House of Commons

Monday 23rd March 2015 Commons Chamber

Monday 23 March 2015

The House met at half-past Two o’clock

Prayers

Monday 23rd March 2015 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 23rd March 2015 Commons Chamber

The Secretary of State was asked—

[Alex Cunningham (Stockton North) (Lab)]

1. What her policy is on the net migration target; and if she will make a statement.

[Mr John Spellar (Warley) (Lab)]

9. What her policy is on the net migration target; and if she will make a statement.

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

Uncontrolled mass immigration increases pressure on public services and can drive down wages for people on low incomes. That is why we are committed to reducing net migration. Where we can control immigration, our policies are working; we have reduced non-EU immigration, raised the standards required to come here and clamped down on abuse. Without our efforts, met migration would have been far higher.

[Alex Cunningham]

But net migration is much higher now than it was when the Conservatives came to power—54,000 higher. It now stands at more than 300,000, which is more than double their target. Is the Home Secretary trying to take the public for fools by suggesting that her party will repeat its broken promise to cut migration drastically?

[Mrs May]

I have been very clear that of course we have not met the net migration target we set, but I have to say to the hon. Gentleman that this Government have clamped down on abuse—860 bogus colleges can no longer bring in overseas students—and tightened every route into the UK from outside the EU, and we have set out clear plans for what a Conservative Government would do to deal with free movement. We on the Government Benches will take no lessons from a Labour party that allowed uncontrolled mass immigration.

[Mr Spellar]

Contrary to that reply, is not the reality that the Home Secretary is leaving office with net migration higher than when she arrived, because it now stands at 298,000? She claims she has cut migration from outside the EU, and that is true: it is down from 196,000 to 190,000. Rather than all this waffle, why will she not finally admit that her record at the Home Office is one of complete failure in that area and a series of broken promises?

[Mrs May]

As I said in response to the hon. Member for Stockton North (Alex Cunningham), I fully accept that we have not met the net migration target that we set, but we have tightened every route into the United Kingdom from outside the European Union, and we have said clearly what a Conservative Government would do to deal with free movement from the European Union. I say once again that it ill behoves the Labour party to make such comments, because in government it presided over uncontrolled mass immigration that had the impact of keeping incomes at the lower end of the scale down and was identified by its own policy guru as a 21st century wages and incomes policy.

[Philip Davies (Shipley) (Con)]

The public certainly want immigration to be properly controlled, and far better controlled than it is at the moment, but they also want some honestly about immigration. Is not the fact of the matter that while we remain in the EU with free movement of people we cannot guarantee how many people will come to this country, so we should not be making promises that we are in no position to keep? Is not the fact of the matter that we cannot control the number of people coming to this country while we remain in the EU?

[Mrs May]

My hon. Friend is right to identify the significant increase in the number of people coming to this country from inside the European Union as the key reason we have failed to meet our net migration target. However, crucially, not only has the coalition already taken steps to tighten up on movement from inside the European Union—for example, by reducing access to benefits—but the Conservative party has clearly set out what we would do in government after the election to deal with free movement and tighten up further to reduce migration from inside the European Union.

[Mr David Nuttall (Bury North) (Con)]

Does the Home Secretary recognise the sense of grievance felt by citizens of Commonwealth countries who for years have abided by the rules when trying to get into this country as immigrants, only to see EU citizens being able simply to walk in and out of the country at will?

[Mrs May]

My hon. Friend makes a point about Commonwealth citizens, many of whom have come to the United Kingdom and contributed greatly. We are clear that we want to tighten the rules on people coming from inside the European Union, particularly in relation to the ability to claim benefits, which I believe will have an impact on the number of people coming here, but in order to do that we need a Conservative Government to be elected on 7 May.

[Mr David Hanson (Delyn) (Lab)]

Could the Home Secretary bring herself to say the words, “Net migration is 54,000 higher than when Labour left office”? Could she stand at the Dispatch Box and say that today—not tens of thousands, as she promised—and could she say to the House with no ifs and no buts that she has broken her promise made at the election?

[Mrs May]

The right hon. Gentleman’s question is the third that I am answering from Labour Members. In response to the first two, I said clearly that the Government have not met their net migration target. I am not trying to claim that we have; I am very clear about the fact that we have not met our net migration target, but this Government have recognised the significance of immigration as an issue, and the impact that it has on public services and wages at the lower end of the income scale, and it is this Government who are doing something about it.

[Justin Tomlinson (North Swindon) (Con)]

2. What assessment she has made of the risks to the UK from gaps in communications data capability.

[The Minister for Security and Immigration (James Brokenshire)]

Our law enforcement and intelligence agencies continue to face a decline in their ability to obtain the communications data they need. This is caused by the use of modern technology and changes in the way in which people communicate. We believe that further changes to the law are needed to maintain capabilities. We cannot let cyberspace become a haven for terrorists and criminals.

[Justin Tomlinson]

Can my hon. Friend assure me that the next Conservative Government will introduce the appropriate legislation to restore our declining communications data capability?

[James Brokenshire]

It is very clear that although this Government have taken some steps to close the gap, significant gaps remain. The Joint Committee on the draft Communications Data Bill identified that, but we have not been able to bring those measures through in this Parliament. We need to remedy that. Given that about 95% of serious crime cases involve the use of communications data, those measures are an essential tool in fighting crime, and we are determined to take further action to close the gap and make sure that our police and security agencies have the powers they need.

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

What discussions has the Minister had with the Scottish Government in relation to the risk and responsibility for communications data?

[James Brokenshire]

On issues of national security, there are reserved powers. We therefore retain that focus on ensuring that security is assured. Clearly, communications data and other measures play an important part. I am sure that discussions with others, including devolved Administrations, will take place in future, but ultimately this is a matter for the UK Government.

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

The Minister and his boss must be aware that our police, under-resourced as they now are, are still in a mode of fighting traditional crime. Cybercrime, as we all know, has been the great challenge. Throughout the country we are unequipped to deal with it, and it is what most citizens will face in the form of fraud and other criminal activity.

[James Brokenshire]

This Government have invested heavily in capabilities to deal with cybercrime through the establishment of the new cybercrime unit in the National Crime Agency and the work of police forces throughout the country to ensure that we have the digital forensics—the digital information to fight the new crime types. The hon. Gentleman clearly does not recognise the important achievements of this Government in cutting crime, at a time of having to save money to deal with the deficit that we inherited from Labour.

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

3. If she will conduct a review of the effectiveness of anti-radicalisation programmes.

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

We continually monitor and evaluate the Channel programme to ensure its effectiveness. Through the Counter-Terrorism and Security Act 2015 we have placed the programme on a statutory basis. The duty aims to secure local co-operation and delivery in all areas and we, of course, work closely with international partners to make sure that we are sharing expertise and best practice in tackling extremism and radicalisation. I have today published the latest annual report on our counter-terrorism strategy, Contest, alongside the annual report on the serious and organised crime strategy, and copies of both reports will be made available in the Vote Office.

[Mr Cunningham]

How many people returning from Syria have gone through the deradicalisation programme, and how many people in total have gone through that programme?

[Mrs May]

More than 2,000 people have gone through Channel since it was rolled out nationally in 2012, and hundreds have been offered support. This is dealt with case by case. It is not appropriate for everybody to be put into the Channel programme, but it has been effective and we are seeing significant numbers of people referred to it.

[Crispin Blunt (Reigate) (Con)]

I welcome my right hon. Friend bringing clarity about what is and what is not acceptable in the context of radicalisation and extremism. In an environment where our press and media are prone to hysterics and have the capacity to achieve the objectives of the enemies of our society by sowing fear and anxiety where none need exist, will she continue to proceed calmly and on the basis of the evidence?

[Mrs May]

My hon. Friend makes a very important point about proceeding on the basis of the evidence. I am grateful for his comments about remarks that I made earlier today about the necessity for us to develop a wider partnership to counter extremism across its broadest spectrum so that we can deal with the hateful beliefs that the extremists are propagating.

[Keith Vaz (Leicester East) (Lab)]

I too welcome the Home Secretary’s comments in her speech this morning. Only by working with communities are we able to tackle this problem. I also commend the Metropolitan police and Turkish authorities for bringing back to London the three young men from Brent. It is sad that we missed the opportunity of doing this with the four young girls from Bethnal Green. What is the message to families to get them to report areas of concern so that they do not feel stigmatised if they do so?

[Mrs May]

I am grateful to the right hon. Gentleman for his comments about my speech. He is right. As I made clear in that speech, Government cannot deal with this alone; we need to work with families, communities and civil society. The message that the Government have given to families consistently in relation to those who might be travelling to Syria to get involved in terrorist-related activity, or to be with terrorist groups, is that the sooner they can give information to the authorities, the easier it is to work with them to ensure that their young people are not put into that danger.

[Stuart Andrew (Pudsey) (Con)]

In the all-party group on Islamophobia we have heard countless times of the need to offer more support to the mothers of young Muslims who fear that their children might be in danger of being radicalised. What specific efforts are being made to support the mothers who are tackling this issue?

[Mrs May]

My hon. Friend makes a very important point. I am pleased to have been involved with two civil society organisations that have been working with families—particularly, in one case, with women. FAST—Families Against Stress and Trauma—is giving support to families whose young people may have travelled and helping them to prevent young people from travelling. Inspire’s “Making A Stand” programme is about Muslim women up and down this country saying that radicalisation is not taking place in their name, and working together as Muslim women to ensure that their young people are not radicalised.

[Diana Johnson (Kingston upon Hull North) (Lab)]

The Home Secretary said this morning, and has just reiterated, that she wants a new partnership on Prevent between communities, individuals, civil society and Government. When she came into government, she inherited 93 Prevent areas, which she cut to 23 and then put up to 30. She now says she wants 50, and they might go up to 90, so we are going back to where we started five years ago. Why the rollercoaster in such an important area for this country?

[Mrs May]

No, we are not going back to where we started. First, the hon. Lady has made a fundamental mistake in her question in saying that my speech this morning related to Prevent. It did not; it related to the new counter-extremism strategy that the Government are introducing. Secondly, when we came into government we found that the Labour Government were funding extremist organisations, and members of the Labour party were standing on platforms embracing extremist hate preachers. Government Members take a very different view.

[Mr Andy Slaughter (Hammersmith) (Lab)]

4. What assessment she has made of the effectiveness of the police response to domestic abuse.

[The Minister for Crime Prevention (Lynne Featherstone)]

Domestic abuse is an appalling crime, and this Government are determined that the police response is the best it can be. The Home Secretary commissioned Her Majesty’s inspectorate of constabulary to review the response to domestic abuse across police forces in England and Wales. We are driving change through a national oversight group. All 43 forces have action plans on domestic abuse. In November, HMIC highlighted the commitment of forces to improving their response.

[Mr Slaughter]

This Government have a truly terrible record on tackling domestic abuse, whether it is closing specialist courts, restricting legal aid, or failing to prosecute. There is a rising number of offences, but since they came into office there have been 4,000 fewer prosecutions. What are they going to do about that?

[Lynne Featherstone]

I totally refute the hon. Gentleman’s assertions. This Government have a record to be proud of in the work we have done on domestic abuse, not just the ring-fencing of stable funding of £40 million but the introduction of new laws, protection orders, and measures on stalking abuses. We have done more in the five years we have been here than the Labour Government before us did in all their 13 years. What is more, I seem to recall that Labour Members are not proposing to reverse any of the legal aid cuts, and we have preserved legal aid for cases in which domestic abuse plays a part.

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

On legal aid for victims of domestic violence, I and other colleagues have come across women who are victims but who have had to fork out from their own pockets, and some have just given in after spending too much, moving too often and finding that the system does not work. Surely the Minister must acknowledge that there is a problem. What is she going to do about it?

[Lynne Featherstone]

I reiterate that the £2 billion annual cost of legal aid, combined with the economic circumstances left by Labour, meant that hard choices had to be made. Labour was also committed to reducing legal aid. We have retained legal aid in key areas impacting on women, particularly with regard to injunctions to protect victims from domestic abuse and in private family law cases where domestic abuse is a feature.

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

5. What steps her Department is taking to tackle extremism.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

6. What steps her Department is taking to tackle extremism.

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

Today I delivered a speech on the challenge of extremism in which I set out the need to develop a better understanding of the threat from extremism; to promote more assertively our values and the proposition that everybody living in this country is equal and free to lead their lives as they see fit; to ensure an effective response from the state; and to build up the capacity of civil society to identify, challenge and defeat extremism. I made it clear that the challenge to the extremists must be centred on a new partnership consisting of every single person and organisation in our country that wants to defeat extremism.

[Rehman Chishti]

In the light of recent incidents, including that of the three young London girls who travelled to Syria, does the Secretary of State have any plans to set up a hotline for parents concerned about extremism, so that they can seek professional advice if they believe their children could be at risk, as is the case in Australia?

[Mrs May]

There are a number of opportunities available to families to report concern, including the anti-terrorist hotline. The Metropolitan police also made a further call to families last week to encourage them to report as early as possible, and organisations such as Families Against Stress and Trauma are actively working in communities to help people understand what they need to do when they are concerned about their children.

[Daniel Kawczynski]

Will my right hon. Friend assure me that the next Conservative Government will introduce new powers to tackle extremists and groups that spread hate but do not break existing laws?

[Mrs May]

My hon. Friend raises an important point. We have looked at addressing the issue of those people and groups who act in a way that does not meet the current proscription threshold, and we will, indeed, introduce extremist banning orders and extremist disruption offers, which will do exactly what my hon. Friend says.

[Fiona Mactaggart (Slough) (Lab)]

In her response to the hon. Member for Gillingham and Rainham (Rehman Chishti), the Home Secretary referred to the three girls from Bethnal Green academy. When the first girl left in December, what specific assistance was given to the school by the Home Office?

[Mrs May]

Following the first girl leaving in December, assistance was given to the school by the local Prevent co-ordinator and the local authority’s schools officer, who went into the school to make arrangements for extra training to be given.

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

What steps is the Home Secretary taking to encourage police forces to record accurately and comprehensively incidences of Islamophobia and hate crimes against Muslim victims, which Greater Manchester police is already doing?

[Mrs May]

The hon. Lady raises a very important point. The approach to recording hate crime has developed over the past five years and I am pleased that we are now able to see much more clearly what is happening. I was very clear in my speech today that this is an issue for a future Government, but a future Conservative Government would require the police to record anti-Muslim incidents as well as anti-Semitic incidents.

[Sir Tony Baldry (Banbury) (Con)]

7. What steps her Department is taking to tackle organised crime.

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

The Government are committed to tackling the threat of serious and organised crime. In 2013 we launched a comprehensive new strategy and a powerful new crime-fighting organisation—the National Crime Agency—which are already making a difference. We continue to strengthen our response through the Serious Crime Act 2015, the Modern Slavery Bill and strategy, and the anti-corruption plan. We have also forged new collaborative relationships with the private sector to tackle money laundering and to combat online child sexual exploitation.

[Sir Tony Baldry]

The National Crime Agency has clearly had a good start, with 300 convictions in just the first six months. Will my hon. Friend confirm that the Serious Crime Act 2015 will ensure that the National Crime Agency continues to have the resources and powers to address serious and organised crime?

[Karen Bradley]

I thank my right hon. Friend for his question. He is right that the National Crime Agency has made a good start. We have looked carefully at where powers are needed to increase the weapons that it has in its arsenal, and the Serious Crime Act really assists the National Crime Agency and other police forces in making sure that they can tackle particularly criminal finances to stop the Mr Bigs keeping hold of their money.

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

One of the most serious forms of organised crime is child sexual exploitation. The National Crime Agency was given information over a year ago about 20,000 people who had downloaded abusive images of children. Twelve months later, only 2% have been fully investigated or charged. What has happened to the other 98%? With that kind of backlog of CSE cases, does the Home Secretary really think that this is the right time to cut thousands more police?

[Karen Bradley]

The hon. Lady disappoints me. We have had this conversation on several occasions. The fact of the matter is that the National Crime Agency, through Operation Notarise and others, has protected more children from abuse than any other agency, and it is ensuring that children at risk of abuse are looked after and protected in a way that has never happened before.

[Damian Green (Ashford) (Con)]

Does my hon. Friend agree that one of the signal successes of the NCA is that it has made more than 600 arrests in dealing with online child sexual exploitation through the operation that she has just mentioned? Will she assure the House that this will continue to be a high priority, not just for the NCA but for each individual local force?

[Karen Bradley]

My right hon. Friend, who has considerable experience in this area, will know full well that the National Crime Agency and local police take this issue incredibly seriously. Bringing the Child Exploitation and Online Protection Centre into the National Crime Agency, as a command within it, has increased both capability and capacity to consider such crime and to make sure that we find those criminals who want to hurt our children and prevent them from doing so.

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

8. What steps she is taking to reduce crime rates.

[The Minister for Crime Prevention (Lynne Featherstone)]

Police reform is working, and crime is down by more than a fifth under this Government, according to the crime survey for England and Wales. We are taking decisive action to cut crime and protect the public, including through working with the National Crime Agency. We are tackling the drivers of crime, including through our drug and alcohol strategies, and we have intensified our focus on issues such as violence against women and girls, gangs and sexual exploitation.

[Mr Raab]

I thank the Minister for that answer. While police funding has been cut by about a fifth, police-recorded crime has fallen by 14%, and by 28% across Elmbridge in my constituency. Will she join me in commending front-line officers in Surrey and across the country for the great job they are doing? Does that fall not demonstrate how vital reform is, and that public services cannot be judged only by the amount of money going in?

[Lynne Featherstone]

I am happy to join my hon. Friend in commending front-line officers in Surrey, and I congratulate all police forces that, with their police and crime commissioners, are rising to the challenge of driving efficiency and cutting crime. Effective policing plays a key part in reducing crime, and PCCs are ensuring that forces focus on the issues that matter most to local people. My hon. Friend is right that money is not the only thing that we need in order to cut crime; dedicated officers are our greatest resource.

[Dan Jarvis (Barnsley Central) (Lab)]

There is no doubt that the huge increase in the use of so-called legal highs has an impact on crime rates. I have seen that in my constituency. The Government have agreed to ban legal highs, but have not yet acted to do so. Will the Government take action in this Parliament, and if not, why not?

[Lynne Featherstone]

Given that this Government have actually banned and outlawed 500 legal highs, I do not think it is accurate to say that we have taken no action. We obviously want to move to a general ban on legal highs—lethal highs, as I call them—and that is on the shelf, ready for the new Government.

[Mr Steve Reed (Croydon North) (Lab)]

There is a glaring difference between the Government’s complacency and the City of London police commissioner’s view that online crime is growing exponentially. Does the Minister agree with the Office for National Statistics that if all bank and credit card fraud were included, the statistics would show that overall crime was up by 50%?

[Lynne Featherstone]

I am having a lot of disagreements with the Labour party today. The ONS is working to incorporate measures of cybercrime in the main crime survey. It looked at this issue specifically and said, when it published the latest crime figures, that it had found that although there may have been some movement by criminals into fraud and cybercrime, it certainly had not been enough to offset the substantial falls in traditional crimes, such as burglary and vehicle theft, over the past 20 years. Action Fraud’s reporting is up. That is a specialist reporting agency. We are acting on fraud.

[Mr Graham Allen (Nottingham North) (Lab)]

10. What steps she is taking to encourage police and crime commissioners to support early intervention programmes.

[The Minister for Crime Prevention (Lynne Featherstone)]

As part of the work of the Home Office crime prevention panel, the Early Intervention Foundation and the College of Policing recently launched new guidance to help front-line police support early intervention. The police and crime commissioners from Dorset, Lancashire and Staffordshire were involved in the development of the guidance.

[Mr Allen]

May I ask the Minister to do something very practical? We are grateful that she launched the report, but will she ensure that every single police and crime commissioner and every single chief constable gets a copy of it so that they can not only reduce crime by cutting down dysfunction in the population early on in life, but save the taxpayer a lot of money through not having to invest money late on through late intervention?

[Lynne Featherstone]

The early intervention guidance for police will provide invaluable support in stopping potential criminals before they commit crimes, which will save the police a great deal of work in the long term. The guidance is already available online. We encourage all police officers, police community support officers, chief constables and PCCs to read it. I am happy to take up his suggestion if I have time, because the more officers have access to it, the better. I am sure that we can get it done before Thursday.

[Kerry McCarthy (Bristol East) (Lab)]

11. What recent discussions she has had with police unions and associations on the effect of changes to police budgets on frontline staff.

[The Minister for Policing, Criminal Justice and Victims (Mike Penning)]

The Home Secretary and I hold regular bilateral meetings with police work force representatives. I have said since day one as the police Minister that my door is always open to those representatives.

[Kerry McCarthy]

The Minister will know, then, what pressure front-line policing is under. The Government promised to protect and even increase front-line policing numbers, yet 8,000 front-line jobs have gone. Why will the Home Office not look at alternative ways of saving money, such as introducing better procurement practices or scrapping police and crime commissioners, rather than pursuing plans to axe yet another 20,000 officers?

[Mike Penning]

I would have thought that the hon. Lady would have praised the work that is being done by Avon and Somerset police, rather than following the party line. In her constituency there has actually been a 5% increase in front-line officers, who are not doing back-room work, and a 21% cut in crime.

[Mr David Heath (Somerton and Frome) (LD)]

Avon and Somerset police have indeed done very well. However, an understandable operational response to difficult budgets is to withdraw policing from rural areas, which empirically have a lower level of crime. That is understandable, but wrong. Will the Minister reassure me that he will tell all police forces that they have a duty to people who live in rural areas? Those people must not think that they are being exposed to crime or abandoned by the forces of law and order.

[Mike Penning]

I assure my right hon. Friend that each time I go into any force I say to anybody who listens to me not only that it is their duty to address rural crime—my constituency has large rural areas—but that all crime, no matter where it is, needs to be detected and prosecuted.

[Richard Burden (Birmingham, Northfield) (Lab)]

12. What her policy is on the minimum income threshold requirement for people wishing to sponsor their partner’s visa to settle in the UK.

[The Minister for Security and Immigration (James Brokenshire)]

The minimum income threshold of £18,600 for sponsoring a partner under the family immigration rules ensures that couples who wish to establish their family life in the UK can stand on their own feet financially. The requirement prevents burdens on the taxpayer and promotes integration. It has been upheld by the Court of Appeal and is helping to restore public confidence in the immigration system.

[Richard Burden]

The Minister has just asserted that the purpose of the minimum income threshold is to ensure that a spouse from overseas who comes to live here is not a burden on the taxpayer. However, at £18,600, the threshold is more than £3,000 higher than the living wage. Does he not think that it should be reviewed to ensure that the original purpose of the minimum income threshold is what counts and that it does not discriminate against those on the living wage or below, or against people who happen to live in the wrong part of the country?

[James Brokenshire]

As the hon. Gentleman knows, the income threshold was set on the basis of advice given to the Government by the Migration Advisory Committee, which considered this issue in great detail to assess the appropriate level. Perhaps he will find interesting the fact that the 2014 annual survey of hours and earnings for the Office for National Statistics showed that median earnings of those in full-time employment were appreciably higher than £18,600 in all parts of the UK.

[Duncan Hames (Chippenham) (LD)]

In practice, the length of time in which a sponsor is required to demonstrate that they have met the minimum income threshold is driving families apart. Would it be sufficient for a sponsor to demonstrate that they have secured permanent employment on such a salary, and not have a situation where several months have to pass with someone providing bank statements to show their income, during which time their partner is separated from them?

[James Brokenshire]

Migrant partners with an appropriate job offer can apply to come to the UK under tier 2 of the points-based system, and those using the family route to come to the UK must be capable of being independently supported by their sponsor, their joint savings, or non-employment income. We have considered the issue in an appropriate way to ensure that people are not a burden on the taxpayer, and I underline again that the system has been tested and upheld in the courts.

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

Has the Minister made any assessment of the minimum age of sponsors as well as minimum income, because the two factors often relate to each other?

[James Brokenshire]

The hon. Gentleman will no doubt be aware that the minimum age for spouse visa applicants and sponsors was increased to 21 in 2008, and the Government defended that position. The Supreme Court found in 2011 that although the Secretary of State was pursuing a legitimate and rational aim in seeking to address the problem of forced marriages —the hon. Gentleman will know that such issues exist—increasing the minimum marriage visa age from 18 to 21 disproportionately interfered with the right to a family life under article 8 of the European convention of human rights. We keep such issues under close review, but they are complex.

[Jeremy Corbyn (Islington North) (Lab)]

Will the Minister think again about this whole policy? It is cruel on children who are denied the right to live with their parents, contrary to the principles of the conventions on human rights, and really not necessary. Its only effect is that of hurting the very people who should not be hurt because of it.

[James Brokenshire]

While ensuring sufficient resources so that those arriving are supported at reasonable levels, the minimum income threshold is also intended to ensure that family migrants can participate sufficiently in every-day life to facilitate their integration into British society. That is one of the fundamental purposes of the policy, and I think that is right.

[Mike Crockart (Edinburgh West) (LD)]

13. What discussions she has had with the Secretary of State for Scotland on the potential introduction of a scheme to allow international students graduating from Scottish further and higher education institutions to remain in Scotland to work for a defined period of time.

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

My right hon. Friend the Home Secretary meets colleagues regularly for discussions on a range of issues, including how we can continue to attract the brightest and best to study here while bearing down on abuse.

[Mike Crockart]

The recommendation comes as part of the Smith agreement. It recognises that the higher education sector is a multi-billion pound industry, and Edinburgh university is one of the most successful participants in that. More than 10,000 foreign students are now studying at Edinburgh, generating some of the highest quality research in the UK. Does the Minister agree that keeping more of those excellent students in the UK while their research is commercialised would be of enormous benefit, not just to the Scottish economy but to the UK as a whole?

[Karen Bradley]

My hon. Friend will know that the Russell Group of universities, of which Edinburgh is a member, has seen a 30% increase in the number of applications from overseas students since 2010, showing that studying in the United Kingdom is an attractive offer to students. There is no cap on the number of students who can stay in the UK after completing their degree, provided they have a graduate-level job, get an internship or become a graduate entrepreneur.

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

The Minister will have seen the Scottish Government’s post-study work working group, which recommends that a post-work study visa is reinstated for a wide range of people, including businesses, education and student representatives. Will the Minister consider that or will she ignore it again? What can the Scottish people do to progress that agenda and ensure that our economy and higher education institutions benefit?

[Karen Bradley]

What the Scottish people can do is clear: stay part of the Union. I repeat that there is no cap on the number of graduates who can stay on after their studies, provided they have a graduate job, an internship or a graduate entrepreneurship.

[Ann McKechin (Glasgow North) (Lab)]

The Minister will be aware of the reduction in the number of students from the Indian subcontinent. One of the major reasons for that is that they are unable to remain in the United Kingdom for a few years to work and to pay off their fees. This policy, therefore, discriminates against those who come from poorer nations, rather than those from richer families.

[Karen Bradley]

I repeat that since 2010 there has been an increase in the number of visa applications from overseas students. It is difficult to say what the drivers are for our seeing more students from some countries and fewer from others. For example, we are seeing a significant increase in the number of students from China, which indicates that it is not the reforms that are stopping people coming.

[Rosie Cooper (West Lancashire) (Lab)]

14. What assessment she has made of the financial condition of police forces in England and Wales.

[The Minister for Policing, Criminal Justice and Victims (Mike Penning)]

The Home Secretary and I have made it clear that there is no question but that the police will have the resources to do their important work. Her Majesty’s inspectorate of constabulary has reported that forces up and down the country are reducing crime and protecting communities, while balancing their books.

[Rosie Cooper]

Since 2010, Lancashire police has lost 700 posts and 11 police stations have been closed due to £60 million-worth of cuts, with more to come. Offences such as burglary, theft and violence are all on the rise. The Lancashire Police Federation says that the police are at breaking point. Will the Minister please apologise to the people of West Lancashire for failing to honour his promise to protect front-line policing?

[Mike Penning]

I like the hon. Lady—I get on with her really well—but she should apologise to her constituents for not mentioning that crime is down by 9% in her constituency and across Lancashire, something we should all be very proud of.

[Tim Loughton (East Worthing and Shoreham) (Con)]

On Friday night, I went out with the very impressive section 136 team at Worthing police. The initiative, under which community psychiatric nurses go out on patrol with the police, is being piloted in Sussex. Given that up to two thirds of police call-outs are estimated to relate to mental health and substance abuse problems, this has the potential to free up a lot of police time and save a lot of money. These pilots really work, so will they be rolled out across the whole country?

[Mike Penning]

That pilot and other pilots around the country are working. I have seen them myself. It is our intention to continue to roll them out. We are working enormously closely in particular with the mental health team in the Department of Health. I have seen dramatic changes not only in my constituency but around the country. There are people who should not be in cells and should not be arrested. They should be in a place of care, where they need to be. That is what we expect to happen.

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

My Greater Manchester police force has had to make savings of £145 million in the five years to 2015, and has lost more than 1,300 police officers as a result. Across the country, the picture is pretty similar. Will the Minister say whether, as a result of the changes to police forces, response times have improved or got worse on his watch?

[Mike Penning]

What has happened on the Home Secretary’s watch and on my watch is that crime in the hon. Gentleman’s constituency is down by 20%, something that is forgotten every time Labour Members stand up in this House.

[Mr Nigel Evans (Ribble Valley) (Con)]

15. What assessment she has made of the adequacy of the number of police officers in Lancashire.

[The Minister for Policing, Criminal Justice and Victims (Mike Penning)]

Crime has fallen by a fifth across the country and by 9% in my right hon. Friend’s constituency. That is because we have proved that more can be done with less. We should be very proud of police forces across the country, particularly in Lancashire.

[Mr Evans]

Unlike the hon. Member for West Lancashire (Rosie Cooper), I want to praise the work of the Lancashire constabulary in my county, where crime has gone down by 19% since 2011. Antisocial behaviour is down by 35.8% and robbery in the past 12 months is down by 47%, which is a remarkable figure. Will the Minister assure the House that the Lancashire constabulary will, under a Conservative Government, have sufficient resources to carry on doing its great work in the next five years?

[Mike Penning]

Not only will we guarantee that, we will continue to roll out the specialist equipment that is helping the police day in, day out, especially body-worn cameras. They are ensuring that more people in the community are protected, the officers are protected and we get more convictions, something I expect to see in Lancashire, as well as in the rest of the country.

[Stephen Hammond (Wimbledon) (Con)]

16. What recent steps she has taken to tackle sham marriages.

[The Minister for Security and Immigration (James Brokenshire)]

This month, the Government introduced a new scheme to tackle sham marriages and sham civil partnerships allowing the Home Office to investigate suspected sham cases under an extended 70-day notice period. Since April 2014, we have intervened in more than 2,000 suspected sham marriages, and last year 30 organised crime groups involved in arranging sham marriages were disrupted, with many receiving long custodial sentences.

[Stephen Hammond]

Will my hon. Friend update the House on the number of people he expects this country to protect itself against following the introduction of these new powers?

[James Brokenshire]

This has been a priority for me since I took on the immigration responsibilities last year. We will take strong action, including prosecution and seizure of assets. As for an update, this financial year we have undertaken more than 2,000 operations, resulting in 1,200 arrests and more than 430 removals, which compares with 327 sham marriage operations, resulting in 67 arrests in 2010, showing that, unlike the last Government, this Government are committed to this issue.

[Mr Philip Hollobone (Kettering) (Con)]

17. What the level of crime was in Northamptonshire in (a) May 2010 and (b) March 2015.

[The Minister for Crime Prevention (Lynne Featherstone)]

Police reform is working and crime is down by more than one fifth under this Government, according to the independent crime survey for England and Wales. According to the latest figures published by the Office for National Statistics, police recorded crime in Northamptonshire fell by 18% between June 2010 and September 2014.

[Mr Hollobone]

We are blessed in Northamptonshire with excellent and hard-working policemen and women, and it is marvellous that crime has fallen. Given that we were told by Her Majesty’s loyal Opposition that crime would rise because of the police budget cuts, why does my right hon. Friend think it has actually come down?

[Lynne Featherstone]

I congratulate my hon. Friend on his work as a police special constable. He rightly says that the Opposition doubted our ability to bring down crime. However, our police forces have proved that where there is a will there is a way, and they have cut crime by more than 20% this Parliament, according to the crime survey. We should be very proud of them.

[Maria Miller (Basingstoke) (Con)]

T1. If she will make a statement on her departmental responsibilities.

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

For too long, thousands of people have been on bail for months or even years, with no independent oversight of the police’s investigation. To put a stop to this, I announced to the House in December that I was consulting on the introduction of statutory time limits for pre-charge bail. That consultation closed on 8 February, and I am grateful to the 300 individuals and organisations that responded. I have today placed in the Library of the House and on the gov.uk website a summary of the consultation responses and the Government’s response.

On the key point of independent review, it is apparent from the consultation that the model where all extensions of bail past 28 days would be done in court would not be viable, as there is unlikely to be sufficient capacity in the magistrates courts. I have therefore decided to adopt the model endorsed by the consultation under which pre-charge bail is initially limited to 28 days. In complex cases, an extension of up to three months could be authorised by a senior police officer, and in exceptional circumstances, the police will have to apply to the courts for an extension beyond three months to be approved by a magistrate. This will introduce judicial oversight of the pre-charge bail process for the first time, increasing accountability and scrutiny in a way that is manageable for the courts.

[Mr Speaker]

We are all now very fully informed.

[Maria Miller]

I recently visited Hampshire’s cybercrime unit and spoke to officers detecting online crime, particularly child abuse. I am sure the Home Secretary will want to join me in commending those officers for their dedication. Does she agree that we need to do everything we can to help police in this work and, in particular, to ensure that social media and other websites verify the identity of UK residents using their sites?

[Mrs May]

First, may I take up the point that my right hon. Friend made about the work of police officers in police forces, the Child Exploitation and Online Protection Centre and the National Crime Agency more widely in dealing with child abuse cases? These are not easy issues, and they do a very valuable job. Over the period of this Government, we have invested £86 million in dealing with cybercrime, and the creation of the national cyber crime unit at the NCA is, I believe, an important element in dealing with cybercrime. We expect social media companies to make it easy for users to choose not to receive anonymous posts, to have simple mechanisms for reporting abuse and to take action promptly when abuse is reported.

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

The Office for Budget Responsibility says that the Chancellor is planning cuts that are much more severe than anything we have seen over the last five years. The Institute for Fiscal Studies has said that the cuts will be twice the size of any year’s cuts over this Parliament. That means a real-terms cut for the Home Office under the right hon. Lady’s plans over the next few years alone of 23% and the loss of 20,000 more police officers on top of those who have already gone. When the terror threat is growing, when more child abuse cases are coming forward, when recorded violent crime is up and when chief constables say that neighbourhood policing cannot be sustained, is she really saying to communities across the country that she and the Tories are prepared to cut 20,000 more police officers?

[Mrs May]

The right hon. Lady knows full well that the funding for counter-terrorism policing has been protected and that this Government are putting more money into dealing with child sexual exploitation. When she comes to deal with this issue, perhaps she could remind people why it is that this Government have had to deal with budget cuts across the public sector: it is because the last Labour Government left us with the worst budget deficit in our peacetime history.

[Yvette Cooper]

But the right hon. Lady has not managed even to meet her deficit plan, and we have already seen the police cut across the country. Her plans mean going further in the scale of police cuts, with 20,000 further police officers going across the country at a time when recorded rapes are up 30%, but fewer rapists are being arrested; when recorded violent crime is up 16%, but fewer violent criminals are being convicted; when online fraud is through the roof, yet fewer fraud proceedings are going ahead; and when recorded child abuse is up 33%, yet 13% fewer paedophiles are being prosecuted. On her watch, 999 waits are up, the police cannot keep up with extremists on the streets and more criminals are walking free. Is she really saying she is going to go around the country, campaigning with all her Back Benchers, saying she is content for 20,000 more police officers to go—because we’re not, and we won’t?

[Mrs May]

The right hon. Lady mentioned that reports of child sexual abuse have increased, and yes they have. In a sense, that is to be welcomed, because more people feel that they can now come forward and report their abuse, which means that those issues can be investigated and the cases looked into. She talked about the figures for rape and domestic abuse, but I have to say that the volume of domestic abuse referrals from the police rose in 2013-14 to the highest level ever: 70% of those referrals were charged, which was the highest volume and proportion ever; there has been a rise in charged defendants from 2012-13; and conviction rates have risen since 2010-11. The figures on which she bases her rant show once again, I am afraid, that she is not paying attention to what is actually happening. What is happening is the exact opposite of what she and her colleagues said five years ago. She said crime would go up, but crime has gone down under this Government.

[Robert Halfon (Harlow) (Con)]

T3. My right hon. Friend will be aware that we in Harlow have had more than 109 illegal and unauthorised encampments over the past 15 months, and there is now a town-wide injunction banning anyone from setting up unauthorised or illegal encampments. Will my right hon. Friend look at how we can strengthen the law, possibly following the Irish example of making trespass a criminal rather than a civil offence?

[The Minister for Policing, Criminal Justice and Victims (Mike Penning)]

I pay tribute to my hon. Friend for the campaigning and work he has done on behalf of his constituents whose lives have been blighted by these illegal camps. When we are back in government after the election, we will look at the law—I can assure you of that, Mr Speaker—but we must also make sure that the police use the powers they have and are not frightened of using them, as appears to have happened in certain parts of the country, including in my hon. Friend’s part of Essex.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

T7. I am concerned about a recommendation in a recent Home Affairs Committee report that those arrested on sexual offences charges should be given anonymity. Does the Home Secretary agree that in these circumstances, these prosecutions are extraordinarily difficult, and that the decision should be made carefully by the police? Will she ask the independent panel inquiry also to look at this issue?

[Mrs May]

The hon. Lady raises an important issue. As she will be aware, there was a significant debate about this very thing early on in this Parliament. The Government have not yet responded to the Home Affairs Committee report—for understandable reasons, given that it has only just come out—but I was asked about the matter when I was in front of the Home Affairs Committee last week. This issue has to be dealt with on a case-by-case basis. I think that an assumption of anonymity on arrest is right in general, but there will be cases when it is right for the police to ensure that the name is put out so that other people can come forward to report crimes by the same perpetrator.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

T4. The use of legal highs is a significant problem all over the country, and it is certainly a problem in Harrogate and Knaresborough. Such drugs can have devastating consequences. The papers covering my area, the Harrogate Advertiser and The Knaresborough Post, have run a very good campaign highlighting the scale of the local problem. What progress has been made in tackling these dangerous drugs?

[The Minister for Crime Prevention (Lynne Featherstone)]

It is very helpful when the local media join the campaign against what I term “lethal highs”. As I said earlier, the Government are drawing up proposals for a general ban on the supply of new psychoactive substances throughout the United Kingdom, with a view to introducing legislation at the earliest opportunity. Obviously there is not enough time left for us to legislate in the current Parliament. However, we have already banned more than 500 new drugs, created a forensic early warning system to identify new psychoactive substances in the UK, and supported law enforcement with the latest intelligence on new substances, and we are taking a number of actions in relation to health, prevention and treatment.

[Kerry McCarthy (Bristol East) (Lab)]

T8. The Minister told me a moment ago that there were more front-line police officers in Avon and Somerset. However, a report by Her Majesty’s inspectorate of constabulary tells me that the number is down by 10%, from 2,937 in March 2010 to 2,651 in March 2015. In what way is that “more”?

[Mike Penning]

I apologise if I misled the hon. Lady, but I am sure I said that we were taking staff out of the back rooms and putting more on the front line. There are more officers serving on the front line today than there were when the Labour Government left office.

[Sarah Teather (Brent Central) (LD)]

T5. I understand that the Home Secretary has asked officials to carry out a detailed piece of work on the future requirements of the immigration detention estate, in conjunction with her decision to halt the expansion of Campsfield. What is the remit for that work, what is the timetable for it, and will it be made public? Will the Home Secretary direct the officials to look at the international evidence that was presented in our cross-party report on the immigration detention system, which suggests that we could substantially reduce our need for detention places?

[The Minister for Security and Immigration (James Brokenshire)]

Let me take this opportunity to wish the hon. Lady well for the future, as that was probably the last Home Office question she will ask before she leaves the House.

We will certainly look at the all-party parliamentary group report, and I intend to write to the hon. Lady about it before the House rises on Thursday. We are examining the issue of the detention estate internally, but our work will be informed by Stephen Shaw’s review of the welfare aspects. It is important to ensure that we are providing a humane environment for people who are being detained.

[Julie Hilling (Bolton West) (Lab)]

Crime rose by 6% in Greater Manchester last year. Will the Minister update us on her improvement plan with Action Fraud, and can she assure me that the defrauding of my constituents will be investigated and they will be kept up to date with the progress of that investigation?

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

The hon. Lady and I have had several discussions about Action Fraud. Let me bring her up to date with the latest figures from the organisation. As we have established in earlier discussions, fraud is historically an under-reported crime. The number of recorded offences has almost trebled, from 72,000 before the introduction of Action Fraud’s centralised reporting system to 211,000 now. As the hon. Lady knows, Action Fraud is also embarking on an improvement plan. It has resulted in a reduction in the number of complaints, which should be welcomed, but we are still keen to ensure that local police forces in particular treat and correspond with victims in a way that enables them to understand the action that is being taken to deal with these crimes.

[Sir Edward Leigh (Gainsborough) (Con)]

T6. Yesterday huge crowds turned out in our most multicultural city, Leicester, to celebrate English history. Did not that celebration of monarchy and continuity provide a fine example of British values, and should we not learn from that example of history that it is not a good idea to get on politically by bumping off one’s close relations?

[Mrs May]

We could have an interesting debate about my hon. Friend’s last comment, and I am grateful to him for not suggesting that the princes in the tower is an historic case that the police should take up today. The point he made about those in Leicester coming together yesterday from all parts of the community and celebrating British values is an important one. It is exactly what I was speaking about this morning, when I said that we need a partnership of individuals, communities, families and Government, going across Government and including other agencies, to promote our British values and what it is to live here in the United Kingdom and to be part of our British society.

[Paul Blomfield (Sheffield Central) (Lab)]

The Home Secretary will know that one of her former Cabinet colleagues and a former chief inspector of prisons were among those of us from all parties and both Houses on the recent inquiry into immigration detention which recommended that the Government learn from best practice abroad where alternatives to detention not only allow individuals to live in the community, but are more effective in securing compliance, and at a much lower cost to the public purse. Will she respond positively to our recommendations?

[James Brokenshire]

I have already indicated that we are examining the points made in the recent all-party parliamentary group report, but I have to say to the hon. Gentleman that there is a need for detention in managing immigration and ensuring that we can remove people safely and appropriately. It is also worth underlining that we cannot detain people indefinitely. This is about the perspective of ensuring that there is the ability to remove, and that is the way in which the Government operate the rules.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

T9. Does the Home Secretary agree that until such time as front-line resources and targets are set for rural crime, these crimes will not be taken seriously in rural constituencies? Will she give an edict from the Dispatch Box today that Travellers who are on rural land illegally will be removed forthwith?

[Mike Penning]

The police already have powers. As I indicated to my hon. Friend the Member for Harlow (Robert Halfon) earlier, the police often have the powers in respect of illegal Traveller sites. Crime in rural areas is a very serious issue and we should all take it seriously. While crime is down 16% in the part of the world of my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), any crime is bad.

[Barry Gardiner (Brent North) (Lab)]

Yesterday I spoke to community leaders at one of my mosques about the young men who had been educated at schools in Brent North and who have now been returned from Syria. They expressed to me their deep concern about the lack of community facilities for some of the community groups and the way in which this was tending to lead to radicalisation of the young men. Does the Home Secretary regret the cuts to the Prevent programme?

[Mrs May]

The changes we made to the Prevent programme are very simple. We did two things when we came into office: we said Prevent should look at non-violent extremism as well as violent extremism, but we also said that the part of the Prevent programme that was about the integration of communities came better under the Department for Communities and Local Government than under the Home Office, because people were looking at this as people effectively spying on them rather than a proper integration of communities. What we are doing now is standing back and recognising that we need to deal with extremism across a broader spectrum, because Prevent has always been cast in terms of counter-terrorism. That is why in my speech today I talked about the broader partnership with Government, other agencies, communities, families and individuals to deal with extremism and give a very clear message to the extremists that they will not divide us.

Speaker’s Statement

Monday 23rd March 2015 Commons Chamber

15:32

[Mr Speaker]

I have a short statement to make. Under the chairmanship of the right hon. Member for Blackburn (Mr Straw), the Select Committee on the Governance of the House of Commons recommended, and the House agreed on 22 January, that the roles of Clerk of the House and Chief Executive should henceforth be split. It invited the House of Commons Commission to make arrangements to select a new Clerk and thereafter to begin to recruit for a separate role of Director General of the House of Commons. Accordingly, a trawl for the vacant post of Clerk of the House of Commons was held. Four applicants were interviewed by a panel chaired by me and also including the Leader of the House, the shadow Leader of the House, the Chairman of the Finance and Services Committee and Liz McMeikan, an independent assessor. The unanimous recommendation of the panel was that Mr David Natzler, at present acting Clerk of the House, should be recommended for appointment. I am glad to be able to tell the House that Her Majesty the Queen has approved the appointment. I am sure that the House will join me in warmly congratulating David.

I have further to report to the House that the deadline for applications for the separate position of Director General of the House of Commons has passed and that the selection process is under way. In keeping with the recommendation of the Straw Committee, it is expected that this recruitment process will be completed very early in the next Parliament.

European Council

Monday 23rd March 2015 Commons Chamber

15:35

[The Prime Minister (Mr David Cameron)]

I know that the whole House will join me in welcoming David Natzler as the new Clerk of the House. Mr Speaker, you went to the ends of the earth in search of the best candidate, but I am glad that we found the right answer right here in Britain.

Before turning to the main focus of the Council, which was the situation in the eurozone, let me say a word about the discussions on Tunisia and Libya, on the situation in Ukraine and on the nuclear talks with Iran. I am sure the whole House will join me in sending our deepest condolences to the friends and family of Sally Adey, a British holidaymaker who was among at least 20 tourists and two Tunisians brutally murdered in the terrorist attack at the Bardo museum last week. I have written to President Essebsi to assure him that Britain will stand with the people of Tunisia as they seek to defeat the terrorists and build a peaceful and prosperous future. The EU has agreed to offer practical assistance, and Britain will play its part, deploying SO15 and military counter-terrorism experts and continuing to provide assistance in aviation security and tourist resort protection.

The suggestion that some of the terrorists involved had been trained in Libya is the latest evidence of the very difficult situation in that country. The Council agreed on the need for a political solution, supporting UN-led efforts to bring the different parties in Libya together to agree a national unity Government. Britain has provided Libya with aid and military training, and we will continue to do all that we can to assist. I know that some people are looking at this situation and asking whether Britain, France and America were right to act to stop Colonel Gaddafi when we did. We should be clear that the answer is yes. Gaddafi was on the brink of massacring his own people in Benghazi, and we prevented what would have been a wide-scale, brutal, murderous assault. It was the right thing to do, and we should be very proud of the British servicemen and women who carried out that vital task.

Turning to the situation in eastern Ukraine, the Council welcomed the significant reduction in fighting and the progress on the withdrawal of heavy weapons. But as President Obama, President Hollande, Chancellor Merkel and I agreed earlier this month, it is essential to send a clear signal that sanctions will not be eased until Russia delivers on its promises and the Minsk agreements are fully implemented. The European Council did exactly that. The conclusions say that

“the duration of the restrictive measures...should be clearly linked to the complete implementation of the Minsk Agreements.”

The conclusions also underline our readiness to take further measures if required.

One of the best things we can do to help Russia’s neighbours is to help them to fight corruption and strengthen their democracies. Just as the Know-How fund, set up by Margaret Thatcher, did a great job of helping eastern European countries after the fall of the Berlin wall, so we need the same approach today. At the Council, I announced a good governance fund with an initial £20 million to support reforms in countries in the eastern neighbourhood and the western Balkans. This will complement support from other donors, accelerating efforts to fight corruption, strengthening the rule of law, reforming the police and justice systems and supporting free markets by liberalising key sectors such as energy and banking. The fund will be up and running by the summer. As well as covering Ukraine, it will initially cover Georgia, Moldova, Serbia, and Bosnia and Herzegovina.

Turning to Iran, I met Chancellor Merkel and President Hollande in the margins of the Council to discuss progress in the vital talks on Iran’s nuclear programme. We are absolutely clear and united in our purpose. Iran must never be allowed to develop a nuclear weapon. But there is a peaceful path to civil nuclear energy, and we believe that a comprehensive, durable and verifiable deal is possible, but only if Iran shows greater flexibility and takes some tough decisions during the talks this week. We also discussed proposals for co-ordinating Europe’s energy policy, ensuring transparency of gas supply agreements and that Europe’s energy policies are consistent with reaching the vital deal at the climate change summit in Paris this December.

Turning to the eurozone, the Council welcomed the agreement between Greece and the euro area to extend their programme. Let me say again—this is the last of these statements in this Parliament and I have probably uttered this sentence 11 times: Britain is not in the eurozone and we are not going to join the eurozone. But we do need the eurozone to work properly. A disorderly Greek exit from the euro remains a major threat to Europe’s economic stability and it could be very damaging to the British economy. Protecting our economy from these wider risks in the eurozone means sticking to this Government’s long-term economic plan. Five years ago, Britain’s economy was close to the edge. We had the biggest budget deficit in our peacetime history. We had a deficit that was forecast to be bigger than that of Greece or of any other developed country on the planet. Five years on, the deficit has been halved and our national debt is falling as a share of GDP; we have the fastest growth of any major western economy; we have 1.89 million more people in work; and we have more jobs created in Yorkshire than in the whole of France, and more jobs created in the UK than in the rest of the European Union put together. We need to stay on this path, not abandon it just as it is leading our country to prosperity.

Just as we are acting in our national interest at home, so we have acted to protect our national interest in Europe, too: we have cut the EU budget for the first time in its history; we got Britain out of the euro bail-out schemes; we vetoed a treaty that was not in our national interest; we stopped attempts to discriminate against EU countries outside the eurozone, not least with our successful legal challenge last month; we have made vital progress on cutting red tape and completing the single market; at our G8 in Lough Erne, we kick-started the talks on what will be the biggest bilateral trade deal in history, between the EU and the US; we have put power back in the hands of our fishermen so they can sell what they catch; we have negotiated a new single European patent that will reduce cost for entrepreneurs, and part of that patent court will be based right here in London; we have ensured new safeguards to protect our vital financial services industry; we have returned over 100 powers from Brussels to Britain, giving us more control over our borders, policing and security; we have clamped down on benefit tourism; and in foreign policy, we have worked with our European partners to get things done and keep our people safe, on matters ranging from sanctions on Russia and Iran, and practical assistance to help countries in north Africa fight terrorism, to international action to help those in desperate need around the world, including in west Africa, where British aid workers are risking their lives, helping to stop the spread of Ebola.

In the coming two years, we have the opportunity to reform the EU and fundamentally change Britain’s relationship with it. We have the opportunity to build a European Union that is more competitive, more flexible and more accountable to the people, where powers flow back to member states, not just away from them, and where freedom of movement is no longer an unqualified right. And for the first time in 40 years, we have the opportunity to give the British people their say on Britain’s place in Europe with an in-out referendum. If I am Prime Minister, that is what I will do. Those who would refuse to give the British people their say should explain themselves to this House and to the country. I commend this statement to the House.

15:43

[Edward Miliband (Doncaster North) (Lab)]

May I thank the Prime Minister for his statement? He is obviously getting in his preparations for opposition now. Let me also join him in congratulating David Natzler on his very well-deserved appointment.

I also wish to join the Prime Minister in condemning the appalling terrorist attack in Tunisia last week. Our thoughts go out to the family and friends of Sally Adey and all the victims who were involved in the attacks. This despicable act of terrorism once again reinforces our determination to stand united across Europe.

Before turning to other matters, I also want to note that since the last European Council we have had the Israeli elections, although they do not appear to have been discussed at the European Council. Let me say that there is now one overriding priority, which is restarting negotiations towards a two-state solution: a secure Israel alongside a viable Palestinian state. Can the Prime Minister, when he replies, say whether he agrees that we must put pressure on both sides now to restart negotiations? In the light of Prime Minister Netanyahu’s comments in the run-up to the election, has our Prime Minister sought reassurances about his continuing commitment to a two-state solution?

On Iran, we support the talks. We cannot allow an Iran with nuclear weapons. It is vital that we secure a successful outcome and we will support the EU in seeking to bring that about. Let me also echo the Prime Minister’s words on Libya. We supported the military action—it was the right thing to do—and we support the call for an immediate and unconditional ceasefire. However, the Prime Minister needs to tell the country why things have gone so wrong in Libya. Are people not entitled to conclude that the international community did not adequately plan for the aftermath of the conflict, and what does he realistically believe can be done now?

On Greece, rather than recycling his failing election slogans, can the Prime Minister tell us what the prospects are for a long-term agreement with Greece? That agreement is in the interests of Greece, the eurozone, and the United Kingdom.

Turning to the situation in Ukraine, it is vital that the international community stands united in ensuring that the Minsk agreement is implemented in full. We welcome the commitment, which the Prime Minister reiterated, that EU sanctions on Russia should be eased only in the event of the full implementation of that agreement. Given that the current situation on the ground is not showing signs of getting better, will the Prime Minister tell us whether discussions took place during the summit about increasing further the pressure on Russia, particularly on the so-called tier 3 sanctions on specific sectors?

It is clear that the security dimension of the EU is becoming more and more important. That has been particularly apparent over the past year. It demands common action, resolve and a clear commitment to our continuing place in the European Union—a commitment that the Prime Minister is incapable of delivering. As this is his 29th and last European statement, I had hoped that he might do what he has failed to do in the past 28 and spell out his negotiating strategy. All we had was the same empty rhetoric. Perhaps he can now specifically tell us what the non-negotiable reforms are that he is seeking in Europe. Is he seeking treaty change? Would he countenance voting for “out” in a referendum—[Interruption] Oh, the Minister for Europe says no from a sedentary position; he would not countenance supporting “out”. Perhaps, when the Prime Minister replies, he can confirm that the Minister for Europe said from a sedentary position that, under no circumstances, would he countenance an out vote in a referendum—the Minister knows that the national interest lies in staying in. Those are the questions to which the country deserves answers.

Was the Prime Minister disappointed last week when the President of the European Council, who is supposedly an ally of Britain, described his position as “mission impossible”? With the typical modesty that we have come to expect from the Prime Minister, he then compared himself to Tom Cruise. [Interruption.] I am coming to that; he will enjoy it. To be fair, he did admit to one crucial difference. He said, “He’s a little bit smaller than me.” I have to say to the Prime Minister that I am not sure that that is the main difference that comes to mind. One has a consistent and relatively coherent approach to international affairs and the other is the Prime Minister of Britain.

The Prime Minister mentioned his achievements. Let us remind ourselves of them. He talked about his veto of the treaty, but the treaty went ahead. He did not mention the stand he took against President Juncker; he lost that 26 votes to two. He did not mention either the £1.7 billion bill from Brussels. His attitude to that was: can’t pay, won’t pay, oh, all right, we will pay. But let me relay my personal favourite over the past five years. Who can forget his phrase that in this town, you need to

“lock and load and have one up the spout.”

Up the spout is exactly where his European policy is—not so much Tom Cruise, more David Brent. He cannot tell us what he is negotiating for—

[The Prime Minister]

rose—

[Edward Miliband]

No, I have not quite finished. The Prime Minister cannot tell us what he is negotiating for; he has no strategy for achieving change—[Interruption.] I thought that Government Members wanted to talk about Europe—not any more. He cannot tell us what he is negotiating for. He has no strategy for achieving change and he cannot even tell us whether he will vote yes or no in a referendum. A Prime Minister who cannot tell us whether he wants to be in Europe or out of Europe is a weak Prime Minister. He cannot provide the leadership that our country needs. For that, Britain needs a Labour Government.

[The Prime Minister]

I had not been counting, but I think that reporting back to the House 29 times is quite an impressive record—too many. The right hon. Gentleman does have one thing in common with Tom Cruise: every policy he touches self-destructs in five seconds—tuition fees, spending, the deficit, taxes; it is all the same.

Let me deal with the right hon. Gentleman’s questions. On the very important matter of the Israeli elections, I am sure that we will all want to congratulate Prime Minister Netanyahu on his election victory. I agree with the Leader of the Opposition that we must put pressure on both sides to ensure that talks on a two-state solution get going. I will be talking with Prime Minister Netanyahu this evening, and I will make it very clear that I support a two-state solution. I think that is in the long-term interests of not only the Palestinians, but the Israelis, and Britain’s policy on that will not change.

I thank the right hon. Gentleman for what he said in support of the Government’s position on Iran and on Libya. He asked why we have seen the difficulties after the fall of Gaddafi. One of the things that we have to be clear about is that the Libyan people and the Libyan Government did not want some occupying force; they did not want to be remotely controlled by others. They were given opportunities to opt for a more unified future, but so far they have not taken them, so we have to do everything we can to keep putting those options on the table, not least through a national unity Government.

The right hon. Gentleman asked about Greece and the prospects for a long-term agreement. I still think that the prospects are quite worrying, because on one hand we have the creditor nations that want to see Greece fulfil its programme, and on the other hand we have a Greek Government who do not seem at the moment to be coming up with reforms that give their creditors confidence. One of the lessons that needs to be learned—the right hon. Gentleman needs to learn this—is that government involves difficult decisions, and the Greeks still have to make difficult decisions. [Interruption.] Yes, he was in government. I remember, because he completely crashed the economy, as a member of the Government who left this country in hopeless amounts of debt.

The right hon. Gentleman asked a very specific question on the Minsk agreement: will there be more sanctions if there is more destabilisation? The answer is yes. We should be prepared to consider more sanctions if the situation deteriorates. The key point about the Minsk agreement is that the difficult decisions for Russia will come at the end of the process, which is why it is so important to keep the sanctions right to the end.

The right hon. Gentleman wants to know why we want to renegotiate in Europe, and I will tell him why: we want to get out of ever-closer union; we do not want that to apply to Britain; we want control of our welfare system; we want safeguards for the single market; we want powers to flow back to Britain. Let me ask him this: if those are the things that we want, what is it that he wants? The answer, when it comes to Europe, is absolutely nothing. He told us that he does not think that Brussels has too much power. He refuses to rule out joining the euro because, as he said, “It depends how long I’m Prime Minister for”, so that is a hopeful message. He has made it clear that he will never give the British people a say in a referendum.

Frankly, I will compare my record on Europe with his party’s every day of the week. They gave away £7 billion of the rebate; we have protected the rebate. They gave away our ability to veto what is not in our national interest; we vetoed a treaty that was not in our national interest. They signed Britain up to being in the euro bail-out fund; we got Britain out of the euro bail-out fund. The truth is that we on the Government side of the House stand up for Britain in Europe and the Labour party just sells us out.

[Sir William Cash (Stone) (Con)]

I commend my right hon. Friend for what he has just said, and for stating unequivocally in his Bloomberg speech that it is our national Parliament that is the root of our democracy, for which people fought and died, but in what specific respects will he repatriate the powers of the British people to govern themselves and return the powers of sovereignty to this Parliament so that we can govern this country as we wish?

[The Prime Minister]

My hon. Friend makes an important point. We have already returned a power to Britain by getting out of the bail-out fund. We have returned 100 specific powers as a result of the opt-out on justice and home affairs. I have been very specific that when it comes to the free movement of people, and particularly its interaction with our welfare system, we need powers to be returned to this country. Specifically, I have said that people coming from European Union countries to Britain should not be allowed to claim unemployment benefit, that they should have to leave after six months if they do not have a job, that they should have to pay in for four years before getting anything out of the tax credits system and that they should not be able to send child benefit or other child tax payments to families back home. Those things require serious change in Europe, including treaty change, and that is what we will secure, and what a contrast with the Labour party, which will do absolutely zip.

[Mr Jack Straw (Blackburn) (Ind)]

May I add my own congratulations to Mr Natzler as Clerk, and say how pleased I am personally that the cross-party process of the Governance Committee has led to one of many important decisions that have been made following it?

When the Prime Minister speaks to Mr Netanyahu this evening, will he underline two things—first, that in respect of the negotiations with Iran, a deal which is acceptable and honourable on both sides is more likely to help guarantee Israel’s security, as well as that of others, than no deal at all? Secondly, will he emphasise to Mr Netanyahu that what his party and Government have been involved in is trying to change the reality on the ground through settlement building, so that if it goes on, it will be impossible for there to be a separate state of Palestine, and that if he carries on like this, the patience of this House and of Europe will run out?

[The Prime Minister]

First, just in case it is the last time I look at the right hon. Gentleman across the Floor of the House of Commons and he does not catch the Speaker’s eye at the last Prime Minister’s questions on Wednesday, may I pay tribute to him for all the work that he has done in government and in opposition, including in some very senior roles at some very difficult times for this country? The one pledge I make him is that if he continues to live where he does, his constituency MP will always stand up for him in this House of Commons and make sure that he receives a premium service.

The two points that the right hon. Gentleman makes about Israel are right and they are points that I will be happy to make. They are linked: if there is no two-state solution, the situation ends up moving towards a one-state solution, which I think will be disastrous for the Jewish people in Israel, so I really do believe in the two-state solution. We are very much opposed to the settlement building that has taken place. We have been very clear about that and will continue to be clear about that. It makes a two-state solution more difficult and that, in turn, will make Israel less stable, rather than more stable.

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

In his Bloomberg speech the Prime Minister set out five core principles for a 21st-century EU. If he has had a chance to look at the current European Commission work programme, he will have seen that, contrary to what the Leader of the Opposition has just said, there has now been significant movement towards these principles, particularly on migration and the single market. Does my right hon. Friend agree that we do not have to demand a renegotiation before a referendum? Europe is already offering us one.

[The Prime Minister]

My right hon. Friend is right. It is because we have been clear about the things that need to change that the European Commission is already looking at the sorts of changes that could be made. This is an organisation that responds not simply to pressure, but to political realities, so we have to make sure that the political reality after the next election is someone walking into the Berlaymont building or the European Council building and demanding change, rather than someone wandering in and just saying, “Relax—there’s nothing you need to do. We don’t have to have a referendum. We don’t need a renegotiation. One day we’ll join the single currency.” All the pressure would be off and, yes, some in Brussels would breathe a sigh of relief, because it would be business as usual with Labour and probably the Scottish National party too.

[Mr Peter Hain (Neath) (Lab)]

I endorse the Prime Minister’s welcome to our excellent new chief Clerk. I also welcome the fact, Mr Speaker, that you are proceeding speedily to the appointment of the post that will carry out the chief executive duties, the director general. That is very important.

On Greece, may I suggest to the Prime Minister that simply repeating the same dose of austerity on the Greek people and their Government will not achieve the objective any more than the last dose did? National debt went up in Greece as a result of the austerity programme. Of course, the Greek Government have to reform to collect their taxes and to get rid of corruption, and the Government have volunteered to do that, but going down the same austerity road is not going to revive the Greek economy or enable it to repay its debts. Those must be rescheduled and the reforms around that must ensure that Greece is capable of repaying its debts, not being strangled with austerity.

[The Prime Minister]

I do not entirely disagree with the right hon. Gentleman. The problem is, though, that the people who have lent the money to Greece want their money back, and they believe that Greece should carry out a series of reforms before they give it any more money. He or I can take a different view and argue as I would, although he would not, that Greece should never have joined the eurozone in the first place. That is not the right hon. Gentleman’s view because he is a fanatic about the eurozone. None the less, as we have not lent money to Greece, we are not in that position. If he had been at the European Council he would have heard, whether from the Germans, the Dutch and the Scandinavian countries, or from the Spanish, the Portuguese and the Irish, who have all been through these painful processes, that there is very little appetite to cut Greece a lot of slack.

[Martin Horwood (Cheltenham) (LD)]

On behalf of the Liberal Democrats, I echo the Prime Minister’s congratulations to Mr Natzler. I welcome the Prime Minister’s remarks on Tunisia and Libya, where we must all still hope that the promise of the Arab awakening will be fulfilled and sympathise about the fact that uniting the Tory party on Europe really is “mission impossible”? On the Transatlantic Trade and Investment Partnership, does he agree that the UK should never ratify a treaty that would undermine the NHS?

[The Prime Minister]

Of course. But I do believe that all of us in this House who support free trade and want to see Britain as a success story in international markets should really get behind TTIP rather than listening to some non-governmental organisations that are raising entirely false fears about it. There is no way that TTIP can in any way undermine our NHS. Our NHS is determined by the policies we pass here in this House. One of the things that was so striking about the European Council was countries worrying about the so-called investor protection mechanisms, even though Britain has 94 of these things and we have never lost a case. There is an awful lot of scaremongering about TTIP. Any of us who want to see a successful British economy should get behind what could be a real jobs boost for our country.

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

If the Prime Minister is so certain that TTIP will not undermine the NHS, does he have assurances in the treaty that specifically mention the NHS and therefore make it absolutely clear that what some of us fear might happen will not happen?

[The Prime Minister]

There is this very powerful quote, which I think I have read out in the House of Commons before, where the previous Trade Commissioner said:

“Public services are always exempted—there is no problem about exemption. The argument is abused in your country for political reasons but it has no grounds.”

The point I would make, though, is that it is local NHS commissioners who make decisions about who delivers services. One of the things that is being done with TTIP is that people or countries who want to raise concerns, like over the investor protection mechanisms, are asking for more things to be put in the treaty, which in the end we will have to pay a price for; and if they are not necessary and there is not a problem, why are we creating one? With the investor protection mechanisms, the country that was raising this problem was Austria, which has 60 of these agreements and has never, ever lost a case. Of course let us have the robust negotiation and seek any safeguards we might need, but let us not raise problems that do not really exist.

[Mr James Clappison (Hertsmere) (Con)]

Is my right hon. Friend aware that in contradistinction to the views expressed by the Leader of the Opposition, there are millions of ordinary voters in this country who want their say on whether Britain should remain part of the European Union—a say that is long overdue? Is it not absolutely crystal clear that they will get that say only if my right hon. Friend continues to occupy Downing street after the election and is in a position to deliver on that promise?

[The Prime Minister]

I think there are millions of people in our country who want to have that say. We have not had a referendum since 1975. We cannot remain in these organisations without the full-hearted consent of the British people behind us. So it is time to have the referendum, but let us have it on the basis of a renegotiation. My hon. Friend is absolutely right: there is only one way to get that referendum, and that is to make sure that there is a Conservative majority and a Conservative Prime Minister after the next election.

[Keith Vaz (Leicester East) (Lab)]

The crisis in Libya is having catastrophic consequences. Prime Minister Matteo Renzi has said that of the 170,000 people who entered Italy illegally last year, 92% did so from Libya, and the figures for this year show a 64% increase. Does the Prime Minister agree that it is not enough to give more resources to Frontex—we also have to deal with the source countries to help them stop migrants putting their lives at risk or being profited from by traffickers?

[The Prime Minister]

The right hon. Gentleman is absolutely right. We will not solve the problem simply by more sea patrols—nor, indeed, by returning to the Mare Nostrum policy, which sounded humanitarianly sound, but deaths at sea during the period of its operation increased fourfold. So there is no alternative to trying to stabilise these countries and deal with the problem at source. We are able to use our aid and other budgets, with European partners, to do that, and we should certainly do so.

[Mr Peter Bone (Wellingborough) (Con)]

A few weeks ago I went to No. 10, along with my hon. Friend the Member for Kettering (Mr Hollobone) and Tom Pursglove, the excellent Eurosceptic Conservative candidate for Corby, to deliver the results of the north Northamptonshire referendum, in which 81% of the people of north Northamptonshire voted to come out of the EU. Unfortunately, when we knocked, the Prime Minister was not in, but he kindly wrote to me stating, rather importantly, that, if it was at all possible, he would be delighted to bring forward the EU referendum. I think there is a misunderstanding that it has to be held at the end of 2017, so will the Prime Minister confirm that it could take place earlier?

[The Prime Minister]

First, may I apologise for not being in? It is not that I have an adverse reaction when I see the men in grey suits approaching Downing street, but I obviously was not there on the right day and I am very sorry about that. What I have said is that the referendum must take place by the end of 2017, but if it is possible to complete the renegotiation and hold it earlier, no one would be more delighted than me. I think it would be—[Interruption.] The Leader of the Opposition complains from a sedentary position, but there would be no referendum or choice with Labour. They would literally just turn up in Brussels and say, “Tell me how much to spend. Where do I sign? No renegotiation or referendum.” It is absolutely clear that there is only one way to give the British people a choice, and that is to make sure I am at this Dispatch Box after the next election.

[Kate Hoey (Vauxhall) (Lab)]

Does the Prime Minister accept that thousands of small and medium-sized businesses and companies throughout the United Kingdom would love, and are desperate to see, a different relationship with the European Union? Does he accept that promising a referendum is a better way of getting that ultimate change?

[The Prime Minister]

I agree with the hon. Lady and wish she could talk some sense into her Front-Bench colleagues. She is absolutely right. By holding a —[Interruption.] The Leader of the Opposition says that the hon. Lady does not agree with me, but she just stood up and made the case for a referendum rather better than I did. I will take careful note of what she said. The point is that, by having this pledge and renegotiation, we can get things done for businesses large and small.

[Sir Edward Leigh (Gainsborough) (Con)]

We are all being a bit unfair on the Labour party. After all, 40 years ago it was the Labour party that gave us a referendum and, to be fair to the Liberals, they promised one in the last Parliament, although I do not understand why they have gone wobbly on trusting the people. Perhaps it is because the people may give the wrong answer. Is not the answer to the Leader of the Opposition that every single person in this country, no matter how important they are—whether they are the Prime Minister, the Deputy Prime Minister or the Leader of the Opposition—gets one vote? Will my right hon. Friend therefore give a categorical assurance that any Government of which he is Prime Minister will deliver this choice to the British people?

[The Prime Minister]

I have been absolutely clear: I will not be Prime Minister in a Government that do not hold a referendum. I could not be more clear about it. My hon. Friend makes an important point. I remember Tony Blair standing at this Dispatch Box as Prime Minister —I was sitting somewhere on the Opposition Benches—and saying with respect to the European constitution, “Let battle be joined”, and making a great pledge. He could have held a referendum, but he did not. That is one of the things that has poisoned the well in this country and that makes a referendum even more important today.

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

During discussions on the middle east with his European counterparts, did the Prime Minister explain why the United Kingdom has allowed only 140 refugees from Syria to come into this country?

[The Prime Minister]

We have spent about £800 million helping refugees in Syria, which makes us the second largest bilateral donor to the programme. We have taken 140 people under the vulnerable persons relocation scheme, and it is right that we have done that, but we have to be frank with ourselves and with the public. In a refugee crisis of this scale, which runs into millions of people, the idea that even a small part of the solution is for our country to take in hundreds or thousands is completely wrong.

[Neil Carmichael (Stroud) (Con)]

Does the Prime Minister agree that inward investment from the European Union, including Sartorius Stedim investing in my constituency, is a sign that Europeans believe in a reformed European Union and that we have a large number of allies in Europe who want to reform the EU in a constructive way, ready for a referendum?

[The Prime Minister]

My hon. Friend makes the important point that Britain is a magnet for inward investment. In fact, we are getting 50% more inward investment than either France or Germany, the next two biggest recipients of such investment. The interesting point is that, since I made my Bloomberg speech and that referendum commitment, there has been no sign of change in the inward investment from countries in the rest of the world coming into the United Kingdom, because they know that it is right to hold that renegotiation and that referendum.

[Mike Gapes (Ilford South) (Lab/Co-op)]

We can all wish for a political solution and a national unity Government in Libya, but the reality is that it is not happening and an al-Qaeda or ISIL-linked state is being established on parts of the coast, which is a serious threat to our country and the rest of Europe. What are we going to do about the situation in Libya, rather than just wishing for a change?

[The Prime Minister]

It is not a question of simply wishing for a change; we are working with our allies to help to bring one about. The aim so far has been to produce a national unity Government by bringing together the different parties that there are in Libya. We have not taken the approach that some in the region have taken of trying to pick sides and creating conflict between the various parties. I accept, however, that as we see the growth of ISIL in Libya, we are going to have to challenge all those who could take part in a national unity Government to oppose ISIL and any formation it is able to achieve in Libya. That will be an important part of the stability that we seek not just for the sake of the Libyan people, but for that of our own.

[Mr Andrew Robathan (South Leicestershire) (Con)]

In my last week as a Member of Parliament, may I commend my right hon. Friend not just for his statement, but for his work over the past five years in re-establishing the United Kingdom as a serious and respected player in international affairs?

Turning specifically to the good governance fund that he mentioned with regard to Ukraine and eastern Europe, will the Prime Minister look at the money that has been transferred to this country, particularly from Russia? Oligarchs and others seem to have thought that here and western Europe were good places to put their money, most of which was looted from the good people of Russia. Part of the reason why there is a problem in Russia is that money has been taken out of Russia and placed here.

[The Prime Minister]

First, may I thank my right hon. Friend for the valuable work that he has done for his constituents in this House, but also as part of the Government both in Northern Ireland and at the Ministry of Defence? He has played an absolutely crucial role, and he will be missed.

On the issue of Russian money, we have some of the toughest controls anywhere in the world in terms of money laundering and other such issues. I would make the point that Britain has very much been in the vanguard of arguing for sanctions on Russia and Russian individuals, even though it could be argued that this might in some way disadvantage investment coming into the United Kingdom. We have put the interests of Europe and the interests of the Ukrainian people first.

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

Is the Prime Minister aware that many of us on the Labour Benches who are pro-European want what our allies want, which is a strong Britain in a strong Europe? Yes, we want a reformed Europe—all of us are in favour of reform in Europe—but we are not in favour of weakness and vacillation, which manufacturers and exporters in my constituency say will damage this country over the next three years while we wait for a referendum.

[The Prime Minister]

The hon. Gentleman says that he is in favour of reform, but I have not heard one single proposal from the Labour party about anything it wants to reform. He is presumably standing on his leader’s ticket, but I do not know whether he has his picture on his leaflets. When I met my Labour opponent in Chipping Norton market square this week, I had a look at his leaflet, and there was not a dicky-bird when it came to the Leader of the Opposition. It could have been from a totally different party. There are plenty of pictures of me. The Leader of the Opposition has said:

“I don’t think Brussels has got too much power”.

That is the official position of the Labour party: it is not for reform, but for the status quo.

[Dr Julian Lewis (New Forest East) (Con)]

As the only major party leader to trust the British people with an in/out referendum on EU membership, my right hon. Friend has certainly reassured the patriotic British electorate. Will he now go the whole way by reassuring them that throughout the next Parliament, when he is Prime Minister, Britain will not fall below the NATO recommended minimum of 2% of GDP on defence?

[The Prime Minister]

I would say to my hon. Friend, who I know cares passionately about this issue, as I do, that we are one of the few countries in Europe to meet 2%. We have met it through this Parliament, and we are meeting it this year and next year. He has very specific guarantees about a full replacement for Trident, a £160 billion equipment programme that will go up in real terms each year and no further reductions in regular personnel in our armed forces. I think those are bankable assurances, which will resonate on the doorsteps as he goes house to house.

[Kelvin Hopkins (Luton North) (Lab)]

Even at this late stage, I think that the Prime Minister might thank my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) for keeping us out of the euro. As he knows, the euro has been sinking like a stone in recent weeks and there are terrible stresses inside the eurozone, arising from the rigidities of the euro. Is not the only serious solution to dissolve the euro and recreate national currencies? Is he not in a strong position to say that?

[The Prime Minister]

I believe strongly in maintaining our national currency, but it is not a realistic option to tell all other countries in Europe which currency they should use. Many of them are hugely enthusiastic about the euro. However misguided I feel that is, arguing that they should all break up their currency is not a viable option. Obviously, being in the euro and not being able to devalue have damaged Greece’s ability to respond to the problems, but we cannot lay all the problems with the Greek economy at the door of the euro. Greece has a long history of not making structural reforms, having ludicrously early retirement ages—[Interruption.]—having problems with its working practices and all the rest of it. The hon. Member for Bolsover (Mr Skinner) asks what is wrong with ludicrously early retirement ages. He has enjoyed making such comments from a sedentary position for many, many years and I am sure that he will do so for many years to come. There is a slight irony there.

[Robert Halfon (Harlow) (Con)]

Did my right hon. Friend have any discussions at the European Council about the jobs miracle in this country, in that there are more people employed here than at any time in our islands’ history? Did he ask members of the European Council to come and see that miracle at first hand in Harlow, where unemployment has halved, youth unemployment is down by nearly 60% and apprenticeships are up by 116%?

[The Prime Minister]

I am grateful to my hon. Friend for his question. We discussed the employment situation across Europe and I was able to give a very strong report on what is happening in Britain: the 1,000 jobs that are being created every day and the plummeting levels of unemployment and youth unemployment. I said that that is evidence of the combination of long-term structural changes and economic recovery. There are European countries with very high structural rates of unemployment that need to take action to deal with that.

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

My party heartily congratulates David Natzler on his appointment. There could be no one more suitable and appropriate for this role in the House of Commons.

On the Tory European referendum, what will happen if the UK votes to leave the European Union, but Scotland votes to remain within it? Should the Scottish people just put up with being yanked out of Europe against their will? Would it not be better if all the siblings in the Prime Minister’s family of nations agreed individually before they were taken out of Europe?

[The Prime Minister]

What I want to know is, where are the rest of the Scot nats? They are preparing for power and writing Labour’s Budget. They are obviously very busy. What I would say about referendums is that the hon. Gentleman lost the first one and he will lose the next one.

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

You will have noticed, Mr Speaker, that my hon. Friend the Member for Wellingborough (Mr Bone) no longer talks about his wife, but about the excellent Conservative parliamentary candidate in Corby, Thomas Pursglove. I believe that that is because Mrs Bone is going to become a councillor in my constituency and so has been talking to me. She regrets the fact that the Liberal Democrats have not allowed the Government to negotiate formally on a renegotiation in Europe, but she wonders whether the Prime Minister has taken advantage of his meetings on the sidelines of the European Council to talk about our renegotiation with our European partners.

[The Prime Minister]

I must say, I did not know that those sorts of things happened in Northamptonshire. They are obviously very exciting events. I congratulate Mrs Bone on trying to become a councillor. I am sure that she will make a great contribution, as she did to the film about this place. Of course I have had discussions with our European partners about what Britain wants to see renegotiated and I will continue to do so.

[Valerie Vaz (Walsall South) (Lab)]

The Prime Minister is keen to extol the virtues of a referendum and the benefits of Europe, so will he say whether he would lead the yes camp or the no camp?

[The Prime Minister]

I have been absolutely clear: I want Britain to stay in a reformed European Union. That is the aim I have and I am confident I will achieve it.

[Mr David Nuttall (Bury North) (Con)]

Does the Prime Minister agree that this Government’s great progress in turning round the British economy has been achieved despite the eurozone and not because of it?

[The Prime Minister]

Although my hon. Friend and I do not always see eye to eye on issues European, he is making a strong point. We have not seen much of a boost to the British economy from the eurozone because it has been relatively stagnant. We have had to achieve economic recovery by selling to other parts of the world and getting our own economy moving. If we do see a recovery in the eurozone—which we hope to—that will obviously be very good news for Britain.

[Clive Efford (Eltham) (Lab)]

If we ask a group of lawyers their opinion on whether TTIP would apply to the NHS, we will get as many answers as there are lawyers. The Prime Minister cannot get away with saying that it will not apply, because by opening up the NHS to market tendering and market forces in the way he did with the Health and Social Care Act 2012, he has opened the door to treaties such as TTIP applying to the national health service. That is the problem he needs to protect the NHS against.

[The Prime Minister]

I am baffled by Labour’s position on this as I thought it was a party that believed in free trade and backing Britain’s exporters. There are so many areas where we are disadvantaged in our trade with America and where we could be creating jobs and growth, but instead Labour Members want to read out a script handed to them by the trade unions to oppose the trade deal. It makes you weep for the time when the Labour party was in favour of progress and trade.

[Michael Ellis (Northampton North) (Con)]

At the Council did anyone raise the treatment of journalists? Does my right hon. Friend agree that the witch hunt that has seen several journalists from The Sun, for example, put through three years of hell and cases that juries keep throwing out is un-British, in that the Crown Prosecution Service is seeking to neuter the abilities of journalists to obtain information in the public interest? Should there be a rethink of CPS policies for similar prosecutions, because that reflects across the whole of Europe?

[The Prime Minister]

That issue was not raised with me or at the press conference. Obviously, the CPS is independent in our country, as it should be, but my hon. Friend is right to say that justice delayed is justice denied and these things should always be resolved as speedily as possible.

[Nia Griffith (Llanelli) (Lab)]

Many jobs in my constituency depend on continued investment by leading manufacturing companies that also have companies on mainland Europe. Labour Members can say that a Labour Government would give them a categorical reassurance that the UK will remain in the EU. What would the Prime Minister say to those companies if his shilly-shallying over Europe about some sort of referendum were to drive them to invest elsewhere?

[The Prime Minister]

Interestingly, the conference of the British Chambers of Commerce—probably the biggest business trade body in Britain—supported my approach of a renegotiation and referendum, and did not support the alternative of just meekly going along with whatever the European Union is doing today. Business is on the side of the changes I am putting forward.

[Simon Kirby (Brighton, Kemptown) (Con)]

I am a big fan of the public sector. Does my right hon. Friend agree that Greece teaches us a lesson that we can have a strong public sector only if we have a strong economy?

[The Prime Minister]

My hon. Friend is absolutely right. If we look at what happened in Greece with the economic difficulties it has had, we see that it had to make sweeping cuts to its national health service because it was in so much economic trouble. That underlines the point that we will make every day from now and for the next 45 days, which is that if we want a strong NHS, schools and policing, we must have a strong economy.

[Ian Lucas (Wrexham) (Lab)]

In his statement the Prime Minister said that he wanted a European Union where freedom of movement was not an unqualified right. If he does not secure an exemption from freedom of movement by the time of the referendum in 2017, will he be voting no?

[The Prime Minister]

I am very confident that we will get the changes we need, not least on the operation of our welfare system. Back in European history, there was a time when freedom of movement was about accepting a job that had been offered, rather than simply the freedom to move to look for work. I have been clear, and we will be clear on the doorsteps, including in the hon. Gentleman’s constituency: no unemployment benefit for visiting EU migrants; after six months if someone has no job they have to go home; someone must work for four years before they get in-work benefits; and no sending home of child benefit. Those are things that I suspect each and every one of the hon. Gentleman’s constituents wants put in place.

[Dr Matthew Offord (Hendon) (Con)]

With regard to the Iranian nuclear deal, may I urge great caution on the part of the Prime Minister and, indeed, other members of Europe? The road between a civil nuclear energy Iran and a military nuclear Iran is a very short one. Contrary to what at least one of my right hon. Friend’s constituents has said, it would be better for the middle east to have no deal than a bad deal.

[The Prime Minister]

I absolutely understand and share the concerns that people right across the world, including in Israel, have about the prospect of a nuclear-armed Iran. The deal should keep Iran away from having a nuclear weapon, with proper inspection and verification so that if there were any changes to those circumstances, they could be seen. Obviously, we should not do a deal at any price, but the alternatives to doing a deal are not attractive. Frankly, they are not attractive for Iran. The sanctions we put in place—Britain led the charge in Europe—have done such damage in Iran that it is in its interests to conclude a deal.

