentions are no longer necessary.

The noble Baroness pointed out that the powers being taken in the Bill would be sufficient to gather the information needed for a review of current policy, and I take that point. But she was a little unconvincing about why it will take 10 years to gather the information about this issue, even if there were a need to go wider than just the construction industry. If this amendment is accepted, it would have far-reaching benefits for small businesses throughout the construction industry. They would not have to wait another 10 years before this practice is outlawed—but even if they did have to wait that long there is surely a case, which I have outlined above, for action now to require the use of escrow accounts for this type of payment. I beg to move.

[Baroness Neville-Rolfe]

My Lords, I thank the noble Lord for this amendment and for providing the opportunity for us to look again at the important matter of retention payments. Following Committee we have been busy. We have consulted with stakeholders on payment terms, and it is clear that the practice of retentions is an issue, as we suspected, largely confined to the construction sector. As with other payment issues in construction, issues with retentions go to the heart of the industry’s business models. These models are driven by a broad and diverse range of customers—and, of course, there is an extensive reliance on subcontracting. The work is project based and frequently short term, with no ongoing relationships. Typically, low levels of capitalisation mean that the industry is heavily reliant on cash flow.

17:00

On the amendment, government is already able to include a new obligation to report on retention practices through the powers in the Bill. Since Committee, we have held a round table with key construction representative bodies to discuss how this might be done. We are following that up with a series of bilateral discussions to make sure that we get it right. The amendment would also require government to undertake a review of the practice of retentions. Following debate in Committee, we have held discussions with a wide range of stakeholders in the construction industry, and we found that there was a range of opinions. A proper assessment across the industry of the costs and benefits of the retention system will be vital to get the policy right—and it needs to be done in partnership with the industry.

I am pleased to inform noble Lords that the Government will therefore work with the Construction Leadership Council to undertake an analysis of retention payments under construction contracts. We are currently agreeing the project specification and it is our intention that the final report should be published early in 2016. That will provide an evidence base much more quickly than the 18 months after the coming into force of the reporting requirement envisaged by this amendment. The partnership is also important; an enduring solution to the issues rests in culture change. Legislation on its own is never likely to achieve change. The outcome of the research will inform the discussion about how the industry moves to a position of zero retentions.

Finally, the amendment would require government to take a power to introduce regulations. The Government’s work with the Construction Leadership Council will provide the evidence base for any action needed. Before that review has taken place, and given the lack of a clear consensus in the industry and among its customer base, the Government do not believe it appropriate to take such a power at this stage. We are taking a number of steps which will address the key issues at the heart of this amendment—and, on that basis, I hope that the noble Lord will feel able to withdraw his amendment.

[Lord Stevenson of Balmacara]

I am very grateful to the Minister for that response. I agree with her that the issue is the business model in play in the construction industry. It is almost certain that the conclusion that will come out of the review that she is talking about is the one that we have been talking about—that there will need to be a new model for how the industry deals with the problem of how it contracts for and pays for the work that has been undertaken on construction contracts. That cannot happen too soon, because there are a lot of issues that need to be picked up in that regard.

I was very glad to hear of the work that has already been started. It is a good way forward—and, of course, there is an advantage in having a sector group responsible for construction that is well embedded in the department. That should, I would have thought, bring forward some of the issues that she has mentioned.

It is rare for the Opposition to offer the Government a chance to get their hands on an unmoderated handle of power, which they might use on some unspecified future date, because we generally take the view that that is not a good thing to do. We did that in this amendment, but it has been turned down and spurned. I simply regret that—but I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Amendment 6

Moved by

[Lord Mitchell]

6: After Clause 5, insert the following new Clause—
“Small and Medium Sized Enterprises Access to Finance
(1) The Secretary of State has a duty to conduct a review on alternative forms of finance available to small businesses as defined in section 33(2) and micro businesses as defined in section 33(3).
(2) The review should include, but is not limited to—
(a) an assessment of how the banking sector is catering to the finance needs of SMEs,(b) current methods used by the Government and relevant organisations to encourage SME consideration of alternative forms of finance, and(c) the extent to which alternative forms of finance have been used by SMEs.(3) The Secretary of State shall release a report on the findings of this review and lay it before both Houses of Parliament within one year of the commencement of this Act.
(4) The Secretary of State may, by regulations, act on the findings of the review.”

[Lord Mitchell]

My Lords, I have addressed your Lordships’ House many times to take the Government to task for the slow take-up of new schemes designed to provide finance to small and medium-sized businesses. My theme has been constant. There have been so many initiatives over the period of this Government that even I, who really ought to know about these things, am confused. If I do not get it, how can small businesses understand the options when they seldom have to deal with them?

I have cited Funding for Lending as an example. I know that the Government think that it has been a resounding success, but that is not what I hear at the coalface. One banker said to me, “What am I to do? The Government throw money at us, and I have a choice: whether to deploy these funds on small businesses, which are risky and difficult and costly to analyse and administer, or else use the cheap funding to build my mortgage business where I can assess the risk, and it is easy to run”. It is also not what the figures show. More often than not, one quarter followed by the next quarter, the amount of funding extended by Funding for Lending has gone down.

While all these government initiatives have been sputtering along, there has been a very acceptable growth in non-government schemes. The market for alternative finance has exploded, largely as a result of the paralysis of the high street banks, and we on these Benches think that that is to be encouraged. Challenger banks have made a very big impression. Metro Bank, Aldermore and others, such as Santander, are changing the landscape. Peer-to-peer lending has taken off and is becoming a major force. We, as I say, welcome these changes. The traditional banks have let down small business, and it is perfect that alternative sources are stepping into their shoes.

We need, however, to know what is happening in the marketplace. So many questions are asked in your Lordships’ House on this issue, and the truth is that no one seems to know the answer. This amendment will place a duty on the Secretary of State to conduct a review of alternative forms of finance available to small business. This review will examine how the banking sector is catering to the finance needs of SMEs and how SMEs are being encouraged to use alternative forms of finance.

We need the facts, and only an obligation on the Secretary of State will give us the information we require. I beg to move.

[Lord Cope of Berkeley]

My Lords, as the noble Lord, Lord Mitchell, has said, we have debated access to finance and all the various schemes, both government and private sector, on a number of occasions. I agree with him that there is an awful lot going on in this field. A lot of improvements have been made, by the Government’s efforts, these new forms of alternative finance and so on. I go along with the noble Lord, Lord Mitchell, on all that and on the difficulties of assessing quite what is happening and where the best developments are.

Where I get into trouble with Amendment 6 is the last little bit—proposed new subsection (4)—which says that, at the end of this review, when it is laid before Parliament:

“The Secretary of State may, by regulations, act on the findings of the review”.

That is an incredibly sweeping power, which I would be wholly reluctant to give the Government. I heard what the noble Lord, Lord Stevenson, said at the end of the debate on the previous amendment, but this is a very sweeping power indeed, about which I am very cautious.

[Lord Myners (Non-Afl)]

My Lords, I support the amendment of the noble Lord, Lord Mitchell, and will be very surprised if the Government do not see merit in it. The coalition Government have made very serious efforts to address the impact on the economy of a shortfall in credit availability. They have launched multiple schemes, as the noble Lord, Lord Mitchell, indicated. The previous Government, of which I was a member, did likewise, and we found it extremely difficult to stimulate sensible extensions of credit to support business. The coalition Government found that they finally got lending going largely through the mortgage market. Only time will tell whether that has long-term economic benefit.

The Government have encouraged us to leave relatively undisturbed the dominance of the major banks. The market share of our major banks would be sufficient in normal circumstances to have triggered a competition inquiry many years ago. The dominance of the major banks is reflected largely in the absence of any differentiation in their products and pricing, and their basic business model is the same. They do not compete aggressively for market share; they do so at the margin but, on the whole, they sit on large legacy books of existing relationships. We know that, statistically, one is more likely to divorce than to change one’s bank.

Therefore, the Government should be encouraged to promote new forms of lending and should see this as an important adjunct to their own policies to support the economy. In those circumstances, I should like to believe that the Government would see real merit in the amendment of the noble Lord, Lord Mitchell, thereby ensuring that we get clarity about how the banking and credit availability system is working. I do not think that Santander is a challenger bank; it is the old Abbey National. Aldermore, Virgin, Metro and Bank One are challenger banks, but not Santander. However, if progress is not made by these banks, that is precisely the circumstance in which the Government would want to reach to independent evidence to show this.

I do not quite share the anxiety of the Benches opposite about the sweeping powers implied by the final part of the amendment. I imagine that they could be exercised only within the powers of existing law. I hope that a Government who are committed to furthering and promoting competition and transparency will not put themselves into contortions to reject the amendment. If they do so, they will stir continued anxiety that sitting opposite are a Government of bankers, for the bankers, rather than for society and our broader economy.

[Lord Leigh of Hurley (Con)]

My Lords, as has been said, we have discussed finance for SMEs at length and it will continue to be a perennial topic. I welcome Clause 5. All the challenger banks—the noble Lord, Lord Myners, named some of them but I was thinking more of the crowdfunding-type organisations—are very excited about what is going to happen in the market. I have talked to some of the big four clearing banks and they are excited. Despite the fact that one might have thought that they would be nervous about the clause, which will almost force them to send their customers to challenger banks, they are keen and excited about, and welcome, this event.

On the surface, the amendment looks sensible, other than—I reinforce the point made by my noble friend Lord Cope—proposed subsection (4), which is open-ended. Business is nervous about this sort of provision. It is worried by some of the pronouncements that have been made by the Opposition. A Labour Party proposal that has not been raised in this House suggests that if a business chooses not to raise finance, or is not successful in raising it, but actually seeks to find a purchaser of more than half its equity, before such a transaction can be completed to a purchaser of the choice of the vendor, the vendor will be required to offer the business to all its employees on comparable terms. That was proposed in a recent speech by the leader of the Labour Party because he wants a John Lewis-type economy. While I understand that direction of travel, it is, of course, totally impractical and destructive to business life. That sort of policy might be brought in under subsection (4) of the amendment. That makes me nervous and is one of the reasons why I would not be happy about the proposed new clause.

17:20

[Baroness Neville-Rolfe]

My Lords, I am grateful to the noble Lord, Lord Mitchell, for proposing the new clause, for his survey of finance for small and micro businesses, and for his welcome for some of the positive innovations that there have been in this sector in recent years. It was also extremely useful to have the comments of the noble Lord, Lord Myners, with his great experience in the City and in government, but I also heard the concern of my noble friend Lord Cope about the sweeping nature of the power. It was good to hear the comments of my noble friend Lord Leigh of Hurley.

The noble Lord has proposed a new duty on the Secretary of State to publish a review on alternative forms of finance available to small and micro businesses within a year of the commencement of this Act. I start by reassuring noble Lords that the Government share their conviction that small and micro businesses need greater access to alternative forms of finance. Lending to small business, as has been said, is still concentrated within the four largest banks, which account for almost 90% of business loans by volume. Overall rejection rates for loans and overdrafts are declining, but still stand at around one in four over the past 18 months. Access to appropriately regulated alternative sources of finance can provide a real counterbalance to the mainstream banking sector.

I fully agree with the noble Lord that we should seek transparency on the availability of alternative forms of finance. I disagree, however, that a new review is necessary as it would duplicate existing publications on small business finance. One of these publications is the British Business Bank’s report on small business finance markets, which was published in December 2014. Its main focus was on the increasing use of alternative forms of finance by small business. I believe that this is what noble Lords are largely seeking from this clause. I can confirm that the British Business Bank intends to publish its small business finance report annually. I am happy to commit today to place this report in the Library of the House when it is published again this year.

The British Business Bank’s publication sits alongside a number of other independent pieces of research into this important subject, including the Bank of England’s quarterly Trends in Lending report, last published in January, the quarterly independent SME Finance Monitor, most recently published last week and Professor Russel Griggs’s report on the banks’ lending appeals process, published this week.

My response to the noble Lord would not be complete without touching on an even more important report—the work of the Competition and Markets Authority, the new, independent competition regulator. The CMA is conducting a market investigation into the retail banking sector, including the provision of banking services to small businesses. It has a wide range of powers available if it finds there are problems in the sector. The existence of this investigation helps to respond to the points made by the noble Lord, Lord Myners. The CMA is due to report by April 2016 and I know that it will be of huge interest to this House. The Government will then respond to any recommendations made within 90 days. Any legislation that follows this response would, of course, be subject to parliamentary scrutiny in the usual way. I believe that we should let the regulator do its job and not pre-empt its recommendations with a concurrent review by the Secretary of State of how the banking sector is catering for the needs of SMEs.

Finally, I draw the noble Lord’s attention to the positive measures in this Bill to promote access to finance. Clause 1 removes a contractual barrier to invoice finance. Clause 4 provides for greater sharing of information through credit reference agencies. Clause 5 provides for the UK’s larger banks to be required to refer rejected finance applicants on to alternative finance providers. These provisions got a good degree of support across the House in Committee. I believe that all these measures will make a real difference to the availability of alternative finance for small business. Given the activity described, I am not convinced that a further report as proposed in this clause would be of merit. I hope that the noble Lord will feel reassured by what I have said and that he will feel able to withdraw his amendment.

[Lord Mitchell]

I thank the Minister for her reply. I thank the noble Lord, Lord Cope, for his insightful addition to what was said and on reflection I think that he may have a point on Clause 4. I also thank the noble Lord, Lord Leigh. He and I know each other well. I have never before heard the statement that he made but he has my email so he knows exactly where to send it. I also thank the noble Lord, Lord Myners—I find it very hard to say that and am tempted to say “my noble friend”—for making the comments that he did. I have always felt that the banks are, and act like, a cartel and that you cannot tell one from the other. It is really good that they are now starting to change and are being forced to change. If my particular area—digital technology—is making that happen, so much the better. Crowdfunding has been very exciting but many of the new challenger banks have been able to come into this because of the technology they are using. That is absolutely fantastic.

I thank the noble Baroness for her comments and feel very reassured that the Government are working in this direction. The facts are really clear. Whether we are in government or not, I would like to be standing here in a year’s time having a conversation like this with the facts at hand. I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

Clause 13: Electronic paying in of cheques etc

Amendment 7

Moved by

[Lord Newby]

7: Clause 13, page 13, line 18, leave out from second “instrument,” to end of line 19 and insert “if”

[Lord Newby (LD)]

My Lords, Amendments 7 to 19 and 84 make two technical but essential changes to the cheque-clearing provisions relating, first, to consistency in the treatment of cheque and non-cheque paper instruments and, secondly, to the continuation of current statutory protections for the paying customer.

Amendments 7 to 9 and 19 are designed to ensure that non-cheque instruments, such as warrants and travellers’ cheques, are treated in the same way as traditional paper cheques under the new provisions for electronic presentment. Under the new legislation for cheque imaging, as currently drafted, it would be possible for corporate customers and other large non-bank customers to make arrangements to submit cheque images directly to the central switch that clears cheque transactions for all member banks, rather than their bank submitting images on their behalf. This would make the clearing process more efficient. However, the current drafting means that this option will not be available for non-cheque paper instruments that are not drawn on a bank.

The Government’s policy intention is to provide for a system that treats cheques and non-cheques in the same way, and therefore it is necessary to make these amendments to ensure the equal treatment of non-cheque instruments in all circumstances of presentment. On the basis of current practice, this approach does not present any difficulties. However, it is possible that the position could change in the future—for example, as a result of the development of new types of instruments that do not currently exist. For this reason, Amendment 9 confers a power on the Treasury to restrict the circumstances in which presentment by image is permissible. This power is intended to be used to deal only with any unforeseen issues that may arise in the future and could not be used to have any retrospective effect on instruments that have already been presented by image. It is subject to the affirmative procedure.

Amendment 12 is intended to ensure the continuation of current statutory protections for the paying customer. Under the existing cheque clearing system, a customer who makes a payment with a cheque can request the original cheque to be stamped “paid”, which stands as prima facie evidence that the payee has received the amount payable. This provides a protection for the payer in situations where the payee claims that they have not received payment.

The legislation for cheque imaging does not provide for an equivalent protection when cheques or other paper instruments are paid in by electronic image and the physical instrument does not end up in the possession of a bank. It has become clear that the loss of this protection would remove a useful service currently relied upon by some cheque users. Therefore, it is necessary to make an amendment to preserve this type of protection for the paying customer under electronic cheque clearing. This amendment will confer a power on the Treasury to make appropriate provision in regulations, subject to the affirmative procedure, because the precise nature of the evidence to be provided to the payer may depend on the technical design of the clearing system. The regulations will be able to set out the nature of the evidence to be provided to the payer and the effect of that evidence, including the weight to be given to such evidence.

Amendments 10, 11, 13 to 18 and 84 are consequential amendments dealing with the procedure for making regulations under Amendments 9 and 12, and they provide minor and technical clarifications of the drafting.

To conclude, these amendments will ensure that the provisions for electronic presentment treat cheques and non-cheques consistently and that existing customer protections continue under the new system. I beg to move.

[Lord Stevenson of Balmacara]

My Lords, I welcome the contribution to this debate by the noble Lord, Lord Newby, and for his helpful explanation of the matters that are being considered by this large group of amendments. We had a fair bash at this in Committee, so I was a little surprised to see so many additional regulations on this matter, particularly as this is an attempt to simplify rather than make more complicated an already rather obscure area of financial transactions. Indeed, in some senses these amendments seem to take us back rather than forward in that they seem to provide a bolstering of a paper-based or evidence-based solution to a number of things that one would have hoped could have moved on to an electronic age. But I am sure that the intention behind them is entirely correct, and we support the general direction of the move.

I wanted to pick up on one point. In the wording of the amendments on the Marshalled List there is reference to the power for the Treasury to make regulations, but it does not specify how they are to be exercised in practice. I agree that the number of occasions will be limited, but the Minister mentioned that the first group would be subject to the affirmative procedure and did not say anything about the second or third groups and whether they would be subject to the negative or the affirmative procedures. Could he clarify that for me please before we leave this point? If it is too difficult to do now, I am very happy to have that in correspondence, but we have no objection to this in general.

[Lord Newby]

My Lords, I think I said that the second group would be subject to affirmative resolution. My understanding is that the two issues that we are debating will both be subject to the affirmative procedure. If I am mistaken, of course I will write to the noble Lord.

Amendment 7 agreed.

Amendments 8 to 19

Moved by

[Lord Newby]

8: Clause 13, page 13, line 22, after “to” insert “regulations under subsection (1A) and to”

9: Clause 13, page 13, line 22, at end insert—
“(1A) The Treasury may by regulations prescribe circumstances in which subsection (1) does not apply.
(1B) Regulations under subsection (1A) may in particular prescribe circumstances by reference to—
(a) descriptions of instrument;(b) arrangements under which presentment is made;(c) descriptions of persons by or to whom presentment is made; (d) descriptions of persons receiving payment or on whose behalf payment is received.”

10: Clause 13, page 14, line 12, leave out “is” and insert “appears to be”

11: Clause 13, page 14, line 37, leave out second “banker” and insert “person”

12: Clause 13, page 14, line 37, at end insert—
“89CA Copies of instruments and evidence of payment
(1) The Treasury may by regulations make provision for—
(a) requiring a copy of an instrument paid as a result of presentment under section 89A to be provided, on request, to the creator of the instrument by the banker who paid the instrument;(b) a copy of an instrument provided in accordance with the regulations to be evidence of receipt by a person identified in accordance with the regulations of the sum payable by the instrument.(2) Regulations under subsection (1)(a) may in particular—
(a) prescribe the manner and form in which a copy is to be provided;(b) require the copy to be certified to be a true copy of the electronic image provided to the banker making the payment on presentment under section 89A;(c) provide for the copy to be accompanied by prescribed information;(d) require any copy to be provided free of charge or permit charges to be made for the provision of copies in prescribed circumstances.(3) The reference in subsection (1)(a) to the creator of the instrument is—
(a) in the case of a bill of exchange, a reference to the drawer;(b) in the case of a promissory note, a reference to the maker.”

13: Clause 13, page 14, line 43, leave out “subsection (1)” and insert “this section”

14: Clause 13, page 15, line 47, at end insert—
“89E Supplementary”

15: Clause 13, page 15, line 48, leave out “section” and insert “Part”

16: Clause 13, page 16, line 7, leave out “section” and insert “Part”

17: Clause 13, page 16, line 9, leave out from “containing” to “may” in line 10 and insert “—
(a) regulations under section 89A or 89CA, or(b) the first regulations to be made under section 89D,”

18: Clause 13, page 16, line 12, leave out “this section” and insert “section 89D”

19: Clause 13, page 16, line 14, at end insert—
“(12) For the purposes of this Part, a banker collects payment of an instrument on behalf of a customer by—
(a) receiving payment of the instrument for the customer, or(b) receiving payment of the instrument for the banker (but not as holder), having—(i) credited the customer’s account with the amount of the instrument, or(ii) otherwise given value to the customer in respect of the instrument.(13) Section 89D(4) applies for the purposes of subsection (12) in its application to section 89D.””

Amendments 8 to 19 agreed.

Clause 17: Review of regulators’ complaints and appeals procedures

Amendment 20

Moved by

[Lord Stevenson of Balmacara]

20: Clause 17, page 19, line 14, at end insert—
“( ) The following regulators are excluded from the provisions outlined in this section—
(a) the Equality and Human Rights Commission;(b) the relevant regulators in—(i) the Department of Health;(ii) the Department of Transport;(iii) the Department for Work and Pensions;(iv) the Department for Business, Innovation and Skills;(v) the Department for Culture, Media and Sport;(vi) the Department for Communities and Local Government.”

[Lord Stevenson of Balmacara]

My Lords, my noble friend Lady Thornton would have preferred to have been in her place on this matter, but unfortunately she has suffered an unexpected bereavement. I am sure that your Lordships’ House would wish to send her its commiserations and hope that she is in good spirits at this difficult time.

The question of whether the Government have the relationship with the EHRC correct has featured on a number of occasions in this Bill and the Deregulation Bill. The Minister will be aware that the EHRC enjoys an A status as a national human rights institution. It is therefore right that on all occasions the Government are crystal clear that it is not appropriate to apply general regulations to the EHRC. The A status is awarded by the United Nations International Coordinating Committee of National Human Rights Institutions, which regularly reviews the EHRC’s compliance with the United Nations Paris principles, which require the EHRC to be an independent body.

We have to avoid the reality, or indeed the perception, of interfering with the commission’s ability to perform its regulatory functions and ensure that it is always and at all times independent. If that were jeopardised, it would in turn jeopardise the A status, which is generally agreed to be of importance to the UK’s international standing and reputation. For example, it enables the UK to influence the protection of fundamental rights globally and gives us a voice at the United Nations Human Rights Council. Any downgrading of the commission’s status would have a significant negative impact on the UK’s global influence.

The amendment also deals with regulators in other departments unspecified, which suggests that there may be regulators within each or any of the departments that might have the same characteristics as those applying to the EHRC. In some senses, that is a reflection of the fact that we are still in discussions within the Deregulation Bill about exactly how this process will be developed.

We understand—the Minister may be able to confirm—that it has now been decided to exclude at least one regulator in the Department of Health. If that is the case, the exclusion should also appear in the Bill, as that of the EHRC will if the amendment is accepted.