[Andrew Stephenson (Pendle) (Con)]

Earlier this month, I met a group of talented young people at John Fisher and Thomas More Roman Catholic high school in Colne, who, through CAFOD, are helping to raise the profile of climate change. They have all made their own climate change pledges, which they presented to me. Will the Prime Minister say more about his discussions on energy policy and the prospects of our reaching a long-term agreement in Paris this December?

[The Prime Minister]

I am very grateful to my hon. Friend for that question. I think the prospects are good, because of the deal Britain helped to broker at the previous EU Council. It shows that the European Union will be making a very serious contribution to reducing carbon emissions. We obviously had to allow some countries, such as Poland, some flexibility, but the overall numbers for Europe are impressive. Now what we need to do, with the movement by the Americans and the Chinese, is discuss the matter with all the countries which might, if we are not careful, put a spoke in the wheel of progress, so that, with others, we will help to ensure that the sort of mitigation that they will need in their countries goes ahead.

[Henry Smith (Crawley) (Con)]

In his statement, the Prime Minister spoke about opportunity. Does my right hon. Friend agree that people will have an opportunity to reform the EU and have an in/out referendum on this country’s membership of the EU only by voting Conservative, and that voting for any other party will kill that opportunity?

[The Prime Minister]

My hon. Friend is right. Voting for another party is really opening the back door to a Labour Government, who would not renegotiate or have a referendum. It would just lead to a sigh of relief in the corridors of Brussels that none of those changes was necessary. If people are serious about wanting reform and a referendum, there is only one box they can put their cross in.

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

On foreign policy, did the European Council look at the coup in Yemen against the legitimate Government of President Hadi? Taking into account the words of the Yemeni Foreign Minister in today asking for Gulf Co-operation Council countries to send in their forces to avoid civil war, the Saudis have asked their ambassador to operate from Aden to show support for the legitimate Government. Will we be doing the same?

[The Prime Minister]

We did not discuss Yemen specifically at the Council because we were very focused on Tunisia, Libya, Ukraine, energy union and the eurozone crisis, but my hon. Friend is absolutely right that what is happening in Yemen is deeply worrying. It is extremely unstable. We still, obviously, support and believe that President Hadi is the legitimate power. Frankly, what is needed in that country is what is needed in so many other troubled countries in the middle east, which is inclusive government that includes representatives of all the people of that country, so there can be some sort of progress.

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

Despite yet another eurozone crisis, the UK economy continues to grow strongly, creating more jobs than the rest of Europe added together. Does the Prime Minister agree that it would have been a huge error of judgment, especially by someone who aspired to be Prime Minister, to have backed Francois Hollande’s failed socialist policies when he should have been backing our long-term economic plan?

[The Prime Minister]

We all remember what the Leader of the Opposition said. He stood on the steps of the Élysée and said he wanted Britain to follow the French course. If we had done that, unemployment would be twice as high as it is and growth would be one seventh of what we have achieved, so I am sure that when it comes to the choice at the election, people will recognise that we should follow not the French course but the British course, which means voting Conservative.

[Mr Speaker]

Before I call the Minister for the Cabinet Office and Paymaster General to make his statement to the House, it might be helpful to colleagues to know that the final day’s debate on the Budget is very heavily subscribed, with no fewer than 38 colleagues seeking to catch the eye of the Chair. As a consequence, it will be important to be very pithy in the statement now, both from the Back Benches and the Front Bench. We will then proceed with the main business of the day.

Government Efficiency and Reform

Monday 23rd March 2015 Commons Chamber

16:30

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

With permission, I would like to make a statement on Government savings from efficiency and reform.

Since May 2010, my Department has led a cross-Government programme, working closely with the Treasury, to ensure that taxpayers’ money is focused on front-line services. With rising public expectations for high-quality services, coupled with the huge budget deficit we inherited in 2010, the coalition faced a huge challenge to do more—and better—for less. Over this Parliament, we have secured unprecedented levels of savings, delivering for successive years £3.75 billion, £5.5 billion, and £10 billion, compared with spending in Labour’s last year. For 2013-14, we saved £14.3 billion, against a 2009-10 baseline.

That is testament to the hard work of civil servants across Whitehall and the strong support of my right hon. Friends the Chancellor and the Chief Secretary and other Treasury colleagues. Last July, the Comptroller and Auditor General recognised the pace and priority we had injected into the efficiency agenda. We started this with the introduction of tight spending controls just days after we entered government, and these controls have delivered the largest share of savings. Since 2010, we have negotiated billions of pounds off expensive legacy contracts and cut central Government spending on consultants and interim workers by over half. Like for like, the civil service is 21% smaller. I publish today our annual “State of the Estate” report, which shows that we have exited in aggregate more than one building every day since May 2010, reducing the total size of our estate by 20%.

As part of our long-term economic plan, our aim was to save £20 billion from central Government efficiency and reform for the last year of this Parliament, including by reducing losses to the public purse through fraud, error and uncollected debt. I can tell the House that we are on course to meet and indeed exceed this target. Up to January 2015, we have already identified £11 billion of efficiency and reform savings—over a third up on the same point last year—with the largest savings coming in the final quarter every year so far. With fraud, error and debt benefits still to be counted, we are well on the way to the £20 billion target. The full year’s savings will need to be confirmed by independent audit, and, as in previous years, we will invite the National Audit Office to undertake this.

We have made significant progress in transforming government and cutting costs, but this is only the beginning. At the autumn statement, we published, with the Treasury, a document entitled “Efficiency and reform in the next Parliament”, which set out our intention to save a further £10 billion for 2017-18 and £15 billion to £20 billion for 2019-20 compared with the current year. We now set out our next steps. We will implement a new approach to land and property, based on central ownership and management of assets and Departments paying market-level rents. This will provide greater incentives for Departments to rationalise space, as well as releasing land and property for productive use—for example, for up to 150,000 homes. To do this successfully will mean working even more closely with local government, including through our One Public Estate programme, which now operates across 32 local authorities.

The UK is now a world leader in digital government, and we will work with local government to take this transformative approach into the wider public sector. Digital services improve the citizen experience, while being significantly cheaper to provide. We will continue to reduce the cost of technology in government, as extravagantly expensive legacy IT contracts fall in over the coming years. To that end, I have signed an innovative deal to create a joint venture for data hosting that will save up to £100 million.

All of this work has been driven by an increasingly strong corporate centre, supporting and challenging Departments to work together to maximise efficiencies and improve services. We are strengthening central leadership across 10 key cross- departmental functions, including commercial, digital and technology, project management, legal and human resources. Later this week, we will publish our functional leadership model.

The chief executive of the civil service will lead the build-out of this strengthened model, under which the Treasury and the Cabinet Office will work together as the corporate centre to support Departments to continue their programme of reform and to deliver future spending consolidations. Spending controls will remain in place and evolve in time to strong functional standards, while Departments will need to own more of the transformation agenda. As part of this, we are recruiting 25 commercial directors across government and launching a new project leadership programme at Cranfield university. This programme will help to build project management skills in parallel to our successful major projects leadership academy.

I am grateful for the collaborative way in which the shadow Cabinet Office Minister has approached this important programme, which continues that of her predecessor, the hon. Member for Barnsley East (Michael Dugher), and also for the support of the Chair of the Public Accounts Committee and its members, who have seen the point of what we are seeking to do and given significant support to it.

We have made substantial and long-overdue improvements to the way government operates, but much more lies ahead. We have shown that we can drive down the cost of government while improving the quality of services. We have shown that we can get more and better for less, and that we have a long-term plan to deliver it. I commend the statement to the House.

16:37

[Lucy Powell (Manchester Central) (Lab/Co-op)]

I thank the right hon. Gentleman for advance sight of his statement. His statement today has a little bit more content than his empty statement of two weeks ago, but only a little bit more. One has to wonder again why it is that I keep being called to this House for his statements. Is it perhaps because he wants to continue his very long career of public office in the other place after May and is using Hansard to scrub up his CV? Or is it, more seriously, to distract me and this place from the disarray that is now besetting the Conservative party’s election campaign? Perhaps his and his colleagues’ time would have been better spent today deploring the despicable actions of the Tory candidate for Dudley North or by explaining to the public where the axe will fall, following last week’s confirmation of the Chancellor’s extreme spending cuts in the next Parliament.

The Minister has carried out his job in government of identifying efficiency savings with zeal and his work to reduce the cost of government bureaucracy is welcome. While I might disagree with him on occasion, I do not question his motives to reduce costs. I also commend the civil service for its work on the shared agenda.

The Minister for the Cabinet Office thanked the Chancellor for his support on this agenda, but I have to say to the right hon. Gentleman that it really should be the other way around. It is clear from the Office for Budget Responsibility and the Institute for Fiscal Studies that after the Chancellor’s Budget last week, unprotected Departments will face huge and colossal cuts to meet his spending plans and unfunded tax cuts. With all due respect to the Minister, no amount of back-office efficiencies will save front-line police, armed forces or social care services, or working families from the Government’s secret VAT plans. Only so much can be got from efficiency savings and even with his savings in this Parliament, the Government are still only halfway to their own deficit reduction targets. That is why, even with his savings, public services would face even bigger cuts in the next Parliament than they have in this one. Opposition Members have a better plan. We will balance the books in a fair way, ensuring a recovery for the many, not just for the privileged few.

We broadly support the approach to land and property that the Minister has outlined. On digital government, I am pleased to see that he has been reading our independent review on this topic. Just weeks ago, he was saying that the Government Digital Service could not work with councils to improve services and save money. Now he is championing this, and I welcome his conversion today. We agree that stronger functional skills in the civil service are important, and we will examine in detail the Minister’s plans for new commercial directors and a new project leadership programme.

Any new Government will have to think about how we can provide better and more responsive public services with less, but with just a few weeks to go, the country faces a clear choice at the election. No amount of spinning on efficiency savings will hide the Tories’ true agenda of cutting front-line public services and hitting families with a rise in VAT.

[Mr Maude]

I am very sorry that the hon. Lady has been so mean-minded about this. She has cast some unworthy aspersions on the reasons for my statement. The historic purpose of the House is to vote Supply and scrutinise the way in which Governments spend their money. I am astonished that, when I come to the House to explain how this Government have delivered savings running into tens of billions of pounds, and have protected front-line services by taking out the cost of government, the hon. Lady should trivialise something that is at the core of the historic mission of the House of Commons. She has done no honour to her position.

The hon. Lady should reflect on the fact that the Office for National Statistics, which began its series on public sector productivity in 1997, has shown that during the years of the Labour Government, up to 2010, productivity in that sector remained flat, while productivity in the nearest analogue, the private services sector, rose by nearly 30%. She should reflect on the difference that could have been made to the deficit of historic proportions that her party bequeathed to the coalition.

The hon. Lady talked about the future, and about the contribution that could be made by what she described as back-office efficiencies. We are talking about much more than back-office efficiencies; we are talking about the introduction of very different and improved ways of delivering public services. That can be done, and we have shown that it can be done. The public’s expectations in terms of the quality of public services are, properly, rising; the demand in terms of the quantity of public services is also rising as people—happily—live longer; and the amount of money that is available to support those public services is less, thanks to the deficit that we inherited.

We therefore must do more, and do it better, with less money. We have shown over the last five years that that can be done, and we have also shown that it needs to be done again. There should never be an end to efficiencies. The most efficient organisations in the world always look for further efficiency savings every year, and that is what this Government, under a Conservative leadership, will do in the next Parliament.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

Why has the rigorous challenge that the coalition Government have had to make to the way in which money is spent in many Departments not been applied to the criminal justice system? Having a larger prison population than nearly all the other European countries is not necessarily the most cost-effective way of keeping people safe. Will the Minister look at the American states that are trying to reverse that trend in order to spend the taxpayer’s dollar in the way that is most likely to keep the taxpayer safe?

[Mr Maude]

Let me say to my right hon. Friend, as we both enter our last week in the House of Commons, that, as he knows, the reason our prison population is so large is the rate of reoffending. I know that he will support, as I do, the rehabilitation revolution, led by our right hon. Friend the Lord Chancellor, which is committed to a radical reduction in the rate of reoffending that is the sole reason why our prison population is so much higher than those of comparable countries.

[Kelvin Hopkins (Luton North) (Lab)]

The Treasury’s problems are, above all, about income, not expenditure. There is a gap of £120 billion a year between the tax that should be paid and the tax that is actually paid. However, the Government have presided over tens of thousands of job cuts in Her Majesty’s Revenue and Customs, where senior staff collect 20 times their own salaries and junior staff 10 times theirs. Are the Government not shooting themselves in the foot?

[Mr Maude]

The hon. Gentleman is completely mistaken if he believes that there is a direct linear relationship between the number of HMRC officials and the amount of tax that is being collected. There is absolutely no evidence of that. The size of HMRC, in terms of headcount, was falling before the 2010 election, and the amount of tax being collected has risen. We can do things differently and we can do things better—we have already shown that that is the case—but if the hon. Gentleman thinks that the only problem with the public finances is that we are not taxing enough and not raising enough taxes, I am afraid that he and I differ. I think that we must cut our costs first, which is what we are doing and will continue to do.

[Nick Herbert (Arundel and South Downs) (Con)]

May I congratulate my right hon. Friend and parliamentary neighbour, who has done a superb job in driving these savings and thereby ensuring front-line services can be protected? He has done a fine job behind the scenes and will be much missed from this place, but I hope he will be able to continue in some way in this important public service. Does he agree that the key part of his statement was that these savings have been achieved as a result of a strong corporate centre—a central drive for efficiency—and is it not the case that that centre will have to be strengthened further if significant additional savings are to be achieved?

[Mr Maude]

I am grateful for my right hon. Friend’s kind comments, and I also hugely appreciate what he and the right hon. Member for Wentworth and Dearne (John Healey) have done in leading the work of GovernUp, which has made the case very powerfully, as indeed has the Public Accounts Committee, for a strong corporate centre in Government that can drive these sorts of changes. When we examined this, we found that, in almost all cross-government functions, the historical position of the British Government is to have an extraordinarily weak centre. That is part of the reason why it has been proved in the past to be so difficult to drive these sorts of efficiency savings, but we are changing that.

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

This was a swansong statement, if I may say so, which largely looked backwards rather than forwards. Nevertheless, what the Minister has announced today about stronger central leadership within Whitehall, clearer professional standards right across the Departments and more power to the elbow of the new chief executive of the civil service are welcome on all sides. The right hon. Gentleman over five years has made something of a start in ensuring we get better and more for less, but his statement this afternoon is clearly passing the baton for the next five years to this side of the House and my hon. Friend the Member for Manchester Central (Lucy Powell) on our Front Bench.

[Mr Maude]

I agree with every part of what the right hon. Gentleman says except the last part, but I am grateful for what he says and the work he has done on this issue. He is a very experienced former Minister himself and he has seen very vividly how we can do these things better. We have made a start but there is much, much more to be done.

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

As my right hon. Friend has stated, public sector productivity flatlined between 1997 and 2010, but what assessment has he made of improvements in civil service productivity since 2010?

[Mr Maude]

Productivity has improved dramatically. Like for like, the civil service is 21% smaller, yet I do not think anyone would say the civil service is doing less. It is not; if anything, in some places it is doing more. Productivity has markedly improved and I pay a very warm and genuine tribute to those hundreds of thousands of civil servants who do a fantastic job, often in very difficult circumstances. All of us in this House should be warm in our tribute to them.

[Wayne David (Caerphilly) (Lab)]

I agree with what the Minister has said about extending digitisation in government, but what is he doing to ensure millions of people are not excluded from the process of digitisation?

[Mr Maude]

That is a very good point. When the now Baroness Lane-Fox reported to me at the very beginning of this Parliament when she introduced the concept, which we warmly adopted, of digital by default—if a service can be delivered online, it should be delivered only online—she made the point, which again we strongly supported, that there must always be an assisted digital option, which ideally can be used to help people who are currently digitally excluded to become full participants in the online world, so, for example, older people can more easily communicate with distant family members. There is a big programme here that we are strongly promoting.

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

I am so pleased to hear that we are protecting public services while cutting down the cost of government, but does my right hon. Friend share my concern that we have been prevented from delivering one of the bigger cuts—namely, cutting the number of Members of Parliament by delivering our proposed boundary changes? Does he agree that although the Opposition refer to fairer cuts, they give no indication of what those cuts would be, and that the public therefore cannot trust anything they have to say?

[Mr Maude]

Aneurin Bevan once said:

“Why look into the crystal ball when you can read the book?”

The last Government did nothing to drive the sort of efficiency savings that we have achieved, so when it comes to making cuts in public spending, we can only fear that they would cut the services, whereas we are cutting the costs, which is the better way to go.

[Paul Flynn (Newport West) (Lab)]

Why has there been no reform of the continuing parliamentary scandals of cash for access to politicians and cash to buy peerages? Why has there been no brake on the revolving door that allows retiring Ministers to prostitute their insider knowledge to the highest bidder, and why are there no controls over lobbyists who are still free to buy influence and privilege in this House? Is not the Minister ashamed that, after his Government have been in office for five years, the reputation of politics remains firmly in the gutter?

[Mr Maude]

I cannot imagine a greater contribution to that reputation than the hon. Gentleman going on about it all the time. As he above all people ought to know, most people come into this particular form of public service, known as politics, for high reasons and with high motivation, and they do their job in an honourable way. He might just occasionally shrug off that carapace of cynicism and give due credit to the public servants in this House as well as to those outside it.

[Richard Benyon (Newbury) (Con)]

My right hon. Friend can leave the House knowing that he has done an outstanding job in reforming our public services, and it would have been nice to hear a little more humble pie from the hon. Member for Manchester Central (Lucy Powell). On the question of getting better digital coverage across our country, does he agree that the public estate should be made more available for things such as mobile phone masts if we are to have a 21st-century digital economy? What more can be done to encourage the public sector estate to make up for the absence of support from the private sector estate in getting greater digital coverage?

[Mr Maude]

My hon. Friend makes a really good point, and there is much more that we can do. For example, we will make available public sector Government-owned land and buildings for the siting of mobile phone masts, which will be beneficial in lots of ways. It will provide locations for the masts as well as income for the Government. We have now also published the second iteration of our map of the publicly funded digital infrastructure. This includes the many thousands of miles of fibre that have been paid for by the taxpayer but which are massively underused and under-exploited. If that network can be mobilised to support the roll-out of mobile coverage and rural broadband, it could accelerate the programme to which my hon. Friend and I are both deeply committed.

[Duncan Hames (Chippenham) (LD)]

It is three years to the day since the Minister took up my invitation to visit Ark Data Centres in Corsham with me, and I am delighted to hear that the taxpayer stands to benefit to the tune of £100 million from the Crown hosting joint venture with the company. Does he agree, however, that the benefits of digital services extend much further than that, in that they allow a total redesign of the processes that underpin our public services?

[Mr Maude]

My hon. Friend is completely right. The digitisation of services is sometimes seen as just a pretty front end on a website, but this goes much deeper. It is about a fundamental redesign of the way in which services are delivered, with the processes being designed and built around the needs of the citizen instead of around the convenience of the Government, which has far too often been the case in the past.

[Andrew Stephenson (Pendle) (Con)]

As this is probably my right hon. Friend’s last statement in the House, may I thank him for the numerous visits he has made to Pendle over the past few years and for recently meeting Training 2000 in the Cabinet Office to discuss its plans to set up a cyber-security institute in my constituency? Will he say more about public service mutuals, the increase in their number under this Government and how they can benefit productivity?

[Mr Maude]

I am grateful to my hon. Friend. The public service mutuals programme is important. There are now more than 100 of them, whereas there were fewer than 10 when the coalition Government were formed. More than 35,000 members of staff have joined public service mutuals, which are delivering public services to the value of more than £1.5 billion. Most of them choose to be not-for-profit, and have seen an extraordinary improvement in productivity by bringing together: entrepreneurial leadership, of which there is much more in the public sector than is generally thought; staff who are liberated from bureaucratic constraints; hard-edged commercial discipline; and the public service ethos. Those four factors, brought together, are an extraordinarily powerful driver of improved productivity and value.

[Mr Andrew Robathan (South Leicestershire) (Con)]

In my right hon. Friend’s swansong—I commend him for it and for his five years’ work, saving money for the public purse—I wonder whether I might pick up on one specific issue of government efficiency reform, which is the trade unions training fund. It was set up a dozen or so years ago by the previous Government; some £10 million to £12 million was given to trade unions’ training and, lo and behold, £12 million came back as a bung to the Labour party. Will he update the House on what has happened to that?

[Mr Maude]

My right hon. Friend should not assume that this is my swansong. Although it is my last week in the House of Commons, I am answering oral questions on Wednesday and I am looking forward to that—[Interruption.] I am looking forward to engaging with the hon. Member for Manchester Central (Lucy Powell) on that occasion. It is very nice to see my right hon. Friend the Chief Secretary to the Treasury here, as he has been my comrade in arms as we have driven forward these efficiency savings over that period. My right hon. Friend the Member for South Leicestershire (Mr Robathan) will know that I made a statement, either last week or the week before, about the reform of trade unions within central Government. We have cut the cost of the subsidies to trade unions significantly over that time, bringing into these things a proper sense of proportion.

[Mr David Nuttall (Bury North) (Con)]

I thank my right hon. Friend for his statement and for the work he has done, saving taxpayers billions of pounds. Does he agree that by merging Departments even greater efficiencies and savings could be made?

[Mr Maude]

I understand what my hon. Friend says. The studies that have been done on machinery of government changes do not always indicate that they pay for themselves, but there are undoubtedly ways in which we can organise government to yield—in addition to what we have already done—significant improvements.

[Dr Matthew Offord (Hendon) (Con)]

I congratulate my right hon. Friend on his statement. Many of us recall my hon. Friend the Member for Cannock Chase (Mr Burley) making his suggestions to the House at the beginning of this Parliament and being vilified by some Opposition Members. May I say how resolutely and quietly the Minister has gone about this work? Not only has he made the savings, but he has taken the civil service with him to improve the public services of this country.

[Mr Maude]

I am grateful to my hon. Friend. This has been a long process and it is fair to say that the further we have gone, we have discovered a deep appetite for reform and change within the civil service, particularly among its younger members, who often get frustrated. They are the people who complain most about bureaucracy, and they have welcomed the fact that Ministers have taken a real interest in driving out bureaucracy and speeding things up.

Tobacco Manufacturers’ Producer Responsibility

Monday 23rd March 2015 Commons Chamber

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

16:59

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

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to undertake a programme of research into the costs and benefits of introducing an annual levy on sales to be paid by tobacco manufacturers, with the proceeds to be used to support tobacco control measures, to discourage young people from starting to smoke tobacco, to help existing tobacco smokers to stop smoking; and for connected purposes.

This Bill is about establishing the principle that the tobacco industry, which has done so much to harm our society, should pay more than it does now to help reduce the harm that it might do in the future. Like the majority of Members in this House, I warmly welcomed the announcement by the Chancellor last autumn—it was in the autumn statement—that he would consider a levy on tobacco manufacturers and importers. I strongly agreed with him that:

“Smoking imposes costs on society and the Government believe that it is therefore fair to ask the tobacco industry to make a greater contribution.”

I welcomed the announcement by the Leader of the Opposition that his party was also committed to such a levy. It is right in principle that the tobacco industry should pay for the damage that its addictive and lethal products cause. The industry is one of the most profitable on earth. The two largest tobacco firms in the UK market, Imperial and Japan Tobacco International, hold around four fifths of the UK market and achieve joint profits of about £1 billion a year. Charging those firms to help clean up the damage their products cause is a rational and justified extension of the “polluter pays” principle to public health policy.

In the United States, the tobacco industry is required, under the Family Smoking Prevention and Tobacco Control Act 2009, to pay an annual “user fee” to the Food and Drug Administration to fund tobacco regulation and wider tobacco control activity. In effect, that fee is independent of the wider US fiscal regime, and the proceeds are controlled directly by the FDA.

As of 31 March 2014, the US Food and Drug Administration had collected $1.88 billion in manufacturer user fees, of which it spent $1.48 billion. About half a billion dollars went on public education, and another half billion went on scientific research projects to support additional FDA regulations on tobacco products.

In the UK, there is a policy parallel in the energy companies obligation, which places a legal requirement on the energy industry to invest in energy efficiency and related measures, especially for poor and vulnerable households. That leads us to a key problem with both the Chancellor’s and the official Opposition’s approach to the levy. The Treasury consultation on the levy, which was announced in the Budget but is still ongoing, does not include any commitments on how the money raised should be spent. Instead, it seems that the levy will be used simply to go to the Exchequer.

If a tobacco levy is introduced, the tobacco industry will have to decide whether to pass on to consumers some, or all, of the cost in higher prices. That would of course have some public health benefits, as price increases are known to be the single most effective policy lever in reducing smoking prevalence. However, the potential benefits to public health can be fully realised only if the levy is used to fund tobacco control action, which is designed to increase the rate of quitting tobacco use over and above what might otherwise be expected as a result of price rises.

I strongly believe that at least some of the funds raised should be directed towards actions to reduce the harm caused by tobacco consumption. A research paper by the economist Mr Howard Reed suggests that £500 million could be raised without much difficulty every year from a levy based on sales data. If the programme of research proposed in this Bill were carried out, it would show that the recurring cost of tobacco control activity at every level—local, regional and national—could be met from the proceeds of the levy. Indeed, it is likely to generate a fund sufficient to support these activities as well as assisting deficit reduction.

That would include national action through Public Health England and regional strategy through regional offices and any future regional governance structures, and tobacco control work by local authorities and in the third sector. The funding would cover: stop smoking services, mass media and public education campaigns and research, and efforts to tackle illicit trade at local and regional level. It could also fund new initiatives such as a positive retail licensing scheme to help ensure that retailers do not face any new costs. I also note with interest that the Communities and Local Government Committee has recommended that some levy proceeds be used to help clear up the litter and environmental problems caused by discarded cigarettes.

Local stop smoking services play an essential role in helping people to quit. However, following the transfer of the public health function to local authorities, which I support, those services are vulnerable, because of the financial strains placed on local authorities and the difficult choices that they have to make.

There are already grounds for concern about how many people are being reached by stop smoking services. Indeed, the Health and Social Care Information Centre reported in 2013-14 that the number of people quitting had fallen relative to the previous year. Although stop smoking services are demonstrably highly cost-effective and greatly benefit the whole of society, the direct savings they deliver go mainly to the NHS and not to the local authorities that pay for them. That applies also to local action by trading standards officers and others, for example when it comes to reducing the scale of illicit tobacco trade. The Exchequer benefits financially from that action, not the local authorities.

I draw the House’s attention to NHS England’s “Five-Year Forward View”, published in October of last year. This includes a section entitled, “Getting serious about prevention”, which states:

“The future health of millions of children, the sustainability of the NHS, and the economic prosperity of Britain all now depend on a radical upgrade in prevention and public health.”

Those words will remain simply a pious hope if we do not find new ways of financing public health policy and that would in turn mean that the chances of bridging the £30 billion NHS funding gap identified in the forward view forecast will not be achieved.

The Bill also proposes that research should be conducted into how the levy could be assessed and collected. I would favour basing it on sales data made public by manufacturers at a local and regional level as well as a national level. That would allow resources to be focused on the areas with the greatest sales and the greatest prevalence rates, better targeting tobacco control in the future.

Like most of us in this House, I was delighted when the former Health Secretary, the right hon. Member for South Cambridgeshire (Mr Lansley), said that he wanted the tobacco industry to have no business in this country. Smoking still causes hundreds of thousands of premature deaths across the UK every year and for every death caused by smoking, 20 smokers suffer from smoking-related disability. That is a terrible toll of death, disease and disability. It is why we must carry on seeking ways to improve public health measures to tackle smoking. A tobacco levy could provide vital funds for that purpose and I am confident that the programme of research proposed in the Bill would show just that. I therefore commend the Bill to the House and hope that Members will support it.

17:06

[Philip Davies (Shipley) (Con)]

I shall speak only briefly. I should say at the start that I do not intend to divide the House, as I know that many people wish to speak in the forthcoming debate, but I could not allow this Bill to stand without any opposition whatsoever. It takes the typical Lib Dem populist approach, trying to attack the tobacco industry without any evidence whatsoever, probably just because the right hon. Member for Sutton and Cheam (Paul Burstow) thinks that he might be able to extract four extra votes from it in his constituency at the general election.

The right hon. Gentleman made big play of wanting the tobacco industry to pay its fair share. I have never met anyone who would disagree with that sentiment, but he failed to mention one thing. I received a briefing note from Action on Smoking and Health—I see that the right hon. Gentleman is putting himself up as the spokesman for ASH, as it is its campaign that he is advocating—and it estimates that the cost of smoking to the NHS is about £2.7 billion a year. That figure comes from ASH, the deadliest opponent of the tobacco industry, yet tobacco excise and VAT already raise about £12 billion a year in revenue according to Her Majesty’s Revenue and Customs. How on earth the right hon. Gentleman has come to the conclusion that the fair share is not being raised from the tobacco industry is beyond me. The industry is clearly paying well above the cost of smoking to the NHS and even if he wants to add on the cost of cleaning up cigarette butts, fires and all the other things that ASH tries to add on, it comes nowhere near £12 billion.

I particularly wanted to oppose the Bill because the right hon. Gentleman has done us all a great service. He has let the cat out of the bag. Of course, the Government have already accepted ASH’s campaigning on banning smoking in cars where there are children, which is completely unenforceable. They have also accepted the plain packaging of tobacco, which is completely idiotic. Of course, the Government accepted those policies because ASH told them that if they did so the amount of smoking in the country would plummet. We were told that if we introduced plain packaging it would be absolutely fantastic because all of a sudden cigarettes would not appeal to young people and children and that would close the gateway into tobacco use. The whole policy was based on that premise.

That policy has not even been implemented and already the right hon. Gentleman is saying, “Actually, that was all a load of tripe. It won’t make any difference whatsoever. What we need now is a levy on the tobacco industry so that we can do some research to find out why young people smoke and then try to stop them smoking.” Well, what on earth was the plain packaging campaign about, if not that? I am grateful to him for letting the cat out of the bag by telling us that the whole premise behind plain packaging was a complete load of old codswallop. Unfortunately, the Government idiotically accepted that codswallop in a mindless fashion without even thinking it through, because they, too, are in the pocket of ASH and, rather than making up their own policies based on evidence, just want gleefully to accept anything ASH tells them.

If we want to raise more money from the tobacco industry, there is one great way of doing so: by clamping down on the illicit trade in tobacco, which would raise far more than the right hon. Gentleman’s levy ever would. Yet the Government are pursuing policies, such as plain packaging, that will reduce the amount of revenue from the industry and increase the illicit trade. Why he says that he wants to raise more funds from the tobacco industry but supports measures that will do exactly the reverse is absolutely beyond me.

The point is that this is just the latest campaign from ASH. Every time it advocates the introduction of another measure, it tells us that that is what the Government need to do to tackle tobacco, but as soon as it is implemented we are told that actually it was a load of old cobblers and now we need something else. It is like those companies that tell us their washing powder is absolutely magnificent, only to bring out a new one a couple of years later and tell us that the previous one was actually terrible and that really we need to buy the new one. ASH cannot now hand over the keys to the company car; it has to keep going and justifying its role. It will keep coming up with new, innovative solutions to try to keep its jobs, which no doubt the Government will accept, because they do not have a mind of their own and just have to do what ASH tells them to do.

I just hope that we can start thinking these things through, rather than simply accepting all the nonsense that comes from ASH, the Liberal Democrats and other hon. Members on these subjects. The right hon. Gentleman wants the tobacco industry to pay its fair share. I want the tobacco industry to pay its fair share. It is already raising far more in taxes and duties than it ever cost the NHS, according to ASH’s own figures. If we want to get more money, let us stop the illicit trade, and the best way to do that is not by having a levy, but by getting rid of the ridiculous plain packaging policy.

Question put (Standing Order No. 23) and agreed to.

Ordered,

That Paul Burstow, Kevin Barron, Bob Blackman, Dr Julian Huppert, Alex Cunningham, Martin Horwood, Nick Smith, Sheila Gilmore, Sir Alan Beith, John Robertson and Dr Sarah Wollaston present the Bill.

Paul Burstow accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 27 March, and to be printed (Bill 192).

Ways and Means

Monday 23rd March 2015 Commons Chamber

Budget Resolutions and Economic Situation

Monday 23rd March 2015 Commons Chamber

Amendment of the Law

Monday 23rd March 2015 Commons Chamber

Debate resumed (Order, 20 March).

Question again proposed,

That,—

(1) It is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.

(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide–

(a) for zero-rating or exempting a supply, acquisition or importation;

(b) for refunding an amount of tax;

(c) for any relief, other than a relief that–

(i) so far as it is applicable to goods, applies to goods of every description, and

(ii) so far as it is applicable to services, applies to services of every description.

17:13

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

It is a pleasure to open the debate, possibly for the last time, and to welcome this final Budget—[Hon. Members: “Hear, hear.”] I knew that I would draw support from different parts of the House, and I am pleased to hear that I draw it from the Opposition Front Bench as well. Last week the Chancellor reiterated the Government’s commitment to our long-term economic plan—even the previous Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), slightly smiled at that one—restoring the public finances and supporting businesses while providing security and stability for Britain’s families.

At the start of this Parliament we inherited an economy that had suffered a greater collapse than almost any other country, with £112 billion wiped off our GDP and 750,000 people losing their jobs, contributing to a welfare bill that had risen by 60% in real terms under the previous Government. Over the past year, however, Britain has grown faster than any other major advanced economy, with the Office for Budget Responsibility’s future growth forecast revised up. Britain has had the best performing labour market in the G7, with employment forecasts revised up too, and unemployment revised down. We are on the path, therefore, from austerity to prosperity. The deficit has been cut in half. The fiscal mandate has been met in the target year. National debt is set to fall in the coming year. A surplus of £7 billion is forecast by the end of the next Parliament. Welfare spending is down in real terms for the first time in 16 years and is below its 2010 level as a share of GDP.

Underpinning this recovery is the remarkable performance of our labour market, with the highest employment rate that Britain has ever seen, at 73.3%. The rise in youth employment in the UK over the year is larger than the rest of Europe combined, and there are now more people in private sector jobs than ever before, more women in work than ever before, more lone parents in work than ever before, more older workers than ever before, more disabled entrepreneurs than ever before, and perhaps most importantly, the most households in social housing in work since records began. That is arguably the most important of all the figures.

[Wayne David (Caerphilly) (Lab)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

In a moment.

Importantly, and contrary to the myths that the Opposition promulgate, of this rise in employment since 2010—I want to make this clear, as I suspect the hon. Gentleman may ask about this—80% is full-time work and 80% is permanent. Three fifths has come from managerial, professional and associate professional jobs, 70% of private sector jobs have been outside London, and two thirds of jobs have gone to UK nationals, reversing the damaging trend under the previous Government when more than half went to foreign nationals.

[Wayne David]

Will the Secretary of State kindly tell the House how many of those new jobs were on low pay?

[Mr Duncan Smith]

I think I have just told the House. It is always good to ask another question when I have just answered it. The jobs that we are providing are paid well. We have seen a rise of 2.1% in private sector pay against inflation of 0.3% now, and a rise in public sector pay of 0.7%—somewhat over and above inflation.

So we have seen unemployment fall to pre-recession levels. The number of out of work benefits has fallen to its lowest for a generation, and the number of workless households has fallen to the lowest on record.

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

Precisely on employment at record levels and the other boasts that the right hon. Gentleman has made, why then are national insurance and tax receipts way below budget and employment above budget? Does that not reflect the quality and level of the employment that is being offered—1.8 million zero-hours contracts, for example?

[Mr Duncan Smith]

I respect the hon. Gentleman and I am glad he asked me that, because it allows me to point out something that I was going to come to later. We have raised the thresholds on taxation. It is not surprising, therefore, that some of the insurance levels are low. I am proud of that. I am proud that my right hon. Friend the Chief Secretary is also proud of the fact that we are raising the point at which people pay tax for the first time. The real reason behind all these facts and any other issues that the hon. Gentleman raises in this regard is the fact that the previous Government saw the economy go over the edge of a cliff, and we have been picking it up ever since. If the question is why it is not perfect yet, the answer is that we still have some way to go, but we are making progress and going in the right direction.

Through this Government’s employment programme we are ensuring a jobs recovery for all. I want to point out some of the figures: 2 million apprenticeship starts since the beginning of this Government; over 1 million claimant commitments signed—as people go in to sign on to jobseeker’s allowance, setting out and reinforcing people’s obligations; work experience for 250,000 young people; 60,000 start-up businesses through the new enterprise allowance; and the Work programme helping more long-term unemployed people back into work than any other programme before.

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

rose—

[Mr Duncan Smith]

I will come back to the hon. Gentleman. I want to make a little progress, as I know that others want to speak.

The Work programme is continually improving. Nearly 1.1 million people have spent time off benefits, 680,000 have got a job, 400,000 have found lasting work, and job outcomes after 12 months are nearly twice as high as with the early cohorts, including the new employment and support allowance claimants. Compared with the previous back-to-work programmes—the flexible new deal, for example—the Work programme has helped more than twice as many people into work in the first two years as the flexible new deal, with nearly three times as many people in jobs for six months. This is not just getting people into work but ensuring that they stay there—that is the critical element.

I will give way to the hon. Member for Coventry South (Mr Cunningham) and then make some progress.

[Mr Cunningham]

The Secretary of State said that when the present Government took over, the economy was on a knife edge. I remember the previous Conservative Chancellor claiming credit when we were in power for the handling of the economy. More importantly, the Secretary of State has not mentioned the fact that recently the purchasing power of wages has dropped by 6%. Wages might have gone up by 2% in the private sector, but their overall purchasing power has dropped by 6%.

[Mr Duncan Smith]

I am a little bit lost. I am not sure whether the hon. Gentleman is saying that the previous Prime Minister was claiming credit when he was Chancellor in the previous—[Interruption.] If he is referring to my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), it is difficult for the previous Labour Government to claim credit when their Chief Secretary left a letter on the desk saying, “There’s no money left.” If the hon. Gentleman wants to claim credit for that, I will certainly allow him to intervene.

While the Budget proposed new measures to boost growth and support private sector job creation, in turn increasing employment, the Opposition’s only alternative, the jobs guarantee, it now turns out, is more like a no-jobs guarantee—a make-work scheme that the Institute of Directors has said is

“not the source of sustainable jobs”.

It is the kind of scheme that, for the past 20 years, the OECD has demonstrated is expensive and counter-productive in the long term. It says that large deadweight losses, displacement and substitution effects are of little success in helping unemployed people to get permanent jobs in the open labour market. We got rid of the Opposition’s last scheme, which did not work, and this one will fare no better. Labour’s flagship programme is just a rehash of the failed make-work schemes that seem to be its solution almost every time.

The hon. Member for Leeds West (Rachel Reeves) made this comment about Jobs Growth Wales:

“I went to see a scheme very similar to this in Wales last week and...that’s what we would aim to do across the UK”.

If that is what she thinks she is going to do, let us deal with what Jobs Growth Wales actually produces. It has been revealed to be an expensive exercise in cherry-picking the best-quality people who want to go back to work. Far from being a guarantee for all, which I understood was her policy, the hardest to help are not eligible for the programme, and only one in three applicants has got a place on it. A success rate of 80%, at a cost of £6,000 per place, is trumpeted, yet that compares with the 90% success rate of all—not some of—the eligible people in Wales who apply, who move off jobseeker’s allowance within nine months anyway. The reality is that this programme, on top of already successful programmes getting people into work, is less successful than the programme that it seeks to replace. Apparently, this is the programme that the Opposition want to copy and turn into a national programme in government, and it is all a rehash of the future jobs fund.

In the public sector, this Government have achieved the same success as the future jobs fund achieved through work experience in the private sector, but—here is the key—at a twentieth of the cost of what it cost Labour to provide jobs in the public sector. That is the problem with this make-work scheme.

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

While the right hon. Gentleman goes on mudslinging about party policies, he is skimming over the fact that what is wrong with our economy and the jobs being created is that over the past five years we have had a terrible deficiency of highly skilled workers. We are still churning out apprentices from short-term apprenticeships of a year, on average. That is not meeting the real need. When is he going to address that? If he does not do so, he will never solve the problem of low productivity.

[Mr Duncan Smith]

I agree with the hon. Gentleman that that was the situation we inherited. As I said earlier, under this Government there have been 2 million new apprenticeships aimed at getting people the necessary skills. There are also more people going to university and studying science. The reality is that it is not possible to turn around in a few years the problem mentioned by the hon. Gentleman, which followed 13 years of Labour government. We have set in train all of the right measures for the medium and long term to get more skilled people back into work. Before the hon. Gentleman sneers a little too much about people going back to work, I want to say that they are far better off in work and working towards full-time pay than sitting on benefits being depressed and worried.

[Mr Sheerman]

indicated assent.

[Mr Duncan Smith]

The hon. Gentleman agrees with me. The key point is that we want to get people into work, including skilled work, and for them to develop skills not only while they are in work, but as they come through apprenticeships and university.

I want to return to the make-work scheme, because I have a feeling in my bones that the Opposition are beginning to slide away from it. They have failed to answer a number of questions. We have asked them time and again how many private businesses have signed up to the jobs guarantee, but we have never had an answer. We have been told endlessly that there is a lot of interest, but we have never heard any examples.

I heard the shadow Chancellor on, I think, a Radio 4 programme and he seemed rather scared and unusually unable to be coherent. [Interruption.] All right, I will drop the “unusually”. He was unable to list the vast number of private sector companies taking part. When asked how many there were, he seemed to lose his nerve and said:

“But if not, you can do it through the voluntary sector. If not, you have to have a final backstop: a public work scheme.”

The shadow Chancellor has pretty much made it clear that the scheme is going to be about jobs created not in the private sector, but in the public sector. [Interruption.] Oh no, it will not: the right hon. Member for East Ham (Stephen Timms) knows that to be the case. In other words, the Opposition would repeat the mistakes of the past.



I hope that the hon. Member for Leeds West will answer another question we have asked the Opposition time and again: how long will the guarantee last? Back in 2011, we heard about a 12-month guarantee for young people unemployed for one year. By 2013, the proposal had morphed into a six-month guarantee—half the time previously advertised—for those unemployed for two years. Even that is not enough, for as Labour begins to see what a disaster the policy is and the shadow Chancellor begins to wind away from it—there is no interest in it from private sector firms and it has no traction with business—they seem to be beginning to realise that it is not worth all the money they are talking about spending.

I had a look at the Labour website when it launched its tuition fee policy. Interestingly, buried in the relevant document—I would like to say it was in the small print, although the print was pretty small anyway—I found that the scope of the flagship jobs guarantee had been halved again. This announcement was made without fanfare and without anyone taking to the airwaves to tell everybody what a wonderful scheme it was going to be. Labour now proposes “a six-month job”—remember it was for a year originally—

“for any more 18-24 year olds who find themselves claiming Jobseeker’s Allowance for a year”.

It also proposes “a three-month job”—it used to be for six months—

“for the over 25s out of work for two years”,

not one year. In other words, Labour is edging back, killing off its policy bit by bit, and I suspect that eventually it will let it go altogether.

Following a Budget in which the Chancellor once again pledged that no spending commitments would be unfunded, the final and most significant unanswered question—I hope the hon. Lady will answer it, because this is her last opportunity to do so—is: how will the jobs guarantee be paid for? That is a legitimate question, for the Budget punched a hole in Labour’s two proposals with two new measures: the first to levy funding from the banks and the second to restrict pensions tax relief.

Given that the shadow Work and Pensions Secretary has herself declared that

“we need to make sure that the sums add up”,

it is right that we do the maths, starting with the cost of the jobs guarantee, an estimation of which was done by Treasury officials in January. The cost of the jobs guarantee for 2015-16 is forecast to be £1.54 billion for over-25s and £540 million for under-25s. That is £2 billion in total in one year alone, which is far more than the Labour estimate. Taking the small print of the document we found, even if the figure in it is halved, as the Labour U-turn seems to make clear that it will be, it is more than three times the £300 million a year that Labour says it will cost, at close on £1 billion a year.

When the hon. Lady gets up to speak, I hope that she will explain how Labour will fund the jobs guarantee. If she is going to use the bankers’ bonus tax again, I must tell her that it has been spent 11 times over. Here are the things on which it has been spent: reversing the VAT increase—£12.75 billion; reversing the tax credit savings—£5.8 billion; more housing—£1.2 billion; reversing the child benefit savings—£3.1 billion; more capital spending—£5.8 billion; child care—£800 million; and there are more. The last Chancellor, the right hon. Member for Edinburgh South West, said that he did not think it would be feasible to repeat the one-off bankers’ bonus tax, but the reality is that Labour will repeat it to pay again and again for other things.

Another announcement in the Budget was the excellent decision to reduce the tax-free lifetime allowance. It had already been reduced from the £1.8 million inherited from Labour to £1.25 million, and it will now fall to £1 million. The latest change will save about £600 million a year. Importantly, it will affect only 4% of those approaching retirement. That is in stark contrast to Labour’s proposal to reduce the tax-free annual allowance, which would plunder the pension pots of moderately paid, long-serving public servants such as police officers, teachers, nurses and others. With the Government already taking effective steps to curb the size of the very largest pension pots—my right hon. Friend the Minister for Pensions has been involved in that—Labour’s proposed pension tax relief changes will be left null and void. Despite the fact that Labour has committed the money for the purpose of increasing working and child tax credits and, very recently, to pay for the £3.1 billion cost of lower tuition fees, it will apparently be used only to fund the jobs guarantee. As for Labour’s final funding proposal, restricting pension tax relief for those with incomes of more than £150,000, it would not come in for a further three years.

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

Will the Secretary of State give way?

[Mr Duncan Smith]

Not yet. I will finish this particular point before I move on to the rest of the stuff in the Budget.

In this key area, the Opposition have absolutely no idea what they will do. They do not have the money, they are losing interest in the very policy that they said was at the heart of their policies and the rest has just become smoke and mirrors. It is as simple as that. There we have it: the cobbled-together nonsense of Labour’s jobs guarantee is destined to fail as wholly unfunded. Yet we should not be surprised by that from a party which built an entire economy on debt, with policies paid for by more borrowing and higher taxes. Under Labour, Britain accumulated personal debt of a record high, reaching some £1.5 trillion, while the level of household saving fell to a 50-year low.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Will the Secretary of State give way?

[Barbara Keeley]

Will the Secretary of State give way?

[Mr Duncan Smith]

In a minute.

This Government are restoring stability in our economy, with no unfunded spending and no extra borrowing; instead, aspiration, responsibility and security will pave the way for a better future. The principle behind the Budget is to restore a Britain built on savings and investment, and that will be done with three new measures. There is a radical, more flexible individual savings account, with the complete freedom to withdraw money from a cash ISA and pay it back later in the year without losing any of the £15,000 tax-free entitlement. There is the brand-new Help to Buy ISA: we are working hand in hand with first-time buyers to help them to save for a home—£3,000 will be provided by the Government for every £12,000 saved—which is an excellent idea. There is a new personal savings allowance, with up to £1,000 interest-free. It will take 17 million taxpayers out of savings tax, not just cutting but abolishing that tax for 95% of people.

On pensions, the Government have already reversed the decade-long decline in pension saving, rolling out automatic enrolment to make saving the norm and introducing the new state pension, while reducing the means test and creating a solid foundation on which to save. We are returning to people who build up their pension pots the freedom to use that money as they see fit. In last year’s Budget, the Chancellor announced radical changes to abolish the prescriptive rules that dictated how and when people could use their pension savings. That means that from April, 320,000 people a year will be able to choose what to do with their pension savings on turning 55. In last week’s Budget, he went further still by allowing 5 million annuity holders to access their existing annuities. He has extended the freedom to give those people greater control over their finances, which is an excellent idea.

[Barbara Keeley]

One group of people who do not have much chance to accumulate pension pots is unpaid family carers, many of whom have to give up work in order to care. Will he say, at the end of this Parliament, whether he regrets forcing 60,000 unpaid family carers to pay the bedroom tax, meaning that not only can they not acquire pensions, but many of them are having to cut back on food and heating to pay it?

[Mr Duncan Smith]

The spare room subsidy policy that we introduced has been assisted by some £380 million that we have given to local government to ensure that anybody in the local community is supported and aided, as necessary. I do not regret that policy. I think it will bring fairness to social housing. Why does the hon. Lady not get up one time and answer this question: does she not feel ashamed about leaving so many people—7 million people—on long waiting lists for accommodation? Why does she not apologise for leaving so many people, when Labour left office, in overcrowded—

[Barbara Keeley]

rose—

[Mr Duncan Smith]

No, she has had her word. Why does she not apologise for leaving so many people in overcrowded accommodation? Labour Members do not apologise for that. The answer is that they have no policy on that. Social house building under the Labour Government fell to the lowest level since the 1920s. She should get up and apologise for that.

[Barbara Keeley]

I thank the Secretary of State for giving way, eventually. Perhaps he would like to look at the case of the couple in Sefton—the disabled person and her carer—who have fought their case through to the Supreme Court. The Prime Minister was unable to give an answer about that couple. It is not a question of such couples giving up their home or their spare room to anybody else. Carers find those rooms essential. That couple found their room essential. The Prime Minister could not answer. Will the Secretary of State answer?

[Mr Duncan Smith]

That is exactly the reason why we gave £380 million to local authorities to deal with individual cases. The courts have supported us in this. Again, the hon. Lady did not get up and apologise for the mess Labour left social housing in: overcrowded accommodation, people who could not find the right houses, people on huge waiting lists for accommodation and the lowest level of house building on record since the 1920s. That is the shame of the 13 years of the last Labour Government.

I spoke a moment ago about the pension freedoms that have been provided. The last pension freedom that has been provided by my right hon. Friend the Chancellor is to allow 5 million annuity holders to access their existing annuities. I pay tribute to my right hon. Friend the Minister for Pensions because that was originally his idea. It shows that the coalition is working at all levels.

It pays to save and, through our welfare changes, this Government have ensured that it pays to work. We have undertaken the most significant reforms in living memory, which span not only pensions but job-seeking benefits, disability benefits, child maintenance and more. They have been opposed at every turn by the Opposition. We are delivering a welfare state fit for the 21st century.

Universal credit is rolling out nationally. It is already in 150 areas and is set to be in every jobcentre by this time next year. The earliest claimants are spending more time looking for work, are moving into work quicker, are working more and are earning more than those on jobseeker’s allowance. It will bring economic benefits of up to £35 billion over 10 years, as the Public Accounts Committee agrees.

The benefit cap has ended the something-for-nothing culture. Capped households are 41% more likely to move into work and 12,500 have done so. Housing benefit is capped too. There has been the first real-terms fall in housing benefit spending in a decade and it is set to carry on falling in real terms up to 2020. Our reforms are restoring fairness and mean that we are making better use of Britain’s housing stock as we build more houses.

Over this Parliament, the increase in welfare spending has been the lowest since the creation of the welfare state at 0.5% a year compared with the 3.5% increase in Labour’s last Parliament in office. Total welfare spending is below what we inherited in 2010 as a proportion of GDP. In the coming year, out-of-work benefit spending will be back to pre-recession levels. Welfare reforms are set to have saved nearly £50 billion cumulatively, all while departmental baseline spending is down—I say this to the Chief Secretary to the Treasury—by some £2 billion a year. He can say “well done” if he likes. We are doing more, and we are doing more efficiently as a result.

As we come to the end of this Parliament, I am proud of the work we have done with my right hon. and hon. Friends in this House. I pay tribute to some of my previous Ministers, including my right hon. Friends the Members for Epsom and Ewell (Chris Grayling), for Basingstoke (Maria Miller) and for Hemel Hempstead (Mike Penning), and my hon. Friend the Member for Fareham (Mr Hoban), as well as to current Ministers, including the Minister for Employment, who has done brilliantly in her job, and the Minister for Disabled People, who is doing brilliantly in his. I pay particular tribute to an hon. Friend who is unsung and unfairly traduced by the Labour party: my good friend Lord Freud. He has worked tirelessly for two different Governments, determined only on one thing, which is to improve the quality of life for people in Britain. I am also proud of my working relationship and what has been achieved with the Minister for Pensions. We have worked well together and achieved good things, and we have also worked closely with the Chief Secretary to the Treasury on many subjects.

The last five years have often been hard and difficult, but always rewarding. We took a system that was bloated and unfair, and which under the previous Government seemed to penalise those who tried and rewarded those who did not. The last Government left us a system that measured only the amount put in and not the results obtained, and it trapped many in dependence. We took that system and changed it for the better, leaving a positive legacy: the deficit down, unemployment down, youth unemployment down, long-term unemployment down, employment up, private sector work up, working households up, growth up. That is a legacy of which any Government of any stripe should be proud. This Budget is key to that legacy, and I commend it to the House.

17:41

[Rachel Reeves (Leeds West) (Lab)]

I thank the Secretary of State for his valedictory address this afternoon, and I hope that this will be my last speech from the Opposition Benches.

The last five years have been a tragic and terrible waste for working people in this country, and a shocking record of Tory welfare waste at the Department for Work and Pensions. What a wasted opportunity this Budget was to put in place the better plan that we need. People in my constituency—and in every constituency around the country—have been let down yet again. People are putting in the hours at work but still falling behind with the rent and the bills; they are desperate to work and earn, but are not getting the support they need to find a job. People who cannot work because they are sick or disabled are forced to turn to food banks because the safety net is being pulled away from them.

The people of our country have been put through five years of hardship by this out-of-touch Government, and they are still waiting to feel the benefits of what has been the weakest recovery in more than 100 years. Five wasted years in which working people have put in the hours, day after day, year after year, only to find themselves £1,600 a year worse off than when the Government took office. Five wasted years in which families have been hit by tax and benefit changes that cost the average household more than £1,100 a year, only to find that the Government have borrowed £200 billion more than they said they would and have totally failed to deliver on their central promise to balance the books. Five wasted years in which people have been told “We are all in this together”, while the Government prioritised tax cuts for millionaires and came back time and again to take money from the poorest. Five wasted years in which a Secretary of State for Work and Pensions has waxed lyrical about his grand scheme for welfare reform, but all he has delivered is delays, backlogs, write-offs and overspends—a record of Tory welfare waste that we cannot stand for another five years.

Let us remind ourselves of the backdrop to this Budget and of the complacent and self-congratulatory speech we have just heard from the Secretary of State. The Chancellor promised in 2010,

“we will bring down the benefits bill.”

Since then we have had five years of cruel and unfair policies: taking money from the pockets of disabled people through the bedroom tax; taking money from working families with restrictions to tax credits; driving hundreds of thousands of people to food banks to feed their families; and increasing the number of children in absolute poverty by 500,000. And yet, at the beginning of this year, the Institute for Fiscal Studies confirmed that

“Real terms benefit spending…is forecast to be almost exactly the same in 2015–16 as it was in 2010–11”.

Why is that, we may ask, after the Government have inflicted so much hardship on so many people who have the least? It is because, the IFS explains, these harsh and unfair policies have been cancelled out by upward pressure on the benefits bill resulting from

“weak wage growth and rising private rents”.

Meanwhile, it says, most of the major structural changes, such as universal credit, have run into problems and are yet to be delivered. This is the reason why, in the past five years, the Government have spent £25 billion more on social security than they said they would in 2010. It is why, yet again, the small print of the Budget reveals another £600 million overspend this year against last year’s forecasts.

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

My hon. Friend is making some incredibly strong points. On low wage growth, does she agree that we have seen particular challenges in very low paid sectors, such as care? Not only are carers struggling to get by on very low wages and struggling with the cost of living, we are seeing the minimum wage being undermined and some companies possibly not even paying it. Allegations have been made this week about MiHomeCare in Penarth in my constituency. The Government are failing to enforce the minimum wage.

[Rachel Reeves]

We know that still too many people are not even paid the minimum wage, and we know that the number of people paid less than the living wage has increased from 3.4 million to 4.9 million in the past few years. It is also true that we need to do more to ensure the minimum wage is always enforced, which is why we have said we would increase fines for non-payment to £50,000 and why we would give more powers to local authorities to ensure that the minimum wage is always paid.

[Mr Robinson]

Will my hon. Friend confirm what the Secretary of State failed to confirm? What she has clearly exposed this afternoon, supported by an earlier intervention, is that there have been 1.8 million zero-hours contracts in the past five years. As a consequence, tax and national insurance receipts are, cumulatively, £100 billion below the Government’s own projections. That is at the heart of the problem.

[Rachel Reeves]

My hon. Friend is right. Income tax and national insurance receipts have fallen short of forecasts by a staggering £97 billion in the life of this Parliament. As he makes clear, too many people are working on zero-hours contracts or in very low-paid jobs where they just cannot make ends meet.

[Mr Sheerman]

As a fellow Yorkshire Member of Parliament, does my hon. Friend share my anger that despite all this bland talk about the success of the economy and the success of the welfare system when it is actually being destroyed, in my town—and probably in hers—30% of people working are on low wages? It is women and families with children who are being particularly hard hit.

[Rachel Reeves]

My hon. Friend is right to talk about the experience of people in his Huddersfield constituency. People in Huddersfield, Yorkshire and around the country will, I think, be slightly shocked by the degree of complacency from the Secretary of State today and from the Chancellor last week, when for them and their families things are very often getting harder, not easier.

The Government have failed to control social security spending, as they promised they would, because they have failed to tackle the true causes of rising welfare spending, such as low pay and the lack of affordable housing, and because they have failed to deliver the flagship reforms the Secretary of State made such great claims for five years ago. What a tragic waste of time, talent and taxpayers’ money: wasting the precious time of sick and disabled people forced to wait for months on end for the support they so desperately need; wasting the talents of people who are not getting the help they need to get into work, or who are stuck in low-paid insecure jobs that my hon. Friends have spoken of that do not make the most of their potential; and wasting money on IT systems that do not work, assessment and appeals procedures that have descended into chaos, and soaring spending on in-work benefits because of this Government’s failure to build an economy that actually rewards hard work.

[Mr Duncan Smith]

The hon. Lady talks about what she calls soaring benefit costs. Does she accept that under her Government not only did in-work benefits rise by more than 50%, but housing benefit for those out of work rose by 70%? In other words, both in-work and out-of-work housing benefit claims rose dramatically under her Government.

[Rachel Reeves]

Under the last two Conservative Governments, unemployment reached 2.5 million. There was a global financial crisis during the period of the last Labour Government, and as a result, unemployment rose, but it has risen even further under this Government, from 1.5 million, when Labour left office, to 1.7 million in February 2012. The OBR’s Budget forecast last week showed a £600 million increase in the forecast for social security spending in just one year, and since 2010, the Government have spent £25 billion more on social security than they set out to spend.

Under the Government, the number of people paid less than the living wage has soared by 44%, while house building has fallen to its lowest levels since the 1920s. It is for those reasons that housing benefit spending—the second-largest area of DWP spending, after pensions—was more than £2 billion higher in 2014-15 than in 2009-10. It was due largely to the rocketing numbers of working people not paid enough to cover their rent. In this Parliament, the Secretary of State has spent £1.8 billion more than he planned on housing benefit for working people and, on current Government forecasts, the cost of working people’s rising reliance on housing benefit to pay their rent will reach £14 billion by the end of the decade, if left unchecked—£488 for every household in the country.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I think there is some common ground between us, particularly on zero-hours contracts for women who choose to work part time, but could the hon. Lady not congratulate the Government on regulating part-time zero-hours contracts, especially given that the Office for National Statistics has knocked the figures Labour used? This is often something that working mothers choose.

[Rachel Reeves]

According to the ONS, the number of zero-hours contracts has increased from 1.4 million to 1.8 million in the last year. This is a huge challenge for working mothers and others. We want to ban the exploitative use of zero-hours contracts so that if someone does regular hours, they will be offered a regular contract and so that their hours cannot be cancelled at the last minute without compensation. If we make those changes, I hope we can stem the increase in the number of zero-hours contracts, giving more people the security of paid work they know will happen week after week.

[Barbara Keeley]

I want to give an example from the social care sector to add to that given by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty). I recently spoke to a constituent working in the care sector whose job decayed over the years after an agency took over the firm she worked for, to the point where, instead of working the 35 to 40 hours a week she wanted, she was lucky if she got 20 hours a week, and the agency constantly cancelled at short notice. She could not manage from week to week with that. Sadly that is the care industry these days.

[Rachel Reeves]

My hon. Friend speaks powerfully about something she knows a lot about. The number of zero-hours contracts in the social care sector, and more widely across the economy, has grown. It is incredibly difficult to plan from week to week if someone does not know how much money they will take home or whether they can afford to pay the rent and bills and put food on the table. That is why more people in work are having to rely on food banks to make ends meet.

I move now to key reforms that have spun out of control under the Government. Universal credit was supposed to cut fraud and make work pay, but after five wasted years of this Government and more than half a billion pounds of taxpayers’ money spent, it is being paid to just 41,000 of the 1 million people who were supposed to be receiving it last April. The National Audit Office has identified a fortress mentality and a “good news” reporting culture in the Department as key factors behind this fiasco. Last summer, the Secretary of State promised an accelerated roll-out plan, but we have yet to see much evidence of it—things could not be going much slower.

The Work programme—another failed programme—was the Government’s belated and inadequate replacement for the future jobs fund they scrapped, but it has failed to tackle long-term unemployment. Indeed, the number of long-term unemployed people has risen by a staggering 49% since 2010. It still sends more people back to sign on at the jobcentre after two years than it places in a job and has made no impact on the disadvantaged and high-risk unemployment faced by over-50s and disabled people. The introduction of personal independence payments has also been a complete and utter shambles, leaving sick and disabled people waiting months on end for support, while total spending has gone over budget by more than £2 billion. The roll-out of employment and support allowance was supposed to deliver big savings by helping more disabled people into work, but just 8% of people on ESA have been helped into work by the Work programme. Furthermore, analysis by the House of Commons Library shows that the Secretary of State has spent £8.6 billion more than he said he would on ESA. What a mess and what a waste—five years of Tory welfare waste we needed this Budget to put an end to.



The Budget was a wasted opportunity. We needed a better plan to make work pay and get social security spending under control, but instead the report of the independent OBR confirmed that all we could expect from the Government in the future was more of the same: more unplanned spending on social security and more failure to deliver promised savings on disability and sickness benefits, with the OBR noting on page 143 that

“projected spending on incapacity benefits, DLA and PIP is up by £0.2 billion a year on average between 2014-15 and 2019-20”;

more failure to deliver promised savings on fraud, with the OBR reporting on page 191 that it had

“revised down the savings associated with tax credits operational measures. These increase spending by £0.2 billion a year between 2015-16 and 2019-20”;

and more of the “good news” culture on welfare reform, with the OBR noting on page 192 that

“we have noted a history of optimism bias relating to reforms to incapacity benefits, disability benefits and universal credit.”

“Optimism bias” is a polite way of saying that we cannot trust a word the Government say.

In a moment of optimism bias, the Secretary of State promised that 1 million people would be on universal credit by April 2014, but one year on, fewer than 41,000 people are claiming it. In another moment of optimism bias, he promised that universal credit would be on time and on budget, but with delay after delay and millions of pounds written off, everyone knows that it is neither on time nor on budget. In yet another case of the Government’s optimism bias, they promised to back carers but then forced 60,000 households with carers to pay the bedroom tax, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) mentioned. Was it not optimism bias that led the Chancellor to promise to reduce the benefit bill, only for the Government to spend £25 billion more on social security than they set out to spend? And perhaps optimism bias is why the Chancellor broke his promise to clear the deficit by the end of this Parliament.

[Christopher Pincher (Tamworth) (Con)]

Is the hon. Lady’s muddled jobs guarantee an example of optimism bias?

[Rachel Reeves]

Labour’s jobs guarantee would help 150,000 people get into work in the first year of a Labour Government. I am optimistic that we can transform the lives of young people and the long-term unemployed, unlike this Government, who have left them on benefits. Funded by a repeat of the bank bonus tax they abolished and by restricting pensions tax relief to 20% for people earning more than £150,000 a year, our compulsory jobs guarantee will help young people who have been unemployed for a year and older people out of work for two years. Should that not be our priority, rather than tax cuts for bankers?

The Budget also reforms the rules governing pensions and annuities. The Opposition have long called on the Government to sort out the failing pensions and annuities markets, which result in too many hard-working savers finding their retirement pots eroded by excessive fees and poor-value products. So we welcome more freedom for savers to choose how to access their money and plan their retirement. Just as with last year’s announcement, we find the same failure to ensure that savers and pensioners have the support and protection they need to secure a decent and reliable income and to avoid the rip-offs that are already threatening to create another mis-selling crisis.

Just this weekend, we learned that with fewer than two weeks before the reforms announced in last year’s Budget come into effect, there is still no telephone number for the promised advice service, Pension Wise, leaving hundreds of thousands of savers exposed to scams that could have a devastating effect on their retirement plans. Instead, we have the ridiculous spectacle of the Pensions Minister trying to wash his hands of the responsibility by warning of the rip-offs that will result—without doing a single thing properly to protect people from those risks.

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

Any decisions about annuities are extremely complex decisions to take. Failing to get the advice lines up and running is not just a fault on the part of this Government, it is negligent. It is negligent to allow people this freedom without providing them with any back-up to help them make the right decision. What is more, there is no thought given to the remedies if the decision they take is wrong.

[Rachel Reeves]

When the Chancellor spoke in the 2014 Budget he said that people would be given “advice”, which was then watered down to “guidance”. Now, with two weeks to go, we know that nobody has received this guidance, yet people will be making irreversible decisions about their retirement income.

This Budget has been more of the same from the same old Tories: more overspends, delays and missed targets on social security; and more big promises for savers and pensioners that are not backed up with the support and the protections we need to make these reforms work.

[The Minister for Pensions (Steve Webb)]

The hon. Lady is concerned, as we are, to make sure that consumers get good value. She has proposed a cap on charges for these new pension products. Presumably, she thinks the cap should come in straight away. What should it be?

[Rachel Reeves]

We have said that there should be a cap on fees and charges—not just for the annuities products, but for the new drawdown products. We think it should be at the same level as the Government have set out, but then reduced over time. In that way, we will ensure that savers get value for money. Unless we do that, more people will be ripped off. Unfortunately, despite all the Government’s rhetoric, they have not taken action to protect people’s retirement incomes.

What we have heard from the Secretary of State today is the same complacency and self-congratulation. Yes, of course we welcome any fall in unemployment, but it was this Government who allowed unemployment to soar to record levels in the first place, peaking three years ago in February 2012 at 1.7 million. Under this Government, the number of long-term unemployed, abandoned to a life on the dole, has risen by 49%. That is why Labour will have a compulsory jobs guarantee.

[Richard Graham (Gloucester) (Con)]

The hon. Lady made a number of comments about the prices and charges that should be levied on pensions. Will she confirm that the price cap that has been levied on auto- enrolment pensions is, in fact, half that of the amount levied on stakeholder pensions when her Government were in power?

[Rachel Reeves]

We introduced a cap on charges for stakeholder pensions and the automatic enrolment brought in policies for which Labour had already legislated. We are proud of automatic enrolment, but we disagree with the changes that this Government introduced, which mean fewer people are benefiting from automatic enrolment —1.5 million fewer, two thirds of them women. That is a real lost opportunity to ensure that those people who should be saving are actually saving.

What this Secretary of State and the Government he speaks for simply do not understand is that their failure to make work pay and to deliver a recovery that raises living standards for all is the root cause of their failure to control social security spending and balance the books as they promised. They have spent £25 billion more than they planned and their receipts from income tax and national insurance have, as has been pointed out, fallen short of forecasts by a staggering £97 billion over the life of this Parliament.

It is because of that failure that, in order to deliver his objective of a large surplus in the next Parliament, the Chancellor has now committed to even deeper spending cuts over the next three years than we have seen over the past five years. The Office for Budget Responsibility confirms that these plans will mean

“a much sharper squeeze on real spending in 2016-17 and 2017-18 than anything seen over the past five years”,

and

“a sharp acceleration in the pace of implied real cuts to day-to-day spending on public services”.

My right hon. Friend the Member for Morley and Outwood (Ed Balls)and my hon. Friend the Member for Nottingham East (Chris Leslie) have highlighted the threat this poses to police, defence and social care. Is it not the truth that the Chancellor’s extreme fiscal plan can be delivered only by putting our NHS at risk or imposing yet another Tory rise in VAT? Although it is hard to see how this Government can make the extra £12 billion-worth of cuts to social security spending when they have failed to deliver any savings in social security so far, these cuts could not be delivered without inflicting unimaginable hardship on low-paid workers, children in poverty, disabled people or carers.

So for this Government, this empty Budget will be a fitting epitaph. What of this Secretary of State who wanted to take his place in history as the compassionate Conservative who reformed welfare? His time is up and his record is clear: major reforms undelivered or descending into costly chaos; food banks in every town and child poverty back on the rise; more and more spending on in-work benefits as more and more working people find their wages do not cover the rent. No wonder the OBR says that the Government are guilty of “optimism bias”.

[Mr Jim Cunningham]

One important factor in looking at low pay, child poverty and similar issues is that many people’s employment rights are eroded. We need only to look at City Link in Coventry to see that more than 1,000 people could not even get any redundancy pay because of the erosion of employment laws under this Government. That only adds to the poverty.

[Rachel Reeves]

I thank my hon. Friend for that intervention. Of course, this Government have made it harder for people to access justice, too, through the cuts they have made there.

We have had five years of Tory welfare waste—and it is high time we put it behind us. The Secretary of State wanted universal credit to be his legacy, but it is being paid to less than 4% of those who were supposed to be receiving it a year ago. Instead, this Secretary of State will be remembered for the hundreds of thousands of disabled people hit by the bedroom tax; for the 1 million people forced to resort to a food bank to feed their families last year; for the 3 million low-paid working families who have been hit by this Government’s cuts to tax credits. We cannot afford another five years of this Tory Government.

This could have been a Budget to make work pay, with a plan to raise the national minimum wage to £8 an hour and measures to promote and incentivise the living wage. This could have been a Budget for mums and dads who want to work and earn more, with 25 hours a week of free child care for all working parents of three and four-year-olds and guaranteed wrap-around care for those with children at primary school. This could have been a Budget that gave relief to working families on low incomes, by scrapping the ill-conceived and unfair married couples tax allowance and using the money to introduce a 10p starting rate of income tax instead. This could have been a Budget to create more of the productive, well-paid jobs we need by backing entrepreneurs, small businesses and the growth industries of the future, with a cut to business rates, a proper British investment bank, and new powers devolved to every city and county region across the country.

This could have been a Budget to secure our NHS for the future, with a tax on properties worth more than £2 million to pay for the thousands more doctors, nurses, midwives and home care workers that our health service desperately needs. This could have been a Budget that began to right the wrongs of the past five years, by tackling the tax loopholes and reversing the tax giveaways that have benefited a few and by cancelling the cruel and unfair bedroom tax that is hitting disabled people so hard. All that is not just the Budget that this could have been; it is the Labour Budget that we can have and the Labour Budget that we will have if we elect a Labour Government in just 45 days’ time.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Due to the large number of right hon. and hon. Members who wish to speak, there will be a time-limit for all Back-Bench speeches. There will be 10 minutes for the first two Back Benchers and five minutes for each remaining speech thereafter.

18:09

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I congratulate my right hon. Friend the Chancellor, the Chief Secretary and the rest of the Treasury team on the Budget. I also congratulate them, even more emphatically, on the extraordinary record of the last five years which enabled a Budget of this kind to be presented. I think it must be acknowledged that we took over a worse situation in 2010 than any Chancellor had taken over since the war. It was even worse than the winter of discontent in 1979. I have not looked up the debate on that first Budget, but I believe that our present position would then have been beyond the wildest dreams of most Members on either side of the House. That is why this Budget gives us such a firm foundation for making further progress.

I also congratulate the Treasury team on the type of Budget that we have been given. I am relieved and delighted that it was not a gimmicky Budget, and that we did not see one of those foolish attempts to start buying votes with populist measures. Chancellors who are facing elections are always besieged with requests for them to do unbelievably silly things in the belief that the public will respond by voting for them, but the public are usually far more sensible than most of the journalists and most of the politicians, and have never responded to such measures in the past. Admittedly, both the right hon. Member for Edinburgh South West (Mr Darling) and I eschewed that type of Budget, because we were producing the last Budgets for Governments who on any sensible view were doomed to be defeated at the next election, but we did what has been done on this occasion. It is not a question of the electoral purpose; it is a question of the national interest. A sensible, competent, prudent Budget is in the national interest, and gives us the best opportunity to deliver what we hope to deliver over the next five years.

[Sir Edward Leigh (Gainsborough) (Con)]

In her peroration, the hon. Member for Leeds West (Rachel Reeves) produced a great, long shopping list of things that could have been done in the Budget. “It could have been a Budget” for this, that and the other. Would not the best response to the hon. Lady be “It could have been a Budget to bankrupt Britain if Labour were in charge”?

[Mr Clarke]

I think that it would. Blatantly going around telling people that their pay will go up and that expenditure will be increased in a number of instantly popular ways, along with Labour’s earlier promises to start ordering companies to reduce the prices of sensitive products in highly volatile markets, is totally irresponsible. I hope that, were the population so foolish as to return a Labour Government in six weeks’ time, their policies would be hastily abandoned when they found themselves confronted with the realities of power.

In basic terms, this is a fiscally neutral Budget, which is plainly what was required. During Budget debates, we used to spend more time discussing the Budget judgment, and on this occasion that judgment was “fiscally neutral”, which I think has been widely applauded. That does not mean that the Budget is devoid of significant measures, including measures that will have a considerable impact on the rest of the human race—the ordinary men and women out there who have ordinary, moderate incomes. I am rather surprised that so little attention has been paid to the wider impact of another rise in personal allowances, which will not only have the welcome effect of taking the very low paid out of tax altogether, but will have a big impact on the great bulk of the population who are receiving perfectly ordinary pay. Some 27 million people will benefit, and average taxpayers will be better off by £900 million a year.

However, so that the Budget could remain fiscally neutral, that easing of the problems of the ordinary population has been balanced and financed by a rather eye-watering increase in the bank levy—which I think is a perfectly sensible way of raising money now that the banks are on their way to recovery—and a further reduction in tax relief on the pension contributions of not the very wealthy, but the better off. They can build up a pension pot of £1 million, which is not to be sneezed at; they have secure jobs, are making contributions, and have plans for their retirement. How that measure can be characterised—as the activities of this Government often are—as helping the rich at the expense of the poor and ignoring the demands of the ordinary man, I cannot imagine. It is the banks and the better off whose taxation has been raised, and the ordinary man and woman whose income tax has been lowered. That shows that free-market economics can be combined with a social conscience, which I have always believed is the best guiding principle for the Conservative party when it is running the macro-economic affairs of the country.

There are also further measures—which, again, will not create pleasure among all the rich—to deal with tax avoidance, of which a great deal has been made. On this occasion, they mostly involve corporate tax avoidance. My right hon. Friend the Chancellor has set a very ambitious target for the future—he is aiming to get another £5 billion out of tax avoidance—but he has already introduced a general tax avoidance measure in the Finance Act 2012, which has had an enormous impact on what we can do. We have agreements in the G20 and with Switzerland and Liechtenstein, and it is now impossible to hide money in the way that caused a scandal recently, when it was discovered that in 2007, under the last Government, thousands of British taxpayers were finding it easy to evade tax abroad. That is not favouring the rich. The present Government have done far more to tackle tax avoidance and evasion, and to make the raising of revenue more efficient, than any of their predecessors for 20 years or more, including the Government in which I served. Looking back, I have to concede that.

I do not have time to go into all the other measures that have been introduced, but ending the annuities racket and giving more flexibility to those who are saving for their retirement and their old age, so that they can make more use of their own resources, is a major social reform, on which I congratulate the Government and the Pensions Minister in particular. All that has been taken further in the Budget, together with our drive to help business. That is very important: we have to be pro-business. We are trying to revive the economy through lower corporate taxation and more extension of investment allowances, and by easing the tax burden on North sea oil. This Budget is an extremely responsible package, and it bodes well for the future if we are returned to office.

The debate has been dominated by extraordinary arguments about deficits: the size of deficits in the past, the size of deficits now, and where the deficit will go in future. Most of those arguments are based on strange interpretations of statistics or wild over-reliance on forecasts that are at least five years out, which has reduced the debate to a rather simplistic level. I agree—indeed, it is absolutely fundamental—that tackling the problems of debt and deficit is an essential pre-condition of putting the disasters of 10 years ago, and since, behind us, and paving the way for a modern, competitive economy in future.

[Mr Jack Straw (Blackburn) (Ind)]

Will the right hon. and learned Gentleman give way?

[Mr Clarke]

No, I will not, because, with great respect to the right hon. Gentleman, it would not be fair to the 30-odd other Members who wish to speak.

The hon. Member for Leeds West keeps criticising the Chancellor for not succeeding in eliminating the deficit entirely in the last five years. I am very glad that he did not do so. It is the same with all forecasts—[Interruption.] It is not possible to find a Chancellor who has produced forecasts that are three, four or five years out and which resemble what actually happened. It is necessary to take account of what is happening in the real world. Macro-economic policy has to be pragmatic.

I cannot tell what will happen over the next five years, and nor can any Opposition Member. Will China actually have a soft landing? What will happen to the oil market? Is the recovery in the United States really sustainable? Will the eurozone begin to achieve a bit more growth this year and beyond? What about difficult emerging markets like Brazil? The fact is that we are part of a globalised economy—quite apart from the impossibility of forecasting with exactitude what will happen here.

The Chancellor has cut the deficit substantially, and has moved nearer to getting it under control. Had he moved at a faster pace, heaven knows where we would be now, but we would be in a very difficult situation. Actually, I do not know whether the Labour party thinks that he should have moved faster or more slowly, but I am sure that it is not capable of maintaining progress. I hope that we can achieve a surplus in the next Parliament—and so, obviously, does the Chancellor—but that will depend, again, on whether circumstances permit us to do so. In five years’ time, we shall find out where we are.

Meanwhile, having that kind of responsibility is an essential precondition to raising our educational standards and continuing to tackle the skills shortages which always slow up the British economy—we are making great progress with apprenticeships, and we have much further to go. At last we are beginning to see business investment come through, with more confidence and, I hope, improved credit for businesses. That should pave the way for the productivity growth that we desperately require. We need infrastructure investment, which the Government are pressing on with. We need the EU reforms, which the Prime Minister was talking about earlier. If we can complete the single market—if we can extend it to services, if we can have a common energy market, if we can have a common market for the digital economy, if we can have an EU-US trade agreement—all that will reinforce the efforts of the Government to put this country in a much better position than any other to look optimistically to the future.

If we were in the world of traditional politics of 30 or 40 years ago, this Government would be on a walkover in this election, producing figures to die for after taking over a disaster. We still have to rise above the cynical comedy of today’s protest politics. This Budget shows that a competent Conservative Government can finish the job.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

18:20

[Mr Alistair Darling (Edinburgh South West) (Lab)]

I continue to admire the humour and chutzpah of the right hon. and learned Member for Rushcliffe (Mr Clarke) in delivering that speech.

Thank you, Mr Deputy Speaker, for allowing me to make what I am pretty certain will be my last speech in this House; I am very grateful to you for that. I will not follow on from the comments of the right hon. and learned Gentleman, although I will return to some of the points he made, and nor will I follow on from what the Secretary of State for Work and Pensions said, except by saying this: I agree very much with what my hon. Friend the Member for Leeds West (Rachel Reeves) said in relation to annuities. Here we are, days away from people being able to choose what they do with their annuities, yet we hear that we are still to recruit the people who are going to be giving the advice—let alone training them and let alone members of the public being able to access that advice. The only thing the Secretary of State did was lay off some of the blame on to his Liberal Democrat colleague—so when the inevitable inquiry starts as to why these things were mis-sold, we know where the blame will be apportioned.

I draw the House’s attention to my entry in the Register of Members’ Financial Interests, but I want to focus on the Budget as a whole. The most notable thing in the report by the OBR—it has done a very good job over the last five years—is in the second paragraph, where it says that the Budget is not expected to have any material impact on the economy. Call me old-fashioned, but I thought that was what Budgets were for.

The economy was growing in 2010—and it was growing in 2010—because of the measures we put in place in 2008 and 2009 to stop a recession becoming a depression. The Chancellor last week and the Secretary of State today implied that nothing particular had happened at that time, but we came within hours of the banking system collapsing. That is why we were facing such a difficult set of economic circumstances by 2008-09, and it took a Government committed to doing something about it—our Government—to make sure our economy was growing again in 2010. Sadly, what happened after that was that the economy slowed down, to a large extent because of the rhetoric and the fact that the current Government chose to trash what was happening and mendaciously claim we were like Greece, and as a result the Chancellor’s public spending figures are now way off what he planned in 2010.

[Mr Straw]

Does my right hon. Friend agree that, contrary to the myths peddled on the Government Benches, up until the financial collapse the Conservatives backed our spending plan and our debt levels were significantly lower than those of most other countries, including the US?

[Mr Darling]

My right hon. Friend is right. Our debt levels were the second highest of the G7 group of economies in 1997, but 10 years later they were the second lowest. On public spending, last week the Chancellor blamed all our woes on our alleged overspending. How was it that the Conservatives were supporting our public spending plans right up until December 2008? As for the Liberal Democrats, they were in a different stratosphere from the rest of us when it came to calling for more public spending.

At the last election five years ago the essential argument between us was whether we could halve the deficit in a five-year period, which was my judgment of what we could safely and realistically do. The Chancellor—the shadow Chancellor at that time—said that that was woefully inadequate. But what was woefully inadequate five years ago was announced as a personal triumph last week. He has managed to do what I said we could do, but he somehow says it is a great triumph on his part and something we should be grateful to him for.

Let us look at what the Chancellor has actually done in relation to borrowing. He announced last week that at long last borrowing was on a downward curve. Every Budget he has ever presented shows borrowing on a downward curve. The difference between this Budget in 2015 and the Budget in 2010 is that it is on a downward curve all right, but he is borrowing three times more than he expected to borrow in 2010 because the economy slowed down so badly in 2011-12.

As for debt, we all expected that it would be shown that we were not going to hit the Chancellor’s original target of debt reducing as a share of national income by 2015, and that was what was expected from his autumn statement in December, yet, lo and behold, last week suddenly he was meeting his target, by a minuscule amount—coming from 80.4% to 80.2% of GDP. Why was that? It was not because of some economic miracle. It was because he looked around the Treasury cellars and found assets he could sell, one of them being a thing called Granite, which is an absolute monster of financial alchemy. Northern Rock produced it, into which it fed sub-prime mortgages, and the more sub-prime they became, the more mortgages had to be fed into this thing to keep it going. After five years it is, of course, possible to manage these things and get them to come right, and that is why the debt is coming down—because he is selling off this asset—yet even the OBR says it is highly uncertain whether or not this target will actually be met. So when we look at what the Chancellor said on the causes of where we are now and what he has done over the last five years, I have to say his credibility and track record are not as great as he would have us believe.

On the public expenditure figures of last week, the OBR has described the Chancellor’s spending profile as a rollercoaster. If we want to go on a rollercoaster, we go to Disneyland, not the British economy. Anybody else whose plans had been described as a rollercoaster would have hung their head in shame. What sort of planning can people put in place when they have no idea what is going to be spent? We have the absurd situation where the Ministry of Defence may have to lay off armed services personnel in 2016-17 because of the steep decline in public spending, only to say, “It’s all right. We’ll be able to re-engage you in two years’ time.” How can universities plan for research and development when we have such a steep decrease in public spending now, with the promise of perhaps something in the next few years?

The former Chancellor the right hon. and learned Member for Rushcliffe knows as well as I do that when we look at spending profiles for four or five years, the last two years are pretty doubtful.

[Mr Kenneth Clarke]

indicated assent.

[Mr Darling]

The right hon. and learned Gentleman nods. They are pretty doubtful for one of two reasons: one is that a lot can change in that time, and the other is that the person presenting them has every intention of changing them as and when we get to that time. I do not believe for one moment that the Chancellor has changed his philosophy or beliefs from when he told the House last year that he wanted to reduce public spending to the lowest share in modern times—certainly since the welfare state and the national health service were introduced. All that has changed is that that was a political embarrassment last year, so he has simply shoved up the numbers at the end of the spending profile to be able to say, “Look, I’m not going to cause you any difficulties; public spending is going to rise, not decrease.” That is nonsense; the Tory view of public spending has not changed one jot.

Where I part company with many Government Members is that I do not think public spending is almost de facto a bad thing. It is extremely helpful to an economy in education and research and development, never mind the things an advanced economy demands in relation to the welfare state and pensions. So when we look at that profile, it is not credible, and I think it also conceals what the Conservatives would really like to do.

I want to say one thing about oil. I welcome what has been proposed. It is very sensible, because the oil taxation regime had to change, but I just remark in passing—and I am sorry only one nationalist has turned up to the debate—that the OBR forecasts are 47% below what it proposed just a year ago. North sea oil revenues are a 10th of what the nationalists told us they would have if they had an independent Scotland. This is another example of where pooling and sharing resources across the United Kingdom makes a massive difference. If Scotland had been independent today, it would have been faced with cuts that would make the austerity that is now being visited on the economy look like a Sunday afternoon tea party. They would have been substantial and damaging to the people of Scotland. That is why the nationalists have nothing to say about this; they have no one to blame for this problem but themselves.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Will the right hon. Gentleman give way?

[Mr Darling]

I have never actually met the hon. Lady, but I will certainly give way to her.

[Dr Whiteford]

I am grateful to the right hon. Gentleman for giving way. Would he accept that, over the past 30 years, oil revenues have contributed billions of pounds that have consistently bailed out Westminster’s bad economic management? Would he also accept that oil prices go up as well as down, and that the long-term trajectory of oil revenues is an upward one?

[Mr Darling]

I agree that oil prices go up and down, but when I said that last year during the referendum campaign, I was told that I was scaremongering, that I was talking Scotland down and that that could not possibly happen. The hon. Lady should listen to her former leader. He told us that the oil price would never drop below $113 a barrel, but look what happened a few months later.

In relation to the oil price, I would like to say in passing that whoever is Chancellor in the future will increasingly face a structural problem in the economy. North sea oil revenues are not going to return to where they have been for the past 30 years, income tax revenues are decreasing, corporation tax is proving more and more difficult to get, and the Government’s ability to collect money through fuel duties is steadily diminishing. This is all going to put more pressure on measures such as VAT. All Governments are going to have to face these facts, and the fall in oil prices brings them into sharp focus.

The current low levels of productivity are a matter of great concern. The Chancellor had a lot of fun comparing Yorkshire and France, but French workers are in fact more productive. That is not because our workers are lazy, or anything like that; it is simply because French firms have invested more. That is why certainty in public spending is important. It is also important that the Government should do those things that the private sector is not going to do. For example, I have increasing doubts about the ability of the private sector to provide us single handed with the energy generation that we are going to need. I am in favour of replacing our nuclear power plants, but the proposals for the next nuclear power station are heavily dependent on the French and Chinese Governments, and I worry about that. I speak as an advocate of the mixed economy, but I believe that we now need to ask ourselves whether we have reached a stage at which it might be cheaper and more effective for the Government to be doing more in that regard, rather than leaving it to the private sector.

On transport infrastructure, it will, I hope, be for the next Government finally to make a decision on additional expansion, whether at Heathrow or elsewhere in the south-east. Actually, none of those arguments has changed in the 10 years since the last White Paper was published on the subject. I also hope that the next Government will take advantage of the present ability to borrow very cheaply by borrowing to invest. I personally would spend more time on HS3 than on HS2, but I recognise that I might be in a minority in holding that view, on my own side and in the House as a whole. To be honest, there would be much more benefit, particularly to the northern part of England, in spending more money on the transport links there than in building a fast link between Birmingham and London. However, that is something that the next Government are going to have to deal with. I speak as a former Secretary of State for Transport. The Department for Transport’s record on announcing such plans is pretty good, but it is not quite so good when it comes to delivering. Indeed, many announcements were made last week, but I distinctly remember announcing the same things myself 10 years ago. Perhaps that illustrates the problem that all Governments face.

One of the profound issues that needs to be discussed as we go into the next election is what people expect the Government to do in regard to the provision of services such as education, health and pensions and what sort of society we want to live in. However, this Budget does not begin to address those questions, which is why I shall have no hesitation in supporting my hon. and right hon. Friends in the Division Lobby tonight.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I suggest that we now move to a time limit of six minutes, as we have had a few withdrawals.

18:33

[Sir Nicholas Soames (Mid Sussex) (Con)]

I congratulate the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), on his speech. I always admired his Olympian calm when he was under great pressure in the past few years. I know that the House will miss him very much indeed. [Hon. Members: “Hear, hear!”]

I warmly welcome the Budget, and I congratulate my right hon. Friend the Chancellor on a truly formidable achievement in accomplishing a huge turnaround in the financial fortunes of our country and our people after the catastrophic failures of the last Labour Government left our economy in such a very bad place. The United Kingdom now has one of the fastest-growing economies in the world. The extraordinary rate of the growth in new jobs is truly exceptional. In my constituency of Mid Sussex, we have the fourth lowest unemployment of any constituency in the land. In Yorkshire, business and enterprise have created more jobs in a year than were created in the whole of France. That is indeed a superb record.

Mid Sussex has a vibrant economy with many small and medium-sized businesses, all of which will warmly welcome the Chancellor’s review of business rates, which are clearly in need of far-reaching reform. It would be good, for example, to see increased help for the independent shops in East Grinstead, Burgess Hill and Haywards Heath and in the villages so that they can compete with the enormous challenge of online business.

Many of my constituents will welcome the new arrangement for ISAs that will enable first-time buyers to have a tax-free way of saving for their first homes. This is a hugely significant and very welcome step. There is also a warm welcome for the Chancellor’s help for hard-working people and their families by raising tax allowances and increasing the amount that people can earn without paying income tax. As my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) said, an enormous number of people will feel significant advantages as a result of this Budget, with 27 million people having their taxes cut and another 4 million people on low wages being taken out of the income tax system altogether—and so they should be. The freezing of fuel duty has made an enormous difference to people’s disposable income. All these steps are most welcome in the south-east of England and particularly in my constituency.

I note that my hon. Friend the Financial Secretary to the Treasury has now left the Chamber, but there are still Treasury Ministers on the Front Bench. May I enter a special plea to them? The rail services on the Brighton line and to East Grinstead are of immeasurable importance to commuters in my constituency, but they have been truly appalling since the works at London Bridge started. Given the extraordinarily high price of tickets, these inconveniences are wholly unacceptable and have gone on for too long. The Under-Secretary of State for Transport, my hon. Friend the Member for Devizes (Claire Perry) has been very helpful in working with Network Rail and with Southern, for both of which the concept of a rail passenger service appears still to be in a formative state. I ask my right hon. Friends on the Treasury Bench urgently to consider the question of compensation for my constituents, who have been terribly mucked about over the last few months as they have struggled to get to work and to get back on time to see their families.

May I enter one more piece of special pleading, which endorses a point made by the former Chancellor, the right hon. Member for Edinburgh South West? My constituency is part of the powerhouse of the south-east but I must tell my right hon. Friends on the Treasury Bench that it is constantly held back by the lack of good infrastructure. I am of course pleased with the plans for the A27, but the pressure of housing and growth is leaving towns such as East Grinstead and Haywards Heath without the proper infrastructure to enable them to cope. As the right hon. Gentleman said, money is cheap at the moment, and this is the time for the Government to borrow and to spread some largesse among the towns that never see any infrastructure spending. The housing situation in my constituency cannot improve without better infrastructure, and of course, if Gatwick were to get a second runway, the position locally would be truly catastrophic.

Thanks to the determination of the Chancellor and the Government to stick with their long-term economic plan, our businesses can invest and our people can benefit from the extraordinary global flow of ideas, innovation and new market opportunities. I hope that these improvements will lead to major increases in productivity, which is increasingly the fundamental key to growth and, above all, to a higher-wage economy.

I continue to remain anxious about the level of skills required as our economy responds to changes in technology and globalisation. I am disappointed to see that we are not producing nearly enough engineers, and I welcome the steps the Government are taking to support vital skills training. I share the Chancellor’s view about the huge potential for our country and about the opportunities that exist for our young people, but it remains the case that, in this astonishingly networked world in which our country now has to make her way, we continue to be unprepared for these challenges. I applaud the Government’s determination to put that right.

18:39

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

First, I congratulate my right hon. Friend the Member for Edinburgh South West (Mr Darling) on not just an excellent speech, but the tremendous work he did in those difficult three years alongside the then Prime Minister. When the world gathered in April 2009, applauding the then Prime Minister and then Chancellor for the work they had done on pulling people together, no one could have thought that the absurdity would exist where the last Labour Government were blamed for the sub-prime mortgage collapse in the United States and the collapse of the financial institutions across the world.

For 30 seconds, I just want to pay tribute to those who have been instrumental in anything that I have been able to do in my public life and in this House, starting with my wonderful family and my closest friends. They were somewhere in the Gallery when I made my maiden speech, and two are here from Canada in the Gallery tonight. Without our family and friends we could never do what we achieve, and so often they take the brunt of the rough and not the smooth in politics. I, of course, want to thank the workers, who are often forgotten in our democracy but who make it possible for us to be here in our political parties, for their dedicated work. I thank the voters and the people of Brightside, of Hillsborough and of Sheffield. I also wish to pay tribute to my colleagues in the House, including my right hon. Friends the Members for Edinburgh South West and for Blackburn (Mr Straw), who served in Cabinet with me. My right hon. Friend gave 36 years of dedicated service in and out of this House, and he deserves a great deal of credit for it.

My first Budget was Nigel Lawson’s of March 1988 and it was seminal in my life because my dog, Ted, was violently sick halfway through. My hon. Friend the Member for Bolsover (Mr Skinner), in a very loud voice, in only the way he could, pronounced, “Someone should clear up this dog’s breakfast.” I was not sure whether he was referring to what the dog or the Chancellor had delivered. That Budget certainly had a detrimental impact which I hope this Budget will not achieve.

I wish to make three quick points. I have already commended my right hon. Friend the Member for Edinburgh South West for what he said about what happened through those difficult times. We do not just have to believe him; we can believe what Mark Carney, the Governor of the Bank of England, said in a speech made on 28 January in Dublin. In his second point about why our economy had managed to come through and bounce back, he said that we had a fiscal system that allowed budget deficits to rise during a downturn. It is self-evident that that is the case and it needs to be done, but it is not self-evident, in all the rhetoric we have heard over the past five years, that anyone on the Government Benches has fully understood what saved us from complete calamity—it certainly was not austerity. It has not been austerity in Greece, Spain, France or Italy that has saved those countries; what has been instrumental has been what was implemented by the Federal Reserve in the United States and by the Bank of England here: quantitative easing—printing money, as my mother called it. It eased the unfortunate—in the long term—bubble in house prices, rather than the investment in business for which it was intended, but it did make a significant difference in terms of allowing us to return to growth and to have sufficient money in the economy.

Paradoxically, the payment protection insurance mis-selling scheme also did that. The PPI repayments have amounted to £20 billion of money going into families and into local economies that people have spent. If a political party had announced that it was going to give, in a Budget, just before an election, £20 billion to selected families across the country, people would have had a fit. Yet that has made a significant impact on what has happened.

We will not and cannot allow a doubling of the pain in the next Parliament to take us backwards, with the unthinkable becoming the unachievable. That is clearly what would happen if the unfair changes and the unfair further additional austerity measures were to be implemented—and, of course, we do not know about many of them. Should the Conservatives be the lead or majority party, they will be implementing further cuts, on top of the 50%-plus of austerity measures that the coalition has already signed up to. We know about the 10% cut in the budgets in schools, because the Prime Minister has announced it. We know about the enormous cuts already in the pipeline in further education, with a 24% cut in adult skills funding. We know about the proposed budget changes already for welfare. We know what is happening in local government, with the most deprived areas taking the biggest hit. We know that if these austerity measures go any further, there will be a massive hit on those least able to take it. This is a crucial moment, when we decide whether we go backwards or forwards to a Britain we are proud of.

18:45

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

It is a privilege to be called in this debate, Mr Deputy Speaker, and, in particular, to follow the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett). I pay tribute to his lengthy service in the House and his major achievements. He will be greatly missed, not just in the House, but in Yorkshire.

I welcome this Budget, which is good for individuals, families, businesses, pensioners and farmers. Obviously, the best news is that more jobs are being created in Yorkshire than in France, as the Chancellor mentioned. I wish to make a special plea on behalf of one category: older women who are too young to retire but who may see too few opportunities to work. I recognise the help being given in this Budget to farmers and make a plea that the particularly welcome rule enabling self-employed farmers to spread their average earnings over five years be introduced this month, before Dissolution. Farming and fisheries are the two most dangerous industries, so may I also make a plea that we need better mobile phone coverage in rural areas, to reduce the risk of accidents on farms away from the house?

Let me dwell for a moment on the reform of the common agricultural policy fiasco in 2005, which led to huge fines and penalties in the European Union for late payments. I welcome the fact that common sense has broken out and that in this month we will revert to paper applications, with only initial registration online. I ask that digital by default be laid to rest this year and that we press forward to make sure that the mapping is easier in future years.

I ask that the vouchers the Government are going to make available in urban areas for upgrading to superfast broadband also be made available in rural areas. Too few farms and rural businesses yet have the benefits of a decent speed and a stable connection for broadband. It is not acceptable that farms and rural businesses have only the basic legal entitlement of 5 megabits and subsidised satellite services, and that the promise of 100 megabits will not reach the farms. Will we therefore see the vouchers extended to rural areas?

I ask the Minister who is summing up to address the issue of the costly failure— £155 million—of the Rural Payments Agency computer. It raises a wider issue relating to contracts under successive Governments: why do we see failures in areas such as the Child Support Agency and, more recently, the RPA? When Governments can supply that big a contract, what are we doing wrong? Can we also make sure that the spectacle of disallowance and EU fines will become a thing of the past? Will the Government confirm tonight that the additional extension of one month offered by the European Commission for basic farm payments will be accepted and agreed? Will we ensure that payments are made on time? The extension to 15 June is welcomed by the farmers.

I welcome the fact that this Budget is good news for savers. The individual savings accounts—ISAs—will encourage savings and investments, and the review of capital investment allowance will be welcome. This is a prudent and responsible Budget, setting a steady course to cut our debt, reduce the deficit and, in the words of my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), achieve a surplus by 2017-18.

This is probably the last contribution that I will make to any formal debate in this House. It has been an enormous privilege to have served 18 years here. I have spent five years as MP for Thirsk, Malton and Filey; 13 years as the MP for the Vale of York, for which I was the first and last Member; and for 10 years before that I was a Member of the European Parliament.

The icing on the cake was being elected by colleagues, from across the House, to chair the Environment, Food and Rural Affairs Committee, which so perfectly reflects the interests and concerns of those living in Thirsk, Malton and Filey—food, farming, fisheries, the environment, the countryside and rural communities. We have been wonderfully served by exceptionally dedicated and extremely effective staff led by the Clerks, with superb special advisers, assistants and others. I have also been blessed with parliamentary colleagues on the Committee, some of whom are in the Chamber today. Together we have formed a dedicated team, really pressing for proper scrutiny of an extremely important Department, which I hope will survive and grow bigger in the next Government.

As I face early release, I pay tribute to my predecessors, including my right hon. Friend the Leader of the House who is also leaving. I wish my successor the very best of luck. I pay personal thanks to my husband for allowing me to do this job, to my supporters for standing by me, and to my electors locally for returning me at successive elections.

18:51

[Wayne David (Caerphilly) (Lab)]

I pay tribute to Members on both sides of the House, especially those who are stepping down, for the contribution they have made to politics; I am sure that we all appreciate their work.

My constituents regard this Budget as a monumental irrelevance. I say that because this Budget has done so little for so many people. Over the past few years, people’s standard of living has been eroded and their quality of life has declined, and this Budget has done nothing to reverse that trend.

In Wales, we have seen the publication of the Welsh Index of Multiple Deprivation and the work of Professor Steve Fothergill of Sheffield Hallam university. Both works have underlined just how bad things are in many south Wales valley communities. Professor Steve Fothergill, for example, has focused on the impact that welfare reform has had on many former mining communities. He has estimated that, in some 36 wards in the south Wales valleys, at least £800 per adult has been lost. The communities as a whole have suffered from that substantial loss of capital.

The situation has been getting progressively worse in the top end of the valleys. Lower down the valleys, there are also pockets of deprivation. Lansbury Park in the centre of Caerphilly is now the worst off ward in any part of Wales. It was tipped over the edge by the introduction of the bedroom tax. In my constituency, more than 1,000 households have been hit hard by that tax. In the past, I have referred to specific cases as examples, one of which I will refer to again. Mr and Mrs Goodwin live in the Caerphilly borough in Blackwood. Both of them are registered blind. After living in their council house for 30 years, they now have to pay a massive surcharge because two of their rooms are deemed to be surplus rooms. That has hit their quality of life and standard of living extremely hard. What is true of them is true of so many other people the length and breadth of this country. Some 57% of those people who have been hit by the bedroom tax have disabilities. What can people like Mr and Mrs Goodwin look forward to? Let us be clear about what will happen if the Conservatives win the election. The Office for Budget Responsibility has said that it anticipates a rollercoaster profile for implied public services spending, with

“a much sharper squeeze on real spending in 2016-17 and 2017-18”.

In other words, the cuts, bad though they have been, are nothing to what they are likely to be over the next few years if the Conservatives win the election. People must not worry though because there will be a massive boost in public expenditure as we approach the election after this one.

Things will get much, much worse before there is any chance of improvement, which is why it is so important that we take this opportunity, on the eve of our general election campaign, to recognise that a Labour Government would offer real hope for people. They would scrap the bedroom tax, introduce a sensible protection plan, increase the minimum wage, end exploitative zero-hours contracts and, above all else, bring in a different set of values that put people first, and that put the many before the few.

18:56

[Chris White (Warwick and Leamington) (Con)]

Although I am pleased to follow the hon. Member for Caerphilly (Wayne David), I have to say that I offer a more optimistic approach. I am happy to say that, in Warwick and Leamington, the signs of economic growth are strong, not least with the number of jobseeker’s allowance claimants falling by 70% since 2010, and the number of claimants aged between 18 and 24 falling by 79% over the same period. We have also seen a growth in the number of businesses that have taken on new employees, with more than 2,700 apprenticeships being created since 2010.

The Budget contained several welcome measures for Warwick and Leamington, the first of which was the support for the creative sector that contributes so much to our local economy. Leamington Spa is now increasingly referred to as “Silicon Spa” due to the growth in our technology and creative industries. As the Budget emphasises, the creative industries deliver both cultural and economic benefits to the UK.

The tax relief for the video games sector, for which colleagues and I on the all-party group for video games have campaigned, has already significantly benefited the video games industry in Leamington. The tax relief has created confidence in the sector with the local industry supporting some 1,200 jobs.

I am also delighted that the Chancellor announced an extension of the skills investment fund, which will provide £4 million to ensure that support for training and development in the creative industries continues for a further two years. Renewed focus and support for a more traditional, but similarly creative industry, was also announced in the Budget. The west midlands has long been a hub for manufacturing, but it is now a resurgent sector of our economy. I was delighted to note that, according to the most recent figures, the manufacturing sector grew by more than 2.5% in 2014 alone.

Since 2010, the Government have invested a great deal in the manufacturing sector, including through innovation catapults. High-value manufacturing is growing in significance in our region. I was particularly pleased to see the one millionth cooker roll off the production line at Aga Rangemaster, just outside my constituency office.

Innovation is key to unlocking further potential in the manufacturing sector and I am delighted that the Government have extended the research and development tax credits, particularly for small and medium-sized enterprises. That measure is estimated to benefit some 15,000 businesses.

As co-chair of the all-party group on manufacturing and chair of the all-party group on video games, I have been privileged to watch the regeneration of manufacturing and the exciting development of the creative industries as a whole. I would like to take this opportunity, however, to make the point that there is still more to be done to achieve the potential in these parts of the economy. We need more support for innovation, more apprenticeships, not least through the excellent Warwickshire college, a continued focus on research and development and support and encouragement for small businesses wishing to grow and expand. I believe that we must do all we can to support these vital industries, rebalance our economy and create additional jobs, but overall the Budget provides assurance that the economic plan is working and that our economy is back on track.

19:00

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

All Members look at the Budget and see what is in it for their constituents. I did the same last week, for the whole north-east of England. When I got a look at it, I thought that there was one little chink of hope: I might get the Blyth and Tyne rail link reinstated in my constituency. I might be lucky, and I know that the county council has put some money aside, but I am not sure what will come from the Budget. We hope that the money might be there, but as for everything else, all my constituency is getting are a few crumbs. Some might be getting their pension, which is their own money, of course, but otherwise a few crumbs have fallen off the table that my people have managed to gather and I am sure that everybody else is thinking the same. As far as I am concerned, all we are getting in the north-east of England is the usual pie in the sky.

A lot has been said about what is happening now, but what will happen after this? What will happen if this lot get elected again? I went and had a look at the TaxPayers Alliance’s site to see what it was doing. We all know what the TPA is: the reserve Tory party, the ones who get paid by big business to tell the Tories what to do. It is talking about ending national bargaining, which means another freeze on wages. Another freeze, after five years of freezes, with some people getting no increase and some people getting only 1% increases. We can see where that is coming from, and that is what the TPA is telling the Tory Government.

The TPA wants an end to the triple lock on pensions. There we are: it is telling the Tories to end the triple lock on pensions. We could go on to benefits, of course. The TPA wants to freeze benefits for two years, so my constituents are in for a right surprise if they get them. That is another thing that will happen at the next election. Then, of course, there is the £12 billion that has to be cut from social security. All that has got to happen, and this is a Budget for happiness? I think that it is a Budget for disaster.

Then there is the cutting back. Apparently it is imperative that the next Government cut back on winter fuel allowances and bus passes. Last week, I saw on television that a compassion pill had been invented—someone could take it and become compassionate. I think £25,000 would give every Tory Member one, to see if we could get some compassion into their hearts for the people of this country, who have suffered for five years.

The TPA says that the next Government “need” to save £70 billion; that is what it is telling you. It is not telling us, thank God—I hope they are not, mind—but it is telling you, because those people are your people. That is who they are.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Obviously, when Members say “you” they mean me. Do not worry about it, Mr Campbell. Carry on.

[Mr Campbell]

I apologise, Mr Deputy Speaker.

What have we got? We have the pension provisions. Okay, that is those people’s money and I suppose they are entitled to it, but I can tell Members what happened a few years ago when the miners were given the chance to pull their pensions out of the national mineworkers’ pension fund. I was chairman of the local branch at the time, not an MP, and I remember the spivs coming in big style. We had nothing to do with them, but they had meetings in social clubs and pubs and brought all the lads in. The Major Government said at the time that people could take their pension then as long as they got a better deal, the lads thought that they were getting a better deal and, of course, the spivs and speculators all came in. The lads all gave up their pension, saying that they were going to get a better deal, but within a year to 18 months they had to come back into the pension scheme.

That was a scandal waiting to happen, because there was no advice at all. The miners were finished—it was after the miners’ strike—and we told them to keep their pension where it was, but of course the spivs were telling them how wonderful their options were.

[Mr Jim Cunningham]

I remember exactly what my hon. Friend is talking about. Under the Thatcher Government, people were encouraged to come out of the state earnings-related pension scheme and to go into private pension schemes. I remember Rolls-Royce spending a lot of money encouraging people to do that, and look at how that ended up.

[Mr Campbell]

It nearly ended up in a scandal. The Government opened up the mineworkers’ pension scheme again so that people could bring their money out of the schemes they had been conned into joining. A lot of miners lost a lot of money, so the warning is there. As has been mentioned in many speeches today, the Government must be very careful that they do not fool the people.

I want to mention the national health service, because 65% of new contracts in the NHS have gone to private companies. I do not know what will happen if the Tories are elected at the next election, but I can tell Members one thing: in five years 65% of contracts in the NHS have become private and that is a disaster waiting to happen. I think that the Tories are waiting for 100% private contracts in the national health service, so that it is totally privatised. The Labour party is prepared to put in at least 5,000 more doctors and 20,000 more nurses, and I hope that that is a reality and that we can afford to pay for it.

I have to mention the banks, as they cost the taxpayers of this country a lot of money over five years. It is time that we started taking a lot more money off the banks than we are taking now. They owe the taxpayers of this country big time and we should increase the levy and say that they should pay the money back. We should not have bailed them out in the first place.

19:07

[Martin Horwood (Cheltenham) (LD)]

It is always interesting to follow the hon. Member for Blyth Valley (Mr Campbell). I am glad that he is such a supporter of the triple lock on pensions. He must remember, of course, that it was the Liberal Democrats and not the Labour party that introduced the triple lock and restored the link with earnings broken all those years ago by Mrs Thatcher.

The economy is undoubtedly looking stronger now, not just according to the headline figures, with unemployment down, growth up, the deficit cut by a third in absolute terms and half in terms of GDP, inflation and interest rates both under control and living standards finally on the rise. It is stronger in a more subtle way, too. We have invested in infrastructure and in apprenticeships and skills, and carbon emissions are falling even while economic growth is increasing. Renewable energy has nearly tripled. This is a more sustainable economy and has strength in that regard as well.

I have some sympathy with something that the hon. Member for Caerphilly (Wayne David) said. When we think about the performance of the economy, we do not think enough about quality of life, and it would be a good thing to have a well-being Budget as well as a classical economic Budget, perhaps delivered by the Prime Minister the day before to put the economic Budget in context. It is important to think about not just economic growth but our quality of life and the state of the nation’s well-being, as well as to have reported to this House indicators on things such as mental and physical health, crime and sense of security, biodiversity, greenhouse gas emissions and access to green space, and education and children’s happiness. That would be good in setting the context for the main Budget.

There is no doubt that in classical terms, at least, the economy is looking much stronger. Liberal Democrats and Conservatives have both taken the flak for the difficult decisions made in government that were necessary to secure those improvements and both parties should share the credit. I am certainly finding that the most popular headline policies in the Budget seem to be those pushed by the Liberal Democrats, such as taking more and more of the lowest paid earners out of income tax altogether; providing £1.25 billion over five years for mental health, particularly for children and new mums; and smaller items that might have passed almost unnoticed, such as £10 million for new school kitchens in support of the provision of free school meals.

It is on future spending plans, of course, that the coalition parties somewhat part company. The Chancellor identified £5 billion from tax avoidance and evasion and aggressive tax planning to help balance the books, which clearly we would welcome, and perhaps even push further on, but the other £25 billion he identified are all from public spending cuts, either in welfare or unnamed Government Departments. Of course, he wants to carry on cutting, even after the books are balanced, and apparently without seeking to raise a penny from those who can afford to pay more. That seems to me to be calculated to damage public services far more than they need to be damaged, to cut more than needs to be cut and to take us towards a less fair society, not a fairer one.

There were a few items in the Budget of particular interest to Cheltenham. I am very pleased that Cheltenham racecourse got a mention; it is not quite in my constituency, but it is economically very important to it. The commitment to a racing right that guarantees a more secure income from betting to racing is very much to be welcomed. I also welcome the commitment on superfast broadband, although there are still questions to be asked on exactly how that will be implemented, even in urban areas such as mine.

I welcome the endorsement for tidal lagoon power, although there are a few qualifications around that. I hope that the negotiations on the strike price will be negotiated quickly and hopefully concluded before the general election. I hope that they will reflect the fact that, unlike the nuclear industry, which receives a huge subsidy, being a 60-year-old mature industry, lagoon power is a cutting-edge, pioneering feat of engineering which has enormous potential for safe and sustainable growth in energy.

The Budget also included a reference to the intelligence services. The Chancellor made a very welcome commitment to right the injustice that has been suffered by the widowers, widows and former civil partners of firefighters, police officers and those in the intelligence services with regard to their pension rights. In the Budget documents, however, the commitment for the intelligence services is not quite so cast-iron; they talk about examining the possibility of doing the same thing for the intelligence services. Many of my constituents work tirelessly for the safety and security of this country. It is fantastic that the widowers, widows and former civil partners of firefighters and police officers will have their pension rights looked at and the injustice remedied, but it would be very unfair if the same right were not extended to the intelligence services. That is just one small way in which we could make our society fairer as well as building the stronger economy that we can all now celebrate.

19:09

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

Having been a Member of this House for 36 years, I suspect that I have listened to about 45 Budget statements, but I must say that I cannot remember one that was so self-congratulatory—the Chancellor of the Exchequer delivered it almost like a lap of honour. I must concede that he can claim one great success: he has been very effective in getting across the idea that the worldwide recession was created by the Labour party, not by the stupidities of the banking system worldwide, and that the British economy was in decline when this Government took over. The fact is that the economy was actually growing when they took over. It then went into decline and is only now creeping out. If we are now seeing a bigger than usual increase in output and growth, that is because we had fallen so low and are growing our way out of a very deep pit.

One of the things that the Tories promised before the previous general election was that there would be no rise in VAT, but their first Budget did just that.

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

Will the right hon. Gentleman give way?

[Frank Dobson]

No, because that would take up other Members’ time.

The Tories also promised to clear the deficit. The right hon. and learned Member for Rushcliffe (Mr Clarke) said that nobody can forecast that. Well, perhaps they cannot forecast it, but they did make that promise and they have not kept it; they have reduced the deficit by a third. They promised to reduce the national debt but, as my right hon. Friend the Member for Edinburgh South West (Mr Darling) pointed out, they have managed to reduce it by a fraction only by fiddling the books—that is as good a way of describing it as any. They said that they would rebalance the economy, but they have no more done that than the Liverpool captain rebalanced the membership of his team the other night. Then there is the claim that we are all in it together. Well, a lot of people have been dropped in it together, and they are not the rich people.

I would like to deal with something that, in a sense, has nothing directly to do with the Budget: taxation. The fact of the matter is that the House of Commons has had a pathetic record over the past 50 or 60 years when it comes to determining what the levels of taxation should be and how they should be applied. Time and again we have come up with a system that helps tax evasion and avoidance and lets people get away with late payment. It is no good simply blaming the civil service, because there has been a failure to deliver what every Government have said about people avoiding tax.

The problem is that the details of all taxation are formulated in secret with Treasury officials plus some experts, many of whom return to their day jobs in the private sector afterwards to pursue what they call “tax efficiency”. In other words, they exploit the loopholes in the taxation system that they helped formulate a year or two before. Years ago our predecessors decided to do away with secret treaties. I think that we now need to do away with secretly formulated taxation. I believe that in future the House of Commons should decide on the principle of a particular tax and then a Committee of the House should summon all the experts before it and decide on the detailed implementation so that we do not have the hole-and-corner fiddling and special pleading that has left us open to so much tax evasion and avoidance and late payment that people have been allowed to get away with.

If the House of Commons is to restore its reputation, we need to take our duty to check on the raising of taxation much more seriously than we have done. If we fail to do that, our reputation will continue to be low, because people expect that when Parliament passes a law, that law will work and it will do what Ministers said it would do. When we pass laws that do not do what Ministers said they would do, that undermines all of us, not just those Ministers. I think that the House of Commons has to take its duties in relation to taxation far more seriously in future, and I hope that it will.

19:18

[Mr Robin Walker (Worcester) (Con)]

It is a pleasure to follow the right hon. Member for Holborn and St Pancras (Frank Dobson), and I agree with a great deal of what he said about taxation and the importance of clamping down on tax avoidance, although I gently point out that this Government, having closed the tax gap and, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) pointed out, made our tax system more progressive, have a better record than their predecessor.

I welcome the Budget, which is about securing this Government’s legacy of growth, jobs and recovery in the economy. It is about delivering on a plan, and a plan that is working. To see that, we need only look back at where we have come from. After the previous Government left the biggest peacetime deficit in our nation’s long history, the deficit has been halved and we have started to pay down the debt as a percentage of GDP. We are achieving record employment against Labour’s legacy of mass unemployment, and growth against its record-breaking recession. The number of apprenticeships has doubled, youth unemployment has been slashed, businesses are confident to invest and people are beginning to be confident to save once again.

Under the previous Government, many people were afraid to go to the bank in case they could not get their money out. We took over in a crisis and at the end of five years of difficult decisions we will leave the country emerging into the sun. I remember, under the previous Government, walking down streets in Worcester where every third door displayed a repossession notice. Those streets now show none. I remember seeing unemployment in Worcester above the national average—well above 2,500 people. Now it is below a falling national average, more than halved since the general election, and long-term unemployment has fallen for each of the past 11 months in my constituency.

The number of people in work nationally is at its highest ever level and around 80% of the new jobs created have been full time. Opposition Members like to talk about zero-hours contracts and part-time work. Both increased hugely in the latter years of their Government, but they chose to do nothing about them. This Government have acted to ban exclusive use of zero-hours contracts and increased full-time jobs by well over 1 million. Labour Members also talk about a cost of living crisis, and it is true that over a long period wages failed to keep pace with inflation. This was the consequence of our economy being £112 billion smaller on their watch, more people being in competition for fewer jobs as a result of the 2009 crash, and the inflation caused by higher energy costs.

[Ms Gisela Stuart]

rose—

[Mr Walker]

I shall not give way. I am sorry; I want to keep time for other Members.

However, this Government have presided over falling inflation, which is now at its lowest level on record, more jobs and, in the current year, above-inflation increases not just in the minimum wage, but in average wages and take-home pay. The crucial decision to cut income tax for the lowest paid contrasts starkly with Labour’s decisions while in power to scrap the 10p rate and to push up employers’ national insurance. Instead of driving up the cost of employment and taking more of people’s wages in tax, we have helped businesses to create more jobs and, crucially, let people in the lowest paid jobs—part-time workers and those on the minimum wage—keep more of what they earn.

As the Chancellor set out, families are £900 a year better off than they were in 2010 and the official figures showing this are borne out by independent research, which Opposition Members used to quote when it suited their arguments. The latest figures from the Asda income tracker show average family discretionary spending power at £185 per week—the first time since its records began in January 2009 that that figure has risen above £180, and an increase of £16 per week since the same time a year ago. In April 2010, before the general election, the equivalent was £172.

As a member of the Business, Innovation and Skills Committee I welcome the fact that this Budget delivers further for business by cutting corporation tax to one of the most competitive rates anywhere in the world, incentivising the employment of young people and apprentices through further changes to employers’ national insurance liabilities, and launching the long-awaited reform of business rates. I welcome the extension of small business rates relief and the high street discount, as well as progress with the valuation system review but, as the Committee’s high streets inquiry concluded:

“The short-term tweaking of the Business Rates system is building up problems for the future and, instead, the....system needs fundamental reform.”

I look forward to supporting the case for fundamental reform. We need to look for a system that removes the bias against our high streets and town centres and rewards businesses that invest and expand. Business rates are currently the only area of taxation where there is not only no incentive, but a positive disincentive to take more people on, and this needs to change. I know that the British Retail Consortium and the Federation of Small Businesses have warmly welcomed the commitment to reform, and I hope that both will be extensively consulted on how it can best be delivered.

I also welcome the continuing focus on investing in skills and helping businesses to do so. The Budget saw the launch of apprenticeship vouchers for businesses to manage their own schemes, and businesses such as Worcester Bosch, Yamazaki Mazak, Titania cyber security, Comco and Green Lighting, which I visited during national apprenticeship week, will welcome the Government’s focus on this aspect.

One of the best things about this Budget is its support for saving. As chairman of the all-party group on credit unions, I warmly welcome both the £1,000 tax-free allowance for savings and the administrative changes that will remove a burden from savings organisations, including credit unions. Last week I attended my local hospital to see the launch of a payroll saving scheme from the Castle and Crystal credit union, which expanded into Worcestershire at my invitation. Such schemes will benefit from the Chancellor’s efforts to make saving more attractive.

In an age where saving for the deposit on a first home has become ever more challenging, I particularly welcome the launch of the Help to Buy ISA. My late father pioneered the policy of right to buy which helped thousands of people to own their first home in the 1980s, and I am hopeful that Help to Buy, combined with this innovative savings scheme, can help thousands more to enjoy the security of owning their own home in the 21st century. Help to Buy has already helped 184 families in Worcester and more than 900 in Worcestershire to get on the housing ladder. With the Help to Buy ISA I hope we can make a difference for hundreds more.

I welcome this Budget continuing the increase in the basic state pension. On the doorsteps of Worcester I often hear from pensioners who are very concerned about the fact that they may be paying income tax on a small pension inherited from a deceased partner. The move to increase the income tax threshold to £12,500 in the future will take thousands of those pensioners out of income tax altogether, which will be an extremely positive reform.

19:24

[Hazel Blears (Salford and Eccles) (Lab)]

It is a pleasure to follow the hon. Member for Worcester (Mr Walker). Perhaps he has caught a bit of the virus of optimism bias this evening, but it was a pleasure to hear what he had to say.

This is probably my last chance to speak in Parliament. I am sorry that it sounds to colleagues like a series of valedictory speeches, but we are all taking our opportunity, which I want to use to talk about an issue close to my heart, and it is what brought me into politics more than 30 years ago.

Poverty in Salford was all around me—poor housing, no jobs, but above all at that time a sense of hopelessness and a belief that things could never be different. I was brought up by parents who both left school at 14. They had no chance to stay on, but they were determined that their children would have the chance to do well and get on in life. I think my mum thought of the phrase, “Education, education, education” long before the former Prime Minister ever dreamed of it. Education was then and is now the key to progress and success, not just for individuals, but for our economy and our country as a whole. Social mobility is at the heart of that.

I shall start by saying a few words of thanks and congratulations—do not worry, it will not all be this nice—to the Chancellor and to the Chief Secretary to the Treasury, in particular for finding £200,000 a year for the next couple of years to support the Speaker’s parliamentary placement scheme, which has been such a success and has changed the lives of so many young people over the past four years. I set it up because I was very worried about the fact that so many of our leading Members of Parliament and our Ministers came from what I called the transmission belt—being a special adviser, working for a Minister, getting a safe seat and being fast-tracked into the Cabinet. In 1979 only 3% of all MPs took that route. At the last election the figure was 25% and rising.

Our scheme aimed to bring working-class young people to work in Parliament—people who would never have got a foot in the door. They included Kay Nuttall from Salford, who had a fantastic experience here, went back to Salford, got a great job and stood to be a parent governor at her child’s school—a contested election that she won, and she is Labour. It is amazing. Another participant was Siraj Odedra, who stayed in Parliament and is working for my right hon. Friend the Member for Slough (Fiona Mactaggart). He no doubt will have a long and, I hope, successful career in politics as well. Thanks very much for taking that step. I thank all the Members of Parliament who helped me establish the scheme and those from all parties who have agreed to take it on. I hope we will have a long-lasting scheme that gives young people the sense that they come here and can make a difference to politics.

I thank Alan Milburn for his work on the Social Mobility and Child Poverty Commission. In his recent report, “Fair Access”, he said:

“Unpaid internships clearly disadvantage those from less affluent backgrounds who cannot afford to work for free for any length of time…Given their centrality to young people’s career prospects, internships should no longer be treated as part of the informal economy.”

That means that we should introduce proper terms and conditions, including remuneration. I am pleased to say that long-term unpaid internships are virtually a thing of the past in Parliament. When I came here, they were widespread. Unfortunately, they still exist in the media, fashion, culture and the creative industries. That means that unless young people have the bank of mum and dad, they cannot make that first step in life.

I thank the Social Mobility Foundation and Victor Blank, the chairman, and David Johnston, the chief executive officer, who have done so much to remedy that situation. The Institute for Fiscal Studies has just done an evaluation of the Social Mobility Foundation’s work. It found that those programmes give people the kind of back-up they would get if they had had a private school education or a good family background, which means that among those who go to university, the Social Mobility Foundation projects increase the likelihood of attending a Russell Group institution by between 17% and 27%, compared with those with similar attainment from similar backgrounds who do not participate in the SMF programme. It is making a real change to hundreds and thousands of young people’s opportunities in the future.

The final thing I want to highlight is a local project, because for all my political career, I have been extremely proud of the things that happen in my constituency. We have the RECLAIM project, which is a two-year leadership programme, again for young people, men and women, who would never get a chance to do such work. It aims to inspire, challenge and develop people to become true leaders for the future. A young woman called Jaimeel, a local girl, who has been through the project, says:

“When I started RECLAIM I had very little idea about who I was, who I wanted to be or where I wanted to go. Due to RECLAIM I have completed several work experience placements, including a project to design a gym. I am a member of a music collective. I have had a work experience placement with the Co-op and with Investec Specialist Banking.”

She is now on the second year of an accountancy degree at Birmingham university. Her life has been changed by the RECLAIM project.

The thing that concerns me most is that in real terms in the next period, education spending will fall by 7% and the widening participation budget has been slashed from £130 million to £67 million. This a false economy. All the examples I have given show that our young people have talent. If we give them hope, encouragement and support, they will have the same chances that people like me have had. I hope that the next Government will take that on and make it a reality.

19:30

[Christopher Pincher (Tamworth) (Con)]

During most of her speech, the right hon. Member for Salford and Eccles (Hazel Blears) spoke of optimism, a word that might have been coined for her. She is never knowingly under-optimistic, and we will certainly miss her sunny disposition.

Five years ago, like the right hon. Lady, I was canvassing for election. At that time, Tamworth was a town in trouble. Unemployment was climbing to 6%, businesses, including well-known names such as Woolworths, were going to the wall and people were losing hope. If you walked from the great city of Worcester to Tamworth, and then down Glascote road, you would see in window after window repossession notices as banks took possession of people’s homes. The grisly legacy of the previous Labour Government was that people were not just losing their jobs or their shops, but losing their homes as well. Walk around Tamworth today and you will see a town that is rebuilding. Just 427 people in the working-age population—fewer than 1%—are claiming jobseeker’s allowance. Unemployment is falling faster in Tamworth than anywhere else in the country: the BBC tells us so. It also tells us that wages are outstripping inflation. Since 2010, 105 new businesses have been created in the town. New jobs and new skills are being created, and with those new jobs and new skills comes new hope. Jobs are transforming people’s lives, and this Budget was a Budget for jobs.

I should like to speak about some of the more detailed elements of the Red Book that will help people and their jobs in Tamworth. Every year, I hold an export conference at Drayton Manor to help small and medium-sized enterprises in my constituency to build the knowledge and confidence to export their goods and services. I am especially pleased that the Chancellor announced £3.5 million of new funding to help our trade with that great, unfathomable market—China. I mention that particularly because Birmingham airport has just extended its runway and it is now possible to travel long-haul directly to China, sending business folk to that place to do better business with it.

I hope that when the Chancellor considers that investment, he also remembers the £7.5 million that he has given to the northern powerhouse to aid its overseas trade delegations. In his next Budget, I hope that he will consider matching that funding to create a midlands powerhouse. Although we have in this Budget the £60 million invested in the Energy Research Accelerator in the midlands, Birmingham and surrounding areas could benefit from a midlands powerhouse strategy to help our economy to grow and prosper. I trust that the Chancellor will take that on board.

Also buried deeply in the Red Book is the determination to build up a study of regeneration on our larger estates in the midlands. That is welcome, but I hope that the Government, in their determination to look at the challenges that we face on big estates in Birmingham and Coventry, will also recognise that smaller towns in Staffordshire, such as Tamworth, Burton and Cannock, have smaller estates that face challenges and also require study and investment. I hope that the study that the Chancellor is considering will look at those smaller estates as well.

I end with a plea for a business in my constituency that benefits from the Budget. It is called Invotec, and it exports electronic circuit boards around the world—very successfully so. It employs 250 people in Tamworth and in Telford in Shropshire. However, while this Government and this Budget tear up more and more red tape, there is still a problem with exporting those circuit boards because they are used for defence purposes. No other country in the EU applies a licence regime for every circuit board that is exported. As a result, Invotec faces difficulty in selling to its clients. BIS undertook to review the situation, but the report that was due to resolve it has not been published. I encourage those on the Treasury Bench to find the time to encourage BIS to publish that report and that resolution so that Invotec can export its wares around the world and compete with our European competitors.

This Budget will be welcomed in the boardrooms and in the living rooms of Tamworth. It is a Budget for jobs—jobs that pay the mortgage, pay for the foreign holiday, and pay the taxes that pay for the schools and hospitals that we all want and need, and that must be fit for purpose in the 21st century.

19:36

[Yvonne Fovargue (Makerfield) (Lab)]

This Budget was summed up by the chief executive of Citizens Advice as a disappointment because

“People on the lowest income and those without savings benefit least”.

“But what about the increase in the personal allowance?”, I may hear those on the Government Benches say. There are two issues with that for the lowest-paid. First, there is the relationship with the benefits system. The lowest earners claiming housing benefit and council tax benefit lose 79p in every £1 that they gain through the increase in the personal allowance. Secondly, once they are out of tax, they are out of tax—they cannot gain any more for being even more out of tax. Raising the threshold at which national insurance is paid would be much more targeted at low-paid workers and enable them to keep much more of their income, and I am disappointed that that was not in the Budget.

Let us move on to the unexplained £12 billion saving in the social security budget. From where—or rather from whom—will this come? Will it be low-paid families who are claiming in-work benefits? They have already been hard hit by this Government. Will it be people with disabilities? They have already been hard hit by this Government. Will it be children in poverty or young people? They have already been hard hit by this Government. I suggest that people have a look at Real Life Reform’s reports to see the real stories of those who have been hit by this Government’s welfare changes. Those people are certainly not feeling any optimism. In fact, one of its most recent reports says that at least 75% of them were feeling “not at all” or “not very” optimistic about their chances for the future. Will this £12 billion saving be clarified before the election so that people know exactly what they are voting for and exactly who they are voting for to be hard hit even further?

“Northern powerhouse” is easy to say, and I would love us to have one, but what is actually being delivered to councils in the north by this Tory-Liberal Democrat coalition is cuts of 75% more than in the rest of the country. Simply devolving responsibility and cutting budgets will not empower anybody.

It is good that savings are not double-taxed, but I regret the level being set at £1,000 of interest. Most of my constituents can only dream of £1,000 in total savings. The Chancellor’s figures are predicated on an unprecedented rise in household debt. Surely we should be looking at ways of preventing that. It seems that debt for the country is bad, but debt for the individual is welcomed. We should at least be looking to provide help for those who fall into unmanageable debt. It is worth remembering that an extra 0.5% of interest on a rising mortgage rate will put a further 600,000 people at risk of losing their homes. Where is the help for low-income savers to build a small pot for a rainy day, keeping them out of the clutches of the payday lenders and rent-to-own companies like BrightHouse?

Talking of exploitation, what extra protection are the Government putting in place to prevent the most vulnerable from being ripped off by companies offering to help unlock their pension pot? This is Money spent one hour and £100 to set up a fake website that popped up on Google alongside the Government’s own site when a search was done for Pension Wise. We already know that this happens in many other areas. For example, there are many sites offering to help people get the European health card for a fee of £49, even though it is free. Con artists are already looking at this as a great opportunity to make a fast buck. What is being done to protect people who are googling for information on who can help? The helpline is not yet up and running, so what is being done to help those people now?

The Budget has been called a “rollercoaster” by the Office for Budget Responsibility, but I would rather describe it as a game of snakes and ladders. Unfortunately, the ladders appear to be targeted at the rich, while the snakes are for the poorest and most vulnerable. Let us stop playing games with people’s lives and make the next Budget a Labour Budget, with a strong economic foundation that delivers a fairer recovery for all.

19:41

[Neil Carmichael (Stroud) (Con)]

It is a great pleasure to participate in this debate. This is a good Budget not only because it is fiscally neutral, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) has said, but because it underlines the fact that the long-term economic plan is producing solid results. It has been endorsed by none other than President Obama, who has pointed out that the UK and US economies are the only two that are really growing, so we must be doing something right. It has also been endorsed by the OECD, which has noted the solid performance of our strategy and suggests that we should not turn away from it. The Institute for Fiscal Studies has also pointed out that living costs are now becoming more favourable. That is the overall background.

The plan is good for another set of reasons. First, it is making sure that getting a job is a good thing, which is what we want to see. I inherited 1,488 unemployed people in my constituency, but we have got the figure down to 551. That is fantastic and exactly the direction of travel we should be taking. It is part of the strategy we have pursued, and that was underlined in last week’s Budget.

We need more savings and we need to turn the economy into a saving economy rather than one of debt. The actions taken to encourage not only pensioners to save, but young people to save for mortgages, are absolutely fabulous. Our course is absolutely right and we can only conclude that we have cause to celebrate.

The Budget is also about rebalancing the economy and creating a real economy that actually makes and sells things. We need infrastructure not only to enable our manufacturers and engineers to operate, but to promote and save the environment. That is why I was really pleased that the Chancellor recognised the need for more investment in my constituency to defend our land and houses against flooding. That is appropriate because it is both a real economy activity and worth while.

Training and education is another big area. I have been campaigning for some time for a university technical college in my constituency and we are going to get one on the site of the old Berkeley power station. This Government are committed to training, because it makes it possible for people to get jobs that last and that are highly skilled and worth while. That is exactly what the Secretary of State for Work and Pensions said earlier: 80% of all new jobs are full time and 80% are highly skilled. That is what we want to see, and that is what I am seeing in my constituency. The situation has been buttressed by the performance of our economy and strengthened by the Budget.

I have also been campaigning for action to make it easier for road hauliers to recruit and train drivers. The Chancellor has helpfully responded by signalling in the Budget that that is exactly what is going to happen.

Not only have I successfully campaigned for a university technical college in my constituency; I have also been at pains to make sure that manufacturing and engineering are put under the spotlight and that schools and colleges work with business to make it a reality. We have to continue to attract investment, so what has the Chancellor done? He has made it easier and more attractive for businesses from afar to come to my constituency. That is absolutely brilliant, because we need high-tech modern businesses with plans to invest and the ability to translate research and development into products and services that people want.

I salute the overall approach the Chancellor has been at pains to take over the past five years. The real problem is that we inherited an economy that was swamped by debt, which does nothing for investors, hard-working families, the unemployed or people who need proper care. The challenge was, “Where is the money going to come from and what are we going to do to solve the problem of debt?” The Government have done something about that.

[Mr MacNeil]

Will the hon. Gentleman give way?

[Neil Carmichael]

I am not going to give way, because a lot of Members want to speak and it would be unfair to do so.

We have to make sure that we deal with our debt. We are on the right course.

The point I want to leave Members with is that it is essential that we continue to make our economy work for families, pensioners and people who need assistance, because that is how we will generate the capacity to pay for all the things we need. That is why the growth rate of 2.6% is very welcome: it is sustainable and reliable and we should embed it. The long-term economic plan should be saluted and cheered at every opportunity.

19:47

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

I am pleased to speak in my final Budget debate. In his Budget speech, the Chancellor said:

“Future economic success depends on future scientific success”.—[Official Report, 18 March 2015; Vol. 594, c. 776.]

I agree entirely, but this Budget does not do enough to unlock the potential of our science, engineering and technology industries, which have the capacity to grow and to invent and develop new products that will create jobs and wealth. Research by EngineeringUK shows that simply filling the demand for new engineering jobs could generate an additional £27 billion a year for the UK economy from 2022.

The Government claim that 8% of jobs created while they have been in power have been in skilled occupations, but the large demand for more skilled people is not being met. We need more engineers. Companies need 182,000 people with relevant engineering skills per year.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

I think I speak on behalf of the whole House when I say that we regret that this is my hon. Friend’s last ever speech in a Budget debate. On the need for more engineers and qualified people, will she reflect on the particular need for more women in engineering roles?

[Meg Munn]

My right hon. Friend may know that I have been banging on about that for years; I will come to it shortly.

There is currently an annual shortfall of about 55,000 skilled workers. The Chancellor’s commitment for financial support for PhD and research masters degrees will certainly help, but to keep up with demand we need to nearly double the number of engineering graduates. We need action on a much larger scale. We should be slashing tuition fees for engineering courses and providing bursaries to help students with living costs.

The Government tried using a programme to increase the number of skilled women engineers, but it was a complete failure. The employee ownership fund had £10 million to develop women engineers, but just £104,000 has been allocated. Unfortunately, despite me and the Women’s Engineering Society—of which I am a patron— pressing them, the Government have refused to reinvest the unspent funds into schemes specifically aimed at women.

Public services have been neglected not only in the Budget speech, but in reality. The Chancellor tried to give the impression that the Budget devolves resources to northern cities. He also claimed that

“the quality of public services has not gone down—it has gone up.”—[Official Report, 18 March 2015; Vol. 594, c. 770.]

However, the reality is that our front-line services have been cut to the bone. The fundamental question is: how they will be funded in the future? The silence from the Government Benches is deafening.

In the next 10 years, there will be a 27% increase in the number of those aged 80 or over in Sheffield. Without a new funding settlement, social care services will be severely affected, with more and more of my constituents unable to receive the preventive, joined-up services they need, and some will receive no support at all. How much longer are the Government going to spin the better care fund as a fund? They claim that my local authority will revive £37.8 million, but that figure represents the total amount of pooled budget shared with the NHS: they are top-slicing existing resources. Not surprisingly, decimating social care puts more pressure on the NHS. I am not surprised that Sheffield Teaching Hospitals NHS Foundation Trust has rejected the Government’s most recent offer on budget cuts, under which it would have had to find an additional £40 million in savings. Enough is enough.

In recent months, reports of child sexual abuse have been widespread, but a recent Ofsted report concluded that three quarters of councils do not deliver children’s social care to a good enough standard. The Public Accounts Committee has found that there has been little or no improvement in outcomes for children in foster and residential care, nor in how well they are looked after. It highlighted the abject failure of the Department for Education to take any responsibility for driving up standards. Let us not underestimate the effect of the downward pressures on local authority budgets in contributing to these issues. The College of Social Work has called on the Government to allow real social work to thrive and to invest in the service. It is hugely disappointing that the Government have again failed to make extra funding available to protect children from sexual abuse.

Social workers are often the glue that holds integrated services together. They possess the skills and expertise to lead multi-disciplinary teams and to provide help, care and, where necessary, protection. As such, the profession plays a key role in reducing delayed discharge, bringing mental health services into the mainstream, preventing emergency admissions, and supporting and enabling people to live full, independent lives. By contrast, the Budget will do little or nothing to contribute to these services.

When I was first elected 14 years ago, my constituents were seeing the start of the investment in the public realm that characterised the Labour years—new schools, hospitals and health centres and improved roads all led to better lives. This year, the revenue support grant for my local authority will have been cut by 50% compared with 2010. Local government cannot continue to absorb such pressures. It is no wonder that the people of my city have little time for the Tories. This Budget did not try to tackle the real issues at local level or to provide solutions to real problems, and it will do little to improve the lives of the constituents whom it has been my privilege to represent for the past 14 years.

19:53

[Jeremy Lefroy (Stafford) (Con)]

It is a great honour to follow the hon. Member for Sheffield, Heeley (Meg Munn). I entirely agree with her on two matters. The first is the need for more engineers, particularly women engineers. I saw that when I visited Alstom in my constituency recently and met women engineers, all of whom came from outside the UK. They are very welcome there, but with one exception, there were no British female engineers. The second is her call for a new model for health and social care funding, which the next Parliament will have to look at. At the moment, what we have from most—in fact, all—of the major parties is a sort of patchwork of funding for health and social care, but that is not enough to meet the demographic needs of the future.

In May 2010, the number of jobseeker’s allowance claimants in my constituency was 1,530, but it is now well below 600, the lowest figure since the current series of records began. However, there is absolutely no room for complacency. Not only are we working for full employment in Stafford, we want wage levels to rise in real terms. I will give a few examples of where the additional jobs have come from.

On Friday, I visited Turner Construction, which specialises in civil engineering works, house building and fitting. It plans to more than treble its turnover and work force between now and 2018, having already trebled its work force since 2009. That reflects two things: one is people’s increasing confidence in the performance of the economy, which means that they are investing in extensions and new kitchens; and the other is that house building is picking up again. Figures from the National House Building Council show that the number of homes started in my constituency has increased from 317 in 2013—compared with a national average of 188—to 473 last year. That includes a welcome increase in social house building, particularly through Stafford and Rural Homes. The increase is partly owing to the arrival of 1,000 servicemen and women and their families from this year. That has brought Stafford an investment of £150 million in military facilities and homes, and should provide a permanent boost of at least £15 million annually to the local economy, as well contributing greatly to community life.

Last month, I attended the opening of the Risual academy at Stafford college. Risual is an IT business, which was established in 2006, and now employs 120 people, with much of its increase having come in the past three years. It, too, intends to expand its staff considerably in the coming years, but it has run up against a skills shortage, as other hon. Members have mentioned. That is why it has decided to work with the local college to train young people to take up such positions.

If businesses are to expand or modernise, they need the space to do so. That is why Staffordshire county council has invested in a new business park to the north of Stafford. The wisdom of doing so was shown when Alstom announced in late 2014 that it would build its new world-class research and manufacturing facility for automation at Redhill, despite the fact that, as an international company, it could have chosen to go elsewhere. Its large transformer factory, which is the only one in the UK, has a full order book, almost all for exports. The Perkins engine plant in Stafford has also invested in the past few years, both in plant and in apprentices, and it too makes a considerable contribution to the UK’s balance of payments.

If we are to continue that story of successful job creation and investment, there is much we need to do. First, we need to improve careers guidance and advice. That issue has been raised with me by students and employers, and it is part of the manifesto of the Institute of Chartered Accountants in England and Wales, of which I am a member. Secondly, the increase in apprenticeships during this Parliament to more than 2 million needs to be maintained. I welcome the pledge to increase the number of apprenticeships to 3 million, but we need to work continuously to improve their quality. Thirdly, we have to continue to increase investment in infrastructure. Fourthly, we need to improve productivity. As hon. Members have mentioned, we still lag well behind our competitors. There is no simple solution: better training, more spending on research and development and greater investment in plant and equipment will all help, but education about work and working effectively at school are also essential. Finally, we need to maintain the drive to improve exports. UK Export Finance has been expanded, and the UK’s diplomatic network has been put at the service of exporters, but we need to do far more if we are to reach our target of £1 trillion of exports by 2020.

In conclusion, I want to address the opportunities in the heath sector. In Stafford, we are very aware of the importance of our national health service. We have been through extremely difficult times, but we have worked together as a community to ensure that we retain an excellent district general hospital with an accident and emergency department, when some people told us that it would be closed or privatised, or would become a cottage hospital. We are still campaigning for a return to 24/7 A and E with paediatrics and consultant-led maternity, and we will continue to fight. At the same time, however, I welcome the investment being made in refurbished wards, operating theatres, the expanded A and E department, chemotherapy and dialysis. In Stafford, we are building the district general hospital of the future, with an emphasis on acute care for the frail and elderly, alongside first-class general services for children and adults. I am determined to work with everybody to make that dream a reality.

19:59

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

The thematic focus on jobs in this debate helps us to get to the heart of why last week’s Budget was a huge missed opportunity. The Government had a chance to move away from a cuts agenda that has stifled recovery, but they failed to take it. Instead, Scotland alone is looking at a further £12 billion of cuts over the next four years, which will hamper our economic recovery, damage our public services and harm our poorest communities and families.

Everyone welcomes the fact that finally the economy is recovering and unemployment is falling, but it has been a painfully slow process. It is the slowest recovery from recession in history. The OBR does not expect real wages to return to 2008 levels until the second quarter of 2016. On the most recent figures, the UK’s GDP per capita is still 1.8% below pre-recession levels and the current account deficit—a measure of our trade and income flows with the rest of the world—is worse than at any point in the UK’s history.

In 2010, the Chancellor said that the UK would run a surplus of £5 billion in the current structural budget this financial year. Instead, he now expects a structural current deficit of over £45 billion. In the six years to March 2016, the Chancellor’s borrowing target from 2010 is set to be missed by £150 billion. The austerity programme simply has not worked in the way he led us to expect.

If austerity has failed in economic terms, it has been a disaster for people, especially people on the lower half of the income spectrum. When we look at the cumulative winners and losers from the changes to the tax and benefits system over the past five years, we see that those who are trying to raise children have taken some of the heaviest hits to their incomes and living standards. The distributional analysis by the Institute for Fiscal Studies demonstrates that in every income group households with children have lost relative to those without children.

Given the rapid growth of child poverty levels, we should be particularly concerned about those in the lowest-income households. The Child Poverty Action Group points out that almost two thirds of the children who are growing up in poverty in the UK today have at least one parent in work. I have said before in the House that in-work poverty is one of the greatest challenges we face. The Budget offers little that will help those families. Indeed, measures such as the increase in the personal allowance tend to benefit higher-paid workers and higher-rate taxpayers far more than those in low-paid work. That is symptomatic of the wrong priorities that we have seen from this Government. On the Government’s own figures, the poorest 20% of households will be worse off by an equivalent of £466 a year. I am fortunate to represent a constituency in Aberdeenshire where unemployment is extremely low, yet in parts of Banff and Buchan, one in four children is growing up in poverty.

[Mr MacNeil]

Does my hon. Friend agree that the increase in VAT, which was proposed by the Liberals and the Tories, certainly did not help poor people, and that it is unforgiveable that Labour abstained on that vote?

[Dr Whiteford]

I agree with my hon. Friend that regressive taxation has played an important part in driving up child poverty. The pernicious combination of low pay and cuts to tax credits and child benefit has been the main driver of child poverty in our communities and of the increased pressure on parents to comply with the sometimes quite unreasonable and disproportionate conditionality in the system.

Child poverty has long-term consequences for the health, education and life chances of those who experience it. That is why it is short-sighted of the Government to short-change families and inflict yet more financial pain on those who are already carrying the can for the financial collapse.

I do not want to leave the topic of jobs without acknowledging the significance of the Budget announcements on the North sea fiscal regime. Many of the better-paid jobs in my constituency are in the energy sector. However, it is not just those who work directly in the oil and gas sector and its supply chain who depend on the industry, but myriad large and small local businesses, including retailers, hoteliers and service providers. The Government’s U-turn on the fiscal regime in the North sea, at long last, is very welcome, but it could have been done months ago when problems started appearing on the horizon—some of them predating the fall in oil prices. It has taken the Chancellor four years to reverse the tax increases he has imposed on the sector since 2011.

Will the Chief Secretary, who is back in his place, now accept that his supplementary charge was a mistake that has had a detrimental impact on our offshore energy sector and on the people who work in the industry, onshore and offshore? Will the Government provide assurances that their poor stewardship of our oil and gas resources will give way to a period of fiscal stability for the sector? Over the past five years, the one consistent chorus that I have heard from every part of the industry has been, “Stop shifting the goalposts on tax.” While we are still seeing announcements of job losses in the north-east, it is more important than ever that the industry can plan ahead with confidence.

There has been a cosy consensus around austerity that implies that it is inevitable, necessary and unavoidable, but there is nothing inevitable about it. The Chancellor had headroom in the Budget to make small increases in public spending, while still bringing down the deficit and debt. Such small increases would help to protect our public services and our social fabric, which has never looked so worn and fragile. Professor Simon Wren-Lewis of Oxford university argues that the Government’s austerity programme may have cost the UK economic growth equivalent to 5% of GDP. No doubt economists will argue the toss on the detail, but the huge loss of potential tax revenues that that represents helps to explain why the OBR’s 2010 forecasts on public borrowing have been £150 billion out over the past six years.

An alternative approach to deficit reduction could benefit the economy and expand the tax base, bringing real and sustainable economic growth. The benefits of that are simply not reflected in the Treasury’s modelling. The SNP leader, Nicola Sturgeon, has set out an alternative to the austerity agenda to support jobs and public services. I hope that in a few weeks’ time, an enhanced group of MPs will sit on these Benches and make that case. We will be a strong voice not just for the people of Scotland, but for everyone in the UK who wants a progressive alternative to this failed austerity project and this failed coalition Government.

20:05

[Richard Graham (Gloucester) (Con)]

Today’s debate focuses on work and pensions—the two issues that are at the heart of this Government’s mission to ensure that everyone is better off working and everyone is better off saving. Neither of those things was remotely true in 2010 and both are much closer to being true today. It is vital that Britain allows this Government to finish the job of making both those crucial philosophies true.

The first part is about ensuring that universal credit is rolled out and implemented effectively everywhere. That means that, finally, the tax credits that have prevented so many people from working for longer than 15 hours will no longer prevent people from doing so and that many of my constituents will have the chance to benefit from having full-time jobs.

At the same time, we need to get the spirit of the triple lock, which has brought security so effectively to those on the basic state pension by giving everyone £950 more than they were getting in 2010, into the world of annuities, which have been liberated, so that those who need and want them can have them, but those who do not want them do not have them. The small income that many of my constituents generate from their savings should not be taxed, so that there is an incentive to save. The means-tested pension prevented many people from saving, because they could see that their neighbour was better off not saving. We must not allow that world to continue.

That is our mission. It is what my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) called free market economics with a social conscience. In my words, it is getting the economy right in order to improve lives. That is the mission that this Government have been on for the past five years and it must continue.

How does it feel on the ground in my Gloucester constituency? Youth unemployment went up by 40% under the previous Government and it has gone down by almost 60% under this Government, from 760 to 345. There were too many families with two generations, if not three, in which no one was working, meaning that there was no role model. Some 2 million children across the country were growing up in those households.

Today, we have 5,900 new apprenticeships in Gloucester, which is more than double the pace under the previous Government. That is not about statistics, but about opportunities for individuals. People who come from backgrounds that meant that they never imagined they would be able to get a job and that they faced a future on benefits are getting the skills that they need for a lifetime of opportunities. In terms of social justice, there is no better individual story than that of Beauty—a Nigerian woman who was trafficked to this country and who, with help from a number of us, was given the chance to stay in this country and is now training to be a nurse in a hospital in Gloucestershire. That is the mission.

Interestingly, only today, I read the best indicator I have come across of business confidence in the south-west of England. It stated:

“Turnover and profit growth are expected to remain steady”.

It said that there were good prospects for jobs. However, there was a but: the prospect of a new Government makes many business leaders nervous about their long-term prospects. It is no surprise that businesses are nervous. They should be, and so should parents because the shadow Business Secretary announced recently that the Labour party would axe the level 2 national vocational qualification from being considered an apprenticeship. That would be a disastrous blow for the many people who leave school at 16 or 17, start with a level 2 and go on to improve the level of their apprenticeship.

We need a Government who are fiscally responsible—as the Budget was—and who produce specific instances of improving the lives of our constituents. I was delighted with the encouragement for tidal lagoon power and its first historic opportunity to develop marine energy from Swansea bay. The company is headquartered in Gloucester and is a £1 billion project. Opportunities in the future with three or four further tidal lagoons will offer thousands of jobs in south Wales and around Gloucestershire. There was also encouragement for my plan for the redevelopment of Gloucester railway station. That was confirmed by the announcement this morning by the Department for Transport that we will be getting a new station car park with up to 240 new places and a new entrance to our station on Great Western road, linking our hospital and the station directly for the first time. That will come in 2016.

I also welcome the announcement by the Chancellor—we await the full details—that the campaign that I and my hon. Friend the Member for Winchester (Steve Brine) have been running for justice for police widows has been accepted by the Government. That is a good example of where a stronger economy allows for social justice and for the Government to make decisions that improve the lives of those who, through no fault of their own, were victims of an historical injustice.

Some things remain to be done, and we await the details of the retirement guidance on savings. That is critical and we must work to ensure that it is good. We must continue with auto-enrolment and to reverse the decline of those with pensions and savings. We might consider a new ISA for care. I say yes to 3 million apprenticeships—deeper, broader and perhaps more for the over 50s. The hon. Member for Leeds West (Rachel Reeves) said there have been five wasted years, but they were not wasted. We must now build on those years to ensure that we go forward with an even better, stronger economy, helping those who have less.

20:11

[Mr Jamie Reed (Copeland) (Lab)]

It my solemn duty to inform the House that outside this Chamber the Prime Minister has informed the BBC that he will not seek a third term as Prime Minister. I think this is a constitutional first. It is the first time in our history that a Prime Minister who has yet to win a general election—let alone contest a second one—has ruled out serving a third term as Prime Minister. We are all grateful, Mr Speaker.

As the MP who represents England’s most remote and least accessible constituency from Westminster, I was disappointed but not surprised by the Budget. The job of any Government, particularly in the wake of the Scottish referendum, must now be to facilitate the ambitions of the English regions. A new constitutional settlement for Scotland also compels a new constitutional settlement for the other nations of the United Kingdom. Difficult? Yes, but inescapable, and the Budget ducked that challenge.

As a starting point, I will again look to Scotland. During the recent debate surrounding the future of the UK, Scottish nationalists sought deliberately to conflate the entire concept of England with Toryism. That is and was a knowingly false claim. The insinuation beneath the lie was that the English are content with London’s dominance of the national economy and with how Westminster functions, but nothing could be further from the truth. In cities such as Liverpool, Manchester, Newcastle and Leeds, dissatisfaction with how London runs the show and how Westminster functions is about to erupt. People are dissatisfied all over the country, so I will talk about regional growth policy for England.

Regional devolution is a necessity, but it is only the beginning of what England requires. Beyond our great cities, the nation building that England needs will be much more difficult, and the Government must begin to concentrate their efforts in the peripheral areas outside our major conurbations. England is beset by a toxic disconnection between the governed and the governors, and that problem is central to the proposition of regional economic growth in our country. Nowhere is that disconnection more keenly felt than in that forgotten England, largely ignored by the political mainstream and the national media—those places people have heard of but have never been to. In our rugby league towns and our lower-league football cities, a crisis is taking grip that the Budget did nothing to address. Right now, England’s peripheral economies are experiencing a collapse in their reserves of “social capital”.

Social capital can be defined as those people with “talent”: literate, numerate, ambitious, financially adept and engaged with civic society. Successful regional economies are built on that class, which oxygenates local economies and acts as the arteries of local and regional civic life, including in health care, local government and commerce. In short, the Government’s task in those areas should be to create nothing short of a vibrant, thriving, mercantile class. Whatever public investments those areas might receive, without the software of social capital, new hardware will be largely pointless. We have seen that in a blunt and unsophisticated way through our foreign policy efforts in “nation building”. It is now time for nation building in England.

In many places, driven by austerity, the community fabric is being destroyed and the pillars of local society and community are disappearing. Therefore, when the Chancellor presents a Budget in which the takeaway message is that “the worst is yet to come”, those areas understandably wince. Such communities are used to dealing with the consequences of factory closures, but a new challenge is on the horizon. What happens to these communities when the Government pull out? It is a vital question and it is left unanswered by the Budget. At the centre of attempts to drive regional economic growth is the essential question about the role of the state. What size should it be? Should it command more or less resource? Should those resources be spread more thinly, performing more functions, or should they be concentrated by performing less? Away from that debate, austerity is not just crucifying the public and private sectors in these peripheral areas; it is also causing the social capital to flee. Life outside the premier league is tough, as figures released today by the Industrial Communities Alliance demonstrate perfectly.

For my constituents, the Budget provided precious little in the way of encouragement for our ambitions—those ambitions are likely to be achieved despite, not because of, anything the Government are likely to do. After 10 years of work, Copeland and west Cumbria—Britain’s energy coast—is on the verge of a transformative era that will see billions of pounds of investment, tens of thousands of new jobs, and the emergence of our area as a world leader in high-skilled engineering, manufacturing and research and development.

We are about to witness investment on an Olympic scale, and the Government should have used the Budget to ensure that we have the tools we need to deliver on our ambitions after five years of savage cuts to our area, but that has not happened. We needed more investment in developing skills for local people and our young people, to ensure that we can truly benefit from the work we have put into developing Britain’s energy coast after the last 10 years. In west Cumbria our local secondary schools require significant investment after the Government withdrew the Building Schools for the Future money—almost £70 million—allocated by the previous Government. Along with local head teachers, businesses and Cumbria county council, I am developing a plan for secondary school investment in my constituency, but the Government must contribute to that. Their record so far has been shameful, and if they cannot or will not fund new secondary schools, they should at least help to enable and expedite such schemes.

I would have liked the Chancellor to support my call for improvements to the A595, and for more to have gone into our health service. I would have liked the money that was taken from hospitals in Millom, Maryport, Keswick and elsewhere immediately after the last general election to be addressed, but it was not. It is a matter of record and frankly weird that the Chancellor spoke about the battle of Agincourt more than he mentioned the NHS in his Budget statement, and he could have done a lot more to ensure that local government was given the type of settlement it needs.

William Cobbett, the radical Tory, left a chequered legacy that was in part contemptible. He also wrote “Rural Rides”, which was published in 1830 after touring England on horseback to discover for himself the condition of England. He famously wrote:

“I defy you to agitate a man on a full stomach”.

The Chancellor and the Prime Minister should saddle up, get around England and see for themselves in the 21st century the agitation in the country at large.

20:17

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

It is an honour to follow my hon. Friend the Member for Copeland (Mr Reed) who is such an advocate for the north and particularly his area.

When I made my maiden speech in June 2010, I paid tribute to former colleagues working in the Child Maintenance and Enforcement Commission at Longbenton, and said to Members that we as fellow public servants should do all we can to protect our colleagues across the public sector from harsh Government cuts. My words obviously fell on deaf ears as far as the Government are concerned, because since then they have constantly attacked our public services in an attempt to balance the books. Under the coalition we have seen the erosion of pay and conditions for teachers, the police and firefighters, despite campaigns to demonstrate clearly that those workers have a case. To add insult to injury, the 1% pay rise announced by the Chancellor last year did not apply across the board, with some workers—particularly nurses—scandalously missing out on that below-inflation increase.

This year in the Chancellor’s Budget, civil servants will lose any remaining contractual pay progression. Moreover, the announcement of a further £30 billion of cuts to come will not only be an attack on the most vulnerable in society, who have no choice but to rely on the welfare system, but will mean public servants facing the threat of further job losses, further cuts to their pay and conditions and, for those who keep their jobs, more pressure in the workplace.

The Public and Commercial Services Union points out that in the past few years public sector workers have suffered a loss in real wages of up to 20% because of the pay freeze and pay cap, as well as higher pension contributions. Many workers in the civil service are on low pay. Ironically, the very workers who will be administering universal credit will be eligible to receive it themselves.

The Government have made big play of the fact that they want to tackle tax evasion and avoidance. However, with proposals afoot to reduce the number of Her Majesty’s Revenue and Customs staff by 10,000, the Chancellor will be hard pressed to collect the £5 billion target he has set, which falls far short of the tens of billions actually lost to the Treasury every year. HMRC is stretched to the limit and the team responsible for the enforcement of the minimum wage has fewer than 200 staff across the country. In fact, HMRC needs 100 more compliance officers to ensure that workers can get what they are due. How can the Chancellor claim that living standards are on the rise when the vast majority of ordinary people working for Government Departments across the land have seen their living standards and job security fall year on year under this coalition? Poor growth and poor pay will do nothing to boost our economy. It is no wonder the Chancellor has not been able to clear the deficit as he promised he would do by this year.

I would like to raise another important employment issue. I listened attentively to what the Chancellor had to say about helping the oil and gas industry. His words were good news for the industry, which has been hit so hard by the fall in oil and gas prices. That is all fine, but, while the measures will help operating oil and gas companies, there is nothing to ensure that in return for concessions there will be an expectation that UK fabricators will be given the opportunity to tender for related contracts. In the past five years, the majority of North sea fabrication contracts have gone overseas. The Government could do a lot more for the fabrication industry without breaching either EU or World Trade Organisation regulations. Companies such as OGN in North Tyneside have a track record of supporting thousands of jobs when they win these contracts, instead of companies from other countries which benefit directly at the expense of the British taxpayer.

In conclusion, people in North Tyneside, whether they work in the public sector or the private sector, have little hope for a better future with this Budget. The Tory Chancellor has let the people of North Tyneside down yet again.

20:19

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

The Chancellor did not deliver a Budget last week; he delivered a party political broadcast on behalf of the Tory party. The macro-economic state of our country, which is the real purpose of a Budget statement, was almost entirely absent. His speech had two purposes: first, to give the impression that the worst of austerity was now over and that the sunny uplands now beckon if only we vote Tory at the election; and, secondly, to shoot as many Labour foxes as he could squeeze into an hour on his feet. I want to show that he failed on both counts.

The Chancellor claimed that factors such as lower inflation enabled him to ease up on austerity by pulling back his target of a £23 billion surplus after the elimination of the structural deficit to a mere £7 billion. The fact is, however, that the pathway by which he might meet even this more modest target of a £7 billion cutback is, frankly, pure cloud cuckoo land. The rate at which the deficit has been cut by this Chancellor has averaged so far about £7 billion a year. The deficit still stands at £90 billion. Yet according to page 23 of the Treasury Red Book, the deficit will supposedly go down by £15 billion next year, then by a whopping £36 billion the year after that, then by £27 billion and then by £18 billion in 2018-19. These are, frankly, confetti figures. They have been manufactured and thrown about simply to produce a political feel-good factor that somehow austerity is easing off. This is the most enormous con being perpetrated on the British people. Either those figures are wildly wrong and will never remotely happen, or, if the Chancellor does choose to push them through, they will mean cuts in benefits and departmental expenditure on a scale of up to three to four times anything that has previously been experienced. I suggest that the nation will never stand for that. If he does press them, I think there will be an explosion on the streets.

The Chancellor also failed to shoot Labour’s fox that he is still determined to take the British state back to the 1930s. That was the cat he let out of the bag in his autumn statement three months ago. Page 75 of the Office for Budget Responsibility report on the Budget gives the lie to any idea that he has backtracked when it states that Government expenditure under the Chancellor’s latest twiddling of the figures

“would be the joint lowest level in consistent National Accounts going back to 1948”.

The truth is that almost all the vainglorious boasts the Chancellor made are either seriously misleading or not supported by the evidence. He claimed that the deficit was being cut this year, when in fact that is only due to the exceptional delaying of tax payments until the end of the fiscal year by the super-rich to take advantage of the reduction in the top income tax rate to 45%. Without that, which of course will not be repeated, the deficit would have risen this year, and on present policies, it will rise in future years.

The Chancellor promised the biggest increase in real spending for a decade in 2019-20. As others have said, however, that is only because of the rollercoaster boom and bust after massive cuts in 2016-18, which any Whitehall mandarin will tell the Chancellor is a crazy, not to say utterly irresponsible, way to manage public services. He claimed that national debt will begin to fall in 2019-20, but that is only because he is planning to pocket the £20 billion windfall from selling off the proceeds of bank privatisation, not because there has been any change in the fundamentals of debt inflation.

The Chancellor complimented himself on a nationwide recovery. The truth is that London and the south-east continue to pull away from the rest of the country. Manufacturing and construction still badly lag behind the financial sector. He claimed that Britain stood tall and was now beginning to pay its way in the world. The truth is exactly the opposite: the OBR is predicting that in 2014 Britain had its biggest current account deficit since 1845. I repeat that: not 1945, but 1845—nearly 200 years ago.

The Chancellor claimed that with rising real wages, albeit by a fraction and only because of the collapse in oil prices, prosperity was now returning to British households. The truth is that real wages are still nearly 8% below their pre-crash level, while at the top inequality marches on relentlessly. The ratio between the average FTSE chief executive’s remuneration and median pay in those companies is now on average more than 140:1. The Sunday Times rich list shows that the richest 1,000 people in the UK have actually doubled their wealth in the past five years, from a staggering £250 billion to an almost unimaginable £500 billion. I think the conclusion from all this is unavoidable: the real problems of the economy have not been addressed, we are investing far too little, productivity has collapsed and the UK continues to run up debts at an unsustainable rate.

20:28

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

The Government parties are trying to brainwash us into thinking they have an economic plan, when in actual fact it is an economic puzzle, given some of the measures announced.

The Government have to be challenged over their allegation that the Labour Government created the economic situation in 2010. I think the Conservatives have forgotten that in opposition they said they would match our Budget pound for pound—in fact, they said we were not spending enough. That does not suggest any economic foresight on the part of the Chancellor when he was shadow Chancellor. Moreover, the previous Governor of the Bank of England, who was an adviser to the then Chancellor and Prime Minister, said it was not the Labour Government’s fault. It actually started in America with Fannie Mae and Lehman Brothers—the bankers—and the housing crash. In other words, the Government have become apologists for the bankers, rather than holding them to account for what they did to this country and the international community in 2008.

We should also remind the Government that we kept interest rates down to help young people, in particular, deal with negative equity. We introduced the quantitative easing that the Government are still carrying out today and persuaded George Bush—funnily enough, a Conservative American President—to pump more than $200 billion into the American economy, and when Obama came in a month later, he saved the motor car industry, which helped this country. If we had not bailed out the banks, some Ministers would be losing not just their houses but their pensions. We bailed out the banks partly because we knew that otherwise the ordinary person—the pensioner, the saver, the young person saving for a mortgage—would have gone under, but it also helped to rejuvenate industry.

As far as we know, the Chancellor needs to make another £30 billion of cuts, but we do not know if that means more cuts to the police. We know there will be benefits cuts, but we do not know where they will come from, and defence cuts, but we do not know whether there will be further cuts to the NHS. I am not scaremongering. Unless the Government tell us exactly where the cuts will be, it will be open to speculation. They have emasculated local government financially—is local government facing further cuts? Is that part of the plan? In Coventry, at least 1,000 jobs will go over the next three years, and the city council has to find £75 million in cuts, which will affect basic services. Today I attended a school where children were trying to save their local library. The council has granted a reprieve, but there is another area where the council might find itself in difficulty—care in the community. There has been bed blocking at the university hospital in Coventry because we do not have enough social workers to discharge people back into their own homes. Labour will certainly put that right.

People in the public sector have not been appreciated and have had their wage increases held at 1% for the last three or four years. The Government can say what they like about wages rising by about 2%, but purchasing power has dropped by 6%. They say we are back to 2010 wage levels—well, that is one heck of a cut over the past four or five years. We have also had cuts to the legal aid budget, meaning that people cannot get social justice. We have 1.6 million people on low-wage zero-hours contracts, yet the Government have the effrontery to hand back £6 billion in tax cuts to their friends. The Chancellor proposes to cut £12 billion by reducing welfare spending and £13 billion by reducing departmental spending. Where is this coming from? Only £2 billion of cuts have been announced, so where might these cuts come from? I have already indicated some areas where they might fall.