17:30

When she replied to this debate in Committee, the Minister said that this amendment was not necessary, primarily because the list of regulators to which the small business appeals champion provisions can apply will be set out in regulations and that, because these will be taken under the affirmative procedure, there would be adequate control of the process. It is well established within this House, and Parliament generally, that it is not possible to amend secondary legislation. Therefore, this is not really the answer to the question of whether it is appropriate to bring forward a list of specified regulators in secondary legislation. There are three main reasons why the Government should accept this amendment, which would provide clarity.

The first, which has already been mentioned, is the need to protect the EHRC from any possible imputation that it is not independent. Secondly, the noble Baroness herself argued that financial regulators should be excluded from the Bill because they already have an extensive statutory framework for engaging with business stakeholders. This makes it easier for other regulators in the other departments mentioned to be excluded. Following the line taken on financial regulators, it would be appropriate to think about whether there are specific regulators to which similar arguments apply and they should also be listed in the Bill. Thirdly—and more generally—it provides the opportunity for regulators to have uncertainty about their position removed, because they will not have to wait for secondary legislation to come forward to know whether they will be included in a future regulatory provision. As we all know, uncertainty is very bad for business.

The Minister said in Committee that she agreed that there may be regulators for which the growth duty—an issue that is for the Deregulation Bill, not this one—is not appropriate, but she did not think it would be appropriate to start excluding certain regulators within the Bill because,

“regulators may change over time and it is important that there is flexibility to amend the list accordingly”.—[Official Report, 12/1/15; col. GC 100.]

As I have tried to explain, the opportunity for flexibility is not given, because the secondary legislation process does not provide it. Real flexibility would be to determine now which regulators go into the Bill and which do not. That is why the amendment would be important in making sure that there is clarity. I hope the Minister will accept that there is at least a case for looking at this issue again and, perhaps, coming back to it at Third Reading. I beg to move.

[Lord Deben (Con)]

I do not find the second half of the amendment compelling, but the first half is very important indeed. The EHRC has a very special role in society and it is looked at very carefully by people outside. The Government have to be super-careful: we know perfectly well that this will not, of course, interfere with the EHRC. This is not, in any way, some sinister operation, but there are people out there who will find sinister operations in anything, particularly when one is dealing with something as delicate as the issues with which the EHRC is concerned. The trouble is that the mischievous people come from both ends of the spectrum: one end wants the EHRC to be more dominant and expansive in its role and the other end wants to have as little to do with it as possible. It is, therefore, important that the wording is right and I hope that my noble friend will have been able to consider this, both in relation to this Bill and on the other occasion that this issue has been raised. I hope she understands that this is not because either side really thinks that there is something here that is wicked or hidden and being covered up. It is simply that there is a very blanket view from outside and it is quite hard to see why it is so difficult to exclude the EHRC. I very much hope that my noble friend will be able to help on that part, at least. The other part of the amendment is probably otiose: I shall not argue with it but I would not want to support it. However, the EHRC is particular, special and has a real reputation in the rest of the world that we do not want to see undermined.

[The Earl of Lindsay (Con)]

My Lords, I also have a problem with a large part of the amendment. I disagree with the argument of the noble Lord, Lord Stevenson, that putting some departments and regulators in the Bill would make it more flexible than using secondary legislation. The Bill provides a requirement for that secondary legislation to be debated by Parliament. My other concern is the very wide exemption that the amendment suggests for a large number of regulators that fall under the six departments cited. This would undermine and threaten a policy that has been developed specifically to support small businesses and would send an unhelpful message. The policy is simply aimed at improving the appeals and complaints processes of a regulator when dealing with small businesses.

We should not forget that driving greater efficiency, accountability and transparency into the interaction between regulators and those they regulate has to make sense, as does having a simpler, more effective, more transparent, less costly and better understood series of processes by which small businesses are able to challenge regulators’ decisions and behaviour. Ensuring that regulators have appeals and complaints processes that work well and are fit for purpose, that rectify wrongs with minimal delay and are sensitive to small businesses—and micro-businesses in particular—must be good news for the economy as well as for the objectives that regulators are seeking to deliver. I would be very uneasy at the thought of the Bill exempting the number of departments and the very large number of regulators that the amendment proposes. I agree about the EHRC, but I understand that the Government will use secondary legislation to exempt it from this section.

[Baroness Neville-Rolfe]

My Lords, I thank the noble Lord, Lord Stevenson, for his comments on Amendment 20, which would restrict the regulators to which the provisions on small business appeals champions can apply. It was also good to hear from my noble friends Lord Deben and Lord Lindsay.

Clause 18 already provides that the list of regulators to be covered by the appeals champions should be set out in regulations. A consultation on the list of regulators closed in January. We intend to publish a summary of the consultation and our response before Parliament rises, based on careful consideration. The Government’s response will then become the basis of the regulations which will bring regulators into scope. These regulations will be subject to affirmative resolution, so Parliament will have the opportunity to consider which regulators should be on the list. On other occasions, the noble Lord, Lord Stevenson, has called for just that affirmative resolution. Although the consultation has closed, we shall take into account representations that noble Lords have made during discussions on the Bill. I am coming on to reassure about the EHRC, but I encourage any noble Lord who has particular concerns about anything else to let me know: we will give them a fair hearing.

Listing inclusions and exemptions would make the Bill cumbersome and unwieldy. Pre-empting our case-by-case consideration through a blanket exemption is not the right way ahead. The amendment first seeks to exclude the EHRC. Noble Lords have linked this to the protection of the EHRC’s A status as a national human rights organisation. The Government share the determination to protect the commission’s status and we understand that, as a regulator, the EHRC is different and needs to maintain its independence from government.

The Government’s position is that the EHRC will not be in the scope of the champions policy. It was not included in our consultation on the list of regulators to be brought into scope. No specific regulatory functions of any other particular named body are listed for inclusion or exclusion in the Bill and it is not necessary to do so in relation to the regulatory functions of the EHRC. Doing so would set a precedent that might lead to overly complex legislation. We have never proposed to include the EHRC, and today I can make a commitment not to do so. The Government will not include the EHRC in the small business champions policy. I hope that noble Lords will accept that full, unequivocal and repeated assurance. In Committee, the noble Baroness, Lady Thornton, was kind enough to accept my assurance on this point, and the majority of noble Lords accepted similar assurances in respect of the growth duty during the passage of the Deregulation Bill. I hope that the House will be willing to do the same today.

The second part of the amendment proposes to exclude any regulator belonging to a list of departments. The proposal would exclude more than half of the regulators we propose to include. Many of them have considerable contact with small businesses. There is broad support for small business appeals champions to make sure that businesses have effective routes to regulators. The amendment would deny that assurance to care homes, which need to challenge rulings by the Care Quality Commission or businesses challenging inspections by the Health and Safety Executive. I do not understand why we should emasculate a policy that has such widespread backing.

The noble Lord, Lord Stevenson, asked whether the Government had decided to exclude a health regulator from the appeals champion policy. We have made no decisions yet, and we shall do so on a case-by-case basis. As I have said, if any noble Lord or regulator is in this situation, they should make representations to us. We intend to make a decision on the list and publish our response before the end of the Parliament.

This is not the growth duty. This is simply a policy that aims to improve public administration and provide an assurance that regulators have the procedures and processes in place to support business appropriately. We all agree that small businesses need a better deal, and we should be aiming to apply this policy to regulators where possible rather than looking at potentially wide exemptions. I hope that, in the circumstances, the noble Lord will feel reassured and that he will agree to withdraw the amendment.

[Lord Stevenson of Balmacara]

I thank all those who have contributed to the debate. Perhaps I may make one or two points about it. I would say to the noble Earl, Lord Lindsay, who obviously has great knowledge of and experience in this area, that I can understand why he might think so. However, I draw his attention to the fact that the intention in the second part of the amendment is to select a group of regulators equivalent or similar to the EHRC in the sense that they are required to be taken out of a broader approach. It does not attack all the regulators in a department. If he misunderstood that, I apologise, but it is clear that what we are trying to do here is to say that because we were not involved in drawing up the list of regulators, we are not absolutely clear which are in and which are not. In that sense, it is imperfect and we would have to be quite inventive, if the amendment were to be accepted, to come to the right conclusion. I accept that it is not as well done as it could have been. However, it has provoked a good debate and that is the point. Indeed, the noble Baroness has already accepted that there may be one or two regulators that might well be included in the list of the growth duty within the Deregulation Bill. That might not be appropriate for small businesses—and vice versa. We are in a situation where we are not sure how the lists will bottom out. It is that unease which I was trying to attack, and in that sense I hope that the noble Earl is reassured on the point.

It is worth reflecting on the fact that, to do what is required in the Bill, as I understand it, appointments would need to be made to various regulators at board level. That would have an impact on how these bodies operate. I do not think it is an entirely free-riding champion helping to resolve appeals. These are people who, by their constitutional and statutory position, will have to have an involvement in the day-to-day work of these regulators. By accepting this, we are accepting by implication that there will be a change—perhaps a beneficial one—to the way that some regulators will operate in the future; they will not do so as they were originally set up. Again, that is what I am trying to reflect in this debate.

However, I accept that, as presently drafted, the amendment would not achieve the ambitions we had for it and there may be better ways to approach this. It may be that the rather convoluted process whereby I think the noble Baroness was inviting individual Members of your Lordships’ House to write in with special and favourite regulators to be excluded will mean that we arrive at a resolution in an appropriate way. I am sure that this will come out all right in the wash, but at the moment it seems rather a complicated way of doing it.

I will say again that it will not be possible for either House of this Parliament to pick and mix within the secondary legislation. Either it must be accepted as it stands or we can vote against the whole of the SI. It is not fair to say that we will have a choice at the time when these regulations are going through. The choice will have to be made outside Parliament and before the Government, whichever Government they are, put forward the secondary legislation. We have to be realistic about the fact that there will not be the same level of scrutiny.

I broadly take the points which have been made. It will be interesting to see how they go through. We made it clear in Committee that we are not against the idea of there being appeals business champions, as it were. I think we agreed that we would call them “small business champions” in relation to regulation. It is a good idea but I am not quite sure whether it will work in practice; only time will tell.

Finally, on the EHRC, I am grateful to the noble Lord, Lord Deben, for his consistent support for this issue. If it is so clear in the minds of Ministers that the EHRC is not, will not and never can be part of the processes involved in this Bill or in the Deregulation Bill, why on earth can they not just accept that it would be sensible to table an amendment at Third Reading stating that the EHRC is not involved? That would peradventure put beyond doubt the question of whether the EHRC is ever around. There may be evil forces at work and there may not. We do not think there are, and we are not looking at it with suspicion. However, enough damage has already been done to the EHRC, for heaven’s sake, and what is left of it needs to be protected. It would be a positive and rather a noble thing for the Government to accept at this stage that it would be right to have that line in an amendment, just because the EHRC is so special, as the noble Lord said, and to be super-careful because of the particular nature of the commission. That is for the Minister to reflect on and perhaps to come back at Third Reading.

17:47

[Baroness Neville-Rolfe]

I very much take the point that the noble Lord has made. I am happy to consider whether we could put the EHRC into the Bill, but whether I can do that, I am not sure. Giving the commission that clarity seems to be widely supported around the House.

[Lord Stevenson of Balmacara]

That is a very generous offer and I think it would solve an awful lot of problems. Indeed, we have been discussing it week after week for the past two or three months. I would be very pleased if she can do this, but I repeat that I am happy to withdraw the amendment at this stage.

Amendment 20 withdrawn.

Clause 19: Guidance by the Secretary of State

Amendment 21

Moved by

[Baroness Neville-Rolfe]

21: Clause 19, page 20, line 1, after “must” insert “—
(a) ”

[Baroness Neville-Rolfe]

My Lords, government Amendments 21, 22 and 23 respond directly to our Committee debates regarding the small business appeals champion and the business impact target. Regarding the champion, the noble Lord, Lord Mendelsohn, made a number of helpful observations about how it might work in practice. He was keen to ensure that any guidance issued to the champions should be laid before both Houses as well as published. I made it clear in Committee that this was already our intention and I am pleased to confirm it with Amendments 21 and 22.

I turn now to the business impact target. I thank the noble Lord, Lord Stevenson, for his comments in Committee regarding the scope of the target. In particular, he raised concerns around the clarity of the coverage regarding voluntary and community bodies. I have reflected on this issue and I agree that there is more that we can do in the Bill to clarify it. I have therefore tabled Amendment 23, which is a relatively straightforward provision to simplify Clause 27(5). It will remove the current membership threshold of at least 21 individuals for unincorporated bodies that do not distribute any surplus to their members. As I am sure many noble Lords will be aware from their own work in the voluntary sector, such bodies can be adversely affected by redundant, ineffective or excessively burdensome regulation, just as much as businesses can. Therefore, including them within the scope of the business impact target makes a lot of sense. It will not harm the voluntary sector, but will help to ensure that any burdens from new regulations are minimised and that there is transparent reporting of impacts.

This Government have already made a number of changes that have made it easier to set up and run charities and social enterprises. Those include providing greater legal clarity on volunteer liability and supporting proposals to make criminal record checks simpler and less onerous. The amendment will mean that such bodies are not excluded from the definition of “small” and “micro” businesses in Clauses 33 and 34, meaning that they can benefit from any regulatory exemptions made by reference to that definition. I hope noble Lords will welcome the amendments, and I beg to move.

[Lord Stevenson of Balmacara]

This must be the shortest amendment ever considered in my time in the House. I look to the clerks for further guidance on these matters. The Minister suggested that we might welcome the amendments; we do welcome them.

Amendment 21 agreed.

Amendment 22

Moved by

[Baroness Neville-Rolfe]

22: Clause 19, page 20, line 2, at end insert “, and
(b) lay any such guidance or revised guidance before Parliament.”

Amendment 22 agreed.

Clause 27: Sections 21 to 25 etc: interpretation

Amendment 23

Moved by

[Baroness Neville-Rolfe]

23: Clause 27, page 26, line 16, leave out sub-paragraph (i)

Amendment 23 agreed.

Clause 28: Duty to review regulatory provisions in secondary legislation

Amendment 24

Moved by

[Lord Stevenson of Balmacara]

24: Clause 28, page 27, line 23, at end insert—
“( ) The Secretary of State shall conduct a review of the current regulatory machinery used to consider regulatory and deregulatory proposals.
( ) The review should include, but not be limited to, the work of the Regulatory Policy Committee.
( ) Following the findings of the review the Secretary of State shall bring forward regulations to enhance the role of the Regulatory Policy Committee and its recommendations.”

[Lord Stevenson of Balmacara]

My Lords, the amendment is in my name and that of my noble friend Lord Mendelsohn.

The amendment might have been raised within the Deregulation Bill, because it deals with the overall architecture of the regulatory framework. Although I am proposing the amendment to Clause 28, to some extent it is possibly echoed in some other phrases and clauses in the Bill. However, it would be useful to get a response from the Government on the issue. I look forward to hearing what the Minister is able to say in response to my comments.

By way of background, I want to reflect a little on the purposes of regulation. The purpose of the amendment is to probe further the Government’s intentions in the changes that they are making to the regulatory machinery, particularly that bit currently undertaken by the RPC, which reflects on secondary legislation and gives the Government an external view of how that regulation will work in practice, particularly in the business area but not restricted to that.

Regulation is a word that we use extensively in this Bill and the Deregulation Bill. It takes several forms, and we should be careful to try not to mix them up too much. There are things that businesses have to do to be compliant, either with industry standards or with health and safety. But there are, in some senses, different types of regulation, including pre-emptive measures by businesses to reduce the likelihood of being sued, inspection-based regulations for food and hygiene standards, and workplace and financial regulations, particularly health and safety. Many of these will offer benefits to businesses outside of simple compliance, but, in many cases, they are there in generic form and do not specifically help an individual business.

It is important to bear in mind that the culture and context within which businesses operate, which we talked about a lot in earlier amendments, results from a combination of legislation and regulation. The two go together and cannot be distinguished, but where they are coming from and what they are trying to achieve must be carefully thought through.

I say all that because the Government have made a virtue of their one-in, one-out approach—now one in, two out. Doing it by numbers has rather taken the eye, rather than trying to lead into proper consideration of what the regulation is about. In some senses, it is a good thing. Simply saying that there has to be a reduction in regulation does focus the mind. But, and I offer this simply by way of observation, I feel that, in the Deregulation Bill, we got a response by numbers and not by intention or principle, which is not necessarily the right way. There may be a better approach, which might be to think harder about what it is that regulation is attempting to do and try to work out, across the various aspects of it, how it could be made more appropriate to the job.

Such an approach really has to answer questions about whether regulation is the right approach or there is some other solution; whether the regulations come from an external force, such as European Union requirements; and whether it will be easy to comply with. These are all areas that follow on from the need that one has. One hopes that, in doing that, the assessments that are made in the preparation of regulation answer those questions and, in aggregate, provide a better environment in which regulation operates. As part of that arrangement, the Government have set up and use an independent body, the RPC, to look at regulations put forward. It provides a kind of “traffic light” solution, which is relatively crude in its outline, as well as some detailed comments about whether the regulations are fit for purpose, whether they will achieve what is intended and whether they need to be rethought in terms of their impact.

If we are to continue to have the approach that I have outlined, which is not just a by-numbers approach but one which reflects the kind of economy that we are trying to build, supporting high-quality skills and other things, and where regulation in totality is fit for purpose and is as good as can be got, there is a role for a body which looks across the totality of government and considers more than just how the Government are proposing regulations but how they will apply. It is a two-sided approach: both looking at the words in the regulations and the impact that they will have, not just on business but on society more generally. One then has to ask what needs to be set up in order to do that.

As I understand it, Clause 28 requires departments to review secondary legislation that they propose. In our earlier exchanges in Committee, the impression was gained—I would like the Minister to confirm or deny it—that this would affect the work of the existing RPC, which is very well regarded. It is not entirely clear from Clause 28 what exactly is happening here, so I would be grateful if we could have more detail on that. Will the RPC be made statutory? Will there be more bodies that each department will have? Will the new arrangements being introduced be limited to secondary legislation or will they have a wider remit, as has the RPC, for all regulation, including regulation that impacts on other groups such as consumers, charities and other bodies?

Where will responsibility for the new system lie within government? Will it be within BIS or will it go to the Cabinet Office? That would be a more logical place to locate it, because the arrangements have to apply around Whitehall and not just within the business department.

The primary purpose of the amendment is to add some more detail to what was said in Committee and to enable us to reflect more carefully on the position of the RPC. I beg to move.

17:59

[The Earl of Lindsay]

My Lords, in moving the amendment in his name and that of the noble Lord, Lord Mendelsohn, the noble Lord, Lord Stevenson, raises a number of interesting issues. I am delighted to be able to share many of the sentiments that lie behind the proposal, having served both the previous Government under both their Prime Ministers and this Government on a number of independent bodies advising them on better regulation.

While supporting and sharing the sentiments that lie behind the amendment, I am not completely convinced that the Bill is the right place in which to progress them. I am also concerned that, as written, there could be unintended consequences.

I wholly agree that the Secretary of State should be reviewing the current regulatory machinery used to consider regulatory and deregulatory proposals. I would prefer to see—which I believe is the case—the relevant Secretary of State regularly reviewing the entire regime that oversees regulation and deregulation; so rather than it being a one-off exercise, this, as it were, should be a regular exercise undertaken by any Government.

Going on to the next part of the amendment, I also agree that the scope of the review should include the RPC, but not be limited to the RPC. That is absolutely right. Not only are regular reviews very important, but the reviews should be very broad and should cover the broad scope that the noble Lord, Lord Stevenson, set out in terms of the landscape that surrounds and underpins legislation and determines the culture that produces legislation, regulation and so forth.

The ecology of regulation is certainly a very long and quite complex one. The review should look at how the better regulation machinery deals with policy-making prior to regulatory proposals being brought forward. It should look, as the RPC does, at specific proposals that come forward, but it should also look at compliance and enforcement issues. As the noble Lord, Lord Stevenson, mentioned, it should also look at the extent to which alternatives to regulation are properly considered. I share the motives behind this amendment, but, as I said, I have concerns about the exact proposal for putting this in the Bill.

In terms of the possible unintended consequences, it is the third part of the amendment that I have some concerns about. It is, to an extent, pre-emptive. To have a review of the better regulatory regime, and then presume that it must be the RPC that needs to be strengthened, is almost pre-empting the outcome of any such review. I wholly agree with the noble Lord that, at the moment, the RPC is the best show in town. It is doing an excellent job. It is well established, very well respected and extraordinarily effective. It is providing robust and independent scrutiny and analysis, supporting new regulatory proposals.

At 3 pm today I went to the launch of the RPC’s latest annual report. It was a well attended event. It looked back at the work it had done since 2010, over the lifetime of this Parliament. There are some very impressive statistics in the report. For example, it has managed to drive an improvement in the percentage of impact assessments from departments that are judged to be fit for purpose to around 80%. That is a much higher percentage than was the case in 2010, and some departments are achieving a much higher percentage than 80%. If noble Lords read nothing else but the executive summary, they will see a page or two of very impressive achievements elsewhere on what it has managed to deliver by way of progress. Further to the remarks of the noble Lord, Lord Stevenson, in those five years the RPC has scrutinised more than 1,200 regulatory proposals and issued just over 2,000 opinions on the quality of the evidence base supporting those proposals. It has done an extremely important piece of work throughout the past five years. I agree that the RPC’s role is absolutely fundamental to the current better regulation regime.

If we had been debating this matter eight years ago, we would have said that the Better Regulation Commission was the best show in town. A similar amendment then would have suggested putting the BRC in the Bill. If we had been discussing it 12 years ago, we would have said that the Better Regulation Task Force was the best show in town and would have suggested putting that in the Bill. One of the strengths of the better regulation effort by successive Governments over the past 10 to 15 years has been its ability to evolve. My concern about the last part of this amendment is therefore that it presumes the continuity of the current body. The RPC is, as I said, doing an extraordinarily effective job at the moment; but given what we have learnt from the past 15 years, it is not unlikely that we might eventually want either the RPC to evolve into a successor body or to create another body alongside it to broaden its duties or scope.

The last chapter of the RPC annual report which was launched today deals with the future. It is a very interesting chapter in that the RPC speculates, with the experience it has gained, on how it could be more effective and how the better regulation effort could be more effective in the years to come. Although I favour leaving the Bill as it is, the noble Lord’s comments in moving the amendment, and the issues which the amendment raises, are very important. The Secretary of State should regularly conduct major reviews of the machinery and landscape surrounding regulation. Those reviews should be very broad-ranging and should look both at current bodies and at new bodies that may be sensibly developed in the future. In the mean time, I welcome that the Bill provides for the continuity of the role that the RPC performs and the outcomes that it delivers. That is the most important thing—that the role is undertaken and the outcomes achieved.

Under the business impact target, the Secretary of State must appoint an independent body to verify the impact of new regulations that are scored under the target. That is set out in Clause 25 and has been welcomed by the RPC. I agree that it is an important signal that independent scrutiny will continue to play a central role under any future Administration. The current arrangements under the RPC are working very well, and the RPC has developed a strong foundation for the future. However, to assume that the current machinery will be the right machinery in three or five years’ time might not be the best way to proceed with the Bill. Otherwise, I welcome the issues that have prompted the noble Lord to table this amendment.

[Lord Popat (Con)]

I thank the noble Lord, Lord Stevenson, for his amendment and for his comments on the work of the Regulatory Policy Committee. I liked his comment on the “traffic light” solution. Indeed, I give credit to the party opposite for its decision to establish the RPC in the first place. That created an important and enduring cornerstone for the regulatory machinery—one which this Government have continued to develop and improve.

The amendment requires the Secretary of State to review the current regulatory machinery used to consider regulatory and deregulatory proposals. Of course, such reviews already take place from time to time. They look both at the distribution of responsibilities between different bodies, and at the specific rules and requirements. When this Government came into office, they carried out their own review as to what arrangements were required to deliver their key policy priorities for better regulation. Critically, that involved a strengthening of the RPC’s independent scrutiny role.

The Government carried out a further review in 2012, when some useful changes were made, including a “fast track” route for proposals whose impact on business is modest. That change has helped make the system more efficient for both departments and the RPC. I am sure that the Government will ensure that reviews of the system will continue to take place as and when necessary. Given the terms of the amendment, I am equally sure that the Opposition, were they to be in our place, would do the same.

However, the benefit of reviews needs to be balanced against the need for stability in the system. This is why, for example, the appointment of the verification body under the business impact target in Clause 25 is required to be for the duration of a Parliament. An open-ended duty to review, as proposed in this amendment, could potentially undermine that stability and as a consequence put at risk a future Administration’s ability to deliver against the business impact target. It would also generate uncertainty for stakeholders about the wider regulatory system.

The amendment also requires that once a review of the machinery has been completed the Secretary of State must bring forward proposals to enhance the role of the RPC. The Government are by no means opposed to expanding the role of the RPC where it can add value—in 2013, we asked the RPC to scrutinise the new small and micro-business assessment—but it is very odd to create a statutory commitment to a further expansion of the RPC’s role in advance of the review that the amendment envisages.

The noble Lord, Lord Stevenson, asked whether the Government were legislating for the RPC. We are legislating to underpin the business impact target with robust independent scrutiny. Clause 25 requires the Secretary of State to appoint an independent body to perform that verification function. The proposals in the Bill entrench in legislation the verification role currently performed by the RPC but do not change the status or independence of the RPC. As regards the status of the RPC, it is an advisory non-departmental public body of BIS. It is not established in statute and does not have a separate legal personality. Its members are independent from the Government.

There is cross-party support for the RPC, the wider framework within which it operates and the principle that, from time to time, that framework should be reviewed. We can rely on that consensus to secure such reviews when they are needed. We do not need a statutory provision to do so. I hope that the noble Lord will be persuaded by my explanations and will agree to withdraw his amendment.

[Lord Stevenson of Balmacara]

I thank the Minister for that response and also the noble Earl, Lord Lindsay, for his comments. We are at exactly the same place on this. I was only a bit sad that I got caught out trying to have my cake and eat it by sketching out the work which I think we agree is continuing and necessary, which will be to think harder about the regulatory functions, how best they can be delivered and—constructively and creatively—how best to do that work of review and scrutiny. On the other hand, I was taken by the “best show in town” argument: since we need something like this, why not just build on what we have, because it seems to be the best version of the body we all seem to think is necessary?

The Minister is right: the ecology of regulation needs a bit more scrutiny than it sometimes gets. Of course, his work and experience here were instrumental in our thinking on this. Without that scrutiny, we will not be in a very strong place to build on the policy issues we are talking about, and to think harder about the way in which legislation and regulation will bite on individuals, companies and society as a whole. There is not an easy solution. We must just keep it under review.

I note what the Minister said in his response. Maybe we should leave things as they are for the moment, but the lessons need to be taken back to all departments, not just BIS. There may be some argument for BIS perhaps loosening its hold on this and encouraging other departments to have a bigger share of it. Although in some senses that makes it less likely to be effective because there is no champion within government, it might have the impact of raising other people’s game, which would be good. We need more thinking around that—I am not saying that we would necessarily do it at this stage.

The annual report of the RPC is very impressive, as the noble Lord said. The volume of work it does is astonishing, given that it is independent, non-statutory and has no particular locus within government. I do not know how we get these people to do the work they do, but it is a message we might pick up in other areas. With that, I beg leave to withdraw the amendment.

Amendment 24 withdrawn.

Ebbsfleet

Tuesday 3rd March 2015 Lords Chamber

Statement

18:15

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, first, I congratulate the noble Lord, Lord Stevenson, on his excellent timing. With the leave of the House, I shall repeat a Statement made in another place by my honourable friend the Minister for Housing:

“Honourable Members will be aware of the Government’s ambition to create a new garden city at Ebbsfleet and of our intention to establish an Urban Development Corporation to drive forward its development and delivery. I would like to take this opportunity to update honourable Members on the progress we have made.

The country has faced a shortfall in housing for many years, with young people and families struggling to find the homes they want and need, particularly in the south-east. We are committed to increasing their chances, and our programmes to accelerate housebuilding are already seeing results. Our £1.5 billion large sites programme is expected to unlock 100,000 homes by the end of this month and a further 200,000 homes could be unlocked as we take the programme forward. This is in addition to the plans in place to create housing zones on brownfield sites across the country.

Last year, we published our prospectus for locally led garden cities, and we are now working closely to support the development of a new garden town at Bicester, with capacity to deliver up to 13,000 new homes. Our approach is a locally led approach. We invite local areas to come forward without any top-down, centrally imposed requirements. This approach will help make new garden cities locally acceptable and so make them a reality.

With close transport links and large areas of brownfield land, the Ebbsfleet area has huge potential as a place to deliver a substantial number of new homes. It has long been identified as an ideal location for major development—in fact, as far back as the last Government’s Sustainable Communities Plan. Yet, despite these ambitions, progress has been slow and Ebbsfleet remains largely undeveloped. Our plans for Ebbsfleet aim to change that and drive forward this historic development.

At last year’s Budget, the Government therefore announced plans to create a new, locally led garden city at Ebbsfleet, Kent, capable of providing up to 15,000 new homes based predominantly on brownfield land or former quarries. The Government are seeking not only to increase the pace of development but to create high-quality development and to build homes that are supported by local employment opportunities, green space and the necessary infrastructure so that Ebbsfleet becomes a place where people want to live, work and raise families.

To help realise this vision, the Government have announced that up to £200 million of infrastructure funding would be made available to support delivery. We also announced that a new statutory body—an Urban Development Corporation—would be formed to bring real focus on driving forward delivery. Since then, we have been working closely with each of the three local authorities and other partners on the preparatory work to establish the Urban Development Corporation and set the scene for the future garden city. I welcome the cross-party support that the Opposition have given to these proposals.

I am pleased to report that housebuilding is already under way in some areas of the proposed garden city. Last November, I opened the first phase of housing being led by Ward Homes at Castle Hill. Today, Land Securities exchanged contracts with Persimmon Homes for the next phase of 170 new homes at Castle Hill. Much remains to be done to increase the rate of development at Ebbsfleet, but this is welcome progress none the less.

In August last year, we consulted on the proposal to set up an Urban Development Corporation. We set out the powers that we are proposing that the corporation will have, including compulsory purchase powers, the transfer of the planning management powers that are currently exercised by the local authorities and, of course, the ability to invest money to secure the regeneration of the area. In our consultation, we asked for views on the area in which the Urban Development Corporation would operate, the planning powers that it would be granted and the composition of the board. The consultation was supported by an active engagement campaign, and the results demonstrated overall support for the proposal to create a development corporation for Ebbsfleet. In December last year, we published our response to the consultation in which we therefore confirmed our intention to continue with the proposal to establish a development corporation at Ebbsfleet.

The consultation, although supportive, did highlight some areas of concern, such as the impact of development on existing infrastructure. These issues were not unanticipated, and at the Autumn Statement the Government announced that there will be a review of the transport provision for the Ebbsfleet area. At the Autumn Statement, the Government also announced the provision of the first £100 million to fund infrastructure and land remediation to kick-start development, subject obviously to due diligence. We are working closely with local partners to understand the scale of the infrastructure required and how best to accelerate delivery. We want to ensure that, on establishment, the Urban Development Corporation has in place the tools necessary to enable it to hit the ground running. It is crucial that the Urban Development Corporation is able to pick up the reins from the local authorities and deliver on its objectives seamlessly, without causing any unnecessary uncertainty among the local communities and businesses.

In August last year, we appointed Michael Cassidy as the chairman-designate. He was the chairman of the City of London Property Investment Board and has extensive experience in a range of roles across the business and industry sectors. Since his appointment, he has been actively engaging with local partners and the major landowners to develop a shared understanding of the work required to drive forward development.

More recently, we launched the recruitment process for a permanent chief executive. However, as this post will take some months to fill, we are appointing key interim personnel to maintain momentum and continuity. These interim posts will, in the mean time, continue to drive forward not only the set-up of the Urban Development Corporation, but also progress with the work to develop a shared strategy for the garden city. We have also made progress with the process to recruit, through open competition, the remainder of the Urban Development Corporation’s board members. Ninety applications were received and interviews are under way. These will be in addition to the local authority representatives from Dartford, Gravesham and Kent, who, as we have already made clear, will have a seat on the board.

The Urban Development Corporation will develop a shared vision and master plan for the locally led garden city which reflect the views of the local people. However, there is much that can be done in the mean time to set in place the foundations for this work and provide a platform for the Urban Development Corporation to work from. We are therefore progressing with the production of a development framework for the area. This will provide critical baseline data and act as the starting point for the design of the future Ebbsfleet garden city. In parallel, we are preparing the procurement process for a full master plan which can then be taken forward by the Urban Development Corporation. We want the design of the garden city to be as collaborative as possible. We will therefore use this preparatory work to make sure that future master-planning is carried out in a way that encourages the full participation of the local communities and local businesses.

We recognise that there is likely to be a transition period between the establishment of the Urban Development Corporation and the point at which it will be fully resourced to operate as the local planning authority. We are therefore working closely with the local authorities to agree and put in place a service-level agreement. This will enable the local authorities to administer the planning service for the Urban Development Corporation for a transitional period to ensure a smooth handover and develop a partnership to deliver a locally led garden city. We are also pushing forward with the final key stages of the physical set-up of the Urban Development Corporation, putting in place the accommodation and technical facilities needed to ensure that it is fully resourced and equipped to undertake its objectives.

Honourable Members will be aware that, in the other place, the Government tabled an amendment to the Deregulation Bill to change the parliamentary approval procedure from affirmative to negative for the establishment of the urban development areas and Urban Development Corporations. This amendment was accepted and is now part of the Deregulation Bill. I would like to place on record my thanks to the honourable Member for the City of Durham, Roberta Blackman-Woods, for her participation in discussions on how to proceed on this matter. I know she shares my view that we want to see progress in taking this proposal forward.

The Government therefore intend, subject to parliamentary approval, to lay a negative statutory instrument immediately following Royal Assent to establish the Urban Development Corporation. A separate order to grant the Urban Development Corporation planning functions, making it the local planning authority responsible for the development of the area, will be laid at the same time. I trust that this update will reassure honourable Members of the Government’s commitment to drive forward with creating a locally led garden city at Ebbsfleet fit for the 21st century”.

18:25

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for repeating a Statement made in the other place. We are strong supporters of the development of Ebbsfleet and agree with what has been said about it in the Statement about it having huge potential to deliver a substantial number of new homes, which are desperately needed. The development of Ebbsfleet provides opportunities but by all accounts challenges in difficult terrain. We want to see a new generation of garden cities and new towns, and Ebbsfleet could be an important contribution towards such a programme. As the Minister said in his Statement, that is why my colleagues in the other place have sought to work constructively and on a cross-party basis with the Government on the delivery of Ebbsfleet. When because of their tardiness the Government fell foul of the Delegated Powers Committee we supported them on the amendment to the Deregulation Bill. The Minister will be aware that we remain unconvinced that the negative procedure, accompanied by a statutory duty to consult, was the best one for establishing the UDC.

As the Minister in the other place said, my honourable friend the Member for the City of Durham participated heavily in the discussions with the Government on this. She has a strong commitment to the delivery of a new generation of garden cities and has spoken eloquently on these issues in the other place and elsewhere. We of course welcome the forming of a development corporation to drive the development, but we have concerns about the use of urban development corporations to deliver a full programme of garden cities. Perhaps the Minister could take a moment to say in what way the garden city principles are to be encapsulated by the Government in the plans for Ebbsfleet. As he knows, UDCs are not set up to deliver garden cities or developments formed on the basis of garden city principles. That is also why we pushed for the inclusion of a sunset clause in what was then the Infrastructure Bill.

Although we welcome the initiative that the Government are taking to set up a UDC, it is safe to say that over the past five years they have given mixed messages on Ebbsfleet and garden cities. These were summarised by my honourable friend Emma Reynolds MP. She reminded us that in 2011, the then Housing Minister spoke about “rebooting” garden cities. Three years ago the Prime Minister announced that he would be publishing a consultation on garden cities by the end of the year. Six months later, the Deputy Prime Minister said that there was some lively debate going on within Government, but promised incentives that would deliver projects that were “big and bold”.

In December 2012 the Government announced that Ebbsfleet would be a site for the large-scale development of 20,000 homes. Early last year, instead of the big and bold projects that were promised, there were reports in the newspapers that the Prime Minister was suppressing a document and had gone cold on the idea. In January last year the then Housing Minister said that he was not aware of a report that was supposed to have been published, but the Deputy Prime Minister said that there was a prospectus and that the Government should be honest about their intentions. Then the Secretary of State contradicted his Housing Minister and said that he had been told by his department that there was a report, but not a report from the Department for Communities and Local Government—so that is all very clear.

In the Budget, the Chancellor announced that there would be a new garden city at Ebbsfleet with 15,000 homes. But today we should not be churlish. We finally have the welcome step of the setting up of a development corporation, but after five years of confusion and lots of announcements but very little action, I am afraid that many people will have concluded that this Government are not serious about tackling the housing crisis.

I shall conclude with a few questions. The Government made it clear earlier in the year that, once established, the Ebbsfleet urban development corporation would be expected to identify sources of additional funding further to the £200 million earmarked by the Government for basic infrastructure. Will the Minister tell the House how much additional funding is necessary to get Ebbsfleet moving and whether this additional funding has been identified from the private or public sector?

Will the Minister explain why he has not mentioned affordable housing today? Can he reassure the House that in the master plan there will be a commitment to a significant number of affordable homes? The Government’s garden city prospectus invited communities to come up with garden city proposals—or “big and bold” projects, as the Deputy Prime Minister called them. Will the Minister tell the House how many bids have come forward so far? Finally, will he say why is it thought that the urban development corporation is an appropriate model for the development of garden cities?

I reiterate that we support the development of Ebbsfleet. Now is the time to make real progress after the delays of recent times.

[Lord Ahmad of Wimbledon]

My Lords, I record my thanks and those of the Government to the Opposition and, in particular, to the noble Lord, Lord McKenzie, for his co-operation and support in the discussions that we have had about the Ebbsfleet development. Indeed, the noble Lord suggested the sunset clause he alluded to, which was taken up by the Government. I thank him for the constructive discussion we had in this regard on the important issue of moving forward.

The noble Lord asked a series of questions, and I will address them. He mentioned the importance of housing and the need to move forward. The Government share that objective, and we are driving forward on a raft of different initiatives that I referred to in the Statement I repeated.

The noble Lord raised the issue of the principles of garden cities, with specific regard to Ebbsfleet. We do not seek to prescribe what a garden city will mean at Ebbsfleet. That will be for the UDC to establish with the local community—but, as noble Lords would expect, we expect it to include good-quality design and green space. The noble Lord asked why a UDC was necessary and perhaps answered that question in that, as I mentioned in the Statement, we have seen delays on the development at Ebbsfleet, and the UDC will provide the necessary focus and commitment in ensuring that we move development forward in this area.

The noble Lord asked a series of other questions about the funding of the Government’s commitment. Again, it is for the UDC to establish what is needed and to make progress with development in the Ebbsfleet area—which will be the funding over and above the £200 million. He also asked about the garden city prospectus and said that there was confusion about whether it existed, whether it was a secret report and where it sat. It is not a secret report; the Government’s position is set out in the prospectus.

The noble Lord asked about the number of bids. I have announced Bicester—I mentioned that in the Statement I repeated—and we continue to work with other places interested in the delivery of large-scale development and garden city principles through the large-sites programme.

Once again I thank the noble Lord and Her Majesty’s Opposition for their support in moving this development forward with the creation of the UDC. I hope that once it is created we will be able to move forward rapidly in seeing housing developments progress to the target of 15,000 homes that has been set.

The noble Lord also asked about affordable housing. I have previously said from the Dispatch Box that the affordable housing requirement will reflect what is contained in the local plans of the authorities that will make up the UDC and will sit on its board.

18:35

[Lord Avebury (LD)]

My Lords, we, too, welcome the statement that £1.5 billion is being made available to the large-sites programme. I know that had already been announced, but that has been taken a stage further with the news that Bicester has applied for funding under the infrastructure support route, as mentioned in the Statement. The Minister did not quite answer the question put to him by the noble Lord, Lord McKenzie, about whether the £200 million that will be made available to Ebbsfleet for infrastructure is supposed to cover the whole of the cost of the infrastructure development or whether some money has to come from other sources and, if so, what they are. The Minister said that was a matter for the UDC to press forward. Will it be able to come back to the department if the £200 million proves insufficient or does it all have to come from private sources, which is what the noble Lord, Lord McKenzie, asked?

The Minister said that the first £100 million is to fund infrastructure and land reclamation and to kick-start development. Will he amplify that a little? What does he mean by “kick-start development”? I understand that a lot of work has to be done on the infrastructure because the state of the land means that a lot of remedial work has to be done on it. Does “kick-start development” mean that part of the £200 million that has been allocated for Ebbsfleet is for the construction of homes or facilities for the people who live in the homes? I know that the funding of schools has already been arranged with the developers. It would be useful if the Minister could say a little more about how that will work. If the developers are responsible for providing public services, such as schools or health centres, it would be useful for us to know that at the start.

The Statement says that—

[Lord Ashton of Hyde (Con)]

My Lords, 20 minutes are available for all Members. Questions are meant to be brief.

[Lord Avebury]

I will try to be as brief as possible. What is the work required to drive forward development which the head at Ebbsfleet is now discussing with others? Will the Minister be a little more specific about that? Will he amplify what was said in the Statement about the development framework for the area? Will he give us some indication of what the baseline data which are to be provided are and the timescale for them to be provided? Finally, local authorities are to administer the planning service for the UDC for a transitional period. What does he envisage that will be? When will the UDC be in a position to take over the planning functions that it will ultimately have to deliver?

[Lord Ahmad of Wimbledon]

My Lords, my noble friend has raised a series of questions related to infrastructure and funding. With the leave of the House, I will answer one or two to allow for more questions, and will then write to him with specific details, which I will of course share with noble Lords.

The mainstay of my noble friend’s questions was about the £200 million and the further money required. This is not a cap for the UDC to work out what is needed and to make the case to the Government if more money is required. As I have said, the first task for the UDC is to draw up a business plan with details on how to spend the first £100 million—not on homes, as he asked specifically, but on infrastructure. That could include—to answer some of his questions—schools and community facilities. We very much want the UDC to be in the position of telling us how it can move this forward.

The important element is that this is not about giving the UDC specific targets or parameters in which to work. Once the UDC is created and appointed with local expertise, including representation from local authorities on its board, it is then up to the UDC to identify the priorities for the area, to ensure that whatever garden city develops reflects local needs, as I said in my response to an earlier question from the noble Lord, Lord McKenzie. As to the other specific questions that my noble friend asked, I will write to him.

[Lord Beecham (Lab)]

My Lords, I join my noble friend in welcoming the Statement. I will ask a few very short questions and will be perfectly content with the Minister replying to most or, if necessary, all of them in writing.

First, what proportion of the affordable housing might be expected to be for rent, and will that include social housing? Secondly, to what extent will environmental concerns about housing design—particularly around energy efficiency—be incorporated into the scheme? Thirdly, will there be provision for extra care housing for the elderly? Since there will probably be 40,000 people or more we are going to see a town here, so it might be sensible to have extra care housing as part of the development. Fourthly, what steps will the Government encourage the UDC to take to ensure that there are employment opportunities—including training—for local people from the Kent area and the district councils there?

At what point, if any, will the local community—once it is becoming more of a town—be involved with the UDC? Will there be opportunity for local residents to become members of the UDC board once they become established there? Finally, what is the position regarding the provision of health facilities? Presumably NHS England will be involved in that, although normally of course the CCG will be commissioning hospital services. At what point will NHS England and the UDC be looking at the provision of appropriate health services?

[Lord Ahmad of Wimbledon]

The noble Lord rightly asks a series of quite specific questions. If I may, I will take up his offer and come back to him in writing on some of them. He raised—for example—the issue of affordable housing and clean energy and there is a target of 30% in the local plans, covering all forms of tenure. It is for the UDC to look at issues such as clean energy, and the board will be recruited on the basis of a wide variety of skills including expertise in this area. He asked specific questions about the elements of affordable housing. As I said earlier, this will reflect the priorities of the local authorities which will be represented on the UDC board. Specific questions on care homes, again, are very valid concerns to raise. On the specifics of affordable housing, I will write to him, because it is important we cover these issues in the detail he asked for.

[Lord Whitty (Lab)]

My Lords, could I put this in a wider context? Progress on Ebbsfleet is welcome but, as the Statement indicated, it has been complex and slow and at the end of the day, we are talking about 15,000 dwellings. Best estimates suggest that we need 200,000 dwellings or so a year, of all forms of tenure. Can the Minister indicate in terms of other potential garden cities, or similar large sites, what proportion of that 200,000 is likely to be provided by initiatives such as Ebbsfleet and, I hope, Bicester? What proportion of that would be affordable housing, because we really need a much more substantial effort on the total housing crisis? While progress today is welcome, it is a very, very small step indeed.

[Lord Ahmad of Wimbledon]

I thank the noble Lord for his welcome support. He mentioned Ebbsfleet, but Bicester has certainly put forward a bid and we are looking at other areas to come forward with bids which will reflect their local needs. As to the specific issue of housing and the need to meet the requirements that we currently have, I share his concern.

I talked earlier about unlocking 100,000 homes through the large-sites programme. This is the aggregate number of the impact the Government have made on housing delivery through providing investment, capacity funding and brokering solutions. We have talked about unlocking a further 200,000. This is what we expect to be delivered through the current shortlisted schemes, and the Government are investing a great deal in various initiatives that we have undertaken. One example I will share with your Lordships’ House is the issue of housing zones. We are in the process of announcing the list of successful housing zones, whereby we are looking at innovative solutions to actually provide the housing which is clearly needed up and down the country.

Maternity Services in Morecambe Bay

Tuesday 3rd March 2015 Lords Chamber

Statement

18:46

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)]

My Lords, with the leave of the House, I shall now repeat a Statement made earlier today by my right honourable friend the Secretary of State for Health in another place about maternity care at the University Hospitals of Morecambe Bay NHS Foundation Trust. The Statement is as follows.

“With your permission, Mr Speaker, I would like to make a Statement on the independent investigation into the care of mothers and babies at the University Hospitals of Morecambe Bay NHS Foundation Trust, which is being published today. I commissioned this report in September 2013 because I believed there were vital issues that needed to be addressed following serious incidents in maternity services provided by the trust dating back to 2004.

There is no greater pain than for a parent to lose a child, and to do so knowing it was because of mistakes that we now know were covered up makes the agony even worse. Nothing we say or do today can take away that pain, but we can at least provide the answers to the families’ questions about what happened and why, and in doing so try to prevent a similar tragedy in the future.