The NHS is due to have increased funding in line with Simon Stevens’s proposals, which the Government are supposed to be in favour of. Similarly, the education budget is supposed to be protected, as is overseas development assistance. As I just mentioned, the Government have promised £6 billion in personal tax cuts, without bothering to inform us how they will be costed. We should also consider the NATO commitment to spend 2% of GDP on defence, which the Prime Minister recently advocated. If they do not achieve this, will we see more cuts and job losses in the defence industry? The Government have also promised to ring fence universal benefits and the state pension triple lock. So it comes down to this: where do they plan to make the cuts and why will they not open up and tell us?

20:34

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Coventry South (Mr Cunningham). Last week, the Chancellor proved to us all just how out of touch and deluded he and his Government are. Apparently, people in my South Shields constituency have better living standards than they did in 2010, despite weekly pay across the north-east being the lowest in the country and dropping again just last week, prices continuing to rise, public sector jobs being shed at the rate of over 1,000 a month since 2010 and having 28,000 people in the north-east stuck on exploitative zero-hours contracts.

At the same time as the Chancellor was making his statement, one of my local food banks moved to larger premises to cope with the increase in the working poor they feed. That is hardly a record that any Chancellor should be proud of. When he boasts about full-time employment, what he fails to mention is that this includes those who are self-employed. The reality for many of the self-employed I have spoken to is that they are low paid: some do not even take a wage themselves and many do not work full time. It is worth noting the correlation between high levels of self-employment, low pay and poverty. We need look only at other EU countries where self-employment is high—Greece, Spain and Portugal, which are countries where working people are struggling.

On hearing the Chancellor’s speech, people in Shields will have concluded either that he does not know their pain or that he does not want to know. I bet he does know that many of the people taken out of the unemployment figures in Shields have not found employment at all, but have been unfairly sanctioned or ushered into meaningless training courses just so they do not show up in the stats. If so, the Chancellor is painting a picture he knows does not match up with what is really happening in our country—a picture that my constituents are far too smart to fall for: they will see right through it.

It was not only on living standards that the Chancellor’s hype did not match the reality. What about his so-called northern powerhouse? We were told to expect big announcements, but in our part of the north, there were next to no announcements at all. He mentioned the north-east once in his speech and for every five projects announced in London and the south-east, he announced one for the north-east.

Looking more closely at the Chancellor’s plans for our region, it appears that they are totally vacuous and simply an afterthought. The northern transport strategy document re-announced a number of projects, some of which are still not under way. There was no announcement on business rates. Talks about reopening a ferry route to Norway were “welcomed”, but without a commitment that the Government would do anything to make any of these things happen.

I have been a Member of this House for just under two years. Prior to that, I lived and worked under this Government, and I am telling the House now that things were tough—at times, really tough. Life beyond this place has got tougher for the people of this country. I wanted to be here to give a voice to the people in my constituency who have suffered under this Government, and to fight for a Labour Government because Labour has a different way—a fairer and more balanced way.

We know from the Office for Budget Responsibility that another five years of this Government will bring a level of pain that will be nothing like the pain people have already seen. People have a choice. They can opt for cuts to the vulnerable on a faster and crueller pace, deep and damaging cuts to our police, defence and social care budgets and total decimation of our NHS coupled with VAT rises, or they can choose Labour’s plans to make work pay and bring the deficit down in a more responsible way, while protecting vital services like our NHS.

I conclude with the observation that the sun is certainly not shining yet, but come May, it will be—when we have a Labour Government.

20:39

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I place on record my indirect interests in the register entry for my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford).

The Chancellor had a throwaway line in the Red Book referring to a review he plans to undertake if he is re-elected and in government about whether the airport in Plymouth is needed and should be reopened. Let me point him in the first instance to the report produced for Viable, the group that has tenaciously kept the issue on the boil, and the report of some 146 pages produced for the city council at the end of 2014. I ask him to use those as a starting point rather than to delay the process by seeking a brand-new report covering the same ground.

In its Plymouth Plan, the city council has already made clear its intention of protecting the airport site. We also know that at last, as part of its bargaining tool to persuade the Government to back its expansion plans, Heathrow is considering offering slots or cash to smaller regional airports, and it will be interesting to see whether Gatwick follows suit. Governments of all complexions have missed a trick in relation to regional growth by not consistently supporting airports such as Plymouth. Plymouth should be receiving the sort of help that Dundee has received, which I think could be provided by the Government or one of the London bids.

The inclusion of Plymouth’s enterprise zone bid says a great deal about the quality of the offer, and I congratulate the Labour city council on making such a strong case, alongside the local enterprise partnership and businesses. Chancellors do not throw money away so close to a general election if they do not believe that doing so will bring about a positive outcome. Plymouth, under Labour, delivers.

One of the Government’s biggest failures has been their inability to keep the level of housing benefit down. Over the past five years, they have spent about £1.8 billion more than they planned to spend on housing benefit for people in work because they have depended on it to meet the cost of the otherwise higher rents that they have imposed through “affordable rents” or the private sector. That has happened notwithstanding the earlier mantra from, in particular, the then Housing Minister, the right hon. Member for Welwyn Hatfield (Grant Shapps), who made a number of rash promises virtually all of which, unsurprisingly, proved to be inaccurate or undeliverable. Since the election of this Government, the number of working people who are forced to claim housing benefit to pay their rents has risen by more than 50%, and the Budget does nothing for them.

The Budget is very light on anything specific to the delivery of much-needed social rented housing. There is the offer of an individual savings account for first-time buyers, but that will not solve the main problem, which is the fact that we are not building enough homes. I find the Secretary of State’s bare-faced cheek extraordinary, given that his Government have delivered the lowest level of house building since the 1920s. During the run-up to the great crash, Labour were delivering 200,000 homes a year. This Government’s record of building new and affordable social rented housing is abysmal, and enormous pressure has been imposed on the private rented sector, pushing up rents.

The Government cannot duck the evidence. The UK Housing Review and the live tables of the Department for Communities and Local Government give clear figures for social rented housing starts and completions. The Chief Secretary may wish to listen, because he got the figures wrong in the Chamber the other day. In 2009-10, there were 39,492 starts and 30,939 completions. In 2013-14, the last full year, there were a meagre 3,961 starts and 7,759 completions. That is a massive drop in the number of homes available for social rent. It is also a further indication that the rise in rents that has resulted from people being given no option but to rent in the private sector, and the increasing number of so-called affordable rents, have contributed to the inexorable rise of the housing benefit bill.

The Budget contains no measures to boost social housing numbers. Indeed, the Conservatives are now talking about introducing a right to buy for housing association residents, which would reduce the stock further and leave people with low incomes facing the pressures of the private rented sector with little hope of finding homes that they could afford without recourse to housing benefit. Successive housing Ministers have promised that their enhanced right-to-buy scheme, offering up to £77,000 per unit, would lead to a one-for-one replacement, but that scheme has failed dismally. Analysis shows that only one home has been built for every 21 that have been sold. That is not solving the problem.

The Government are pushing more and more housing associations to become developers, building homes for market sale rather than to meet social need. They will not be able to cross-subsidise from the market sales sufficiently to cover the loss of units from a potential right-to-buy option. That idea, floated by the Prime Minister, is yet another reason why people should vote Labour at the election. The hopes of home ownership aspirants can already be fulfilled through existing shared ownership schemes and other low-cost home ownership initiatives.

There has been a dramatic and deliberate reduction in the amount of social housing, and a further right to buy would have a devastating effect. The slashing of the social housing grant has already led to a reduction in the number of units that it has been possible to build. David Orr, the chief executive of the National Housing Federation, has said that this is

“not a budget to end the housing crisis.”

He did not mince his words, and he was right. Sadly, it is not a Budget that matches the reality of most people’s lives, and it will not help them to deal with the pressures that they face.

20:45

[Graeme Morrice (Livingston) (Lab)]

Like the Chancellor’s previous five Budgets, this one does nothing to recognise or address the problems faced by my constituents and many others across the country. It is a Budget that yet again demonstrates how out of touch this Government are.

The Chancellor talks of a national recovery and an economic plan that is working. However, the reality is that thousands of hard-working people in my constituency continue to experience low pay and in-work poverty. The Joseph Rowntree Foundation is right to say:

“There was little in today’s Budget to enable those on the lowest incomes to be part of an economic recovery.”

Indeed, about 18,000 of my constituents currently earn less than the living wage.

The Chancellor’s announcement of a 20p increase in the minimum wage will mean very little to my constituents. It is yet another example of a broken promise from a Chancellor who, over a year ago, promised to increase the minimum wage to £7 per hour. People in my constituency and across the country deserve better and it is clear that more needs to be done to help those on the lowest incomes. It was a Labour Government who introduced the minimum wage and it will be a Labour Government who go further and increase it to £8, because that is what people deserve.

[Adam Afriyie (Windsor) (Con)]

I have been listening very carefully to the hon. Gentleman’s words. Will the Labour party raise it to £8 even if it should be higher than that?

[Graeme Morrice]

I think that is a possibility, and I am glad the hon. Gentleman acknowledges we will have a Labour Government on 7 May.

Throughout the past five years, people have come to my surgery to tell me that their benefits have stopped or that they are struggling to pay their bills, and what is clear is that, month after month, people are worse off under the Tories, as the prices of food, heating and travel rise faster than wages. Given the continued struggle faced by my constituents and many others over the last five years, it raises the question: who is this Budget for? The answer is that this is a Budget made by the rich for the rich.

The bedroom tax continues and so do zero-hours contracts, and retail energy bills do not reflect the fall in wholesale costs. There can be no getting away from the fact that working people are £1,600 a year worse off after five years of the Tories. Indeed, the Institute for Fiscal Studies is right to say that

“the poorest have seen the biggest proportionate losses”.

The Budget offered nothing to help families with children, who have borne over 70% of the impact of this Tory Government’s changes to tax credits and benefits. The Chancellor said they “choose families” but it is clear from the Budget that they choose millionaires.

The Budget also offers nothing to help our young people. It speaks volumes that there was hardly any mention in the Chancellor’s Budget speech of any real commitment to help our young people and their prospects. Our young people are the key to the future success of our country, and our young people deserve the chance of a secure job with decent pay.

I know from speaking to young people in my constituency that many feel a sense of hopelessness about their situation. Indeed, nationally youth unemployment remains high, with 743,000 young people currently out of a job. In my constituency, youth unemployment remains above the national average, with 3.6% of young people in West Lothian unemployed. Even when our young people do get jobs, many of them are insecure zero-hours contract jobs. There was nothing in the Budget to address any of these problems, and that once again demonstrates how this Government have written off our young people.

Young people need a Government who will listen to their concerns and ensure they have a better future. They need a Labour Government who will introduce a jobs guarantee scheme for all young people out of work for a year and over 25-year-olds out of work for two years, and I have no doubt that this scheme will be of enormous benefit to all young people in my constituency.

My constituents cannot afford another five years of the Tories, but it is clear that there would be further pain to come if they were to form the next Government. Indeed, the Office for Budget Responsibility has warned that there is to be

“a sharp acceleration in the pace of implied real cuts”.

We need a Labour Government to ensure that that does not happen. We need a Labour Government with a plan for working people and their families and for our young people. We need a Labour Government who will stand up for the whole of my constituency and for the whole of our country.

20:49

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

It is great to follow my hon. Friend the Member for Livingston (Graeme Morrice), who has reminded me that when Labour introduced the minimum wage, it was fiercely opposed by the Conservatives, who said it would bring about the end of the universe as we knew it. Also, unless I am much mistaken, that was when we had our last all-night sitting in the House. We kept the debate going until 8 o’clock in the morning, with a full house on the Labour side all waving their Order Papers as we brought in the minimum wage. That was one of our proudest achievements, and one that we should never forget. We should never take any lectures from the Conservatives on that subject.

Today, I want to talk about the dog that did not bark—the thing that was not mentioned in the Budget. According to the latest news from Asda Mumdex, 70% of women think that it is the most important factor affecting their lives. It is called the NHS. I am not sure whether its omission from the Budget was the logical extension of the Government’s trying to take politics out of the NHS, which the right hon. Member for South Cambridgeshire (Mr Lansley) tried to do with dubious success. However, to try to do that now would be to deny the fact that the NHS is deeply political because it is a service that is dependent on an annual decision on what percentage of the tax take we should spend on it.

I do not know whether the Conservatives want to take politics out of the NHS by moving to an insurance model, for example, but if they do, I would have to warn them about making comparisons with what is happening in the United States of America. The US spends 16.9% of its GDP on health but produces only 3.1 hospital beds per 1,000 of population, whereas we spend 9.3% of our GDP on health and produce three hospital beds per 1,000 people. So ours is an extremely efficient system. My constituency has some of the best in NHS provision, as well as the second largest number of doctors and life sciences professionals in the country. If something cannot be done in Edgbaston, in the University Hospitals Birmingham NHS Foundation Trust, then it cannot be done.

I have set up an NHS tracker service for my constituents, and in the past month, 400 of them have come forward with responses which show that 17% said that either they or a member of their immediate family had been to accident and emergency in the previous month, of whom only 78% were seen in under four hours, with 16% waiting longer to be seen. Also, 67% of the respondents said that either they or a family member had seen a GP in the previous month, with 34% being seen on the same day and 24% being seen in one or two days. However, 11% had to wait more than a week to be seen, and 8% waited more than two weeks. This tells us that the service is being stretched to the limit.

We also know that the Government have tried to delay a number of decisions until after 7 May. For example, when Monitor tried to arrange the tariffs for specialised hospitals, the University Hospitals Birmingham NHS Foundation Trust faced a potential deficit of £60 million because of the funding structure, but when a number of hospitals objected, all that happened was that Monitor delayed the decisions. We will now have to wait until the end of May or early June and hope that the problem will go away.

The problem will not go away, however, because the botched £3 billion reorganisation that the Tories and the Lib Dems saw through not only cost us a lot of money but created unnecessary structures. We now have about 440 new bodies and administrative layers. They have not improved patient care, but they have diluted accountability and made it even more difficult to find out who is actually in charge.

In addition, there has been an increased reliance on agency staff in our hospitals, and people have been made redundant only to be rehired. We have ended up with a Tory Government who are trying to make us believe that the NHS is fine and things are working, but even in the best areas, such as mine, things are about to be stretched beyond their limits. The dismantling of some of the state structures that has taken place over the past few years will become worse if there is another Tory Government. In three areas—local government, education and the health service—state structures have been dismantled in a way that makes some services simply undeliverable.

So what I want in my patch in the NHS is: a return of the 48-hour GP guarantee; a stop to the closures of the walk-in centres, because the ones we have are being used; and a better use of our pharmacists. Above all, I do not just want an extra 20,000 nurses and 8,000 extra doctors to be recruited—I want more of them to be trained. Although the Chancellor forgot to mention the NHS, it is still extremely important. However, it is currently not funded and structured in a way that is sustainable, and that is one of the most important omissions of this Budget.

20:56

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

Since this Government were elected five years ago, three mantras have been quoted by the Con Dems against the Labour party, and I want to debunk some of them. The first is the suggestion that, somehow, the global financial crisis was caused by the Labour party. [Laughter.] The second is that, somehow, that was because we had a light touch in our regulation of the banks. The third is that, somehow, our party is anti-business. Conservative Members started laughing when I mentioned the global crisis, but they perhaps need to be reminded that when Labour came to office in 1997 the national debt to GDP ratio was 43% but by 2002, five years later, it was down to 30% under Labour. So let us not have any lectures about our financial prudence.

The banking crisis occurred later—I expect more laughter—but Conservative Members should stop laughing because if the banking crisis was our fault, why were the USA, Japan and the entire world having the same problem? That is why it was called the global financial crisis. It was not the UK’s financial crisis; it was the global financial crisis, which we know started with the sub-prime mortgages in the USA, the collapse of Lehman Brothers and the other things that happened. So it is wrong for the Government to have said what they have said for the past five years, and I hope that the British people, who know the truth, will reject them at the forthcoming election.

We keep hearing about our light-touch regulation, with people saying, “You took your eyes off the banks and you regulated them too lightly.” Yet this Chancellor and this Prime Minister were saying up until 2010 that the Labour party was far too stringent on the regulation; we were being accused of stifling business and of over-regulating the banks. So which way do Conservative Members want to play this: were we overly light or too strong? I would say that we regulated the banks properly. Again, the Government have collective amnesia and they need to be reminded.

The current national debt is £1.36 trillion, whereas when Labour left power in 2010 it was £0.76 trillion, about half what it is now. The national debt to GDP ratio is about 95% now, so we need take no lectures from Conservative Members about financial management and fiscal prudence. The reason there remains such a high debt, much bigger than when we left office, is that the Chancellor’s austerity measures meant he was not able to get the revenue receipts he needed to close the deficit.

Although jobs have been created, which we welcome, most are on zero-hours contracts, part-time jobs and poorly paid jobs. Many people still have to rely on working tax credits to make ends meet. It is worth remembering that, in 2007, the Labour Government borrowed £37.7 billion, but spent £28.3 billion on big projects, such as building hospitals and schools, which helped the economy. By contrast, when this Government borrowed £91.5 billion in 2013, they invested only £23.7 billion. The rest was used to bring down the budget deficit, so there has been no economic miracle.

Today’s debate is about jobs. We are told by Government Members that we are the party that is against business. Well, since 2010, it is Labour that has constantly urged the Government to fulfil the infrastructure projects that we pushed for and it took years for the legislation to be passed so that they could go ahead. We called for a reduction in VAT and in national insurance to help small businesses. We called on the Government to reduce business rates to enable start-ups and to allow local authorities to help small businesses. We have constantly argued that the banks were not lending enough money to small and medium-sized enterprises. We are the party that said we would build 200,000 new homes. We are the party that said that all 18 to 24 year olds who qualify would get apprenticeships, which is about 1 million young people. We are the party that said that it would create 20,000 more nurses training places and 8,000 more doctor and GP training contracts.

[Adam Afriyie]

The hon. Lady is saying that Labour is the party for all sorts of things, but was it not also the party that did nothing about zero-hours contracts when it was in power?

[Yasmin Qureshi]

When zero-hours contracts are properly used, which is rare, they are fine—I am talking about students who work part time—but we now have 1.5 million people on them.[Interruption.] I am sorry; I thought that the hon. Gentleman wanted to intervene again.

[Adam Afriyie]

I am happy to intervene.

[Yasmin Qureshi]

No, no. To say that we are a party that does not believe in business or enterprise is wrong. We are a party with a social conscience. Some years ago, when my right hon. Friend the Leader of the Opposition talked about producers and predators, he was said to be anti-business; he was not. We are the party that believes in fairness. We are the party that believes that if a person does a day’s work, they should be properly remunerated. We are the party that spent many hours in the previous Parliament arguing for the minimum wage when everyone in the Conservative party was trying to argue against it. We have a record of which we should be proud.

21:03

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

Last week, we had the Budget announcement and the eclipse. One plunged the nation into darkness and the other one was a rare and important astronomical event. [Interruption.] I got one laugh, thank you.

The Chancellor claimed that Britain was walking tall again, giving the impression that our economy was booming, that well-paid jobs were being created, and that voters were better off now than they has in 2010. But are voters really better off, because that is not what they are telling me in Heywood and Middleton?

Many of my constituents work in the public sector where they have seen their pay frozen since 2010 or have been subjected to below-inflation pay rises. Some NHS workers have seen their pay fall by as much as 30% through the withdrawal of recruitment and retention premiums and reductions in out-of-hours pay on top of flatlining basic wages, not to mention additional pension contributions.

[Ms Gisela Stuart]

At the same time as people on regular employment contracts are undermined, our hospitals are spending extraordinary sums on agency payments, destabilising the labour market even more.

[Liz McInnes]

My hon. Friend makes a good point about the amount of money NHS trusts are having to pay for agency workers. It is scandalous that NHS staff are being made redundant and the spaces created are having to be filled by agency workers. The problem is also caused by the stress that is now caused to NHS staff, as so many NHS staff are off sick with stress that yet again the gaps are having to be filled by agency workers.

To get back to Heywood and Middleton, none of my constituents is coming to see me to tell me how much better off they are now than they were in 2010—quite the opposite, in fact. As TUC general secretary Frances O’Grady said,

“The Chancellor’s Britain, where happy people skip to their secure jobs to celebrate their rising living standards, is not one that many will recognise.”

Last week, the Prime Minister was falling over himself to tell me that the claimant count in Heywood and Middleton was down, in answer to a question I had not asked. The reality that he does not see is that constituents come to see me in dire financial straits because of benefits sanctions when their benefits are withdrawn for minor reasons, such as being a few minutes late for an interview. That leaves them penniless and forced to seek help from one of the biggest growth industries under this Government—food banks. Yes, the food banks do wonderful work and I for one am very grateful that so many people give freely of their time and energy to help those less fortunate than themselves, but I have yet to talk to a single volunteer at a food bank who does not express regret that such a thing should have to exist.

Cuts to taxes on savings do not mean much when there is no money to save. In my constituency, 40% of local workers are paid less than the living wage, with women workers particularly badly affected. Sadly, my constituency features in the top 10 worst areas of the UK for payment of the living wage. When I asked the Prime Minister about those figures he responded on the subject of the minimum wage, yet the minimum wage has risen by just 70p under this Government and is set to rise by 20p in October. Those meagre sums will go nowhere near far enough to meet the Government’s objective of ending in-work poverty.

Enforcement of the minimum wage is lacking in resources and the HMRC team responsible comprises fewer than 200 staff across the whole country. At least 100 more national minimum wage compliance officers are needed to ensure that workers get what they are due. Although workers have an alternative means of pursuing the minimum wage by applying to a tribunal, the imposition of fees for applications to employment tribunals mean that workers who might have taken that route will approach HMRC instead, generating yet more work for an already under-resourced work force.

Today, we have the evidence of five years of Tory-led austerity, with wages driven down, damaged public services and devastated lives. In the Budget, the Chancellor has reminded us that he is either incapable of or uninterested in building an economy that works for the good of all. Perhaps only the cuts to beer, cider and spirits will be of comfort to public sector workers, who might want to drown their sorrows at the prospect of even more cuts in their living standards to come.

21:09

[Mark Durkan (Foyle) (SDLP)]

I rise not to make any party political points on the Budget, with regard to parties formerly or currently in government, but to respond to a Budget statement that was full of smuggery and spin. It seems to me that the Chancellor was claiming circumstantial credit for things such as low commodity prices and low inflation and using that context to set out a Budget stall that was very much about making an election statement. However, I need to look at such a Budget and ask what the implications really are for the next spending period and for my constituency.

Beyond some of the measures that the Chancellor announced, not all of which I disagree with—indeed, some of them no one would disagree with—it is quite clear that he has locked in further heavy cuts for the next spending period, not least in welfare. I represent a constituency that is consistently ranked as having the highest level of unemployment anywhere in the UK, and the problem is genuinely lack of work, not lack of work ethic. It is also a border constituency. We must therefore judge the measures in the Budget and in what is promised for the next spending review, courtesy of the previous autumn statement, in terms of the implications for our economy and our services.

It is not the case that the Budget has little to do with the circumstances in a place such as Derry because all the key service decisions are devolved. Many of those decisions are rightly devolved, and I want to see more decisions made at that level, but of course the spending power of the devolved Executive is determined here, and of course the working circumstances for many of our businesses as well as our services are still determined by the Chancellor’s Budget statement.

The hon. Member for Birmingham, Edgbaston (Ms Stuart) pointed out that the Chancellor said nothing in his statement about the health service. I agree with her, but actually he said very little about the public services at all, and in circumstances in which he was using a degree of spin and a few wheelie turns to try to say that austerity was coming to an end earlier and that an easing was in sight. Nothing was offered to the people in key public services who have endured pay restraint after pay restraint, even as their work loads have increased. As payrolls have decreased and work loads have increased, the pressures on them have gone up and the rewards have gone down. With the exception of what they can find in the changes in the personal tax allowance, absolutely nothing—not relief or respite—was offered to them. Instead, they are being offered more of the cuts that will affect the circumstances in which they are working very hard to provide those services.

It must be remembered that the private sector in Northern Ireland, and certainly in my border constituency, is very dependent on selling across the border, and in circumstances in which our trade is affected, so our retail sector and those selling services to households are losing out because, with the current exchange rate, trade is going across the border and people are purchasing across the border, rather than locally. For those who export, much of their business is in the south, and obviously the continuing pressures in the eurozone and the high exchange rate affect those markets. The Budget therefore contains no great news for our public sector, on which Northern Ireland is very dependent, and nothing to relieve the pressures faced by our private sector.

The Chancellor referred to the Government’s moves in relation to corporation tax for Northern Ireland and the Corporation Tax (Northern Ireland) Bill, which we welcome. We recognise that the Chancellor made it clear that he is committed, if he is returned to that position, to go on reducing the headline rate of corporation tax for the whole of the UK, so the differential that we will achieve for Northern Ireland will not be as marked as it was when people first sought the devolution of corporation tax. We also know that the Government are saying that the commencement of the devolution of corporation tax in 2017 will only be on the basis that the Treasury is satisfied at that point that Northern Ireland has a balanced and sustainable budget.

We see this year that the Government set out pre-conditions for the introduction of the corporation tax Bill, such as that the Assembly had to deliver welfare reform measures in terms that it might have preferred not to. The question arises whether the Executive and the Assembly will similarly be told in 2017 that what will then be the corporation tax powers Act will be activated only on the basis of decisions then made, such as the welfare cuts to be imposed at that time. We know that £12 billion of welfare cuts are foreseen in the next spending review period, so again we have to ask where that is going to leave the Executive in Northern Ireland and, more importantly, people in my constituency.

21:16

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

It is a pleasure to follow my hon. Friend the Member for Foyle (Mark Durkan), who spoke with characteristic passion on behalf of his constituents in Foyle and more broadly in Northern Ireland.

In his speech last week, the Chancellor of the Exchequer said that

“the north grew faster than the south”.—[Official Report, 18 March 2015; Vol. 594, c. 767.]

However, when we scratch beneath the surface, the Chancellor’s headline figures do not match the reality on the ground. In the region where my constituency is situated, the north-west, it is true to say that in a single year, 2012-13, the north-west was the fastest growing region in the country, and that is welcome, but if we look at the first three years of this Government, 2010 to 2013, the overall figures for the north-west show that we have grown more slowly than any region other than Northern Ireland. So yes, there is welcome news in that one year, but taking the three years as a whole, the picture is not quite the one that the Chancellor set out.

I welcome the fact that unemployment is down. In my constituency in Liverpool, the memories of jobless economic recoveries of the past are very real, especially the impact of the Thatcherite policies of the 1980s. Unemployment can leave a scar on communities that may last for generations. As we all know, the evidence shows that once people are out of work, it can be very hard for them to get back into it. In my constituency many people are managing to find work. Over the past year the claimant count is down by 28%. Work is a good thing, but the quality of jobs is surely critical as well. Once again, the story is more complicated than that set out by the Chancellor last week or the Secretary of State earlier this afternoon.

Too many of the jobs in Liverpool are insecure, low paid jobs. The growth in agency work lies behind a large part of the fall in unemployment in my constituency. Recently, I met two local people, one of them a constituent, who worked at a factory in Liverpool. They had worked there for several years. However, they are paid and technically employed not by the company that runs the factory, but by one of the biggest agencies and suppliers of contract labour. They do the same work as regular staff, but are paid £2 an hour less, and the supply of hours is sporadic and uncertain. Their holiday and sick pay entitlements are far worse, and scandalously, one of them told me that when he suffered an injury at work, the medical centre at the factory turned him away because technically he was not an employee. Surely such working arrangements are unfair and wrong.

[Julie Elliott (Sunderland Central) (Lab)]

However bad those contracts are, does my hon. Friend accept that the explosion of zero-hours contracts, which are even worse than agency contracts, has occurred under this Government because of the tightening of some regulations to try to stop the abuse of agency worker regulations?

[Stephen Twigg]

I am grateful to my hon. Friend, who is absolutely right to make that point as we seek to understand the reasons for that and find solutions. I will come to that next.

I pay tribute to the employment, enterprise and skills select committee of Liverpool city council and its chair, Councillor Barry Kushner, for undertaking painstaking research that shows the extent of this problem. Their work has revealed that there are currently about 6,500 vacancies in Liverpool, over half of which are agency jobs. The council has identified the Swedish derogation as a major cause of the increase in exploitation. This derogation allows for agencies to employ staff directly and the eventual engager—the employer—to treat workers less fairly than their directly employed workers. Without the derogation, the system would still allow for the use of agency workers, which can still be of real use in various sectors, but the engager would be obliged to give the agency workers the same rates of pay as their permanent staff after a 12-week period in employment. The two local people I met who have been working for years at the same factory, but are paid less than the colleagues they are working alongside, feel like second-class citizens. Reforming this area would make a real difference for them. That is why I am delighted that my hon. Friend the shadow Business Secretary has promised that a Labour Government would end the Swedish derogation for agency regulations—a change that cannot come soon enough.

Other long-term changes need to be made. To tackle the structural problems of a low-pay, low-skilled job market, we need to ensure that entrants to that market have the appropriate skills. As a country, we have failed for far too long in this respect. My right hon. Friend the Leader of the Opposition has talked about the “forgotten 50%”—the young people who do not get the opportunity to go to university. It is welcome that fewer young people are unemployed, but our youth unemployment rates are still significantly higher than those of countries such as Germany, Austria and Norway that have invested in high-quality technical, vocational and practical education that breaks down the barriers between different sorts of learning.

We need to strengthen devolution within England. That is why the Andrew Adonis review recommended an English devolution Act, a central plank of which would be to devolve powers and funding for skills, and commission 19-plus further education provision based on local decision making. On top of this, city and county authorities should have the power to commission the Work programme in order to get the long-term unemployed back to work. I pay tribute to Liverpool’s mayor, Joe Anderson, and to Liverpool city council for the extraordinary work they have done to promote apprenticeship and work opportunities for people of all ages, but particularly young people.

[Ben Gummer (Ipswich) (Con)]

The hon. Gentleman is making a speech of characteristic subtlety, which is why he is no longer on the Opposition Front Bench. He is making some good points about apprenticeships. Does he not regret that the Leader of the Opposition has pledged to end all level 2 apprenticeships across the country on a blanket determination, which will do more damage to people’s ability to learn good skills than any other policy that anyone is proposing in this House?

[Stephen Twigg]

That is not what the Leader of the Opposition has said. I worked on that policy. We want to ensure that apprenticeships are high quality, learning from the countries I mentioned that have a great track record in this area. Our policy is not the policy to which the hon. Gentleman referred.

I appear not to have received the extra minute for the intervention that I think I should have had, Mr Speaker. Should I have that extra minute?

[Mr Speaker]

Yes. I would not want the hon. Gentleman to be denied, and I think that in the interim the appropriate adjustment has been made. I am glad that he is alert to his rights.

[Stephen Twigg]

I am immensely grateful to you, Mr Speaker.

To get this right, we need to give priority to spending on education. That is why the commitment that the Labour party has made to protect the entire budget of the Department for Education, including early years and 16 to 19, is so important. That contrasts significantly with the Conservative policy, which does not protect early years and 16 to 19. Those are precisely the areas that have faced the biggest cuts over the past five years, and they would face even bigger cuts were the Conservatives to win again. Investment in education and fairness in the jobs market should be features of a Budget, but they were not features of this one.

21:24

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

May I first take the opportunity to note the many valedictory speeches by right hon. and hon. Members who have chosen to step down at the forthcoming general election? They brought back many good memories of my time working with them.

My right hon. Friend the Member for Edinburgh South West (Mr Darling) reminded us of the necessary steps he took after the global banking crisis, which, of course, the Conservative party wants to airbrush from our recent economic history. I am glad we managed to keep the cash machines working, but the recklessness of the banks left a dreadful legacy and deficit that has stayed with us to this day.

My right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) spoke passionately. He has been a good friend to many Members on both sides of the House and he will be an enormous loss to Parliament. He is such an impressive individual and one of the great parliamentarians whose capability is incomparable.

My right hon. Friend the Member for Salford and Eccles (Hazel Blears) spoke passionately about her advocacy of getting young people involved in politics. Her achievements will be seen for many decades to come. My hon. Friend the Member for Sheffield, Heeley (Meg Munn) and my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) also talked about their belief in public service and the need to invest in public services, and they told us that we should never forget the need to regulate the banking sector and make sure that the dreadful activities we have seen are never repeated. Those were fine valedictory remarks. I do not have time, in the final moments of several days of debate on the Budget, to congratulate and thank my many other colleagues who spoke passionately today.

This is the coalition’s last Budget. The final verdict is in. There are no more opportunities to pull rabbits out of the Government’s Budget boxes, whether they be red or yellow. For all the Chancellor’s complacency about walking tall and how we have never had it so good, the residual legacy of last Wednesday was confirmation that, if the Government parties get their way with their proposed public investment in vital public services, the rollercoaster will be pushed over a precipice.

The Chancellor tried every trick in the book to distract from the Government’s plan for extreme cuts, and he hoped that the public would not notice his record of failure on living standards and borrowing. Every target he has set has been missed and every promise broken.

In 2010, the Chancellor told us that the structural deficit would be eradicated in time for this Budget—it would all be gone—yet we are still borrowing £90 billion this year, which is only a 5% fall from last year’s deficit. Tax receipts should have been strong and tax credit costs significantly lower by now, but in the low-wage economy that this Chancellor has fostered—with an epidemic of job insecurity and zero-hours contracts up 20% in this past year alone—revenues have stagnated and the Government are spending £25 billion more on social security than the Secretary of State for Work and Pensions and the Chancellor had expected. We were meant to have an export-led recovery, heading towards £1 trillion-worth of exports by 2020, but we have already fallen a little bit behind that target—about £300 billion behind it. Moreover, our triple A rating, which was once this Chancellor’s litmus test of economic credibility, was, of course, downgraded.

It was not supposed to be like that, as my hon. Friend the Member for Caerphilly (Wayne David) has pointed out, and this is not where the Chief Secretary’s party wanted to be, either. The Budget spectacle over the past few days has been not of a responsible Government focused on the economy, but of an out-of-touch Chancellor in denial and focused on political survival and a Chief Secretary counting down the hours and living out his own fantasy, which even his own leader could not bear to sit through.

The reality is that we have had one and a half Budgets in two days from two parties that had nothing to offer the majority of people in this country. Those two parties are basing decisions on party political interests and their perceived electoral advantage, rather than on what is in Britain’s best interests. The Chancellor’s Budget was a Budget that could not be believed, and the Chief Secretary’s statement was just unbelievable—a Budget not for public services, not for working people, not for families and not for the NHS.

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

Will my hon. Friend give way?

[Chris Leslie]

I will certainly give way to my hon. Friend.

[Andrew Gwynne]

Now that the dust has settled from Thursday’s Liberal Democrat statement, has my hon. Friend had the chance to scrutinise the document—published online, rather than available in the Vote Office—and if so, may I draw his attention to table 2.A on the scenario input assumptions? Did he notice, as I did, that the source for the assumptions was not authoritative bodies such as the ONS, the OBR or the IFS, but none other than the Chief Secretary to the Treasury?

[Chris Leslie]

I commend to Conservative Members, who should have a good read of it, this very authoritative document with very carefully crafted figures:

“Source: Chief Secretary to the Treasury”.

It was a classic. My hon. Friend knows that the real Budget was in the Red Book. Shall I pass it to him? Perhaps not.

The Chancellor told us in the Budget that everything was sunshine and roses, but in coalition Britain, 900,000 people use food banks, 600,000 people are affected by the bedroom tax, the typical working person is £1,600 a year worse off and the NHS is in crisis. The Chancellor tried to find the best statistic, however obscure, to muddy the waters and deny what most working people know, which is that their wages have eroded year after year as we have experienced the longest period of prices exceeding income since the 1920s. He did that by relying on a forecast for this year, rather than real data, and by adding university and charitable income, as well as what are known as imputed rents from homes even if they are not actually rented. That was basically designed to say, “If you stand on one leg and squint a little, there you are—you’re back to 2010 levels of affluence and incomes.” Even on that statistical measure, from election date to election date—rather than the start of the calendar year, as the Chancellor tried to use—people are still worse off than they were. Of course, all that does nothing to change the burden of higher taxes and lower tax credits that have seen families worse off by more than £1,000 a year. As ever, the Chancellor may give a little with one hand, but he takes away much more with the other.

By the way, now that the Chancellor has taken the time to enter the Chamber, it would be interesting to know whether he has spotted the Prime Minister’s announcement this afternoon. I understand that the Prime Minister has indicated that he will not stand for election again after this general election. He has said tonight that he is likely to be gone in a couple of years’ time, so what will the country be voting for at the next election? I can see the poster now—“Vote Cameron, get Osborne”—and all the right-wing agenda that would go with it. A Prime Minister who did not win his first election, and had not won a second election, would be saying that he would not win a third.

Of course there were a few give-away measures in the Budget, and we welcome anything that helps those on lower and middle incomes. Why, however, does the Chancellor still stand by the biggest give-away of them all? His tax cut for the wealthiest 1%—those earning £150,000—means that someone earning £1 million each year gets an annual tax cut of £42,000. That is simply unfair and unacceptable, and that is why we will vote against those income tax plans this evening. We will vote against the Government’s Budget plans for public services and public investment, because although we must balance the books as soon as possible in the next Parliament, going so far beyond that—with cuts over the next three years that are twice as deep as those of the past three years—means extreme cuts to services on a scale not experienced for generations. [Interruption.]

[Mr Speaker]

Order. There is a most discourteous exchange taking place between those on the two Front Benches while the hon. Gentleman the shadow Chief Secretary is addressing the House. Modesty forbids me from naming the errant Members, but I feel sure that they will correct their behaviour at once.

[Chris Leslie]

Perhaps we can ask Hansard for a transcript later. I would certainly be interested to read that.

When we look at the Chancellor’s plans—and those of the Secretary of State for Work and Pensions—we see that he is thinking about cutting for the next three years at twice the level we have seen over the past three years. The Chancellor realised how toxic his plans were shortly after the autumn statement, when he published the trajectory that showed he would take Britain back to 1930s levels of public investment as a share of national income. In the days running up to the Budget, we were therefore told that he had had a change of heart on public spending—coincidentally, it was just weeks before an election campaign. Sure enough, the figures for 2019-20 were shuffled around in the Budget. However, in the end, he just could not fight his gut instinct, so all he did was to front-load the cuts on to the first three years of the next Parliament and hope that nobody would notice.

Unfortunately for the Chancellor, the Office for Budget Responsibility did notice. It said that his plans will mean

“a much sharper squeeze on real spending in 2016-17 and 2017-18 than anything seen over the past five years”

and

“a sharp acceleration in the pace of implied real cuts to day-to-day spending on public services”.

That will create what the OBR calls

“a rollercoaster profile for implied public services spending through the next Parliament”.

We remain with a path of public spending that is based on ideology and political game playing, rather than a Budget for our public services based on what the economy requires and what our country needs.

I ask my hon. Friends to imagine the impact these extreme plans will have, especially on the public services that the Government say are unprotected—the police, bus and rail services, the Army and our defences—and on all those who depend on tax credits to make ends meet. I encourage my hon. Friends to take a moment to look at exactly what those extreme cuts will mean. They are not just statistics in the Red Book; they will have real consequences for real people’s lives.

To take social care as an example, in the past five years, the number of vulnerable people who receive social care support has fallen by 500,000 and the number of home-delivered meals—meals on wheels—has fallen by 59%. Of course, there has also been a rise in the peremptory 15-minute visits. That is just what has happened so far, before the Government tip social care over the precipice of the rollercoaster. Just imagine what the next three years could bring. Care cuts like this are health service cuts. As my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) said, our health services will be placed in real jeopardy in that scenario. It says everything one needs to know about this Chancellor that the battle of Agincourt got twice as many references in the Budget speech as the NHS. When I look at the Government’s Budget, it is not so much “Henry V” that comes to mind as “The Comedy of Errors”.

This path of spending—extreme and unnecessary, going way beyond tackling the deficit—is why we will vote against the Budget resolutions tonight. This is a Budget that delivered little, but revealed much. It revealed the Conservatives’ ideological obsession with shrinking public services in preparation for a privatised society. There is no support for those struggling on low incomes and in insecure work, no credible action to tackle tax avoidance and close the tax gap, nothing to reverse their tax cut for millionaires and no help for the NHS. We have a Chancellor who is full of spin but is fooling no one, and a Chief Secretary who is enjoying his final days in office but not in power.

What we need is a Labour Government who will put the interests of the British people first; who will balance the books in a fair way; who will help small businesses with a cut in business rates, rather than simply helping the largest corporations; who will raise living standards by raising the minimum wage and expanding free child care; and who will govern for the many and not for the few, because Britain succeeds when working people succeed. That would be a better plan and a better Budget. That is why I urge my hon. Friends to reject the Budget of this failing Government.

21:39

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

We have had a good debate with distinguished contributions from Members across the House, and like the shadow Chief Secretary I particularly wish to recognise the contributions of those who are not seeking re-election to this House. A number of hon. Members said that their speech would be their final contribution here, including the hon. Members for Sheffield, Heeley (Meg Munn) and for Thirsk and Malton (Miss McIntosh), the right hon. Members for Holborn and St Pancras (Frank Dobson), for Sheffield, Brightside and Hillsborough (Mr Blunkett), for Salford and Eccles (Hazel Blears) and for Edinburgh South West (Mr Darling). I am sure the House will agree that in their different ways they have all made a significant contribution to British public life, and the whole House will be grateful for their service to their country.

The right hon. Member for Salford and Eccles spoke movingly about the circumstances in which she grew up and the commitment to social mobility that that imbued in her—a commitment I strongly share. I am grateful for her kind words about the Government’s decision to support the Speaker’s parliamentary placement scheme, which as the House will know provides opportunities for many young people from disadvantaged backgrounds to work in this House. Credit should go to the right hon. Lady, and to you, Mr Speaker, for promoting that scheme. In her remarks she gave some examples of young people who have benefited from the scheme that she promoted, and many hon. Members will have encountered young people who have gained apprenticeships through it.

My hon. Friend the Member for Thirsk and Malton spoke about her rural constituency, and drew attention to the issues facing rural communities and the need for broadband. As a Member who represents a very rural constituency, I share that concern. I draw her attention to the supplementary document that was published alongside the Budget which included the strategy for superfast broadband, and indeed for moving to ultrafast—[Interruption.] The shadow Chief Secretary is muttering, but I will come to that point. The supplementary document on the move to ultrafast broadband set out a new and ambitious strategy for this country, including moves towards superfast broadband for 95% of households through the BT scheme, the roll-out of 4G broadband to 98% of households, and the availability of a vouchers scheme for the most remote households to gain satellite connections. I hope that that answers her point, which I am sure is an important issue for many hon. Members.

Other strong contributions included the one from my hon. Friend the Member for Cheltenham (Martin Horwood)—I do not know whether he is in his place. He made an important point about the decision in the Budget to extend the pension changes to police and fire service widows and widowers where someone has lost their life in the line of duty. We made clear in the Budget that we also intend to extend that change to apply to members of the security services who have lost their lives in the line of duty. That pension change is not yet fully worked out, but we intend to make it along the same lines as the measure announced for police officers and members of the fire service who lose their lives in the line of duty.

The hon. Member for Liverpool, West Derby (Stephen Twigg) made a balanced speech—I think he was the only Labour Member to welcome the strong record of job creation we have seen since 2010, and I credit him for that. He also—fairly, I think—called for further improvements to the quality of job creation, and the measures that the Government announced in the Budget, as well as the creation of more than 2 million apprenticeships during this Parliament, will help to support the agenda he described.

We also heard distinguished contributions from two former Chancellors of the Exchequer. My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) provided distinguished service in government during this Parliament, and indeed for many, many decades before that—[Laughter.] I know he is standing again; I am not citing him as a Member who is stepping down. He is an immortal in this House as far as many of us are concerned. In his remarks he gave strong support for a balanced, fiscally neutral Budget, and responsible measures from the coalition Government. He rightly celebrated the rise in the income tax personal allowance, a matter to which I will return. I am bound to say, however, that his customary generosity deserted him when describing the political heritage of this particular policy commitment. My hon. Friend the Member for Cheltenham corrected the balance of the ledger in that respect, when he made clear that this policy emerged from the 2010 Liberal Democrat manifesto. It is making a huge difference to 27 million people.

[Mr Kenneth Clarke]

I cannot remember whether I raised personal allowances once or twice in my Budgets, but once certainly, so it does have slightly older antecedents. I always thought it was a good idea. I was unfortunately discouraged by the then Prime Minister who told me that he thought there were no votes in it.

[Danny Alexander]

It is fair to say that the current Prime Minister also discouraged this policy. In the television leaders debates in 2010 he said it could not be done and could not be afforded. We have shown in this Parliament that we can afford it. The difficult decisions we on the Government Benches have been willing to make in other areas have meant that we have been able to deliver the largest income tax cuts for working people in a generation. That is something of which I am very proud indeed.

My right hon. and learned Friend also rightly highlighted how much progress we have made in tackling tax avoidance during the course of this Parliament. He was humble enough to admit that progress had not always been as strong during his time as Chancellor. There were many measures in the Budget to tackle tax avoidance and evasion.

We then had a contribution from the right hon. Member for Edinburgh South West. It is fair to say that there were many things in the Budget that he was not very keen on. He certainly made that clear. He did not like the rollercoaster, as he described it, of the public finances. I have set out my own alternative scenario on that. He did not mention the big dipper that the public finances had been on during his time in office.

The right hon. Gentleman rightly welcomed the package of measures to support the oil and gas sector, which was a very strong feature of the Budget. The measures will ensure that the sector, which is suffering from a dramatic fall in the oil price, has some confidence in the future. He welcomed those measures, but he rightly pointed out that the oil revenues in the OBR forecast at this Budget were a little more than a 10th of those predicted by the nationalists in the recent Scottish referendum. He made the point that had Scotland voted for independence and experienced the fall in oil prices, the difficult decisions made in this Parliament—I think I quote him correctly—would have seemed like a school picnic in comparison.

The right hon. Gentleman was too modest to remind the House of the service he rendered to his country with the leadership he showed in the Better Together campaign. I hope that Members on all sides of the House express their appreciation for that. It was certainly something I experienced first hand. It was immensely important in ensuring that the people of Scotland voted the right way in the referendum. The experience of working with him on that campaign, although we may have disagreed on many other matters over the years and will no doubt continue to do so, is one I will always remember. He showed himself to be a man of the greatest statesmanship in his conduct of that campaign.

Before I respond to some of the other points, I want to respond to the jibes from the shadow Chief Secretary—[Interruption.] It certainly is not—there are another 10 minutes to go. The shadow Chancellor, the shadow chunterer, is in his place chuntering as usual. He doesn’t have many policies, but he sure does like to chunter.

The Budget, as set out in the Red Book, was agreed by Conservatives and Liberal Democrats working together in the coalition Government. There is no policy measure in the Budget which Liberal Democrat Ministers did not sign off. Are there differences in the way the two parties in the coalition would approach the task of deficit reduction in the next Parliament? Yes, of course there are. I have made clear in this House and outside that there is another way we can meet the fiscal mandate that all parties signed up to when we voted for the charter for budget responsibility in January. Opposition Front Benchers appear to have forgotten about that, but we can do it in a more responsible and stable way. For that reason, last week I published and set out an alternative fiscal scenario for the next five years—a plan to borrow less than Labour and cut less than the Conservatives, a plan to give the UK a brighter future without sacrificing financial prudence. As the independent OBR mentioned in its economic and financial outlook, this profile of public expenditure

“is driven by a medium-term fiscal assumption”,

but

“both parties have said that they would pursue different policies if they were to govern alone.”

The Budget that my right hon. Friend the Chancellor presented last week is a coalition Budget that reflects the hard work the coalition Government have carried out over the past five years to turn the country around from the mess we inherited from Labour and to set us on a path back to prosperity. I do not hesitate, therefore, to speak in favour of it.

[Chris Leslie]

This is very confusing. So the right hon. Gentleman supports the Budget, but he opposes the Government. He wants to be a Minister, but he does not want to be a Minister. Will he at least agree that the cuts for the next three years are extreme and would be damaging, and will he confirm that he does not support the depth of the cuts to our public services over the next three years?

[Danny Alexander]

It really is not that confusing. Even the shadow Chief Secretary ought to understand that two different parties in a coalition Government will have different views about the future direction of policy in this country. I would say—[Interruption.] If the hecklers would silence themselves, I would say that Labour signed up to £30 billion of deficit reduction in the first three years of the next Parliament when they voted for the charter for budget responsibility. I am sure you remember the occasion, Mr Speaker. It was an important debate in the House, and one to which the country should be paying great attention. It is fair to say that all parties in the House have different views about how to achieve that £30 billion of cuts, and I set out my view to the House on Thursday.

[Andrew Gwynne]

Tell us!

[Danny Alexander]

If the hon. Member for Denton and Reddish (Andrew Gwynne) had not been cavorting so loudly, the shadow Chief Secretary might have been able to listen to my speech on that occasion.

[Sir Nicholas Soames]

Inexplicably, my right hon. Friend seems to have failed to mention the excellent points I made about my constituency, particularly the need for more spending on infrastructure in Mid Sussex and compensation for passengers being grievously delayed by improvements on the railway line. Will he look into these matters and let me have an answer before 6 May?

[Danny Alexander]

My right hon. Friend made his points so powerfully I did not see the need to repeat them, but I will certainly look into the matters he raises and respond to him. However, the Government have a very good record of investment in infrastructure, including the largest programme of rail investment since Victorian times; the largest programme of rail investment since the 1970s; and a huge investment programme in broadband infrastructure.

This is a Budget for fiscal responsibility that meets the supplementary target for debt as a share of GDP that the Government set in 2010. The deficit has fallen by a half over the Parliament, and every year we have borrowed less than set out in the autumn statement. This is a Budget, too, for a strong economy. The UK is the fastest-growing major economy in the G7. We have record numbers of people in work and the highest employment rate in our country’s history. It is very different from the predictions we heard from Labour Members, who said that jobs would be lost this Parliament. Instead, nearly 2 million jobs net have been created. Astonishingly, more jobs have been created in the UK since 2010 than in the whole of the rest of the EU combined. That is a truly extraordinary record.

There were measures in the Budget to support job creation and key sectors in the economy. I have mentioned the measures to support the oil and gas sector, which have been widely welcomed by Oil & Gas UK, Sir Ian Wood, who authored the Wood review, and many other figures in the oil and gas sector who see the package as one that will increase confidence in the sector.

I could mention the measures we took on alcohol duties, which were particularly warmly welcomed by the Scotch Whisky Association, as I discovered at its reception at the Scottish Liberal Democrat conference in Aberdeen on Friday evening. We also announced radical new measures to pilot full retention of business rate increments in Manchester and Cambridge, and a number of hon. Members have welcomed the wide review we announced of the way in which the business rate system operates.

This is a Budget that delivered on several key Liberal Democrat party priorities. I particularly note the package of measures to support mental health. The hon. Member for Birmingham, Edgbaston (Ms Stuart) wrongly said that the Budget did not mention the national health service. In fact, it contained a full package of measures to help fund additional support for people suffering from mental ill health. I pay tribute to the Minister of State, Department of Health, my right hon. Friend the Member for North Norfolk (Norman Lamb), who worked very hard to devise this package. It is a £1.25 billion package that provides measures for children’s mental health services, perinatal mental health services, and to improve support for the mental health of people who are out of work. Worth more than £1 billion over the next five years, we will be able to start new access standards and see 110,000 more children cared for over the next Parliament. Some £118 million will be invested over the next four years to complete the roll-out of the children and young people’s increasing access to psychological therapies programme. The measures to support mental health in this Budget mark a radical departure and a radical change. It is perhaps not surprising that some hon. Members said that the national health service was not mentioned in the Budget—so weakly has mental health been accorded its proper status under previous Governments. Because of the Liberal Democrat involvement in this Government, that particular thing has changed.

The Budget included further big increases in the income tax personal allowance, increasing the tax-free allowance to—[Interruption.]

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Danny Alexander]

No, I am not giving way. I am going to make some progress. The hon. Lady was not here for the debate, so I am certainly not giving way to her.

[Chris Leslie]

rose—

[Danny Alexander]

No, I am not giving way. I am going to finish.

The income tax personal allowance will increase to £10,800 in 2016-17 and—

[Chris Leslie]

Will the right hon. Gentleman give way?

[Danny Alexander]

No, I will not.

This is the most significant tax cut for working people in a generation. As a result of the increases to the personal allowance, a typical basic rate taxpayer will be £905 a year better off in 2017-18, and 27.2 million individuals will have benefited from increases to the personal allowance since 2010. As a result of these changes, over 3.7 million people—[Interruption.] Opposition Members do not like to hear about tax cuts for working people, Mr Speaker.

[Chris Leslie]

rose—

[Danny Alexander]

No, I will not give way. Opposition Members do not like to hear about tax cuts for working people because they did not deliver those cuts themselves. If they cared about cutting taxes for working people, they would be welcoming and celebrating the fact that 3.7 million working people on the lowest incomes no longer have to pay any income tax at all. That is something that Government Members would celebrate; Opposition Members should be celebrating it, too.

When a Government lose control of the public finances, it is the poorest who are hardest hit. That is why imposing fiscal discipline was such a priority for us in 2010. We created the stability necessary to deliver growth, jobs and investment. Last year, the shadow Chancellor channelled Ronald Reagan and asked, “Are you better off than you were in 2010?” On Thursday, the independent Institute for Fiscal Studies confirmed that families are set to be £900 better off in 2015 than they were in 2010.

Compared with five years ago, we have lower inequality; child poverty is down; pensioner poverty is at record lows; the gender pay gap is smaller than ever; and the number of students at university from disadvantaged backgrounds is at an all-time high. Some 1.9 million people are now in work, which is 1,000 new jobs a day, four fifths of them full time and four fifths in skilled occupations. This is a record to be proud of, and I am proud of these achievements. I am proud of the role my party has played in achieving them.

Responsible government does not mean standing on the sidelines and complaining about how long other people are taking to clean up the mess they created. Responsible government is about stepping up to the challenges and not flinching from taking the tough but necessary decisions. That is what we have done since 2010. We have created a stronger economy, we have created a fairer society, and we have delivered for the people of the United Kingdom. I commend the Budget to the House.

Question put.

21:59

Division 179

Ayes: 334

---

Conservative: 285
Liberal Democrat: 44
UK Independence Party: 2
Independent: 2

Noes: 250

---

Labour: 231
Democratic Unionist Party: 6
Scottish National Party: 6
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1
Independent: 1

Resolved,

(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.

(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting a supply, acquisition or importation;

(b) for refunding an amount of tax;

(c) for any relief, other than a relief that—

(i) so far as it is applicable to goods, applies to goods of every description, and

(ii) so far as it is applicable to services, applies to services of every description.

The Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3).

2. Income tax (charge and main rates)

Question put,

That—

(1) Income tax is charged for the tax year 2015-16.

(2) For that tax year—

(a) the basic rate is 20%,

(b) the higher rate is 40%, and

(c) the additional rate is 45%.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

22:15

Division 180

Ayes: 340

---

Conservative: 284
Liberal Democrat: 44
Democratic Unionist Party: 6
UK Independence Party: 2
Independent: 2

Noes: 244

---

Labour: 230
Scottish National Party: 6
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1
Independent: 1

3. Income tax (Limits and Allowances)

Resolved,

That—

(1) For the tax year 2015-16—

(a) the amount specified in section 37(2) of the Income Tax Act 2007 (income limit for personal allowance for those born before 6 April 1938) is replaced with “£27,700”,

(b) the amount specified in section 38(1) of that Act (blind person’s allowance) is replaced with “£2,290”,

(c) the amount specified in section 43 of that Act (“minimum amount” for calculating tax reductions for married couples and civil partners) is replaced with “£3,220”,

(d) the amount specified in section 45(3)(a) of that Act (amount for calculating allowance in relation to marriages before 5 December 2005 where spouse is 75 or over) is replaced with “£8,355”,

(e) the amount specified in section 45(4) of that Act (income limit for calculating allowance in relation to marriages before 5 December 2005) is replaced with “£27,700”,

(f) the amount specified in section 46(3)(a) of that Act (amount for calculating allowance in relation to marriages and civil partnerships on or after 5 December 2005 where spouse or civil partner is 75 or over) is replaced with “£8,355”, and

(g) the amount specified in section 46(4) of that Act (income limit for calculating allowance in relation to marriages and civil partnerships on or after 5 December 2005) is replaced with

“£27,700”.

(2) Accordingly, for that tax year, section 57 of that Act (indexation of allowances), so far as relating to the amounts specified in sections 37(2), 38(1), 43, 45(3)(a), 45(4), 46(3)(a) and 46(4) of that Act, does not apply.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

4. Personal allowances for 2015-2016

Resolved,

That—

(1) Section 2 of the Finance Act 2014 (basic rate limit for 2015-16 and personal allowances from 2015) is amended as set out in paragraphs (2) and (3).

(2) In subsection (1)(b) (amount specified for 2015-16 in section 35(1) of the Income Tax Act 2007 (personal allowance for those born after 5 April 1938)), for ““£10,500”” substitute ““£10,600””.

(3) In subsection (8) (amendments of section 57 of the Income Tax Act 2007), omit the “and” at the end of paragraph (a) and after that paragraph insert—

“(aa) in subsection (1)(h), omit “36(2),”, and”.

(4) In section 55B(4)(a) of the Income Tax Act 2007 (transferable tax allowance for married couples and civil partners: entitlement to tax reduction), for “£1,050” substitute “£1,060”.

(5) The amendments made by paragraphs (3) and (4) have effect for the tax year 2015-16 and subsequent tax years.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

5. Corporation tax (charge for financial year 2016)

Question put,

That—

(1) Corporation tax is charged for the financial year 2016.

(2) For that year the main rate of corporation tax is 20%.

22:29

Division 181

Ayes: 337

---

Conservative: 282
Liberal Democrat: 44
Democratic Unionist Party: 6
UK Independence Party: 2
Independent: 1
Alliance: 1

Noes: 240

---

Labour: 228
Scottish National Party: 6
Plaid Cymru: 3
Green Party: 1
Independent: 1

[Mr Speaker]

With the leave of the House, I will put the remaining motions together.

6. Taxable Benefits (diesel cars)

Resolved,

That—

(1) In section 141(2) of the Income Tax (Earnings and Pensions) Act 2003 (diesel cars: the appropriate percentage), in Step 3, for “35%” substitute “37%”.

(2) The amendment made by paragraph (1) has effect for the tax year 2015-16.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

7. Taxable Benefits (vans)

Resolved,

That—

(1) The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.

(2) In section 155 (cash equivalent of the benefit of a van), for subsections (1) and (2) substitute—

“(1) The cash equivalent of the benefit of a van for a tax year is calculated as follows.

(1A) If the restricted private use condition is met in relation to the van for the tax year, the cash equivalent is nil.

(1B) If that condition is not met in relation to the van for the tax year—

(a) if the van cannot in any circumstances emit CO2 by being driven and the tax year is any of the tax years 2015-16 to 2019-20, the cash equivalent is the appropriate percentage of £3,150, and

(b) in any other case, the cash equivalent is £3,150.

(1C) The appropriate percentage for the purposes of subsection (1B)(a) is—

(a) 20% for the tax year 2015-16,

(b) 40% for the tax year 2016-17,

(c) 60% for the tax year 2017-18,

(d) 80% for the tax year 2018-19, and

(e) 90% for the tax year 2019-20.”

(3) In section 156(1) (reduction for periods when van unavailable), for “155(1)” substitute “155”.

(4) In section 158(1) (reduction for payments for private use), for “155(1)” substitute “155”.

(5) In section 160(1)(c) (benefit of fuel treated as earnings), for “section 155(1)(b)” substitute “section 155(1B)(b)”.

(6) In section 170 (orders etc relating to Chapter 6 of Part 3), for subsection (1A) substitute—

“(1A) The Treasury may by order substitute a different amount for the amount for the time

being specified in—

(a) section 155(1A) (cash equivalent where van subject only to restricted private use by

employee),

(b) section 155(1B)(a) (cash equivalent for zero-emission van), and

(c) section 155(1B)(b) (cash equivalent in other cases).”

(7) Article 3 of the Van Benefit and Car and Van Fuel Benefit Order 2014 (S.I. 2014/2896) is revoked.

(8) The amendments made by this Resolution have effect for the tax year 2015-16 and subsequent tax years.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

10. Income Tax (PAYE)

Resolved,

That provision may be made as to the matters that may be provided for by regulations under section 684 of the Income Tax (Earnings and Pensions) Act 2003.

11. dISTRIBUTIONS

Resolved,

That provision may be made amending Chapter 3 of Part 4 of the Income Tax (Trading and Other Income) Act 2005.

12. Disguised investment management fees

Resolved,

That provision may be made about sums arising to individuals who perform investment management services.

13. Losses from miscellaneous transactions

Resolved,

That provision (including provision having retrospective effect) may be made amending Chapter 7 of Part 4 of the Income Tax Act 2007.

14. Remittance basis of taxation

That provision may be made increasing the remittance basis charge.

15. Loan relationships

Resolved,

That provision (including provision having retrospective effect) may be made amending Part 5 of the Corporation Tax Act 2009.

16. Intangible fixed assets

Resolved,

That provision (including provision having retrospective effect) may be made amending Part 8 of the Corporation Tax Act 2009.

17. Expenditure on research and development

Resolved,

That provision may be made about tax relief for expenditure on research and development.

18. Deductions for carried-forward losses

Resolved,

That provision (including provision having retrospective effect) may be made for and in connection with restricting the deductions that may be made by companies in respect of losses carried forward from earlier accounting periods when calculating their profits for the purposes of corporation tax.

19. Pensions

Resolved,

That provision may be made in connection with the taxation of pensions.

20. Pension Flexibility (beneficiaries’ annuities etc)

Resolved,

That—

(1) Part 4 of the Finance Act 2004 is amended as follows.

(2) Section 167(1) (the pension death benefit rules) is amended as follows.

(3) In pension death benefit rule 3A (payments that may, by way of exception, be made to a nominee) after “other than” insert “a nominees’ annuity in respect of a money purchase arrangement or”.

(4) In pension death benefit rule 3B (payments that may, by way of exception, be made to a successor) after “other than” insert “a successors’ annuity in respect of a money purchase arrangement or”.

(5) Part 2 of Schedule 28 (interpretation of the pension death benefit rules) is amended as follows.

(6) After paragraph 27A insert—

“Nominees’ annuity

27AA(1) For the purposes of this Part an annuity payable to a nominee is a nominees’ annuity if—

(a) either—

(i) it is purchased together with a lifetime annuity payable to the member and the

member becomes entitled to that lifetime annuity on or after 6 April 2015, or

(ii) it is purchased after the member’s death, the member dies on or after 3 December

2014 and the nominee becomes entitled to the annuity on or after 6 April 2015,

(b) it is payable by an insurance company, and

(c) it is payable until the nominee’s death or until the earliest of the nominee’s marrying, entering into a civil partnership or dying.

(2) For the purposes of sub-paragraph (1)(a) a nominees’ annuity is purchased together with a lifetime annuity if the nominees’ annuity is related to the lifetime annuity.”

(7) After paragraph 27F insert—

“Successors’ annuity

27FA (1) For the purposes of this Part an annuity payable to a successor is a successors’ annuity if—

(a) the successor becomes entitled to it on or after 6 April 2015,

(b) it is payable by an insurance company,

(c) it is payable until the successor’s death or until the earliest of the successor’s marrying, entering into a civil partnership or dying,

(d) it is purchased after the death of a dependant, nominee or successor of the member (“the beneficiary”),

(e) it is purchased using undrawn funds, and

(f) the beneficiary dies on or after 3 December 2014.

(2) For the purposes of sub-paragraph (1)(e), sums or assets held for the purposes of an arrangement after the beneficiary’s death are undrawn funds if—

(a) immediately before the beneficiary’s death, they were held for the purposes of the arrangement and, as the case may be, represented (alone or with other sums or assets) the beneficiary’s—

(i) dependant’s flexi-access drawdown fund,

(ii) dependant’s drawdown pension fund,

(iii) nominee’s flexi-access drawdown fund, or

(iv) successor’s flexi-access drawdown fund,

in respect of the arrangement, or

(b) they arise, or (directly or indirectly) derive, from undrawn funds under paragraph (a) or from sums or assets which so arise or derive.”

(8) In section 216(1) (benefit crystallisation events and amounts crystallised) the table is amended as follows.

(9) In the second column of the entry relating to benefit crystallisation event 4, after “any related dependants’ annuity” insert “and any related nominees’ annuity”.

(10) After the entry relating to benefit crystallisation event 5C insert—

[Mr Speaker]

With the leave of the House I will put the four procedure motions together. The House will be intimately conscious that I am referring to the motions on future taxation, television tax relief, wholesalers of alcohol and country-by-country reporting referred to on page 21 of the Budget resolutions.

Procedure (future taxation)

Resolved,

That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain the following provisions taking effect in a future year—

(a) provision about the basic rate limit for the purposes of income tax,

(b) provision about personal allowances for the purposes of income tax,

(c) provision for corporation tax to be charged for the financial year 2016,

(d) provision about the tax treatment of certain employment-related expenses and benefits,

(e) provision amending the description of vehicles which are exempt vehicles for the purposes of the Vehicle Excise and Registration Act 1994,

(f) provision about the rates of climate change levy,

(g) provision about the rates of landfill tax, and

(h) provision about the taxable value of single-dwelling interests for the purposes of the annual tax on enveloped dwellings.

Procedure (television tax relief)

Resolved,

That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision for tax credits to be paid to television production companies in respect of expenditure or losses on television production activities in connection with further descriptions of programmes.

procedure (wholesalers of alcohol)

Resolved,

That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may make provision for the approval and registration of wholesalers of alcohol.

procedure (country-by-country reporting)

Resolved,

That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision enabling the implementation of the guidance on country-by-country reporting contained in the OECD’s Guidance on Transfer Pricing Documentation and Country-by-Country Reporting, published in 2014 (or any other document replacing that Guidance).

FINANCE (MONEY)

Monday 23rd March 2015 Commons Chamber

Queen’s recommendation signified.

Resolved,

That, for the purposes of any Act of the present Session relating to finance, it is expedient to authorise—

(a) the payment out of money provided by Parliament of expenditure incurred by the Commissioners for Her Majesty’s Revenue and Customs in connection with the approval and registration of wholesalers of alcohol, and

(b) the payment out of the National Loans Fund or the Consolidated Fund of sums required to redeem, or to meet expenses incurred in connection with the redemption of, government stock.

Finance (Money)

Queen’s recommendation signified.

Resolved,

That, for the purposes of any Act of the present Session relating to finance, it is expedient to authorise—

(a) the payment our of money provided by Parliament of expenditure incurred by the Commissioners for Her Majesty’s Revenue and Customs in connection with the approval and registration of wholesalers of alcohol, and

(b) the payment out of the National Loans Fund or the Consolidated Fund of sums required to redeem, or to meet expenses incurred in connection with the redemption of, government stock.

Ordered,

That a Bill be brought in upon the foregoing Resolutions;

That the Chairman of Ways and Means, the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Secretary Vince Cable, Secretary Iain Duncan Smith, Secretary Eric Pickles, Danny Alexander, Priti Patel, Andrea Leadsom and Mr David Gauke bring in the Bill.

Finance Bill

Presentation and First Reading

Mr David Gauke accordingly presented a Bill to grant certain duties, to alter other duties and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 193) with explanatory notes (Bill 193-EN).

Business without Debate

Monday 23rd March 2015 Commons Chamber

Business of the House

Ordered,

That, in respect of the Finance (No.2) Bill, notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—(Mr Wallace.)

1915 Armenian Genocide

Monday 23rd March 2015 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Wallace.)

22:44

[Stephen Pound (Ealing North) (Lab)]

I am glad that Members have decided not to leave the Chamber. The subject of this Adjournment debate is the commemoration of one of the most appalling, heinous acts that has ever been committed on this earth: the Armenian genocide of 23 and 24 April 1915.

May I at the outset put one thing firmly on the record? What I have to say tonight is not an attack on the Government of Turkey. I am not criticising the Government of Turkey. I realise that these debates frequently engender much heat and very little light in Ankara, but I am talking specifically of the actions of the Ottoman empire and particularly the Young Turks, whom I will mention later, in 1915.

I make no apologies for raising this matter. Not only are we approaching the 100th anniversary of this appalling crime against humanity, in which 1.5 million people were killed in the most horrendous circumstances and an attempt was made to destroy an entire people—their culture, nationhood and very being and existence. This is also a time when two books have just been published. The first, “An Inconvenient Genocide” by Geoffrey Robertson, once and for all proves to those gainsayers who are still out there that the genocide was real and that it did happen: the dates, names and times are provided. The other excellent book is “The Fall of the Ottomans” by Eugene Rogan, which contains a chapter on the annihilation of the Armenians.

It is otiose even to ask the question, “Was there genocide?” Yet the question has been asked many times. People have said there was no genocide in 1915, but to a certain extent that was not the only genocide. The Armenians—a people of incredible, intense culture and great sophistication—were assaulted between 1894 and 1896, when 200,000 people were killed. There was the Adana massacre of 1909, in which 20,000 to 30,000 people were killed. In particular, leading up to 1915, after the 1912 Balkan wars, refugees from the Caucasus and Rumelia—they were known as muhacirs—moved from the south Balkans and the Caucasus into Anatolia. That movement into the traditional Armenian land, coupled with the aftermath of the battle of Sarikamish—which took place on 24 December 1914, when the Russians defeated the Ottoman army—led to a completely different situation whereby the peaceful Armenian people suddenly found themselves between different warring factions: on the one hand the Ottoman empire, and on the other people moving into their land, so they were dispossessed. The then War Minister, Enver Pasha, demobilised all Armenians from the army—many of them fought in the Ottoman army—into labour battalions, and the infamous tehcir law, which is known as the deportation law, was passed by Talaat Pasha, the Interior Minister.

At that particular time, the Young Turks had arrived—the Committee of Union and Progress as they were known—and the massacre commenced in Istanbul on the night of 23 April. It is impossible to imagine what it must have been like. Anatolia––western Armenia––was a peaceful country in which the Armenians had succeeded greatly. They had filled many posts, not just in the army, but in medicine and law. They were a peaceful and prosperous people. Just as the upper echelon of Poles at Katyn were massacred, similarly the upper echelon of Armenians were taken to slaughter.

Did it happen? There were so many eyewitnesses there at the time. American Ambassador Morgenthau gave a detailed account, and Father Grigoris Balakian, who survived and was in Istanbul when the entente fleets finally sailed in at the end of the war, gave an incredible amount of detail. Above all, one of the reasons why we in this House can discuss this matter and know about it is the single, definitive volume describing the horror of the genocide, namely the famous “Blue Book” by Lord Bryce and Arnold Toynbee.

[Jim Shannon (Strangford) (DUP)]

Obviously, this is an important issue for us as parliamentarians. Does the hon. Gentleman agree that it is past time that the Turkish Government not only admitted to the historical genocide of 1.5 million Armenians, but apologised for the most horrific atrocities they carried out at the time? We cannot ignore the fact that the Turkish Government have to apologise for that.

[Stephen Pound]

I am grateful to the hon. Gentleman for his intervention, but I am reluctant to go entirely down that route. Obviously the Turkish Government should do so, but today I am talking about the commemoration in this House, particularly as we approach 24 April. I cannot disagree with him—I surprise myself at how seldom I disagree with him—but we should concentrate on the subject at issue.

One and a half million people were driven to die in the burning sands of the Syrian desert in a death march to two concentration camps, in which the men were killed first. The then Interior Minister said, “Kill the men, the women and all the children up to the height of my knee.” If that is not genocide, I really do not know what is. In Trabzon—or Trebizond—14,000 were killed. Many of them were put into boats, which were dragged into the Black sea and sunk. People were injected with typhoid or morphine. Experiments took place on children in a way that presages what happened under the Nazis. Incidentally, what happened in Trebizond was witnessed by the Italian consul general, Gorrini, who started out being sceptical, but ended up as horrified as every other civilised person.

It happened: it is incontrovertible that it happened. It happened within the memory of some people still living. Their grandparents and their great-grandparents died: their bones are still there in the Syrian desert, and their homes are still there in Anatolia, no longer occupied, although their Christian churches have been destroyed. It is within living memory, so why are we not recognising it?

One of the joys of the Freedom of Information Act is that we can get hold of copies of confidential briefings from the south Caucasus team. Last time this issue was raised by Baroness Cox, that indefatigable friend of Armenia—she has visited Nagorno-Karabakh some 70 times, not always in a combat role, but frequently under fire—she had a debate on 29 March 2010, and I have been provided with the document, although it is partly redacted. The Foreign and Commonwealth Office position at the time was that

“it is not appropriate for the UK Government to use the term genocide”.

However, the briefing states:

“The British Government recognises that terrible suffering was inflicted on Armenians living in the Ottoman Empire…and we must ensure that the victims of that suffering are not forgotten.”

I am torn between admiration of the honesty of the ministerial officials and slight horror, because the middle paragraphs are entitled “Bear Traps”—things to watch out for. It goes on to say what would happen to Anglo-Turkish relations if the British Government agreed to the term, and it talks about early-day motion 357 and various other debates.

The crux of the reason why the Government would not agree to recognition is that in one debate—I have had three debates on this subject—the then Foreign Office Minister Geoffrey Hoon said that we could not call it the Armenian “genocide” because Raphael Lemkin did not invent the word until 1944 or 1945. Let us think about that for a minute. When Cain killed Abel, there was no word for fratricide, but Abel was just as dead as if there had been such a word. Raphael Lemkin was present in Berlin at the trial of Soghomon Tehlirian, one of the members of the Armenian Revolutionary Federation who was part of the Nemesis group that assassinated 10 of the 18 perpetrators of the genocide indicted in the military tribunal in Istanbul at the end of the first world war, in what most people think was an attempt to minimise the impact of the treaty of Versailles. Raphael Lemkin, who is accepted as the originator of the word, said that it was his experience of that trial, listening to the evidence of the genocide of the Armenian people, that made him use it. The assassination of Talaat Pasha in Berlin in 1921 clearly precedes the use of the word “genocide”, but the same person—the man who coined the word—was actually at that trial and referred to it.

We are not entirely sure how many, but 20 or 22 national Parliaments have recognised the Armenian genocide, including the devolved Assemblies in Scotland, Wales and—I am delighted to say—Northern Ireland. No one who visits the Genocide museum in Yerevan and sees testimony from all around the world, photographs, cards, letters and books can remain unmoved. No one can deny for a moment that something horrible and terrible beyond human imagination took place in western Armenia at that time.

Genocide is a crime that is intended to destroy a people. Genocide denial is a crime that is intended to destroy a people’s memory. The Armenian people will not have their memory, their culture, their individuality, their strength or their national pride destroyed. Many people have tried; none has ever succeeded, nor ever will they. Think of the double agony of those people whose families were massacred, whose culture was destroyed, whose homelands have been taken over and who are now having that very act denied. That, for me, is the supreme double cruelty.

The British Government will be represented in Gallipoli on 24 April. By coincidence—I make no comment about that—that is the same day as the international recognition of the Armenian genocide. The Gallipoli landing is often prayed in aid by those who apologise for the Ottoman empire of the time. They say that the Gallipoli landing somehow stimulated the action of the Young Turks, who were terrified that some Armenian fifth column would arise and attack Turkey with the Russians. In reality, as we all know, the massacre that started the great genocide took place on the night before. To suggest that moving the commemoration of Gallipoli to the same day, 24 April, as the Turks have done, is anything other than a provocative act is pushing credulity.

Will the British Government be present? President Putin will be there. Francois Hollande will be there. I have heard that a distinguished colleague of mine, although he might not be from my side of the Chamber, will be there. I admire that, I respect that and I am proud of that. We will hear from him later. Can we not go the extra mile? Can we not finally give support and succour to the Armenian people whose relatives died? Can we not say to the Armenian community in this country—one of the most peaceful, law-abiding, hard-working, decent communities that we are proud to have in our country—that we, along with 22 other countries of the world, recognise the genocide that took place? Edinburgh has recognised it. Many councils have recognised it. Even my own little borough of Ealing has done so. We have a strong Armenian apricot tree growing in Ealing soil—British soil—in commemoration of that event. I would like to see a memorial garden in Ealing.

I would like to see wider recognition. Is that not fair when a people have suffered, as have the Armenian people? In many cases, they have suffered in silence. We do not see huge marches through the city or massive protests. The Armenian people are a dignified people. The people of Armenian descent in our country concentrate on hard work, on achievement and on preserving their dignity, but they also keep their culture. They have integrated, but they have not been assimilated. To be Armenian is to be a good citizen, but it is also to be different. That unique, special Armenian quality is worthy of a little recognition.

Can we not finally say it in this House—maybe not tonight, maybe not even before the election, but some time soon? For years it has been our policy to deny that the Armenian genocide took place, and yet we have the FCO briefing here that talks about the suffering of the Armenian people. Would it hurt so much? Are we not straining at the gnat here? Could we not go that last little bit and say, “Yes, it happened.”? Then, hopefully, the wave of global condemnation would wash up even across the battlements in Ankara and the Turkish Government would admit that their predecessors, the Ottoman Government back in 1915, did commit appalling crimes.

I was in this House, as were you, Mr Speaker, when the then Prime Minister, Mr Blair, apologised for the Irish famine of 1848. He apologised on behalf of this country for an appalling act that was horrendous in its brutality and in its impact on the Irish people. He felt justified in apologising for that. Some people said that he should not have done so. I think that he did so because this country was very much a part of that process. I think that Mr Blair did the right thing in apologising.

We have an opportunity tonight to do the right thing, and not just by our Armenian friends, our Armenian brothers and sisters, our Armenian community, our Armenian fellow citizens—those people who have earned the right to our respect and friendship through their contribution to our society. We have an opportunity to do the right thing not just for the sake of Armenia and the Armenian people, but for the sake of humanity. Humanity really needs to recognise what happened in 1915. As long as it is denied, it can happen again. As long as we say, “It didn’t happen”, we echo the terrible words that everybody remembers from Hitler in 1939, when he justified the invasion of Poland by saying, “Who now remembers the annihilation of the Armenians?”

I think that all decent people, all human beings, recognise and remember the annihilation of the Armenians, and I hope that we are all determined to recognise it and ensure that it never happens again. I say to my Armenian friends, fellow citizens and Armenian brothers and sisters: we thank you for all you have done for this country, and this is our small way of returning that thanks.

23:00

[Mr John Whittingdale (Maldon) (Con)]

I congratulate the hon. Member for Ealing North (Stephen Pound) on obtaining this debate and putting with his customary eloquence the case for why it is important that we in this House remember what was one of the first great crimes of the 20th century. He has worked on behalf of his constituents from Armenia and the Armenian community generally for a long time, and it was a pleasure to be in Yerevan with him just over a year ago.

It is entirely right that we in this House mark the centenary of the Armenian genocide. We have commemorated other genocides here, such as those that took place in the Balkans and in Rwanda and, of course, the holocaust. As the hon. Gentleman said, the term “genocide” was originally coined by Raphael Lemkin who, when he came to describe what had happened to his own people—the Jewish people—initially had the experience of hearing about the massacre of the Armenians, which undoubtedly influenced him.

The hon. Gentleman made a strong case, and I concur that we should use the term “genocide” to describe what was clearly a deliberate attempt to kill an entire people. In a sense, whether we use that word or not there is no question but that the massacre of more than 1 million people—perhaps 1.5 million Armenians who were either massacred or starved to death—was a horrendous crime. Both he and I have visited the memorial to the genocide in Yerevan and the museum, and anybody who goes there can be left in no doubt of the true horror of what occurred. The evidence is overwhelming. Those who try to dismiss it cannot argue with the records, photographs and accounts of witnesses, both Armenian and international, not least those from this country whose testimony is perhaps among the most powerful. As a result, it is important that we remember what happened, and renew our determination to ensure that that kind of event never happens again.

The hon. Gentleman is right to say that this is not about apportioning blame, certainly not to the present Turkish Government, and I welcome the fact that the Prime Minister of Turkey talked about the shared pain and offered his condolences a year ago. I hope that that provides an opportunity to try to build reconciliation between Armenia and Turkey, and to normalise relations and perhaps in due course to re-open the border between those two countries. I hope that can still be achieved.

I was very struck by a speech that I heard not long ago by the former Prime Minister of Armenia and Armenian ambassador to this country, Dr Armen Sarkissian. He said that of course we should remember what occurred and commemorate the loss of life, but that more importantly it is an opportunity to celebrate the survival of a great people and a great country. I am delighted that we have had the chance this evening to put that on record in this place, and in four weeks’ time I shall be honoured to pay my own tribute in Yerevan to those who died.

23:04

[The Minister for Europe (Mr David Lidington)]

I congratulate the hon. Member for Ealing North (Stephen Pound) on securing the debate. I pay tribute to the moving way in which both he and my hon. Friend the Member for Maldon (Mr Whittingdale) spoke about the tragedy that befell the Armenian people just over 100 years ago.

It was on 24 April 1915 that about 250 leading members of the Armenian community in Istanbul were arrested. This marked the beginning of a campaign of forced deportations directed against the Ottoman Armenian community. From 1915 to 1916 during the course of the deportations to the Syrian desert, it is estimated that well over 1 million Ottoman Armenians lost their lives as a result of massacres by soldiers or irregulars, forced marches, starvation and disease. A number of other minorities, such as the Assyrians, also suffered.

The British Government of that time robustly condemned the forced deportations, massacres and other crimes. We continue to endorse that view. British charities, as we look back, played a major part then in humanitarian relief operations. The deaths of more than 1 million Armenians in the Ottoman empire was an appalling civilian loss of life against the backdrop of the first world war, a conflict which itself broke new ground in developing international warfare on an industrial scale.

Today, the centenary of those terrible events has huge significance, as the hon. Member for Ealing North said, for the people of Armenia and for the worldwide Armenian diaspora. As an inseparable part of the tragedy of first world war, it is entirely appropriate that we in this country include this tragedy in our remembrance of the first world war to honour the dead, and to draw lessons from history and hope for a better future. The British Government’s commemorations this year have focused on how the first world war shaped society and touched lives and communities. The deportation and massacres of the Ottoman Armenians, and the role played by the UK and other allies in reporting the atrocities and helping the survivors, are an indivisible part of that story. The events and commemorative activities, which the Armenian community in the UK will organise on 24 April and over the course of this year, will help to illuminate further that period of history for British people, some of whom may be hearing about it for the first time.

The appalling nature of the events of 1915-16 were brought home vividly to me when I visited the Tsitsernakaberd memorial museum in Yerevan during my first ministerial visit to Armenia in 2012. When I went back to Armenia last year, I laid a wreath at the memorial to pay my respects to those who had died and those who had suffered. As has been said, in this centenary year my hon. Friend the Member for Maldon, as chair of the British-Armenian all-party group, and our ambassador to Yerevan will be present at the Armenian Government’s commemorations on 24 April in the Armenian capital.