We can do something else, too, which should have happened much earlier. That is, on behalf of the Government and the NHS, to apologise to every family that has suffered as a result of these terrible failures. The courage of those families in constantly reliving their sadness in a long and bitter search for the truth means that lessons will now be learnt so that other families do not have to go through the same nightmare. We pay tribute to those brave families today.

I would especially like to thank Dr Bill Kirkup and his expert panel members. This will have been a particularly difficult report to research and write, but the thoroughness and fairness of their analysis will allow us to move forward with practical actions to improve safety, not just at Morecambe Bay, but across the NHS.

Before we discuss the report in detail, I know the whole House will want to recognise that what we hear today is not typical of NHS maternity services as a whole, where 97% of new mothers report the highest levels of satisfaction. Our dedicated midwives, nurses, obstetricians and paediatricians work extremely long hours providing excellent care in the vast majority of cases. Today’s report is no reflection on their dedication and commitment, but we owe it to all of them to get to the bottom of what happened so we can make sure it never happens again.

The report found 20 instances of significant or major failings of care at Furness General Hospital, associated with three maternal deaths and the deaths of 16 babies at or shortly after birth. It concludes that different clinical care would have been expected to prevent the death of one mother and 11 babies. The report describes major failures at almost every level. There were mistakes by midwives and doctors, a failure to investigate and learn from those mistakes, and repeated failures to be honest with patients and families, including the possible destruction of medical notes. The report says that the dysfunctional nature of the maternity unit should have become obvious in early 2009, but regulatory bodies including the North West SHA, the PCTs, the CQC, Monitor and the PHSO failed to work together and missed numerous opportunities to address the issue.

The result was not just the tragedy of lives lost. It was indescribable anguish for the families left behind. James Titcombe speaks of being haunted by ‘feelings of personal guilt’ about his nine day-old son who died. ‘If only’, he says, ‘I had done more to help Joshua when he still had a chance’. Carl Hendrickson, who worked at the hospital and lost his wife and baby son, told me that he was asked to work in the same unit where they had died and even with the same equipment that had been connected to his late wife. Simon Davey and Liza Brady told me the doctor who might have saved their son Alex was shooed away by a midwife, with no one taking responsibility when he was tragically born dead. In short, it was a second Mid Staffs, where the problems, albeit on a smaller scale, occurred largely over the same time period.

In both cases perceived pressure to achieve foundation trust status led to poor care being ignored and patient safety being compromised. In both cases the regulatory system failed to address the problems quickly. In both cases families faced delay, denial and obfuscation in their search for the truth, which in this case meant that at least nine significant opportunities to intervene and save lives were missed. To those who have maintained that Mid Staffs was a one-off ‘local failure’, today’s report will give serious cause for reflection.

As a result of the new inspection regime introduced by this Government, the trust was put into special measures in June 2014. The report acknowledges improvements made since then which include more doctors and nurses, better record-keeping and incident reporting, and action to stabilise and improve maternity services, including a major programme of work to reduce stillbirths. The trust will be reinspected this summer, when an independent decision will be made about whether to remove it from special measures. But patients who use the trust will be encouraged that the report says that the trust,

‘now has the capability to recover and that the regulatory framework has the capacity to ensure that it happens’.

The whole House will want to support front-line staff in their commitment and dedication during this difficult period.

More broadly, the report points to important improvements to the regulatory framework, particularly at the CQC, which it says is now,

‘capable of effectively carrying out its role as principal quality regulator for the first time … central to this has been the introduction of a new inspection regime under a new Chief Inspector of Hospitals’.

As a result of that regime, which is recognised as the toughest and most transparent in the world, 20 hospitals—more than 10% of all NHS acute trusts—have so far been put into special measures. Most have seen encouraging signs of progress, with documented falls in mortality rates, but there remain many areas where improvements in practice and culture are still needed. Dr Kirkup makes 44 recommendations—18 are for the trust to address directly, and 26 for the wider system. The Government received the report yesterday and will examine the excellent recommendations in detail before providing a full response to the House.

However, there are some actions that I intend to implement immediately. First, the NHS is still much too slow at investigating serious incidents involving severe harm or death. The Francis inquiry was published nine years after the first problems at Mid Staffs, and today’s report is being published 11 years after the first tragedy at Furness General. The report recommends much clearer guidelines for standardised incident reporting, which I am today asking Dr Mike Durkin, director of patient safety at NHS England, to draw up and publish. However, I also believe that the NHS could benefit from a service similar to the Air Accidents Investigation Branch of the Department for Transport. Serious medical incidents should continue to be investigated locally, but where trusts feel that they would benefit from an expert independent national team to establish facts rapidly on a no-blame basis, they should be able to do so. Dr Durkin will therefore look at the possibility of setting up such a service for the NHS.

Secondly, although we have made good progress in encouraging a culture of openness and transparency in the NHS, this report makes clear that there is a long way to go. It seems medical notes were destroyed and mistakes covered up at Morecambe Bay, quite possibly because of a defensive culture where the individuals involved thought they would lose their jobs if they were discovered to have been responsible for a death. However, within sensible professional boundaries, no one should lose their job for an honest mistake made with the best of intentions. The only cardinal offence is not to report that mistake openly so that the correct lessons can be learnt.

The recent recommendations from Sir Robert Francis on creating an open and honest reporting culture in the NHS will begin to improve this, but I have today asked Professor Sir Bruce Keogh, medical director of NHS England, to review the professional codes of both doctors and nurses and to ensure that the right incentives are in place to prevent people covering up instead of reporting and learning from mistakes. Sir Bruce led the seminal Keogh inquiry into hospitals with high death rates two years ago that led to a lasting improvement in hospital safety standards and has long championed openness and transparency in healthcare. For this vital work he will lead a team which will include the Professional Standards Authority, the GMC, NMC and Health Education England, and will report back to the Health Secretary later this year.

The report also exposed systemic issues about the quality of midwifery supervision. While the investigation was underway, the King’s Fund conducted a review of midwifery regulation for the NMC, which recommended that effective local supervision needs to be carried out by individuals wholly independent from the trust they are supervising. The Government will work closely with stakeholders to agree a more effective oversight arrangement and will legislate accordingly. I have asked for proposals on the new system by the end of July this year.

For too long the NMC had the wrong culture and was too slow to take action, but I am encouraged that it has recently made improvements. Today it has apologised to the families affected by the events at Morecambe Bay. The NMC is already investigating the fitness to practise of seven midwives who worked at the trust during this time, and it will now forensically go through any further evidence gathered by the investigation to ensure that any wrongdoing or malpractice is investigated. Anyone who is found to have practised unsafely or who covered up mistakes will be held to account, which for the most serious offences includes being struck off. The NMC also has the power to pass information to the police if it feels a criminal offence may have been committed, and it will not hesitate to do so if its investigations find evidence which warrants this. The Government remain committed to legislation for further reform of the NMC at the earliest opportunity.

The report expresses a ‘degree of disquiet’ over the initial decision of the Parliamentary and Health Service Ombudsman not to investigate the death of Joshua Titcombe. I know the Public Administration Committee is already considering these issues and will want to reflect carefully on the report as it considers any improvements that can be made as part of its current inquiry.

Finally, I expect the trust to implement all 18 of the recommendations that have been assigned to it in the report. I have asked Monitor to ensure that this happens within the designated timescales, as I want to give maximum reassurance to the patients and families who are using the hospital that no time is being wasted in learning necessary lessons. We should recognise that, despite many challenges, NHS staff have made excellent progress recently in improving the quality of care, with the highest ever ratings from the public for safety and compassionate care. The tragedy we hear about today must strengthen our resolve to deliver real and lasting culture change so that these mistakes are never repeated. That is the most important commitment we can make to the memory of the 19 mothers and babies who lost their lives at Morecambe Bay, including those named in today’s report: Elleanor Bennett, Joshua Titcombe, Alex Brady-Davey, Nittaya Hendrickson and Chester Hendrickson. This Statement is their legacy, and I commend it to the House”.

My Lords, that concludes the Statement.

18:59

[Lord Hunt of Kings Heath (Lab)]

My Lords, I thank the noble Earl for his well-judged Statement and entirely echo the sentiments he expressed. Families in Barrow and the wider Cumbria area were badly let down by their local hospital and the NHS as a whole. He was right to apologise to them on behalf of both the Government and the NHS, and I do the same for the previous Government. It is hard to imagine what it must be like to lose a child or partner in these circumstances, but to have the suffering intensified by the actions of the NHS is inexcusable. Bereaved families should never again have to fight in the way that these families have had to fight to get answers. The fact that they found the strength and courage to do so will benefit others in years to come, and I pay tribute to them all, but particularly to James Titcombe. The report finally gives families the answers they should have had many years ago. It explains in detail both what went wrong and the opportunities missed to put it right.

I echo the noble Earl’s praise for Dr Bill Kirkup, the investigation team and the panel which assisted them. Our shared goal must now be to ensure that this report changes this hospital trust and the NHS as a whole for the better. Its recommendations are powerful but proportionate. We support them all, and the noble Earl can rely on our full support in introducing them at the earliest opportunity.

People’s first concern will be whether services are safe today. Clearly there are parts of this report where the alarm bell is being rung. It identifies the root cause of the failures as the dysfunctional local culture and the failure to follow national clinical guidance. There are suggestions in the report that this problem has not entirely disappeared. It says that,

“we also heard from some of the long-standing clinicians that relations with midwives had not improved and had possibly deteriorated over the last two to three years”.

It goes on,

“we saw and heard evidence that untoward incidents with worryingly similar features to those seen previously had occurred as recently as mid-2014”.

I am sure the fact that problems have been acknowledged means there is improvement. I very much take the latter point the noble Earl made in that regard, but can he say more about those findings and what steps are being taken to ensure that the trust now has the right staff and safety culture?

After safety, people will rightly want accountability, not just for the care failures but for the fact that problems were kept hidden from the regulators and the public for so long. When information did come to light it was not acted upon. Lessons were not learnt and problems were not corrected. The investigation recommends the trust formally admits the extent and nature of the problems and apologises to those affected. I am sure that this House, as well as the other place, will endorse that and want to see it done both appropriately and immediately.

Can I ask the noble Earl to ensure that any further referrals to the GMC and NMC are made without delay? Will he ensure that any managerial or administrative staff found guilty of wrongdoing are subject to appropriate action? I wonder whether it is time to revisit the issue of the regulation of managers and administrators because of this concern about staff moving on to another organisation and still being in the employ of the service, seemingly without being subject to accountability for their actions. We know a number of staff have left the trust in recent years, many with pay-offs. Will the noble Earl review those decisions in the light of the report and take whatever steps he can to ensure that those who have failed are not rewarded?

One of the central findings of the investigation is the particular challenges faced by geographically remote and isolated areas in providing health services. The investigation warns of the risks of a closed clinical culture, where,

“practice can ‘drift’ away from the standards and procedures found elsewhere”.

Given that, is not the report right to recommend a national review of maternity care and paediatrics in rural and isolated areas, and will he take that forward? Will the noble Earl comment on the concerns about the sustainability of the Cumbrian health economy? My honourable friend the Member for Copeland has today written to Simon Stevens, the chief executive of NHS England, to call for a review of the specific challenges it is facing. I hope that Ministers will be sympathetic to this call.

On the question of the CQC, the role of the regulator is to be a champion for patients, to expose poor care and to ensure that steps are taken to root it out. It is clear the regulator failed in that duty in this case. Given what was known, the decision to register the trust without conditions in April 2010 was inexplicable, as was the decision in 2012 to inspect emergency care pathways but not maternity services. In doing so, it failed to act on specific warnings. The report says there was, and remains, confusion in the system as to who has overall responsibility for monitoring standards, with overlapping regulatory responsibilities. We support the moves to makes the CQC more independent, but does the noble Earl agree that the journey of improvement at the regulator needs to continue and that there is a need for further reform, as recommended?

Will the noble Earl ensure that NHS England draws up the recommended protocol on the roles and responsibilities for all parts of the oversight system without delay and does he agree that the CQC should take prime responsibility? Does he also agree that the answer to a number of the problems identified is a much more rigorous system of review of deaths in the community and in hospitals than currently exists? Is it not the case that the reform of death certification and the introduction of a new system of independent medical examination are well overdue? We know Ministers have previously said that they are committed, in principle, to bringing this in but nothing has happened. I hope that the noble Earl will agree to bring this new system in without delay. It needs to go further, too. We need to look at mandatory reporting and investigation as serious incidents of all maternal deaths, stillbirths and unexpected neonatal deaths. We need to see how we can move to a mandatory review of case notes for every death in hospital. We have asked Professor Nick Black to advise us and inform a review which we want to conclude by the end of the month. I hope the noble Earl will support us in that review.

There are two other points I would like to raise with the noble Earl. I want to ask him about leadership of the profession nationally. He will know that maternity services are coming under great pressure at the moment. With the increase in the number of births, many maternity services are facing huge difficulties and challenges, particularly in recruiting midwives to work in those units and in making sure that they can respond to the pressures that are undoubtedly there. We do not have a chief midwifery officer, either at the Department of Health or at NHS England. I wonder whether we need a leader of the profession who can really start to raise the morale and tackle some of these issues which have been around for many years. There will be a head of profession within his department who will be working with the Chief Nursing Officer, but I wonder whether we need a more visible leadership of the profession.

The noble Earl also mentioned the work of the NMC and the King’s Fund review into midwifery supervision and regulation. I very much understand those recommendations and am very sympathetic to the need to look at this carefully. That clearly has major implications for the current supervisory role of midwives. I take the point he and, indeed, the King’s Fund report make, about that role needing to be independent of the employing authority. Can he confirm, though, that much of what supervisors do is of value and that, in moving to a new system, we would not want to lose the value of the work that current supervisors undertake? I echo the noble Earl’s views on the work of the NMC. Under the current leadership it has shown great signs of improvement, and it needs to be supported.

Finally, I pick up the point that the noble Earl made about the acceptance of honest mistakes as long as people and organisations are open. I agree with that, but could he reassure me that he believes that that philosophy is consistent with the Private Member’s Bill of the noble Lord, Lord Ribeiro, in relation to the issue of doing no avoidable harm? I believe that it is. Perhaps we will come back to this when we debate the noble Lord’s Bill, but if the noble Earl was able to say that it is consistent, it would provide considerable reassurance to those health organisations that have reservations at the moment.

[Earl Howe]

My Lords, I welcome the measured and constructive comments of the noble Lord, Lord Hunt. He asked me a series of questions and I shall answer as many as I can. First, on how things are today at the trust and the safety of its services, clearly the CQC is the body best placed to make judgments about the quality of services. At the last inspection of the university hospitals of Morecambe Bay in February last year, safety in the maternity service at Furness was rated as good but overall the maternity services were assessed as requiring improvement. As a whole, the trust has been rated as inadequate. This demonstrates that, while the trust is making progress, there is still a long way to go, and it is clear that embedding changes of this nature takes time. The CQC will reinspect the trust in May 2015 and will make a judgment on whether it has made the required improvements.

The noble Lord asked about referrals to the NMC and the GMC. Where there are failings by a member of staff, they must be held to account. If an allegation is made about a medical doctor, a nurse or midwife, who may not meet the professional standards required in the UK, the relevant professional regulator has a duty to investigate—and, where necessary, to take action to safeguard the health and well-being of the public. The Department of Health is aware that the NMC and the GMC have each received a number of fitness to practise referrals linked to maternity and neonatal services provided by the University Hospitals of Morecambe Bay NHS Foundation Trust. As an independent body, each of them is responsible for operational matters concerning the discharge of its statutory duties. I would hesitate—in fact, I think it would be wrong of me—to comment further on those fitness to practise cases. However, we are confident that the NMC will take account of the recommendations and findings in the report.

The noble Lord made a number of comments about managers. As he well knows, the NHS is a huge and complex service staffed by committed people who often work under a huge amount of stress. I believe that those tasked with leading our NHS organisations, whether in management positions or clinical ones, are committed to making good decisions on behalf of patients. When it becomes clear that they are not up to the job, they should be replaced. Many senior leaders at Morecambe Bay have now been replaced. The current leadership should be allowed a period of time to refocus the trust on those values that are so vital to good patient care—staff morale, sound governance, strong leadership, team working and a focus on delivering high-quality care.

On the issues that are particularly pertinent when you have NHS services that are geographically remote, NHS England has today announced details of a major review of the commissioning of NHS maternity services as promised in the five-year forward view. The review will assess current maternity care provision and consider how services should be developed to meet the changing needs of women and babies. Recent advances in maternity care, changes in the demographics of women having babies and preferences of where they want to give birth will form the key focus. This review, which is expected to report by the end of the year, will be led by an external chair, supported by a diverse panel, and will include a review of UK and international evidence on safe and efficient models of maternity services.

I listened with interest to the noble Lord’s comments on the Cumbrian health economy as a whole. I am not in a position to comment on that at the moment but, if I may do so in writing, I shall be happy to. As for further reform of the CQC, we will examine the recommendation on this score in detail and publish a full response in due course. Further consideration is needed to ensure that the overall responsibility for patient safety sits in the right part of the system and the department has already committed to consider with relevant organisations the options for transferring NHS England’s responsibilities for safety to a single national body. We will also continue to look for opportunities to improve both the operation of the oversight arrangements in place at present and the understanding of those arrangements by NHS organisations and the public.

On the matter of reviewing all deaths and picking up the recommendations around death certification, a number of the recommendations in Sir Robert Francis’s Mid Staffordshire inquiry report refer to our planned reform of the death certification system and the introduction of the role of medical examiner in England and Wales. A new system of medical examiners has been successfully trialled in a number of areas around the country. The work of the two flagship sites in Gloucestershire and Sheffield has been continued and extended to operate a medical examiner service on a city and county-wide basis on a scale that will be required for implementation by local authorities when legislation is introduced. We will publish shortly a report from the interim national medical examiner, setting out the lessons learnt from the pilot sites. I hope that that gives the noble Lord an indication that this is work very much in progress.

On mandatory reporting of maternal, stillbirth and neonatal deaths, the Government are committed to doing further work to review avoidable deaths. We are working with NHS England to introduce a national standard approach for undertaking case-note review. This has the potential to enable NHS trusts to develop a better understanding of avoidable deaths. However, a top-down approach to ensuring that every trust reviews every death is not, in our view, appropriate. Our aim is to ensure that trusts focus their efforts on improving patient safety through learning about the root causes that have led to avoidable death. A systematic, but not necessarily burdensome, approach is needed, which is why we are moving ahead to develop a national rate and produce an estimated number of avoidable deaths for each hospital. The numbers will be made public. Trusts will be expected to report annually to the Secretary of State for Health on their actions to reduce avoidable deaths.

The noble Lord made a very interesting suggestion about the possible appointment of a chief midwifery officer. I would be happy to consider that idea. Of course, he knows that there is a head of maternity in NHS England at the moment.

On the performance of the NMC, it is, as the noble Lord is well aware, an independent body accountable to Parliament, via the Privy Council, for the way in which it carries out its responsibilities. In addition, its performance is monitored by the PSA, and the Health Select Committee has also chosen in recent years to hold an annual accountability hearing with NMC leadership. So there are a variety of robust measures in place to hold the NMC to account. I am aware that the performance of the NMC has a troubled history, which is why Ministers commissioned the Professional Standards Authority’s predecessor body, the CHRE, to undertake a full strategic review in 2012. As noble Lords will remember, the final report of the strategic review was published, putting forward 15 high-level recommendations for improvement in delivering the NMC’s regulatory functions, with the expectation that demonstrable improvements should be seen within two years. We welcome the new NMC chair and we hope that, under Dame Janet’s leadership, it will continue to make improvements to become a confident and capable regulator.

19:19

[Baroness Barker (LD)]

My Lords, back in 2006 the Minister and I had the unhappy experience of being in opposition when the NHS Redress Act went through your Lordships’ House. We are both on record as saying at the time that we felt that it was a fairly inadequate piece of legislation. I think the 44 recommendations in this report are searing evidence that that is in fact the case.

In the wake of the reports by Dame Carol Black, Sir Robert Francis and Sir Bruce Keogh, does the Minister agree that it is now time for a thorough root and branch review of the legislation underpinning the NHS complaints system? I have very little time in which to deal with the great many points in this report, but I wish to ask the Minister about two, which are important. First, in recommendation 27, the regulatory bodies, the GMC and the NMC, are asked to reconsider the guidance to professionals about what to do if they suspect that clinical standards or services are not being fulfilled. It seems to me that in this case there was a failure at every level in that respect. That is unacceptable. Secondly, the report points to the breakdown of the relationship between the CQC and the Parliamentary and Health Service Ombudsman. They had no communication and the consequence was that the families had nowhere to go to seek redress. It is difficult because that ombudsman is both the parliamentary and the health service ombudsman for Members of Parliament to make recommendations about ways in which the health service might be reformed. Will the Government act quickly on the recommendation of this report that there should be a memorandum of understanding between the CQC and that ombudsman?

[Earl Howe]

I am grateful to my noble friend and I do indeed recall our debates on the NHS Redress Act. It is telling that the previous Government chose not to bring that Act into force in the end. The recommendation in the report that there should be a fundamental review of the NHS complaints system is one that we will consider very carefully. We agree that there are still challenges to improving NHS complaints handling, including improving the culture around complaints. Those challenges have been well documented. Our work to improve complaints handling across the board was set out in our update on progress in response to the Francis inquiries in February. Complaints and how they are handled is now one of the key strands of inquiry in all inspections of the CQC.

On my noble friend’s point in relation to recommendation 27, the GMC, the NMC and the PSA have guidance in place on how to raise and act on concerns about patient safety. We will work with these bodies to determine whether this guidance needs strengthening in the light of this report. The GMC has been undertaking its own review of how it deals with doctors who raise concerns in the public interest.

On my noble friend’s final point about the disjointedness of the CQC and the Parliamentary and Health Service Ombudsman, a new MOU was signed in September 2013 which outlined how the two organisations would collaborate, co-operate and share information relating to their respective roles. It is without question that the lack of co-ordination between the CQC and the PHSO was a contributory factor to the ongoing inability of the wider system to identify and act on failings at the trust.

[Baroness Emerton (CB)]

I thank the Minister for repeating the Statement. I want to pick up two points. The report by the King’s Fund relating to the supervision of midwifery said that there was a risk in changing the situation because there might be no one ready to take on the job. That is a very telling phrase in what is a very long and sad report about what has been going on. We need to be very clear. I hope that the noble Earl will be able to reassure us that the supervision of midwives, which has a long history, from 1902 to now, but in very changed circumstances, will be sustained in a way that is going to be to the benefit of mothers for the safe delivery of babies. A report like this always sends shock waves through the profession and is very sad for the families involved. We need to be clear that the action being proposed in the Statement is taken forward quickly. I notice that the supervision is supposed to be concluded by the end of July. That is a very short time to sort out a very complex system.

The second point I want to pick up is the one made by the noble Lord, Lord Hunt, about a chief midwifery officer. The Minister said that he would look at that. It is not something that has been thought of very carefully. We have a Chief Nursing Officer and a director of public health and so it would be sensible to give this serious consideration, especially in light of the present situation. I ask the Minister to take that away and consider it.

[Earl Howe]

On the noble Baroness’s second point, I shall of course take due note of her recommendation. It is something to which we will give very careful thought. On the principal issue that she raised about supervision, as she knows, the statutory supervision of midwives was designed more than 100 years ago—in 1902, I believe—to protect the public. In our view, it no longer meets the needs of current midwifery practice. The King’s Fund was commissioned by the NMC to review midwifery regulation following the findings of the ombudsman that midwifery regulation was structurally flawed as a framework for public protection. The current structure does not differentiate between the requirements of regulation and clinical supervision.