As discussed in today’s debate, for this country and the Commonwealth the dates of 24 and 25 April have great significance for an additional reason, as the days we remember the centenary of the allied landings at Gallipoli. On 24 April, His Royal Highness the Prince of Wales will attend a ceremony in Gallipoli to honour the memory of all those who died during the campaign, including soldiers from Britain, Ireland, France, Australia, New Zealand, the Indian subcontinent, Canada and Sri Lanka, as well as the Ottoman soldiers who died defending the peninsula. Those sombre commemorations in both Gallipoli and Yerevan should be used to honour the memory of those who lost their lives, whether soldiers or civilians, and to reflect carefully on the painful lessons we have learnt from history and how to prevent such events from happening again.

The hon. Member for Ealing North asked me a direct question about the Government’s policy on the recognition of the events in Armenia as a genocide. I have to say to him that the Government’s policy, indeed the policy of successive Governments, has not changed since 1988 when this matter was reviewed. We take the view that genocide is not simply an expression of a political judgment. It is now a crime, and the British Government recognise as genocide only those events found to be so by international courts—for example, the holocaust and the massacres in Srebrenica and Rwanda. We do not exercise a political judgment in ascribing the term “genocide” to a set of events, whether in Armenia, the Holodomor in Ukraine or the massacres of the Kurds by Saddam Hussein in 1998.

In honouring and reflecting upon the past, it is vital that we look to the future. The peoples and Governments of Turkey and Armenia need to find a way to face their joint history together and forge a new, more constructive relationship, and part of the role the UK seeks for itself is to support them in finding this path forward. I will not pretend that we from London can provide instant answers, but we are doing what we can practically to foster people-to-people exchanges and links between the two countries to break down stereotypes and barriers. For example, we have just completed a successful exchange of Turkish and Armenian Chevening alumni who visited each other’s countries for the first time.

Ultimately, the Governments of Armenia and Turkey must take the lead in forging and delivering that new relationship. For that reason, the UK Government strongly supported the imaginative diplomacy that led to the Turkish-Armenia protocols in 2009. The protocols envisaged opening the border and initiating diplomatic relations without any preconditions, and it is a matter of great regret that the ratification process for those protocols has not moved forward. I hope that both sides will continue to consider creative ways to re-set their relations and open up new channels for dialogue and co-operation.

This year, we will reflect with sadness on the nature and horrific scale of the deportations, massacres and other crimes in 1915-16 and on the importance of this centenary for Armenia and Armenians worldwide, but we will also renew our commitment this year to promote reconciliation between Armenia and Turkey. A genuine step forward along that path to reconciliation would take us towards a more peaceful and secure future for everyone living in the region. I continue to hope that both Turkey and Armenia can find a way to look together towards a brighter future.

[Stephen Pound]

I have immense respect for the right hon. Gentleman—he and I have met the President of Armenia, and I entirely respect his position—but immediately after the genocide, the British Navy took 50 of the worst suspects from the Young Turks to Malta to try them because it recognised that what had happened was against civilisation. There was not sufficient legislation at the time for the trial to take place so the British took them back—probably rightly so—but does he not agree that we need that recognition now so as to avoid such a situation in the future? I am not criticising Turkey. I am talking about the Ottoman empire.

[Mr Lidington]

I hesitate to get into a legal dispute with the hon. Gentleman, but we take the view, as have successive British Governments, that international law, including the 1948 protocol on genocide, is not retroactive, and that is part of the explanation for our position. That is not to detract from the horror of what took place 100 years ago, or to suggest that we will draw back from our commitment to seek the reconciliation of the peoples of Turkey and Armenia and to strive as hard as we can to bring about that much desired outcome.

Question put and agreed to.

23:14

House adjourned.

Mr Speaker’s Ruling (Presentation of Public Petitions by Ministers)

Monday 23rd March 2015 Commons Chamber

The following Private Ruling given by Mr Speaker is published in accordance with the Speaker’s undertaking of 5 November 1981 (Official Report, c. 113)

When a Member of the House accepts appointment as a Minister of the Crown, he or she accedes to the convention on collective responsibility.

The procedures of the House depend on its being able to rely on the presumption that whenever a Minister speaks or acts in the course of its proceedings, he or she does so on behalf of Her Majesty’s Government. Ministers cannot choose to assume or divest themselves of their status as Ministers of the Crown in the course of the House’s proceedings––this would introduce a degree of uncertainty and ambiguity which would be injurious to the clarity of its proceedings.

The specific question has been raised with me whether a Minister can present a public petition on the Floor of the House. The Government cannot present a petition, and a Minister cannot act as a private Member. I have therefore ruled that a Minister cannot present a public petition on the Floor of the House.

Ministers are, however, free to present a public petition informally (that is, by depositing it in the petitions bag at any time at which the House is sitting), but the Votes and Proceedings will not in such cases identify the Member who deposited the petition.

Petitions

Monday 23rd March 2015 Petitions

Monday 23 March 2015

Downsizing of UK visa and immigration services in India and Bangladesh

Monday 23rd March 2015 Petitions

The Petition of residents of the UK,

Declares that the Government’s decision to downsize the Mumbai Deputy High Commission’s visa services will inconvenience hundreds of thousands of people; further that these changes to one of the busiest visa centres in the world will move the majority of decision-making powers to New Delhi; further that in Dhaka in Bangladesh, visa decision-making powers have been removed altogether which deprioritises the importance of the UK’s relationship with Bangladesh; further that the decision was made under ‘cost-cutting’ measures as it may take longer for decisions on visas for friends and families of British Indians and Bangladeshis to be made and may cause them to encounter numerous problems and further that a local petition on this matter was signed by 196 residents of Leicester East.

The Petitioners therefore request that the House of Commons urges the Government to immediately review the decision to downsize visa and immigration services in India and Bangladesh.

And the Petitioners remain, etc.—[Presented by Keith Vaz.]

[P001467]

Children's centres in Rushden, Northamptonshire and the surrounding areas

Monday 23rd March 2015 Petitions

The Humble Petition of residents of Rushden, Northamptonshire and the surrounding areas,

Sheweth,

That in Rushden and the surrounding areas, there is a high proportion of isolated working women with children; further that this group often suffers post-natal depression through their circumstances but as they are often working and married, these women are not targeted for support by the local Council; and further that local children’s centres currently provide a vital lifeline to these women, offering them access to non-judgemental support networks, other mothers with similar aged children, and the reassurance that regular, trained and familiar staff are keeping an eye on their babies and their mental health.

Wherefore your Petitioners pray that your Honourable House urges the Secretary of State for Communities and Local Government to encourage Spurgeons and Northamptonshire County Council to reconsider their decision to reduce universal access services for working women with children and instead decide to increase the offer of such services to nearer 50% of the overall service provided.

And your Petitioners, as in duty bound, will ever pray, and c.––[Official Report, 21 January 2015; Vol.591, c. 3P.]

[P001427]

Observations from the Secretary of State for Communities and Local Government:

The Government acknowledge the important part that such services can play in local communities. We want to see a strong network of children’s centres in place across the country, offering families access to a wide range of local, flexible services, tackling disadvantage and preparing children for life in modern Britain.

Local authorities have a statutory duty on children’s centre sufficiency and should ensure services are accessible to all families and young children in their area, with the revised core purpose setting out a particular focus on those families with the greatest needs.

It is up to local authorities to decide how to organise and commission services from children’s centres in their area, which is why we have given local councils, like Northamptonshire, the freedom to target their resources where they will best support the needs of local communities.

Local authorities have the funding to ensure they can meet their statutory duty to provide sufficient children’s centres.

Closure of the Seven Stars public house in Sedgley

Monday 23rd March 2015 Petitions

The Petition of residents of the Dudley North constituency,

Declares that the Petitioners are opposed to the proposal to close the Seven Stars public house on Gospel End Road in Sedgley and are opposed to the retail development plans for the site.

The Petitioners therefore request that the House of Commons urges the Government to encourage Marston's PLC to reconsider the closure of the Seven Stars public house, Gospel End Road, Sedgley.

And the Petitioners remain, etc.—[Presented by Ian Austin, Official Report, 4 March 2015; Vol. 593, c. 1046.]

[P001446]

Observations from the Secretary of State for Communities and Local Government:

The Secretary of State for Communities and Local Government is aware of the concerns some people have about losing their community pubs, and the Government have made clear their commitment to protecting those pubs that most benefit the community.

Through the Community Right to Bid the Government have given people the power to list local buildings as Assets of Community Value. So far this has included over 600 pubs. In addition, the Government have recently introduced new legislation which means that, from 6th April 2015, the listing of a pub as an Asset of Community Value will trigger the disapplication of the permitted development rights that allow the change of use or demolition of a pub without the need for planning permission.

This will mean that, where a pub is listed as an Asset of Community Value, planning permission will be required for its change of use or demolition. This will enable the local planning authority to determine the application in accordance with its local plan, any neighbourhood plan, and national policy, and provide an opportunity for local people to comment on any proposals.

Impact of new housing in Longridge, Clitheroe and Whalley

Monday 23rd March 2015 Petitions

The Petition of the residents of Longridge, Whittingham and the Ribble Valley Parliamentary Constituency,

Declares that the small rural towns and villages like Longridge, Clitheroe and Whalley up and down the country are under siege from housing developers seeking to build excessive numbers of homes to encourage people to migrate from industrial towns and cities to rural communities.

The Petitioners therefore request that the House of Commons recognises the problems of these communities like Longridge where developers are seeking to build 2,300 houses and amend the National Planning Policy Framework to:

(a) Suspend the operation of clauses 14 and 49 of the National Planning Policy Forum until 90% of local authorities have an approved local development plan so there is no presumption in favour of planning consent where a local authority does not have an approved Local Development Plan or 5 years of development land and

(b) Allow local communities divided by a local government boundary to be treated as one entity for planning purposes.

And the Petitioners remain, etc.—[Presented by Mr Nigel Evans,

Official Report, 4 November 2014; Vol. 587, c. 796.] [P001395]

Observations from the Secretary of State for Communities and Local Government:

Through our reforms in the Localism Act and National Planning Policy Framework the Government have put local plans at the heart of the planning system. We have encouraged and supported all local authorities to get up-to-date plans in place as soon as possible as this is the most effective way of managing development within a local area. Local plans help guard against ‘speculative’ or unwanted development by setting the framework in which decisions on particular proposals are taken (whether that decision is taken locally or by the Planning Inspectorate at appeal).

Our policy does not ask that areas deliver more development than is needed, but that they plan to meet objectively assessed development needs as far as is consistent with national policy as a whole. National policy, including the presumption in favour of sustainable development included in the Framework does not mean development at any cost. The presumption is clear that applications should not be approved if the adverse impacts would significantly and demonstrably outweigh the benefits; or if specific policies in the Framework indicate that development should be restricted.

This ensures that important safeguards are respected.

The Ribble Valley Core Strategy (local plan) was adopted by the Council on 16 December 2014. In determining planning applications, decisions must be taken in line with the local plan unless material considerations indicate otherwise. The adopted plan will therefore put local communities in the best possible place to steer future development in their area.

It is a fundamental principle of the planning system that authorities must take decisions on planning applications as they come before them rather than delay until a future point in time. It is also now almost three years since the publication of the Government’s National Planning Policy Framework and the Localism Act. To impose a moratorium on decision-taking in respect of housing until 90% of plans are adopted would stall much needed development; there are pressing national needs for housing and jobs that would be exacerbated were such an approach adopted.

All residents of Longridge, Whittingham and the Ribble Valley, have opportunities to express views and influence decisions on proposals for future developments. Upon the submission of any planning application for development the council must advertise the application by site notice and on their web-site. At such a time local residents may object to the proposal, and the council must take these views into account in reaching a decision.

Since the National Planning Policy Framework was introduced, the number of appeals received across England has fallen as has the number allowed. The quality of local decisions also remains high—99% of decisions are made locally with only approximately 1% of planning applications overturned on appeal. Housing starts and housing construction are also up, as are permissions for new homes. This means there is more local decision-making, and our reforms are supporting badly-needed new homes within a locally-led planning system.

The Localism Act 2011 places a legal duty on local planning authorities, county councils, and public bodies to co-operate with their neighbouring authorities on strategic planning issues. Councils are required to demonstrate that they have complied with the duty when their local plans are at examination. Failure to demonstrate compliance will mean that a local plan cannot be found sound. Co-operation between local authorities should produce effective and deliverable policies on strategic cross boundary matters, and effective planning policies will ensure local authorities are in control of their planning issues.

Radiotherapy facility at Lister Hospital

Monday 23rd March 2015 Petitions

The Petition of residents of the constituency of North East Hertfordshire,

Declares that patients who are residents of Letchworth Garden City and the surrounding towns and villages have to travel to Mount Vernon Hospital in Hillingdon to receive radiotherapy treatment and that this journey is long and exacting and often has to be made on consecutive days.

The Petitioners therefore request that the House of Commons urges the Government to encourage NHS England to provide a radiotherapy facility at Lister Hospital in Stevenage in order to make the journey for radiotherapy treatment much easier for patients who live in Letchworth Garden City and the surrounding towns and villages.

And the Petitioners remain, etc.—[Presented by Sir Oliver Heald, Official Report, 10 March 2015; Vol. 594, c. 266.]

[P001441]

Observations from the Secretary of State for Health:

Decisions about local services should be made as close to patients as possible, by those who are best placed to work with the patients and the public to understand their needs. Because it is a specialised service, radiotherapy is commissioned directly by NHS England.

NHS England has carried out a high-level exercise to assess capacity and demand for External Beam Radiotherapy generally at a national level. A further phase of work will also take place at a local level shortly and will include the launch of a radiotherapy capacity and demand survey.

On 12 March 2015, the Public Accounts Committee published “Progress in improving cancer services and outcomes in England”. One of the recommendations in the report is that NHS England should set out how it will ensure a co-ordinated national approach to procuring replacement radiotherapy equipment so that sufficient capacity is available in the right places.

NHS England will develop a plan to respond to this recommendation and the radiotherapy capacity and demand survey will be the first step in this process.

NHS England will continue to review the need for additional radiotherapy facilities outside the current centres if it benefits sufficient numbers of patients and will ensure that any changes are economically viable and enhance the existing care pathways.

The hon. Member for Stevenage (Stephen McPartland) and the hon. and learned Member for North East Hertfordshire (Sir Oliver Heald) are meeting NHS England representatives shortly to discuss the provision of radiotherapy services locally, which is the appropriate course of action.

The Petition of residents of the constituency of Stevenage,

Declares that patients who are residents of Stevenage and the surrounding towns and villages have to travel to Mount Vernon Hospital in Hillingdon to receive radiotherapy treatment and that this journey is long and exacting and often has to be made on consecutive days.

The Petitioners therefore request that the House of Commons urges the Government to encourage NHS England to provide a radiotherapy facility at Lister Hospital in Stevenage in order to make the journey for radiotherapy treatment much easier for patients who live in Stevenage and the surrounding towns and villages.

And the Petitioners remain, etc.—[Presented by Stephen McPartland, Official Report, 10 March 2015; Vol. 594, c. 1P.]

[P001450]

Observations from the Secretary of State for Health:

Decisions about local services should be made as close to patients as possible, by those who are best placed to work with the patients and the public to understand their needs. Because it is a specialised service, radiotherapy is commissioned directly by NHS England.

NHS England has carried out a high-level exercise to assess capacity and demand for External Beam Radiotherapy generally at a national level. A further phase of work will also take place at a local level shortly and will include the launch of a radiotherapy capacity and demand survey.

On 12 March 2015, the Public Accounts Committee published “Progress in improving cancer services and outcomes in England”. One of the recommendations in the report is that NHS England should set out how it will ensure a co-ordinated national approach to procuring replacement radiotherapy equipment so that sufficient capacity is available in the right places.

NHS England will develop a plan to respond to this recommendation and the radiotherapy capacity and demand survey will be the first step in this process.

NHS England will continue to review the need for additional radiotherapy facilities outside the current centres if it benefits sufficient numbers of patients and will ensure that any changes are economically viable and enhance the existing care pathways.

The hon. Member for Stevenage (Stephen McPartland) and the hon. and learned Member for North East Hertfordshire (Sir Oliver Heald) are meeting NHS England representatives shortly to discuss the provision of radiotherapy services locally, which is the appropriate course of action.

UK Petitions to the European Court of Human Rights

Monday 23rd March 2015 Petitions

The Petition of Jonathan Roger Steinberg,

Declares that the Petitioner is a resident of both London and New York; further that the Petitioner and his mother were forced to leave their home; further that the Petitioner believes that he was deprived of his home and assets as a result of a malicious vendetta carried out by a solicitor in over half a dozen pieces of litigation concluding with Pritchard Englefield v Steinberg HQ02X01159; further that the Petitioner believes that each such action over a 15 year period was commenced in abuse of process by a firm of solicitors acting for their own benefit; further that in that litigation, the solicitor succeeded by applying to various courts for various ex parte and without notice judgments often by presenting falsified evidence and at a time when they knew the Petitioner was unable to take part in the litigation for medical reasons; further that the UK judge assumed a right to handle the solicitor’s application because he said he had power after a few weeks wait to “decide the time had come” to dispense with the strictures of Article 6(1) of the European Convention on Human Rights and pass judgment against a party who could not take part in the proceedings for medical reasons and deprive that party and his family of their home contrary to Article 8(1) of the Convention without giving that party any opportunity to present opposition to such application or applications; further that the Petitioner believes that without any or proper reference to judicial staff, the European Court of Human Rights wrongly struck out the Petitioner’s petition to that court without any hearing and without being able to write any judgment in the case with the statement that the petition disclosed no breach of any Convention right; and further that the Petitioner believes that litigation before courts of the UK should be properly and fairly disposed and that applications should not be left undecided for any reason.

The Petitioner therefore requests that the House of Commons urges the Government to strengthen the procedures for requesting the Master of the Rolls to review a litigation case under Section 54(4) of the Senior Courts Act 1981; further requests that the House requests that the Government press the Council of Europe to review the Petition process of the European Court of Human Rights to establish whether UK Petitions are properly treated when tested against whether a violation of rights is alleged and to establish what further steps could be taken to strengthen the rights of UK subjects who have Petitions before the European Court; and further requests that the House urges the Government to consider whether steps should be taken to strengthen the rights of UK subjects who have Petitions wrongly culled from European Court lists without regard for the rights of those UK Petitioners; further requests pursuant to the facts and matters set out herein the House of Commons set up a full inquiry.

And the Petitioner remains, etc.––[Official Report, 12 February 2015, Vol.592, c. 11P.]

[P001437]

Observations from the Secretary of State for Justice:

The Government have the following Observations to make:-

In the United Kingdom the separation of powers as between the Executive, the Legislature and the Judiciary is paramount––the judiciary are not subject to review by the executive, nor indeed Parliament.

Judges carry out their duties having regard only to the facts and arguments which are brought before them and it is their task to apply the law in that light. Questions about the merits of a case, about the evidence that was offered, about the interpretation of that evidence, or about the decisions that have been made, are not questions on which Parliament has any jurisdiction.

Where someone believes that a court or tribunal has been confused and did not properly understand the facts of the case concerned, or has misdirected itself in law, the appropriate remedy is to seek to appeal or, where appropriate, to apply for judicial review.

The judgment of the Court of Appeal in Steinberg, v. Enslefield f20051 EWCA Civ 288 makes clear that the litigation referred to in the petition was properly conducted. Here Sedley LJ set out the case history and paid specific attention to the care that the lower court had taken in dealing with the petitioner, especially in balancing the need for judgment as against the need to be present at the proceedings¹. It should be noted that the petitioner made two separate applications to the Court of Appeal; both raising the complaint that judgment was made in his absence². Both times his applications were dismissed. There has been no appeal to the Supreme Court.

As to the issue of the loss of the family home, this is covered by the findings of Peter Smith J in the possession proceedings³. In effect the sale was ordered so as to preserve as much of the value as possible so that there would be something left over for the petitioner’s mother to live on. Had the judge not made the order for sale, the equity would have been swallowed up in the existing charging orders and the judgment debt.

Our legal system, courts, judges and lawyers are admired throughout the world. Judicial independence, professionalism and impartiality are the cornerstone of this. There is nothing that indicates that the cases were not tried with the degree of care that one expects from United Kingdom judges.

In accordance with the principle of subsidiarity, it is for domestic courts to ensure that proceedings are conducted compatibly with the right to a fair trial under Article 6 of the European Convention on Human Rights. It is of course open to anyone to apply to the European Court of Human Rights in Strasbourg if they believe their rights to have been breached. However, in view of the large number of applications that it receives, it is the practice of the Strasbourg Court to dismiss an application immediately as manifestly inadmissible if it considers that it does not disclose a possible violation of the Convention, taking note of the consideration that has already taken place at national level.

The Government strongly support the implementation of the principle of subsidiarity by the Strasbourg Court, this having been a key part of the reforms cemented by the Brighton Declaration under the United Kingdom’s Chairmanship of the Committee of Ministers of the Council of Europe in 2012.

There is no evidence that applications made against the United Kingdom are treated differently by the Strasbourg Court from any others. In any case, as the Government respond to proceedings on behalf of the United Kingdom, it is not in a position to intercede on behalf of applicants against it.

¹ See para 18

² [2005] EWCA Civ 824

³ [2004] EWCH 1908 (Ch)

Westminster Hall

Monday 23rd March 2015 Westminster Hall

Monday 23 March 2015

[Mr Dai Havard in the Chair]

Nurses and Midwives: Fees

Monday 23rd March 2015 Westminster Hall

16:30

[Mr David Anderson (Blaydon) (Lab)]

I beg to move,

That this House has considered the e-petition relating to proposed increase in fees for nurses and midwives.

It is a great privilege to serve under your chairmanship today, Mr Havard. I thank hon. Members for coming to this serious debate, and I thank my colleagues on the Backbench Business Committee for agreeing to it. I also thank the various trade unions and representative organisations in the national health service that have provided support and given me background material for the debate.

I start by reading out the petition and thanking Mr Stephen Iwasyk and the other 113,795 people who signed it, demonstrating their interest and concern about this vital issue. The petition states:

“We would like the Government to Review the Nursing and Midwifery Council (NMC) with regard to the fees charged to registered nurses and midwives, and the processes through which those fees are decided. The Nursing and Midwifery Council (NMC) recently discussed a further increase in registration fees for Nurses and Midwives from £100 to £120. The fees were increased 2 years ago from 76 to 100 following a consultation that was overwhelmingly against the rise. The NMC are, of course, obliged to consult before any further rise. However 96%+ of individuals voted against the rise last time. The Health Committee in their report earlier that year said ‘We would urge the NMC to avoid further fee rises and to consider fee reductions for new entrants to the register.’ Approximately 670,000+ Nurses and Midwives contribute £67+ Million annually to the NMC. Please sign the petition to encourage a review of the NMC and the charging of annual fees to Nurses and Midwives.”

I am grateful for the opportunity to debate an important issue that faces many of our constituents who are nurses and midwives. The petition, which had reached 113,796 signatures by the time it closed in February, relates to the proposal of the Nursing and Midwifery Council to increase registration fees for all 670,000 nurses and midwives by almost 60% in two years. The e-petition opposed the proposed fee increase and called for a general review of the NMC, and a review of the charging of annual fees to nurses and midwives.

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

I congratulate my hon. Friend on securing the debate. Does he agree that there is an urgent need for the Government to enter discussions with the Nursing and Midwifery Council with a view to reducing fees, in order to sustain the profession and keep people in it?

[Mr Anderson]

That is absolutely what the debate is about. I will point out some glaring worries that have been described to me about the capability and the effectiveness of the NMC. It is not that people do not want to pay a subscription fee; people are forced to pay a fee to be registered, and if they do not pay it, they cannot work. If they cannot work, obviously, they will not make money. The question is whether they get value for money. I am pleased that my hon. Friend the Member for Easington (Grahame M. Morris) is here, and I hope that he will talk about the findings of the Select Committee on Health, which published a report a couple of years ago that was—to put it mildly—quite critical of the NMC.

I will provide some background about what the NMC stands for, what its objectives are and why it proposed a fee increase. I will explain why the NMC fee increase was so strongly opposed by the overwhelming majority of nurses and midwives. The reasons for that opposition included the NMC’s historically poor financial oversight and management, which was highlighted in a damning report by the Council for Healthcare Regulatory Excellence in July 2012. The council criticised the NMC’s lack of focus on preventive measures to reduce fitness-to-practise referrals, the real-terms pay cut imposed by the coalition Government on hard-working nurses and midwives and the catastrophic impact that a fee increase would have on workplace planning. Finally, I will talk about the impact of future fee increases on nurses and midwives and on the care that patients will receive.

Despite heavy opposition from professional bodies and trade unions representing registrants’ views, the NMC chose to increase fees, effective from the end of last month. I want to talk about how fees could be reduced, which comes back to the point made by the hon. Member for South Down (Ms Ritchie).

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

I congratulate my hon. Friend on securing the debate, and I congratulate those who supported the petition. Does he agree that one of the fundamental problems is that the Nursing and Midwifery Council is spending a disproportionate amount of its budget—about 75%—on 1% of the register through the fitness-to-practise cases? There must be a more cost-effective way for it to carry out its obligations.

[Mr Anderson]

That is the core of the debate. I am concerned about the fact that more and more cases are being referred. It appears that there has been a failure on the part of hospital management or health management in general, who are, in some cases, referring nurses and midwives to the NMC instead of using their own disciplinary procedures. They are giving away their responsibilities, and in doing so they are adding to the cost and the work load of the NMC, which should be dealing with other issues of equal importance.

Believe it or not, the NMC is the world’s largest regulator, with 670,000 nurses and midwives on its register. It is in the unique position of having a guaranteed income of £71 million a year. What other business or organisation has such a luxury nowadays? The NMC’s primary purpose is to protect patients and the public in the UK through effective and proportionate regulation of nurses and midwives. It is required to set and promote standards of education and practice, maintain a register of people who meet those standards, and take action when a nurse or midwife’s fitness to practise is called into question. By doing so, the NMC seeks to promote public confidence in nurses and midwives, and in the regulation thereof. However, the fee rise has done little or nothing to raise the confidence of the nurses and midwives whom the NMC regulates. Many, including some in my own constituency, feel that when they voiced their opposition to the fee increase, they were opposed or—even more worryingly—completely ignored.

For a nurse or midwife to practise in the UK, they must be on the register. They have no choice. It is illegal to work as a nurse or a midwife in the UK without being on the NMC’s register. To join and to stay on the NMC’s register, all nurses and midwives must pay the annual registration fee.

[Ann McKechin (Glasgow North) (Lab)]

I congratulate my hon. Friend on securing the debate, especially as I tried for about three months last year to secure a debate on this subject. Does he agree that, particularly given the 60% increase in the fee over the past few years, the fact that there is no fee reduction for nurses and midwives who work part time is becoming a much greater concern and is discouraging people from coming back to work part time?

[Mr Anderson]

That is central to the discussion. I have been struck by the fact that nurses who are relatively well paid and work full time will have to pay exactly the same registration fee as those who work short hours. That may make things quite comfortable for the NMC’s bureaucracy, because the organisation will know exactly how much money it will have, but it does nothing for people who are worried about where the next pay packet is going to come from. My hon. Friend is right to say that it is a real problem.

[Sir Alan Meale (Mansfield) (Lab)]

From my hon. Friend’s contribution to the debate so far, it is clear that a poll tax model has been adopted in respect of the gathering of funds for the Professional Standards Authority. Doctors and dentists will be paying the same fee as nurses. Does he not think that that is quite unfair, given the wage structure in the national health service?

[Mr Anderson]

That seems unfair to me, as it does to the nurses. As I will try to bring out in the debate, the important thing is not only the money that people are paying—for some, that is a real issue—but the value for money that they receive. Two years ago, the Government had to step in and give the NMC £20 million to prevent a fee increase. Of course, the nurses and midwives welcomed that, but it means that the taxpayer is subsidising the NMC because it has failed to do its job properly. My hon. Friend is right to say that there is an imbalance in what it is doing.

[Sir Alan Meale]

It is about not only the position but the numbers. There are far more nurses and midwives than doctors and dentists. The fee increase is disproportionate and quite unfair.

[Mr Anderson]

The fee increase is disproportionate, but the numbers of disciplinary and fitness-to-practise cases are also disproportionate. As we will hear, the number of nurses facing fitness-to-practise issues is grossly more than the number of doctors facing such cases. That means there is less money to spend on education and training to increase registration standards for nurses, which is what we all want.

Nurses lose at every level through the way in which the system is run. The review was not just about people saying, “Please don’t make me pay more money”; it was about, “Can we have a root and branch investigation into how this organisation is run? Can we make it run better? Can we make it run in everyone’s interest?”

[Grahame M. Morris]

There is a valid point about nurses and midwives who are returners and working part time. This burden is falling on the profession at a time when wages have been cut in real terms by between 8% and 10% over the past five years because of the Government’s failure to implement the recommendations of the pay review body. This is a double travesty.

[Mr Anderson]

My hon. Friend is right. He will not be surprised to learn that I share his view. The Government are treating nurses and other public sector workers appallingly. At the same time as saying, “We will give you no pay rise,” the Government are saying, “We want 60% more off you, and if you don’t pay it, you won’t be able to work.” As my hon. Friend the Member for Mansfield (Sir Alan Meale) said, these people are being pole-axed.

To join and stay on the register, all nurses and midwives must pay the annual registration fee. The fee is tied to their employment contract, which often stipulates that anyone who fails to pay the fee will face disciplinary action by their employer and a temporary lapse from the register. Since the NMC was established under the Nursing and Midwifery Order 2001 on 1 April 2002, there have been a number of increases in the annual registration fee. Historically, nurses joined the register for life and there was no annual fee increase. The order changed that, however. In 2004 the NMC annual registration fee was £43, which increased to £76 in August 2007.

In 2011, the Council for Healthcare Regulatory Excellence was tasked with investigating the NMC. It published a damning report that criticised the NMC’s lack of leadership, poor communication, inadequate governance and poor financial management. A new chairman and chief executive were appointed and, critically, the NMC accepted the report’s findings in full—the NMC accepted that it was not doing what it was supposed to have been doing as well as it should have been doing it.

In May 2012, the NMC indicated its intent to consult on a 58% fee rise from £76 to £120 a year. Following pressure from Unison, the Royal College of Midwives and the Royal College of Nursing, the Government offered a £20 million grant to the NMC. The Secretary of State for Health agreed to the grant because he was also appalled by the regulator’s poor financial management—and he would know about poor financial management, given the state into which he has got the health service in general. The result of that grant was that the registration fee was kept down to £100 a year, although we should remember that it had gone up to £76 only a few years earlier, so there was a big increase at a time when people were not receiving pay rises.

[Grahame M. Morris]

Is there not an argument for placing a moral obligation on the Government to make a contribution in the wake of the Francis report, which identified failings in a number of organisations, including the Nursing and Midwifery Council? Surely the Government have an obligation to help to meet the costs in order to put things right.

[Mr Anderson]

I am happy to say that, although I do not completely agree with my hon. Friend. A review would allow us to have a discussion and get people involved. If the Government are too involved, some people will worry whether the NMC will lose the independence of which it should be proud, if it is running properly. I have no problem in principle with the Government helping out in any way they can, because that is part and parcel of ensuring that nurses are able to do the job that we and the public want.

The fee increase was significant because nurses and midwives have been subjected to a Government-imposed pay freeze while, outside in the real world, everyday items and household bills are increasing dramatically. As we know, figures from the Labour party and others show that people are £1,600 a year worse off than they were five years ago. It is a double whammy, to put it mildly, for hard-working nurses and midwives to be told, “You are going to be worse off—and by the way, why don’t you pay more for your registration?”

In May 2014, the NMC consulted again on increasing the fee from £100 to £120, an increase of almost 60% in two years. The Government could have offered another bail-out to allow the NMC more time to address the challenges it faces from fitness-to-practise cases, but they chose not to. The proposed annual registration fee increase was heavily opposed by all the professional bodies and trade unions that represent the views of registrants. Ninety-nine per cent. of respondents to the Unison survey opposed the proposed increase to £120 a year. In the RCN survey, the same proportion of respondents disagreed with the proposed fee rise. The anger felt by registrants is demonstrated by the e-petition condemning the proposed fee increase, which was signed by almost 114,000 people. Their feelings are reasonable and understandable.

I will now address the NMC’s poor financial management, which was highlighted in the 2011 report. The fee increase was felt to be inappropriate because it placed too big a burden on individual nurses and midwives to make up for the NMC’s poor management. The £20 million grant from the Department of Health was meant to contribute to the cost of clearing the backlog of historical fitness-to-practise cases. Despite that help, some 50 cases have been outstanding for three years or longer. The issue was reinforced by the report, and 50 cases have been on the books for the three or four years since then. In 2009, the NMC had a relatively small number of such cases, and had it taken appropriate action at that stage, there would never have been the need to increase the registration fee to such a level.

The NMC’s consultation paper on registration fees recognised that the key driver of increasing costs is the massive increase in fitness-to-practise referrals. Since 2008, the number of fitness-to-practise referrals has increased by 133%. The NMC holds two and a half times as many hearings as all the other regulators combined. Last year, the NMC spent £55 million of its £71 million budget on fitness-to-practise issues, which means that 77% of its budget is spent on fewer than 1% of registrants. In comparison, the General Medical Council, which my hon. Friend the Member for Mansfield mentioned, spent only 56% of its resources on fitness-to-practise cases involving registered doctors in 2013-14. The people who helped me to secure this debate support my contention that the NMC model is unsustainable and detrimental to the majority of registrants.

Employers are the largest group making fitness-to-practise referrals. In 2012-13, however, 40% of fitness-to-practise referrals were closed during the initial assessment. Employers were making referrals that were not fit to be heard but that had to be heard, and the cost of those hearings comes directly out of the purses and wallets of nurses and midwives. It has been suggested to me that, following the Mid Staffordshire NHS Foundation Trust public inquiry, employers have become increasingly risk- averse and are using the fitness-to-practise referral process instead of internal processes and procedures to address performance and disciplinary issues. Instead of taking cases on themselves, employers are referring them to the NMC at unsustainable cost.

Inappropriate referrals block the system and add to costs, which is why it is important that the NMC assesses whether it is appropriate for employers to refer so many cases. The NMC could do that by including employers in reviewing the reasons for the dramatic increase in referrals since 2008. Is there a crisis? Is there a problem? Is there something wrong with the practice? If employers sit around the table with the NMC, perhaps they will get to the bottom of the situation.

The NMC should also take a more proactive approach to the promotion of education and standards as part of a preventive measure that could contribute to reducing the number of fitness-to-practise cases referred to the regulator. There should be an equally strong commitment to public protection, because that will prevent harm in the first place.

I have a quote from a full-time officer from Unison about his experience in dealing with NMC cases:

“The NMC pursue allegations against registrants that have little or nothing to do with patient safety and could not be said to have a public interest element. Despite the recommendations of the Law Commission review and its apparent endorsement by the NMC and the Department of Health, the NMC continues to bring cases relating solely to inter-employee and other issues wholly unrelated to their nursing practice. In addition the NMC insists on taking any cases with an apparent ‘public interest’ to a full hearing or meeting even where the registrant wishes to be voluntarily removed from the register. The lack of any clear definition of what is meant by the public interest makes the issue wholly subjective.

At a recent NMC hearing an NMC panel decided that a registrant’s apparent failure to approve staff applications for flexible working amounted to serious professional misconduct and was a public interest issue! This hearing lasted 10 days and probably cost well in excess of £30,000. It is absurd that nurses and midwives should be asked to foot the bill for such folly with ever increasing registration fees.”

That is the experience on the front line—that is what people are paying £120 a year for.

In an attempt to convey the affordability of the proposed fee increases, the NMC consultation paper compared subscription fees for professional bodies and those of trade unions with the NMC. However, that is not valid comparison. Unlike the NMC, trade unions and professional bodies are organisations that nurses and midwives can join voluntarily.

I would be delighted if the Government said that we could have a closed shop for trade unions and professional bodies. I am sure that you would agree, Mr Havard, but I have got a feeling that they may not be keen. Come 8 May, the next Government will be led by that wonderful gentleman, my right hon. Friend the Member for Doncaster North (Edward Miliband), but I have a feeling that he also might not be too keen on closed shops in the health service or anywhere else. However, that is what we have got with the NMC.

I understand why that is the way it is, but for the NMC to pretend that, somehow, a comparison can be made with joining trade unions is completely unfair. It would be much more suitable to compare the NMC’s registration fees with Health and Care Professions Council registration fees. Under “Agenda for Change”, both regulate professionals in similar pay bands, but when we compare a nurse at the top of band 5 with an occupational therapist on the same band, we see that the nurse would pay £120 a year in registration fees while the OT would spend £80. That goes back to the point raised earlier about why on earth part-time workers and those on different bands should pay the same subscriptions.

Although the NMC recognised the economic difficulties nurses and midwives face in its consultation paper, it proposed the fee increase regardless. Effectively, it ignored the reality of how those people are struggling.

[Ann McKechin]

I was astonished to find that the NMC has not instigated any efficiency programme to try to control costs and those of tribunal hearings in particular—even things such as booking hotels and accommodation for tribunal members—to try to ensure the most efficient cost basis, given current restrictions. Does my hon. Friend agree that, given that the NMC has a captive audience, it needs to spend more time showing that it is getting maximum efficiency for its costs?

[Mr Anderson]

My hon. Friend makes a valid point, which again comes back to what the review can look into: whether members are getting value for money. That is what we are talking about here. The NMC might think, “If we need more money, we can get it because they have got no option other than to pay.” It can hold people to ransom and, unfortunately, that is what it is surely doing. That is clear, because it has ignored the legitimate claims of those who have said, “Please, give us some relief here.” It appears that those people were told, “We’re going to ignore you, anyway.”

During a time of continued pay restraint for hard-working nurses and midwives and ever-increasing costs of essentials such as child care, household bills and everyday items, the proposed fee increase left many registrants feeling that that was yet another attack on their standard of living.

[Ms Ritchie]

My hon. Friend is making a good point. By and large, the NMC’s members are women and some of them are in part-time employment. Does he agree that the disproportionate payment to the Professional Standards Authority for Health and Social Care will have an adverse impact on equality and could infringe equality regulations?

[Mr Anderson]

My hon. Friend is obviously reading my mind, because that is the point that I was going to come on to next. She is absolutely correct that part-time workers, who are mainly women, are being hit disproportionately because they are in part-time work, and there could well be equality issues around that.

The decision to increase fees will have a catastrophic impact on nurses’ and midwives’ future decisions, which will have a direct result on work force planning and patient care. At present, 30% of nurses and midwives in practice have protected pension rights, so they are eligible to retire at 55 with their full pension. Many do that, and, after a brief period of absence, return to part-time practice. That has gone on for decades and is something that the health service has welcomed and plans for.

I have been told by many people who work in nursing and midwifery that it would not be economic for them to return to work after they retire if registration fees rise and continue to do so. That was borne out by the Unison survey, which found that 51% of respondents would not return to practice if fees increased. That would be a double whammy for the health service. We would lose people with experience who were prepared to come back to work part time; they will not do that because of that block put in front of them.

We already have a chronic shortage of supply of nurses and midwives in the UK, which is made worse by the Government’s decision to cut the number of nurses and midwives in training. That shortage is demonstrated by the increasing numbers being recruited from Europe. A reduction in those returning to practice will have a devastating impact on patient care. It is essential that service and staff implications are taken into account by the NMC and the Government. Without that, it will be impossible for the NHS to plan its work force properly.

On revalidation, the NMC ignored the heavy opposition it received and decided to go ahead with its proposal to increase fees regardless. For any nurse or midwife whose registration payment is due by the end of February 2015 or later, the new fee applies. The bodies and unions sought reassurance from the regulator that fees would not increase further, but the NMC has offered no guarantees about coming years.

Later this year, the NMC will introduce a new revalidation process for registrants, which will place additional requirements on those who wish to stay on the register and continue to work. I support the work on revalidation, and I know colleagues on the Health Committee have been critical of the failure to move faster on that, but many nurses and midwives are concerned that those changes could result in further fee increases. It is not clear what the cost impact will be.

[Sir Alan Meale]

The papers that I have read make it clear that the NMC gathers most of the PSA’s funds, yet it seems to have little say in its budget. Does my hon. Friend agree that that is probably the main reason for the re-evaluation?

[Mr Anderson]

Absolutely. I will come on to discuss the PSA before I sit down, which my hon. Friend will be glad to hear will not be long now.

Professional bodies and trade unions are working hard with the NMC to ensure that the development and introduction of the new process is as successful as possible and that lessons are learnt from the pilot sites. That process will be extensive and require significant efforts from registrants, but it surely cannot lead to further unjustifiable fee increases for hard-working midwives and nurses.

The NMC could take measures to prevent future fee rises for registrants, but it is not the only one that should beheld responsible. The Government could have taken measures to reduce further fee increases, but they chose not to.

First, the NMC has the most unwieldy legislation of all regulators despite being the largest. By contrast, the General Medical Council and the Health and Care Professions Council have more flexible legislation, which allows them to be more efficient and cost-effective. That prompts the question: why should midwives and nurses be treated differently from doctors and occupational therapists?

In April 2014, the Law Commission published a draft regulation of health and social care professionals Bill, which included reforms that would have helped the NMC keep costs down. If implemented, the draft Bill would offer the NMC the opportunity to speed its processes up and give it flexibility to amend rules without having to seek Parliament’s permission.

The Mid Staffordshire NHS Foundation Trust public inquiry called for regulators to focus on promoting safe, compassionate care, rather than intervening only after patients have suffered harm. The draft Bill would have allowed the NMC to focus more resources on education, effective registration and promoting professional standards, which would have done exactly what the inquiry called for. Currently, it is impossible for the nine health regulators to work together: there are nine different pieces of legislation, nine different codes of conduct and nine different fitness-to-practise procedures. It is not clear to me why we are treating health workers differently when the main objective of all health regulators is surely the same—public protection.

The draft Bill would enable and require regulators to co-operate more closely with each other, which would ensure consistency. It would help the NMC and all the regulators to keep their costs down collectively. However, this Government failed to include it in the Queen’s Speech, which meant it could not be debated or passed into law. It would be interesting to hear from the Minister what he thinks of that decision.

Registrants should not be punished for the Government’s failure in that respect. Likewise, the NMC should not use it to justify or push through any future fee increases. The NMC has joined representatives of patients’ groups, nursing and midwifery professional bodies, and trade unions to call on politicians, such as us here today, to commit to introducing the draft Bill to reform health care and its professional regulation.

In addition, following a review in 2010, the Government decided that the Professional Standards Authority, the body responsible for the oversight of the health professions’ regulators, would no longer continue to be funded by the Government and the devolved Administrations. Instead, the review recommended that the PSA should be funded through a compulsory levy or fee on the regulatory bodies that it oversees. So, rather than consult on whether there should be a levy or on who should pay it, the Government decided to consult on how the PSA levy on the regulatory bodies should be calculated. Rather than saying, “Should we do it?” they said, “How will we pay for it?”

Professional bodies and trade unions quite rightly argued against this levy; it is another hammer blow for the people working in the service. However, their concerns were ignored by the Government who, in their response to the consultation, decided to determine the fee based on the number of registrants that a regulator has. Again, this unduly disadvantages the NMC, which will bear a disproportionate amount of the cost because, as I said earlier, it is the largest regulator in the world. Based on the current size of the NMC’s register, the first £1.7 million levy to the PSA equates to £2.50 per registrant. The upcoming fee rise has already resulted in 12.5% of this additional sum effectively going straight to fund an external organisation, which is doing nothing to protect the public or to help to educate or protect the staff working in the service.

Because the NMC has no other source of income, these costs will almost inevitably be passed on to registrants, who include some of the lowest-paid professionals regulated by the health regulators. As I said before, approximately 90% of the NMC’s registrants are women, so the PSA levy will have an adverse impact on equality, as the hon. Member for South Down said. Also, many NMC registrants work in part-time roles, and so frequently they are not high-income earners. If the NMC is forced to increase the annual registration fee in order to pay the PSA, which in some respects it already has, that will have an impact on equality, as those in this group will be financially worse off. The poorest will pay the most, which is not unusual under this Government.

Over the years, all the NMC’s efforts have been directed at dealing with fitness-to-practise cases. This has had a detrimental impact on the level of service provided by the NMC to its registrants. For example, the NMC has failed to provide effective and up-to-date guidance on key issues, and there has been a lack of professional advice to registrants who have queries or concerns about how to interpret the requirements of or guidance on the code of conduct. Given the overwhelming, and appropriate, focus of professional regulation on public protection, and the diminution in professional advice, it could be argued that it is unfair to expect registrants to continue to bear the sole financial burden of the NMC’s professional regulation activities.

Furthermore, if the body overseeing the regulators is funded by the regulators, the public will lack confidence. Consequently, the funding arrangement for the PSA, which is based entirely on registrant funding, is flawed. At a time of ongoing financial austerity, the additional bureaucracy is undesirable, particularly when there are already existing mechanisms to scrutinise and hold regulators to account, for example, the annual accountability hearing by the Health Committee, which enables the people in this building to scrutinise what the regulators are getting up to.

For these reasons, I urge the Government not to implement the levy on the nine health regulators, and for the Government and the devolved Administrations to continue to fund the PSA until it is included in the draft Law Commission Bill.

It is appalling that the NMC decided to increase its fees despite the heavy opposition from hard-working nurses and midwives. It is tough enough to be a nurse or midwife without having to be penalised for coming to work. They are working in an increasingly difficult environment, which has been made worse by public sector cuts, chronic understaffing and continued pay restraint that means their pay is lagging well behind cost of living increases. If the NMC’s fees continue to increase, it will result in nurses leaving the profession, exacerbating existing problems in the health system, which is already struggling to cope.

To ensure that future fee increases are not made, it is essential that the following steps are taken. First, the NMC should undertake a full review of all fitness-to-practise referrals that do not proceed to a full hearing, and use that information to sit down with the employers and trade unions to ensure that all referrals to the NMC are in the interest of patient safety and public protection, and not just an excuse for employers to carry out internal disciplinary procedures. That would have a positive impact by reducing the number of referrals and the overall cost thereof.

Secondly, the NMC should shift resources into promoting awareness and the development of guidance that would help registrants to understand better how to act within the NMC’s code of conduct in their practice. That would help to reduce the number of fitness-to-practise referrals, which would be a win-win for everybody concerned.

Thirdly, the NMC should consider a reduced fee for new registrants, part-time workers and those nearing retirement age, to reflect better registrants’ income throughout their careers. There should be a phased fee for all concerned.

Fourthly, the Government should not implement the PSA levy on regulators and should continue to fund it centrally, at least until it is included in the draft Law Commission Bill.

Finally, the draft Law Commission Bill must be given adequate parliamentary time by the next Government to be debated and passed, to enable the NMC and other health regulators to reduce costs, in the interests of all concerned.

We count on nurses and midwives every day.

[Grahame M. Morris]

I wonder if we can get clarification on that last point; perhaps the Minister can provide it. Given the dearth of legislation, especially in the last Session, why was not parliamentary time found for something on which there could have been cross-party consensus, such as a draft Bill based on the Law Commission’s report?

[Mr Anderson]

My hon. Friend makes a very good point, and I am very interested to hear whether the Minister will respond to it when he sums up and say exactly why we have not been discussing this issue during the past two or three years, when we have been going home at ludicrous times, such as 5.20 pm on a Monday, week after week during the past few months.

We count on nurses and midwives every day. Our families count on them; the people of this country count on them. I have heard loud and clear from my constituents that the fee increases are unaffordable and my fear is that people will start to vote with their feet.

The NMC is subject to parliamentary scrutiny by ourselves and the Health Committee, but we have little opportunity to comment on fee rises such as this one. We need to get the NMC to work together with the employers, the trade unions and the representative bodies, to review what it is doing and to provide a better service for all concerned.

17:08

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

It is a pleasure to serve under your chairmanship, Mr Havard; regrettably, it may well be for the last time in this Parliament.

I congratulate my hon. Friend the Member for Blaydon (Mr Anderson) on securing this debate and the Backbench Business Committee on allocating the time. It is on an important issue, and the reason I wish to participate in it is because I serve on the Health Committee and we have looked at this issue on a number of occasions as part of our annual accountability hearings. Indeed, we produced a report, which my hon. Friend referred to; it was the fifth report of Session 2013-14, and the reference is HC 699. It is an excellent piece of work. The Committee went into some detail, covering many issues mentioned by my hon. Friend the Member for Blaydon and making recommendations about how best to proceed.

I do not want to repeat the arguments, but it might be useful to put into context the report and the concerns that have been raised. Constituents of mine who are nurses and midwives have written to me individually, quite apart from the petition. I think many hon. Members throughout the country have had similar representations.

There is an issue about fairness in respect of this considerable increase in fees, and about how the increases have come about. There is also an issue about whether those who are required, by the nature of their employment, to be registered should be placed into financial hardship, as has happened in some cases, particularly with women returners who are working limited, part-time hours. We all agree with registration, to maintain public confidence and trust in the nursing profession. However, there is an issue about whether some allowance should be made for them, in terms of a reduction in their fees.

As my hon. Friend indicated, the nursing and midwifery professions are among the oldest established and longest regulated professions in the United Kingdom, with regulation taking many forms over the last century. The current regulator, the Nursing and Midwifery Council, which has given evidence to the Health Committee, has been in operation since 2002. As we have heard, it is the statutory regulator for more than 670,000 nurses and midwives. The £67 million figure relating to its income is an old one, because it now receives more than £70 million.

In 2011, the Health Committee began holding annual accountability hearings in relation to the Nursing and Midwifery Council. Prior to that, our concentration was essentially on the regulation of the medical profession, with the General Medical Council. We have since widened the scope of the annual accountability hearings. In its report on the first annual accountability hearing with the Nursing and Midwifery Council, the Committee expressed concerns

“about the affordability of the registration fee”.

This has not just popped up: we have identified it as a trend since 2011. In that report, the Committee urged the Nursing and Midwifery Council

“to avoid further fee rises and to consider fee reductions for new entrants to the register”.

However, there have been fee rises since then. When I was first elected, the fees were £76 and they increased to £100 in February 2013. The further rise to £120 a year—that would probably account for the increase in revenue—would mean a 52% fee increase, at a time when nurses and midwives are experiencing severe and unsustainable pay restraint. These problems are further compounded by the decision of the Government and the Secretary of State for Health to veto the 1% NHS pay rise, denying a pay increase to 70% of nursing staff and ignoring the view of the independent pay review body. I want to place on record that the incredible work and effort of our nurses and midwives is of great value, and I want to say how much that is appreciated throughout the country.

[Ms Ritchie]

My hon. Friend is making a compelling case for the career position of nurses and midwives. Does he agree that the Nursing and Midwifery Council, as well as the Government, should be encouraging people into the profession, rather than providing disincentives, discouraging them from joining it and from training for such vital roles that will benefit all within the wider community?

[Grahame M. Morris]

I agree wholeheartedly. All across the country—certainly in my area—efforts are made, and have been made consistently, to recruit good quality staff. Often recruitment is done overseas, with adverts being placed in newspapers in countries that train good quality nurses and midwives, but have a surplus. It often strikes me as bizarre that although we have a reservoir of women returners, we not making it as easy as possible for them to return. Doing that would be in the interests of the service and of the country. It would be a false economy to continue doing what we are doing.

[Sir Alan Meale]

I am here today because my sister is a midwife and has been a nurse all her adult life. This is not just about times of restraint and restrictions on pay; there has also been a thorough re-grading of the whole nursing and midwifery system throughout the UK, which has already re-graded many nurses to lower grades than previously. They are experiencing a double whammy, and this is the third time they have been hit with a fee rise. We should not approve it.

[Grahame M. Morris]

I am grateful for my hon. Friend’s intervention. That is another excellent point, well made. Pressures are being placed on the NMC, including increases in its costs, that are placing a greater strain and burden on nurses and midwives. The Government have to recognise that. I know that my hon. Friend the Member for Blaydon has reservations about whether the Government supporting the NMC with one-off grants would impact on its impartiality. I do not think that should necessarily follow. We should recognise the considerable pressures being placed on it financially, not least those arising out of public concerns and the recommendations of the Francis report. We want the public to be confident that the profession is properly regulated and that the fitness-to-practise procedures are operating properly and effectively. However, I agree with my hon. Friend. There was a ministerial statement last Thursday regarding untoward practices highlighted in a report, including bullying of staff and so on, in a hospital in east London—I think it was the Barts Health Trust. If fitness-to-practise referrals are being used by employers in that way, it is reprehensible and is adding to the strains and pressures on the NMC.

The latest fee increases are being imposed on nurses and midwives who were extensively consulted about them. My hon. Friend mentioned the overwhelming numbers: 96%—many of us would be over the moon to have that as a vote of confidence in the general election—voted against those recommendations. However, it seems that the consultation served little purpose, other than to antagonise nurses and midwives, because the Nursing and Midwifery Council has, apparently, taken little or no regard of the views of NHS staff and has pressed ahead with the fee increase.

The Nursing and Midwifery Council has also failed to provide any assurances that the latest increase will not be followed up by further increases in coming years. As my hon. Friend the Member for Mansfield (Sir Alan Meale) mentioned earlier, if we are to encourage people to come back into the profession, they have to know that the regulator has a reasonable, cost-effective process in place. The Nursing and Midwifery Council stated in evidence to the Health Committee last year that it had introduced an

“annual formal review of the fee level”,

so it is not necessarily an ongoing commitment. However, we have to ask: why has there been such a huge increase, of more than 50%, in a relatively short period?

Clearly the Nursing and Midwifery Council must meet its statutory obligations. We would expect that as Members of Parliament—and the public would certainly expect that—for maintaining professional standards. Certainly more needs to be done to remove the constraints it faces through the fitness-to-practise process—a number of hon. Members have highlighted that—which is too costly. Seventy-seven per cent of the Nursing and Midwifery Council’s income of more than £70 million is being spent investigating less than 1% of the nurses and midwives on the register. That is an incredible sum of money, and I find it difficult to comprehend how that can be an efficient use of resources.

The Nursing and Midwifery Council is making progress—I recognise that, and certainly the Committee recognised it, although it said it thought the progress was “fragile”. The NMC recognises past failures—not least in IT systems—and is seeking to overcome some of them, but it is clear that further improvement is required. An assessment by the Professional Standards Authority for Health and Social Care—the organisation that oversees all the professional regulators—has found that the Nursing and Midwifery Council is failing to meet seven of the 24 standards of good regulation. By any measure, I would suggest that there is still a long way to go in bringing it up to standard. Of those seven failures, two relate to fitness to practise.

While it is important that improvements continue to be made, it is wrong to expect nurses and midwives to bear the burden of the costs by themselves, particularly when we have seen the value of their pay fall in real terms over the life of this Parliament. The Government cannot sit idly by and allow continual increases in fees without taking action or giving some guidance. We hear Ministers time and again praising the hard work and dedication of nurses, and I hope the Minister will do that at the conclusion of the debate. Nurses do an amazing job in the most difficult circumstances, but when it comes to pay, pensions or professional fees, the kind words of Ministers seem to be rarely followed up by practical action that would help NHS staff.

In conclusion, I hope the Minister will say what steps he is taking to support the Nursing and Midwifery Council to ensure that it can continue to drive through the improvements we all want to see without having to increase the fees and the cost of employment for nurses and midwives. I also hope that he will address the points made by my hon. and right hon. Friends on the need to speedily bring forward the law commissioners’ sensible and well thought out proposals on the NMC. I would be interested if he could explain why they have not been brought forward before now.

17:22

[Fiona Bruce (Congleton) (Con)]

It is a pleasure to serve under your chairmanship, Mr Havard. I thank the hon. Member for Blaydon (Mr Anderson) for bringing forward the debate, although I do not agree with everything he said. With particular reference to the concerns he expressed on NMC registration fees, I will relay to Members and the Minister the experience of a constituent in Congleton whom I have recently had to assist.

My constituent is a registered general nurse. She qualified in 1987 and has practised as an RGN for 27 years. Sadly, the NMC recently nearly barred her from practising for a period, through no fault of her own. My constituent paid her £100 NMC re-registration fee by automatic bank transfer. The fee was debited from her account in October last year and she heard nothing more about it. She assumed that her re-registration had taken place automatically.

By chance, four months later, at the very beginning of February, my constituent was checking the NMC register regarding a colleague, and she decided to put in her own details. The system had no record for her. She contacted the NMC four times in two days, as she was very concerned. Eventually, she received a response. To her consternation, she was told that her registration had lapsed. She was informed that a form had been sent to her home, but had apparently been returned marked with “No longer resident at this address”, even though she had lived in the same house for four years and continued to receive other correspondence from the NMC throughout the period between October and February. Without contacting her or her employer, or reimbursing her money, the NMC had cut off her registration.

My constituent e-mailed me at the beginning of February, as she was extremely concerned. She said:

“I was then informed I would have to re-register”—

effectively, she had to apply for readmission—

“and could not work as I am no longer registered as a nurse and that sending the initial letters back could take up to 10 days and that I would also have to do a PREP audit which could take a considerable number of weeks to process. I do not have an issue with PREP as I do keep myself updated”.

She told me that last year she not only completed the 35 hours of continuing professional development that she should have done, but that she actually did around 100 hours of CPD. We are talking about a responsible member of her profession. Her issue was

“the length of time I will not be working because of the NMC incompetency. I have never received the renewal for registration form…I have received numerous letters from different departments at the NMC during the periods of October and up until last week”.

That was when she contacted me. Of even more concern is that she was also informed that

“the company I work for could request my wages back from October as I have not been registered or that they could discipline me. This situation is not my doing. I feel the NMC must have sent letters to the wrong address…why would I not receive some and receive others...I feel totally let down by a board that I have continually adhered to since 1987 without any blot on my career as both a Nurse and Midwife and now find myself in this diabolical situation which is not my doing.”

In fact, while my constituent was rather concerned, she continued to work. She needed to work, of course, and sought to correct the NMC’s error by reapplying. She was told that she would have to make a readmission application at the increased fee of £120, which she did. It was only after a number of letters from me and e-mails and calls from my constituent that just last week the NMC confirmed her readmission. She should have had her re-registration confirmed and backdated, but what she has had is an e-mail from the NMC that states:

“I have reviewed your readmission application, and I can now confirm that your readmission process is complete. As of today you are effective on the register with an expiry date of 31 March 2016.”

My constituent has been practising under this pressure for a considerable period. She was readmitted more than a month after she realised the situation and contacted me. She is extremely concerned, and so am I. In my constituent’s experience, the registration system has clearly lacked what I consider to be basic efficiency. It has fallen short of taking a reasonable approach to her. How can the NMC see fit to increase its registration fees in just two years from £76 to £120? Before it considers another increase, it should put its own house in order in respect of its relations with its members.

17:28

[Mark Durkan (Foyle) (SDLP)]

As other Members have said, it is a pleasure to serve under your chairmanship, Mr Havard. I commend the hon. Member for Blaydon (Mr Anderson) on securing this debate. I suppose he is a gamekeeper turned poacher on the Backbench Business Committee. He ensured that the e-petition, which gathered a significant number of signatures, would be debated before the close of this Parliament.

It is a pleasure to follow not only the opening speech from the hon. Gentleman, but also the insights from the hon. Member for Easington (Grahame M. Morris). His teasing out of where some of these issues could go are reinforced by his experience as a member of the Health Committee. It was also a pleasure to hear from the hon. Member for Congleton (Fiona Bruce), who talked about a particular constituency case that has given strong, more than anecdotal evidence that corroborates some of the issues raised by other Members on how the NMC is having to work, because of the position it is in. It is important that we consider issues relating not only to how the NMC works and whether its cost burdens should be alleviated in different ways or apportioned, but to the Professional Standards Authority, the funding source and scheme of which seems to be fundamental to the inequities we are discussing.

Many people wonder what Parliament’s role is in all this. They think Parliament is meant to oversee the health service and strong public service ethics, but it appears to wring its hands when these changes come along but everyone seems powerless to do anything. I tabled a prayer of annulment against the order that has brought about the increase in fees—early-day motion 697 if any Members want to scrabble in and sign it before Dissolution. However, it is only a prayer of annulment. As the hon. Member for Easington said, many people have written to MPs in all parts of the UK, but they are left bemused by the responses they receive. At least now we are having this debate, courtesy of the hon. Member for Blaydon. I look forward to hearing the Minister respond to it.

The point has been made that those who have to register with the NMC have faced pay restraint for a number of years. They are locked into pay freezes, and many are coping with the perverse and inequitable outcomes of the “Agenda for Change”. That has been the case for many professionals in my constituency in Northern Ireland, who have not only questioned where they are in relation to particular bands and how their responsibilities have been correlated with others, but found themselves at odds with what has been decided in neighbouring health trusts.

If people are already facing so many frustrations relating to their pay and conditions, they are particularly aggrieved when they are hit with what is essentially a vocational tax. They are being told that because their vocation is so important and sensitive and is subject to a registration process that is open to fitness-to-practise procedures, they have to pay more for the privilege of continuing to work. They are not being paid any more—they are actually being paid less—but they are having to pay more to register to turn up to work. Surely that is unfair and inequitable.

The fees have gone up from £76 to £100, and now to £120. That is just shy of a 60% increase in a small number of years, and people are rightly aggrieved. If that has been the form over a couple of years, they will ask whether it will be sustained—will it project into the future? There is a proper question for us to ask in Parliament and for Ministers to answer. It is not enough simply to say, “Well, this is the process we have. The NMC has to make the decisions and there is nothing we can do about it.” A couple of years ago, because of the pressure of the number of fitness-to-practise cases, the Government saw fit to use a £20 million subvention to help to relieve the situation, so why could not a further subvention be used? That would at least provide cover while other changes were introduced.

There are questions about the PSA’s funding being sourced on a per-registrant basis, which seems to line up the NMC for a particularly undue hit in terms of its source funding to the PSA. I will not go through it all again, but hon. Members asked about the cost burden that will arise and the procedural length of fitness-to-practise cases. Other hon. Members asked whether there might now be impressionistic evidence that health service management is using fitness-to-practise cases as a crude management tool. Perhaps they allow management to abscond from some of its more subtle and intelligent responsibilities by transferring crude enforcement to someone else. The cost in such cases is clearly giving rise to what seems to be a completely disproportionate working burden on the NMC.

[Mr Anderson]

I related to what a trade union representative told me about taking people through a fitness-to-practise hearing that lasted 10 days and cost £30,000. Employers may well be trying to prevent exactly that sort of thing from happening and tying up their HR staff—all the witnesses and people they have to suspend. Instead of taking responsibility, employers are parking such issues with the NMC, which has hugely increased its work load and the related costs.

[Mark Durkan]

I thank the hon. Gentleman for making that point and for giving colour to the concerns we feel when we look at the number of cases, the cost burden, the wider impact on the NMC and the costs faced by those who have to register with the NMC. We must remember that the NMC does not only work to service its members’ professional standing. It is there to safeguard not only professional standards but public assurance and the wider public interest.

There is a case for asking whether anything can be done to alleviate and re-profile the NMC’s costs and whether those costs can be better shared so that they do not fall only on nurses and midwives but are spread more widely among all of us who rely on the work and good standing of the regulators of such services.

A number of hon. Members mentioned the proposals in the offing that might allow some of these issues to be addressed. It is not a case of some of us just screaming against a fee increase and saying, “Something should be done about it”—there have been opportunities. Reference has been made to the Law Commission’s draft Bill on the regulation of the health and social care professions. It is disappointing that that has not been taken forward in this Parliament, but it should be soon, because it would provide a context for addressing some of the structural and operational questions about the NMC, as well as other issues of fairness and standards.

When the hon. Member for Easington referred to some of the issues arising from the Francis report, the hon. Member for Blaydon got sensitive about that, but we should recognise that as something else that is affecting nurses’ and midwives’ morale. As well as facing pay restraint and bigger fees, they are facing the wider issue of morale relating to their professional reputation, what with some of the headlines that have come out of the Francis report. No doubt the Minister will pay great tribute to the work of nurses and midwives, but we must listen to their concerns and worries. That is why so many people—not just nurses and midwives—signed the e-petition. They want to hear Parliament speak on this issue, which is why this debate is so welcome. I look forward to hearing the Minister’s response.

17:38

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

It is a pleasure to serve under your chairmanship, Mr Havard. It is also a pleasure to follow my hon. Friend the Member for Foyle (Mark Durkan). We recently had the pleasure of serving for 13 hours that we will never get back on the Committee for the National Health Service (Amended Duties and Powers) Bill, which my hon. Friend the Member for Eltham (Clive Efford) promoted. It is quite a novelty to speak in a health debate in which hon. Members have actually spoken about health. It feels quite unique after the debates in that Committee.

As is customary, I place on the record my appreciation of and congratulations to the petitioners, who managed to achieve the number of signatures necessary for the debate, and my hon. Friend the Member for Blaydon (Mr Anderson) and the Backbench Business Committee on getting it on the Floor of Westminster Hall today. I also pay tribute to all who work in our national health service, not only the nurses and midwives in particular, but everyone who helps make the NHS the service that it is. We are now only five and a half weeks from the next general election and we are in the last full week of the 2010 to 2015 Parliament. Issues such as the one that we are debating show the direction in which our health service has been heading.

It is totally wrong to impose further charges on nurses and midwives, especially when many are facing a cost of living crisis caused by the Government. Wages are falling and prices rising; this is now set to be the first time in living memory when people will be worse off at the end of a Parliament than they were at the beginning. Yet the Nursing and Midwifery Council wants to increase the burden on the shoulders of registrants. What message does that send to the nurses, midwives and patients whose interests it is there to protect? I think a pretty poor one.

We have all had similar cases, but the hon. Member for Congleton (Fiona Bruce) put her constituent’s very eloquently. I am sure that other Members have such cases to pursue with Ministers, which highlight the issues surrounding the debate. We are talking about not only numbers, but real people, and it is right for such matters to be raised. Taken together with the 1% pay rise—for which, to put it bluntly, nurses had to fight tooth and nail after the Government initially indicated that they would not honour their pledge—the move we are discussing today shows what the Government think of public sector workers. When Labour gets into power, clearly we will have to look carefully at the books, but we absolutely will not do what this Government have done: break every single promise made to NHS staff.

As we have heard throughout the debate, in particular from my hon. Friends the Members for Blaydon, for Easington (Grahame M. Morris) and for Foyle, the Government should have introduced the Law Commission’s draft Bill on the regulation of health and social care professionals, which included some good measures. Had the Government introduced it, it would have enabled the NMC to increase efficiencies and decrease costs. Instead, the Government have been introducing a swathe of delegated legislation to form something of a patchwork quilt of reform. Indeed, I seem to remember, Mr Havard, that you chaired two statutory instrument Committees only last week—

[Mr Dai Havard (in the Chair)]

At the same time.

[Andrew Gwynne]

At the same time!

I do not understand why the Government could not have found time to introduce the measures in the draft Bill. Even the head of the NMC, Jackie Smith, thinks that the Government have not gone far enough. She has complained that she is fully aware her organisation is not resolving cases quickly enough, but that the legislation as it stands does not allow the NMC to do things any quicker. Likewise, the Royal College of Nursing, the Royal College of Midwives, the Patients Association, the Parliamentary and Health Service Ombudsman, the Care Quality Commission, Unison, Unite and others have voiced their strong support for the draft Law Commission Bill.

In response to the Francis report, the Prime Minister hailed the draft Bill, but then promptly forgot about it. It is simply not a priority for the Government. In response to the draft Bill, they said that they would be

“committed to legislating on this important matter when parliamentary time allows”,

but we have already heard how, towards the end of this Parliament, it has been dubbed the “zombie Parliament”: we have one-line Whip after one-line Whip and we have finished business earlier than the normal moment of interruption on many days. There has been plenty of time to introduce the measures had the Government seen fit to do so. Certainly given the supposed cross-party consensus on the measures, they could have reached the statute book by Dissolution. Judging by the lack of any sort of activity in the House in recent months, the Government have had their chance many times over. Sadly, only a few days of the Parliament now remain.

It looks to me as if the only people opposed to the draft Bill were Ministers. To be fair to the Minister present, whom I like, I do not think that that is through any malice, but that it is rather a result of inertia, or perhaps a lack of attention—I do not know. Let me place clearly on the record, however, that Labour supports reform and simplification of the legal framework for regulation. The draft Bill would enable the regulators to work better together and to share functions and, crucially, to make savings and to keep their costs down. The Government’s failure means that they are now leaving the NMC to force nurses and midwives literally to pay the price.

We went through the same procedure three years ago: the NMC announced that it had to put its fees up; it held the consultation that it is obliged to do; and it promptly increased the fees by one third. In that instance, the consultation showed an overwhelming majority of respondents opposed to the plans. This time it has put the fees up by another fifth, which means, as we have heard from other Members, that the fees will have gone up by £44 in three years, an increase of more than 50% on 2011.

The e-petition has shown the strength of feeling. As my hon. Friend the Member for Blaydon stated, 114,000 signatures is some doing—not many e-petitions make the 100,000 threshold necessary to be considered for a debate in Westminster Hall or in the main Chamber. This e-petition is one of the most modest and reasonable of the ones to meet the criteria, so I genuinely hope that the Minister will consider it in the few days left to him to be accountable to Members of this House of Commons—after Dissolution there will, of course, be no Members of the House of Commons, although the Minister will remain in his post until the formation of a new Government. I want his commitment to give the e-petition the full consideration that it deserves.

I will say a little about the other duties of nurses. Later this year, the NMC will introduce a new process of revalidation for registrants that will place additional requirements on those wishing to stay on the register. It will require significant efforts from registrants. Together with pay restraint lagging well behind increases in the cost of living and an environment of demand, unrest and difficult decisions, it is difficult to see how further increases in the registration fee would not simply demonstrate to nurses that they are not valued. Encouraging staff to leave the NHS is the last thing that we should be doing given the UK’s shortfall in nurses and midwives.

Furthermore, why would new students decide to go into nursing and midwifery when the Government are making life even more difficult for graduates? Nurses have been subjected to an effective cut in their pay of between 8% and 10% since 2010, and the latest move is unacceptable. The Labour party seeks to reverse some of the trends: we are fully committed to a time to care fund, which will pay for 20,000 additional nurses and 3,000 extra midwives, along with 8,000 new doctors and 5,000 extra home care workers over the period of the next Parliament.

I am sympathetic towards the NMC’s complaint that it has no room for manoeuvre when it comes to cutting costs. The real shame here is the lack of reform, but the NMC has £10 million in its reserves. Now that reform is clearly not that far away, perhaps it will consider holding off the fee rise. I understand why it has proposed and gone ahead with that rise, as under current law the fee is almost its sole source of income, and it has a statutory duty of public protection. However, the increase is not reasonable under the circumstances, especially when looked at in the light of the fee bump in 2012.

As far as I am concerned, the blame for this situation lies at the door of the Ministers who could have made changes. The Minister had his chance to introduce the draft Bill in this Parliament, but it will be left to the next Labour Government to make the changes that are so desperately needed.

17:50

[The Parliamentary Under-Secretary of State for Health (George Freeman)]

It is a great pleasure to serve under your chairmanship, Mr Havard, for what will be the last time in this Parliament.

I thank the hon. Member for Blaydon (Mr Anderson) for the opportunity to speak in this debate and for raising issues that many nurses and midwives want to have addressed. I congratulate them on securing the debate through the e-petition mechanism. I pay tribute to all nurses and midwives, who do such great work in our health service, alongside all the others who keep the system going on our behalf 24/7. I also thank the Backbench Business Committee for selecting the debate, in the light of the petition on the Government’s e-petition website asking the Government

“to review the Nursing and Midwifery Council…with regard to the fees…and the processes through which those fees are decided.”

As Members from across the House have pointed out, many nurses and midwives are concerned about the way in which the Nursing and Midwifery Council has proposed to handle the costs of registration and of fitness-to-practise inquiries. Hon. Members have done a great service in raising the issue and allowing both me and the shadow Minister to respond.

The hon. Member for Blaydon will be aware that the NMC is an independent statutory body and is therefore responsible for determining the level of its annual registration fee. Under statute, it is responsible to Parliament rather than to Ministers. However, as the Minister responsible for professional regulation, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), in whose place I am standing today, takes a keen interest in the performance of the professional regulators, not least because he is an NHS clinical professional himself. He has regular contact with regulators, including the NMC, on this and a whole range of other issues.

It may be helpful to set the scene by providing some background about the professional regulatory bodies and how they are structured. They are independent statutory bodies whose statutory purpose is to protect, promote and maintain the health and safety of the public by setting robust standards for their health care professionals across the United Kingdom. For the NMC, the health care professionals concerned are nurses and midwives.

Professional regulatory bodies are held to account by the Professional Standards Authority for Health and Social Care, or PSA—an arm’s length body currently funded by the Government. Hon. Members will be aware that, following the 2010 review of arm’s length bodies, the Government have taken the decision to make the PSA self-funding and independent from Government, part of a broader change to the way in which health care and clinical professionals are regulated, given the growing sophistication and expertise of the various disciplines. The powers to facilitate that change were brought into effect by the Health and Social Care Act 2012. At its heart, the change reflects the long-standing principle that the system of professional regulation in health care is funded by the professionals themselves.

[Grahame M. Morris]

I cannot argue with the Minister’s quoted definition of the terms of reference of the professional regulators, and we would all agree that that is completely appropriate; there is no disagreement on party lines about that. However, does he accept that, as a result of recent events—most notably the specific recommendations of the Francis report—we are placing additional burdens and responsibilities on the regulators? Is it not beholden on the Government to recognise that and give due consideration as to where those burdens should fall?

[George Freeman]

The hon. Gentleman makes an interesting point. As the challenges for the NMC’s members and for it as a professional body change, adapt and evolve in the new landscape of greater transparency and accountability in the public interest, one issue for the NMC as a professional body is how it deals with that internally. Members across the House have raised a number of concerns about that, and I will touch on some of those later.

The intention is that in future the PSA will be funded by a fee raised on the nine professional regulators that it, in turn, serves. It is important to note that the fee is raised on the professional regulators—the regulatory bodies—not on registrants. The formula for calculating what contribution each of the nine regulatory bodies should pay was subject to consultation. It has been based on the number of registrants, simply because it was judged that that would most fairly equate the fee to the amount of service that the PSA provides to each regulator.

The NMC has nearly 50% of the total number of registrants so its contribution to the fee equates to nearly 50% of the overall costs of the PSA. However, it is important to remember that the fee per registrant is likely to be in the region of £3, which represents only 2.5% of the NMC’s overall registrant fee of £120 a year.

[Mr Anderson]

I am trying to understand what the Minister is saying. Is it that the regulators have to pay a fee but the registrants will not, and if they do, it will be £3? Where else are the organisations going to get the money from?

[George Freeman]

My point is that it is important to understand that the reforms mean that the PSA is funded by the nine regulatory bodies. How the bodies seek to cover that cost is up to them. In this case, the NMC has decided to apply it equally across all its members.[Official Report, 25 March 2015, Vol. 594, c. 3MC.] A number of hon. Members have raised a number of issues connected to that; the point about part-time nurses and midwives was an interesting one. There are issues with how the NMC chooses to allocate the cost internally. However, I repeat the key point that the fee increase is likely to be in the region of £3 per registrant. That represents 2.5% of the NMC’s overall registrant fee, which covers a whole range of other services.

It may be helpful to the House if I set out some details about the services that the NMC provides. It is the independent regulator for nurses and midwives in the UK. Its primary purpose is to protect patients and the public through effective and proportionate regulation of nurses and midwives. It is accountable to Parliament—not Ministers—through the Privy Council for the way in which it carries out its responsibilities. It sets and promotes standards of education and practice, maintains a register of those who meet those standards and takes action when the fitness to practise of a nurse or midwife is called into question. It also has a role in promoting public confidence in nurses and midwives and in regulation.

Members from all parties would agree that we welcome the growing sophistication of the role of nurses and midwives and the extra responsibilities reflected in salaries and professional standards. That is part of the evolution of the professionalisation of standards that we all welcome.

[Grahame M. Morris]

The Minister is setting out an explanation of transparency and accountability that I do not disagree with, but if we follow the line of his logic, he is saying that the NMC is responsible not to Ministers but to Parliament in the round. My assumption—perhaps he will correct me if I am labouring under a misapprehension—was that the Health Committee performed the role of holding the NMC to account. Given that the Committee takes the trouble to hold interviews and evidence sessions, and to make specific recommendations, is it not beholden on the Minister and Government to act on those recommendations, not least in relation to the Law Commission?

[George Freeman]

The Government take recommendations from the Health Committee very seriously—we have done so on a number of issues. It is interesting to quote what the Committee has said on this matter:

“We would urge the NMC to avoid further fee rises and to consider fee reductions for new entrants to the register.”

My point is that it is the NMC’s responsibility to deal with the issue. It is accountable to Parliament, and the Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich, observes its recommendations closely. However, its internal organisation is a matter for itself.

[Mr Philip Hollobone in the Chair]

[Andrew Gwynne]

The Minister is correct that the NMC is accountable to Parliament, but it has asked for legislative changes, and the legislative programme is largely under the control of Ministers, so why have the Government not acted?

[George Freeman]

It is a fair question, which I will come to, but it has nothing to do with the importance of getting this right; it is merely a matter of the regrettable constraints of parliamentary time. One reason why I very much hope my colleagues and I will be returned in May, Mr Hollobone—I was about to call you Mr Havard; I welcome you to the Chair—is that we will be able to get on with that important reform.

For the benefit of the House, let me finish summarising some of the important information about the NMC. The NMC’s total income for 2013-14 was £65 million. Its fee income was £62 million, which is quite a substantial sum. It received a grant of £1.4 million from the Department of Health and investment income of £1 million. Its expenditure totals £70 million, with £24.18 million, or 34%, going on staff. Its permanent headcount has been going up year on year. The average for the year 2014-15 was 496. The NMC had 521 permanent staff on the payroll in March 2014 and 577 in March 2015. The permanent headcount for March 2016 is projected to be 606. I merely point that out to highlight that the NMC faces some important considerations in driving productivity and efficiency internally to deliver the service it is statutorily required to deliver to its members, who fund it through subscription.

Let me turn now to the relationship between the PSA and the regulations we have introduced. The proposed change will be introduced in the Professional Standards Authority for Health and Social Care (Fees) Regulations 2015—or S.I., 2015, No. 400, with which you will be intimately familiar, Mr Hollobone, as an assiduous observer of these things—which have already been laid in Parliament. The NMC’s council meets this week to decide its policy towards them, so this debate is, again, extremely timely.

The NMC has decided to increase its fees for nurses and midwives from £100 to £120. The rise was effected through the Nursing and Midwifery Council (Fees) (Amendment) Rules Order of Council 2014, which came into force on 1 February. Although the NMC is an independent statutory agency, the Government have made it clear that they expect the NMC council to have clear justification for, and to consider nurses’ and midwives’ financial constraints when making, decisions on fees. I will say a little more in a moment about that and about the importance of the Bill to modernise the NMC’s constitution.

The NMC has consulted its registrants on the proposed fee rise, but I am aware of the strong body of opinion among those who opposed it, and that has been expressed in the debate and in the number of people who have signed the petition. The NMC says that it has not taken its decision lightly and that it has considered the responses to the consultation in detail and carefully listened to the issues raised, and I have no reason to doubt that. However, I remind hon. Members that the NMC’s first duty must be to deliver its core regulatory functions and to fulfil its statutory duties to ensure public protection, and the fee rise must be justified against its core duty.

Let me touch now on the Government grant, which is important. I appreciate that, since the NMC was established in April 2002, there have been a number of increases in its annual registration fee, and I appreciate the impact that that has had on dedicated nurses and midwives working long hours in difficult roles to provide excellent care. That is why, in February 2013—more than 10 years after the increases started in 2002—the Government awarded the NMC a substantial, £20 million grant to ease the pressure.

One purpose of that grant was to allow the NMC to protect nurses and midwives—particularly lower-paid nurses and midwives—from the full impact of a proposed annual registration fee rise. The grant meant that, in 2013, the NMC was able to raise its fee from £76 to £100 and not to £120, as originally intended. With a week before Parliament dissolves, the Government have no plans to give the NMC a further grant to subsidise the 2015 registration fee increase. Given that we continue to have to make tough decisions to put the economy back on track, and that we have given the NMC £20 million, it now needs to work out internally how best to allocate the fee increase, which I should remind hon. Members is equivalent to £3 per member if it is spread equally among them.

I am pleased to say that, as part of the broader package of measures the Government are putting in place to support the lowest-paid workers in the NHS, all the major NHS trade unions accepted the Government’s pay offer on 9 March. It will be implemented from 1 April, giving more than 1 million NHS staff, including most nurses and midwives, a 1% pay rise, without risking front-line jobs or costing the taxpayer more money. That means our lowest paid staff will receive the biggest rise.

I want to update hon. Members on the changes, because they are an important wider consideration against which to view the impact of the fees. For the lowest- paid, the 1% rise will mean an increase of up to 5.6%, or an extra £800 in their pay packets. I have looked at the salary figures, and the average, ending March 2014, for nurses, midwives and health visitors—the people we are talking about—is £31,000. They will get the 1% rise, which is an extra £800.[Official Report, 25 March 2015, Vol. 594, c. 3MC.] Importantly, staff earning between £15,000 and £17,000 will get an extra £200, which is equivalent to 2.3%. Nursing staff earning up to £40,558 who are not at the top of their pay band are still eligible to receive an incremental increase.

Let me take issue with the point that the Government are not looking after the lowest-paid. The pay offer specifically makes sure that the increases the system can afford are targeted at the lowest-paid. Those earning more than £56,000 are more able to cope with the challenges of pay restraint. We are supporting the poorest in the system most, and we are making the highest-paid bear more of the burden. Finally, the bottom pay point will be abolished, seeing the lowest pay rise from £14,300 to £15,000, with about 45,000 on the lowest two pay points benefiting.

[Mr Anderson]

I am interested in the average figure the Minister cites. Obviously, if he could give us his figures now, I would be happy to look at them, but could he also put them in the Library? The average he gave seems very high, when we are talking about the lowest point on the scale being £14,500. The average is more than double that—the scale must be heavily loaded at the top, which is not my experience from working in the public sector.

[George Freeman]

I will happily make those data available to the hon. Gentleman and put them in the Library. They are from the NHS staff earnings survey’s provisional statistics by staff group in England.

It is worth noting that UK taxpayers can claim tax relief via Her Majesty’s Revenue and Customs on professional subscriptions or fees that they must pay to carry out a job. That includes the registration fee paid to the NMC. Nurses and midwives on a salary of £30,000, confronted with a fee increase of £3, can therefore claim tax relief on it. A basic rate taxpayer would be eligible for £24 tax relief on the £120 fee.

[Grahame M. Morris]

Could I press the Minister? He suggested that things are tight. We have just had the Budget statement from the Chancellor. We had a list of give-aways in Tory marginals—£2.5 million for the RAF museum in Hendon, moneys for projects in Blackpool and a new theatre in Pendle—but would that money not have been better spent helping to subsidise the registration fees of nurses working part time and of women returners, who earn considerably less than the average figure the Minister cited?