If, as I anticipate, legislation is needed to change this—I think it is clear that it is—that is likely to take up to two years, even on the best estimate. During that time the Department of Health will work with the UK chief nursing officers, the NMC and the Royal College of Midwives to develop a four-country approach, which it has to be, as the noble Baroness will understand, to midwifery supervision that will replace the current statutory midwifery supervision. I hope that that is helpful.

[Lord Patel (CB)]

My Lords, I have to admit that, as an obstetrician, when I read this report, my immediate response was intense anger, anger at this systems failure on a grand scale. None of these things should have occurred. This is not an example of failure of a mild degree or of a relationship. This is failure on a major scale. No maternity unit in the country would tolerate these kinds of tragedies occurring in their own unit.

I commend the report. I have worked with the chairman and several of the expert advisers. Dr Kirkup worked with me when I carried out the inquiry on cancer services in Gateshead. He was a member of the team and I know the others, particularly as they come from my own hospital. Professor Stewart Forsyth was neonatologist with me, and I know James Walker, whose father is responsible for all the successes I have had in obstetrics and none of the failures. His name was also James Walker.

What can we do? There is the idea of mandatory reporting of unexpected maternal deaths and stillbirths. We have a stillbirth rate in the antenatal period that has not reduced in this country for 40 years. We have unexpectedly high numbers of normally formed babies who die in the interpartum period but who should not die. If that kind of tragedy ever occurred in my unit, there was a major investigation immediately afterwards. Mandatory reporting may highlight this issue because we need to address it.

I will focus on one recommendation of the several that are addressed regarding the professional organisations in medicine and midwifery. They need to step up to the plate and respond positively to this report on what their role will be in making maternity services safer in this country. The noble Earl referred to an airline-type investigation for root cause analysis. I accept that that is absolutely necessary but it requires experience and training and it must be done soon after the event to learn the lessons that might be applicable to other maternity units. I am encouraged to hear that NHS England will carry out a review of maternity services and I hope that it will be an in-depth review with the specific purpose of making maternity services safer. It should not be about demarcation issues with which we got ourselves tied up previously between different professional groups. It should not be about relocating services. It should be about making maternity services safer.

I have lots of questions but they are not for today and I will save them for another time. I hope all of us—no matter who the Government are—will now work to make maternity services in this country among the best possible.

[Lord Winston (Lab)]

Does the noble Lord not agree that one of the key issues is that nurses as midwives and obstetricians no longer work together as a team? They work separately and conflict with each other instead of seeing patients together. Would that not solve many of the problems identified in this shocking report?

[Lord Patel]

The noble Lord is absolutely right. That is why I said that the review must address how to make maternity services safer and not address any of the demarcation issues. I work with midwives. Midwives taught me—I have said that before in this House—so there should be no issues between different professional groups, whether they be nurses, midwives, doctors, neonatologists, anaesthetists or whoever.

[Earl Howe]

My Lords, anyone who reads this report will not fail to alight on the phrase that Dr Kirkup uses—that what we had at this hospital was a “lethal mix”, comprising, among other things, substandard clinical competence, poor working relationships in the maternity unit, a move among the midwives to pursue normal childbirth at any cost, shooing obstetricians away at various points, and failures of risk assessment and care planning that led to unsafe care. All these things should pull us up short and, indeed, do so. They are shocking. We certainly expect the relevant professional regulatory bodies, including the GMC and the NMC, to review the findings of this investigation report and act on the recommendations. Those organisations should review the findings of the report concerning the professional conduct of registrants involved in the care of patients at the trust to ensure that appropriate action is taken against anyone who has broken their professional code, but building on those lessons to see whether there are wider matters around safety to be considered.

On mandatory reporting, I can only add to the remarks that I made to the noble Lord, Lord Hunt, by saying that we remain totally committed to the principle of the reforms. Further progress will be informed by reconsideration of the detail of the new system in the light of other positive developments on patient safety since 2010 and by a subsequent public consultation exercise. We are working with the health departments in the devolved Administrations, NHS England and the professional bodies to consider how standardised reviews for all perinatal losses might be introduced.

[Baroness Masham of Ilton (CB)]

My Lords, what will happen if the 18 recommendations are not put into practice? Will they apply to all hospitals across the country? The maternity service at the Friarage Hospital, Northallerton, which is my local hospital, has recently been downgraded to midwives only, to the anxiety of the local people who live in a very rural area. I hope that the noble Earl can give some assurances on safety as there are so many worried people and there will be more after this report.

[Earl Howe]

My Lords, as regards Northallerton, our approach as Ministers and in the department is that service reconfiguration has to be a matter for local decision-making. We do not, as a rule, interfere with those decisions unless there is a referral from an overview and scrutiny committee in the statutory manner. I hope the noble Baroness will therefore understand that I am rather precluded from commenting on that local situation. Nevertheless, on her first point, we have asked the trust to implement the recommendations that have been assigned to it in the report. We have asked Monitor to ensure that this happens within the designated timescales to give maximum reassurance to the patients and families who are using the hospital that time is not being wasted. At a local level, the trust is in special measures. It has put in place a largely new management team, which is working towards delivering against its agreed improvement plan. Progress against that plan is being closely monitored by the quality surveillance group, thereby ensuring that the trust, CCGs, regulators and others are working together in the best interests of the local population.

Health: Rare Diseases

Tuesday 3rd March 2015 Lords Chamber

Question for Short Debate

19:37

Asked by

[Lord Turnberg]

To ask Her Majesty’s Government what action they are taking to improve access to treatments for patients with rare diseases.

[Lord Turnberg (Lab)]

My Lords, many rare diseases can be severe and life threatening, and the problem for patients unlucky enough to suffer from them is that there are few really effective treatments for most. So among the small number for whom a new treatment seems to hold out some promise, there is intense interest and renewed hope. Of course, it is reasonable that new treatments should be evaluated for their effectiveness and that they should be prioritised before they can be commissioned. But therein lies the rub—because, although these diseases each affect a small number of patients, there are more than 8,000 individual rare and ultra-rare diseases in existence. Although there are no treatments for most, more than 100 drugs licensed by the European Medicines Agency are awaiting approval for funding by NHS England, and many of them are very expensive.

It is not surprising that companies that develop such drugs for very small numbers of patients find it difficult to recoup their investment without a high charge; and it is hardly surprising that NHS England, which foots the bill for specialised services, is pretty cautious about what it can afford to pay. This budget is already overspent by £900,000. So we can no longer avoid recognising the dilemma of how to pay for these expensive drugs. My first question to the noble Earl is: what effort are the Government making to face up to this problem? We clearly now need to have the open discussion and thorough review that the topic deserves. The consultation exercise that NHS England is currently conducting is interesting but limited in scope, and the whole issue of affordability of expensive drugs is one that should be opened with the public by the Department of Health itself.

Leaving aside that issue for the moment, nothing can provide an excuse for the enormous delays in decisions being taken by the bureaucratic systems that we have set up. They are not only complex but so completely opaque that clinicians and the pharmaceutical industry despair, and the poor patients are completely bewildered and perplexed. I have spent a considerable amount of time trying to understand the ways in which these treatments are assessed, and here I have relied heavily on advice from the Rare Disease UK alliance, whose members represent a large number of patient groups.

The problems begin when anyone who is proposing that a new treatment should be centrally funded is faced with no fewer than seven possible routes to take. The first three are through NICE—although only one of these, the HST or highly specialised technology route, is really capable of assessing these types of treatment. The problem here is that the HST can manage to deal with only three proposals a year. It does not have the capacity to cope with more. It has, in fact, so far approved only one treatment—eculizumab, for atypical haemolytic uraemic syndrome—since it took over responsibility for rare disease treatments more than a year ago. Yet we know that the EMA is licensing many more new treatments for rare diseases, and that many of these, at least 10 a year, have to be redirected to NHS England itself. However, the rationale behind which three treatments NICE will take on itself and which it will hand on is clouded in mystery. Even worse, it seems that a few drugs have to go through an assessment by both organisations. Can the Minister say how NICE decides which treatments to examine itself and which to hand on—and, more importantly, why on earth we need two separate systems of appraisal? Would it not save a lot of time and money if we had one well resourced and efficient system?

Then we come to the remarkable apparatus set up by NHS England, where we also have several possible entry routes that I will not bore noble Lords with. The main route is through the clinical reference groups, of which there are 75, each assessing different types of potential treatments. Their views are then transmitted to one of five programme of care boards—and that is just the beginning. Approval is then sought from the clinical effectiveness team and the finance group, before the matter is sent on to the clinical priorities advisory group, which in turn passes it on to the specialised commissioning oversight group and the directly commissioned services committee. I hope that noble Lords are keeping up. If it gets through that lot, it is sent out for public consultation and, if approved, has to wait until the beginning of the next financial year for funding.

You can imagine the frustration and angst that all this creates among patient groups who feel alienated by the whole prolonged and tortuous process, which is made worse by the fact that the way in which these committees go about their business seems quite opaque. No minutes seem to be available, decisions are hard to come by and patient involvement is tangential to say the least. The noble Earl, in a response to my Written Question on 1 December, tried to reassure me that patients were involved in a number of advisory committees, but I have to tell him that many patient groups feel quite ostracised by the systems that have been set up. There are no less than seven serial committees, and a cynic might think that this complicated system has been devised to avoid having to make any funding decision. You might well think that; I couldn’t possibly comment.

As if that is not enough, the whole apparatus has now ground to a halt after a legal challenge to CPAG on behalf of a child with Morquio’s syndrome. No new treatments have been examined since December and there is no end in sight until at least next June. There is now a backlog of some 80 treatments awaiting a decision. Can the Minister say when we might expect this matter to be resolved?

With such a complicated system, it is little wonder that there are inconsistencies in the decisions that have been taken. For example, why has funding been agreed for patients with tuberous sclerosis who have brain tumours but not for those with kidney tumours that are equally life threatening? How come treatments have been approved for a very small and specific subgroup of patients with cystic fibrosis but not for a small specific subgroup of patients with gastrointestinal stromal tumours? The numbers affected are similar and the treatments equally effective for each of these rare subgroups, but there is no consistency in the decisions taken. Will the noble Earl press NHS England to rethink this problem of inconsistency?

On another issue, can the noble Earl say why the commissioning through evaluation system, set up in 2013, has apparently not yet approved any drugs brought to it—that is, zero drugs—despite having an available budget of some £16.9 million? Why has this innovative scheme not been activated?

Then there is the question of the high costs that drug companies have in developing new treatments for these very small markets. There is a need here for negotiation between government and industry on price—and there is clearly room for negotiation where industry could be asked to justify its high charges when it has such small patient groups to test and can avoid the very high costs of large-scale phase 3 trials. In practice I understand that companies find that, despite the price access scheme, it is extremely difficult to fix up a meeting even to begin negotiations. Can the noble Earl explain why there seems to be this reluctance to negotiate?

There is also a particular problem when a clinical trial of a new innovative treatment is coming to an end and patients are seen to be benefiting from it. Industry funds the trial but expects to be able to hand on the costs of continuing the treatment after a successful trial has finished. This area of negotiation is particularly fraught since many patients who have benefited are desperate to continue the treatment yet find themselves in limbo because of a reluctance to reach a decision on who pays. Can the Minister clarify what engagement the Government are having with companies and patients who find themselves in this position?

Finally, there is a mind-blowing system of committees and advisory groups set up in NHS England. Can all the CRGs, PoCs, CPAGs, SCOGs, DCSCs and RDAGs be justified? I doubt it. Is it not time for NHS England to get a grip and radically prune this morass of committees? Will it take advantage of its current consultation exercise to think again, and will it kick-start some interim measure to get past the logjam while it is cogitating? I hope that the noble Earl will exert some pressure on it to provide a simple, clear and transparent system of appraisal in a timely way that takes full account of patients’ views. We clearly do not have that now and it is desperately needed.

I return, finally, to my plea for a thorough and open inquiry into the ways in which it might be possible to cover the costs of expensive drugs for rare diseases in an equitable way. That is something that the department itself can hardly avoid tackling. I look forward to the noble Earl’s response.

19:47

[Baroness Bottomley of Nettlestone (Con)]

My Lords, I warmly congratulate the noble Lord, Lord Turnberg, on securing this debate on a critically important subject and one in which I know he has taken a long-term interest. His comments are very much top-down; I am going to speak more from the bottom up. I think my noble friend Lord Howe has been quite an exceptional Health Minister, with a mixture of principle and pragmatism, and the UK Strategy for Rare Diseases is a remarkable document. It is a vision. It is not all in place in practice but the focus is on patient involvement, patient groups, empowering patients, ensuring patients are listened to, personal care plans, specialised clinical centres, education, training and research. These are the elements of where we hope to arrive.

I take two examples. In 1980, in my former professional life, I was incredibly proud to have an article printed in the Journal of Child Psychology and Psychiatry on the management of families with Huntington’s Chorea. It was a case study to illustrate some recommendations. With the psychiatrists at the Maudsley, where I worked, I had been working with a family affected by Huntington’s disease, as it is now called. They faced a very bleak future. There was little support and little identification. It is quite extraordinary the changes that have taken place over the years. Our basic thesis was that the children in a family always know if there is a secret and if you listen to them, they know what the problem is, and you have to talk to them about Huntington’s disease. Recently, the Huntington’s Disease Association, a magnificent patient group—of the kind that has developed in so many areas and quite remarkably in this country for so many conditions—has produced wonderful guidance about talking to children about Huntington’s disease.

On the MRC, we campaigned to get the human fertilisation legislation through. That was the first Bill that I handled as a Health Minister. Earlier this month, we heard that baby Amelia had been born, through IVF, free from Huntington’s disease. It is an incurable condition which parents have a 50% chance of handing on to their children. Therefore, that is an example of remarkable progress.

However, I want to draw my noble friend’s attention to a totally different condition: lymphangioleiomyomatosis —LAM. This is a wretched condition. Huntington’s disease affects 120 people in 1 million; LAM affects about seven in 1 million, so it is a very unusual condition. I want to talk about Amanda Simpson, a brave young woman from the Isle of Wight. She had chest problems and went to the hospital, where they told her that she had pigeon fancier’s disease, ME or emphysema. She was not happy. In fact, she was miserable because nobody had recognised her condition. Nobody knew what it was. She had two young children. Was it depression? Was it lethargy? However, she felt bad.

She then secured private funding to get a second opinion in Southampton and was referred to a centre in Nottingham, where LAM was identified. It is a pretty wretched chest condition creating cysts, which sometimes lead to non-malignant tumours on the kidney. The prognosis is poor. Fortunately, there is now a drug called sirolimus, which seems to address the problem. However, there are only 200 patients with this condition in the country, so Amanda has not had a care plan. LAM Action is a very small support group. I want to read from her comments. Having been referred to a specialist consultant from the Isle of Wight, she says:

“In a nutshell he told me I was a … hypochondriac and the problems were probably down to stress. I remember going home in tears feeling that no one believed me”.

After she went to the private specialist, she at last felt that she knew she had some reliable information. She continues:

“The next few days proved really challenging. I read up all I could and felt that in essence my world had come to an end. The prognosis wasn’t great and doing a self diagnosis on the internet threw up more questions than answers. I had extensive scarring of my lungs with cysts which were getting worse. My efficiency had fallen to nearly 40%, there was no known cure for the disease and I had two children under three. It all seemed so unfair. I had finally got my life on track and then this was thrown at me. The next six months proved really difficult. All the data I could get was not very helpful and there is a real shortage of any kind of support for”,

LAM. She goes on:

“The counsellors I did speak to seemed unable to grasp the situation and to all intensive purposes they were pretty useless”.

Finally, she was referred to Nottingham. I know of services provided at the Brompton hospital, the Heart Hospital and other specialist centres, but at Nottingham, with Professor Simon Johnson, professor of respiratory medicine, at last she had somebody who understood the whole subject. His wife, Jan, has set up LAM Action, creating a support group, and encouraging and promoting research. Amanda has been put on to the new drug, sirolimus, which only 30 people in the country are receiving, and it is having a beneficial effect on her. Even so, she has to get from the Isle of Wight to Nottingham, where she stays for three days at a time. There is no financial support. Now, her teeth are deteriorating, and she has to go to Winchester. Nobody understands all this.

In comparison, associated with cancer are Cancer Research UK, Macmillan Cancer Support and Marie Curie. People know and understand about cancer; they are sympathetic. Most people think that Amanda is a hypochondriac. They do not know what she is talking about and there is precious little sympathy or concern.

I want to make that contrast because of the change that I have seen in my lifetime in the approach to Huntington’s disease—its recognition and people’s understanding of it. There is a whole cohort of regional support advisers to help families and a very effective patient group recognised by the National Health Service. There is a clear pathway for this disease, and now there has even been a breakthrough with a family producing a child free of the affected gene. As the noble Lord said, there are 8,000 rare diseases, but I wanted to take this opportunity to identify the condition that had particularly come to my attention.

I want to say in passing that the new proposals for the tariff system and for the changes in commissioning for rare diseases need to be addressed in such a way that in time it will be possible for people suffering from LAM at least to get the recognition that is given to sufferers of some of the other more prevalent rare diseases.

19:55

[Lord Walton of Detchant (CB)]

My Lords, last week I had the privilege of attending a symposium, or reception, for what was called Rare Disease Day, sponsored by the International Rare Diseases Research Consortium and various other bodies. The Minister made a useful and helpful contribution, as indeed did a member of the staff of NHS England.

As the noble Lord, Lord Turnberg, to whom I am very grateful for introducing this debate, said, several thousand rare diseases have now been identified. These are of varying degrees in that some are fatal, some are progressive and some very much less so, but there is clear evidence that new forms of treatment are beginning to emerge for many of them, not least for the many inherited rare diseases, many of which are due to single genes. The gene has been located, the missing or abnormal gene product has been isolated, and effective drugs are now coming on stream to overcome the problems. The drugs for the very rare conditions are called ultra-orphan drugs, whereas drugs for conditions affecting 1,000 or more patients are called orphan drugs. It is clear that, although some of them are life-saving, others have produced an improvement but not, as yet, a cure. I pay tribute to the industry for the excellent work that has been carried out to develop these drugs, which is continuing to expand at a very important and interesting rate. I have often said that today’s discovery in basic medical science brings tomorrow’s practical development in patient care, and there is no more obvious example than the case of many rare diseases.

Many of the drugs are extremely costly, because the benefit to patients is relatively small and the number of patients who benefit is, again, very small—hence in many instances they are not commercially viable. Quite a few of these drugs have been licensed. Examples come particularly from the Cancer Drugs Fund, but that fund of £360 million is now running out of money and under threat of being closed. When, a couple of months ago, I said to the Government how important it was that they should create a rare disease drugs fund, this was not looked upon with any great favour because the Cancer Drugs Fund is not now managing to handle the needs of many patients with cancer.

There are excellent examples of drugs for rare diseases. A drug called eculizumab is a cure for haemolytic uraemic syndrome, but it has to be continued almost indefinitely, at a cost of £100,000 per patient per year. As the noble Lord, Lord Turnberg, mentioned, for other conditions such as tuberous sclerosis, which causes brain tumours, and the rare condition called lysosomal acid lipase deficiency, which causes severe liver disease, drugs are now available. But they are not at the moment becoming prescribable under the NHS.

My own field of research is muscular dystrophy, and I declare an interest as life president of Muscular Dystrophy UK. About 10% to 15% of cases of the serious progressive paralysing disease Duchenne muscular dystrophy are due to a nonsense mutation where a single letter of the DNA places a stop signal in the middle of a gene. The drug encourages cells to ignore this, and the signal therefore allows the dystrophin protein to be restored in the muscle, which produces clinical improvement. Clinical trials in Newcastle have shown significant improvement in the walking capacity of boys receiving the drug. A new generation of drugs called exon-skipping drugs are being developed that produce a molecular patch over deletions in the gene. Clinical trials were very effective in Newcastle and the results were helpful, but the drug, although licensed, is not currently prescribable under the NHS because it is going through what is called a draft clinical commissioning policy. That means that these boys, whose walking was improving, are now finding that they are again deteriorating because they are no longer in a position to receive the drug.

As the noble Lord, Lord Turnberg, made clear, the bodies in the NHS are extremely complex. NICE, the National Institute for Health and Care Excellence, has a specialised technology assessment, a single technology assessment and a multiple technology assessment. There is also specialised commissioning under NHS England and a Rare Diseases Advisory Group advising NHS England. As yet, I am finding it extremely difficult to find out what that Rare Diseases Advisory Group is doing and I cannot get hold of any of its reports. This is an extremely complex problem because the cost of these drugs will be huge. Patients’ charities and patient groups are small but are collectively becoming increasingly vocal and concerned about the problem of finding the appropriate treatment for these diseases. I have said that the patients are relatively few but, collectively, they are huge in numerical terms, and it is not possible in my opinion to assess human suffering in purely numerical terms. We need from the Government greater clarity on how the drugs for these rare diseases can be produced.

I have to express serious concern for the future. The next Government will be faced with a huge dilemma because drugs are coming on stream at such a rate that it is perfectly clear that the present mechanisms available in the NHS will not be able to fund the treatment necessary for these diseases. I wonder whether it is not time, as the noble Lord, Lord Turnberg, said, to have a major review of the funding issue. I would love to see a mechanism whereby the Association of Medical Research Charities, the Specialised Healthcare Alliance and other bodies in this field might embark on a massive fundraising programme to support the availability of these drugs.

If only we could find a donor like Bill Gates, who has given so much to the management of malaria. I was even thinking of the second wealthiest person in the United States, Christy Walton, the widow of John Walton—no relation, I am sad to say—who was at Walmart. Can we not find someone to take on board the funding of the drugs—a very major effort? It might temporarily reduce the money available for research, but the important thing is that the research will not be translated into treatment unless we have funding for the treatments that result from that research. A major new initiative along those lines will be needed.

20:03

[Baroness Thomas of Winchester (LD)]

My Lords, I acknowledge at the outset that the two matters I am mainly going to speak about tonight are not drug treatments for rare diseases, but they are certainly treatments in the wider sense of that word. I, too, am very grateful to the noble Lord, Lord Turnberg, for asking this Question, which can never be asked too often. I am also very pleased that the noble Lord, Lord Walton of Detchant, spoke about the new drugs coming on to the market for some Duchenne muscular dystrophies. I should at this point declare an interest as I have a rare disease. The two matters that I wish to raise are cough assist machines and hydrotherapy.

Last week, Muscular Dystrophy UK published a new report called Right to Breathe, highlighting the vital need for access to specialist respiratory care for people with muscle-wasting conditions. The report found that respiratory infections have been a primary factor in deaths for certain muscle-wasting conditions with, shockingly, a third of families being repeatedly turned down for equipment by local NHS commissioners, even when it has been requested by consultants or specialist physiotherapists.

Each cough assist machine costs in the region of £5,000, which is equivalent to a 48-hour stay in an intensive care unit. They are considered to be of vital importance by respiratory specialists and are routinely used during hospital stays for patients. An example of what can happen is the case of Freddie Kemp, who had Duchenne muscular dystrophy. He was turned down by his local NHS for a cough assist machine, which would have helped keep his lungs clear. Tragically, in November he died, weeks after leaving hospital following a serious chest infection. This essential piece of equipment may not be a treatment in the way that a new drug is, but it can still save lives. What assurances can my noble friend give that people with muscle-wasting conditions who require a cough assist machine will be provided with one by their clinical commissioning group? This matter of spending a relatively small amount of money on the right equipment for vulnerable people in order to save an expensive hospital stay later on crops up time and again. Surely, something should be done to point this out to CCGs.