[George Freeman]

I note with relish and interest what I assume is official Opposition policy—that they do not support the Chancellor’s announcement about funding for the RAF museum. The point that I am trying to make is that he already set out in the autumn statement a serious pay commitment to the lowest-paid staff in the NHS, which I was summarising.

I am glad that the hon. Member for Easington (Grahame M. Morris) has raised the issue of the Budget. The reporting on it has made it clear that for a pre-election Budget it was, far from making give-aways, surprisingly light on them, and was very much “steady as she goes”, continuing to pare down the deficit with fair tax reform. The truth is that we have cut income tax for 27 million people, and particularly for the lowest-paid nurses and midwives. The impact of that is nearly £900 a year from changes to the personal allowance. That is not fashionable stuff that captures the top line in red-top newspapers, but nurses and midwives do not exist in isolation. They have the NHS pay deal but also the important tax allowance changes introduced by the Chancellor. The Government are taking pressure off the lowest-paid workers in the NHS and elsewhere. Viewed in the round, those changes give us a record that we can be proud of, albeit within a difficult set of funding requirements.

[Mr Anderson]

Will the Minister give way on that point?

[George Freeman]

I really need to make progress.

[Mr Anderson]

We have got an hour and a half.

[George Freeman]

I happily give way.

[Mr Anderson]

The Minister made a point about tax, and that is welcome, but does he deny the fact that overall, people, including those we are talking about, are worse off under the present Government as a result of VAT rises and other rises across the economy? People are worse off than when they came to power.

[George Freeman]

I am glad, again, that the hon. Gentleman raises that, because fortunately the Chancellor was able to confirm that the Office for Budget Responsibility has confirmed that finally people in this country are better off, after a very difficult period. I am not going to pretend that it has not been difficult. The reason was that we inherited a chronic legacy of debt, deficit and structural deficit, which was tackled by the previous Government nowhere less than in health care. That created a situation in which, despite a growing economy, we face a huge structural challenge, exacerbated by demographics.

This year there are 1 million more pensioners in the system—1 million more people needing and generating high health demand. I do not hold the Opposition responsible for that. However, the lack of reform and the structural issues at the heart of the health service, which mean that the health structural deficit is growing faster than the general economy, have left us with a challenge. We need to tackle that.

As the hon. Member for Blaydon pointed out, the NMC has stated that there has been a significant rise in its costs, because of fitness-to-practise referrals, which are up more than 100% since 2008-09. Since 2008-09 it has raised its fee by only 63%, making up the bulk of the difference in cost through a programme of efficiencies. Without those it would have had to scale back its fitness-to-practise activity, or generate additional costs earlier. The NMC has provided assurances that it is committed to continuous improvement in carrying out its regulatory functions and will continue to deliver more efficient ways of working to maximise the value of registration fees and to keep them at the lowest level possible while enabling it to fulfil its statutory duty. The NMC is a £70 million-a-year organisation with substantial opportunities to put efficiencies in place, to reduce the cost of the £3 extra cost on its members.

As to the need to update the NMC constitution, the Government have worked with it to make changes to its legislation. We have made good progress with legislative change to reform the way it operates. On 11 December 2014 an order made under section 60 of the Health Act 1999, amending the Nursing and Midwifery Order 2001, came into force. Those changes to the NMC’s governing legislation will enable it to introduce more effective fitness-to-practise processes, while not lessening the public protection it provides.

A key amendment to the NMC’s governing legislation enables it, through its rules, to delegate the decision-making functions currently exercised by its investigating committee to its officers known as case examiners. The intended effect is to speed up and therefore reduce the cost of early-stage fitness-to-practise proceedings, as it will not be necessary to convene the full investigating committee to consider every allegation of impairment of fitness to practise. That should result in financial savings to the NMC as well as greater consistency in decision making. I think we would all welcome that. The rules that bring those changes into effect come into force on 9 March.

The section 60 order has helped the NMC by providing a degree of modernisation of its legislation. However, there is still much to do and that is why we asked the Law Commission in 2011 to review the whole framework of legislation underpinning professional regulation. The report was published last year and we published the Government response in January. I am aware that the decision not to progress a professional regulation Bill to take forward the thinking in the report in the current parliamentary Session was a disappointment to the NMC, as it was to us. We want to move on, but parliamentary time, as you know, Mr Hollobone, is an eternal constraint on Government’s ability to implement. However, that decision provided an opportunity to invest time in getting that important legislative change right, for the benefit of those who will be affected by it. Of course, it will not restrict the NMC’s ability to implement its own internal modernisation and efficiency programme, or to decide how to deal with the internal allocation of its fee obligations to the PSA. It is free to do that.

[Andrew Gwynne]

The Minister will know that a number of the changes and efficiencies that the NMC would like to implement require further legislative change. With those changes, it could free up some of its £10 million reserves, to offset some fee charges. Could we give the NMC some certainty, on a cross-party basis, that, whoever forms the next Government, we will bring in those changes? That would give it the certainty that it could use the reserves to offset the fee increases.

[George Freeman]

I am delighted to confirm that the Government remain committed to introducing primary legislation to address those wider reforms to the system of professional regulation; and it sounds as though, if the hon. Gentleman and I are in our posts then, that may well have cross-party support. That would be an important measure, and our inability to pass it before the end of this Parliament is not a sign of its importance; it is merely a function of the challenge of the availability of parliamentary time.

It is worth pointing out that the performance of the NMC has been challenged and highlighted by a number of bodies, including the Select Committee, but also by some of its members—nurses and midwives. It has had a troubled past with its performance, which is why Ministers commissioned the predecessor body of the Professional Standards Authority, the Council for Healthcare Regulatory Excellence, to undertake a full strategic review in 2012. That review put forward 15 high- level recommendations for improvement in the delivery of the NMC’s regulatory functions, and set an expectation that demonstrable improvements should happen within two years.

In 2014, the NMC commissioned KPMG to undertake an independent review to assess its progress, and KPMG concluded that the NMC had made a substantial number of improvements, which cumulatively placed it in a much stronger position than in 2012. That improvement was recently recognised by the Secretary of State for Health in his oral statement to the House about the Morecambe bay investigation. However, the NMC itself recognises that there is still much more to be done, and so the processes of improvement continue. Ministers have made it clear that we expect the NMC to work towards and ensure compliance with the standards of good regulation, and to continue looking for more efficient ways to work.

Hon. Members on both sides have raised points that I want to deal with. Several mentioned how the fees of part-time nurses are dealt with by the NMC, which is an interesting point. It is not for me to tell the NMC how to deal with it. That is for the NMC to decide, as an independent body, but I should have thought that, on the basis of pure justice and equity, members who do not work full time and therefore do not earn the same as those who do, and who do not generate, even on a pari passu basis, the same level of exposure to the costs or their organisation, would not have to pay the same costs. However, that is of course a matter for the NMC.

The hon. Member for Blaydon raised several questions, including whether the NMC will review its guidelines on fitness to practise, and provide guidance on fitness to practise cases. Those are all matters for the NMC as an independent body, but new legislation means that nurses can pay fees in instalments, and that fees can reflect part-time work.[Official Report, 25 March 2015, Vol. 594, c. 4MC.] The hon. Gentleman made an important point in his speech about part-time nurses.

The hon. Gentleman also spoke about revalidation. The truth is that the majority of the cost of nurse revalidation will fall on the employers that will be responsible for supporting their staff through revalidation. The revalidation drive is an important means of raising professional standards, and it will ensure that the public have faith and confidence that we are raising standards for nurses and midwives.

[Grahame M. Morris]

The NMC sometimes takes two years to complete some fitness-to-practise cases. The Select Committee recommended that it should aim to complete them all within nine months, which is not an unreasonable request. That is an incredible amount of time and resource to spend on those cases.

[George Freeman]

The hon. Gentleman makes a really good point; I was trying to make a similar point myself. We have encouraged the NMC and made it easier to speed up its processes. Anecdotally, I know from speaking to nurses and midwives that there is a lot of frustration about the slow pace of basic procedures, such as getting registration and coming back to the profession.

My hon. Friend the Member for Congleton (Fiona Bruce) cogently and clearly told the story of one of her constituents, a nurse, and spoke about the bureaucratic and clumsy registration processes. There is a common message for the NMC: it has a £70 million budget, so it ought to be able to run a less inefficient, quicker organisation and direct resources away from bureaucracy and towards dealing with fitness to practise, in which there is likely to be a growing public interest. It is good that the public want to drive up standards and be clear about patient safety across the professions.

On the issue of revalidation, we believe that nurses and midwives have some of the most important jobs in the NHS. They care for patients every day, so it is crucial to ensure that they are up to speed with the standards that the public and patients expect. We support the NMC in its drive to introduce revalidation, which will improve safety and the quality of care. It will reassure patients that nurses remain fit to carry out their vital work.

The challenges of the serious debt and structural deficit inheritance that we as a society are confronting mean that everyone in our public services has to deliver more for less within the current financial constraints and to ensure that standards continue to improve. Across our public services—indeed, across our general economy—there are extraordinary levels of productivity gain day in, day out. The general economy runs at 2% to 3% productivity growth every year with its eyes shut. The challenge is to create in the public sector the right climate and leadership conditions so that our great public servants can deliver similar productivity.

That said, we recognise the importance of the level of the NMC registration fee to all its registrants, which is why the Government have assisted the NMC to introduce rules that will allow registrants to pay their registration fee in instalments. Those rules came into effect on 9 March, and they enable the front-line nurses and midwives who have to pay the £3 extra fee to schedule payment of the total £120 annual fee across the whole year.

To maintain the NMC’s independence from the Government, its registration fee must cover the full costs of its regulatory activity. I am sure that nobody in any corner of the House believes that we should downscale or curtail the quality of that regulatory work merely on the basis of members’ unwillingness to pay. The principle is that health care professionals should fund the regulation of their profession to maintain the confidence of the public and patients. However, it is for the NMC to decide how to meet its statutory functions and protect patients and the public, which is our paramount consideration. The NMC recognises that it needs to do more to maintain the confidence of registrants, patients and the public in its performance, and to continue to improve its operation, effectiveness and efficiency.

I am grateful for the chance to correct the record and clarify that the Government are prioritising the lowest-paid workers in the NHS; we applaud and support their commitment. I want to take this opportunity to reaffirm the Government’s gratitude, thanks and support for their work. Despite the difficult funding constraints, in this Parliament we have consistently supported the lowest-paid workers in the NHS, rather than the best-paid, and we have reflected that in the latest pay settlement.

At the heart of this measure are some important points that need to be reiterated. There is a long-standing convention that health care professionals pay their own professional registration fees. The reform will increase the registration fee paid by nurses and midwives, whose average salary is £31,000, by £3, against their annual registration fee of £120. The Government have given the NMC a £20 million grant to help to offset those costs. The NMC has made it clear that it is able to pay for a substantial element of the increases through its ongoing efficiency programmes. The principal driver of cost is the growing public interest in fitness to practise and the cost of handling such cases. We are helping the NMC, not least by helping it to deal with those cases much more quickly, as the hon. Member for Easington highlighted.

We should not hold back the public’s interest in fitness to practise. It is part of a new culture of transparency and accountability across the system, post the Francis report, and the Secretary of State and many others want to encourage it in the modern NHS. The NMC is an independent statutory body that is accountable to Parliament, not Ministers.

I welcome the chance to inform the debate, particularly for NMC workers and for the many nurses and midwives who have taken the time to sign the Government’s e-petition form and, through the Backbench Business Committee and Members in the Chamber, to bring this issue to the Floor of the House. We as Ministers are very aware of the needs of the lowest-paid NHS workers, who do an extraordinary job for us. That is why, in the latest pay deal, we reflected that, with a 5.6% increase for the lowest earners and a 1% pay rise, which equates to £300 in the pockets of the nurses and midwives we are talking about.

The measures in the Budget and the Chancellor’s wider tax reforms, such as raising the tax threshold for the lowest-paid workers, will take more than 4 million of the lowest-paid workers out of tax altogether. The lowest-paid nurses and midwives are now £900 a year better off as a result of the increase of the personal allowance to £11,000. That is a substantial sum, compared with the £3 fee increment. The hon. Members for Denton and Reddish (Andrew Gwynne) and for Blaydon are eloquent and persuasive men, but even they cannot suggest that a £3 fee on health care professionals earning £31,000 represents a crisis in the NHS. They rightly said that it is important that the NMC quickly develops its efficiency and upgrades its internal mechanisms, and they made a number of interesting points about how that can be done to maximise fairness for the lowest-paid workers. I want to take the opportunity to repeat that the Government are absolutely on the side of those workers.

[Mr Philip Hollobone (in the Chair)]

It was a real treat for me to have been in the Chair to hear the Minister’s response, but a great misfortune not to have been in the Chair to have heard the introductory remarks of the hon. Member for Blaydon (Mr Anderson). As recompense, he now has two or three minutes to pithily sum up the debate, largely for my benefit.

18:28

[Mr Anderson]

Thank you, Mr Hollobone; nothing would give me greater pleasure than to take the pith with you any time you like.

I thank my hon. Friends for speaking in the way they have. My hon. Friend the Member for Easington (Grahame M. Morris) is hugely respected across the House, particularly for his work on the Health Committee. I assure him and the hon. Member for Foyle (Mark Durkan) that when I said that I was not sure about accepting Government money to support the NMC, that was not to say, “Don’t do it.” I am not in a position to say it should not be done; it is down to the professionals to work out what their view is.

The intervention from the hon. Member for Congleton (Fiona Bruce) was absolutely brilliant. She spoke about the real world. The big issue is not so much about people paying the registration fees; it is about what they are getting for their money, and the hon. Lady showed exactly what they are getting. Her constituent was breaking the law by working without being on the register, in genuine ignorance. She could have been brought up on disciplinary or, potentially, legal charges. That is real the worry: what are people getting for their money?

It is always a great privilege for me to work with the hon. Member for Foyle, as I have done over almost 20 years. Some of the greatest work I did before I came into the House was with health service workers in the north of Ireland, who really were at the cutting edge at some of the worst times in this country’s history. It is brilliant to work with him, and he more than anybody else pressurised the Backbench Business Committee to get this debate held today.

My hon. Friend the Member for Denton and Reddish (Andrew Gwynne), as always, robustly defended our NHS and our party’s plans going forward. I thank the Minister for his words, but warm words do not put bread on the table. The health service workers who I represent, who I spoke to on the picket lines before Christmas, told me that they were organising shoebox collections for their members in their workplace at the same time as the chief executive of their trust was getting a 17% pay rise and the foundation trust members were getting an 88% increase in their allowances. That is the real world out there; that is the world where we are “all in this together.”

The Minister said that the regulatory bodies would have to pay the PSA, but ultimately it would surely be the registrants who cough up. It is like the brewery saying to the landlord of a pub, “You’re going to have to pay me more for your beer,” and then where does the landlord get the money from? Obviously he puts the price on a pot or a pint. Talk about having a “pith up” in a brewery—well, this is clearly one of those things. It is quite clear that the cost will fall on the people on the front line.

I am not sure whether I lost track of the Minister, but I do not believe he answered the question he was asked a number of times about why the Government did not introduce a Bill. He mentioned that something happened in December, and perhaps that is related—I am quite happy for him to come back and put us right—but I am not sure whether what happened in December gave the same rights to the NMC to do what it would have done if the Bill on the regulation of health and social care professionals had gone through. I asked him to reflect on that, as did my hon. Friend the Member for Denton and Reddish, but I do not believe that happened.

I do not want to repeat what the Minister said in his speech, but it did not address the issues. He said that £3 on people’s registration fees is not a crisis—he said that to me and my hon. Friend the Member for Denton and Reddish. We did not say that, but I will tell him who did: the 114,000 people who signed the petition; the people out there who are struggling to get by in the health service; the people we all owe a duty to. We should be putting this right. We are not necessarily calling for the fees to be stopped, but for the system to be reviewed to make sure that it is working properly. Let us sort out the fitness-to-practise issues. Seventy-seven per cent of the time is spent on that, but the problem is that they are all after-the-event interventions. If the job was done beforehand, that would not only save money, but stop incidents that have an impact on the professionals concerned and the people they look after.

Question put and agreed to.

18:32

Sitting adjourned.

Written Statements

Monday 23rd March 2015 Written Statements

Monday 23 March 2015

Office of the Commissioner for Public Appointments

Monday 23rd March 2015 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The Government have asked Sir Gerry Grimstone to lead a review of the Office of the Commissioner for Public Appointments. This will be the first review of the Office’s status and role since the role of the Commissioner for Public Appointments was created by the Public Appointments Order in Council 1995 on 23 November 1995. Although the Office of the Commissioner for Public Appointments is technically not a public body, the review will follow the guidance on conducting a triennial review.

The review’s purpose will be to establish the continuing need for the Office, and to examine its scope of responsibilities. In particular the review will consider the Office’s role in regulating the processes by which Ministers make appointments to the boards of certain public bodies and certain statutory offices. The review’s terms of reference have been placed in the Library of the House.

Sir Gerry will seek input from a wide range of individuals, including current and former Ministers, current and former officials and advisers, the Government’s Non-Executive Directors, the Office of the Commissioner for Public Appointments, Parliament, public bodies and those who have gone through an appointments process. The review will report in the summer.

TERMS OF REFERENCE. The role of the Commissioner for Public Appointments was created by the Public Appointments Order in Council 1995 on 23 November 1995, following recommendations made by the Committee on Standards in Public Life (under the chairmanship of Lord Nolan). We are now twenty years on, and this provides a suitable opportunity to review the role of the Commissioner and the processes around public appointments. In the light of the range and diversity of public appointments, it is important to ensure that the procedures are both effective and proportionate. The review will be led by Sir Gerry Grimstone and will report to the Minister for the Cabinet Office.

[HCWS448]

“The State of the Estate in 2013-14”

Monday 23rd March 2015 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

I have today laid before Parliament, pursuant to section 86 of the Climate Change Act 2008, “The State of the Estate in 2013-14”. This report describes the efficiency and sustainability of the Government’s civil estate and records the progress that Government have made since the previous year and since 2010. The report is published on an annual basis.

[HCWS450]

Convergence Programme

Monday 23rd March 2015 Written Statements

[The Financial Secretary to the Treasury (Mr David Gauke)]

Article 121 of the Treaty on the Functioning of the European Union (TFEU) requires the UK to send an annual Convergence Programme to the European Commission reporting upon its fiscal situation and policies. The UK’s Convergence Programme will be sent to the European Commission by 30 April. This deadline was set in accordance with the European semester timetable for both convergence and national reform programmes. The Government support the European semester which plays an important role in EU surveillance of economic and fiscal policy.

Section 5 of the European Communities (Amendment) Act 1993 requires that the content of the Convergence Programme must be drawn from an assessment of the UK’s economic and budgetary position which has been presented to Parliament by the Government for their approval. This assessment is based on the Budget 2015 report and the most recent Office for Budget Responsibility’s Economic and Fiscal Outlook and it is this content, not the Convergence Programme itself, which requires the approval of the House for the purposes of the Act.

Article 121, along with Article 126 of the TFEU, is the legal basis for the stability and growth pact, which is the co-ordination mechanism for EU fiscal policies and requires member states to avoid excessive Government deficits. Although the UK is bound by the stability and growth pact, by virtue of its protocol to the treaty opting out of the euro, it is only required to “endeavour to avoid” excessive deficits. Unlike the euro area member states, the UK is not subject to sanctions at any stage of the European semester process.

Subject to the progress of parliamentary business, debates will be held on 24 March for the House of Commons and on 25 March for the House of Lords in order for both Houses to approve this assessment before the Convergence Programme is sent to the Commission. While the Convergence Programme itself is not subject to parliamentary approval or amendment, I have deposited advanced copies of the document in the Libraries of both Houses and copies will be available through the Vote Office and Printed Paper Office.

The UK’s Convergence Programme will be available electronically via HM Treasury’s website after it is sent to the European Commission.

[HCWS447]

Local Audit

Monday 23rd March 2015 Written Statements

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

Today, the final commencement order of the Local Audit and Accountability Act 2014 was signed off. This means that the residual Audit Commission will close its doors on 31 March, paving the way for local audit appointment within a new, leaner framework which, while it retains the knowledge and expertise of the commission where it has value, will create more freedom and flexibility for local public bodies, replacing top-down inspection with local accountability.

Hon. Members will recall that in August 2010, I announced plans to disband the Audit Commission and refocus audit on helping local people hold local public bodies to account for their spending decisions. The new system coming into effect will sweep away the old top-down regime, offering greater responsibility and choice for local councils, replacing central bureaucracy with local democracy, while upholding the same high standards of audit.

While this quango was borne of good intentions, local government has changed since the 1980s. The commission had become a regulator of local government, micro-managing local services and imposing excessive red tape, from best value performance indicators, to comprehensive performance assessment to comprehensive area assessment. Such box-ticking exercises did not champion the public’s interests, as evident by the fact the Audit Commission bullied and cajoled councils into axing weekly rubbish collections in order to meet Whitehall targets set by Labour Ministers.

Despite a slogan of “protecting the public purse”, it wasted public money on ill-advised spending decisions, such as a luxury London hotel to house its chief executive, a best practice audit conference with a string quartet, drinks receptions for its “alumni”, fine dining at the most expensive restaurants using corporate credit cards, board dinners in oysters bars (losing the receipt in the process), and hiring lobbyists to “combat the activities of Eric Pickles” (arguably, one of the least successful lobbying campaigns in history).

We therefore abolished the commission’s interfering and ineffective inspection regimes in 2010, and in 2012 the remaining in-house audit contracts were successfully outsourced, saving £250 million over five years. The Royal Assent of the Local Audit and Accountability Act in January 2014 put the legal framework in place to finish the job. Our latest estimates for the savings to taxpayers have increased to £1.35 billion over 10 years, with councils pocketing the bulk of the savings.

My Department will also this week make the necessary transfer schemes to provide continuity for essential roles in the local audit system. The National Audit Office will set the standards for public audit and take on responsibility for the code of audit practice, with the Financial Reporting Council and professional accountancy bodies monitoring the quality of audit as they already do for the private sector. The recent inspection by PwC into the London borough of Tower Hamlets illustrates how a private firm can provide robust advice and analysis without fear or favour.

The Cabinet Office will assume responsibility for the national fraud initiative, joining up its existing anti-fraud work. Public Sector Audit Appointments Ltd is the transitional locally led body set up to manage the existing audit contracts until they expire ahead of full local appointment of auditors in 2017. This new streamlined regime mirrors the framework already used for the private sector, while maintaining the high standards of public audit.

The localisation of audit is complemented by other transparency reforms to increase local accountability and empower an army of armchair auditors. The local government transparency code requires councils to place online important local information about spending and decisions; we have introduced a lighter-touch transparency code to smaller local bodies like parish councils so people can access key spending, governance and meeting information; we have changed the law to allow filming and reporting of public council meetings by the press and public; a new common period next year will allow local ratepayers to inspect councils’ accounts––a right more powerful than freedom of information, and it is our intention to legislate in the next Parliament to allow those local inspection rights to be exercised by members of the press who may not otherwise live or work in the council area.

I am confident that these reforms will protect taxpayers’ money and ensure high standards in local government.

[HCWS451]

Local Government Update

Monday 23rd March 2015 Written Statements

[The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins)]

I would like to update hon. Members on a number of actions taken by my Department relating to local government:

Updating statutory notices for the 21st Century

Statutory notices are an important way of ensuring that local residents are informed of decisions that affect their property and lives. Public bodies must do more than provide just ‘an obscure notice’ on the depths of a council website, with local newspapers retaining a key role. Last year, my Department invited bids for innovative approaches to be taken to both protect local newspapers and provide essential information to the public in new ways.

We have now announced almost £1 million of funding for 24 local pilot programmes as part of efforts to help councils bring their public information requirements into line with the modern media. We have backed proposals from both councils and local newspaper groups which embrace new technology and innovation to improve the provision of vital information to the public.

The pilots include collaborations between councils and local media organisations, tests of new technology such as mobile phone applications and social media, and consultations with local people over how they want to receive information.

We are committed to supporting an independent free press, and to ensuring that local taxpayers are better informed about council decisions that affect their lives. We look forward to seeing the results. The pilots will run from March 2015 to the end of August 2015.

Calling time on inflated golden goodbyes

My Department has previously sought the views of the local government sector on reforms to the legal minefield that can pressure councils into giving large pay offs to chief executives they want to dismiss.

Slow and costly bureaucracy requires councils to appoint a “designated independent person”, usually a Queen’s Counsel, to review dismissal and disciplinary cases for chief executives. Councils seeking to dismiss a chief executive for misconduct or poor performance have in some cases paid out inflated lump sums to avoid the cost of taking this bureaucratic route. Local government estimates the review process can cost at least £100,000 in legal fees, not counting independent investigation costs and salary for the suspended officer. One previous case cost £420,000 and took 16 months to adjudicate. Ministers believe decisions by full council ensure proper democratic accountability, without the need for a centrally dictated process.

We are laying this week the associated secondary legislation which will reduce the unnecessary and costly bureaucratic process for councils to take decisions about disciplinary matters, including dismissal, of the most senior staff.

They will require such decisions to be taken transparently by full council; and when making such a decision, require the council to consider any advice from a panel of independent persons. These are the independent persons appointed for the purposes of the members’ conduct regime under the Localism Act 2011, and, where possible, must be local government electors for the area concerned; there will be restrictions against paying inflated expenses for such advice.

The reforms give councils the power to decide on the best disciplinary process that will deliver value for money for local taxpayers, while retaining independent scrutiny and accountability to local people.

My Department will also be shortly be publishing guidance to local government on the use of severance agreements and on ‘off-payroll’ arrangements, reflecting reforms we have introduced at a civil service level to protect taxpayers’ interests.

Protecting local government against cyber threats

My Department have been working jointly with security experts and local government colleagues to develop guidance for local authority leaders and their teams on cyber resilience. It is very important, as local people increasingly access local service electronically, that they have confidence that their information will be safe and the services they use can be relied upon. We are publishing guidance this week on the steps that local councils should take to build resilience.

Review of Arms Length Bodies

We are announcing the start of the triennial review of the valuation tribunal service and the valuation tribunal for England. The valuation tribunal considers appeals from council taxpayers and business ratepayers about the levels of council tax and non-domestic (business) rates. The review will examine their role, whether they are operating efficiently, and whether their control and governance arrangements continue to meet the recognised principles of good corporate governance.

Reforming council tax and business valuation practices

Following a statutory consultation, my Department has now published its response and associated secondary legislation on curtailing the powers of entry of the Valuation Office Agency, using powers under the Protection of Freedoms Act 2012. This Government believe that the privacy and rights of homeowners and businesses should be protected and strengthened wherever possible. These reforms include protection from unnecessary and intrusive visits into a taxpayer’s home or business, and introduce a new requirement for consent from a First-tier tribunal before any power of entry. It is intended that this will create a considerable road block and check and balance against use of the power.

This action builds on steps we have taken to cancel the last Administration’s plans for a council tax revaluation in England, and terminate the ‘Big Brother’ council tax revaluation database being drawn up by the Valuation Office Agency.

Cutting red tape on councillors

Ministers in my Department have agreed with colleagues in the Ministry of Justice to take forward steps to remove the annual fee that many councillors are required to pay to register as data controllers under the Data Protection Act. Instead, local authorities will undertake the notification process itself as part of their local authority-wide registration, and individual councillors will be exempt from the fee. This will remove an effective ‘tax on volunteering’. Ministers have asked officials to draft the necessary secondary legislation in purdah, with a view to laying the amending legislation early in the next Parliament.

I am placing copies of the associated documents in the Library of the House.

[HCWS452]

Equality and Human Rights Commission

Monday 23rd March 2015 Written Statements

[The Parliamentary Under-Secretary of State for Women and Equalities (Jo Swinson)]

I am today laying before Parliament a copy of the Strategic Plan Revision for 2015/16 which has been prepared by the Equality and Human Rights Commission (EHRC), as required by Section 4 of the Equality Act 2006. The Commission will next revise the Strategic Plan by March 2016.1 am also today placing in the Libraries of both Houses copies of a revised framework document agreed between the Government Equalities Office and the EHRC.

[HCWS446]

Oil and Gas Authority: Consultation on Levy Design

Monday 23rd March 2015 Written Statements

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

Today I am launching a consultation on the design of the levy to fund the new Oil and Gas Authority (OGA).

We are working at a great pace to establish and empower the OGA to be a strong and influential regulator, equipped with the necessary powers to regulate and steward the UK continental shelf.

To ensure the OGA is sufficiently resourced to deliver its remit of maximising economic recovery from the UKCS, and in line with the established precedent for other regulatory bodies, we have determined that the OGA should recover its costs from the companies who benefit from its services.

While the Government have agreed to contribute £3 million per year for five years starting from April 2016 to ensure the OGA is well funded from the outset, the OGA’s ongoing costs will be met by a combination of the extant fees and charges regime, and a new levy on industry. We agree with industry that it is important that the levy is simple, transparent and cost-reflective.

This consultation sets out details of the allocation methodology and the proposed levy rates. In line with the early focus of the OGA, we have determined that initially we will levy only offshore petroleum licence holders as (in the short term) the OGA will incur costs related to these licence holders. We intend that the OGA will begin collecting the levy in October 2015, subject to regulations.

The consultation will be open for four weeks and will conclude on 20 April 2015 and the Government welcome views on the proposals and invites comments through the consultation process.

I will be depositing a copy of this consultation in the Libraries of the House.

[HCWS443]

Property/affairs: Missing Persons

Monday 23rd March 2015 Written Statements

[The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)]

My noble Friend the Minister of State for Civil Justice and Legal Policy (Lord Faulks QC) has made the following written statement.

“I am pleased to announce that following its consideration of the responses to the consultation paper published by the Ministry of Justice on 27 August 2014 the Government have decided to create the new legal status of guardian of the property and affairs of a missing person.

The Government strongly support the creation of the new legal status and will now prepare the necessary primary and secondary legislation and guidance to enable the proposed scheme to be implemented as quickly as possible. In this task we will continue to work with stakeholders to design a scheme that can be implemented at minimum cost and operated with minimum problems.

The timing of the introduction of the legislation will be decided by Ministers in the next Parliament. Nonetheless, given the importance of this measure, the strong support to date from all sides and its own commitment to bringing forward legislation as soon as possible, the Government hope that legislation will be brought forward without delay in the new Parliament.

The key features of the proposed scheme will be:

A guardian will be required to act in the best interests of the missing person and in this respect will be subject to duties similar to those of a trustee.

The guardian will be supervised by the Office of the Public Guardian and will be required to file accounts in much the same way as a deputy appointed under the Mental Capacity Act 2005.

A guardian will be appointed by a court on application by a person with a sufficient interest in the property and affairs of the missing person.

The appointment will be for a period of up to four years with the possibility of applying for an extension for up to another four years.

The replies to the consultation are described and analysed in the response paper published by the Ministry of Justice today.

I have placed a copy of the response paper in the Library of each House of Parliament. It is also is available at https://consult.justice.gov.uk.”

[HCWS449]

HS2 Update

Monday 23rd March 2015 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

Following the publication of”'HS2: On track”^[1] on 12 March which set out the good progress we have made on HS2 over the last five years, I thought it would be helpful to give an update on the latest project developments.

The hybrid Bill for the first phase of HS2 is making good progress through Parliament. By the end of today the High Speed Rail (London-West Midlands) Select Committee will have sat for 76 days and heard almost 400 petitions, almost twice as many as the Crossrail Committee heard in 21 months of sittings. I am sure the whole House will welcome the commitment and seriousness with which the Committee has gone about the very important task of ensuring that the project strikes the right balance between the needs of affected communities and the environment, and the long-term needs of the country as a whole.

We are continuing to develop our plans for the redevelopment of Euston station and are working with the local community to ensure we keep disruption to a minimum. On 18 March we signed an agreement with the London Borough of Camden that fulfils our pledge to social rented tenants affected by Euston’s redevelopment. We have now ensured that replacement housing will be available for all 136 social rented properties in Camden affected by HS2.

On 20 March we published a report on the Northern Transport Strategy. Developed jointly with Transport for the North, the strategy sets out our ambition for a world class northern transport system, as well as the concrete steps we are taking to get there. The Government have already committed £13 billion of investment to improving connectivity across the north. The report set out how we will work with Transport for the north to build on this investment, including developing a new “TransNorth” rail system to slash journey times between major northern cities and taking immediate action to simplify rail fares across the north.

In addition to this, I have set out my commitment to get HS2 to the north sooner, delivering benefits to businesses and individuals more quickly. Therefore, subject to further analysis and decisions on the preferred route, I intend to prepare a dedicated hybrid Bill to lay during the next Parliament with a view to bringing HS2 to Crewe earlier than planned.

Finally, we have moved another step forward to realising our ambition of creating a world-class railway, with the appointment by HS2 Ltd of award winning designer Sadie Morgan as the Chair of an independent design panel, which will advise on the delivery of the HS2 Design Vision, published today. This will set the bar for all future HS2 design.

I welcome this progress and am pleased to be able to report that the momentum of the HS2 project remains strong to deliver a railway which will be an engine for growth in our country.

^[1] Department for Transport (2015), HS2: On track, https://www.gov.uk/government/publications/hs2-on-track

[HCWS445]

Rail Franchising: Great Western

Monday 23rd March 2015 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

Today I have announced the successful conclusion of negotiations for a new directly awarded franchise agreement with First Greater Western Limited (FGW). This deal will see FGW continue to run passenger rail services on the Great Western franchise until the start of the services on the next competed franchise, which is expected in April 2019. The direct award secures an operator for the franchise for the three and a half years from September 2015 (with an optional 13 period extension at the Secretary of State’s sole discretion); through a period of unprecedented change on the franchise and the most significant upgrade of infrastructure and rolling stock for a generation.

The passenger benefits secured in this direct award are considerable, taking advantage of this Government’s significant investment in new infrastructure, electrification of the route, new intercity express trains on long distance routes and new high capacity electric trains in the Thames Valley, which will enable the cascade of diesel trains to the west and south west of England where additional capacity is badly needed.

The franchise overall will see an increase in capacity of around 25%, or 3 million seats per year as well as significant increases in service frequency and journey time savings. This will include a two trains per hour service to the south west of England, an earlier arrival into Plymouth, and double the number of trains to Cornwall. My Department will also work with FGW to improve the performance and quality of the rolling stock serving the south west of England, particularly for intercity services, during this direct award; to complement the introduction of the IEP trains.

Other benefits secured by the direct award include investment of £30 million to create 2,000 more car park spaces, additional customer information systems, CCTV, ticket gatelines, and a fund of £2.5 million for station access improvements, a £3.5 million station development match fund, as well as extension of station travel plans at a further 20 main interchange stations. The operator will also support the Government’s commitment to get more people into work by providing an annual fund and training opportunities for young and unemployed people, as well as providing 85 modern apprenticeships by the franchise end.

New passenger satisfaction, punctuality and cleanliness targets will be introduced on the franchise. We expect FGW to continue to provide improving standards for its 99 million annual passengers including the provision of free Wi-Fi on all train fleets. In addition the company will deepen its engagement with communities and stakeholders so that all the users of the franchise can continue to have a real influence in how it can continue to improve services.

Reaching this agreement with FGW marks a new chapter for the Great Western railway and builds on the success of my Department’s rail franchising programme; working in partnership with the rail industry to deliver far better services for passengers as well as value for money for the taxpayer.

[HCWS442]

Office of Nuclear Regulation: Annual Plan

Monday 23rd March 2015 Written Statements

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

My noble Friend The Under-Secretary of State for Work and Pensions (Lord Freud) has made the following written statement:

Later today I will place a copy of the Office for Nuclear Regulation’s Annual Plan for 2015-2016 in the Library of the House. The annual plan will also be published on the ONR’s website.

I can confirm, in accordance with Schedule 7, Section 25(3) of the Energy Act 2013, that there have been no exclusions to the published document on the grounds of national security.

It is also available on line at: http://www.parliament.uk/writtenstatements.

[HCWS444]

Grand Committee

Monday 23rd March 2015 Grand Committee

Monday, 23 March 2015.

Greater Manchester Combined Authority (Amendment) Order 2015

Monday 23rd March 2015 Grand Committee

Motion to Consider

15:30

Moved by

[Lord Ahmad of Wimbledon]

That the Grand Committee do consider the Greater Manchester Combined Authority (Amendment) Order 2015.

Relevant documents: 25th Report from the Joint Committee on Statutory Instruments, 29th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, the draft order was laid before this House on 25 February. It makes vital changes to enhance the leadership capacity of the Greater Manchester Combined Authority in order to promote economic growth and support Greater Manchester in delivering the devolution agreement made with the Government in November last year. As I will discuss with the Council of Europe when I address it tomorrow, the Greater Manchester devolution agreement is part of the Government’s plan to create a northern powerhouse. The agreement will see Greater Manchester having significant additional powers over, for example, transport, housing, planning and policing. These proposals will build on the success to date of Greater Manchester by creating a powerful devolved administration with strong political leadership that can drive through policies to stimulate economic growth and plan strategically across the city, as well as nationally and internationally.

With such powers, it is essential that there is within Greater Manchester leadership which is clearly and directly accountable to the people of Greater Manchester. A central tenet of the devolution agreement is that by 2017 there will be for Greater Manchester a mayor directly elected by the people, but this needs primary legislation. To enhance leadership capacity in the mean time, Greater Manchester leaders have asked us to enable them to appoint an additional board member who will chair the combined authority. This is exactly what the order does.

The draft order amends the 2011 order which established the Greater Manchester Combined Authority. It enables the combined authority to advertise, shortlist and ultimately appoint an additional board member who will chair the authority for a maximum of two years. This person, the interim mayor, will not exercise any functions individually. He or she will have one vote, and no casting vote—exactly the same as the other 10 board members. To be eligible to be appointed as the interim mayor, a candidate must be a resident of Greater Manchester and already hold an elected position; that is, they must have some form of democratic mandate and accountability to residents. This could be as an existing councillor or local authority mayor, Member of Parliament or the police and crime commissioner. The order also sets out the process for resignation and termination, and how the interim mayor’s allowances will be set. Additionally, all the existing arrangements for overview and scrutiny of the combined authority will continue to apply.

We have laid this draft order after following the statutory process for making changes to a combined authority as set out in the Local Democracy, Economic Development and Construction Act 2009. Crucially, it is a bottom-up process. The first steps must be taken by the councils and the combined authority. The Greater Manchester Combined Authority has, as the statute requires, requested this change through undertaking a governance review and preparing an appropriate scheme, and as the statute also requires, the Government have consulted on the proposed change. Having done so, my right honourable friend the Secretary of State for Communities and Local Government is satisfied that if these changes are made, the statutory conditions for such an order will have been met.

In short, making these changes is likely to improve: first, the exercise of statutory functions relating to transport in the area; secondly, the effectiveness and efficiency of transport in the area; thirdly, the exercise of statutory functions relating to economic development and regeneration in the area; and fourthly, the economic conditions in the area. The Government have also had regard to the need to reflect the identities and interests of local communities and to secure effective and convenient local government.

In conclusion, this draft order will enable the Greater Manchester Combined Authority, an already effective combined authority, to enhance further its leadership capacity in order to deliver effectively the additional powers within the devolution agreement and to help drive growth in Greater Manchester and across the north as part of the Government’s vision for a northern powerhouse. Making this change is what the civic leaders of Greater Manchester want in order to help them to do what councils across the country should be doing: promoting economic growth; that is, putting the promotion of economic growth at the heart of all they do. This is a priority for them and it is a priority for the Government. I commend the draft order to the Committee.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for introducing this order and wish him well with his address to the Council of Europe tomorrow. The order, as we have heard, covers a narrow but very important point concerning the governance of the Greater Manchester Combined Authority. By way of background, we note that on 3 November 2014 the combined authorities endorsed the devolution agreement negotiated with the Government which sets out the new powers and new responsibilities to be transferred but alongside governance changes which will eventually lead to a directly elected mayor being introduced.

Of course this is all part of the northern powerhouse, in recent times seemingly and belatedly so beloved of the Chancellor, with the agreement on an elected mayor referred to in glowing terms in the Budget speech—a new promise for the combined authority to be able to keep 100% of the additional growth in local business rates. We are thoroughly supportive of the Greater Manchester Combined Authority, which was created under legislation of the previous Labour Government, and acknowledge the innovative approach of the authority and its 10 constituent members. Indeed, the briefing note provided by the authority correctly asserts that Greater Manchester has been at the forefront of the debate about fiscal and functional devolution for some time. It states that greater devolution has been a cross-party objective for many years. The stated ambition is to develop a new “place-based” partnership with government over the lifetime of the next Parliament to influence, if not control, all public spending in Greater Manchester.

The thrust of all of this sits full square with our position of wanting, across the piece, to transfer some £30 billion of funding over five years from central to local government to resource transport, skills, employment support, housing and business support. But our ambition is not just to empower cities such as Manchester; it is to empower all parts of England that are prepared to join together in city and county regions. Unlike this Government, we would not give with one hand and take with the other by hitting the most vulnerable communities with the largest cuts.

It is understood that, under the 3 November 2014 agreement, the powers and functions of individual authorities will be retained by them but the combined authority will be strengthened through the transfer of existing powers and functions from central government. Perhaps the Minister will confirm that those cover transport, skills, business support, housing, planning, public service reform and health and social care. A set of governance protocols for the combined authority have been developed to reflect this, which widens and strengthens participation among local members. This has been built on to develop the agreed revised GM model which introduces a directly elected mayor as the chair and 11th member of the combined authority. There will be a cabinet of leaders with clear portfolio responsibilities.

It is understood that the plan is for an elected mayor to take responsibility for the newly gained powers in respect of planning, transport, housing and policing. Perhaps the Minister will confirm that that is so. We are influenced in our acceptance of the model by the fact that the combined authority has itself signed up to it. Clearly, this is all dependent on further primary legislation, which will fall to the new Parliament. It will be known shortly to which party or parties this opportunity will fall. However, so far as primary legislation is concerned, can the Minister say—assuming it fell to his party—what would be proposed in terms of consultation in advance of that legislation? Would the primary legislation require a referendum to approve the creation of an elected mayor? If so, what would happen if a referendum rejected the concept? It has been rejected in the past. Would there be an endless succession of interim appointed mayors? Where would such a rejection leave the devolution agreement?

The deal entered into between the combined authority and the Government is ground-breaking and the issues of governance are clearly an integral part of the negotiations and the agreement. However, can the Minister say whether other forms of additional governance capacity and chairing were considered apart from the elected mayor and the interim arrangements?

How will the interim mayor be held to account? Other members of the combined authority are leaders in their individual authorities, it is understood. An interim mayor may have to initially have held an elected post, but presumably it can be relinquished subsequently, and in any event it may not be the appropriate channel for judging performance.

Finally, the Secondary Legislation Scrutiny Committee of your Lordships’ House has drawn attention to the paucity of the consultation which has taken place in respect of this order. It points out that albeit the order is concerned with an interim appointment, the powers involved are potentially wide. How do the Government respond to that criticism? However, as indicated at the start, we support this order.

[Lord Bradley (Lab)]

My Lords, as the Secondary Legislation Scrutiny Committee pointed out on this interim order for the appointed mayor, there were barely three weeks of consultation, and the only people who effectively were consulted were business representatives and local councils. Although it was on the website, there was very little public involvement in the discussions and the decisions that were subsequently taken. It is essential that, under the forthcoming primary legislation, there is full consultation. Can the Minister give an absolute assurance on the length and depth of that consultation with the public in Greater Manchester? What timetable does he envisage for that primary legislation? If we are to move towards an ultimately elected position, the two-year time period might be shortened in that process.

[Lord Ahmad of Wimbledon]

My Lords, I thank the noble Lords, Lord McKenzie and Lord Bradley, for their contributions. I welcome the support across the Committee for the way that we are moving forward with Greater Manchester. Various questions were raised and I shall try to answer all of them.

The noble Lord, Lord McKenzie, asked what powers the Greater Manchester Combined Authority will receive. To give a bit more detail on some of the issues over which it will have control, they include: control of apprenticeship grants for employers; power to reshape and restructure the further education provision within Greater Manchester; control of an expanding Working Well pilot with central government funding linked to good performance; the opportunity to be a joint commissioner with the Department for Work and Pensions for the next phase of the Work Programme; and the GMCA and Greater Manchester clinical commissioning groups will be invited to develop a business plan for the integration of health and social care across the area based on the control of existing health and social care budgets.

The elected mayor of Greater Manchester will receive greater responsibility for a devolved and consolidated transport budget with a multiyear settlement to be agreed at the next spending review, for a franchised bus service, for integrating smart ticketing across all local modes of transport and for exploring on an urgent basis further opportunities for devolving rail stations across the Greater Manchester area. The elected mayor will also receive powers for strategic planning, including the power to create a statutory spatial framework for Greater Manchester; control of a new £300 million housing investment fund; control of a reformed earn-back deal with the current envelope of £300 million a year for 30 years; and incorporate the role and responsibilities of the Greater Manchester police and crime commissioner.

15:44

The noble Lord, Lord McKenzie, also asked how the legislation would come about. As I said in my opening remarks, there will be a transition period before the legislation creating a Greater Manchester mayor is passed and he or she is elected, which we expect to be in early 2017. During that period the combined authority will receive additional flexibilities to reform public services, specifically around business support skills and complex dependency. It will also assume responsibilities which will eventually be transferred to the elected mayor, such as the housing investment fund, and steps will be taken to amend the combined authority to create an 11th member as a chair, who will be the interim mayor until the mayor is elected.

As to the timeline, primary legislation for the election of the mayor will be required and this will be laid in the next parliamentary Session. Accordingly, the first mayor is due to be elected in early 2017. As to when we plan to bring forward legislative proposals following the November 2014 devolution agreement between the Government and Greater Manchester, it is envisaged that a Bill will be introduced into Parliament with a provision that would enable the mayor for Greater Manchester to be elected in early 2017.

The noble Lord, Lord McKenzie, asked about the circumstances under which the reappointment of the interim mayor of Greater Manchester may be necessary. Until Parliament legislates for an elected mayor, it is at the discretion of the Greater Manchester Combined Authority to appoint an interim mayor. Any such appointment would be for a fixed term to be determined by the combined authority for up to a maximum of two years. It is our intention that there will be primary legislation in the next Parliament to directly facilitate elections in 2017, as I said.

I have already referred to mayoral powers. On the public consultation, an issue which the noble Lord, Lord Bradley, raised, the devolution agreement provides for the Greater Manchester Combined Authority to agree with the Government its plans for evaluation, with the first review to be completed in 2019-20. These plans will be expected to include the extent of any public consultation considered appropriate in the evaluation.

On the question of a referendum on the introduction of the directly elected mayor, this is not about replacing one form of governance with another: it delivers the same services with the same resources—which, in effect, is what previous referendums have been about. There will be greater democratic accountability. I was asked what would happen if there was a rejection of the proposal for an elected mayor. There will be no referendum for the reasons that I have just talked about. Clearly, if there were a referendum that rejected the proposal, the proposal could not be proceeded with at that time. As I said, this is about ensuring good governance. The combined authority’s current members are elected by residents in individual wards and, as the new devolved powers will affect the whole of the Greater Manchester area, we believe that the best way of achieving the necessary greater democratic accountability is for all residents of Greater Manchester to decide who would take the position of the elected mayor.

The noble Lord, Lord Bradley, also asked about the existing consultation and expressed his concern that it took only three weeks and did not give residents an opportunity to comment. The order is technical and limited in scope and we consulted all the statutory consultees—in this case the Greater Manchester Combined Authority and the 10 local authorities within the Greater Manchester area. Other appropriate consultees were considered to be the local enterprise partnership and the Business Leadership Council. I trust that I have answered all the questions.

[Lord Bradley]

Perhaps I may clarify what the Minister was saying about consultation on the primary legislation. He seemed to be saying that there would be an evaluation of it in 2019. My question was whether there would be consultation with the public on the primary legislation to be introduced early in the new Parliament.

[Lord Ahmad of Wimbledon]

My understanding is that, as the deal has been done on laying the primary legislation, it will proceed in the next Parliament. That has already been negotiated between the Government and the leaders, so there are no plans for additional consultation on the primary legislation.

Motion agreed.

Local Authorities (Prohibition of Charging Residents to Deposit Household Waste) Order 2015

Monday 23rd March 2015 Grand Committee

Motion to Consider

15:49

Moved by

[Lord Ahmad of Wimbledon]

That the Grand Committee do consider the Local Authorities (Prohibition of Charging Residents to Deposit Household Waste) Order 2015.

Relevant documents: 25th Report from the Joint Committee on Statutory Instruments, 29th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, the draft order was laid before this House on 25 February. It prohibits local authorities in England charging their residents to enter into or exit from household waste recycling centres or deposit household waste or recycling at such centres. The order reinforces the principle that such centres—also known as civic amenity sites or tips—should be provided free to use by the general public or local residents in the area.

From provisions previously contained in the Civic Amenities Act 1967 to the current provisions in the Environmental Protection Act 1990, Parliament has required local authorities to provide free-to-use household waste recycling centres for their residents to dispose of household waste. The Government’s 2011 waste review supported that principle and the order reaffirms the status quo.

The order has been brought before this House because the Government know that some councils have introduced, or plan to introduce, such charges and we are seriously concerned that they will inconvenience residents, make recycling harder and increase fly-tipping and backyard burning.

The Government understand that in the Republic of Ireland, which has a series of charges on household waste disposal, the domestic burning of household rubbish is the biggest single source of toxic dioxin emissions into the air. Such pollution crosses local authority boundaries, creating a wider harm to the public good.

The councils in England introducing this “tip tax” appear to consider the household waste recycling centres in question as additional to those required to be provided without charge under the Environmental Protection Act 1990 and offer them as a discretionary service—one that councils have power but not a duty to provide.

The Localism Act 2011 gave councils in England the general power of competence. This enables them to do anything an individual might do, other than that which is specifically prohibited by law. As such, in the absence of specific limitations, councils can set up discretionary services and charge for their use.

The Localism Act also gave the Secretary of State the power to make an order restricting what a council may do under the general power of competence, recognising that there were occasions where that would be appropriate. The provisions in the Localism Act operate side-by-side with those in the Local Government Act 2003, which also enable councils to charge for discretionary services, and the Government have adopted a belt and braces approach. A separate order made under the negative resolution procedure prohibiting councils from using the 2003 Act to introduce similar charges will come into force on 6 April. Drafts of both orders were provided as part of the public consultation that the Government ran for four weeks earlier this year.

I now turn to the concerns of the Secondary Legislation Scrutiny Committee regarding the length of time given for responses to the consultation and the argument that the order will lead to centres closing. Although acknowledging that a four-week consultation could result in a limited response, I do not consider that that occurred. Thirteen respondents felt that four weeks was insufficient, but the quality of responses demonstrates that providing detailed input was possible in the time available.

I reject the committee’s assertion that the judgment of the Government on the timing of the consultation was self-serving. The Government carefully considered all responses in taking their decision on whether to introduce the order. They have also been mindful of the views of affected residents. Norfolk County Council plans to introduce charges at nine of its 20 centres. Respondents opposed that when the county council consulted on its proposal, citing concerns about fly-tipping and the unfairness of charging for a service that they believe is paid for through council tax.

The Government do not want centres to close as a result of the order. Sites already making such charges will have until April 2020 to make alternative arrangements. The Government invited views on how centres at risk of closure can stay open without councils resorting to charging. Respondents provided a number of useful, sensible ideas. It will be for councils to determine the necessary blend of these and other effective measures to make such centres more cost-effective. Hampshire County Council argues that many sites are not viable for its area and that if this order is implemented it will have no option but to consider site closures, resulting in increased fly-tipping and thus imperfectly achieving the policy objective of environmental protection. However, I cannot agree that the “charge or close” scenario is inevitable. For example, Northamptonshire County Council has asked residents for views on how its household waste recycling centres could be run more efficiently. Options included entry charges and site closures, but residents were opposed. Using feedback, the council refined its plans and alternative measures are being put in place to significantly reduce costs.

The Government encourage councils to innovate and confidently use their general power of competence to act for their communities, and in their own financial interest to generate efficiencies and savings. However, having regard to the Government’s clearly expressed policy of free-to-use centres for residents, householders deserving a comprehensive waste and recycling service paid for by council tax, concerns that charges will not benefit local communities and the consultation responses, the Government consider it appropriate to prevent councils using the general power of competence in these particular circumstances. I therefore commend the order to the Committee.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for his introduction of this order. More particularly, I thank the House of Lords Secondary Legislation Scrutiny Committee, whose diligence in this case has been particularly helpful in getting a better understanding of what is going on here.

We are supportive of the principle that household waste recycling centres should be free to use, as charging could lead to an increase in fly-tipping and damage to the environment, but I am bound to say that this order seems to be central government micro-managing gone mad. Just a few years ago we legislated to give local authorities freedom because we believed that they have the competence and desire to do the right thing for their communities; but here we are now, snatching that freedom away. Can the Minister confirm that so far only one authority, the Somerset Waste Partnership, has actually introduced a charge? A few others are thinking about doing so, but as things stand, only one authority would be eligible to take advantage of the grandfathering provisions through to 2020. If it is not just that one authority, can the Minister tell us which other authorities are involved?

The Secondary Legislation Scrutiny Committee has criticised the consultation process as being too short, at only four weeks. Although it stated that the period should be six weeks minimum, it argues that in this case, given the intervention in local authority powers, it should be longer. Despite what the Minister said, it points out that one in five respondents criticised the period allowed for responses. Why do the Government consider it so vital to press on with this order in these circumstances and not take a pause? It is hardly a matter of national security.

There is further criticism, which we endorse, about the consideration of the responses. Just over half opposed the change. Not only was the opposition anti-localist, but there was a clear consensus about the measure being counterproductive—that is, that it would lead to closures of household waste recycling centres, with consequent increases in fly-tipping.

Consultation has elicited certain suggestions, as we have heard, for ways of avoiding site closures, but considerable doubt has been cast on the effectiveness of those, including by Hampshire County Council, which has been referred to. What detailed work have the Government undertaken to assess the viability of these alternatives? What specific models have they developed to assist authorities to avoid closure in the short to medium-term, and what assurance can the Minister give that actual closures of sites will be avoided? Why are the Government so dismissive of the points made by Hampshire County Council?

16:00

Perhaps I may refer in some detail to those points, which are in the appendix of the scrutiny committee’s report. On a number of key points, we have had no satisfactory answers or rebuttals. Hampshire County Council says that it,

“like many other local authorities, has already taken steps to reduce opening hours”,

as a means of making economies,

“and to enforce trade waste controls as a way of reducing costs. Although there is scope to go further with these approaches this is unlikely to meet the Government’s policy objectives and will still result in a much reduced service for residents”.

Presumably it will reduce services just as much as the charges for services and be an inhibitor in the use of these facilities, given increased fly-tipping. The council says that:

“Charging businesses to access”,

these centres,

“is another option which many local authorities have already implemented or are planning to implement, including Hampshire County Council”.

As for voluntary and community-sector running, it says that,

“whilst the voluntary and community sector has an important part to play in the reuse and recycling of materials, it does not consider the running of HWRC sites by the sector to be a viable option, given the economic realities. The reduced value of recyclable materials and the cost of disposing waste materials that are not reusable or recyclable make the business model unsustainable without considerable additional funding or having to significantly restrict the service”.

It refers to issues around a more transparent packaging recovering note and says that, even if that were to be effective, it simply could not be introduced overnight. It says that,

“the option to encourage greater producer responsibility could help to reduce the cost”,

but,

“the outcome may be even less desirable for local residents”.

The council has raised a number of detailed points in its representation to the Government but the Government have brushed those aside. It seems to me that the Government have a duty to evaluate them properly. If they evaluate them and still reject them, that is fine, but they have to do the work first. There is a rush to get this thing through. I know where we are in the parliamentary timetable, but why is this so fundamental and important that they have to ignore decent practice, decent consultation and a proper analysis of the risks that could involve the very thing that the Government say they are seeking to avoid actually coming to fruition?

[Lord Beecham (Lab)]

My Lords, I warmly endorse my noble friend’s critique of this—what I can only describe as—peculiar order. I spent some time on Friday with children in a primary school in my ward who were engaged on a litter-pick on the adjoining council estate. That was quite interesting, and quite a worthwhile project from the point of view of encouraging children to take an interest in their environment and, we hope, for their parents to avoid depositing the litter there in the first place. It was also striking that, at the same time, the council in Newcastle—I declare my interest as a member of the local authority—which is meant to charge for the collection of bulky refuse from properties, had arranged a day on which it would pick up items from that estate without such a charge. I saw a full lorry-load being carted away, and more to come besides. So there is clearly an issue around these matters. However, for the Government to assume the power to dictate to local authorities on an issue like this, given the amounts of money involved, seems ludicrous.

There are some questions that I would like to raise. In the first place, what is meant by a “resident” for the purpose of the order? Would that include not merely householders or individuals but also, for example, businesses or organisations, to which my noble friend has referred? How is the council supposed to validate the provenance of those coming to take advantage of this free disposal? They might not even, for example, be a resident of the immediate local authority. Would a resident of Kent be empowered to cross the border into Hampshire and deposit something there, or does it have to be a resident of the individual local authority and, if so, as I say, would that be confined to individuals or could they be corporate?

The second question is: where does this process stop? As I have indicated, my local authority charges, I think, £15 for taking away bulky refuse. That is not a vast figure, perhaps, to most of us, but it is quite a burden on a family household on a very low income. I am in fact going to look into the efficacy of the charge, because there is certainly a good deal of refuse being disposed of otherwise than by paying for it to be taken away. Is the next step for the Government to say that there should not be a charge for bulky refuse collection? In principle, if they are going to take this sort of measure, there would appear to be no logical reason why they should not do that.

Then, of course, there are other enormous contrasts. Now, every resident in many areas will pay effectively 20% council tax because of the way that the Government have changed the council tax support system. People who have been paying nothing now have to pay—or are supposed to pay; certainly not all of them are paying—council tax at that level. Although they can deposit their refuse for nothing, assuming they can get it to the disposal area, they are required to make a significant contribution to their council tax, whereas previously they were exempt from so doing. Is this not a complete inconsistency in the Government’s approach? It is lamentable that the Government—particularly the Secretary of State, who proclaims his belief in localism—should descend to the detailed management of services such as this.

The noble Lord is, of course, not to blame for the Secretary of State’s curious ventures into these areas, and I am not expecting the noble Lord to give too full a defence of what has happened. I am sure that, privately, he would share my view—although I am not for a moment expecting him to confirm it—that this is a ludicrous contrast to all the protestations about localism and democracy which we constantly hear and to which we will return in respect of some other orders this afternoon. They are what I trust will be a final flourish on the Secretary of State’s part. Hopefully he, if not the whole of the rest of the Government, will move on to pastures new in a few weeks’ time. Then we might restore some sense in what local democracy is actually supposed to be about—that is, local decision-making, responsible to the local electorate and not to Whitehall.

[Lord Ahmad of Wimbledon]

My Lords, I am grateful to the noble Lords, Lord McKenzie and Lord Beecham, for their contributions. Various questions have been raised, which I will seek to answer in turn.

The noble Lord, Lord McKenzie, asked how many local authorities had introduced, or planned to introduce, these charges. He is right to mention Somerset Waste Partnership. This team, as noble Lords may know, manages waste and recycling services for Mendip, Sedgemoor, South Somerset and West Somerset District Councils, Taunton Deane Borough Council and Somerset County Council, which has a £2 entry charge at two of its sites, at least. Norfolk County Council has plans to introduce such a £2 charge at nine of its 20 household waste recycling centres from April 2016. Dorset Waste Partnership—which manages the waste and recycling services for all of Dorset’s district councils and Dorset County Council—is currently consulting on introducing such charging for entry to one or more of its household waste recycling centres. As to whether the Government’s response was excessive, given that there is just one such charge currently and others are planned, three counties are involved, and I have listed some of the areas covered by those counties. That means that a sizeable number of council tax-paying residents will be affected. It is our view that other county councils will consult on introducing charges in due course. Hampshire County Council is clearly of the view that the opportunity to charge remains in place.

[Lord McKenzie of Luton]

The specific focus on numbers was to do with the number of authorities, partnership arrangements or whatever which would be protected by the grandfathering provisions—that is, those which have got a charge at the moment and which they can keep until 2020. Does that apply only to those which have it as of today? What about those which are in the process of thinking about it—or might be encouraged to think about it depending on the Minister’s answer?

[Lord Ahmad of Wimbledon]

It will be only the one which is currently in place, which is Somerset. Grandfathering, as I remember from my life in financial services, was often applicable only to those in situ, much to the annoyance of those who had to sit exams. That is a well founded principle.

The noble Lord, Lord McKenzie, asked about local authorities being able to charge for non-household waste or to charge users who are not residents within the local authority area where the site is located. The noble Lord, Lord Beecham, asked, in his own charming way, what is a resident. I am sure that he knows the answer already. As he knows from his own experience, a resident of a local authority is one who lives within the council’s boundary in which the centre is sited. I can give him a practical example of how this was measured from my time in a local authority. After much hard campaigning in my ward I had managed to open a recycling centre, but this was quickly closed by the then Labour council when the authority changed hands. People from my borough tried to go into neighbouring Wandsworth sites but they had to show a local council tax bill at the entrance before gaining entry. Of course, as a Merton resident, I was unable to avail myself of the excellent facilities in the Conservative council next door. However, on a more general point, there are means available to local authorities to ensure that only residents use the sites and not non-residents.

The noble Lord also asked about business waste. The Government recognise that many local authorities charge household waste recycling centres for the deposit of non-household waste, such as car tyres, and/or for users who are not resident in the local area.

[Lord Beecham]

Perhaps I may go back to the point the noble Lord made about residents. To take the example I gave, if a good citizen of Kent crossed the border into Hampshire, or a good citizen or otherwise of Merton went to Wandsworth, would it be in order for the receiving centre to make a charge to that person?

[Lord Ahmad of Wimbledon]

That would be for the local authority. If it is not charging its own residents, that applies through this order. However, if someone who is not a resident of that locality and within the remit of that council, it is up to the local authority whether it exercises a charge. This is akin to business charges. Different local authorities have different ways of charging business users.

I was delighted to hear that the noble Lord, Lord Beecham, took part in community clear-up day. He referred to my right honourable friend Eric Pickles and his initiatives. I am sure Mr Pickles will be delighted to know that the noble Lord took part in the community clear-up day in his area. Of course, last Saturday, 21 March, was the first time we have had a national clear-up day. I was delighted that schoolchildren, residents, community groups and charity groups up and down the country played their part in ensuring that we had a good national clear-up day.

The noble Lord, Lord McKenzie, also asked whether charging could lead to the closure of costly household waste recycling sites. We take the view that it should not. The Government have asked respondents to the consultation paper about how household waste recycling centres at risk of closure can stay open without local authorities resorting to charging their residents. There are other ways to consider rather than charging local residents and we do not agree that the scenario of charge or close is inevitable. It is for individual authorities to determine the necessary blend of other measures to make centres at risk of closure more cost effective.

There are two reports from the sector. Local Partnerships’ report on Yorkshire and Humber Local authorities in 2015 demonstrated savings of up to £300,000 per authority through, for example, more effective charging for commercial waste, which I have already mentioned, and a sensible and flexible opening hours regime.

A 2015 report by the Chartered Institution of Wastes Management highlights many opportunities for further savings to be made; for example, centres diverting reusable and repairable materials from landfill. As I said, the consultation asked for alternatives to charges for centres at risk of closure.

16:15

[Lord McKenzie of Luton]

One can understand that there may well be alternatives in some authorities to introducing charging other than closure, but the Government seem to be saying that local authorities can do pretty much anything other than closure. We know that some authorities are already restricting hours, which makes the facility less accessible and it more likely that fly-tipping will take place. Why do the Government say that local authorities can do what they want in all those areas but not simply introduce a charge if that were the one effective way to keep a facility open? That is not logical in any way, shape or form.

[Lord Ahmad of Wimbledon]

Again, I know from my experience that when you look at the usage of such amenity sites from local residents, it often falls on weekends rather than during the week, so there is a sensible and practical way of managing hours. Contrary to what the noble Lords, Lord McKenzie and Lord Beecham, said, the Government believe in localism. That is why we introduced the Localism Act.

The noble Lord laughs. The point is that this Government have done a great deal for localism in empowering local people in community rights debates, and so on and so forth. Unless there are other specific questions, I believe that I have answered the questions raised and I once again commend the order—

[Lord McKenzie of Luton]

Before the noble Lord sits down, I should make clear that we want to reflect further on this. I do not say that we will, but we may well want to move a Motion of Regret or other sort when the Motion is reported to the House. It is right to put the Government on notice that that is a possibility given where we are in the timetable. We cannot conclude that here.

[Lord Ahmad of Wimbledon]

Hansard will have recorded the noble Lord’s comments. I cannot let the final comment pass. The noble Lord, Lord Beecham, talked about whoever it is in power post 7 May. I of course look forward to standing where I am and addressing further concerns that he may have post 7 May. I commend the Motion.

Motion agreed.

Council Tax and Non-Domestic Rating (Powers of Entry: Safeguards) (England) Order 2015

Monday 23rd March 2015 Grand Committee

Motion to Consider

16:18

Moved by

[Lord Ahmad of Wimbledon]

That the Grand Committee do consider the Council Tax and Non-Domestic Rating (Powers of Entry: Safeguards) (England) Order 2015.

Relevant document: 25th Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, the order was laid before this House on 27 February and I beg to move that it be approved. The Government are committed to protecting individuals and businesses from unnecessary intrusion into their homes and business premises by public bodies. It is essential that powers of entry, as with any enforcement power, achieve the right balance between the need to enforce the law and ensure public protection and the need to provide sufficient safeguards and rights to individuals. That is why I am delighted to inform the Committee that the Government have clamped down on the overuse and abuse of snooping, with more than 300 powers of entry already being abolished. We have also stopped spy cars and bin snoopers. However, some powers of entry are important and reasonable, such as the need for council tax and business rate inspectors to enter a property to value it. We now propose to introduce three additional safeguards for individuals and businesses through the draft order.

The main change is that the draft order, using powers under the Protection of Freedoms Act 2012, would change the law so that officials from the Valuation Office Agency, an agency of Her Majesty’s Revenue & Customs, should no longer have an automatic power of entry into homes and businesses to value them for council tax and business rates. We are proposing to amend the Valuation Office Agency’s powers of entry so that where consent to enter is not given, listing and valuation officers will have to seek the authority of the First-tier Tribunal before they can exercise their statutory entry power. The vast majority of inspections will continue to happen with consent. However, where consent is not given, it will be for the First-tier Tribunal to judge whether the inspection is needed.

Secondly, when listing or valuation officers exercise their power, if the property’s occupier obstructs them the occupier can be prosecuted and fined. We propose, through this draft order, that the fine level for council tax be reduced and aligned with business rates to level 1 of the standard scale. This is currently £200. The third and final change is that the period for written notices sent by listing officers and valuation officers in advance of inspecting a business property to business ratepayers following First-tier Tribunal authorisation is increased and aligned with that for council tax, to three working days.

These changes, if they are approved, will ensure that private and family life is respected at all times. They will ensure that the privacy of citizens’ homes and businesses is protected, while allowing the Valuation Office Agency to meet its statutory functions and enabling listing officers and valuation officers to fulfil their statutory valuation duties.

In drawing up our proposals, we listened to representations from a range of sectors. We had a total of 23 responses from local authorities, the Valuation Tribunal for England, the Institute of Revenues, Rating and Valuation, Big Brother Watch, a member of the Royal Institution of Chartered Surveyors and the Rating Surveyors Association, and from members of the public. The majority agreed that the proposals set out in the consultation document sufficiently protect the privacy and rights of homeowners and businesses. There was no significant disagreement with the principle of requiring that listing and valuation officers should be made to seek the authority of the tribunal before exercising their power of entry. There were mixed views on whether to reduce the fine level for council tax and align it with business rates, to level 1 of the standard scale. The majority agreed with aligning the period for written notices sent by listing officers and valuation officers in advance of a visit to council tax payers and business ratepayers to three working days. Based on the details of the order, I commend it to the committee.

[Lord Kennedy of Southwark (Lab)]

My Lords, I do not have too many comments to make in respect of this order. When I looked at the order, I noticed the reference to the Protection of Freedoms Act. This Government seem to like some grand titles for Acts. I think also of the SARAH Bill, which my noble friend Lord Beecham did for the Opposition.

There is a lot of florid language in this order. As the noble Lord, Lord Ahmad, outlined, it ensures that when officials want to get entry to a property, if they have not been allowed it they have to seek the permission of the First-tier Tribunal. I have no particular issue with that. However, I saw that no impact assessment was done on this provision. Who will bear the costs of these actions? I hope that it will not be the taxpayer or the council tax payer. Why was no impact assessment done? Is it because in reality there will be a relatively small number of cases? That would be very useful.

Will the Minister also comment a bit more on the consultation? I read it and thought it was a bit more mixed than the Minister may have outlined. Also, who were consulted? I saw that Big Brother Watch is mentioned here, but what other groups were consulted? It would be quite nice to have a list of the organisations. I assume that local authorities were included. What concern did Big Brother Watch have? It stuck out on the list. I would appreciate some answers to those questions.

[Lord Beecham (Lab)]

My Lords, in following my noble friend and in relation to the costs which he raised, there seem to be a couple of questions. First, what is the cost assumed to be nationally of any applications that would be made to the First-tier Tribunal and how many cases is it estimated will take place? My noble friend asked upon whom the cost would fall, but would that depend on the outcome of an application or just fall upon the relevant authority? If so, would that then become part of the new burdens doctrine and would it be funded by the department itself?

I have another question. What we are talking about here appears to be valuation for council tax purposes but what about, for example, the bedroom tax? It will presumably be necessary to inspect a property to see how many residents there are and what the position is in relation to allegedly spare rooms. There is already quite a lot of controversy, for example, about rooms adapted for disability purposes within a property. That would presumably require some kind of inspection. Is it proposed that there would have to be an application under these provisions for an inspection by a valuation officer or some other official to determine whether it is appropriate to levy the bedroom tax? I cannot quite remember the more dignified name that the Government choose to give it. Is the euphemism deployed the “supplementary room”?

[Lord McKenzie of Luton]

It is the spare room subsidy.

[Lord Beecham]

That is right. Yes, it is the spare room subsidy, a wonderful euphemism. In establishing whether that applies, an inspection would presumably often be required but is that covered by these provisions? It would be interesting to know.

[Lord True (Con)]

My Lords, if I may intervene, noble Lords opposite do not need to feel that they have to object to every regulation that comes here. I have no particular difficulty with this order, as to give three working days is highly sensible. Indeed, most of what is in it is highly desirable.

I intervene briefly only to say that, as we have discussed on other occasions, this is part of a lot of stuff now coming out from the department. As we look forward to the next Parliament, I would put in a plea to whoever is in control of it. I agree with my noble friend and I sincerely hope that it is him, because he is a highly respected and experienced colleague from local government. After the election, however, I hope that there will be a restraining hand laid on those who want to uninvent the general power of competence or assert the principle that Whitehall knows better than local authorities about a range of things, from how votes should be conducted in council meetings to how an individual high street should be regulated. At this last stage in the Parliament I put in a plea before both parties, although I hope that my own will form the next Government, for that message to be heeded. However, I hope that we can approve these regulations. They are highly welcome and I thank my noble friend for bringing them forward.

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords for their questions, comments and general support for what the Government are proposing. I first thank my noble friend Lord True for his very kind remarks and, as a general point, I take on board what he said about powers of competence. From this Government’s perspective, the whole essence has been an increased focus on localism. He raises his points well and I am sure that both my party and others will listen to his comments with great interest as we move forward, post 7 May.

Turning to the specific questions from other noble Lords, the noble Lord, Lord Kennedy, raised the issue of the impact assessment for this change. The proposed policy changes do not actually fall within the scope of the reducing regulation committee, and so they do not need an impact assessment for this purpose. We do not anticipate any impact on the private or voluntary sector in this regard. A question was also raised about the costs associated with the order. As my noble friend Lord True pointed out, with most inspections there is an allowance of three working days and they will still happen by consent. There will be no significant increase in costs, as new costs for First-tier Tribunals will be paid by DCLG.

The noble Lord, Lord Kennedy, asked about consultation and whom we consulted. I listed a number of organisations and all the consultation details are available on the government website, GOV.UK. This includes all the statutory consultees I mentioned earlier.

[Lord Kennedy of Southwark]

I am sorry to interrupt the noble Lord. Would it be possible to send me a list of the organisations consulted other than the obvious ones such as local authorities? It would be helpful to me if he could do that.

16:30

[Lord Ahmad of Wimbledon]

I am quite happy to send the noble Lord the list of the statutory consultees, although the whole idea of putting it on the website is to open it up to whoever wishes to comment. However, if the noble Lord is asking specifically about the statutory consultees, I am quite happy to send him the list.

I am delighted that the noble Lord, Lord Beecham, referred to the spare room subsidy by its correct name. Just by way of clarification, that is not assessed by the Valuation Office Agency and, as such, this order will not apply. I believe that I have answered the questions that were raised.

[Lord Kennedy of Southwark]

I just want to say that obviously we have great respect for the noble Lord. I think that all Members here have served on local authorities in the past. Certainly, the noble Lord, Lord True, leads a council; my noble friend Lord Beecham has led a council; and I was deputy leader of a council many years ago and went back on to Lewisham council last year. Of course, I hope that we get back in May and that the position will be reversed. However, whatever happens, I have great respect for the noble Lord.

[Lord Beecham]

I hasten to add my agreement to that. However, with respect, the noble Lord has not answered a couple of the questions that I put to him. What will be the cost of the use of the valuation service and who will bear that cost? Will it be the local authority or the householder, or, to put it another way, the occupier of the property? In that event, would the cost apply only if he objected and the objection was overruled?

[Lord Ahmad of Wimbledon]

Just so that I am clear, this is if a request is made to enter a property and the request is refused. I am just clarifying the nature of the noble Lord’s question.

[Lord Beecham]

An application has to be made to the First-tier Tribunal and there must be a cost for the application to that tribunal. Who bears the cost of the tribunal hearing?

[Lord Ahmad of Wimbledon]

I think that I have already alluded to the administrative costs, which I said the DCLG would pay. The House will have an opportunity to see the full details of how the First-tier Tribunal will operate when the MoJ tribunal regulations are brought forward. They will include full, detailed costs.

Motion agreed.

Legislative Reform (Community Governance Reviews) Order 2014

Monday 23rd March 2015 Grand Committee

Motion to Consider

16:33

Moved by

[Lord Ahmad of Wimbledon]

That the Grand Committee do consider the Legislative Reform (Community Governance Reviews) Order 2014.

Relevant document: 15th Report from the Delegated Powers and Regulatory Reform Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, the order before us today will make amendments to the Local Government and Public Involvement in Health Act 2007. The changes will make it easier to create new town and parish councils by improving the community governance review procedure.

Town and parish councils are a valuable part of our democracy and an important component of our vision for localism. Parish councils provide communities with a democratically accountable voice and a structure for taking community action. The Localism Act 2011 gives parish councils a range of powers, including neighbourhood planning, and we want to see parish councils take on a greater service delivery role for their local communities.

Many local communities clearly have a passion for placing power at a more localised level. However, the prospect of embarking on a lengthy process to realise that goal has discouraged many communities which wish to live in a parished area from exploring this opportunity. We are committed to working with local communities, councils at all levels, and representative bodies across the sector to explore measures to remove the obstacles that stifle the potential which exists for creating more new town and parish councils.

The legislation governing the community governance review procedure requires that every principal council conducts a review as it gives consideration to whether to create a new town or parish council. The proposals which I set out today will improve the experience for local communities, which will be better placed to achieve their vision of local governance at the grassroots level.

The draft legislative reform order was laid before Parliament on 11 December 2014 under the affirmative resolution procedure. The Delegated Powers and Regulatory Reform Committee scrutinised the order on 21 January 2015 and raised it to the super-affirmative procedure. The chair of the committee, my noble friend Lady Thomas of Winchester, invited the Department for Communities and Local Government to submit further information. I am pleased that following the submission of further details, the committee confirmed its satisfaction that the order now meets the tests set out in the 2006 Act. I am grateful to the committee for its hard work in scrutinising this order.

Before getting into the details of the amendments to the Local Government and Public Involvement in Health Act 2007, I will briefly explain the background to these measures. In 2011, the Open Public Services White Paper set out the policy objective of making it easier to set up new town and parish councils. This reflected the growing belief among local campaigners and the local government sector that under the current legislation, the process is too burdensome and bureaucratic for local citizens.

We undertook two government public consultations to consider these proposals. The first consultation was conducted from October 2012 until January 2013 and sought views on a wide range of measures to improve the governance review procedure, including the three specific measures set out in the proposals today. It has been particularly insightful to listen to the views of bodies such as the National Association of Local Councils, the Society of Local Council Clerks and the Local Government Association and to learn from the first-hand experiences of new and established town and parish councils which have gone through the review process. Respondents to the consultation were broadly in support of the three measures proposed. As a result, the Department for Communities and Local Government decided to proceed with plans to introduce the three key legislative measures.

In the second public consultation, conducted between March 2014 and May 2014, we gave specific consideration to the use of a legislative reform order as the mechanism for introducing the proposals. All those who responded to the consultation fully supported the specific use of the LRO. Today, I am asking noble Lords to support the introduction of measures that will help to deliver on the commitment first made in 2011. Introducing these changes will benefit local communities by giving them a greater say in how their local neighbourhood should be governed.

In summary, the new measures will, first, reduce the percentage of local government electors required to sign a community governance petition that will trigger a community governance review from 10% to 7.5%. This change will enable local campaigners to obtain the required number of the local electorates’ support more quickly, allowing for the voice of communities to be heard and for the review to be triggered within a shorter timeframe. Secondly, it will reduce the period allowed for the relevant local authority to conclude a community governance review from 12 months from the date the review begins to 12 months from the date of receipt of the petition or application. Introducing a clearly defined timeline will significantly reduce the financial and administrative burden currently being placed on local communities. It will also help local communities to campaign more effectively by reducing the costs associated with delivering local campaigns, including the cost of producing leaflets, circulating campaign material and hosting meetings.

Thirdly, it will allow those neighbourhood forums which have a neighbourhood development plan that has passed a referendum to trigger a community governance review without the need for a petition. This significant change recognises the important role that neighbourhood forums play in our local communities. The membership of forums reflects the different people who live in a local area. Allowing forums which have already received support for their plans through a referendum to trigger a review will avoid duplication and acknowledge the extensive work that they undertake to engage the wider community in the discussions about forming a new council. These three measures will foster collaborative working between local authorities and campaigners, and lead to greater local democracy.

In summing up, I emphasise that the proposed amendments to the legislation will be invaluable for local communities. The changes unlock the barriers within the current legislation, which will enable local citizens to realise the benefits to be gained from living in an area represented by a town or parish council. We are seeking to complete the process of parliamentary scrutiny and to bring these changes into force as soon as possible. I beg to move.

[Lord Kennedy of Southwark (Lab)]

My Lords, as the noble Lord, Lord Ahmad of Wimbledon, outlined, this legislative reform order makes it easier to set up new town and parish councils. At present, a local authority or local campaigners petition the local authority to create a new town or parish council. A petition must meet the threshold of signatures to instigate a review. The local authority must then set the terms of reference, including the geographical area the review will cover. The review is completed within 12 months, and the final decision rests with the principal council.

A number of changes are proposed in this order, and it would be useful if the Minister will comment further on them, including the decision to reduce the proportion of people signing the petition to 7.5% and the consequent reductions in the other thresholds. Did the department consider the practicalities of having a percentage figure and a small, fixed figure for smaller authorities rather than the current scale?

In respect of reducing the 12-month period from when the review begins to when the petition is received, how much of a difference is there in reality? Will the Minister give the Grand Committee more evidence for the assertion that where a neighbourhood forum has been set up it can trigger a review? I am not sure how many neighbourhood forums have been set up in England. Can the Minister tell the Committee anything on that?

I am a local councillor in Lewisham in south London. I represent the ward of Crofton Park. We have just started the process of setting up a neighbourhood forum. If the forum gets off the ground, I am not clear whether we want to go the further stage and consider setting up a parish council. Setting up the forum is quite a challenge for local people.

I am aware that a new parish council in London—Queen’s Park, Westminster— was elected last May. Does the Minister have any assessment of how it is working? Particularly for London to get a parish council—the first one in 50 years—is interesting. If he has any comments on it, that would be helpful.

[Lord Beecham (Lab)]

I again endorse what my noble friend has said. I have no objection in principle to the order, but I am wondering about the evidence base which underpins it. I have been looking across a few local authorities and a large number of parish and town councils have been created and boundary changes made over the years. What scale of problem is being addressed in terms of failure to reach the requirements of the present legislation in the number signing petitions and subsequently voting on a proposal? Have many failed on that account? It would be interesting to know that.

For that matter, is there a view about the turnout in subsequent elections for town and parish councils? Does it differ significantly from the admittedly not wonderful turnout in local elections generally? Certainly in my, now very long, experience of local government, one used to hear of parish councils in which it was pretty difficult to gauge the turnout because there was none. People were regularly returned unopposed. It would be interesting to find out whether that is still the case. I do not think we are quite going to reach Athenian democracy by virtue of the implementation of these measures. I do not necessarily object to them, but I would like a little more knowledge of the factual background to the proposals and whether they are likely to make any significant difference.

16:44

[Lord Ahmad of Wimbledon]

I thank noble Lords for their general support. I suppose that I should say to the noble Lord, Lord Beecham: “You want more?”. I hope that we can provide some more evidence on this, but I am genuinely grateful for the support because I think that we are all aligned to the principle of making things easier for our communities, and the order reflects that. The noble Lord, Lord Kennedy, asked about the 7.5% threshold. We originally proposed 5% but, based on feedback that some felt that was too low, we amended the proposal to 7.5%, so that reflected the consultation.

The noble Lord, Lord Kennedy, also asked about the number of neighbourhood forums. Forums have been set up across the country. There are many in London, including one in Lewisham, I believe. They are found across all our major cities, including Liverpool, Birmingham and Bristol. The noble Lord also asked about the 12 months. We believe that the introduction of the 12-month timeline will result in a more effective decision-making process and will give people certainty about the length of time that the review will take. DCLG’s informal consultations and the 2013 formal consultation have shown that local campaigners feel that they face unnecessary burdens as a result of the bureaucracy in the current process. I am sure that all of us who have served in local government can recount many occasions when that issue has been raised by residents.

The noble Lord, Lord Kennedy, asked about the new council in Queen’s Park. The new Queen’s Park council has already delivered several community events, although these are very early days. It is important that it will reflect the views of local residents who, we feel, are better placed to take decisions and represent their area’s interests.

The noble Lord, Lord Beecham, talked about turnout, which is a very valid question to raise. As with all elections, turnout varies, but where the community understands that it has a stake, it is comparable to other tiers of local government. As a general point, I agree with the noble Lord. Having served in local government, I have always been concerned about the low turnout that we see on issues and in areas which impact communities more directly. It is incumbent on all of us from across the political spectrum to do more. I am sure that we all recall that the Scottish referendum showed that where the right message is put across and people’s interest is engaged, they turn out to vote in large numbers.

The noble Lord, Lord Beecham, also talked about the evidence base. At the moment, governance reviews can take up to 18 months. We believe that, based on that experience, the process will significantly reduce the time to give greater certainty to local projects. Part of the evidence base was the frustration that residents feel. We believe that shortening the period and reviewing the percentage will allow for quick and more efficient decisions based on local needs.

With those responses, I commend the order.

[Lord Beecham]

I was really looking for evidence of the failure of the present system to get the relevant numbers, not so much about the timescale, which I concede to be a problem, and it should be improved. Is there an estimate of the number of cases where people have come forward but have simply failed to get the level of support currently required, which is now to be changed? Where is the evidence that that will make a difference?

[Lord Ahmad of Wimbledon]

As I said earlier, if we are talking about lowering the threshold, that was reflected in the consultation where 5% was proposed. The consultation showed that reducing the threshold from 10% to 7.5% constituted a fairer reflection of what the respondents felt would be the appropriate trigger. However, we feel that lowering the threshold somewhat will allow residents to move forward more quickly.

[Lord Beecham]

Is that what you are expecting in the light of experience?

[Lord Ahmad of Wimbledon]

I say to the noble Lord that all things in life are reviewed in the light of experience.

Motion agreed.

Selective Licensing of Houses (Additional Conditions) (England) Order 2015

Monday 23rd March 2015 Grand Committee

Motion to Consider

16:51

Moved by

[Lord Ahmad of Wimbledon]

That the Grand Committee do consider the Selective Licensing of Houses (Additional Conditions) (England) Order 2015.

Relevant documents: 26th Report from the Joint Committee on Statutory Instruments (Special attention drawn to the instrument), 30th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)]

My Lords, I beg to move that the Committee should consider the Selective Licensing of Houses (Additional Conditions) (England) Order 2015. The purpose of this order is to extend the criteria for the selective licensing of privately rented housing.

The private rented sector is an important part of the housing market, providing flexibility and allowing people to move quickly. There are now 4.4 million households who rent in England. Selective licensing was introduced by the Housing Act 2004. It enables local authorities to designate all or part of their area as subject to selective licensing. The effect of doing so is that landlords of all privately rented accommodation in the designated area must obtain a licence from the local authority. Local authorities must consult persons likely to be affected by the designation, such as landlords, tenants and other residents, before introducing a licensing scheme. A licence typically costs between £100 and £200 per year per property and is normally valid for five years. A local authority can attach conditions to the licence, such as setting a limit on the number of people who can live in the property or conditions relating to the installation of safety devices.

At present, selective licensing can be introduced only on the grounds of low housing demand and/or anti-social behaviour. We published a discussion document last year which invited views on a range of issues, including selective licensing. Many of the respondents, particularly local authorities, made it clear that further criteria needed to be added to enable local authorities to target action where it is most needed, help drive up the quality of privately rented accommodation and ensure that landlords take responsibility for the actions of their tenants. The Government agree that the current criteria for selective licensing are not wide enough and do not give local authorities enough discretion to take account of local circumstances. Subject to parliamentary approval, this order will extend the criteria for selective licensing to cover areas where there are a high number of properties in the private rented sector and the area is experiencing poor property conditions, large amounts of inward migration, a high level of deprivation or high levels of crime. In addition, the local authority must be able to show that making a designation will, when combined with other measures taken in the area, lead to an improvement in conditions or a reduction in the problem that the designation was designed to tackle.

The Housing Act 2004 provides that before introducing a selective licensing scheme a local authority must seek approval to do so from the Secretary of State. However, in March 2010 the department issued a general approval which provides that, subject to the local authority ensuring that it has complied with the statutory requirements around designation and consultation, it does not have to seek approval from the Secretary of State before introducing a selective licensing scheme and can rely on the general approval instead.

The Government believe that licensing can play an important role, particularly when it is strictly focused on discrete areas with specific problems. However, the blanket licensing approach which has been adopted by some local authorities since the general approval was issued can have major drawbacks because it impacts on all landlords. Newham Council and Barking and Dagenham Council have already introduced blanket licensing schemes which cover their entire local authority areas. Three other local authorities—Croydon, Liverpool and Waltham Forest—are also planning to do so shortly.

There is a real risk that, left unchecked, blanket licensing could proliferate, putting additional burdens on reputable landlords who are already fully compliant with their obligations. The vast majority of landlords provide a good service, and the Government do not believe it is right to impose unnecessary additional costs on them or their tenants. Such an approach, without proper justification, is disproportionate and can unfairly penalise good landlords.

The impact is reduced investment by landlords in additional rented housing and unnecessary costs which tend to be passed on to tenants through higher rents. Our specially appointed private rented sector task force has estimated that the impact of widespread licensing in London would be an £8 million reduction in investment value on the 5,000 new build-to-rent homes that the mayor wants built each year.

To address this issue, it has been decided to amend the general approval at the same time as the criteria are extended. With effect from 1 April, and subject to the criteria being extended, local authorities will have to seek confirmation from the Secretary of State for any selective licensing scheme which would cover more than 20% of their geographical area or would affect more than 20% of privately rented homes in the local authority area. All applications will be considered on a case-by-case basis. This approach will help ensure that local authorities focus their activity on areas with the worst problems while helping to ensure that they do not adversely impact on good landlords.

In its report to both Houses, the Joint Committee on Statutory Instruments made two comments which I would like to address. The first was that the draft order contained errors in the preamble, specifically that it mistakenly cited subsections (1) and (6) of Section 250 of the Housing Act 2004 as enabling powers and did not refer to a draft of the order having been laid before and approved by resolution of each House of Parliament. These drafting errors, which do not in any way affect the substance of the statutory instrument, will be corrected in the final version.

The second comment was that the proposed additional criteria were too broad and open-ended and could result in significant areas of the country being designated as subject to selective licensing. The committee therefore reported the draft order on the ground that it appears to make an unexpected use of the power in Section 80(7) of the Housing Act 2004. I would like to make the following points in response. First, local authority powers will not be open-ended. If this order is approved, we will publish guidance for local authorities which will set out how they should interpret the new criteria and the evidence base that they would need to develop to support any decision to designate an area. Secondly, widening the criteria will help local authorities target enforcement action in areas where it is most needed. This should help ensure that, overall, fewer properties are designated and that any schemes do not impact on good landlords or their tenants. Thirdly, local authorities will need to obtain confirmation from the Secretary of State of any selective licensing designation that would cover more than 20% of the authority’s geographic area or more than 20% of its privately rented stock. This requirement should help ensure that schemes are kept tightly focused and are only introduced where absolutely necessary.

I recognise that extending the criteria in this way, together with the introduction of a requirement for local authorities to obtain confirmation from the Secretary of State before introducing schemes above a certain threshold, are potentially major changes. Therefore, the Government have decided that they will undertake a review of the impact of these changes 18 months after their introduction. I am sure that that is well appreciated by the noble Lord, Lord Beecham.

The current criteria for selective licensing on the basis of low housing demand and/or anti-social behaviour are too restrictive. The Government have decided to address this by extending the criteria to cover poor property conditions, large amounts of inward migration, a high level of deprivation and high levels of crime, as I mentioned earlier. These changes will help ensure that local authorities have the right tools to target enforcement action where it is most needed. At the same time, we are amending the general approval so that in future the Secretary of State will need to confirm any licensing designation above a certain threshold. I commend this order to the Committee.

16:59

[Lord Best (CB)]

My Lords, I wish to raise a number of points about what is, in essence, an important initiative from the Government for improving conditions in the private rented sector. I declare interests as president of the Local Government Association and as chairman of the Council of the Property Ombudsman. I am grateful to Shelter and Crisis for their briefings, and am also drawing on some years of chairing the Private Rented Sector Policy Forum for representatives of both tenants and landlords.

The positive intention of this statutory instrument is to make it easier for local authorities to designate areas for selective licensing. Once designated, through the requirement for landlords to obtain a licence, the local authority can exercise some regulatory controls through advice and accreditation of landlords and a weeding out of those who are not “fit and proper persons”. With the extraordinary growth of the sector—which has increasingly meant replacing the purchase of properties by first-time buyers with purchase by buy-to-let landlords—it follows that some regulation of the PRS is needed.

Any of your Lordships who watched the recent “Panorama” programme about Britain’s acute housing problems will have witnessed the scenes of overcrowding, “beds in sheds”, high rents and abysmal conditions in parts of the private rented sector. Some intervention seems overdue to introduce proper standards and to weed out the exploitation to be found in what is obviously a minority of cases, but a minority that is truly terrible for the tenants involved and can ruin the credibility and reputation of the whole sector.

The problem has been that local authorities, even where existing powers should lead to intervention, have not had the resources to act. Selective licensing can buttress existing powers and, through the charging of a fee, can raise the money needed to pay for enforcement of the necessary measures. This statutory instrument helps councils wishing to go for selective licensing by sanctioning this regulatory route not just in places where there is low demand for housing and where anti-social behaviour is rife but where there are high levels of properties in poor condition or high levels of inward migration, social deprivation or crime.

I commend this policy of broadening the reach of selective licensing. However, at the same time, the Government are introducing a new restriction on the use of licensing: only in exceptional circumstances, it seems, where the Secretary of State permits it, will the local authority be able to use selective licensing to embrace more than a fifth of its area or more than a fifth of its rented properties. This would prevent the use of licensing to cover at least four-fifths of privately rented properties. The purpose of this restriction, as I understand it, is to save decent landlords the burden of form-filling and, in particular, of paying a licence fee, which could be £100 per property per annum. I want to explore whether this “one-fifth only” rule is sensible.

The CLG Select Committee did indeed find in 2013 that the process of licensing could be bureaucratic and tedious. It is hoped that a simplification of procedures is now to be expected. However, the committee also concluded that local authorities should be given more discretion over decisions on when and where licensing should be implemented.

My objections to the 20% limit are as follows. First, should it not be for councils themselves to decide on the extent of the licensing that they need? I am not sure how, in this age of devolution and localism, central government can decide which places—which streets—most need the extra protection that licensing can bring.

Secondly, councils that want to implement an authority-wide regime and not one covering just a fifth of their territory argue that unsatisfactory—indeed, unsavoury—landlords may be operating in any part of their area. The new restriction would deny councils the tools to sort out the rogues, wherever they are. After all, houses in multiple occupation—HMOs—are subject to licensing anywhere in a local authority’s area, not just in a specified one-fifth thereof.

Thirdly, economies of scale are important for a project such as this. If enforcement is to be effective, and it is not cheap, the more landlords involved the better. The Newham success story shows what can be done—I joined that borough’s enforcement team on one of its dawn raids recently at the invitation of the mayor, Sir Robin Wales—if licensing covers a whole borough, and therefore a large number of landlords. At £100 a property, significant resources can then be raised. If only a fifth of properties were to be involved, the cost to landlords would have to be much higher and/or the service would be much less effective. I note that Newham has completed well over 2,000 enforcement visits, taken dozens of landlords to court and refused licences for some notorious landlords with scores of properties, all because it has had the resources to do so.

Fourthly, I note that the DCLG’s impact assessment stresses the financial burden on landlords of this annual fee but, of course, other industries pay for their own regulation. Set against a rent of perhaps £15,000 a year in Newham, a £100 fee does not sound excessive. The suggestion that landlords will simply pass on the cost to tenants does not sound like good economic sense. It assumes that these landlords are not currently charging the maximum rent the market will bear and that they have the scope for increasing rents further. There seems to be no evidence that where councils are using selective licensing, rents have been raised accordingly. The local housing allowance would certainly not be increased for this purpose. Moreover, I presume that landlords are able to offset licence fees against tax, just like the costs of gas safety inspections or agents’ fees.

Fifthly and finally, the real impact is surely not the relatively modest annual fee but the effects of licensing on raising standards in the PRS. The fee is not money down the drain. It pays for a service, making the worst landlords fulfil their obligations. Not only do tenants benefit from the improved performance but other landlords benefit because licensing helps to drive out unfair competition from those who do not play by the rules. The Newham experience shows how the police, Home Office and Her Majesty’s Revenue & Customs can all be helped, thereby saving the taxpayer money under a number of other headings.

So I congratulate the Government on opening up more opportunities for selective licensing, strengthening the hand of local authorities to exercise greater regulatory influence over the private rented sector in their areas. However, I see the somewhat arbitrary restriction of licensing to just a fifth of areas or properties as a mistake that will unnecessarily undermine this opportunity to enhance the standards and reputation of the sector. A fallback power for the Secretary of State to intervene if a maverick local authority behaves in an eccentric way is understandable, but not a blanket blocking of local authority plans to improve tenants’ lives in this way. I am glad to hear that an impact assessment will take place in 18 months but, in the mean time, can the Minister reassure us that the Government will use their powers only to curb the autonomy of local government in extreme cases? The net effect of this statutory instrument is otherwise one good step forward but two steps back.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for his introduction to this order. I particularly welcome the contribution that we have just heard from the noble Lord, Lord Best, pretty much all of which we agree with.

The order itself is to be welcomed but we know that it comes attached to an administrative change to the general approval regime which will significantly curtail the opportunity to introduce selective licensing. From 1 April, local authorities will have to seek confirmation from the Secretary of State for a selective licensing scheme which covers more than 20% of their geographical area or will affect more than 20% of the privately rented homes in the local authority area. This is yet another centralising, controlling proposition from the Government, who continue to espouse the cause of localism but too often act in a contrary manner.

However, we support the arrangements for selective licensing; indeed, they were introduced under legislation of the previous Labour Government. The intent is to focus on those who show no interest in managing their properties properly, often letting to anti-social tenants who cause havoc for the local community. Licensing is a means of seeking to ensure that landlords are fit and proper persons. Can the Minister confirm that a local authority cannot simply designate an area on a whim? In particular, local authorities are currently required to consult those likely to be affected by designation and consider any representations made. Nor, if we are correct in our understanding, can the licence conditions be open-ended; they must relate to residential use of the property. Although authorities have a degree of discretion to set the precise conditions of the licence, they must include certain mandatory conditions, including the requirement to produce a “gas safe” certificate each year, keep electrical appliances and furniture in a safe condition, and keep smoke alarms in proper working order. Why on earth would the Government wish to weaken these requirements?

These matters need to be considered in the context of what is happening more generally in the private rented sector. One in five now lives in the PRS, including 1.5 million families with children, but we know that a third of the homes in the PRS do not meet decent home standards. We need to drive up standards by introducing a national register of landlords, which will make it easier for local authorities to introduce licensing schemes and ensure that tough sanctions are in place.

It is argued by the Government that selective licensing is not supposed to be a blanket arrangement, but does the Minister not accept that being more selective would be aided if there were a national register? From the information in the impact assessment, only a handful of local authorities have introduced authority-wide schemes to date—Newham, Barking and Dagenham, Enfield, Liverpool and Waltham Forest—although others are exploring the possibility. Can the Minister say specifically what problems have actually arisen in those boroughs? From the evidence we heard from the noble Lord, Lord Best, it seems that Newham, far from being a problem, has actually been a success and that progress is being made in tackling bad landlords. What evidence is there that landlords are not absorbing the cost of licensing?

It is suggested that borough-wide selective licensing can deter investors. RBS’s position is cited, but is not the whole rationale for licensing to improve areas, encourage better management of stock and tackle anti-social behaviour? Is it not the case that individual authorities are best placed to judge the impact on the extent of licensing in their areas? Why on earth would they wish to do something to impair the prospect of more investment in their housing? So far as the new thresholds are concerned, what analysis underpins the Government’s 20%/20% approach? What evidence backs up that requirement?

It is suggested that the Government will issue guidance—indeed, the Minister has confirmed that—advising local authorities to focus their efforts, in the first instance, on just the 10% most deprived local super output areas across the country. This would significantly reduce the number of PRS properties covered by a licensing scheme; one can see the tabulation at the end of the impact assessment. The Government’s emphasis seems to consider the landlord in priority to the tenants and the community.

I have one further point. Option 1 in the impact assessment sets out whether approval would be granted in schemes larger than 20%, and states that,

“local authorities must be able to demonstrate the scheme is enforceable and fully resourced”.

How will that judgment be made? Does this not mean that the most deprived areas, which are likely to have the greatest need for licensing, will struggle the most to resource that requirement? Where is the fairness in all that?

17:14

[Lord Beecham (Lab)]

My Lords, while welcoming, in particular, the conditions set out in the draft order as being helpful to facilitate the successful operation of licensing schemes, I respectfully adopt the—critique is perhaps too strong a word—observations of the noble Lord, Lord Best, and my noble friend Lord McKenzie in relation to the matters to which they spoke.

I have had some experience of the selective licensing regime, as I campaigned strongly for one to be created in the ward that I represent. It has been pretty successful. When I tried to persuade the local authority to extend the scheme for another, discrete, part of the ward, at that time—I am going back four or five years—it was not feasible because the Government were concerned about the size. A size factor was required, although that is probably no longer the case.

I fear that the drafting of this order contains potential problems and I should like to address my remarks to those matters. For example, paragraph 3 requires that,

“the area contains a high proportion of properties in the private rented sector”.

What on earth does that mean? Have the Government produced any guidelines or guidance, preferably in conjunction with the Local Government Association—I declare an interest as an honorary vice-president of that organisation—about the proportions they are talking about?

One or two issues of that kind are contained in paragraph 4. For example, it refers to where,

“the local housing authority considers it would be appropriate for a significant number of the properties”.

What is a significant number? The local authorities could be in danger of challenge here unless there are, again, clear guidelines.

There is also the question of the character of, rather than the number of, properties. There could be a number of three or four-storey houses in an area alongside a number of semi-detached houses or whatever, and the number of properties might not tell the whole story of the number of people involved in the appropriate lettings. I am concerned about that aspect.

Paragraph 5 states:

“The second set of conditions are … that the area has recently experienced or is experiencing an influx of migration into it”.

I have two questions about that: what is meant by “recently” and what is meant by “migration”? Migration could take a number of forms. In common parlance it is people from overseas but in an area, to take an extreme example, an influx of people from Sunderland to Newcastle might be regarded as a somewhat questionable process of migration. I do not say that I share that view but there is a question about what is meant by migration in that context.

In paragraphs 6 and 7 there are references to “a high level”. In paragraph 6 the area must be,

“suffering from a high level of deprivation”,

and in paragraph 7(a),

“from high levels of crime”.

These are potentially justiciable issues and seem very vague. It would be helpful if the department—again, in conjunction with the LGA and possibly other consultees—were to consider guidelines in that respect.

There is a reference in paragraph 7(b) to criminal activity having an impact on other households and businesses in “the area”. Does that mean in the area of the licensing scheme or in the wider area? What happens in an area adjoining where there is a licensing scheme could well depend upon or be caused by the conditions in the licensing scheme area, although the impact might be outside. Would that be taken into account? It is not clear.

Finally, there is a significant issue which certainly affects Newcastle and many other places, and that is student accommodation. Large areas of my city and, I suspect, many others are now given over to student accommodation. That is often quite problematic. In fact, I would go so far as to say that it is very problematic in some areas. I am not sure whether, as an issue, that is implicitly incorporated within these conditions or whether it becomes a discrete factor in itself. My preference would be for the latter, but is the Minister able to say whether, to adopt the present order’s words, a high proportion of student residences in an area would be a factor that could justify a licensing scheme? If not, I encourage the Minister to take a look at that issue because it impinges quite significantly on what had hitherto been ordinary residential areas. I am talking not about purpose-built student accommodation but about the conversion of existing family accommodation into student accommodation. Sometimes they are HMOs and can be controlled in that sense, but very often they are not. It seems to be an increasing problem that is likely to increase further. If at all possible, it should be brought within the framework of the scheme.

Having said that, in general, I welcome the proposals. They should assist, but some of the issues that I and others have raised need to be addressed if we are going to make the best use of the possibility of deploying the scheme in the way that the Government wish.

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords who have taken part in this debate. They all speak from great experience of local government and I appreciate their constructive suggestions and questions. I shall seek to answer all of them, or at least most of them, as I work through my response.

The noble Lord, Lord Best, talked of the 20% reference point for the Secretary of State. I assure him that it is the Government’s view that this strikes a fair balance between ensuring that schemes are focused on areas where there is a problem and, as I said in my opening remarks, which he acknowledged, do not unfairly impact on good landlords and their tenants. I assure the noble Lord and the noble Lord, Lord McKenzie, who raised a similar point about whether this is centralising the proposition if approval is required, that all applications will be considered on a case-by-case basis. If a local authority produces evidence in support of its proposition, we would expect that application to be approved.

The noble Lord, Lord Best, said that only in exceptional circumstances could licensing be used in more than 20% of properties. As I have already said, it will be considered on a case-by-case basis. There may be cases where licensing of more than 20% of the borough would be considered appropriate. Such applications would be submitted to the Secretary of State. There is sometimes a sense that just because it is submitted to the Secretary of State the answer will be no but it would be looked at on a case-by-case basis on the evidence submitted.

The noble Lord, Lord Best, was concerned that landlords may be inclined to pass on costs to tenants. In areas of high demand, it is highly likely that rents will go up. We feel that, given the scarcity of accommodation, tenants will have no choice but to accept higher charges. There is a concern we are looking to address.

The noble Lord, Lord McKenzie, said there was concern about introducing licensing on a whim. As noble Lords are aware, councils must consult tenants, residents and landlords over a 10-week period before introducing any such licensing.

[Lord McKenzie of Luton]

My point was not to encourage councils to introduce licensing on a whim but to make the point that they cannot do so. They have to go through a process, which is why it should be left up to them.

[Lord Ahmad of Wimbledon]

I agree with the noble Lord. Perhaps I should rephrase what I said. I was not for a moment suggesting that he would ever do anything on a whim; he would do things only in a careful and considered fashion. I will not comment further: following the previous five SIs I think we are on to dangerous territory. The noble Lord makes a valid point and I think that we are on the same page here, although we are perhaps looking at the issue from different angles. My suggestion is that the check and balance approach that we have adopted does not mean that when councils make an application for more than 20% of the area it will be rejected, but consideration will of course be given to the application as submitted.

The noble Lord, Lord McKenzie, also referred to the problems that have arisen and asked whether we were seeking to highlight any specific ones. The noble Lord, Lord Best, talked about his experience in Newham. Of course, the Newham scheme was introduced only in January 2013 and the other scheme that I alluded to in Barking and Dagenham was introduced only in September 20014. In answer to the noble Lord, Lord McKenzie, it is too early to make an assessment based on robust evidence, and that is why the Government are strongly inclined to ensure that we review this policy in 18 months’ time. As we move forward in this respect, both the contributions that have been made in this debate and the concerns that have been raised will, I am sure, be considered as part of that review.

The noble Lord, Lord McKenzie, also raised the issue of guidance. I think that I made the point that we will shortly be publishing guidance for local authorities on the additional criteria, and perhaps some of the questions will be answered in that. More importantly, it will set out the information that local authorities will need to give if they want to apply to the Secretary of State to confirm a particular designation.

On the evidence base, of course various consultations were carried out. Various people also gave evidence to the CLG Select Committee and perhaps I may quote one. On deterring investment, Andrew Cunningham from Grainger said at the CLG Select Committee hearing in 2013 that,

“the introduction of licensing that Newham has done is for an organisation like ourselves a very heavy stick. There is no incentive for an organisation like Grainger to invest its relatively scarce resources into a borough like Newham. There is no incentive for a landlord like us to stay there”.

That has in part also been noteworthy for the Government but, again, I emphasise that we will be reviewing the implementation in 18 months’ time.

The noble Lord, Lord Beecham, raised a series of questions on definitions—for example, the definition of a high proportion of privately rented properties. It is estimated that nationally the private rented sector makes up about 19% of the total housing stock. Therefore, where an area contains a private rented sector higher than 19%, this may be taken broadly as an indication of a high proportion of properties in the private rented sector. However, we have been very careful not to specify a particular figure which would be considered to be too high a proportion for the private rented sector, because we recognise that there may be regional differences that influence what is considered to be a high proportion of properties in this sector. Therefore, our view is that it is really for local authorities to determine what should be defined as a high proportion.

The noble Lord, Lord Beecham, also asked about high levels of crime. Again, it is for local authorities to determine whether they consider their crime levels to be high in a particular area. However, he will know as well as I do that local authorities make assessments of low-and-high crime areas across each borough of a county, and they make determinations accordingly.

The noble Lord, Lord Beecham, also asked about migration, using the example of people from Sunderland going over to Newcastle. However, it could also be people from Newcastle going over to Sunderland. I do not know what that does for football supporters but I am sure that the rivalry will be sustained. Nevertheless, the term “migration” is also left undefined, so it would take on its ordinary meaning of referring to people moving into an area from neighbouring cities in different parts of the country, as the noble Lord himself suggested, or from overseas. It is worth saying that migration can have an important impact on the supply and demand of rented accommodation and may result in a shortage of available accommodation overall. A small number of rogue landlords are known to exploit such a scheme.

Although I fully accept that the noble Lord may have sought more precise definitions, the emphasis is that we seek to keep the definitions broad to allow local and, indeed, regional interpretation. We will provide further clarification in the guidance. The final sense that I would convey is one of understanding that these are new provisions and that it is important that we review the policy in practice. I am therefore pleased that the Government have committed to the 18-month review.

[Lord McKenzie of Luton]

Will the Minister deal with the point that I raised about the impact assessment reference to local authorities having to demonstrate that a scheme is enforceable and fully resourced? Can he say little more about what is likely to be involved in those judgments, particularly about whether a scheme is enforceable?

[Lord Ahmad of Wimbledon]

I think it is as it says on the tin: can the scheme be practically applied? Each case that is presented will be among the evidence base supplied. My immediate response is: ultimately, is the scheme practical; can it work, in essence? I hope that with that response, the noble Lord and other noble Lords are assured, with the commitment that I give again that the 18-month review will attempt to address some of the concerns that have been raised. I have just received a note which states that the enforceable and practical element will also cover whether, for example, fees will cover the cost of any scheme.

[Lord Beecham]

My Lords, this is my last question of the noble Lord today—and probably the last thing that I will say for the duration of this Parliament, as he will be relieved to hear. I return to my question about student accommodation and whether the Government will take a particular look at that as an issue in the context of the whole area of selective licensing.

[Lord Ahmad of Wimbledon]

The noble Lord makes a valid point. In his question he also talked about crime, deprivation and migration. Areas with high numbers of students alone would not be covered; it would involve taking those other elements into account as well. However, I will reflect on his comments to see whether I can add anything more specific. I will hold him to the statement that this is the last question that he will raise not only today but in this Parliament.

Motion agreed.

Insolvency (Protection of Essential Supplies) Order 2015

Monday 23rd March 2015 Grand Committee

Motion to Consider

17:33

Moved by

[Baroness Neville-Rolfe]

That the Grand Committee do consider the Insolvency (Protection of Essential Supplies) Order 2015.

Relevant document: 23rd Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)]

My Lords, this order puts into effect a power taken in the Enterprise and Regulatory Reform Act two years ago during its passage through Parliament. I should remind noble Lords that that power was added to the Act following an amendment tabled by the noble Lord, Lord Stevenson of Balmacara. I am sorry that he has been unable to stay to see his baby come through into the statutory instrument.

The order supports the rescue of viable insolvent businesses by amending the Insolvency Act 1986 to safeguard the supply of IT and utility supply during administration and voluntary arrangements where business rescue is viable. It does this in two ways. The first is by extending the list of suppliers of goods and services that under current insolvency law are prevented from demanding payment of pre-insolvency debt as a condition of continuing to supply the business. As well as utility providers, that list will now also include the suppliers of IT goods and services, as well as intermediary providers or the on-sellers of utilities such as landlords.

As we have seen from discussions on the Consumer Rights Bill and the Small Business, Enterprise and Employment Bill, IT is now a universal tool for doing business. By ensuring the continuation of essential supplies such as IT to businesses in administration and voluntary arrangements, we estimate that creditors will benefit by around £50 million each year, and because a distressed business can continue, this also benefits the employees. Secondly, the order amends the law to prevent such suppliers from exercising contractual terms that entitle them to terminate the contract or increase charges for the supply on account of the insolvency. This amendment will ensure the continued supply of the essential service on the same terms as before the insolvency.

I recognise that prohibiting suppliers from exercising contractual rights interferes with contractual freedoms, which is why we have used the time since the power was taken two years ago to ensure that there are adequate safeguards for those suppliers which are affected. During the consultation process a number of energy providers, large and smaller, independent providers, raised concerns about the adequacy of the safeguards. We have listened to these concerns, and the safeguards included in this order strike a balance between the need to secure the supply of essential services and the need to protect the interests of suppliers. These safeguards include a right for the supplier to request a personal guarantee from the insolvency practitioner at any point in the insolvency as a condition of continuing supply. The supplier can also terminate the contract where payment for ongoing supply remains outstanding 28 days after payment is due. In the case of hardship, the supplier will be able to apply to the court for permission to terminate the contract. Suppliers have also said that early engagement with the insolvency practitioner would go a long way in helping them better to manage their supply costs. Consequently, the Government will provide guidance to insolvency practitioners urging them to make early contact with suppliers as to their future energy use.

To sum up, I believe that the benefit this measure brings in rescuing businesses makes intervention in contractual rights justifiable in those sectors where the supplies are truly essential and without which the continuation of a business would be impossible. I therefore commend this order to the Committee and I beg to move.

[Lord Young of Norwood Green (Lab)]

My Lords, I welcome the Minister’s introduction of the order and I can assure her that it was not a lack of interest; I had agreed to deal with this. My timing was a little belated, but I have managed to fulfil my obligation. We welcome the order. I have listened carefully to what the Minister said and it is clear that a balance has been struck between trying to ensure the continuation of businesses and the benefits that that can bring both to the employer and employees, while also ensuring that reasonable safeguards are in place. I also welcome the fact that guidance is to be issued to insolvency practitioners because obviously, in order to make this work, they need to engage as quickly as possible.

I do not have anything further to add because, as the Minister has described it, it is my noble friend Lord Stevenson of Balmacara’s baby, although I am not sure who could be classified as the midwife being called here. In any event, we welcome the successful delivery.

Motion agreed.

Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015

Monday 23rd March 2015 Grand Committee

Motion to Consider

17:39

Moved by

[Baroness Neville-Rolfe]

That the Grand Committee do consider the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015.

Relevant document: 24th Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)]

My Lords, I beg to move the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015. These regulations complete the UK’s transposition of the new EU accounting directive 2013/34. The aim of this directive is to modernise long-standing requirements set out in the fourth and seventh company law directives. The directive reflects the Commission’s better regulation programme and builds on the EU’s “Think Small First” initiative.

The micros directive has already allowed us to relieve burdens for the very smallest companies. The accounting directive now provides an opportunity further to simplify the UK’s small company regime. This will help those companies to get on with running and growing their businesses rather than dealing with administration. The UK’s accounting regime is, I am glad to say, well regarded. In negotiations, we worked hard to ensure that this remains the case. In particular, we secured options allowing us to continue using the UK’s most common balance sheet format and to increase flexibility with a harmonised small company regime. This included securing the ability to require small companies to provide key information on matters such as arrangements not included in the balance sheet, post-balance sheet events and certain related party transactions. I am sure noble Lords will agree that this information is key to a proper understanding of a company’s accounts.

We have worked closely with the accounting sector and national regulatory bodies throughout this process from the earliest negotiations through to the implementation phase. We are grateful for the contributions made by accounting professionals and the UK’s chartered accountancy bodies. They include, to mention a few, the ICAEW, the ACCA, the ACA, the Financial Reporting Council and firms such as Baker Tilly and Deloitte, and the Charity Commission, as well as my own team, who have been working on the directive for four years.

I am aware that the regulations may strike noble Lords as a complex instrument. This is because they largely amend existing domestic legislation on financial reporting; that is, they amend the Companies Act 2006 as well as the supporting regulations which set out the frameworks for small companies, medium-sized and large companies. Marked-up versions of the affected legislation have been lodged in the Libraries of both Houses.

What do the regulations do? As I have just said, the changes affect small, medium-sized and large companies. The regime for micro entities is unchanged except that they will no longer be required to provide a director’s report which, for this size of company, adds no real value. The regulations raise the thresholds for defining the size of companies. This is the first time we have been able to do so since 2008. In raising the thresholds, we have taken up the option to maximise the thresholds for defining a small company. This will enable 11,000 medium-sized companies to be recategorised as small and so access the significantly less burdensome small companies accounting regime. Similarly, the raising of the thresholds will enable more than 3,000 large companies to be categorised as medium-sized companies and so reduce their reporting obligations.

The thresholds for the small company accounting regime currently also determine the thresholds for the small company audit exemption. We will allow the small companies audit exemption threshold to rise in line with that for the small companies accounting regime. This will mean that an estimated 7,400 companies will be exempt from annual audit of their accounts. However, consultation responses indicated that the link between thresholds was an area of concern to some stakeholders. Some think the thresholds should remain aligned, while others want more debate. Therefore, we will consider the link further in the light of responses to the Government’s discussion document on the new audit directive, which closed for comment last week.

We will also permit small companies to prepare abridged accounts. These are accounts whose formats are simplified from the general formats provided in the small companies accounts regulations. However, in response to stakeholder concerns about the availability of information to minority shareholders, abridged accounts will be possible only where the decision is supported by all the company’s shareholders, not just the majority. Of course, there are some companies for which the provision of reduced levels of information would be inappropriate. These include certain types of financial and investment bodies and all companies currently excluded from the small company regime—for example, banks and insurance companies. Such companies must continue to provide full accounts.

These regulations fulfil our obligation to transpose the directive and, importantly, provide thousands of UK companies with the opportunity to access a more flexible, less burdensome financial reporting regime. I commend the regulations to the Committee.

17:45

[Lord Young of Norwood Green (Lab)]

My Lords, once again I welcome the Minister’s full and comprehensive report. She mentioned the dreaded Companies Act 2006, in which I was not involved. I forget how many clauses it contains—something like 1,000.

These are sensible proposals which will help companies. I have only one concern. The Minister probably addressed it but there was a rather long list. It is a point about small companies being exempted from annual audits. If they do not have to submit an annual audit, when do they have to submit an audit? The information may be contained in the regulations, in which case I apologise, but that thought has crossed my mind. There was a safeguard for abridged accounts because, as the Minister has advised, they have to be supported by all the shareholders. I hope I did not mishear what she said about the exemption to annual audits but, in any event, it would be useful to have clarification on the record. With that question, I am happy to approve the regulations.

[Baroness Neville-Rolfe]

I thank the noble Lord, Lord Young, for his support for both this instrument and the previous one. We have worked together in these areas and, as he said, these are good changes. As to the question about exemptions, a small company audit is done at the request of shareholders or, as I explained, if it is a financial company. I hope that clarifies the point.

[Lord Young of Norwood Green]

If they do not submit an annual audit, when do they submit an audit? The Minister has said that it is at the request of shareholders, but I am still puzzled.

[Baroness Neville-Rolfe]

I hope this helps. A small company is exempt from audit unless the shareholders request it. If it is a financial company, there is an audit. I am not sure that that helps.

[Lord Young of Norwood Green]

I am not going to pursue the matter further today. Perhaps the Minister can write to me because at some point, small company or not, an audit has to be prepared. The Minister is shaking her head so I have clearly misunderstood.

[Baroness Neville-Rolfe]

There are companies which are exempt from audit because of their size and the simplicity of their affairs. I will write to the noble Lord setting out the circumstances in which companies are exempt from audit. Obviously directors’ duties and so on still apply, but some companies are exempt from audit.

Motion agreed.

Committee adjourned at 5.49 pm.

House of Lords

Monday 23rd March 2015 Lords Chamber

Monday, 23 March 2015.

14:30

Prayers—read by the Lord Bishop of Peterborough.

Israel: Gaza

Monday 23rd March 2015 Lords Chamber

Question

14:37

Asked by

[Baroness Tonge]

To ask Her Majesty’s Government what discussions they have had with the government of Israel about lifting the blockade of Gaza.

[The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)]

My Lords, we have frequent discussions with the Government of Israel about the need to ease restrictions on Gaza. We welcome Israel’s recent decisions to double water supply to Gaza and to begin some imports of food for the first time since 2007. We call on the Israeli Government to ease restrictions further and for Israel, the Palestinian Authority and Egypt to work together to ensure a durable solution for Gaza.

[Baroness Tonge (Ind LD)]

I thank the Minister for that reply and the efforts that our Government are making, but is she aware of the bleak and dangerous conditions in Gaza at the moment, which are spreading to the West Bank and east Jerusalem? Now that Mr Netanyahu has shown his true colours and—to quote his own words—we no longer have a “partner for peace” to do business with, should we not fulfil our responsibilities to the Palestinians, stated in the Balfour Declaration, and call for divestment and sanctions against Israel until an agreement is reached on a two-state solution based on the Israeli peace initiative, of which I know she is aware?

[Baroness Anelay of St Johns]

My Lords, there were several strands in there. Clearly, it is still a priority for this Government to achieve a two-state solution to the issue of Israel. With regard to the words used by Mr Netanyahu, who is at this moment seeking to form a Government, on Thursday 19 March he said:

“I do not want a one-state solution, I want a sustainable, peaceful two-state solution but for that circumstances have to change”.

We have to agree. Partners from the region would be welcome if they became involved in constructive peace negotiations, but of course Hamas must renounce violence, recognise Israel and accept previously signed agreements and Israel, for example, must stop its settlements expansion policy.

[Lord Davies of Stamford (Lab)]

My Lords, is it not the case that the Hamas regime in Gaza could get the blockade lifted any day they wanted by the simple action of renouncing violence, recognising the state of Israel and accepting existing agreements, including the Oslo accords? Would it not be very much in the interest of everybody, but particularly the long-suffering people of Gaza, if they did just that?

[Baroness Anelay of St Johns]

Yes, my Lords.

[Lord Alderdice (LD)]

My Lords, is it not clear that the Prime Minister, Mr Netanyahu, has now received a mandate for his statements that there would be no two-state solution agreed on his watch? If Her Majesty’s Government insist on their approach of finding a two-state solution, that will require the recognition of a Palestinian state, including Gaza and the West Bank, without the agreement of the incoming Israeli Government.

[Baroness Anelay of St Johns]

My Lords, as I mentioned earlier, Mr Netanyahu is in the process of forming a Government. He has made it clear that he wants a sustainable, peaceful, two-state solution, and there will be great pressure on him to achieve exactly that, including from this Government.

[Lord Hughes of Woodside (Lab)]

My Lords, did not Mr Netanyahu say, quite specifically, that there would be no two-state solution on his watch? Then there is this change of view, where apparently he says that he does, but he does not. Is it not time that the Government spoke very firmly to that Prime Minister and say that he must make it absolutely clear that nothing less than a two-state solution will do?

[Baroness Anelay of St Johns]

My Lords, I agree entirely with that second sentiment. We make it clear to Israel that only a two-state solution will do, and one which can be achieved by an agreement between both Israel and the Palestinian Authority. That is, I agree, the right way forward.

[Baroness Warsi (Con)]

My Lords, what is the Government’s position on the legality or illegality of settlements? In light of that position, once the new Government have been formed, what will be their position on engaging with those politicians who are themselves settlers?

[Baroness Anelay of St Johns]

My Lords, we have made it clear, and our position is clear, that they are illegal under international law. They present an obstacle to peace, and that remains the same today, as it was before the elections. They take us further away from a two-state solution, and we strongly urge the Government of Israel to reverse their policy on illegal settlements. That is essential for a peace process to go ahead.

[Baroness Eaton (Con)]

My Lords—

[Baroness Morgan of Ely (Lab)]

My Lords, aid agencies have estimated that at current rates it will take 100 years to import enough construction materials to rebuild Gaza. Can the Minister comment on whether she thinks an independent monitoring regime will help to assuage Israeli concerns and ensure that imported building materials go only on rebuilding civilian homes, not on the building of military tunnels by Hamas?

[Baroness Anelay of St Johns]

The noble Baroness raises an extremely important issue—that the reconstruction of Gaza must be for the benefit of civilians, not as a way to provide Hamas with materiel further to launch assaults on Israel, which would undermine any move towards peace. At present the Gaza Reconstruction Mechanism is a step in the right direction to import materials that are urgently needed, and at present there is no evidence that any materials are diverted for military means. Some are used for civilian rebuilding means, but certainly oversight is crucial, as she said.

[Baroness Eaton]

My Lords—

[Lord Dykes (LD)]

My Lords—

[Lord Kilclooney (CB)]

My Lords—

[The Lord Privy Seal (Baroness Stowell of Beeston) (Con)]

My Lords, my noble friend Lady Eaton has tried to get in several times. I am sure we still have time to go to the Cross-Benchers on this Question.

[Baroness Eaton]

My Lords, since last summer, Israel has permitted 88,000 tonnes of construction material to enter Gaza, enabling 57,000 Gaza residents to rebuild their homes. While much more needs to be done, will my noble friend join me in acknowledging the important role Israel has played in this humanitarian effort thus far?

[Baroness Anelay of St Johns]

My Lords, yes, but of course it is even more important that those who have committed to providing material to that area for rebuilding pay up the money. We have already paid a quarter of the £20 million that we committed to last October; my right honourable friend Desmond Swayne in another place made clear that the rest, we hope, will be transmitted very soon in the new financial year. However, it is up to others to come up to the mark, too, to get the aid in.

[Lord Kilclooney]

My Lords, now that Israel is losing support not just across Europe but in the United States of America, will the Government refer the new circumstances in Israel and Palestine to the European Union?

[Baroness Anelay of St Johns]

My Lords, we discuss matters with regard to the Middle East process across a range of other interlocutors, including the European Union. This is a peace effort in which all can play a constructive part; the important thing is to remain patient but utterly determined.

[Lord Dykes]

Would my noble friend agree that it is essential for the United States to stop endless vetoes obliging Israel to disobey international law? There have been 35 since 1968.

[Baroness Anelay of St Johns]

My Lords, nobody should disobey international law. Our position on that is clear, particularly with regard to cases before the International Criminal Court. Of course, recently we have had discussions about Ukraine’s and Russia’s breaking of international law. It should not be done.

General Elections: Peers’ Exclusion from Voting

Monday 23rd March 2015 Lords Chamber

Question

14:45

Asked by

[Lord Naseby]

To ask Her Majesty’s Government what proposals they have to review the exclusion of life Peers from voting at general elections.

[Lord Wallace of Saltaire (LD)]

My Lords, the Government have no plans to review in this Parliament the long-established legal incapacity that prevents Peers who are Members of the House of Lords voting in a general election.

[Lord Naseby (Con)]

Is this not extraordinary when society is calling for votes at 16 and for felons; when every single Member who is a life Peer in your Lordships’ House has already voted in a general election; and when not one of the 189 upper Houses in the IPU precludes Members from voting? Has not the time come for my noble friend to recognise that it is time for a change? The claim that a Member of the House of Lords already has a voice in Parliament, and that therefore it is right to deprive him or her of having that voice heard through an elected representative in the Commons, no longer has validity as we do not have a voice on money Bills—the very central feature of our democracy, epitomised by “no taxation without representation”.

[Lord Wallace of Saltaire]

My Lords, the noble Lord, Lord Naseby, is a Conservative and has taken very Conservative views on the reform of this House. I would have hoped that he would therefore agree with the statement of Lord Campbell, as Lord Chief Justice in 1858, that by,

“an ancient, immemorial law of England … Peers sat in their own right in their own House, and had no privilege whatsoever to vote for Members to sit in the other House of Parliament”.—[Official Report, 5/7/1858; col. 928.]

[Lord Dubs (Lab)]

My Lords, I cannot believe that the Minister is saying things that he actually believes. Will he concede that this House passed a Bill to give us the right to vote in elections which was blocked by some dissident Whips or other people at the far end for no good reason, and that it is offensive that, when the voters of Britain have a chance to express their views, we are not allowed to? Surely, it is time for the Minister to say that if he had a chance and was Minister for long enough, he would do it.

[Lord Wallace of Saltaire]

My Lords, the noble Lord, Lord Dubs, and I would very much like to introduce a more rational and modern approach to the second Chamber, but we will have to do that in an overall way. There are many anomalies in our voting system. The position in which citizens of the Irish Republic and the Commonwealth can vote in British parliamentary elections is also quite extraordinary, but has a long tradition behind it.

[Lord Cormack (Con)]

My Lords, I thank my noble friend for asserting his Conservative instincts in answering this Question. Would we not be better employed in seeking to persuade all those who do have the vote that it is their civic duty to use it?

[Lord Wallace of Saltaire]

My Lords, I have spent considerable time over recent weekends and when visiting universities and colleges doing exactly that, and I hope all other Members of this House do the same.

[Lord West of Spithead (Lab)]

My Lords—

[Lord Foulkes of Cumnock (Lab)]

My Lords—

[Lord West of Spithead]

I give way to my noble friend.

[Lord Foulkes of Cumnock]

Thank you. Does the Minister recall that the coalition agreement says that membership of this place should reflect of the share of the vote at the last general election? If the Liberal Democrats poll the 8% that they currently have in the polls, there will be only two ways to resolve the position after the next election—either by creating 450 new political Peers or by half the current Liberal Democrat membership seeking retirement. Which would he recommend and, if the latter, would he lead by example?

[Lord Wallace of Saltaire]

My Lords, I note that so far there are 11 names of current Peers on the list of those who have expressed their intention to retire at the end of this Parliament: they include no Members from the Labour Benches.

[Lord Brown of Eaton-under-Heywood (CB)]

My Lords, does the Minister agree that, whatever the arguments justifying the banning of Members of this House generally from voting in general elections may be, there can be no justification in respect of those who are disqualified? I speak on behalf of five erstwhile colleagues of mine in the Supreme Court who, when they were exiled across the Square, lost their vote and their voice here. They are totally disfranchised, and so too is the Lord Chief Justice. Can the Minister justify that?

[Lord Wallace of Saltaire]

I would have to look closely at the 1999 Act to be assured that they remain disqualified. I was not aware of that.

[Baroness Brinton (LD)]

My Lords, do not the questions that we have heard in the past few minutes demonstrate exactly why we need complete reform of the arrangements for your Lordships’ House, to ensure that we have an effective bicameral system appropriate for the 21st century?

[Lord Wallace of Saltaire]

My Lords, there is a very strong case for substantial constitutional reform. I fear—as I hope others may fear—that there may be a low turnout and an indecisive result at the election. That may at last push us towards a larger scheme of constitutional reform.

[Lord West of Spithead (Lab)]

My Lords, does the Minister not agree that sometimes it is better not to change things? One hundred and five years ago today, their Lordships of the Admiralty decided to issue a second typewriter to each battleship. Then we had 38 battleships; today we have hardly any ships and thousands of word processors.

[Lord Wallace of Saltaire]

My Lords, the first reference I have to Peers not voting comes from an Act of the reign of King Henry VI, but I regret to say that I have not been up the Tower to check that it is there.

[Lord Trefgarne (Con)]

My Lords, has the Minister observed that the Question refers to life Peers? Why did it not include hereditary Peers? Have we no rights in this matter?

[Lord Wallace of Saltaire]

My Lords, as the noble Lord knows, under the 1999 Act, hereditary Peers who are excluded from this House—not including the 92 who are here—are allowed to vote.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, the Minister has been asked about reform of Parliament and the situation of a bicameral reformed Parliament. Would he agree that, de facto, we now have a unicameral system in which the House of Commons, by legislative right, ultimately gets its way? Who would arbitrate if there were two equal Chambers in Parliament?

[Lord Wallace of Saltaire]

My Lords, I would not agree with that, but I think that the noble Baroness and I had better have a long conversation with an authority such as the noble Lord, Lord Norton, on the subject.

G20: Turkish Presidency

Monday 23rd March 2015 Lords Chamber

Question

14:53

Asked by

[Lord Balfe]

To ask Her Majesty’s Government what steps they are taking to support the main aims of the Turkish Presidency of the G20 in 2015.

[The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)]

My Lords, we support the Turkish presidency’s priorities of inclusiveness, implementation and investment, and particularly welcome the focus on the implementation of previous G20 commitments. We are liaising closely with the Turkish presidency, and are actively involved in all the G20 working groups, including co-chairing the Energy Sustainability Working Group. A UK official is seconded directly to support the Turkish G20 presidency team.

[Lord Balfe (Con)]

I thank the Minister for her reply. As she says, the Turkish presidency is founded on the three “i”s of inclusiveness, implementation and investment, and these aim to ensure that the benefits of growth and prosperity are shared. Indeed, it has been estimated that if all the plans already endorsed by the G8 were carried out, some 2% would be added to the world’s GDP. Can the Minister outline how the Government will work to help the Turkish presidency achieve these aims?

[Baroness Anelay of St Johns]

My Lords, we are at the forefront of implementing a series of commitments. For example, on anti-corruption the UK Anti-Corruption Plan published in December 2014 clearly sets out more than 60 actions for tackling corruption domestically and internationally. My second example is the automatic exchange of tax information, of which the UK is an early implementer, with the first exchange expected in 2017.

[Baroness Falkner of Margravine (LD)]

My Lords, my noble friend mentioned previous G20 communiqués so she will be familiar with the November communiqué, which said that tackling infrastructure shortfalls is,

“crucial to lifting growth, job creation and productivity”.

In that case, what conversations have taken place with the United States over the very welcome UK application to join the Asian Infrastructure Investment Bank, which I understand has been less than enthusiastically received by the US?

[Baroness Anelay of St Johns]

My Lords, it is a matter of discussion with the United States. Our whole focus with regard to the G20 is the implementation of previous commitments. This is one and we will continue that discussion. I know, for example, that at Lough Erne 1,000 commitments were made. Since this is the forum which has a prime focus on achieving international consensus on economic matters, we have to work for that consensus.

[Baroness Morgan of Ely (Lab)]

My Lords, as the noble Lord, Lord Balfe, has just noted, inclusiveness is one of the main aims of the presidency of the G20. The document on presidency priorities states clearly:

“At the domestic level, we must ensure that the benefits of growth and prosperity are shared by all segments of the society”.

Can the Minister explain how the Government can comply with this aim when, according to the Social Market Foundation, the rich in Britain are,

“64% richer than before the recession, while the poor are 57% poorer”;

when, despite the so-called recovery, the economic chasm between London and the regions is widening; and when 3.5 million children are living in poverty in one of the richest countries on the planet?

[Baroness Anelay of St Johns]

My Lords, the Budget showed clearly last week that in the jobs-led recovery, which is the achievement of this coalition Government, we have shown the rest of Europe the way in which one can achieve success. It is hard work and takes a long time but that is what we are doing. It means that all parts of society are benefiting, and clearly the Budget set that out word for word.

[Lord Howell of Guildford (Con)]

My Lords, does my noble friend think that the Turkish presidency of the G20 will in any way affect its long-standing attempts to join the European Union? Does she not agree that Turkey seems to be getting a bit tired of its constant efforts to make progress negotiating with the European Union in its present form and is seeking a reformed European Union to join? Does she also agree that that could be a basis for our own efforts in this country to seek reforms in the European Union to bring it into the 21st century?

[Baroness Anelay of St Johns]

My Lords, it is a matter of fact that the Foreign Secretary has been meeting his counterparts throughout Europe to look at ways in which the European Union should be reformed. Reform is needed and he has met a lot of agreement on that. With regard specifically to Turkey, the block on it joining has been self-imposed as well as imposed by other countries. Turkey assures us that it is still very keen to join the European Union. We welcome that. It is the sixth largest economy in Europe. We want it to be a partner. One of the issues that must be resolved before Turkey can do that, and for chapters to be both opened and closed, is Cyprus.

[Lord Richard (Lab)]

My Lords, I think that the noble Baroness said in her Answer to the Question that a member of the Foreign Office would be seconded to the Turkish team. Can she tell us whether other countries are doing the same? Will there be a French member of the team—somebody there from the Quai d’Orsay and somebody from the German Foreign Ministry and perhaps one or two others as well? Can she also tell us exactly what status this individual will have—and, indeed, what work he will do?

[Baroness Anelay of St Johns]

My Lords, this is a practical way in which Governments can work before a presidency to ensure that work is done in the run-up, whether it is by the Sherpas or by the finance directors. This is a very practical step forward. Indeed, a Turkish member is seconded to the Foreign Office on other matters. I cannot answer the noble Lord’s question with regard to specific countries that may provide the same service, but clearly it is important that we have this kind of interplay between countries when we are working on consensus issues at G20 meetings, whether they are in Turkey this time or in China next time.

[Lord Kilclooney (CB)]

My Lords, why do the Government have double standards on Cyprus? Why does the Minister say that Cyprus is an obstacle to Turkey joining the European Union when Her Majesty’s Government supported Greece joining the European Union after it had organised a coup d’état in Cyprus?

[Baroness Anelay of St Johns]

My Lords, we did not block it; Cyprus blocked it.

BBC: Russian Language Programming

Monday 23rd March 2015 Lords Chamber

Question

15:00

Asked by

[Lord Watson of Richmond]

To ask Her Majesty’s Government what discussions they have had with the BBC about increasing its Russian language programming and distribution, including via the internet.

[The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)]

The FCO and the BBC World Service meet regularly to discuss areas of co-operation, including Russia. However, any decision to increase Russian language programming and distribution would be an operational decision for the BBC World Service to make.

[Lord Watson of Richmond (LD)]

I am grateful to the Minister for that reply. I understand the relationship between the FCO and the BBC World Service and indeed, the technical and political obstacles to increasing broadcasting inside Russia. However, does the Minister not agree that, if there is to be a bridge of understanding rebuilt with Russia—it is imperative that there is—it is essential that we have the ability to inform directly Russian public opinion about the situation in east Ukraine, why it so deeply disturbs the rest of Europe and indeed, why sanctions are being imposed? To this end, will the Minister encourage the BBC as it considers—as I believe it is doing—news gathering capability in Russia, and its possible increase, and the output for BBCRussian.com?

[Baroness Anelay of St Johns]

My Lords, I am sure that the BBC will be listening to the views of Peers. Of course, the relationship between the Foreign Office and the BBC World Service is a framework agreement. I stress that the FCO has its framework agreement with the BBC World Service—its strategic partnership—not with the BBC as a whole. Of course, it is important that a trusted broadcaster, such as the BBC World Service, should be able to provide balanced editorial work throughout not only Russia, but in other countries as well. That is what it does. What we can do is work to protect the BBC World Service from any threat to its operations, such as jamming, visa restrictions and threats to journalists. That, we do.

[Baroness Coussins (CB)]

My Lords, if the World Service is independent of government, why does the Foreign Secretary have the final say on whether new Russian or other foreign language services are launched?

[Baroness Anelay of St Johns]

My Lords, the noble Baroness refers to the way in which the strategic partnership works. The FCO and the World Service work through that and meet regularly to ensure that we can support the world services as best we can. The Foreign Secretary agrees the targets, priorities and languages in which the BBC World Service operates. It is the BBC World Service board which makes the decisions about operations and editorial matters and brings its view to the Foreign Secretary regularly throughout the year. The strategic partnership meets at director level annually and at official level quarterly, when we cover the issues that our organisations work on together. The Foreign Secretary does not say to the BBC World Service that the Government want it to do particular language services or particular programmes. It is the BBC World Service board that makes the proposal to the Government, and its proposal is based on commercial grounds. That is the consideration at which the Government look.

[Lord Judd (Lab)]

My Lords, while the point is well taken about the very special relationship and need for care in preserving it between the Foreign Office and the BBC, the financial settlement for the BBC as a whole is very much a concern of government. The effectiveness, quality and worldwide respect for the overseas service has been based and rooted in the accumulation of expertise, insight and experience. Are we certain that the BBC has the resources that it should have to ensure the quality and quantity of human resources necessary in this complex region, with all the challenges that exist?

[Baroness Anelay of St Johns]

My Lords, that is very much a matter for the BBC Trust to determine. The House will know that, following the change in funding made last year, the BBC is now funded directly from licence fee payers. At that stage it was a discussion about funding and the BBC has increased the funding that has gone to the BBC World Service—the subject of this Question—beyond that which originally applied to it. There will be a review of the BBC charter next year. The noble Lord makes a very valid point: in this changing world of communications, with changing platforms on which one can receive news and language programmes, we all need to consider very carefully which expertise is appropriate and how we may attract it.

[Baroness Falkner of Margravine (LD)]

My Lords, my noble friend has mentioned the commercial impetus in the dialogue conducted between the Foreign Office and the BBC board. Given the importance of the strategic situation in Russia, whereby Russian speakers need access to objective and historical truth, have the Government proposed to the BBC board that they would be prepared to put in some funding for this vital work that is in our strategic interests?

[Baroness Anelay of St Johns]

My Lords, I repeat that it is for the BBC World Service board to come to the Government with strategic proposals, but my noble friend asks a very proper question about what happens with regard to balanced and trustworthy information. That is the kind of information that the BBC provides. We are building relationships with and supporting the Ukrainian Minister for Foreign Affairs, and independent Ukrainian journalists. We are funding via a conflict pool BBC Media Action—a charity under the BBC’s auspices—giving £200,000 to train Ukrainian producers and directors, and to produce a drama handling conflict issues sensitively for both Russian and Ukrainian-speaking audiences. That will be broadcast on Ukraine’s state TV channel.

[Lord Hannay of Chiswick (CB)]

My Lords, does the Minister not agree that what she said—I am sure inadvertently—gives the impression that the Foreign Office’s role in this matter is entirely passive and that decisions on broadcasting in Russian are taken on purely commercial grounds, even when circumstances have changed fundamentally? Does she not agree that it is really important that the Foreign Office continues to play a proactive role in responding to foreign policy challenges? One of those now is how to get the truth around in Russia.

[Baroness Anelay of St Johns]

My Lords, that is exactly the point. We are working to find ways of getting the truth around in Russia that do not in any way undermine trust in the BBC.

Community Radio (Amendment) Order 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

15:07

Moved by

[Lord Gardiner of Kimble]

That the draft order laid before the House on 26 February be approved.

Relevant document: 25th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 17 March.

Motion agreed.

Children and Young People (Scotland) Act 2014 (Consequential and Saving Provisions) Order 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

15:07

Moved by

[Baroness Williams of Trafford]

That the draft order laid before the House on 23 February be approved.

Relevant document: 24th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 17 March.

Motion agreed.

Occupational Pension Schemes (Charges and Governance) Regulations 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

15:08

Moved by

[Lord Bourne of Aberystwyth]

That the draft regulations laid before the House on 4 February be approved.

Relevant document: 22nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 17 March.

Motion agreed.

House of Commons Commission Bill

Monday 23rd March 2015 Lords Chamber

Third Reading

15:08

Motion

Moved by

[Lord Wallace of Saltaire]

That the Bill do now pass.

[Lord Wallace of Saltaire (LD)]

My Lords, in moving that the Bill do now pass, I thank the noble Baroness the Leader of the Opposition for her support in allowing this modest Bill to make progress in such rapid time; other noble Lords who have given tacit support; and my noble friend Lord Tyler for his support and engagement on the wider governance issues. Noble Lords will recall that the Bill will assist the other place in improving its governance arrangements by making the necessary legislative changes to the House of Commons Commission arising from its review of the issue. I beg to move.

Bill passed.

Counter-Terrorism and Security Act 2015 (Risk of Being Drawn into Terrorism) (Amendment and Guidance) Regulations 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

15:10

Moved by

[Lord Bates]

That the draft regulations laid before the House on 12 March be approved.

Relevant document: 25th Report from the Joint Committee on Statutory Instruments.

[The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)]

My Lords, this secondary legislation has been brought forward in respect of measures in the Counter-Terrorism and Security Act 2015 and specifically the provisions in Part 5, which are concerned with reducing the risk of people being drawn into terrorism. This House has recently considered the primary legislation, during which there was widespread recognition of the threat from terrorism and broad support for the measures in the Act. There was also a very informed debate on the duty, imposed in Section 26, known as the Prevent duty. These regulations are crucial to the effective implementation of this new duty. The Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee have considered it, and I place on record my appreciation of the forbearance shown by the chairs and members of those committees in considering this SI outside the normal timescales.

To help the House in its consideration of the instrument, I will briefly outline what the Government seek to achieve with it and why we have brought it forward at this time. The regulations contained in this statutory instrument have three purposes. First, they amend Schedules 6 and 7 to the Counter-Terrorism and Security Act 2015 to add Scottish bodies to the list of those authorities which are subject to the Prevent duty and to those which are listed as partners to local authority panels required to be in place by Section 36. These panels form part of the Channel programme in England and Wales, and Prevent Professional Concerns in Scotland, which are programmes designed to provide support to those vulnerable to being drawn into terrorism.

Secondly, the regulations make a number of amendments to the Act which are consequential on the adding of these Scottish bodies. In particular, they ensure that Scottish further and higher education institutions will have the same requirement to have particular regard to the need to ensure freedom of speech and the importance of academic freedom while complying with the Prevent duty as do their counterparts in England and Wales. It has always been the Government’s intention that the provisions of Part 5 would apply to bodies in Scotland. We have consulted Scottish Ministers and they are supportive of adding Scottish bodies to the duty.

Thirdly, and finally, the regulations will bring into effect guidance issued under Section 29(1) of the Act for specified authorities in carrying out the Prevent duty. This guidance sets out the detail of what this duty will mean in practice for the authorities that will be subject to it and seeks to explain the steps that should be taken best to secure compliance.

Your Lordships will recall that the Government introduced an amendment to the Bill to ensure that this guidance will take effect only following the approval of Parliament. During the passage of the Bill, a formal public consultation on the draft guidance was taking place. Your Lordships will have read the summary of responses which is referred to in the Explanatory Memorandum. Over 1,700 responses were received during the consultation. Another 300 delegates were reached in the course of five events held in London, Manchester, Birmingham, Cardiff and Edinburgh. The responses enabled a thorough revision to take place and the results of that revision are before the House now.

There are two versions of the guidance: one for authorities in England and Wales and a separate one for authorities in Scotland. Following discussions with the Scottish Government, the Government decided that separate guidance, which specifically addresses the particular circumstances of Scotland, would be more helpful than trying to address those circumstances through one set of guidance. The Scottish guidance has also been subject to consultation, through a targeted process undertaken by the Scottish Government.

Your Lordships will have noted that neither document addresses the issue of managing speakers and events in further and higher education institutions. The issue of how universities and colleges balance the Prevent duty with the need to secure freedom of speech and to have regard to the importance of academic freedom is extremely important. Indeed, on account of this, the Government amended the legislation to ensure that institutions pay particular regard to the importance of academic freedom and freedom of speech when complying with the Prevent duty.

15:15

We will use the time before the duty commences to produce further guidance on the matter of managing speakers and events in further and higher education institutions and it will be for the next Government to bring it to Parliament early in the next Session for the approval of both Houses. It is essential that guidance is provided which is accurate and workable for the institutions themselves. It is not the Government’s intention that the duty should commence for the further and higher education sectors until guidance on speakers and events has been published. This of course will be for the next Government to carry through.

Finally, before we debate the particulars of the regulations before the House today, I would like to take this opportunity to remind noble Lords of the purpose of this new duty and its importance. Noble Lords will be aware that the emergence of ISIL and the number of people, particularly vulnerable, young people, who have misguidedly travelled to Syria and Iraq, present a heightened threat to our national security. The intelligence agencies tell us that the threat now is worse than at any time since 9/11. It is serious and it is growing. The threat has changed and so must our response. As part of that response, we need to continue to combat the underlying ideology that feeds, supports and sanctions terrorism, and prevent people from being drawn onto that path. The Prevent duty will ensure that such activity is consistent across the country and in all those bodies whose staff work on the front line with those at risk from radicalisation.

These regulations are needed effectively to implement the Prevent duty across England, Wales and Scotland, which will ultimately help the Government and law enforcement agencies to keep the country safe from terrorism. I commend them to the House and I beg to move that they are approved.

[Lord Hope of Craighead (CB)]

My Lords, I very much welcome these regulations and I am grateful to the Minister for his explanation. He may remember that when we were debating the Bill, which has now become the 2015 Act, I tabled a number of amendments to try to advance the Scottish position, which was difficult because no Scottish institutions were yet mentioned in the schedule. That meant that I felt a little inhibited in pressing the points that needed to be attended to.

I am particularly grateful to the Minister and those who have been advising him for the way the Scottish matters have been dealt with in Regulations 4 and 5. Regulation 4 deals with a technical point which I had thought about raising but it seemed a little too fussy at the time; namely, that a mandatory order, which was being provided for in the Bill and, subject to this amendment, is still in the Act, is not available as a means of enforcing a court’s orders in Scotland. As Regulation 4 correctly puts it, a proper mechanism is,

“by an order for specific implement”.

Had it been necessary to do so, I would have moved that amendment myself. I did not trouble to because I was quite sure that someone would pick it up if the need arose and I am very glad that that has been attended to.

It is pleasing to see how the definition of the duty to ensure freedom of speech has been expressed in Regulation 5, particularly as it mentions visiting speakers as well as,

“members, students and employees of the institution”.

The wording of that provision, which chimes very well with what I and others were attempting to achieve in the debates on the Bill, is very welcome.

Finally, the Scottish guidance is significantly lighter-handed than the English. In particular, the way higher education and further education institutions are dealt with is significantly lighter because a good deal more trust exists between the Government in Scotland and the institutions with which they are dealing. However, looking at paragraph 60 in the Scottish guidance, it occurred to me that further guidance was being anticipated to deal specifically with the problem of visiting speakers. The Minister mentioned that in his summary. I look forward to seeing what comes out of it, but I hope very much that those who are framing the guidance in Scotland will continue to deal with this with a light-touch mechanism. They are dealing with people of good will who know exactly what they are seeking to achieve and who do not need very much detail—just enough to point the way the universities should go in setting out their mechanisms. I am quite certain they will follow the guidance if it follows the kind of pattern we see in the guidance before us today.

For all these reasons, I am extremely grateful to the Minister and those supporting him for what has been achieved in these regulations.

[Baroness Brinton (LD)]

My Lords, I follow the comments just made by the noble and learned Lord, Lord Hope, by saying that one of the benefits of both new sets of guidance, for England and Wales and for Scotland, is that the tone is very different. That is enormously helpful. I am also very grateful for my noble friend’s comments about the final decision on external speakers being made by the next Government.

However, I would ask the Minister for absolute clarification on one point. I know that there have been discussions outside your Lordships’ House following the consultation on exactly what would happen if agreement were not reached on the thorny issue of external speakers. Could my noble friend give reassurance that the guidance to higher and further education would be withdrawn completely should such an agreement not be reached? Clearly, the reference within the guidance makes it absolutely clear that this is one of the Government’s major concerns.

I would be very grateful as well if our thanks could be passed back to the Minister’s civil servants for the hard work involved in accepting the many thorns in the flesh that your Lordships’ House has provided in the detailed discussions of this, especially given that the Commons did not have the chance to talk about the detail of the guidance when it considered the matter.

[Baroness Lister of Burtersett (Lab)]

My Lords, I welcome the opportunity to debate the guidance and welcome a number of the additions to the original draft, notably: the addition of the reference to the public sector equality duty in the Equality Act in paragraph 12; the cross-reference to “other relevant safeguarding guidance” in paragraph 40; and, in particular, the expectation in paragraph 111 that higher education institutions will,

“seek to engage and consult students on their plans for implementing the duty”.

The role of students—listening to what students have to say—is really important, so I welcome that. I am sure that the inclusion of a definition of “Having due regard” in the glossary will be helpful to all those non-lawyers in the higher education sector.

As during our discussion of the Bill, I will focus my remarks on higher education. Here, as the Minister has acknowledged, there is a glaring omission, with the reference to the issue at a later date of,

“guidance … on the management of external speakers and events”,

including, I am pleased to say, on how the Prevent duty will interact with,

“existing duties to secure freedom of speech and have regard to the importance of academic freedom”,

which, thanks to the deliberations in your Lordships’ House and to the Minister’s willingness to listen, were written into the legislation.

Although I understand the reason for the omission, having read about it in the press—I do not want to intrude into private debates on this—it is regrettable that the most contentious part of the draft guidance when it was discussed in your Lordships’ House is not available for your Lordships to debate today, as opposed to what may happen. I very much endorse the plea made by the noble Baroness, Lady Brinton, that, if agreement is not possible, the whole thing should be withdrawn. I also very much urge on the Minister, or any future Minister, that in the time between now and this being brought forward there should be proper engagement and consultation with the higher education sector to try to reach agreement on something that will be workable, unlike the original draft.

Concerns also remain about the position of student unions and societies. The guidance, I am glad to say, now acknowledges that student unions are already,

“subject to charity laws and regulations, including those that relating to preventing terrorism”.

But the NUS states:

“However, the continued emphasis on student unions’ compliance with their institutions’ policies remains worrying and indicates a misunderstanding of the autonomy of students’ unions which could lead to confusion and conflict between institutions and students’ unions”.

The NUS also commends the guidance for Scotland as achieving,

“a better balance in this respect”,

with a greater emphasis on co-operation with, rather than control by, higher education institutions. Can the Minister clarify the Government’s understanding of the implications of student unions’ autonomy in this area and explain why the Scottish guidance differs from that for England and Wales? I cannot see what the particular circumstances of Scotland are to explain this difference.

The other most contentious element in the original draft guidance was the very broad definition of extremism as,

“vocal or active opposition to fundamental British values, including democracy, the rule of law, individual liberty and mutual respect and tolerance of different faiths and beliefs”.

Perhaps even more worrying was the inclusion of “non-violent extremism”. The Joint Committee on Human Rights—again, I declare my interest as a member—emphasised its concerns about such vague terms in its legislative scrutiny report and warned:

“This legal uncertainty will have a seriously inhibiting effect on bona fide academic debate in universities, and on freedom of association”.

UCU, my former trade union, has expressed similar concerns around the revised guidance. So-called fundamental British values, it says, include values and concepts which are rightly the subject of debate and consideration in universities. It is not appropriate for universities to be required to exclude those who lawfully oppose them.

According to the summary of responses to the consultation, this issue attracted some comment, including concerns about that very vagueness. Yet the revised guidance does not appear to have attempted to address these concerns. Can the Minister explain why not? I do not want to make too much of it but can he also explain why the Scottish guidance does not make reference to “non-violent extremism” in the higher education section? If it is not necessary to repeat the earlier general reference there, why is it necessary to do so in the guidance for England and Wales?

Turning to training, the guidance requires a willingness to undertake training of what it calls “relevant staff”. It says:

“We would expect appropriate members of staff to have an understanding of the factors that make people support terrorist ideologies or engage in terrorist-related activity. Such staff should have sufficient training to be able to recognise vulnerability to being drawn into terrorism”.

The guidance also suggests:

“Changes in behaviour and outlook may be visible to staff”.

The Minister, James Brokenshire, when he gave oral evidence to the JCHR, said:

“There might be someone whom a lecturer has concerns about, not simply because of one particular lively debate, but because they are becoming withdrawn and reserved, and perhaps showing other personality traits”.

All this suggests that we are talking about staff who are in close contact with students—for example, lecturers or personal tutors—who will need to be trained as they are presumably the most likely to pick up on such vulnerability or changes on a day-to-day basis.

I was surprised that the impact assessment—if I have read it correctly; perhaps I have made a mistake—assumes that 15 people in every HE and FE institution will receive Prevent awareness training once every two years at a cost of £46,500. Who does the Minister envisage that these 15 or so people will be? What positions will they hold? Clearly, they cannot be at the chalk—or what is now the whiteboard—face of teaching. I am not arguing for mass surveillance of students by lecturers but there seems to be an inconsistency here that could leave teaching staff exposed if they are expected to play an active role in preventing students being drawn into terrorism without being given the training that the guidance itself acknowledges is necessary for people to be able to fulfil this role. Again, I would be grateful for clarification, as it may be that I have misread the impact assessment.

Finally, is the Minister now in a position to clarify HEFCE’s role, as that has not been spelled out in the guidance? Here, UCU repeats its concerns about HEFCE’s ability to regulate institutions with which it has no formal funding relationship. Has this now been resolved? What steps will be taken to prepare HEFCE for this new role?

For all the very welcome improvements that were made to the Bill during its passage through your Lordships’ House and the improvements that have been made to the guidance, the guidance still raises a number of very real worries. This is all the more so in the light of the recent newspaper report about Imperial College cancelling a booking for an international conference on Palestine at the last minute because of what speakers might say. If this is true—I have not been able to check the newspaper report—it suggests that the legislation is already having the very chilling effect that many Members of your Lordships’ House warned about when the legislation was going through. I am not convinced that the guidance as it stands is sufficiently robust to guard against such a chilling effect.

14:46

[Lord Hannay of Chiswick (CB)]

My Lords, will the Minister accept from me—because I was very active in the earlier discussions—my thanks to him and his department for having taken pretty full account of a lot of the points that were made in those debates in bringing forward this guidance? That is admirable and something that we should be grateful for.

I want to raise two or three very small points. The first is one that the noble Baroness, Lady Lister, raised on the vexed issue of non-violent extremism. The Government have consistently refused to define what they mean by non-violent extremism, so they are now passing this extremely hot potato straight to the universities and expecting that they will do better than the Government and will be able to define non-violent extremism. Well, the Minister has one last chance now to do something about that and I ask him to do it. The failure of the Government to say what they mean by this extremely nebulous concept of non-violent extremism is putting universities in a pretty difficult position.

Secondly, I would be grateful if the Minister would note that I take a different view from that of others about the omission from this guidance of any guidance on visiting speakers and lecturers. The Government are very wise not to have rushed into this. Contrary to others who spoke in the debate, I think that, even if it takes the new Government quite a time to work out how to grasp this extremely painful nettle, they should take that time and not dash into it because this is the single most difficult issue.

Finally, there is the issue of the Prevent co-ordinators. It is quite clear from the guidance that the key to this is going to be the sensitivity with which the Prevent co-ordinators and universities are able to work together. That will require the Prevent co-ordinators to show real understanding and sensitivity on how universities work and what makes them worth while. I hope not only that universities will spend a lot of time and resource on Prevent training but that the Home Office will spend a little time and money on training Prevent co-ordinators in how universities work and why it is in our interest that they should continue to work effectively.

[Lord Judd (Lab)]

My Lords, I hope that the Minister will take seriously the points which have just been made by the noble Lord, Lord Hannay, and, in particular, the contribution of my noble friend Lady Lister. Universities are crucial—this is not to overstate the case—to the future of the species. They must be centres of excellence, of course, but they must also be centres of scholarly excellence, free exchange and originality on an international basis—because any relevant university in our age must be an international community. We have to be careful surely in all that we do that we do not unintentionally inhibit the quality and freedom of discourse, discussion and analysis that are central to humanity’s future.

It cannot be overstated just how huge the challenges to the security services are. They are tremendous, and the work that they do on behalf of us all cannot be commended often enough. However, I have a conviction, which I am sure is shared by many noble Lords, that the ultimate battle against this evil which confronts us is in the minds of men and women across the world. We build the ultimate safeguards and the ultimate strength in what people think, feel and have as their values. In that context, the contribution by universities is very special. We must be careful therefore that we do not do things which are counterproductive. Of course, it is a very difficult balance, and I sympathise across the Floor with Ministers and others, and certainly with officials, who grapple with this issue—but we must be careful all the time that we are not eroding what makes universities so important and attracts so many people from across the world to our own universities.

One other thing that I feel strongly about on this matter—again, I am certain that I am not alone—is that we must beware of giving the extremists victories. They are dedicated to destroying our society. If we ourselves get the balance wrong and begin inadvertently to undermine those things which are precious and special to life today and to our future, we give the extremists a victory. From that standpoint, the points that have been made about the care that needs to be taken with the role of education are very important.

Having said all that, I want to put to put on record how much I admire the Minister’s response to discussion on the Bill throughout its passage through Parliament. He sets particularly high standards in listening and trying to respond. I do not want to embarrass him or put him in a difficult position, but I am always reassured because I think that, instinctively and intellectually, he is on the side of the arguments that I have just put forward.

[Lord Butler of Brockwell (CB)]

My Lords, perhaps I may pursue briefly a point raised by the noble Baroness, Lady Lister, on who is to monitor compliance with the Prevent duty. The draft guidance referred to HEFCE undertaking the duty, but, as the noble Baroness pointed out, there is a difficulty about that, because the duty covers institutions with which HEFCE has no funding relationship. I see that in the revised guidance the reference to HEFCE has been removed and there is now reference to “an appropriate body”. Can the Minister tell us a little more about the Government’s thinking on that? I express the hope on my own account that it does not imply that a new quango—a new regulatory body—is to be set up for this purpose.

[Baroness Smith of Newnham (LD)]

My Lords, the noble Lord, Lord Butler, has partly stolen my thunder: I, too, was going to raise the issue of the monitoring body. Like all the speakers so far, I would like to thank the Minister for the care and attention with which he listened at Committee and Report stages to the issues raised. Many of the changes to the guidance are greatly to be welcomed, particularly the addition of a glossary. Although, as the noble Lord, Lord Hannay, said, we still do not have a definition of non-violent extremism, an attempt at that is made in the glossary. Obviously, I think that we would all like to go further and know what the Government’s intention really is in understanding non-violent extremism—because, as the noble Lord, Lord Judd, said, there is clearly an issue about ensuring that we still have free expression and that universities are able to deal with that. A lot of the changes have toned down the language from previous versions, so we are talking about “relevant” and “appropriate” bodies and people, not simply all academics and everybody associated with higher education institutions.

That is very much to be welcomed, but, like many colleagues, I think that there is still an issue of when we are likely to see guidance on counterextremism. As the noble Lord, Lord Hannay, rightly says, it needs to be dealt with carefully and should not be rushed by the next Government and the next Parliament. Can the Minister reassure us that what he said at the outset will indeed be in place and that government proposals will come back to Parliament to be debated on the Floor of both Houses, as this guidance has done? That is hugely important. We welcome this opportunity today, but it would be extremely detrimental if further counterextremism proposals came forward in the next Parliament on which we did not have a say.

[Baroness O'Neill of Bengarve (CB)]

My Lords, would the Minister be willing to consider that the Prevent duty might be well entrenched by preventive measures such as requiring a recording of visiting speakers’ presentations? It is such a normal feature of university life that one is requested to agree to a recording for the intranet, a podcast or whatever. It would mean that there would be a record and that matters could proceed with a lighter touch.

[Baroness Tonge (Ind LD)]

My Lords, I have not spoken previously on this matter, but I just want to draw the Minister’s attention to the fact that Southampton University is organising a conference on legal issues surrounding Israel and Palestine, the two states, in the middle of April and is under intense pressure from the Israel lobby to drop it on the grounds that it will be anti-Semitic. Will he comment on this—or could he, in the interests of freedom of speech and particularly freedom of expression in universities, help Southampton University in this matter?

[Lord Morgan (Lab)]

I join others in thanking the Minister, who has been extraordinarily tolerant and helpful in our discussions. I have one brief query that I would like to raise. We have heard about who might be considered to monitor and examine the role of speakers and organisations in the universities. What will they actually do? It has been widely said that the Prevent strategy has not been very successful, because it has given Islamic groups and the Muslim community a sense of victimisation and the feeling that they in particular are being targeted, which is not at all what one wants. How does one avoid this on university campuses? Will all these monitoring activities focus on a very small number of societies and groups, or will all societies be involved in this? How are we to avoid the charge that individual bodies are being victimised? It seems to me that such extraordinarily general themes as non-violent radicalism are capable of being applied to almost any kind of student activity or student debate that one could conceive of, so how does one strike a balance between non-victimisation and proper inquiry?

[Baroness Hamwee (LD)]

My Lords, we discussed the role of statutory guidance when we dealt with the issue during the passage of the Bill. The guidance has benefited considerably from the work that was done on it then and in the interim, but I am still not convinced that a statutory duty is the best or most appropriate way of going about all this. Although the tone of the guidance is, indeed, rather different from that of the draft, I hope that the Minister will understand if I focus on some concerns rather than on giving a three-minute paean of praise for the changes that have been made—many of which I am glad to see.

15:44

Inevitably, because of the primary legislation, the guidance is quite top-down. There is little attention to the nuanced, softer approach or to the creation of a counter-narrative, which we discussed during the passage of the Bill. There is reference to discrimination, but not very much about the dangers of discrimination or perceived discrimination.

Understandably, the question of resources remains a matter of concern, as many of the consultees said, including when they talked about training. The impact assessment says:

“The cost will vary with the level of the risk”.

However, the context in which that point is made reflects the reactive nature, it seems to me, of some of the guidance, not a more proactive, subtle approach. On the impact assessment, I cannot entirely follow all the figures and I hope that the Home Office can get rid of the typos—there is a stray “m” somewhere, which seems to be a big multiplier of the amount that something might cost, but I think it is an error.

I was interested that the consultation provoked responses from very many consultees, but not from all those that I would expect, including a number of local authorities that are in what I would assume to be the current priority areas.

Some of the guidance I find difficult. It identifies best practice, describing ways in which authorities can comply with the duty, but because of the emphasis on monitoring and enforcement it reads as though “best practice” means the only practice—a lot of the content about record-keeping and inspection rather supports that view. After all, this is a best value duty, and the sanctions which accompany that duty can be quite considerable.

Like the noble Baroness, Lady Lister, I still find some difficulty with the confusion between “extremism”—violent and non-violent—“terrorism” and, in one or two places, “radicalisation”, in phrases such as “drawn into extremism or terrorism”. There is one paragraph—oddly, perhaps, in the section “Prisons and probation”, which I thought was actually very clear—which refers to:

“concerns around someone being drawn into terrorism (which includes someone with extremist ideas that are used to legitimise terrorism and are shared by terrorist groups)”.

I thought that was a very helpful way of expanding on the point.

Conversely, however, one of the paragraphs in the section on schools reads:

“Being drawn into terrorism includes not just violent extremism but also non-violent extremism, which can create an atmosphere conducive to terrorism and can popularise views which terrorists exploit.”

All this is a very difficult area. I knew I would not need to say anything about the higher education sector—although I still wonder how this is to be applied in early years education—but, in that same paragraph, schools are told that they are to,

“secure a balanced presentation of political issues”.

That seems to be quite a difficult ask of them, in the light of the wording that I have just read.

Clearly, however, a lot of work has gone into this and the matter will be kept under review, so I do not suppose that this is the last time that Members of this House will be discussing the matter.

[Baroness Smith of Basildon (Lab)]

My Lords, yet again we have had an interesting and knowledgeable discussion. Noble Lords have rightly paid tribute to the Minister for his consideration of the issues that have been raised. It is unfortunate that when the issue was discussed in the other place we had not previously had any sight of the guidance—we were still waiting for the response to the consultation—but it was helpful that during those debates the Minister was able to say to your Lordships’ House that the issues raised in the discussions and debates that took place here would be taken into account in preparing the revised guidance. That was helpful, and it is evident in some of the changes that have been made.

Noble Lords will be aware that we introduced the Prevent strategy with, at the time, three specific objectives: one was to respond to the ideological challenge of terrorism and the threats that we faced from those who promote and encourage terrorism; another, a very strict part of Prevent, was to prevent people being drawn into terrorism and ensure that they got the appropriate advice, support and help that they needed; and the third was to work with those sectors and institutions where there were risks of radicalisation that they wanted to address.