Hydrotherapy is a highly effective form of therapeutic exercise in a warm water pool for people with muscle-wasting conditions. For many, particularly boys with Duchenne or anyone with serious mobility problems, it is the only exercise they might be able to manage. The benefits are perhaps obvious, but I will spell them out. The first include a sense of freedom from the confines of a wheelchair, a greater range of movement with the relaxation that very warm water gives and, very often, the alleviation of pain. Secondly, the psychological effect on a person’s well-being should not be overlooked. Perhaps the provision of hydrotherapy should be partly assigned to the mental health budget because of its effect on a patient’s sense of well-being. One young woman with congenital muscular dystrophy told the all-party group some time ago that she felt much better for days after a hydrotherapy session.

However, accessing hydrotherapy is ridiculously hard. If a local hospital does have a pool—many have closed or are in danger of closing in order to save money—patients are told that they are entitled only to a block of six sessions. If you have a progressive condition and this is the best way of keeping you well, a block of six sessions gets you only so far. It is fine for a broken leg, but those of us with progressive conditions will never have what is called “an outcome”. It is not easy to measure the effect of hydrotherapy on those with progressive conditions, but we all know that it is good for us. A study into the provision of these pools in the south-west of England a few years ago by Khurm Arshad, whose brother Auzair has Duchenne muscular dystrophy, found that there were more hydrotherapy pools for horses than for people. Muscular Dystrophy UK is undertaking an audit into hydrotherapy provision for people with muscle-wasting conditions across the country. Will my noble friend encourage the NHS to work in partnership with Muscular Dystrophy UK to compile this audit in order to improve access to hydrotherapy pools?

Muscular Dystrophy UK’s Fast Forward campaign is looking at potential new drug treatments, in particular to ensure that cutting-edge, high-cost potential treatments are not being held up due to lack of funding. That will be the leitmotiv throughout this debate this evening. I am sure that I know the answer to this, but I must just ask whether there are any plans to re-establish a ring-fenced fund for rare disease drugs.

20:09

[Lord Rogan (UUP)]

My Lords, I would also like to thank the noble Lord, Lord Turnberg, whom I congratulate on initiating this interesting and important debate. Immune thrombocytopenia, or ITP as it is commonly known, is a bleeding disorder affecting both adults and children and is seen in between one and four in 100,000 of the population. It is a rare condition and I am one of that rarity. I am conscious that members of the medical profession present this evening will have knowledge of what I am about to say, but it is nevertheless important that we have on record the concerns of ITP patients and their families.

This disease is known as an autoimmune disorder because the body’s immune system targets itself. It leads to a reduction in the elements of the blood, called platelets, which are responsible for making the blood clot. When their numbers fall, there is an increased risk of bleeding which may, in the most severely affected patients, be spontaneous, difficult to control and life-threatening. The impact on patients’ lives can be profound. Extensive bruising can be quite socially isolating, particularly in the summer months when one cannot cover up. Active bleeding from the nose, into the gut or as heavy periods can be distressing and may lead to anaemia and the problems which that can cause. At the very lowest levels of platelets there is always a risk of bleeding into the brain, which may be fatal for many.

Some 11 months ago I retired to bed perfectly normally to wake up, the next morning, in a bed with pillows and sheets covered in blood and bleeding from my nose and mouth. I was admitted to hospital and on examination I had a platelet count of two. It was somewhat distressing and I pay tribute to Dr Benson and his team at the Belfast City Hospital for the care and treatment they gave me over my eight days in hospital and to Dr Paul Grimes, our resident medical practitioner, and Professor Adrian Newland for their explanations, which helped me to understand my condition.

Patients with a severe disease live permanently with the risk of a major, life-threatening event. However, even those with moderate forms of this disease are not free; they have many risks. We are told not to play contact sports; advised not to fall down and hit our heads; advised not to have a car crash. I am afraid I did not heed the last one. Coming out of hospital, my wife took me to Sicily to recuperate. We spent the first two days beside the pool and it was wonderful. On the third day, I hired a car. On the fourth day, I wrote off three cars and ended up in hospital in Palermo. Up to one-third of patients will also complain of crippling fatigue as part of their disease process, which again impacts on their day-to-day life.

In the majority of patients there is no known cause that can be treated and, in general, treatment has been aimed at reducing the rate at which the platelets are destroyed by the antibodies produced as part of the autoimmune process. Traditionally, treatment has relied on the use of steroids to dampen down the immune process. These have well recognised side-effects causing mood change and weight gain: I gained 20% of my body weight while I had this. There are other side-effects: diabetes, osteoporosis, cataracts and an increased risk of infection. Patients tolerate but rarely like taking these steroids. For those many who fail to respond to this initial approach, further treatment options have in the past been fairly limited, involving either major surgery to remove the spleen, which in many patients is where the platelets are destroyed, or using drugs to suppress the immunity. These latter are the same drugs as those used to treat cancer, with the known problems that they can cause. Both these approaches increase the risk of serious infection and we know that as many patients may die of infection as a consequence of the treatment as from the bleeding caused by the condition.

Over the last 10 years, doctors have come to learn much more about the background of the disease and are developing treatments that are much more targeted and without the general side-effects I have mentioned. A particularly successful recent development has been the introduction of a class of drugs known as thrombopoietins. These are hormones that stimulate the body to produce more platelets, mimicking the body’s own natural process. They have been shown to be successful in over 90% of patients who have been given them, without the impact on infection seen with other more traditional therapies. In addition, up to a third of patients appear to be able to stop treatment eventually, while maintaining a normal platelet count, which is a major bonus. However, there are two drugs available in this class and both have been reviewed by NICE. Although it has recommended them, it has placed significant limitations on the use of the drugs, which have been open to differing interpretations by commissioners around the country. While some have been very open in allowing usage for patients in need, others have expected patients to go through, and fail, the conventional options before being given this new treatment. This is purely for financial reasons. It exposes patients to unnecessary risk and has led to a postcode lottery of prescribing of the worst kind. These drugs are only the start of a number of existing agents currently being developed to target the specific underlying abnormality in the immune system. They will benefit patients with not only ITP, but other similar autoimmune diseases.

Like many rare conditions, ITP is not an obvious target for research funding. This has hampered both basic research into the condition and clinical studies to investigate treatments. It has fallen to the pharmaceutical industry and groups such as the ITP Support Association to support this crucial work. Here I declare an interest as a member of the association. I shall finish by saying that we would like to see more support from the NHS and the national research funding bodies being channelled into research on rare diseases which, although small in number, can have a devastating effect on many people’s lives.

20:17

[Lord Patel (CB)]

My Lords, it is nice to see the noble Lord, Lord Rogan, looking so well. The thought that he might have a platelet count of two, which I have never come across, surprises me. I am pleased that his treatment is working. I thank the noble Lord, Lord Turnberg, for initiating this debate. Listening to him and to the comments made by the noble Lord, Lord Walton of Detchant, it is clear that the system of funding for treatments is not working and neither are the services that are being delivered, as has just been highlighted by the noble Lord, Lord Rogan, in his words about postcode lotteries. I shall focus in my remarks on the need for greater collaboration and cohesion in the planning and management of services for the rarest conditions—the extremely rare diseases.

With greater national collaboration, treatments for rare diseases can be taken up more quickly, with swifter patient access. Over the past two days I have met many members of the Specialised Healthcare Alliance. As a coalition of more than 100 patient-related organisations and 15 companies, the alliance has been campaigning on this issue for a number of years and has clear priorities for improvements to benefit patients. Collaboration is extremely important for these services. We know that very rare diseases affect only a small number of patients who may well be living in any part of the United Kingdom. Services for these patients cannot sensibly be available in every local hospital. Highly specialised services that typically cater for fewer than 500 patients in England can be provided in only a small number of hospitals across the country, partly due to the sophisticated expertise involved in delivering those services. I am familiar with the work undertaken in my own hospital where very complex dermatological testing is conducted on patients from across the UK. It is a member of the UK Genetic Testing Network. Indeed, networking arrangements of this kind are a vital component of highly specialised care delivery. It is therefore crucial to strengthen networking arrangements of all types, be they between specialist centres as in the UK Genetic Testing Network or between specialised centres and local hospitals based closer to where patients with rare conditions live.

The complex mix of highly specialised care delivery I have described requires sophisticated planning and oversight on the part of commissioners. It is in this area that concerns have been raised. Many are aware of the good work that was undertaken by the Advisory Group for National Specialised Services. Prior to 2013, it developed multidisciplinary expert advice on highly specialised services. The work of AGNSS and the national specialised commissioning team which it advised covered many areas of service delivery and management. It reviewed potential service developments and brought in specialist expertise to consider whether they should be prioritised for funding. The expertise included input from expert clinicians, patient representatives, health economists, health ethicists, commissioners and others. This function has now passed to NHS England. However, apart from a weakened advisory group for these services, all decision-making takes place within the context of specialised services as a whole. This means that services for the smallest patient populations can be competing for resources with very large services. There are also concerns that the expertise formerly vested in AGNSS is not present within these new decision-making processes.

AGNSS also appraised new treatments for rare diseases, many of which are inextricably linked with the associated services. Again, it brought a variety of expertise to bear, as well as an appreciation of the different paradigm for appraising those treatments, which often cannot produce the kind of randomised control trial evidence that is seen for more common therapies due to the small number of patients who are involved. This function has now been passed to NICE, which has been asked to develop a bespoke, highly specialised technologies appraisal process and methodology. While NICE’s rigour in appraising medicines is not in doubt, its ability to run two separate processes with vastly different QALY thresholds may present a challenge. It is also crucial that NICE should collaborate extremely closely with NHS England, given the strong links between treatments and services for the rarest conditions.

Also, the national specialised commissioning team used to commission the providers of highly specialised services directly. This meant that a single national team oversaw delivery and assured quality across the country. Should one provider experience problems, the national team would be aware of it and could liaise with other centres to ensure that they responded accordingly. Now the function is spread across a number of different teams all around the country without any clear national leadership. This involves greater complexity and, most importantly, introduces more clinical risk for these services. NHS England’s ability to evaluate the outcomes of its commissioning, including the outcomes arising from new treatments for rare diseases, would also be strengthened if this was rectified. Greater cohesion in the appraisal, planning and delivery of services for patients with rare diseases is crucial. I hope the Minister will be able to provide some specific assurances on each of the functions that I have outlined above.

The noble Lord, Lord Turnberg, referred to the problem of access to medicine. As the noble Lord, Lord Walton, referred to, there are seven routes through which licensed medicines for rare conditions can be evaluated. NICE’s topic selection criteria do not currently recognise conditions defined by genetics, biomarkers or a difference in clinical presentation. This means that the full range of medicine that could benefit patients with rare conditions is ineligible for HST evaluation. Let me give you an example. Ivacaftor, or Kalydeco, is a medicine developed to treat 5% of cystic fibrosis patients and their specific genetic mutation. NICE’s current criteria mean that it would not be available to patients.

20:24

[Lord Hunt of Kings Heath (Lab)]

My Lords, my name was inadvertently missed off the list, so I am going to speak in the gap. I will give the noble Earl his full 12 minutes. Perhaps I may put two points to him.

First, will the noble Earl agree to my noble friend’s recommendation that the Ministers institute a thorough review? I stress that this should be done by Ministers. NHS England has shown itself incapable of doing the job properly. Ministers are much more accountable and much more aware of the rare disease issue and I really do think they need to take charge.

Secondly, in the new agreement with the drug industry, any increase in the cost of drugs over five years is being met by the industry through rebates. Why on earth are those rebates not being used to fund innovative new drugs for rare diseases? Can it just be that the NHS is under such financial pressure that this money has had to be raided, when it should have been used for innovative new drugs?

20:25

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)]

My Lords, I congratulate the noble Lord, Lord Turnberg, on securing the debate and raising this issue. I am acutely aware that access to treatments for patients with a rare disease is of great importance to him and many others. We have had some excellent contributions from noble Lords this evening.

The Government are committed to improving the life of all those affected by rare disease. The UK is a recognised leader in research, treatment and care for rare diseases. We are at the forefront of the genomics revolution, which has the potential to radically transform the way that we diagnose and treat people with rare conditions. The UK strategy for rare diseases, which my noble friend Lady Bottomley kindly mentioned, is a high-level framework that sets out our strategic vision. I am sure she will know that raising awareness of rare diseases is a key aim of the strategy. To that end, the department has worked with Health Education England to produce two videos: one aimed at parents and patients, the other aimed at healthcare professionals, particularly GPs. These were launched last week at the Rare Disease Day event, which the noble Lord, Lord Walton, referred to.

I was interested to hear about lymphangioleiomyomatosis, or LAM. Access to treatment for that condition, as for others, is based strictly on clinical need, as set out in NHS England’s published clinical policies, irrespective of tariff arrangements. The key in so many cases such as this is what is often referred to as the diagnostic odyssey—the delay that patients experience before getting a diagnosis.

I listened with huge interest to the noble Lord, Lord Rogan, talking about ITP. The UK Strategy for Rare Diseases sets out our strategic vision for improving the lives of all those affected by rare diseases, including ITP, the autoimmune disease. He will be impressed to know that my officials furnished me with an extensive note on ITP as he was speaking.

NHS England has been charged with taking forward many of the strategy’s commitments and in the Five Year Forward View it sets out a contextual backdrop for the strategic work during the next few years. Due to their rarity and their low patient populations, services for rare conditions in England are directly commissioned nationally by NHS England as specialised services. I am sure that the noble Lord, Lord Patel, will agree that commissioning these services nationally means that NHS England can commission each service to a single national standard with single national access criteria. It ensures that patients have the same access to specialised services regardless of where they live in England. NHS England has made significant progress in developing a set of nationally consistent service specifications and commissioning policies which ensure equity of access to high-quality services across the country.

Since April 2013, the National Institute for Health and Care Excellence, or NICE, has been responsible for the evaluation of selected high-cost, low-volume drugs under its highly specialised technologies programme, as has been mentioned. This plays an important role in ensuring that commissioning decisions are based on a robust and thorough assessment of the available evidence. NHS commissioners are legally required to fund treatments recommended by NICE in its highly specialised technologies guidance. Until NICE’s guidance is available, commissioners make their funding decisions based on the available evidence.

Topics are referred to that programme by Ministers, following a topic selection process that is overseen by NICE. At the core of the topic selection process is a set of prioritisation criteria that are used to determine whether a topic is suitable. These criteria are published on NICE’s website. The process for deciding which topics to refer to NICE is carried out with as much transparency as possible and includes consultation with stakeholders once a topic has passed the early stages of the process. However, it must be recognised that some degree of confidentiality is required, particularly early on in the process, as information on new drugs can be commercially sensitive before they are licensed. The noble Lord, Lord Turnberg, might be interested to know—as he was asking me about this—that NICE has recently taken steps to improve the level of transparency in the topic selection process, and has begun to publish more detailed information about the rationale for its topic selection decisions.

NHS England’s Clinical Priorities Advisory Group formulates recommendations on commissioning of new treatments for rare diseases in England. In order to ensure that the maximum number of patients benefit from innovative treatments coming on stream, hard choices need to be made about which of these to fund routinely. Patient groups asked NHS England to consult on changes to the principles and processes by which it makes these decisions. At its board meeting on 17 December, NHS England decided that a 90-day consultation would be carried out on the prioritisation framework and decision-making process that NHS England should use to make commissioning decisions on new treatments and interventions. The length of that consultation period reflects the importance of these decisions and the advice received from patient groups. The decisions on prioritisation will not be completed until the consultation has closed and the responses have had due consideration. The consultation was launched on 27 January, and it is open for responses until 27 April.

In carrying out its public consultation, NHS England will ensure that the principles and processes for making these decisions are well informed, evidence-led and in line with the expectations of patients and the public. I am sure that the noble Lord, Lord Turnberg, will agree that it is important that NHS England has a robust decision-making process in place and that that process must be followed to ensure that NHS England is treating all patients with rare diseases fairly.

[Lord Turnberg]

My Lords, will the Minister give way?

[Earl Howe]

I will give way, but I am sure that the noble Lord understands that we are time-limited.

[Lord Turnberg]

I just wanted to check that the Minister is aware that there are no fewer than seven serial committees that it has to go through. That does not seem very efficient.

[Earl Howe]

I note that point, my Lords, and I will reflect carefully on it. If NHS England has a comment to make, I shall be glad to write to the noble Lord about that process.

Clearly, once the prioritisation consultation finishes, and in the light of NICE assessments, NHS England will take stock of its position in relation to new treatments.

Our priority must always be to ensure that patients with rare conditions have access to new and effective treatments on terms that represent value to the NHS and the taxpayer. I am sure noble Lords will agree that it is very important that NHS England has a robust decision-making process in place and that, as I have described, it makes sure that all patients with rare diseases are treated equitably.

I also recognise that it is vital that we speed up the discovery, design and take-up of new, innovative 21st-century medicines and treatments in the NHS. We will continue to work with industry and our European partners to increase access to these innovative medicines for patients with rare conditions. In April last year, we launched the early access to medicines scheme, which aims to give patients with life-threatening or seriously debilitating conditions access to medicines that do not yet have a marketing authorisation, or licence, when there is a clear, unmet medical need. More generally, our Strategy for UK Life Sciences sets out an ambitious, long-term programme of action to improve the wider environment for health life-sciences companies and overcome the barriers that prevent discoveries being translated into commercial opportunities and new treatments with real benefits for patients.

The noble Lord, Lord Rogan, stressed the importance of research. Undertaking research into rare diseases requires effective partnerships between patients, their families, clinicians, researchers and industry. Of course, health research holds the promise for breakthroughs and improvements in the way that we diagnose and treat people with rare diseases. For example, the NIHR’s world-class Rare Diseases Translational Research Collaboration, launched in parallel with the UK rare diseases strategy, is just about to start 14 new projects. We also want to make it faster to start rare disease research in the NHS. That is why we asked the Health Research Authority to bring in a new single approvals process. This will speed up access for patients to new and effective treatments.

I will cover as many questions as I can in the time available. My noble friend Lady Thomas referred, very powerfully, to the value of hydrotherapy and the importance of appropriate equipment being commissioned by CCGs. As she will know, CCGs are autonomous statutory bodies. Decisions are made locally but I am happy to look into the matters she raised and will write to her on what I fully agree is a very important issue.

The noble Lord, Lord Patel, asked about the successor arrangements to AGNSS. Responsibility for evaluating the use of new and existing highly specialised medicines and treatments within the NHS in England transferred from the Advisory Group for National Specialised Services—AGNSS—to the National Institute for Health and Care Excellence in April 2013. So far, that is working satisfactorily. However, there is the other group—the Rare Diseases Advisory Group—which was referred to by the noble Lord, Lord Walton. Where does that fit it? In terms of rare diseases and highly specialised services, the RDAG makes recommendations to NHS England and the devolved Administrations on issues related to highly specialised services. Its further role is to have an overview across the four countries on the development and implementation of the UK strategy for rare diseases and highly specialised services. It makes recommendations to the Clinical Priorities Advisory Group about how highly specialised services should be commissioned.

The noble Lord mentioned the cancer drugs fund, which has helped more than 60,000 people with cancer to get life-extending drugs that would not otherwise have been available to them. NHS England is now responsible for the operational management of the fund. It is currently working to ensure the very latest, most clinically effective drugs can be made available to patients. We will carefully consider with NHS England what arrangements should be put in place for the fund in the longer term.

The noble Lord, Lord Turnberg, questioned the inconsistency in funding arrangements for different conditions. He mentioned tuberous sclerosis and kidney tumours. Over the next few weeks, the six programmes of care responsible for advising NHS England on specialised services will draw up the work programme for 2015-16, which will include developing a number of policies. Two policies—one for the provision of everolimus for tuberous sclerosis complex-related renal angiomyolipoma and the other for subependymal giant cell astrocytoma or SEGA—will be considered for inclusion in this process.

The noble Lord asked about commissioning through evaluation. That programme was established by NHS England in 2013 as an innovative mechanism to capture further evaluative data and I will write to him further about progress on that front. As regards negotiation on patient access schemes, companies that are members of the pharmaceutical price regulation scheme have the opportunity to propose a patient access scheme to improve the cost effectiveness of their drug, as part of a NICE appraisal. Departmental officials stand ready to meet with any company that wishes to discuss its options.

Time has run out. I conclude by saying that I am committed—indeed, the Government are committed—to ensuring that patients with rare conditions get the same quality, safety and efficacy in medicines and other treatments as those who have more common conditions.

Small Business, Enterprise and Employment Bill

Tuesday 3rd March 2015 Lords Chamber

Report (1st Day) (Continued)

20:39

Clause 33: Definitions of small and micro businesses

Amendment 25

Moved by

[Lord Mendelsohn]

25: Clause 33, page 29, line 28, at end insert—
“( ) Those who represent businesses with 10 to 49 employees and are purchasing goods or services for use within their commercial activities shall be considered consumers with all the rights of consumers under the Consumer Rights Act 2015.
( ) Those who represent businesses with fewer than 10 employees and are purchasing goods or services for use within their commercial activities shall be considered consumers with all the rights of consumers under the Consumer Rights Act 2015.”

[Lord Mendelsohn (Lab)]

My Lords, this amendment proposes to treat small businesses as consumers. Consumers buy goods and services, and enjoy a range of rights and protections. The offer to businesses is lower, on the basis that they should be either smart or big enough to look after themselves. In reality, the smallest of businesses face many of the same problems as consumers do. Our amendment tries to address two core elements. The first is the right of redress and the imbalance that exists. The second is the rights of consideration. This is particularly acute in circumstances where small businesses deal with regulated markets, such as energy, financial services, water and telecoms.

Here we have to take into consideration that in talking about small business we are really emphasising the micro-businesses, those that employ between one and nine people. In these circumstances they need regulators to deal with them as consumers; and they are recognised by a number of regulators and their interests are protected as if they are consumers. It is an uneven practice and our amendment would make it applicable across the board, but there is a great deal of assistance given by some regulators. This should be extended to make sure that things such as tariffs, supplier charge, information and certain difficulties are dealt with more expeditiously, because the small businesses are treated as consumers. When it comes to micro-businesses, third-party intermediaries who may offer services that do some of these things are clearly no substitute for reasonable protections and regulators considering them very carefully.

On the issue of rights of redress, there are protections for businesses under unfair terms legislation, and under the Sale of Goods Act and Supply of Goods and Services Act, but these apply only to business-to-business transactions. A small micro-business buying anything without establishing a business-to-business arrangement cannot be protected. This pushes every small business with one, two, five or nine people not to buy retail and it is entirely misplaced. We are suggesting that the extension of the provisions to allow businesses to be treated as consumers will deal with this.

I am bound to say that the Government have extended the gulf between consumers and these micro-businesses by the extension of individual consumer rights under the Consumer Rights Bill that is still before the other House. There was a debate to address this growing gap through that Bill and the suggestion was that it could be done under this Bill as the most obvious and correct location. These amendments seek to address the gap.

There are arguments against such a provision. One is that it confuses who a consumer is: but that is not really the case. It accords rights as opposed to a sense of definition, and the confusion is not in the definition. As it is, this point is already recognised with respect to how regulators operate in considering small businesses. A second argument is that business does not support the provision, which is true to a degree because bigger businesses do not, but small businesses do. The Federation of Small Businesses has been clear that this is an important and useful device for the very large number of micro-businesses. A third argument is that there is an insufficient level of evidence on which to base this, but that is not the case: there is very strong evidence. It may not meet the highest test of evidence, but that is not for want of the capacity to try to identify it. Putting the burden of trying to monitor this in detail on micro-businesses—many of which stay small—is an unreasonable test.

Finally, I shall raise another important consideration which I thank the noble Lord, Lord Deben, for highlighting in Committee. This amendment is not just about our commitment to helping small businesses but is a strong recognition of the sort of protection small businesses need to be put in place. It shows that we value encouraging enterprise and individual activity in creating small businesses. We should underpin what they do with the most basic of individual protections. This is a good and reasonable measure to create consistency in a law which is currently fragmented. I beg to move.

20:45

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I shall add a few words about this because we are talking about the products and services that very small businesses buy not on a regular basis or within their main business. In the next amendment, we will come to the Government’s welcome attempt to encourage the growth of home businesses, but in other ways aid that could be given is strangely absent from the Bill.

As my noble friend Lord Mendelsohn said, we argued that the Consumer Rights Bill should cover micro-businesses for things bought outside their main area of business. We can all give examples of this, such as when an employee gets married and the boss sends a bouquet of flowers, except that it never arrives; or a sole trader suddenly needs some cleaning done because of an unexpected leak but the dry cleaner damages the chair cover; or a book-keeper needs a new kettle, a radio or a Hoover, but finds she or he will have none of the new protections provided in the Consumer Rights Bill; or, similarly, a charity orders sandwiches for a farewell lunch for a volunteer which fail to turn up.

There is no good reason for those people in such circumstances not to be treated as normal consumers. Unless this amendment is accepted, they lose those rights simply because the cheque is made out on a business account. As my noble friend reminded us, in Committee on the Consumer Rights Bill the Minister told me that such consumer rights for small businesses were best covered in this Bill, but these rights are not there. This is surely the time to add them.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)]

My Lords, I thank the noble Lord for his amendment about treating small and micro-businesses as consumers. I welcome the opportunity to return to this issue. I am very glad to welcome back to the debate the noble Baroness, Lady Hayter. She reminded us of the good and graphic examples she always brought to the Consumer Rights Bill, which is very nearly on the statute book.

Since Committee, we have been giving this issue considerable thought. I remain concerned about the potential consequences of introducing such a wide-ranging measure in primary legislation. As I set out in Committee, we simply do not know the costs it might impose against the benefits which are assumed. The Government of course recognise that these concerns may not be realised, but nevertheless they, and the assumed benefits, require exploration.

Uppermost in my mind is the importance of small and micro-businesses to the UK economy, which the noble Lord, Lord Mendelsohn, rightly emphasised. As we know, these businesses make up 99% of all businesses in the UK and total 5.2 million businesses. Of these, 96% are micro-businesses, which in aggregate employ 8.3 million people and have a turnover of £655 billion.

The Government believe this underscores the need to move carefully. The Bill is designed to support small and micro-businesses and put in place the conditions for them to prosper. The unintended consequences of sudden changes in regulation have the potential to undermine these efforts. We do not know what the impact would be here. We only know that some business groups have concerns, which I will come on to in a minute, especially about the blanket application of consumer rights. This arises, I think, mainly because a protection for small businesses when buying could be a cost for such businesses when selling to others. The worst-case scenario would be where a small business buys an item from another small business and the item fails and causes a significant loss. The purchasing small business seeks to recover that loss from the supplying small business and, as a consequence, the supplier goes out of business. Currently, the businesses could agree in their contract to a reasonable limitation of this type of liability, whereas under this amendment they would not have scope to do so.

Since we last debated this issue, officials in my department have met business representatives and leading academics. As a result of these conversations, I am confirmed in the view that the issue is not straightforward. The British Retail Consortium considers that that the question of small business protection needs detailed consideration before any action is taken. For example, it raised concerns that the measure would remove businesses’ ability to reasonably limit liability in dealings with other businesses, and the possibility of this leading to significant claims for loss of business earnings.

[Baroness Hayter of Kentish Town]

I am sorry to intervene, but that suggests that the Minister is referring to things which are integral to the business. The example we gave in Committee was hair-dryers bought by a hairdresser. Of course if they failed that would create difficulties, but we are not talking about such things. We are talking about things that are not key to the core business, and therefore any failure would not lead to business interference.

[Baroness Neville-Rolfe]

I thank the noble Baroness for her clarification. The problem is that both the items she has described and other items might be covered, but perhaps I could make a little more progress.

I accept that the issue should not simply be dismissed for exactly the kind of point that the noble Baroness, Lady Hayter, has made. There are various points that need to be explored, so in the spirit of collaboration the Government consider that a possible way forward is to hold a public call for evidence, which we need. If the noble Lord will agree to this and withdraw his amendment, I propose that my department publish a call for evidence before the end of this Parliament so this can be taken forward. As I have said previously, small businesses and micro-businesses are not unprotected at the moment. There are protections in the existing law and these also allow businesses to enter into flexible transactions. All businesses need the freedom to contract for their particular requirements, which the current framework allows.

The call for evidence—if this seems a positive way forward—would ask whether these current arrangements offer sufficient protection or whether a gap in the law exists. If such a gap was found to exist, it would enable the Government to better assess whether this could be addressed by extending some of the consumer protections in what should shortly become the Consumer Rights Act to small businesses and micro-businesses, or through other options if they seem better.

I wish to thank the noble Lord and the noble Baroness for the commitment they have shown to this issue. I know we share the same objective of ensuring small businesses and micro-businesses are well supported. I hope that on this basis he will feel able to withdraw his amendment.

[Lord Mendelsohn]

My Lords, I am very grateful to my noble friend Lady Hayter for her intervention. As always, she has been able to encapsulate this issue with the use of some very vivid and impressive examples and I pay tribute to her strong advocacy for small businesses and consumer rights.

I will start by saying a couple of words on what the Minister said on the substance of the amendments, and then I will turn to the other matters. I listened very carefully to what she said. I think that there is a limited issue on costs versus benefits in relation to this. The costs at the moment are heavy burdens on micro-businesses and I think that the cost-benefit analysis of this is quite limited. I am less concerned about some of the unintended consequences that she suggests because some of them are already the sort of things covered in the two Acts that she forced me to look at after Committee. I am not sure I enjoyed reading them but I did look at them to try and get better sense of what is contained in the Sale of Goods Act and the Supply of Goods and Services Act and how they operate. A lot of the issues which she raises are already covered there. In addition, the nature of the contractual relationships is clearly covered in the other Acts and is outside that. I know that she is extremely accomplished in her task, and that she does not just take the legal advice that comes from the department without scrutiny. There is an issue here about some of the caution always inherent in some of that legal advice.

Nevertheless, I thank the Minister for a very constructive suggestion and an excellent way forward, which we on this side strongly agree with and for which we are very grateful to her for suggesting. Outside this, I might try to persuade her perhaps to add a little money for a bit of research on the cost-benefit analysis—that will not be too hard a task. However, with appreciation for a very constructive response to our amendment, I beg leave to withdraw it.

Amendment 25 withdrawn.

Clause 35: Exclusion of home businesses from Part 2 of the Landlord and Tenant Act 1954

Amendment 26

Moved by

[Baroness Hayter of Kentish Town]

26: Clause 35, page 32, line 23, at end insert—
“( ) In considering what is reasonable for the purposes of subsection (4), a court shall have regard to all relevant factors including but not limited to the following—
(a) the nature and location of the premises;(b) the nature of the business and the extent to which the activities of the business are comparable to activities carried on at home which are not business activities;(c) whether the business requires any structural change to the premises comprised in the tenancy;(d) the number and frequency of visitors likely to come to the premises in connection with the business;(e) the number and frequency of deliveries and collections of goods likely to occur at the premises in connection with the business;(f) the amount of any noise or other environmental impact likely to arise from the business;(g) the likely effect of the business on the parking of vehicles in the vicinity of the premises; and(h) the proportion of the property used for the business. ( ) Where a dwelling-house is let under a tenancy to which subsection (2) applies, the landlord and tenant may agree in writing under the terms of the tenancy or in any other document signed by them—
(a) that a particular business, or(b) that a particular description of business,if carried on in the premises, shall be a home business for the purposes of this Part of this Act.( ) Any such agreement shall be binding upon the parties.”

[Baroness Hayter of Kentish Town]

My Lords, Amendment 26 stands in my name and that of my noble friend Lord Stevenson of Balmacara. It deals with the issue of home businesses which take place in rented homes.

At present, any landlord who lets residential property to tenants who then also use their homes for business finds that the landlord runs the risk that they will claim security of tenure as business tenants under Part 2 of the Landlord and Tenant Act 1954. Therefore, to protect themselves from that, very often within the tenancy agreement landlords prohibit any use of the residence for business. However, should the landlord in some way acquiesce to such a business, the tenants get security under the 1954 Act, regardless of any wording of the agreement.

Clause 35 would therefore allow that where a home business is carried on by a tenant, it would not qualify for security of tenure under the 1954 Act, and landlords can accept some working at home by tenants, who have only normal residential security of tenure. The clause also allows that where, in breach of any prohibition against business use, a tenant carries on such a “home business” and the landlord gets to know about it, effectively acquiescing in it, that would not in future give the tenant statutory rights.

We support the intention of this clause, but we are concerned about the woolliness of its wording and fear that it will deter the objectives set for it, because the clause does not say what a home business is. It says:

“A ‘home business’ is a business … which might reasonably be carried on at home”.

That caused my legal friends some amusement. The lack of clarity means that the issue will be fraught with uncertainty, which means that it is less likely that landlords or tenants will make the most of this opportunity.

Whether a tenant’s business can reasonably be carried on at home will depend on many things, which relate both to the physical building and its locality, but also to the work undertaken. We all know of a range of businesses that could happen at home: the office work that probably most of us do, catering, music teaching, tutoring, web design, computer programming, repairs, hairdressing, jewellery-making, fine art, journalism, counselling, physical fitness, accountancy, and the favourite of both the Minister and myself—dressmaking.

What can be done in the back yard of a remote cottage is a bit different from what can reasonably be carried on in a third-floor flat. Therefore, the problem is that without some guidance on what a court might take into account when deciding what a home business is, our fear is that landlords will be reluctant to venture this way. The Minister, the noble Lord, Lord Ahmad of Wimbledon, was very helpful in the meeting he had with me on this, and in his subsequent letter. However, I am afraid that that letter betrayed a slight lack of appreciation of how easily disputes can occur over whether a business is a home business, and disputes such as that can end up in court because of the lack of any sort of clarification of what is meant by a home business.

21:00

There is the same lack of certainty once a landlord—notwithstanding any prohibition in the terms of the letting—acquiesces in the carrying on of a business, because the tenant will not be able to claim security of tenure as a business tenant in future. The problem is that in those circumstances there will not have been any prior engagement or negotiation between the parties; there has been only acquiescence after it, so the exact business being carried out will not have been agreed beforehand. It will therefore come to a straight fight, probably in the courts, sadly, over whether the business to which the landlord has effectively consented falls within the definition of a home business. But “home business” has no such definition in the Bill, and therefore it will be for the judge to try and work it out. He may well ask why Parliament did not give a little more guidance on this. Failing that, litigation lawyers will do what they always do and litigate.

Amendment 26 lays down a non-exhaustive list of considerations that will give the parties and the courts some markers by which they can navigate their way through the definition. The Minister’s letter, which is in the Library, suggests that where a tenant has agreed that a business is a home business, and the terms of the tenancy say so, it would be hard for the tenant to go back on that. Correspondingly, he thinks it would be hard for a landlord who agreed to the carrying on of a business that the tenant thinks is not a home business then to argue that the business is a home business. It is easy to see how disagreements can occur later, partly because the home business might change. It might grow from something that started on one table in the kitchen into something rather larger. There may be a change of landlord. The business and the tenancy might be assigned from the original tenant to someone else. The tenant might get a new lawyer who might try it on, if you like, arguing that it was not really a home business—it was a business and therefore should have greater statutory rights. There are also people who simply go back on their word and will say the business is a real business, not a home business, and therefore they should have statutory rights. We are trying to give some guidance.

There is another part of the amendment that was not addressed by the Minister in his letter, which is perhaps another way to try to solve some of these problems. Where there is an initial agreement between the landlord and the tenant that a permitted business is indeed a home business, it would be binding on the parties, possibly provided they notify the court, as happens in some other circumstances. That might deal with the problem. When we had the discussion with the Minister, he argued at one point that there should be no distinction between a home owner running a business and a tenant running a business. However, there is a third party in this: the landlord, whose interests should not so easily be dismissed. Getting the definition wrong could give tenants rights that the landlord never intended that they should have.

To assist the courts, this amendment sketches out some of the issues that might be taken into account in the definition of “reasonableness”. It lays down the sort of issues to be looked at, such whether it is reasonable for this business to receive deliveries, customers, clients, patients or students; whether they can carry out noisy activities; how close the other neighbours live; and whether the business will generate an excessive amount of vehicle traffic, maybe even congestion or parking problems. The non-exclusive list gives some indication of the sort of issues that should be taken into account.

As I said, we support absolutely the intention of Clause 35, but its success will depend on how such definitions are received in the real world, and whether there is sufficient clarity to enable both parties to know where their statutory rights, particularly the landlord’s, will fall, so that this can go ahead and achieve the objectives that we and the Government want. I beg to move.

[Baroness Neville-Rolfe]

My Lords, I am grateful to the noble Baroness for her amendment and for providing the opportunity to return to the matter of home businesses, and I was very glad to hear of her useful meeting with my noble friend Lord Ahmad. The UK is a great place to start and grow a business. There has been an increase of half a million home businesses in the UK since 2010, with business confidence at record levels. New technology has allowed millions more people to work from home, many creating innovative businesses. Home working allows people to enter the workforce who otherwise might not be able to do so, for example because of family or health constraints. These opportunities should not be limited to home owners, but should also be available to those in rented accommodation.

Part 2 of the Landlord and Tenant Act 1954 gives tenants of premises occupied for any business purposes the right to renew their tenancies. Under the Act, this security of tenure would not apply if the landlord had prohibited business use in any part of the premises. So at the moment, private residential tenancies will commonly include a covenant against any business use to prevent a tenant gaining a security that they would not enjoy under a residential tenancy. The new model tenancy agreement developed by the Government for private landlords has highlighted the need for reform. The clauses before us today simply ensure that a business tenancy is not automatically created should a home business be permitted to operate in residential premises.

The Government have deliberately taken a broad approach to the definition of a home business, but the definition is clear. A home business will be a business run from a home, in a premises let as a dwelling, and a business of a kind that can reasonably be carried on in a home. I understand that the noble Baroness is concerned about the question of what is “reasonable” to be carried on from home. This will depend on the individual characteristics of the home: its size, its proximity to neighbours and the access to the property, to name but a few. If we attempt to legislate to restrict the definition of a home business and set out a list of the kind that the noble Baroness suggests within this huge variability, we risk restricting a tenant’s entrepreneurship and placing a brake on the growth of this exciting sector.

I know that there are also concerns about potential disturbance, but we are taking these steps because they are sensible, and there are safeguards in place. Planning and environment laws deal with these issues for all properties, owned and rented, and there is no evidence to suggest that these laws are ineffective in dealing with businesses run by home owners. Landlords can still prohibit all or any business use and are free to set the terms of the lease and limit the noise level, as now. Covenants in existing leasehold agreements remain in place, and taxes and building regulations remain unchanged. It would surely be unfair for the law to restrict a tenant’s home business opportunity more than a home owner’s.

With the second part of the amendment, I recognise that the noble Baroness is trying to provide clarity for landlord and tenant, but these clauses already include a definition of a home business, and I fear that her amendment could have perverse consequences. Our clause already allows landlords and tenants to use the tenancy agreement to permit a home business that fits that definition. The noble Baroness’s amendment goes further than this by allowing the landlord and tenant to define a home business themselves. This could allow the landlord to avoid security for business tenancies such as those for shops, which rely on this protection to build and develop their businesses. I am sure that this is not the noble Baroness’s intention for the amendment to add more uncertainty and risk for the tenant.

This clause should not be a vehicle for landlords to remove security of tenure from business tenancies. It would be much harder to broaden the scope of these provisions later to encompass new types of business than to narrow or refine them through secondary legislation. We have included within the clause the power to make secondary legislation which could further limit the scope of a home business, and I assure the noble Baroness that the Government will keep this under review.

Since the 1954 Act, the world of work has changed. We need to make changes to ensure that the Act is not stifling tenants’ innovation. We do not think it is for government to limit the business activity people can carry out in their homes, so long as it is not causing adverse impact on the landlord or neighbours. Existing protections are in place to guard against any adverse impact to others. Why should privately renting tenants be treated any differently from home owners who run businesses from their homes?

I greatly appreciate the work of the noble Baroness to scrutinise this provision, but there is little more that I can say. I hope that the reassurance I have given her today in this House and the discussions that she has had with my noble friend Lord Ahmad will mean that she feels able to withdraw her amendment.

[Baroness Hayter of Kentish Town]

I mean it sincerely when I thank the Minister, but I think she has fundamentally misunderstood. She says that my amendment would restrict and narrow the scope, but it is exactly the reverse. My fear is that, without certainty, landlords could still ban—I think she used the word “ban”—all businesses. My fear is that they will keep doing that because of the uncertainty. I think she has misunderstood what I was trying to achieve. The lack of certainty will leave many landlords banning, restricting or forbidding proper businesses because they will not be confident that it really will be a home business as opposed to someone starting a business and then saying, “Well, actually, this is a proper business”.

She also asked why a tenant should not be treated the same as the owner. The reason is that there is a third party, the landlord. The owner already has security of tenure because he owns his house, but tenants can get that extra security by taking it from a landlord. It is a different relationship. The question of why they should be the same as owners has not really been answered.

I accept that secondary legislation is possible. The Minister said it could be used to restrict use, I think, but it is the other way around. I want to enlarge the scope, so that landlords can do this safely, without automatically giving that extra security to the tenant. I have clearly failed to convince the Government. I am sorry about that because Clause 35 is important, and my fear now is that it will not be used as much as they would like. With those comments, I beg leave to withdraw the amendment.

Amendment 26 withdrawn.

Clause 39: Regulations about procurement

Amendment 27

Moved by

[Lord Mendelsohn]

27: Clause 39, page 36, line 6, at end insert—
“( ) The Minister for the Cabinet Office or the Secretary of State may by regulations ensure that the provisions of this section will not undermine the impact of the Localism Act 2011 and the Public Services (Social Value) Act 2012 and have due regard to—
(a) local authorities’ duty to promote economic growth in their relevant area;(b) local authorities’ duty to promote skills development in their relevant area;(c) the advertising and procurement tender period appropriate to the size of the business to ensure a secure procurement process; and(d) the potential harm caused to local companies and businesses by the relevant contracting authority’s choice of supplier through the procurement process.”

[Lord Mendelsohn]

My Lords, I shall also speak to Amendment 31. Amendment 27 ensures that the principles of localism and social value are upheld, and that local authorities have a duty to promote economic growth in their relevant areas. It ensures the duty to promote skills development; that the advertising and procurement period is appropriate to the size of the business; and there is due regard to potential harm caused to local businesses by the contracting authority’s choice of supplier.

Amendment 31 proposes that the Secretary of State must publish a report detailing the procedures of the procurement process, which must include: an assessment of the current systems of redress available to small businesses engaged in the procurement process; an assessment of the viability of the small business procurement adjudicator; and guidance on suitability to estimate which companies are best suited for the contracts on offer.

We are proposing amendments that we hope will help round out the Government’s proposals, which we welcome. These amendments seek to add to Clause 39, which currently provides for the Secretary of State or the Minister for the Cabinet Office to make regulations imposing duties on contracting authorities in relation to procurement functions. Ministers can issue guidance to which authorities must have regard. This power can be used in a variety of ways and is extensive in scope.

21:15

Concerns have been widespread that these powers could centralise, cause approaches that may well not be suitable for a particular scenario—sometimes considered a “one size fits all” approach—and limit the capacity, particularly of local authorities, to procure strategically and adjust to local circumstance. Local government is already the best-performing part of the public sector in encouraging and obtaining services and working with small businesses, and is a successful local agent. In many ways, it seems incongruous that the Government, who have devolved so much to, for example, Manchester—appreciating its local capacity to do so much and to be such a strategically significant player—do not provide this for others and still do not allow for that sense in which a local authority can act effectively as a strategic agent.

Ninety-nine per cent of UK businesses are small but they account for 10.5% of central government expenditure on procurement. Local authorities have a much better record and just over 50% of such expenditure is with small businesses. Local authorities are also able to create skills, clusters, partnerships and arrangements with a variety of local participants, from the smallest micro-businesses to universities, and make a big difference to the profile and capacity of small businesses in their areas.

As with many other things, there is an issue here about ambition, forward direction and the sense of what we are trying to achieve in opening up public procurement to small businesses. Part of our issue, and the reason we have made our suggestions, is that we would wish small businesses to be able to be even more ambitious than the measures that the Government have already introduced. There can be circumstances where, in procurement, collaborations with small businesses could be better placed to deliver an outcome that would traditionally have gone to a larger business. In our discussions in Committee and beyond—we are grateful for the way in which the Government have been open to the considerations that we have raised—we have even raised examples in which contracts identified as being worth just under £10 million could be procured to a small business, which could deliver tremendous capacity and benefits, and even cut prices significantly.

It is therefore important that we do not consider this issue only in regard to the smallest contracts and we should have a much bigger view about what small businesses can achieve for the public sector and in public procurement. Therefore, that is why we are concerned about requirements placed on turnover or levels of insurance. These are important areas in which government needs to find other ways to increase its skills in procuring these services to make sure that we are delivering the right opportunities for small businesses and encouraging them. Additionally, we are conscious that small business representatives are very concerned to make sure that small local firms’ benefits to local communities are protected. Where they can be, they should be enhanced.

Essentially, we are looking for an environment with more effective commissioning. We would like the Government to see these amendments in the context of how we can upgrade our expectations of what small business can achieve, address one of the bigger obstacles in public sector procurement—the procuring skills of the public sector institutions themselves—and deal with the issue of which many people have direct experience: the great caution and risk-averse culture that exists when procuring these tenders.

As part of these amendments, we would be very keen for the Government to consider the requirement to demonstrate how their commissioning for these contracts would promote economic growth and provide skills development in the relevant areas, take account of the local economic impact and make sure that small businesses are not excluded by dint of a contract’s size or documentation requirements. It is important to point out that we are not saying that procurement processes should be designed in favour of small businesses or local suppliers. We are saying that we need to understand what local suppliers can offer in innovation or support of outcome delivery before commissioning plans or procurement processes are signed off.

Too often, the complaint from local and small suppliers is that they have no opportunity to provide input at the pre-procurement stage. This input is often critical to driving innovation and can lead to improved outcomes and often dramatically reduce costs. If this pre-procurement process is not executed, central government, local authorities and agencies will follow the path of least resistance. The larger suppliers, with the resources to invest in marketing heavily to their customers and prospective customers, will have an in-built bias towards large enterprises. In this context, the suggestion of an adjudicator underpins this capacity to create a much more dynamic capacity for government to interact with these procurement processes. It allows for a much more open discussion, in many ways building on some of the work the Government have done with their mystery shopper scheme, but giving a lot more scope to intervene.

The Minister said that she would like to see better, simpler documentation that makes contracts more accessible to small businesses and voluntary organisations. We agree. However, while the structure and form of documentation is critical, it is not inherently the most important part of the procurement process. In fact, before that process commences, much can be done and much benefit derived. There is sometimes too much focus on simplified documentation, which may well trigger the unintended consequence of an obsession with process and the efficiency of that process at the exclusion of the outcome. If organisations have not properly specified and thought carefully about how to include small businesses in the process, we may well be creating a more efficient machinery for excluding small businesses. It is in the design of the procurement process, and the clarity of the definition of the outcomes that we are looking to deliver, that small businesses will be best advantaged.

We agree that small businesses can be and often are excluded at the commissioning stage. That relates to the notion that due and proper consideration should be given to the role that small businesses and third-sector organisations can play in support of the delivery of whatever outcome is required. It is at this stage that the public sector should be engaging with the market in a structured manner, with early market engagement, telling the market what the issues are, being clear and structured about the outcomes it is looking to deliver, and calling on its local supply chain, including small businesses and third-sector organisations, for their input at this pre-procurement stage. Too often, the public sector bypasses this commissioning process, dusts off the tender document from the previous procurement process, makes a few superficial changes and presses the button. If we get that process right and engage the market in a structured manner, we will specify correctly and ask the appropriate questions at all stages of the procurement process to elicit the right outcome and be able to design the contract that will benefit that. This is not loading the dice in favour of small businesses; it is allowing their voices to be heard in a structured manner to enable local authorities to understand what they have to offer and what innovation they can deliver in support of the required outcomes.

Our amendments in effect build on what the Government are suggesting to create an outcome-based culture and a win-win situation, where central government, local government and their agencies can accelerate the shift away from an input-driven approach and be much better able to design processes that work.

We have been very supportive of a number of things. I mentioned the mystery shopper, the website and the portal. We are also very supportive of the Government’s intentions. We have some issues about the withdrawal of the pre-qualification questionnaires. We do not believe that they are great panacea. As it is, they have been withdrawn only for a particular financial limit and that limit seems quite arbitrary. We could, in fact, have the PQQs. They could be standard, but if they are withdrawn that is fine. It is not, in a sense, material for us. What is more material is the thrust, which we hope the Government share, of local authorities being good at procuring from small businesses and focusing on the outcomes and strategies that will benefit small businesses. That should be protected. We should widen the scope for promoting small businesses, building better procurement skills and strategies inside the public sector, and providing an adjudicator to intervene more clearly. These two amendments will help to build the place of small business in public procurement. As I said, we acknowledge the work that is done but we believe that these amendments add to the Government’s initiatives in a very constructive way. I beg to move.

[Baroness Neville-Rolfe]

My Lords, I am grateful to the noble Lord for his amendment and for the opportunity to return to the public sector procurement issue. I also thank him for his interesting and wide-ranging introduction, which I and the officials concerned will read afterwards with considerable interest. The importance of outputs, not inputs, the value of the mystery shopper and the strength of some local authorities in the procurement area are common ground.

In response, I should like to update the House on where we are. Only last week, we were pleased to announce that in 2013-14 central government gave 26.1% of its total spend to smaller businesses, up from 19.9% in 2012-13. This Government have delivered on the aspiration set in 2010 that 25% of this spend would go to small businesses by May 2015. Looking forward, of course we want to do better.

Furthermore, the Public Contracts Regulations 2015 came into force last week. These make it clear how wider policy issues can be delivered through procurement where this achieves value for money and satisfies EU legal requirements and where the policy is clearly relevant to the contract subject matter. This includes, where appropriate, factors related to stimulating local business and growth.

As a result of the recommendations of my noble friend Lord Young of Graffham, the 2015 regulations help to level the playing field for SMEs, working to remove barriers that prevent them accessing public sector contracts. I pay tribute to my noble friend for the work that he has done in this area. All new procurement opportunities will be accessible on a single portal—Contracts Finder—launched last week. PQQs will not be used for contracts below EU thresholds, and there will be 30-day payment terms in all public sector contracts. Clause 39 will build on these new measures to break down further barriers. Following consultation, and once the final regulations are made under this clause, any published guidance will reflect the new obligations in a proportionate and meaningful way.

I shall now look at the amendments, starting with Amendment 27. The Government’s intention is to improve procurement practice. It is not about taking control away from local authority procurers, whether in Manchester or elsewhere. The noble Lord is completely right to emphasise the scale of local government procurement and the opportunities for SMEs for the benefit of both local government and the businesses themselves.

I assure the noble Lord that Clause 39 complements the Localism Act 2011 and the Public Services (Social Value) Act 2012 rather than conflicts with them. It is true that the clause does not reference social value considerations but it does not prevent a contracting authority considering them under the 2012 Act. The social value Act places duties on contracting authorities to consider how they might achieve social value in what they procure and how they procure it. The duties in Clause 39 and those in the social value Act are therefore entirely complementary. The Localism Act is designed to devolve more powers from central government to communities and councils. It does not address the need for procurements to be run in an efficient and timely manner.

21:30

Clause 39 is consistent with recommendations made separately in the Local Government Association’s national procurement strategy. That strategy addresses the involvement of small firms, encourages the use of portals, and places more emphasis on pre-procurement market engagement. This is entirely consistent with the 2015 regulations and the way that the Government intend to regulate under Clause 39.

I turn to paragraph (d) in Amendment 27. The Government understand the importance to local authorities of being able to support local business. Such support must, however, comply with EU rules. The noble Lord’s amendment, while well intended, might lead to contracting authorities discriminating in favour of suppliers within a particular region or locality, which would be a breach of treaty principles.

The clause is not about centralising procurement, or taking a “one size fits all” approach. It is about helping all contracting authorities to establish good procurement practice in an effective way across the whole public sector in support of local economies and sustainable growth.

On Amendment 31 on reporting and the adjudicator, as a result of the 2015 regulations, contracting authorities are now required to ensure advertised procurement opportunities on the free-to-use Contracts Finder website and must report on the number and value of contracts awarded to SMEs. For contracts above the EU thresholds, the EU rules require contracting authorities to publish how many SMEs tendered for the contract and whether the successful bidder was an SME.

Regarding the question of a procurement adjudicator, to which the noble Lord referred, I do not consider that an adjudicator would be appropriate or needed as there are already—perhaps I can explain—two distinct and effective systems of redress for small suppliers. First, there is the traditional approach of taking legal proceedings, and all suppliers have clear legal means of redress set out in the remedies directive and in our new regulations. Secondly, there is a less formal scheme that we are setting in statute through this Bill—our mystery shopper service, which investigates referrals about poor procurement practice. I am glad to say that we are giving more teeth to this service, through Clause 40, so that contracting authorities must co-operate with investigations promptly, and suppliers can expect a robust and expedient conclusion, building on the strength that we both agree on.

Turning to the second part of the amendment and the question of requiring the Cabinet Office to publish guidance, I should make it clear that the new Contracts Finder portal will include information on public sector procurement opportunities above specified thresholds. The system will flag which contracts have been awarded to SMEs. The current rules allow for flexible procurement with appropriate controls, and the Government do not believe we should remove contracting authorities’ autonomy to choose how to award their contracts. Equally, we must not unfairly tip the balance in favour of SMEs by effectively reserving contracts for them. To do so would contravene our policy to deliver value for money through competition and would go against the EU treaty principles. I have spoken at length, but I hope that what I have said gives the noble Lord some assurance on the points that he has raised and has given comfort to the House more generally that we have done this in the right way. I hope that the noble Lord will agree to withdraw his amendment.

[Lord Mendelsohn]

I thank the Minister for that reply. I do not wish to sound churlish, but I hope she will forgive me if I raise a couple of points in relation to what she has said. I made the point twice that this was not about trying to create a process that was rigged in favour, but was much more about making sure that procurement was open to small business because everything—the skills, systems and outputs—was designed towards achieving a better outcome, so that small business would find it easier to compete to try to gain those sorts of contracts.

I think there are different ways in which the numbers have been calculated. I do not wish to doubt them too much, but some of the tier 1 classification subcontracting has been reclassified. It seems that the numbers have changed slightly. There is progress and I do not wish to undermine or contest that, but it is important that we maintain our ambition for this.

On Amendment 27, I am encouraged that the Minister stated very clearly that it was complementary.

This is important and I would be grateful if the Government would consider what they could do to make sure what they are trying to do was much more explicit. I am afraid that there is great concern about what local authorities must do; how they must act and comply. I think they are actually very good at the job. One of the guides I read recently was for Wiltshire. If the Minister can show me a better central government guide to how to procure than Wiltshire has produced, I would be very surprised and more than happy to give her even more fulsome praise from the Dispatch Box than I have already. An important dimension is that we are placing the onus on local authorities, which have been so good at doing it. I thank the Minister for her comments but an outstanding issue is that some local authorities have done a very good job and we should be mindful of that.

On Amendment 31, the procurement adjudicator has a very useful function. There are systems of redress, but this is not really about those. It is about systems of intervention. As the Minister rightly says, they are doing things on redress, like strengthening the mystery shopper, and we discussed this in Committee. There are also the usual methods of employing lawyers and going through the courts. However, the point of an adjudicator in these circumstances is to be much more dynamic, engaged and involved in encouraging the capacity of those procuring and the people involved in designing the processes. There needs to be a more dynamic conversation to make sure the skills are there. I make the point again that everyone will recognise at different times that there is a risk-averse culture; systems are repeated and there is a lack of a dynamic sense about how you procure better. In the private sector, some go through a sort of performance to make sure their procuring capacity becomes ever more skilful, but this is probably lacking in the public sector. That dynamic conversation, which may need a mediator, is what the adjudicator is for. It is not just about systems of redress.

I have had a quick look at Contracts Finder as it stands at the moment in its beta version. Although I welcome the initiative, it is not particularly user-friendly and needs a fair degree of work to make it so. If the Minister would consider making it available also as an app, then the design might be more useful and reflective of what is needed and it would be more accessible to some businesses. There is no point in putting it on one site if it is not as readily available as it could be. In summary, I would be very grateful if the Minister would give further consideration to what we have said and see if there is any way to deal with the areas we are trying to address on how to get the systems working to procure better. I am very grateful that the Government will look at what I said earlier but anything that would give a stronger indication of how we could do something a little bit more inventive, to add to the efforts that she has already outlined, would be greatly appreciated at Third Reading.

[Baroness Neville-Rolfe]

Before the noble Lord withdraws the amendment, I say that I am very happy to reflect further on the important discussion that we have had. I thank him for drawing attention to the Wiltshire guide, because I am a native of Wiltshire, and for his suggestion of making the finder into an app. I will, perhaps, pass that challenge on to those concerned at the heart of government and see whether they can deliver it.

[Lord Mendelsohn]

After such a fantastic response, how is it possible for me to say anything other than “I beg leave to withdraw the amendment”?

Amendment 27 withdrawn.

Amendment 28

Moved by

[Baroness Neville-Rolfe]

28: Clause 39, page 36, line 10, leave out from “authority”” to “, or” in line 12 and insert “has the same meaning as in regulation 2 of the Public Contracts Regulations 2015 (S.I. 2015/102)”

[Baroness Neville-Rolfe]

My Lords, I shall be brief in speaking to these relatively minor but important amendments, and I shall start with Amendment 28. The Government are grateful to the Delegated Powers and Regulatory Reform Committee for its scrutiny of the Bill. In its report, the committee recommended that the power in Clause 39 should be changed from the negative to the affirmative procedure. The noble Lord, Lord Mendelsohn, also raised this in our debate in Committee, and so I am glad to be able to give effect to the recommendation.

Amendments 32 and 33 are technical amendments to update references to procurement regulations in Clauses 39 and 40 in the light of the new regulations that came into force last week. I hope noble Lords will support the amendments, and I beg to move.

[The Deputy Speaker (Baroness Morris of Bolton) (Con)]

My Lords, there is an error in the Marshalled List and the proposed amendment should read as follows:

Page 36, line 10, leave out from first “authority”” to “, or” in line 12 and insert “has the same meaning as in regulation 2 of the Public Contracts Regulations 2015 (S.I. 2015/102)”.

Amendment 28 agreed.

Amendment 29

Moved by

[Lord Young of Norwood Green]

29: Clause 39, page 36, line 42, at end insert—
“( ) duties to require an appropriate number of apprenticeships.”

[Lord Young of Norwood Green (Lab)]

My Lords, at the end of a long day I will endeavour to be as succinct and to the point as possible. We did think carefully about returning to this issue and I have today read through the comments made by the Minister in Committee. Given the importance of the issue, we felt that it was worth doing so. I shall quote the Minister from the previous proceedings:

“We have already delivered 2 million apprenticeship starts in this Parliament, and there are 20,000 apprentice vacancies around England at any one time. However, I share the noble Lord’s concern about getting enough young apprenticeships”.—[Official Report, 14/1/15; col. GC204.]

That goes to the heart of these amendments, although they are not necessarily aimed just at apprenticeships for the young. However, that is surely a primary concern given that there has been a decline in that area and given that in some parts of the country, despite welcome drops in unemployment, we still have significant high levels of youth unemployment. In that respect, I make no apology for returning to this matter.

I pay tribute to the Government’s commitment to apprenticeships but I have also complained in the past about simply quoting the number of 2 million, because the number is not particularly helpful. It needs to be disaggregated if we want to look at the figures for 16 to 24 year-olds. We can then see that more than 50% of those 2 million apprenticeships are in fact adult apprenticeships, and some of them would fall under the classification of reskilling rather than new jobs—not that I would dismiss that as unimportant. But I have yet to hear an argument from the Government or the Minister which is a rebuttal of our view that if we are talking about public procurement contracts, there should be a requirement on the part of those bidding for them to stipulate how many apprenticeships they will provide and what level of training will be available.

Of course this should not necessarily apply to all contracts. There needs to be a cut-off figure, which we have suggested should be for contracts worth £1 million or more. That is an appropriate level. The response from the Minister has been that this might be a deterrent to smaller suppliers in the chain. I again cite the Crossrail model, where that has not proved to be the case. It remains a serious problem that only around one in five employers is recruiting apprentices, and that only about a third of FTSE 100 companies do so. The challenge is to involve a larger number of employers. One way to do that is for the Government to show that they are serious about this issue and that if companies want to bid for significant public procurement contracts they have to demonstrate the seriousness of their intention. I have looked carefully at what the Minister said and still cannot find any reason why we could not go down that road. We do not believe that there is any legal impediment to encouraging smaller employers or contractors to bid for such contracts.

21:46

The Government should recognise that if they want to encourage more companies and more employers to get involved, the apparatus with which they replaced the RDAs, the local employment partnerships, should surely be part of the strategy. There should be a requirement on local employment partnerships to work with local employers and local authorities to produce the maximum number of apprenticeships within the geographical areas that they cover. That is a fairly modest aim in the circumstances, unless we feel that we are being so successful in apprenticeship provision that we do not have to worry about it. I do not believe that we have reached that situation.

That is why we suggest in Amendment 30 that there should be,

“duties on local employment partnerships to work with the relevant small and medium enterprise organisations to deliver an apprenticeship strategy”,

and an annual review. In that way, the Government would have real information on where the best practice and achievements were taking place and they would be able to focus on local employment partnerships that were not delivering.

The second part of the amendment refers to,

“duties on schools, colleges, university technical colleges … and other relevant education institutions to have established links with local businesses to encourage apprenticeship development”.

As I have said on a number of occasions, another challenge that we face—I see it in schools that I visit as part of the Lords outreach programme—is that far too many schools are still committed only to pushing the maximum number of their students through to A-levels, regardless of whether it is suitable for them. They do not carry out the legal requirement on them to give their pupils a wide range of career guidance which shows them that there is another, vocational route, that they can earn while they learn, and that it is just as successful a route—for some students, it is even more successful—to a very worthwhile career.

It is not as though there is not a real need to do this. We know that we have an enormous number of vacancies in engineering and construction. We know that there is a huge gender imbalance as well. There is an awful lot of work that schools and colleges need to do in establishing links with business.

I look forward to the Minister’s response. I hope she will use this as an opportunity to take away the suggestions that we have proposed in these amendments and have another look at it before she comes back to us at Third Reading, rather than just giving us the arguments that we heard in Committee. On those grounds, I beg to move.

[Lord Stoneham of Droxford (LD)]

My Lords, I am pleased to follow the noble Lord, Lord Young. In my heart, I am with him 100%. The opportunity to encourage through public procurement the expansion of apprenticeships and training and development is certainly worth while. The trouble is that these clauses are very much concerned with trying to enable small businesses to have a greater chance for public procurement contracts. Obviously, if we over-complicate the procedure, that is a problem. However, I just wanted to register my hope that the Government are continuing to look at this. It is something that they can encourage in the public sector and, indeed, they are already doing so. We need to do much more and there is a lot of very good casework and examples of where this is being done successfully at all levels of industry. I hope that the Government will continue to give this particular priority.

In addition, the linkages to the work of the LEPs are very important. We also have in schools a big obligation to promote technical apprenticeships and encourage more young people to take part. I am dubious as to whether the Government will be able to accept something at this stage in this Bill but it is something that should be a continuing priority.

[Baroness Neville-Rolfe]

My Lords, I thank the noble Lord, Lord Young, for his amendments and for allowing us to debate the important subject of apprenticeships, albeit rather late in the evening. I am also grateful to my noble friend Lord Stoneham for adding his wisdom to the debate, expressing concern about the particular provisions we are looking at but making absolutely the right point about the need to move the apprenticeship agenda forward and do ever more.

Starting with Amendment 29, I should, perhaps, remind the House that there is some outstanding work currently under way in this area. The noble Lord mentioned Crossrail as a trailblazer. It is an amazing project in all respects and has recently hired its 400th apprentice. Obviously, there is a huge opportunity to train apprentices on big construction procurement projects of that kind.

The Government have agreed to support apprenticeships growth in the provisions brought forward by city deal partners, linked to their growth sectors in the local economies. For example, 1,500 new high-value manufacturing apprenticeships have been created in the West Midlands and 420 apprenticeships have been created in Greater Cambridge in different priority sectors, from professional and scientific, through to advanced engineering. We are also encouraging employers to take on apprentices by creating the apprenticeship grant for employers and relaxing national insurance contributions for employers who take on apprentices. However, not every procurement is appropriate for delivering apprenticeships. I think the noble Lord acknowledged that. Trying to deliver a policy where it does not properly fit creates bureaucracy. We do not want a situation where suppliers are forced to meet a requirement to create new apprenticeship opportunities every time a new contract is awarded. This would change the very nature of apprenticeships, meaning that they were not linked to the company’s needs. Young people could be let go before their apprenticeship ended, a concern that I have heard from the Local Government Association. Even more important, it could be damaging to the individual apprentice.

We also have to follow legal requirements. For above-EU threshold contracts, a contracting authority must always be able to show that the requirement to provide an apprenticeship is sufficiently linked to the subject matter of the contract. Some contracts will have no links with apprenticeships, so forcing apprenticeships into all of them could even breach these EU rules.

The noble Lord might say that the amendment refers to requiring an “appropriate number” of apprenticeships so this does not apply to every procurement. But how would a contracting authority or Government know what an appropriate number was? A blanket requirement about apprenticeships as proposed in the amendment would not work. However, the Government support the appropriate inclusion of training and apprenticeship criteria in procurement and we believe that such requirements are most likely to be relevant on major construction and infrastructure projects. We need to adopt a thoughtful and considered approach, working with industry. I assure noble Lords that we are actively working to achieve this.

I turn to Amendment 30. I should like to reassure the noble Lord that we support schools and local enterprise partnerships working together with SMEs to deliver more training and apprenticeship opportunities. There are some highly successful examples of this work taking place. Indeed, following a debate we had on an Oral Question that the noble Lord asked, I shared some of those good examples with him. I will not delay the House by repeating those this evening.

I understand that the noble Lord’s intention is to place general duties on local enterprise partnerships and educational institutions such as schools to encourage, develop and promote these apprenticeships. However, I do not believe that moving away from good practice in this area to regulation is the right way ahead. Local enterprise partnerships are flourishing because we are addressing exactly the barriers identified by employers, getting them involved directly, simplifying the system and giving them a free hand so that they can do the right thing. The Government are working with a number of such partnerships as part of the city and local growth deals to drive up business demand for apprenticeships in their localities. This allows local enterprise partnerships to choose the most effective way to promote apprenticeship development.

I share the noble Lord’s concern about the way apprenticeships declined in the first part of the 2000s. As he knows, we are getting back on track and doing many of the right things. My noble friend Lord Stoneham is right to urge us to do more and to make it a priority—which I can confirm that it is. However, I do not believe that legislation of the kind proposed in the amendments is right or sensible. While the noble Lord, Lord Young, knows I share his wish to increase apprenticeships, it is wrong to introduce new bureaucratic regulatory burdens in a small business Bill. I fear that these amendments could be perverse in their effects and I hope that on reflection he will feel able not to press them.

[Lord Young of Norwood Green]

I thank the Minister for her response. Like my noble friend Lord Mendelsohn, I do not want to appear churlish, especially at this time of night, but it was a predictable response and a rerun of the previous analysis. Of course, I do not want to introduce any level of bureaucracy that would act as an impediment to SMEs in bidding for contracts. That would be perverse. However, that does not need to be the case.

I am not suggesting that the words within this amendment are by any means perfect. We do not establish the criteria one would need to apply in introducing this. However, I do not believe that there is a legal barrier. We proved that with the Olympic requirement and the Crossrail requirement. If it was approached in the right way, this could be positive. I listened carefully and tried to think of a scenario where somebody bidding for a significant public procurement contract could actually say, “Well, no, we don’t need any apprenticeships in this circumstance”. I find that hard to believe. It is interesting: when I look at the analysis of the types of apprenticeships that have occurred under the Crossrail experience, they are rich and varied, including finance, accounting and business administration. There is a whole range. It is not just the engineering things. They have been much more imaginative in their approach there, so I am baffled by this idea that somehow there are significant public procurement contracts where no apprenticeships would be merited. Then, on the question of the role of local employment partnerships, of course we want them to flourish and be imaginative and proactive.

My concern is that we still have significant numbers of schools and colleges that are not carrying out their legal requirement to give a full range of career guidance to their pupils and students, and that they have not established the kind of links with business that they should. The idea that it would again be bureaucratic to put a requirement on them to establish these links is not a bad one: it would be a good practice for them. They should also report annually, so that we could see the progress that they are making.

I hope that the Minister will reflect carefully on this brief discussion and see whether she will be able to address these issues when we come back to them on Third Reading. In the circumstances, I beg leave to withdraw the amendment.

Amendment 29 withdrawn.

Amendments 30 and 31 not moved.

Amendment 32

Moved by

[Baroness Neville-Rolfe]

32: Clause 39, page 37, line 4, leave out “negative” and insert “affirmative”

Amendment 32 agreed.

Clause 40: Investigation of procurement functions

Amendment 33

Moved by

[Baroness Neville-Rolfe]

33: Clause 40, page 37, line 31, at end insert “or
the Public Contracts Regulations 2015 (S.I. 2015/102) apply, disregarding for this purpose the operation of any financial threshold provided for by those regulations;”

Amendment 33 agreed.

Consideration on Report adjourned.

House adjourned at 10.01 pm.