It is easy to say this, but the scale and complexity of these issues means that trying to address them is not easy or straightforward. We need to better understand the motivations that lead young British people from our community to abandon their homes and families to engage with groups such as ISIS. Part of our response to that, when we first introduced Prevent, was the community strand, which the Government are not now continuing with in the guidance. That is interesting, given the Home Secretary’s speech today in which she recognises the importance of community. It would be helpful if the Minister could comment on why that has been raised today, and whether he feels that the community cohesion strategy and the promotion of a very positive counternarrative was a positive and useful strand of Prevent. I am trying to understand why that is not part and parcel of Prevent now.

Many respondents to the consultation noted, and comments have been made about this today, that there was an insufficient definition of “extremism”, while the definition of “British values” and “non-violent extremism” were vague. The glossary, though helpful, says:

“‘Non-violent extremism’ is extremism, as defined above, which is not accompanied by violence”.

I am not sure that that takes us very far at all, to be honest. I would like clarification on what “non-violent extremism” really means. Does it mean extremism as defined in the guidance, which quite rightly includes,

“calls for the death of members of our armed forces, whether in this country or overseas”?

Is non-violent extremism—I am trying to get this correct—where you are not necessarily calling for the death of someone but you would encourage or support that, even though you would not be involved in violence yourself? Can the Minister clarify whether non-violent extremism includes persons not necessarily being violent themselves but seeking to encourage or support others to do so? That seems to come under the definition of extremism rather than non-violent extremism. Some clarity on that would be helpful.

Noble Lords have raised the issue of the training of front-line staff. I have seen what the impact assessment says about the costs of training, and I think it was my noble friend Lady Lister who referred to the numbers involved, but I am curious about the extent and monitoring of the training. How much knowledge would the Government expect someone to have to be able to appropriately identify potential radicalisation or extremism? I am not sure what the expectations are of what the training should provide. The guidance points out:

“In complying with the duty all specified authorities, as a starting point, should demonstrate an awareness and understanding of the risk of radicalisation in their area, institution or body”.

What exactly is meant by “awareness and understanding”? I think I understand where the Government are trying to get to with some of these definitions, but it might be helpful for those who have to fulfil this duty to have greater clarity.

With regard to central support and monitoring, the Home Office is the body that currently oversees Prevent activity in local areas. Is there a role for the DCLG in this from a community-based point of view? Would it be helpful for the Home Office to engage with DCLG—or CLG, as I think we are supposed to call it now—so that both departments have a role, but focusing specifically far more on community?

On local authorities I was pleased to see that, following the amendment that we tabled here in your Lordships’ House, the guidance now contains a provision which looks at that role of partnership and the impact of Prevent on local communities through continued dialogue and communication with leading community organisations. That is helpful and we are grateful to see that.

The debate has been mainly on higher education. Perhaps I could take a couple of moments to talk about schools and, of course, nurseries. The noble Lord’s face crumpled at that point. Perhaps we can probe a bit further than we did last time. If I have understood correctly, the obligation of the duty no longer falls on management within schools and nurseries but on the governing bodies. Of course, not all nurseries or childcare providers—as defined in the guidance—will have governing bodies. In one particular case, where my mum runs the local preschool, it is the Church of England that is in effect the preschool’s governing body. I think that it is exempt from the duty so that might create complication for church preschools.

Ofsted inspectors already have to have regard to the dangers of radicalisation and extremism. That is part of the Ofsted inspection; they also have to comment on what must be done if it is suspected that pupils are vulnerable. The Prevent guidance also notes that schools have a duty to promote community cohesion. Ofsted was required to report on this but this requirement was scrapped by the coalition Government in 2011 as part of the burden-reducing process. So we have moved away from it being a role for Ofsted that the Government got rid of and it is now shifting towards being a Prevent duty on those schools’ governing bodies. Has any consideration been given to reinstating that role for Ofsted, and has any evaluation been undertaken as to whether that would be helpful in dealing with community tensions, whether social or religious, as an alternative or additional way forward to support the school?

I have struggled with this but I cannot find any further information in the guidance to tell me how nurseries are included and what are the expectations of those front-line staff who work with the children in them. At some point in the next week or so I am going to have to tell my dear old mum, who runs her local preschool, that there is a new duty on her to identify radicalism and extremism is her three year-olds. I do not quite know how I am going to put this to her and retain her sanity and mine at the same time. What training will be expected of those staff in preschools and nurseries to be able to spot extremism and radicalisation in those under-fives?

I am very unclear on the purpose of this measure and how it will work in practice. I hope the idea is not to try to identify the parents who are involved because we are talking about the welfare of a young child, and relationships between the parents, the preschool, the nursery and the child support team are really important. If there is any clarity, advice or information the Minister can give me on how this is going to work, I would be very grateful—and it would help me to talk to my mum about it at the weekend.

I come back to higher education, about which a number of questions have been raised. I would like to put on record my thanks to Universities UK, Million+, the NUS and other organisations which have been very helpful in providing briefings and information. This was a particularly contentious part of our debates and it is extremely helpful that the noble Lord was able to take on board the comments that were made. He had discussions here in your Lordships’ House and discussions with noble Lords and others outside this Chamber. The amendments tabled by the Government to reaffirm universities’ commitment to freedom of speech and academic freedom were really important and useful. The substantial changes in the guidance are certainly very helpful and an improvement on the original guidance.

A number of questions have already been raised that I will not repeat. This cross-institutional Prevent working groups obligation has now been removed. That is helpful, as are a number of other changes, but I have a couple of points for the Minister. It is unusual in any debate on a statutory instrument to debate what is not in it as opposed to what is. However, a number of issues have been raised today about the guidance that the Government will bring back; for example, the issue of external speakers, and guidance on the management of events. Conventional wisdom tells us—the rumour mill is very busy on this—that there is a disagreement between two departments, which if it is the case is not very impressive; perhaps the noble Lord can enlighten us. It is said that there is a difference of opinion between BIS and the Home Office. I hope that that is not a delaying tactic to get us past the election. The Home Secretary’s speech today laid out a number of measures that she thought should be brought in to deal with counterterrorism issues. You have to ask why, if she believes that those are very important measures, they are not in this Act, which was brought forward in the last Session of Parliament—but are so essential that they are now being brought back after the election. That issue gives me enormous concern.

16:00

[Lord King of Bridgwater (Con)]

The noble Baroness knows perfectly well that the Home Secretary has always made it clear that she attaches great importance to this issue; unfortunately, however, it was not possible to get the measure through this House, so it will have to come back, whichever party comes to power.

[Baroness Smith of Basildon]

The noble Lord refers to one issue, but the Home Secretary raised several today, and I assume that this guidance forms part of it. I hope that it is not a delaying tactic for the order before us today. On a rare occasion, I disagree with my noble friend Lady Lister, who said that it was “regrettable” that it was not with us. Although it is in some ways, it is also an opportunity. The noble Lord was very helpful, and when we had our discussions previously he said that he would engage—or that there would be engagement, if not with him personally—with those who would be responsible for implementing such guidance. I always think that guidance and legislation are effective only if they can be implemented in practice—the workability test that was spoken about so often with regard to other legislation. It cannot just be a theory; it has to be something that works. I hope that this will be an opportunity for the Government to engage with the universities and those who will have responsibility for implementing the guidance on who has responsibility for the duty so that they can discuss with the Government—I hope that those discussions are taking place now—how to make this sensible, practical and effective.

One final point, which has been raised by other noble Lords, is the relationship between HEFCE, as a monitoring body, with other bodies. It is not a funding body; I share the concerns of the noble Lord, Lord Butler, that it is to be hoped that the Government are not planning to set up a completely new quango to monitor that. However, I understand that meetings were due to take place last week, on 20 March, with HEFCE and other bodies to discuss how that could work. It would be helpful if the Minister could enlighten us on any progress that was made at those meetings.

A number of questions have come out of this debate, but I hope that the noble Lord will take away with him our gratitude for having seen significant changes; we are grateful to him for listening, because that is not always the case. I hope that we have not wrecked his career by thanking him too much. The guidance we have now is certainly better than what was presented to your Lordships’ House and discussed in Committee.

[Lord Bates]

My Lords, I am very grateful to all noble Lords who have spoken in this debate. It has generated a flurry of notes from the Box and I will try to cover most of the questions that were raised. However, as I try to respond to the points that were raised, it will be worth trying not to lose sight of the general agreement on the journey on which we have travelled, which the noble and learned Lord, Lord Hope, helpfully set out at the beginning, and which I think noble Lords on all sides of the House have broadly welcomed.

We began the journey because Prevent was already in place—the noble Baroness, Lady Smith of Basildon, made the point that it was introduced by the previous Government. We found, through the regional co-ordinators of Prevent, who had a good working relationship with many universities, that the quality of the way in which the Prevent programme was delivered in higher education institutions varied widely, and that often the level of compliance was best where perhaps it was needed least, and worst where it was needed most. For that reason, having given the matter very careful consideration, the decision was made to put it on a statutory footing to try to get some consistency in the way in which it was delivered. That is the context behind this.

I am conscious of the point made by the noble Lords, Lord Morgan and Lord Judd, in talking about how precious our higher education institutions are as a bulwark against extremism. That was one of the finest debates that we had on the Bill. Early on, the noble Lord, Lord Deben, talked about bringing areas of contention out into the open and said that having a debate about them was critically important. That was why, as part of that, we put in place in the Bill and reiterated in the guidance that institutions should have particular regard to academic freedom duties in the 1988 Act and freedom of speech issues in the 1986 Act. Without getting into specific issues that the noble Baroness raised about Imperial and my noble friend raised about Southampton, that is what needs to be taken back to those authorities, to remind them that that is what the guidance states, rather than what it does not—and sometimes how it is interpreted.

I was grateful to many noble Lords who welcomed the fact that we now have a glossary. Those who went through the detailed passage of the Bill will realise that Appendix F was designed for the Minister’s benefit rather than necessarily for those who are participating. I at least found it very helpful, even if, in certain areas, it does not quite go far enough. I shall come to some of those points.

The noble Lord, Lord Butler, with his experienced eye, spotted the nebula for quangos that could be there in the absence of HEFCE—but we should not take it that not specifying HEFCE is saying that it is not going to be that organisation. We consulted on that, and clearly there needs to be a discussion and an agreement that HEFCE will be prepared to take that on. But I can state—and I hope that this will reassure noble Lords—that it is certainly not the Government’s intention to establish a new body to carry this out.

On the point raised by my noble friend Lady Brinton about whether guidance will be withdrawn if further guidance is not agreed, that will be for the next Government—and we could be coming back to that a few times in the course of my remarks. But it is a serious point because it will, of course, have to be brought forward. It is not our intention that the duty should commence for the further and higher education sectors until guidance on managing speakers and events has been published and approved by Parliament. The noble Baroness, Lady Smith of Newnham, made the point that it would require another affirmative statutory instrument to come before your Lordships' House and that there would be a debate on that. Without that debate and that order, it would not be anticipated that we could give commencement to the wider provision, because there would be a very large hole in the guidance that would be implemented.

I will pick up on a few points. Noble Lords referred to recording meetings of organisations. I do not have anything official on that but, intuitively, that would seem to be exactly the type of thing that would be a good way in which to ensure that, when there are speakers of this nature who may give rise to contention, they are reviewed—and that could be part of the internal review. That is exactly the type of innovative idea that I would like higher education institutions to take advantage of.

The noble Lord, Lord Hannay, welcomed a large part of what is in the guidance, but he also asked for the definition of “non-violent extremism”. It means simply that extremism is not accompanied by violence or a threat of violence. The Prevent strategy is clear that it includes challenging non-violent ideas that are part of a terrorist ideology and that risk drawing people into terrorism. In that context, I would add that, although we are talking about acts of terrorism, we are also talking about radicalisation. The Prime Minister’s task force on tackling extremism and radicalisation felt that there should be a provision to capture that which is radical and extreme but does not directly incite acts of violence—although it could, of course, lead that way.

A number of noble Lords asked about training. That may sound rather grander than it is. I have flashbacks of exchanges with the noble Lord, Lord Phillips of Sudbury, on this subject. I do not want to tempt him to come into the Chamber and engage me on this issue again, but I remember him going through the effect of the impact assessment, quantifying how many co-ordinators it would require and extrapolating the cost of that across all institutions.

I come back to the point that we are talking about, which is what the noble and learned Lord, Lord Hope, mentioned in the Scottish context—a light-touch approach. Initially there would be a workshop to raise awareness of Prevent: there is a DVD-led training tool to teach front-line workers how to identify and support those at risk of radicalisation. The DVD course is half an hour or an hour long, and is designed simply to introduce people to the key themes that they ought to be aware of. When we talk about training we are not anticipating that great swathes of trainers, and those being trained, would be required in organisations.

The noble and learned Lord, Lord Hope, also asked about the differences between the Scottish guidance and the English and Welsh guidance. Universities in Scotland will be under the same Prevent duty in law as universities in England and Wales. There are some relatively minor differences in the drafting of the Scottish version of the guidance. On the whole, these reflect the particular circumstances in Scotland. The Scottish version of the guidance makes it clear in the introductory section that being drawn into terrorism includes not just violent extremism but non-violent extremism, which can create an atmosphere conducive to terrorism and popularise views that terrorists then go on to exploit.

The noble Baroness, Lady Lister, asked about the position of student unions. They are not subject to the Prevent duty, but whatever procedures apply to university premises will apply no matter what body is using them. This will be a matter for university governing bodies. Also on the subject of students, the noble Baroness welcomed the fact that in the guidance we had introduced a requirement to consult. That reflects the contents of the letter that I sent out on 9 February, and also the intervention, to which I pay tribute, of the noble Baroness, Lady Williams, who asked for an undertaking that students would be engaged in the process. I said at the time that that was very sensible and that we ought to include it in the guidance—and it is now in the guidance, in the section on partnerships.

16:14

My noble friend Lady Hamwee and the noble Baroness, Lady Smith, talked about the duties of nursery staff in this regard. I am conscious that we had these debates some time ago and, on the surface, it sounds strange to include provision for nursery staff in this area. However, this issue applies to schools, including primary schools. We do not expect teachers and nursery workers to intrude unnecessarily in family life, but we expect them to take action if they observe behaviour which is of concern. That should be done in an age-appropriate way. I overhear the noble Baroness opposite asking from a sedentary position what this could be. For example, a small child attending a nursery may espouse some very strange or extreme views on anti-Semitism. All I am saying is that nursery staff and all staff and responsible adults should be aware of the importance of safeguarding children of all ages. If untoward comments are made—not just asides, but comments that are repeated—which cause concern, we are simply saying that this is a real generational threat that we face, as we see in our newspapers virtually every day, and we cannot tackle this alone. The security forces cannot tackle this alone. They need the support of everybody in the wider community to do that. That is really what we are talking about. We are certainly not talking about anything that is overly intrusive.

My noble friend Lady Hamwee asked whether the measure deals properly with discrimination. The guidance specifically mentions the public sector equality duty set out in Section 149 of the Equality Act 2010, to which all public authorities are already subject. I hope that that helps provide guidance in that regard. The noble Baroness, Lady Smith, asked about communities. Communities are an extremely important part of delivering the Prevent strategy and their importance is mentioned in a number of places in the guidance. There is, of course, a cross-departmental group working on Prevent, radicalisation and people being drawn into terrorism. The Department for Communities and Local Government is part of that.

I think that I have dealt with training and awareness. As regards the encouragement of others—

[Baroness Smith of Basildon]

I am grateful to the noble Lord for his comments on nurseries, although I am not 100% sure that I fully understand what nursery staff could do in response to something that a three year-old says or does that would be beyond what they currently do in ensuring that three year-olds behave appropriately. However, I asked the noble Lord specifically about the training for nursery staff. He has spoken about training generally. Is the training for nursery staff the same as it would be for staff at schools or universities or will there be specific training for those who deal with much younger children?

[Lord Bates]

That is a good point. Procedures need to be set out to ensure that the nursery has guidance in place detailing how it will implement Prevent and what it would do if a three year-old said, “My sister is going off to Syria”, or something of that nature. What would it do if a child made such a comment? Does it have a procedure for dealing with that? To whom would it report that and what action would it take? That is probably not the best example as I have just thought of it and I am sure that the officials will probably send me 10 far better examples. However, I am just trying to appeal to the common-sense elements of this. If such an incident should happen, do nursery staff have a procedure in place to deal with it? I think that is all that would be required of nurseries. The noble Baroness raised a very fair point about Ofsted. I am afraid that I do not have the answer at this stage but it is a good point and I will ensure that I write to her on it. I have tried to address as many of the points as possible—

[Lord Hope of Craighead]

Will the Minister clarify the intention on commencement of the various provisions? I see that Regulation 2 states that the regulations will,

“come into force on the day after the day on which they are made”.

I am not sure of the procedure, but if we approve the regulations, does that mean tomorrow or is there some period during which they will lie awaiting further making? It is important because Regulation 3 states that the guidance for both England and Wales and for Scotland will,

“take effect on the day on which this regulation comes into force”.

The guidance as we have it at the moment is guidance, absent the bit about dealing with visitors to universities, and so on. That is referred to in paragraph 60 of the Scottish guidance. I think the Minister was saying that it was not until the complete package was before us that the provisions would come into force. As worded, it would suggest that we have the regulations as they stand. If that is the position, can we take it that the further guidance will be brought before Parliament in further regulations, which would give us an opportunity to debate it? That might be a neat way of dealing with it. I am not quite clear about the procedure and the timing of these various measures.

[Lord Bates]

That is a very good point. I thank the noble and learned Lord for probing further on that. I repeat the answer that I gave in part to the noble Baroness, Lady Brinton. The intention is that these provisions will come into effect on 1 July. I also said that what would be required is for that further regulation-making order, relating to speakers and events, to be in place for that to happen. If that was not in place, the provisions could not come into force as intended on 1 July. That date would have to be changed, presumably in a further statutory instrument that would come before the House. We hope that that will not be necessary, but the current intention is that these provisions will come into effect on 1 July, provided that that important additional element of speakers and events has been passed by your Lordships’ House.

Motion agreed.

Regulation of Investigatory Powers (Acquisition and Disclosure of Communications Data: Code of Practice) Order 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

16:22

Moved by

[Lord Bates]

That the draft order laid before the House on 2 March be approved.

Relevant document: 25th Report from the Joint Committee on Statutory Instruments.

[The Parliamentary Under-Secretary of State, Home Office (Lord Bates)]

At the same time as moving the above order, I invite the House to approve the Retention of Communications Data (Code of Practice) Order 2015.

I should inform the House that the Joint Committee on Statutory Instruments and the Lords Secondary Legislation Scrutiny Committee have both considered the instruments that we are debating today. It might help the House in its consideration of these two communications data codes of practice if I briefly outline what the Government seek to achieve by them and why we have brought them forward at this time.

Communications data are the “who, where, when and how” of a communication, but not its content. It is crucial for fighting crime, protecting children and combating terrorism. The House will recall that last summer we enacted emergency legislation—the Data Retention and Investigatory Powers Act 2014. This Act preserved and added safeguards to our data retention powers. These codes are directly consequential on that legislation.

We are debating two codes today because communications data policy can broadly be split into two areas: acquisition and retention. Acquisition is carried out by relevant public authorities, such as law enforcement agencies. Retention is carried out by communications services providers. Noble Lords will see immediately that these areas are linked: data need to be retained in order to be accessed. These codes—a revised acquisition code and a new data retention code—set out the processes and safeguards governing the retention and acquisition of communications data. They are intended to provide clarity and incorporate best practice on the use of the relevant powers to ensure the highest standards of professionalism and compliance in this important investigatory power. We are bringing these codes forward now to ensure that the important safeguards within them—some of which follow concerns raised by the European Court of Justice judgment last year—come into force before Parliament rises.

I turn to possibly the most important new safeguard contained in the acquisition code: police access to journalists’ communications data. As your Lordships will know, the Interception of Communications Commissioner recently conducted an inquiry into this subject. He made two specific recommendations. His first was:

“Judicial authorisation must be obtained in cases where communications data is sought to determine the source of journalistic information”.

His second was:

“Where communications data is sought that does not relate to an investigation to determine the source of journalistic information (for example where the journalist is a victim of crime or is suspected of committing a crime unrelated to their occupation) Chapter 2 of Part 1 of the Act may be used so long as the designated person gives adequate consideration to the necessity, proportionality, collateral intrusion, including the possible unintended consequence of the conduct”.

He said that the revised code of practice, which had been consulted on,

“contains very little guidance concerning what these considerations should be and that absence needs to be addressed”.

The Government immediately accepted both recommendations. We have amended the code to implement the first recommendation as far as is possible in this Parliament and the second recommendation in full.

The acquisition code, which we are debating, now stipulates that law enforcement must use production orders under the Police and Criminal Evidence Act 1984, or equivalents in Scotland and Northern Ireland, when seeking to acquire communications data to identify or determine the source of journalistic information. This is because production orders require judicial approval. This will help to protect the freedoms that journalists and their sources enjoy in the UK. Whenever law enforcement wishes to access communications data to determine journalistic sources—including whenever law enforcement wishes communications data to support other evidence or intelligence of the identity of a journalistic source—the decision on the application will be made by a judge under PACE. However, this is only a stopgap until we can put this requirement in primary legislation in the next Parliament. Therefore, we have also published a draft clause that sets out how we would do this.

Changes to the guidance in the acquisition code have been made to implement the commissioner’s second recommendation. The code expands on the considerations of rights needed—in particular, the right to freedom of expression must be taken into account when appropriate—and it also contains additional guidance on the considerations of necessity and proportionality, including collateral intrusion and unintended consequences.

I turn briefly to some of the other key provisions in the codes. The revised acquisition code enhances the operational independence of the authorising officer from the specific investigation for which communications data are required. It includes new, enhanced protections for those who work in professions with a duty of confidentiality or privilege. We have not gone further in this regard because it is important to remember that we are debating communications data, which are not the content of a communication. In his report, the Interception of Communications Commissioner made it clear that communications data,

“do not contain any material that may be said to be of professional or legal privilege—the fact that a communication took place does not provide what was discussed or considered or advised”.

This important distinction explains why, while we are enhancing the protections for others in sensitive professions, we are making the change to judicial approval only where communications data are sought to determine a journalist’s source. The fact that someone spoke to, say, a doctor does not reveal what was said. However, if you are trying to establish the source of a leak, knowing who spoke to a journalist may be more important than knowing what was said. The acquisition code also sets out expanded record-keeping requirements for public authorities, improving transparency and implementing recommendations of the Interception of Communications Commissioner.

16:30

I turn to the retention code, which sets out how the Government implement the requirements in the Data Retention and Investigatory Powers Act 2014 and the Data Retention Regulations 2014. Specifically, it covers the following issues: first, the review, variation and revocation of data retention notices; secondly, communications service providers’ ability to recover their costs; thirdly, data security; fourthly, oversight by the Information Commissioner; and fifthly, safeguards on the disclosure and use of retained data by communications service providers. The House will be aware that both codes underwent public consultation. The Government received in the region of 300 submissions from organisations and individuals suggesting amendments and providing comments on the codes and I thank all of those who took the trouble to respond. The majority of these submissions related wholly or primarily to access to the communications data of journalists and others in professions which may be subject to professional privilege, with which I have already dealt. We have published a summary of the submissions received and how the Government have responded to them. The department considered all the responses to the consultation and many of the suggestions have been adopted in the final drafts. For example, in the acquisition code, in addition to the safeguards in line with the concerns raised by journalists and the commissioner, a number of technical changes were made to increase the clarity of the section on record keeping. In the retention code, we accepted a recommendation to make it absolutely clear that retained data cannot be used by a communications service provider for marketing purposes.

These two communications data codes of practice outline best practice and ensure that the right safeguards are in place concerning access to, and retention of, communications data. It is important that we bring them into force by the end of this Parliament. I hope your Lordships will support these important statutory instruments. I beg to move.

[Baroness Hamwee (LD)]

My Lords, I thank the Minister for his explanation of the two documents. Around 300 responses is quite impressive, and about 250 are wholly or primarily about access to the communications data of journalists. I have just had one about nine minutes ago, as the Minister started speaking. I cannot read it on my BlackBerry, so I cannot do justice to that person.

It is ironic that, in response to the consultation on the acquisitions code, the Interception of Communications Commissioner wrote that it is,

“unhelpful when the reports in the media”—

which I stress—

“misinform the public by stating the use of powers to acquire communications data for crimes, not deemed to be of a serious nature under the Act, are inappropriate. It is also wrong for the reports in the media to cite the Act as a terrorist law and infer that its use for non terrorist related matters is inappropriate”.

I am sure the parties will come together over the next few months in their understanding of this.

From the report of the responses, it is clear that there is still a certain amount of confusion about detail. I note that respondents’ concerns that,

“data would be retained which CSPs did not retain for business purposes”,

were rebutted, as were the concerns that,

“the processing of data by CSPs was a stepping stone to a central database”.

As I said, a lot more communication is clearly needed.

Inevitably, and rightly, there is a focus on data involving certain professions—the Minister mentioned doctors, lawyers and so on—including MPs. I am glad that someone still regards being a Member of Parliament as a profession. I accept that there is no strict privilege here because we are not dealing with content. However, I make the point that, once a person is identified as communicating, it is often only a short step to an assumption about the issues, if not the detail of the content. I was aware of the distinction when I was in practice as a solicitor but it always seemed to me quite a difficult one. If one was tempted to say that one had acted for someone in the public eye, those who heard that comment would make assumptions about what the issues were. I am a bit confused by paragraph 3.75, which says that,

“when an application is made for the communications data of those known to be in such professions … at the next inspection, such applications should be flagged to the Interception of Communications Commissioner”.

I did not immediately see why that should be done then and not straightaway.

If it is not the wrong phrase to say that I look forward to the review of RIPA and the further work on data in the next Parliament, at any rate I anticipate that we will have it.

[Lord Rosser (Lab)]

My Lords, I, too, thank the Minister for his high-speed explanation of the purposes of these two orders which relate to emergency legislation enacted last year—namely, the Data Retention and Investigatory Powers Act, which goes under the happy name of DRIPA, which sought to retain existing data retention powers called into question, as the Minister has said, as a result of a European Court of Justice ruling. The subsequent regulations to the 2014 Act added a requirement for a code of practice on data retention to the existing requirement for a code on acquisition. Both codes are intended to set out how the legislation is to be implemented in practice. The two orders we are discussing bring the two codes into effect.

The two codes of practice before us set out the processes and safeguards governing the retention and acquisition of communications data which, as we know, can be a key factor in combating crime and terrorism and protecting children by law enforcement and intelligence agencies and other relevant public authorities, since communications data can show who was communicating, when, from where and with whom.

Both codes have been the subject of public consultation. As has already been said, the Government received some 300 submissions from organisations and individuals. When the issue of where those 300 submissions could be found was raised during the debate on these orders in the other place last week, the Minister in the Commons said he would write to my colleague, Diana Johnson MP, on this point. By the end of last week no written communication had apparently been received indicating where the responses could be seen. Perhaps the Minister could ensure that that information is provided.

The Regulation of Investigatory Powers (Acquisition and Disclosure of Communications Data: Code of Practice) Order 2015 before us enhances the operational independence of the authorising officer from the specific investigation for which communications data are required. It includes new enhanced protections for those who may have professional duties of confidentiality or privilege, particularly journalists. It reflects additional requirements on local authorities to request communications data through a magistrate, improves the record-keeping requirements for public authorities and aligns the code with best practice in regard to international co-operation and emergency calls.

The Retention of Communications Data (Code of Practice) Order 2015 deals with the new retention code implementing the requirements in the Data Retention and Investigatory Powers Act and the subsequent data retention regulations. The new retention code covers: the issue, review, variation and revocation of data retention notices; the communications service providers’ ability to recover their costs; data security; oversight by the Information Commissioner; and safeguards on the disclosure and use of retained data by communications service providers. It also outlines the scope and definitions of relevant communications data, including data that may be retained in the light of provisions in the Counter-Terrorism and Security Act 2015.

However, the 2014 emergency Act and these two codes of practice do not complete the legislative process. The Government have stated that one of the most important safeguards in the acquisition code covers access to journalistic material. The Interception of Communications Commissioner recently made recommendations following his own inquiry into police acquisition of journalists’ communications data. The acquisition code provides that an application seeking the communications data of a journalist in order to determine sources will be decided by a judge through the terms of a production order under the Police and Criminal Evidence Act 1984.

However, this is only a stop-gap measure—the Government’s words—since it is the intention of the Home Office to put this change in primary legislation in the next Parliament. The Independent Reviewer of Terrorism Legislation is currently examining the operation of the Regulation of Investigatory Powers Act 2000 and his report, which is expected to be completed before May, in a few weeks’ time, may well lead to changes in legislation. The Data Retention and Investigatory Powers Act 2014 itself has an end date of 31 December 2016, so will presumably require further consideration by Parliament.

It is all a very fragmented process of emergency legislation, of stop-gap measures, of imminent further reviews by the counterterrorism reviewer, of further primary legislation already flagged up for the next Parliament and of legislation passed only last year coming to an end in 21 months’ time. The process that has been and is being pursued for dealing with these very important issues does not exactly give the impression—whatever the reality may be—of a carefully planned, thought-through approach to what are very significant matters. Could the Minister say when it is expected that the codes of conduct we are discussing today will need to be updated and reissued in the light of the pending developments I have just mentioned?

Paragraphs 2.21 to 2.23 of the code of practice for the retention order refer to internet-based communications. Paragraph 2.21 states:

“Internet email under DRIPA is considered to be any text, voice, sound or image message sent over a public electronic communications network which can be stored in the network or in the recipient’s terminal equipment until it is collected by the recipient and includes messages sent using a short message service”.

Does that definition include social media or simply refer to internet-based email providers such as Hotmail and Gmail? Does the code of practice include messages sent on social media platforms such as Facebook? If it does, there does not appear to be a section in the guidance devoted to social media. If social media are covered, does a message extend to tagging another person? Specifically, if a person is tagged in a Facebook or Instagram post, does that count as a message for the purposes of this code? What about a person included in a tweet—does that count, as far as the code is concerned? In a situation where there is no user-generated content but there is an interaction, such as liking a post on Facebook, loving a photo on Instagram or favouriting a tweet, would these come within the code of practice?

Paragraph 2.23 says:

“An internet communications service under DRIPA as amended by the CTSA is a communications service which takes place on the internet and can include internet telephony, internet email and instant messaging services”.

The Minister in the Commons hardly clarified the position when he said in the debate on 16 March:

“The code provides that the Home Office may give further guidance to those implementing the requirements”.

He then went on to enlighten us with the statement:

“In other words, there can be further drill-down to give further specificity”.—[Official Report, Commons, 16/3/15; col. 559.]

No doubt, hopefully without too much further drilling down, the Minister will be able to assist in clarifying and placing on the record—which is quite important—how the code, including paragraphs 2.21 and 2.23 to which I have referred, should be interpreted in regard to the points and questions I have raised in respect of social media. That clarification is important and necessary.

The code of practice appears to give the Secretary of State considerable discretion over the review of retention notices, and indicates that factors leading to a review could include significant technological change. How will the dialogue with communications service providers operate and how will it ensure that the Secretary of State will be aware of major technological changes? The Minister in the Commons simply made the somewhat unhelpful and bland statement:

“The Home Office works closely with providers to ensure that it is aware of future technological changes that may lead to a review of a data retention notice”.—[Official Report, Commons, 16/3/15; col. 559.]

I do not really think that is an answer to the question that I have just asked—and was indeed asked in the Commons.

Can the Minister say why no impact assessment has been prepared in relation to the orders we are discussing? As far as I can see, these codes of practice cover the process for decisions regarding the level and extent of compensation payments provided to communications service providers and thus could have financial implications, as well as the potential to affect compliance requirements on businesses. In that regard, can the Minister say what is the total spend on compensation agreed with the communications service providers in each of the past five years?

I hope that the Minister will be able to respond—either now or subsequently—to the queries that I and the noble Baroness, Lady Hamwee, have raised on certain aspects of these two orders, which we do actually support, despite the comments I have made.

16:45

[Lord Bates]

My Lords, I am grateful to the noble Lord for his comments, some of which I will have to come back to him about in writing, but I can certainly deal with his question about where the 300 responses are. They are now on the Home Office website. I can certainly send him a link to that but they are there, along with details of how they were considered and which elements have been included in the revised codes.

My noble friend Lady Hamwee was right to stress the importance of the protection of journalists. That links to the previous debate, when we were talking about the importance of freedom of speech and academic freedom within university settings and how these were going to be upheld. Equally, the freedom of the press is one of our cherished principles and we need to maintain it. Therefore, having this review undertaken by Sir Anthony May, who is the Interception of Communications Commissioner and a former High Court judge—he is widely respected—was a helpful step. He came forward with two additional requirements to ensure that there were extra safeguards in place and immediately the Government responded to say that they would do just that.

There had been a suggestion to go still further. I know that some of the respondents, particularly the NUJ, were concerned about issues in relation to seeking the journalist’s permission or notifying the journalist beforehand. But that was not something that Sir Anthony May felt was appropriate at this stage. Of course, that would result in a tipping-off situation, which would potentially put lives at risk.

The noble Lord, Lord Rosser, asked why there was no impact assessment of these codes. A full impact assessment was provided for the underpinning primary legislation, DRIPA, which was enacted last summer, so that contains the elements he referred to. He asked whether the code would need to be updated. Clearly, if Parliament enacts new primary legislation, there might be a requirement to produce new secondary legislation, including replacing these codes.

My noble friend Lady Hamwee asked why paragraph 3.75 of the acquisition code says that the Interception Commissioner should be notified of cases involving sensitive professions at his next inspection rather than right away, as this would mean waiting for nearly a year. We have of course consulted extensively with the Interception of Communications Commissioner in drawing up the code. The formulation is that the code is based on what the commissioner believes will best enable him to carry out a rigorous oversight function.

The noble Lord, Lord Rosser, asked whether we have maintained a dialogue with the communications service providers. As my ministerial colleague James Brokenshire said last week, we work very closely with the telecommunications sector and it alerts us to new technological developments that may have an impact on its obligations.

The noble Baroness, Lady Hamwee, asked why the requirement for judicial authorisation provides only for journalists—oh, I do not think that she did ask that, did she?

[Baroness Hamwee]

It is a good question.

[Lord Bates]

It is an excellent question, but I covered that in my pacy opening remarks because I was conscious that an important Statement was due to follow.

The noble Lord, Lord Rosser, asked whether paragraph 2.21 covers social media. As Minister James Brokenshire said at the Report stage of the then Counter-Terrorism and Security Bill:

“A communication can include any message sent over the internet. The legislation relates not to the retention of what the message contained, but purely to the fact that a message was sent”.—[Official Report, Commons, 6/1/15; col. 236.]

RIPA makes that clear and extends the machine-to-machine communications examples, such as the ones that were given.

[Lord Rosser]

In the light of what the Minister has said, does that mean that it does cover social media or it does not?

[Lord Bates]

To the extent that social media are messages communicated machine to machine, it does. As to whether the specific examples that the noble Lord, Lord Rosser, talked about, such as tagging on a Facebook page or a tweet, I am going to have to get some further clarification on that and will write to him. But certainly messaging over those platforms would of course be covered.

[Lord West of Spithead (Lab)]

Surely those aspects that the Minister has just touched on, and about which he says he will write to the noble Lord, Lord Rosser, have to be covered otherwise we have not got the coverage that we require.

[Lord Bates]

I do not want to be drawn too much, at this stage, into the content of it. I have said that I will write to the noble Lord, Lord Rosser, and clarify that point. The noble Lord, Lord West, is absolutely right. Here, I tread very carefully, with my noble friend Lord King of Bridgwater waiting in the wings, but the communications data Bill, which David Anderson is undertaking a review on—he will report on 1 May—will need to be considered urgently. The types of deep web communications within the communications data Bill were felt to be an important part of providing our security services with the ability that they need to tackle the growing terrorist threat against us. That will be returned to as a matter of urgency in the new Parliament.

[Lord King of Bridgwater (Con)]

I am grateful for what my noble friend the Minister said. I think that he covered it in his opening remarks. I understood him to say that, as we go forward, both sides of the House now recognise the need for urgent legislation. I think that Mr Alan Johnson has just joined the club of people saying how impermanent this is. In that case, we have to make clear that there will probably need to be some form of revision of the code of practice to take account of what new forms might come forward. There is not much doubt about the speed with which they are coming forward through social media, WhatsApp and the other things that are happening. Probably a few more that we have never heard of will be in operation by the time that we tackle this legislation.

[Lord Bates]

My noble friend is absolutely right. If there is new primary legislation, it is likely that what will follow is new secondary legislation. If there is new secondary legislation, it is almost certain that the codes that we are talking about today will need to be updated to reflect that. However, I have given undertakings that I will write to noble Lords and I give my appreciation to them for their comments.

Motion agreed.

Retention of Communications Data (Code of Practice) Order 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

16:54

Moved by

[Lord Bates]

That the draft Order laid before the House on 4 March be approved.

Relevant document: 25th Report from the Joint Committee on Statutory Instruments

Motion agreed.

European Council

Monday 23rd March 2015 Lords Chamber

Statement

16:54

[The Lord Privy Seal (Baroness Stowell of Beeston) (Con)]

My Lords, with the leave of the House, I will now repeat a Statement given by my right honourable friend the Prime Minister in the other place. The Statement is as follows:

“I know that the whole House will join me in welcoming David Natzler as the new Clerk of the House. Mr Speaker, you went to the ends of the earth in search for the best candidate, but I am glad that we found the answer right here in Britain.

Before turning to the main focus of the Council, which was the situation in the eurozone, let me say a word about the discussions on Tunisia and Libya, on the situation in Ukraine, and on the nuclear talks with Iran.

I am sure that the whole House will join me in sending our deepest condolences to the friends and family of Sally Adey, a British holidaymaker who was among at least 20 tourists and two Tunisians brutally murdered in the terrorist attack at the Bardo museum last week. I have written to President Essebsi to assure him that Britain will stand with the people of Tunisia as they seek to defeat the terrorists and build a peaceful and prosperous future. The EU has agreed to offer practical assistance, and Britain will play its part, deploying SO15 and military counterterrorism experts and continuing to provide assistance in aviation security and tourist resort protection.

The suggestion that some of the terrorists involved had been trained in Libya is the latest evidence of the very difficult situation in that country. The Council agreed on the need for a political solution, supporting UN-led efforts to bring the different parties in Libya together to agree a national unity Government. Britain has provided Libya with aid and military training, and we will continue to do all we can to assist.

I know that some people are looking at this situation and asking whether Britain, France and America were right to act to stop Colonel Gaddafi when we did. We should be clear that the answer is yes. Gaddafi was on the brink of massacring his own people in Benghazi. We prevented what would have been a wide-scale, brutal, murderous assault. It was the right thing to do, and we should be very proud of the British service men and women who carried out this vital task.

Turning to the situation in eastern Ukraine, the Council welcomed the significant reduction in fighting and the progress on the withdrawal of heavy weapons. But, as President Obama, President Hollande, Chancellor Merkel and I agreed earlier this month, it is essential to send a clear signal that sanctions will not be eased until Russia delivers on its promises and the Minsk agreements are fully implemented. This European Council did exactly that. The conclusions state that,

‘the duration of the restrictive measures … should be clearly linked to the complete implementation of the Minsk agreements’.

They also underline our readiness to take further measures if required.

One of the best things we can do to help Russia’s neighbours is to help them fight corruption and strengthen their democracy. Just as the Know-How Fund set up by Margaret Thatcher did a great job of helping Eastern European countries after the fall of the Berlin Wall, so we need the same approach today. At the Council, I announced a new good governance fund with an initial £20 million to support reforms in countries in the eastern neighbourhood and western Balkans. This will complement support from other donors. It will accelerate efforts to fight corruption, strengthening the rule of law, reforming the police and justice system and supporting free markets by liberalising key sectors such as energy and banking. The fund will be up and running by the summer. As well as Ukraine, it will initially cover Georgia, Moldova, Serbia and Bosnia-Herzegovina.

Turning to Iran, I met Chancellor Merkel and President Hollande in the margins of the Council to discuss progress in the vital talks on Iran’s nuclear programme. We are absolutely clear and united in our purpose. Iran must never be allowed to develop a nuclear weapon, but there is a peaceful path to civil nuclear energy. We believe that a comprehensive, durable and verifiable deal is possible, but only if Iran shows greater flexibility and takes some tough decisions during the talks this week.

We also discussed proposals co-ordinating Europe’s energy policy, ensuring transparency of gas supply agreements and that Europe’s energy policies are consistent with reaching the vital deal at the climate change summit in Paris this December.

Turning to the eurozone, the Council welcomed the agreement between Greece and the euro area to extend their programme. Let me say again: this is the last of these Statements of this Parliament, and I think I have uttered this sentence probably 11 times, but Britain is not in the eurozone and we are not going to join the eurozone. But we need the eurozone to work properly. A disorderly Greek exit from the euro remains a major threat to Europe’s economic stability, and it could be very damaging to the British economy. Protecting our economy from these wider risks in the eurozone means sticking to this Government’s long-term economic plan.

Five years ago, Britain’s economy was close to the edge. We had the biggest budget deficit in our peacetime history: a deficit that was forecast to be bigger than that of Greece or any other developed country on the planet. Five years on, the deficit has been halved and our national debt is falling as a share of GDP. We have the fastest growth of any major western economy. We have 1.8 million more people in work, more jobs created in Yorkshire than in the whole of France, and more jobs created in the UK than in the rest of the European Union”.

[Lord Lea of Crondall (Lab)]

My Lords—

[Baroness Stowell of Beeston]

My Lords, I am repeating a Statement. This is not a debate.

“We need to stay on this path, not abandon it just as it is leading our country to prosperity.

Just as we are acting in our national interest at home, so we have acted to protect our national interest in Europe, too. We have cut the EU budget for the first time in history, we have got Britain out of the euro bailout schemes, we have vetoed a treaty that was not in our national interest, and we have stopped attempts to discriminate against EU countries outside the eurozone, not least with our successful legal challenge last month. We have made vital progress on cutting red tape and completing the single market.

At our G8 in Lough Erne, we kick-started the talks on what will be the biggest bilateral trade deal in history between the EU and the US. We have put power back in the hands of our fishermen so they can sell what they catch. We have negotiated a new single European patent that will reduce costs for entrepreneurs, and part of the patent court will be based right here in London. We have ensured new safeguards to protect our vital financial services industry, and we have returned over 100 powers from Brussels to Britain, giving us more control over our borders, policing and security.

We have clamped down on benefit tourism, and in foreign policy we have worked with European partners to get things done and keep our people safe—from sanctions on Russia and Iran and practical assistance to help countries in north Africa fight terrorism, to international action to help those in desperate need around the world, including in west Africa, where British aid workers are risking their lives helping to stop the spread of Ebola.

In the coming two years, we have the opportunity to reform the EU and fundamentally change Britain’s relationship with it. We have the opportunity to build a European Union that is more competitive, more flexible, more accountable to the people, where powers flow back to member states, not just away from them, and where freedom of movement is not an unqualified right. For the first time in 40 years, we have the opportunity to give the British people their say on Britain’s place in Europe with an in/out referendum. If I am Prime Minister, that is what I will do. Those who would refuse to give the British people their say should explain themselves to this House and to the country. I commend this Statement to the House”.

My Lords, that concludes the Statement.

17:03

[Baroness Morgan of Ely (Lab)]

My Lords, I am grateful to the noble Baroness the Leader for repeating the Statement made by the Prime Minister. The noble Baroness, Lady Royall, apologises for unfortunately being unable to respond on behalf of the Labour Party, as she has been called away on an emergency, but she would like to underline how seriously the Labour Party, and she personally, is committed to Europe.

I begin by condemning the appalling terrorist attack in Tunisia last week. Our thoughts go out to the family and friends of Sally Adey and all the victims who were involved in the attacks. This despicable act, once again, reinforces our determination to stand united across Europe against terrorism.

As the noble Baroness went way beyond the Council communiqué, I shall stray only slightly by noting that, since the last European Council, we have also had the Israeli elections. Although they do not appear to have been discussed at the Council, there should be one overriding priority in relation to Israel: restarting negotiations towards a two-state solution—a secure Israel alongside a viable Palestinian state. In the light of Prime Minister Netanyahu’s comments in the run-up to the election, have the Government sought reassurances about his commitment to a two-state solution? Does the noble Baroness agree that we must put pressure on both sides to restart negotiations? Nothing short of a meaningful peace process will do for this region of the world.

On Iran, we support the talks. We cannot allow an Iran with nuclear weapons; it is vital that we secure a successful outcome. We will support the EU in seeking to bring that about. Let me also echo the noble Baroness’s comments on Libya. We supported the military action that was taken and we now support the call for an immediate and unconditional ceasefire. Why does she believe that things have gone so badly wrong in Libya? Are people not entitled to conclude that the international community did not make adequate planning for the aftermath of the conflict? What does she believe can be done now?

We welcome the discussions taking place between Greece and Germany today. Can the noble Baroness tell us what she thinks the prospects are for a long-term agreement with Greece—an agreement that is in the interests of Greece, the eurozone and the UK?

Turning to the situation in Ukraine, it is vital that the international community stands united in ensuring that the Minsk agreement is implemented in full. We welcome the commitment that EU sanctions on Russia should be eased only in the event of the full implementation of that agreement. Given the situation on the ground and the signs of continuing Russian aggression, I ask the noble Baroness whether discussions took place during the summit about increasing further the pressure on Russia—specifically on so-called tier 3 sanctions on specific sectors.

It is clear that the security dimension of the EU is becoming more and more important. This demands common action, resolve and a clear commitment to our continuing place in the European Union—a commitment on which, of course, it is difficult for the party opposite to deliver. Earlier this month, General Sir Peter Wall warned that reaching common policies would be more difficult still if we were outside the EU. How do the Government answer this warning? Why should we take risks with the effectiveness of our soft power by pursuing a policy that risks divorce from our key allies?

Three years ago the Prime Minister walked out of a European Council announcing that he had vetoed a treaty—but it went ahead anyway. Last year he demonstrated his appalling failure at relationship building, winning support and delivering for Britain by losing a vote 26 to two, becoming the first ever British Prime Minister to lose a vote in the EU Council. Last autumn, after saying that there was no way he would pay back the £1.7 billion extra EU budget bill, the Prime Minister achieved a deal for the UK where we still have to pay, saving taxpayers not a single penny. And now the Prime Minister wants to return to Brussels following the election with a mandate to reform. So perhaps the noble Baroness can tell us: what are the non-negotiable reforms her party is seeking in Europe? Will she comment on the statement made last week by the President of the European Council, supposedly an ally of Britain, who described the Prime Minister’s position as “mission impossible”?

The truth is that the Government’s approach to Europe has created unnecessary economic uncertainty at the precise time when our economy needs stability based on growth and investment. I am afraid that the party opposite cannot be trusted on Europe. It cannot tell us what it is negotiating for and has no strategy to achieve change. Britain badly needs leadership on Europe that puts the national interest first. Britain needs a Labour Government.

[Baroness Stowell of Beeston]

My Lords, I am grateful to the noble Baroness, Lady Morgan of Ely, for standing in for the noble Baroness, Lady Royall, and for her various comments. They were quite wide-ranging and I will go through them in turn.

The noble Baroness asked me about Israel and whether we would put pressure on Prime Minister Netanyahu to continue towards a two-state solution. I certainly congratulate Mr Netanyahu on his election victory, and I agree with the noble Baroness that we must put pressure on both sides to ensure that talks get going on a two-state solution. Indeed, the Prime Minister will be talking to Mr Netanyahu this evening, and he will be very clear in that conversation about our support for such a solution; it is in the long-term interests not just of the Palestinian people but of the Israelis and the wider situation in the Middle East, and Britain’s position on that will not change.

The noble Baroness asked what was happening in Libya now. We should be clear that the Libyan people and Government did not want an occupying force—they did not want to be controlled remotely by others. They were given the opportunity to opt for a more unified future but sadly they have not yet taken it. We have done everything that we could to keep putting that option on the table, and we will continue to do so towards a national unity Government. We will very much be part of the UN-led effort to that end.

The situation in Greece remains worrying. On the one hand, there are the various creditor nations that want to see Greece fulfil its programme; on the other, there is a Greek Government who do not yet seem to have come up with reforms that give their creditors confidence. However, I am pleased that the negotiations on that continue. It should be noted that Chancellor Merkel is meeting Prime Minister Tsipras today.

The noble Baroness asked about sanctions relating to Ukraine. I make the point that it was very much the UK that led the way on ensuring that sanctions were put in place, remained in place and were extended until the Minsk agreement is implemented in full. If things were to deteriorate in Ukraine then yes, we should be prepared to consider more sanctions, should that be necessary.

Regarding the questions that the noble Baroness put to me regarding Europe and the future, I shall say a few simple things to her and to the House. The people of the UK, and indeed throughout Europe, do not want the status quo in Europe. They want Europe to be focused on jobs and prosperity, recognising that it is an organisation, or a partnership, that is made up of 28 individual member states. The Prime Minister will renegotiate our membership of the European Union; he is committed to doing that and has proved that it is possible to renegotiate some of the terms of Britain’s membership in Europe. We are absolutely committed to reform; we think that that is the right way forward, and it is in stark contrast to what the Opposition are offering, which is not even to acknowledge that Brussels has too much power. When the Prime Minister has successfully renegotiated the terms of Britain’s membership of Europe, he has committed to giving the people of this country a say in the membership of Europe with an in/out referendum, and we are the only party that is committed to doing so.

17:14

[Baroness Falkner of Margravine (LD)]

My Lords, I thank the Leader of the House for repeating that Statement, which sounded rather like the Conservative election manifesto—but then so did Labour’s response. I am sure the House will be pleased to hear that I will stick to the conclusions of the European Council rather than doing that.

The conclusions say at paragraph 13 that the high representative, in co-operation with member states, is going to prepare an action plan by June to counter Russia’s disinformation campaign. In light of the questions we had a little earlier today in the House, can the Leader of the House confirm that the BBC will assist the high representative in forming this communication team, as it clearly has great expertise in that regard? The other point is on paragraph 16 and the Commission’s initiative to submit a European agenda for migration. Will this be restricted perhaps to the Schengen area, or will it be a comprehensive EU-wide agenda, because the material facts and action possible will be very different in both regards?

Finally, the Leader of the House challenged us at the end of the Statement on the European referendum pledge—

[Noble Lords]

Order!

[Baroness Falkner of Margravine]

I am concluding. Could I just ask whether the Leader of the House has seen the report coming out today by Open Europe on the cost of exit?

[Baroness Stowell of Beeston]

On my noble friend’s first point about communication and Russia, I would not want to commit as to what role the BBC World Service might play. I point my noble friend to the fact that the good governance fund to which I referred in the Statement is designed to help those eastern nations which neighbour Russia and in the Balkans to improve their strategic communications. As to her point about the Open Europe report today, the key thing that I took away from it was that the best way forward is for a reformed European Union, and that is what David Cameron is committed to securing.

[Lord Hannay of Chiswick (CB)]

My Lords, I would like to pose two questions which were discussed at the European Council. The first relates to sanctions on Russia. I wonder if the Leader of the House can confirm that my reading of paragraph 10 of the conclusions, which states that,

“the duration of the restrictive measures against the Russian Federation, adopted on 31 July 2014 and enhanced on 8 September 2014, should be clearly linked to the complete implementation of the Minsk agreements, bearing in mind that this is only foreseen by 31 December 2015”,

in effect precludes any decision by the Council when the one-year duration comes up for discussion in July and September other than to continue the sanctions, unless by some chance Mr Putin has undergone an epiphany of an unlikely kind.

Secondly, the Council conclusions—here I refer to paragraph 16—refer to the need to strengthen Triton, the FRONTEX operation in the central Mediterranean. What contribution will Britain make to the strengthening of the FRONTEX operation in the central Mediterranean, given that on both humanitarian and migration grounds it is in our interest that that operation should work better?

[Baroness Stowell of Beeston]

On the first question the noble Lord asks about sanctions against Russia, I can be absolutely clear: those sanctions are linked to the full implementation of Minsk and remain in force until the end of this year. That is what was committed to at the Council. He may remember that the Prime Minister led the charge to ensure that these sanctions extended beyond the original deadline of July 2015 until the end of this year, and that is what was agreed at the Council last week. As for his question about the central Mediterranean, I am afraid I will have to come back to him on that.

[Lord Tomlinson (Lab)]

My Lords, is the noble Baroness familiar with the content of paragraph 13, which was referred to by the Liberal Democrats? It says:

“The European Council stressed the need to challenge Russia’s ongoing disinformation campaigns and invited the High Representative … to prepare by June an action plan”.

It goes on to say:

“The establishment of a communication team is a first step in this regard”.

It plans to get a programme “by June”, and before that it will establish a communication team. Does the Minister agree that that statement, to which her Government have subscribed, does not give the necessary degree of urgency to a problem which this House took much more seriously at Question Time than the Government seem to have done in their communiqué?

[Baroness Stowell of Beeston]

I do not agree with the noble Lord’s description of what the Council agreed. However, clearly, I will ensure that the views expressed during Oral Questions today on that matter are relayed back to the Foreign Office. Indeed, my noble friend Lady Anelay answered those questions, so I am sure she will already have done so.

[Lord Howell of Guildford (Con)]

My Lords, that was a commendable Statement. Has my noble friend noticed that a good deal of the General Secretariat conclusion document is taken up with thoughts about an energy union and energy policy at the EU level? Does she agree that it may be time to remind, or ask her colleagues to remind, the European Commission and the secretariat of the Council that energy competence does not lie totally with the European Union but is shared, with the bulk of it lying at the national level? Some things can be done better at EU level, such as interconnectors of gas and electricity to help the eastern European states, which are dependent on Russia. However, does she accept that a great deal can be done by nation states to improve their affordable energy supplies and to help with decarbonisation and reliability without the expensive and misguided policy advice of the Commission? Can she pass that message on?

[Baroness Stowell of Beeston]

I always pass on the messages my noble friend provides me with. Energy policy is quite an interesting example of where the Prime Minister has been influential in refocusing the European Union’s approach. We have been able to ensure that we have combined energy security, the costs of energy, and climate change in a more sensible way, so that the way in which we try to improve the internal market for energy in Europe makes sense to member states. Certainly, we have been able to reach agreement without any kind of inflexible targets on member states which mean that they are no longer able to decide their own energy mixes; as my noble friend suggests, that is a very important part of our independence.

[Lord Liddle (Lab)]

My Lords, does the noble Baroness agree that the Statement she has just read out exposes the contradiction and confusion at the heart of the Government’s European policy? In the first half, we had many good reasons why we need to stand together with our European partners—to deal with the situation in Iran, to stand up to Russia, to deal with chaos in north Africa and the problem of migration. All those are good reasons for working within Europe. In the second half, however, we had the Government’s policy of standing there with one hand on the exit door. How on earth can Britain lead in Europe if at the same time it is threatening to leave?

[Baroness Stowell of Beeston]

My Lords, the only person who is confused about European policy is the noble Lord. During our time in Government, we have been committed to ensuring the best deal for Britain as a member of the European Union. The Prime Minister has been successful in securing a reduction in the European budget. He has vetoed a treaty that was not in our interests and secured lots more reforms, that have been in the interests of the British people whereas the noble Lord’s own party leader talks only about Brussels not having enough power and about joining the single currency potentially at some point in future.

[Lord Davies of Stamford (Lab)]

My Lords—

[Lord Deben (Con)]

My Lords—

[Lord Farmer (Con)]

My Lords—

[Lord Lawson of Blaby (Con)]

My Lords—

[Lord Bourne of Aberystwyth (Con)]

My Lords, I think that it is this side and then back to the Opposition.

[Lord Lawson of Blaby]

My Lords, I quite agree with the Statement where it says that a disorderly Greek exit from the eurozone is in nobody’s interest. Clearly, it is an orderly exit that is desirable. However, I should like to revert to what my noble friend Lord Howell said about energy policy. This is very important. Is my noble friend the Leader of the House aware that over the past few years a great battle has been going on between the Commission, which wishes energy policy to be a European Union competence, and the United Kingdom, supported by Poland in particular, which says that energy policy and mix should be a national competence? So far that has prevailed. Can she give an undertaking that that is the policy of the Conservative Party as there has been a certain amount of party politics, however deplorable, in these exchanges so far? Can she give a firm undertaking that it is the policy of the Conservative Party that energy policy will remain a national and not a European Union competence?

[Baroness Stowell of Beeston]

Yes, I can give my noble friend that assurance. As I have said, what we have been able to secure because of the Prime Minister’s negotiating powers in Europe is that we retain responsibility for deciding which methods of energy we should use in our country.

[Lord Davies of Stamford]

My Lords, can the Leader of the House state quite clearly that the sanctions on Russia will not be eased until there is full implementation of the Minsk agreement? That agreement covers only Luhansk and Donetsk—it does not touch on Crimea. The implication is that, if the Russians observe their obligations under the Minsk agreement that relate to Luhansk and Donetsk provinces but remain in full occupation of Crimea, contrary to international law and the Budapest agreement, all economic sanctions will then be lifted. In practice, would not that amount to the western world acquiescing in the illegal occupation of Ukraine? Is that really the Government’s policy?

[Baroness Stowell of Beeston]

We remain absolutely clear that Russia’s annexation of Crimea was illegal and illegitimate, and we will certainly not change our view on that.

[Lord Deben]

My Lords, while my noble friend is taking messages back, will she take the message back that it is very often easier to get people to join with you if you occasionally say how good it is to be party to and a member of the European Union? Would it not be much more helpful, in the perfectly proper desire to have reform in the European Union, if we just remarked on the huge importance to Britain of being in the European Union and to the European Union that Britain is in it? If we were a bit more positive, we would have more chance of winning.

[Baroness Stowell of Beeston]

I am grateful for the message from my noble friend as well. I agree with him at the same time as I agree with my other noble friend, because this is precisely the point. We believe that there are really important, positive advantages to Britain being a member of the European Union. However, we do not believe that the status quo is where we should remain. We believe that some changes are necessary in Europe—that is what the Prime Minister is committed to renegotiating; then he is committed to putting that clear choice to the British people. But there are very important and positive reasons for us to remain a member of the European Union.

[Lord Anderson of Swansea (Lab)]

My Lords, will the good governance fund come out of the aid budget or the Foreign Office budget? The Statement says that,

“the Council welcomed the significant reduction in fighting and the … withdrawal of heavy weapons”.

Is this not part of Minsk II, and did not the Government and some allies—some European partners—try to ensure that the sanctions, particularly the tier 3 sanctions, would be renewed forthwith? But the majority of our partners thought it made sense to monitor the implementation of Minsk II, which, after all, was agreed on 12 February. Is this not a reasonable position?

[Baroness Stowell of Beeston]

In answer to the noble Lord’s first question, the good governance fund will come, initially at least, from the DfID budget. Secondly, I have made it clear that sanctions will remain in place until Minsk II is fully implemented. The importance of those sanctions, and of all members of Europe being united in keeping them in place until Minsk II is fully implemented, was agreed by all member states at the Council last week.

[Baroness Smith of Newnham (LD)]

My Lords, I am grateful to the Leader of the House for repeating the Statement—although I noticed that the noble Lord, Lord Lea, tried to intervene part of the way through. Perhaps that was because he thought that the wrong Statement had been passed to the Leader of the House and it was instead the Prime Minister’s draft notes for the leadership debates ahead of the general election. However, I assume that we are actually debating the Council conclusions and the responses to those. Paragraph 6 of the conclusions says:

“Member States and the Commission should step up efforts to communicate the benefits of the agreement”,

that is, the TTIP agreement,

“and to enhance dialogue with civil society”.

Does the Leader of the House agree that it is important to promote dialogue not just on TTIP but on many of the issues linked to that conclusion, including the European Semester, under which heading it, slightly bizarrely, falls? Should we not engage in further dialogue not only on that but also, more generally, on the benefits of British membership of the European Union, which all sides of your Lordships’ House strongly supported in a debate last November?

[Baroness Stowell of Beeston]

My noble friend is right to highlight the TTIP agreement—the Europe-US trade agreement. Once it is finally in place it will be worth a huge amount to the United Kingdom and all other members of the European Union. It is a good example of why membership of the European Union remains very important to us as a country.

[Lord Campbell-Savours (Lab)]

My Lords—

[Lord Higgins (Con)]

My Lords—

[Lord Stoddart of Swindon (Ind Lab)]

My Lords—

[Lord Bourne of Aberystwyth]

My Lords, we will hear from the Cross Benches and then from the Opposition.

[Noble Lords]

Oh!

[Lord Stoddart of Swindon]

Why do you think I am sitting over here?

I want to raise a quick question about Iran. We all agree that Iran must never be allowed to develop nuclear weapons, but I would remind the Leader of the House that Iran is a member of the nuclear non-proliferation treaty. Israel is not, yet it has nuclear weapons. What will the Government do to persuade Israel that it too should join the non-proliferation treaty so that proper discussions can take place between two equal parties?

[Baroness Stowell of Beeston]

The noble Lord raises an important question, but in the time available I will not be able to do it justice. Clearly we want to prevent the extension of nuclear arms wherever there may be a risk of that happening.

[Lord Campbell-Savours]

My Lords, in the event of an incident occurring somewhere in eastern Europe during the next six weeks, can we have an assurance that the Prime Minister would not unilaterally take action without the fullest possible consultation with the leader of the Opposition?

[Baroness Stowell of Beeston]

The Prime Minister has been clear that his first priority would be to seek a political solution and diplomatic route in response to any kind of situation and that any action taken by the United Kingdom would be as part of wider international auspices.

Counter-Terrorism and Security Act 2015 (Authority to Carry Scheme) Regulations 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

17:35

Moved by

[Lord Bates]

That the draft Regulations laid before the House on 2 March be approved.

Relevant document: 24th Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)]

My Lords, I shall speak to the Motions to approve the following statutory instruments: the Counter-Terrorism and Security Act 2015 (Authority to Carry Scheme) Regulations 2015; the Authority to Carry Scheme (Civil Penalties) Regulations 2015; the Passenger, Crew and Service Information (Civil Penalties) Regulations 2015; the Aviation Security Act 1982 (Civil Penalties) Regulations 2015; the Terrorism Act 2000 (Code of Practice for Examining Officers and Review Officers) Order 2015; the Counter-Terrorism and Security Act 2015 (Code of Practice for Officers exercising functions under Schedule 1) Regulations 2015; and the Civil Procedure (Amendment) Rules 2015.

This secondary legislation has been brought forward to implement measures in the Counter-Terrorism and Security Act 2015. These measures have been debated in this House very recently, as the primary legislation was enacted only on 12 February. During Parliament’s consideration of that legislation, there was widespread recognition of the threat from terrorism and broad support for the measures that were in the Bill. These instruments bring to life some of those important provisions. In passing that legislation in February, the House accepted the need for these new powers.

I should inform the House that the Joint Committee on Statutory Instruments has considered all seven of the instruments that we are debating today. It has drawn the special attention of both Houses of Parliament to the Authority to Carry Scheme (Civil Penalties) Regulations 2015 and to the Civil Procedure (Amendment) Rules 2015. The committee cleared the other five instruments. The Lords Secondary Legislation Scrutiny Committee has also considered all seven instruments and has cleared them without drawing them to the special attention of the House.

It might help the House in its consideration of these statutory instruments if I briefly outline what the Government seek to achieve by them, and why we have brought them forward at this time.

The Counter-Terrorism and Security Act 2015 (Authority to Carry Scheme) Regulations 2015 bring into force the authority to carry scheme 2015. These regulations are provided for in Section 23 of the Counter-Terrorism and Security Act 2015. The purpose of the scheme is to prevent or disrupt travel to and from the UK by individuals who pose a terrorism-related or other threat to the UK. It also mitigates the threat of terrorist attack against aircraft and, should the threat change, ships and trains expected to arrive in or leave the UK.

International aviation remains a target for terrorists. There have been attempts to launch attacks inside planes using concealed explosive devices and terrorist groups with the intent and capability to undertake such attacks continue to operate. Authority to carry is now an important element of our counterterrorism strategy. The new 2015 authority to carry scheme allows us to respond to the changing threat and prevent individuals who may pose a terrorism-related or other threat from boarding flights from, as well as to, the UK. In order to remain responsive to changes in the threat, it is necessary to include international rail and maritime. The scheme applies to all passengers and crew travelling or expected to travel to or from the UK. If a carrier does not comply with any aspect of the scheme, particularly if a carrier were to carry an individual it had been refused authority to carry, it will be liable to a financial penalty.

The Authority to Carry Scheme (Civil Penalties) Regulations 2015 establish a penalty regime for breach of requirements of the authority to carry scheme 2015. A carrier may be liable to a penalty for breach of a requirement: to seek authority to carry a person; to provide specified information by a specified time; to provide information in a specified manner and form; to be able to receive communications in a specified manner and form; or a requirement not to carry a person when authority to carry has been refused. The scheme specifies that it is the requirements set out in detailed written notices issued to carriers under the Immigration Act 1971 or the Immigration, Asylum and Nationality Act 2006 that must be met under the scheme, rather than those requirements being specified in detail in the scheme itself.

I will now move on to the Passenger, Crew and Service Information (Civil Penalties) Regulations 2015. These establish civil sanctions that may be imposed on carriers who fail to comply with a requirement to provide information under the Immigration Act 1971 or the Immigration, Asylum and Nationality Act 2006. These will complement existing criminal offences. The regulations allow the Secretary of State to impose a civil penalty not exceeding £10,000 for each breach, but a carrier may not be required to pay a penalty if they have a reasonable excuse or have otherwise been penalised for the same breach. The Government’s clear preference is that carriers are able to comply with these requirements. We will continue to work with carriers to ensure that this happens. However, when there is a failure, particularly if it is wilful or negligent, it is important that appropriate sanctions exist to deter repeat behaviour.

The draft Aviation Security Act 1982 (Civil Penalties) Regulations create a civil penalty scheme for addressing non-compliance with certain security directions or information requests made by the Secretary of State under the Aviation and Security Act 1982 in relation to inbound flights. The Secretary of State would have the power to impose a penalty up to a maximum of £50,000. Specifically, penalties could be issued where, in respect of an inbound flight to the UK, a carrier has failed to comply either with a request for information or a direction requiring that certain security measures are applied. The threat to aviation from terrorism remains serious. These regulations help the Government to enforce their powers to specify certain security measures for flights operating to the UK where necessary.

The Terrorism Act 2000 (Code of Practice for Examining Officers and Review Officers) Order 2015 gives effect to a revised code of practice for examining and review officers who exercise powers under Schedule 7 to the Terrorism Act 2000 as amended by the Counter-Terrorism and Security Act 2015.

I now turn to the regulations which bring into operation the code of practice in relation to the exercise of powers under Schedule 1 to the Counter-Terrorism and Security Act 2015—the power to seize travel documents. These powers are exercisable at the Northern Irish border area and at ports throughout the UK. They allow for the seizure and temporary retention of travel documents when there is a reasonable suspicion that the person intends to travel to engage in terrorism-related activity outside the UK. Officers exercising the power are required to follow the code, making the code an important safeguard on the use of this power. The code sets out: the process for the training that must be undertaken by officers exercising the power; the procedure for designating Border Force officers to exercise the power under police direction; how the functions under Schedule 1 must be exercised; the information that must be provided to a person subject to the power, and how and when that information should be provided; and the process of reviewing a decision to retain travel documents.

The last of the seven instruments which your Lordships are considering today is the Civil Procedure (Amendment) Rules 2015. The Counter-Terrorism and Security Act 2015 introduced temporary exclusion orders, which enable the Secretary of State to disrupt and control the return to the UK of British citizens suspected of engaging in terrorism-related activity abroad. The temporary exclusion order also enables the Secretary of State to impose certain requirements on an individual on his or her return to the UK. There are two stages of judicial oversight of this measure: a permission stage and an in-country statutory review. This instrument introduces rules of court to govern these proceedings in the High Court and appeals to the Court of Appeal in England and Wales.

I have already mentioned that the Joint Committee on Statutory Instruments reported on this instrument. The Government have acknowledged the issues raised by the committee and has committed to updating the rules by an amending instrument as soon as practicable. That amending instrument will be made by the Civil Procedure Rule Committee, and the process for doing so is already under way. However, as the Government made clear in their response to the Joint Committee, we do not consider that the drafting errors acknowledged render the rules invalid or inoperable. These court rules are essential to ensure that we can operate appropriate safeguards for the temporary exclusion order powers. Accordingly, I hope that your Lordships will support this instrument.

These instruments are needed to implement measures in, or consequential to, the Counter-Terrorism and Security Act 2015. The four border security instruments are required to prevent or disrupt the entry to, return to or departure from the UK of individuals who pose a terrorism-related threat; to mitigate the threat of an attack on an aircraft operating into the UK; or, in the circumstances of children travelling to Syria, to prevent and disrupt travel by individuals who are putting themselves at risk. The Act made important clarifications to the use of the Schedule 7 power, and the revised code of practice for officers exercising that power reflects these changes. The temporary passport seizure code of practice is an important safeguard on the use of that power. The temporary exclusion order court rules are required to implement the judicial oversight of this power in England and Wales. I commend these instruments to the House. I beg to move.

17:45

[Lord Marlesford (Con)]

My Lords, these instruments form a very important part of the defence of our borders and of the realm. I think I am right in saying that they provide for the reintroduction of the monitoring of the departure of persons from the United Kingdom. I want to ask my noble friend—in as far as the instruments cover the departure of persons from the United Kingdom—about the method of administering the scrutiny of travel documents of persons proposing to or attempting to depart. Is that scrutiny made by the organisation, company or airline by which the persons intends to travel, or by an immigration officer in the same way as is now being done to people arriving? In other words, who will scrutinise passports? Under these instruments, will it be done by the airline or whatever? If it is not being done by an immigration official scrutinising the travel documents using the latest technology, will any warning that an immigration officer would have who scrutinises and examines a passport or other travel document of somebody seeking to arrive in this country—a system that has advanced a great deal in recent years—be available to anyone who is asked to scrutinise the document or passport of someone seeking to depart from the United Kingdom in the same way? In other words, will a non-government official to whom the task is delegated, such as the airline, the railway people or the boat people, have that same information or be able to have it under these instruments?

[Baroness Humphreys (LD)]

My Lords, I merely seek clarification on one aspect of the 2015 Counter-Terrorism and Security Act’s code of practice for officers exercising functions under Schedule 1 of the Act, which accompanies these instruments. This code of practice is referred to in the 28th report of the Secondary Legislation Scrutiny Committee. The final sentence of the information paragraph reads:

“In its consideration of the Code the Committee was concerned that directions about when officers may search a member of the opposite sex, particularly a child, were not as clear and consistent as they need to be”.

I am most grateful to my noble friend the Minister for his reply to my written query regarding this matter, but I remain concerned that the clarification I sought has not quite been met.

The committee and I still have concerns relating to the powers that the code of practice confers on officers who need to search a child—defined as anybody under 18—in order to seize or retain their travel documents. The code is exemplary in its guidance to police constables and designated border control officers, highlighting the care which must be taken when exercising their powers and the need to be aware of the necessity of safeguarding a child’s safety and welfare, as well as urging officers to be sensitive to the intimidation that children travelling alone can feel and the possibility that they may be vulnerable to exploitation by an adult with whom they are travelling.

I draw the attention of the House to paragraph 31, which outlines the scope of the power as it relates to the searching of children who have been removed from an adult. In particular, it gives guidance that two officers of the same sex as the child should, where reasonably practicable, be present during the search. It was the insertion of the three words, “where reasonably practicable”, which most concerned the committee and which led to its call for clarity. It seemed to the committee that the words,

“two officers of the same sex … where reasonably practicable”,

could give rise to any number of permissible permutations. I would be grateful if the Minister would clarify which of these would be justifiable and acceptable.

If two officers of the same sex as the child are not available, would two officers, one of the same sex and one of the opposite sex, be acceptable? If they are not available, would two officers of the opposite sex to the child be acceptable? If two officers are not available, would just one officer of the same sex as the child be acceptable? If they are not available, would just one officer of the opposite sex to the child be acceptable? At this stage, I am at a loss to understand why the last alternative is included. Are we to take from this that our ports are so understaffed that there are likely to be times when only one officer of the opposite sex will be available to search a child?

The code has already referred to the intimidation that a child travelling alone can experience. Does the Minister believe that a child, removed from an adult, would experience a similar feeling if searched by one or two officers of the opposite sex because they were the only reasonably practicable alternatives?

I would also be grateful if the Minister would add some detail on the advice given to officers governing the circumstances in which a child may be searched in the absence of the responsible adult with whom they are travelling, and explain how the child is to be removed from the adult and where the search will take place. If the child is travelling with an adult who is deemed to be exerting influence or pressure, how is an officer to defend him or herself against accusations of inappropriate behaviour if the child is influenced to make accusations against the officer and there are no witnesses to the search?

However, these children are unlikely to make a complaint about the manner in which they are searched, by whom they are searched and where they are searched. They are intent on leaving this country and, to all intents and purposes, this renders them powerless to control their situation. I would want firm guidelines to govern the way in which my grandchildren could be removed from my presence and searched at a UK port. Those firm, unambiguous guidelines should be applicable to all children.

The Secondary Legislation Scrutiny Committee called for clarity in this aspect of the code of practice. I hope that the Minister will be able to provide the House with that clarity and describe, definitively, the circumstances under which children will be searched.

[Baroness Hamwee (LD)]

My Lords, I am grateful to the Minister for explaining this raft of instruments. I have a few comments and queries.

As my first query is on an order which is not before us but which is relevant, I do not expect an answer, but I want to use this opportunity to explain a point which I raised with the Secondary Legislation Scrutiny Committee, of which I am a member. The authority to carry scheme sets out to whom it applies. As one would expect, it applies to those who are subject to a temporary exclusion order. Statutory instrument 438—I apologise to the House that I did not make a note of its name—provides that, for the purposes of the service of the order, it can be served on an individual’s representative. I queried who a representative might be for this purpose. The advisers to the Secondary Legislation Scrutiny Committee took this up with the Home Office. I was concerned that, in the normal run of things, one might think that a representative was, for instance, a solicitor, but a solicitor who was not able to pass on the information to his client that an order had been served would find himself in a very difficult state and would probably disclaim the client.

An answer has come back and I want to get it on the record. It states:

“The Home Office agrees that … For adults … a representative must be a legal representative such as a solicitor or legal executive who acts on behalf of the person. The Home Office agrees that the Secretary of State cannot deem someone to be a representative in the absence of a clear relationship such as a … contractual relationship”.

As I have said, any lawyer thinking ahead a bit in that situation would disclaim that relationship. The Home Office also agreed that,

“for someone under 18 the term would cover the person’s parent or guardian”,

and that they could be a representative for this purpose. As I said, I am not expecting the Minister to comment on that.

Paragraph 22 of the scheme states that a person who,

“is refused authority to carry will be informed of that”,

in a notice by the carrier. It occurred to me to ask whether there is any penalty on the carrier who fails to pass on information—not information that they have been denied boarding, because they will have worked that out, but information of the contact telephone and email address that the individual needs to make further inquiries—and whether there should be any liability for compensation on a carrier who fails to pass on that information.

The Explanatory Memorandum to the authority to carry scheme regulations refers to,

“the need for an effective redress process in the case of mistaken identity. Administrative arrangements are in place to ensure that an individual is not mistakenly identified again”.

The second occasion would be pretty awful, but the first occasion of mistaken identity is pretty bad, too. I do not know whether the Minister has any comment on that.

With regard to the penalties for breach of the scheme, again I quote from the relevant Explanatory Memorandum. The consultees felt that the maximum £50,000 fine,

“was excessive and disproportionate, especially when compared to the possible fines imposed by other countries”.

Does the Minister have any information as to that comparison? There is also a feeling that the maximum penalty is unreasonably high, and I understand that there will be guidance on how the penalties will be applied. As this goes to the amount that will actually be levied in different circumstances, can the Minister tell the House when that guidance will be issued?

More generally, there has been a good deal of comment that the current authority to carry scheme is actually quite effective. What extensions from the current scheme will these various regulations and orders bring in?

18:00

The Explanatory Memorandum to the Schedule 1 code of practice regulations talks of engagement with “key stakeholders”. Did those include NGOs, particularly civil liberties NGOs, which obviously have an interest in this issue?

We debated the primary legislation pretty fully, so I do not want to spend too much time on this, but it perhaps builds a little on the points my noble friend Lady Humphreys made. There is reference in the code of practice to officers picking up,

“indicators of abuse or neglect”.

That is beyond what the code is aimed at, but it is very welcome. Reading that, it occurred to me that, although there is reference to abuse and neglect, there is no reference to trafficking. Again, I do not expect a reply tonight, but given the work that the Home Office and Parliament have been doing on slavery and trafficking, I wonder whether there is scope for a consolidated code or consolidated non-statutory guidance which brings together all the indicators that officers who may find themselves dealing with children in this situation might be looking out for in order to be able to identify children who are at risk. I appreciate that this is beyond the scope of these various instruments, but it might be very useful work to think about. This is entirely off the top of my head and I do not want to suggest unnecessary work to either the Home Office or UKBA.

[Baroness Smith of Basildon (Lab)]

My Lords, this is a larger number of instruments but a shorter debate than usual. We support the regulations and order, but it would be helpful if the noble Lord were able to answer a few questions. To take the last one first, paragraph 8 of the Explanatory Memorandum for the Civil Procedure (Amendment) Rules, on “Consultation outcome”, says:

“The Lord Chief Justice was consulted … Due to the urgency … there has been no public consultation”.

But that is not the outcome; it just says that he was consulted, without saying what the response was. If there was an outcome to the consultation, it would be helpful to know what it was, otherwise there does not seem much point in calling it an “outcome”.

The points made by the noble Baroness, Lady Humphreys, on the Counter-Terrorism and Security Act regulations are interesting and valid ones to look at. I would also have thought that in many cases the officers concerned would not want, in their own interests, to be searching a child, whether of the same sex or of the opposite sex, on their own. If I was their trade union representative, I would probably advise them not to. There are dangers to the child, but there are also dangers to the officers concerned. That is something that perhaps should be examined and considered. Our staff do a very difficult job in difficult circumstances and we would not want them to be in a position where they could face accusations; nor would we want a child to feel uncomfortable and even more frightened than they would already be in such cases. I hope the noble Lord is able to give some reassurance and clarification on those points.

The other point I would like to make concerns the risks identified in the impact assessment. It says:

“Possible risks will be mitigated by monitoring and reviewing the use of the powers”.

The powers will be used by Border Force officers and the police but they are the very people who will also be monitoring the use of the powers, or they will at least be collecting the data to monitor the use of the powers. This has been quite a sensitive issue and has had a lot of discussion. Clearly, I am confident that the Government do not want mistakes; they want to get this right. Can the Minister say anything about how the powers will be monitored? Data will be provided by the officers implementing this provision but the monitoring of it will be quite important so that we can assess how effective it is and how appropriately it is being used, to ensure that it is not used for anything other than the purposes for which it is intended.

The authority to carry scheme regulations and the explanatory memorandums—I am sure that is not the correct plural—all referred to the fact that 28 people or organisations responded to the consultations. Was there one consultation or will 28 bodies respond? Was there one, overarching consultation or separate ones? I think it will be helpful to look at the ones relating to the authority to carry schemes together. It was quite clear that the majority of carriers welcomed the extension of the scope and that was widely supported, although a majority were also concerned that the maximum fine of £50,000 was excessive. I have seen the Government’s response to that. What is important is when that will be implemented. Looking at the Explanatory Note, I am not 100% clear about “best endeavours”; one of the impact assessments also refers to the Secretary of State taking into account how co-operative someone has been. It would be helpful to have a little more guidance on the circumstances in which the Government would pursue action that could lead to a maximum fine. I know that the maximum fine is used only rarely and is intended to be a deterrent but I would like to know the circumstances that would mistake against prosecution in the first place and, secondly, the level of the fine.

The guidance for these regulations has not been published. A lot will depend on what exactly is in the guidance. Is the Minister able to say when we will see it, what the process will be for scrutinising it, whether there will be consultation with the carriers themselves and when it will be brought to your Lordships’ House?

I also picked up the strange issue about mistaken identity. The Explanatory Memorandum says:

“Administrative arrangements are in place to ensure that an individual is not mistakenly identified again”.

Surely we should have far more robust processes in place if we want to have confidence in the procedure. If mistaken identity occurs once, it surely should not happen to the same individual a second time, or perhaps I am misunderstanding something here. I would like to know what administrative arrangements are in place to ensure that we do not have a second mistaken identity. Really, what are we doing to ensure that we do not have the first mistaken identity? The issue of identification is crucial to providing confidence in this. I am slightly worried.

I understand that there will be some discussions with the industry about the guidance. I would feel happier to see a willingness to make practical changes in how things work. Quite often we can look at something in theory and know where we want to get to, but the industry may have suggestions on how that works practically rather than just in theory. I would like an assurance from the Minister that the Government will consider changes if the industry comes up with ways in which to make this scheme more effective without undermining the basis for it in the first place.

I have similar points to make on the Passenger, Crew and Service Information (Civil Penalties) Regulations, as similar things have arisen. The Explanatory Memorandum states that:

“The Government’s position however remains that carriers must provide accurate, complete and timely information. Not only is this a legal requirement but they also have a responsibility to ensure adequate steps are taken to protect against threats to their assets, passengers and crew”—

and indeed to the country. If a mistake has occurred, what evidence will the Government require from carriers to ensure that they have used best endeavours? Is there some way of monitoring the processes, procedures and protocols that they have in place? That will be absolutely crucial to ensuring that it works in practice.

On the fifth and sixth statutory instruments, the Minister knows that we have supported the power for passport retention and think that it is appropriate. We still take the view that there should be a power of appeal; that is extremely important. Again, the detail of the code of practice will be crucial and we look forward to more information on that. Can the Minister make clear—just to put it on the record—what changes have been made to the code of practice and any guidance as a result of the feedback on the issues? That feedback is mentioned in the Explanatory Memorandum on these regulations and includes,

“specifying the availability of legal aid and clarifying whether family members may access temporary support arrangements”.

Those issues were raised in previous debates that we have had, and by the Joint Committee on Human Rights. If the Minister can give further clarification on that, that would be very helpful.

That is the extent of my questions to the Minister. If he is unable to address those today, he can write to me, which would be extremely helpful.

[Lord Bates]

My Lords, I am grateful for the contributions that have been made in the debate. I am deeply conscious that there are a large number of orders and regulations before your Lordships this afternoon. The detail of the questioning is very welcome and important—we are talking about very serious issues—and I guess that it will not be possible for me to answer every particular question today. However, I will certainly undertake to write, and copy it to all noble Lords who have been involved in this debate so far.

I will make one general point about the authority to carry scheme and how it operates—this covers the point that was raised about identity and the possibility of mistakes and, in many ways, touches on the point made by my noble friend Lord Marlesford. This is information that the airlines are currently required to send to the National Border Targeting Centre based in Manchester. The information comes in a particular format: it has the passport as one identifier and the date of birth as another identifier, along with the name. It is hoped that through triangulating those three bits of important information the possibility of a mistake can be eliminated.

My noble friend Lady Hamwee asked what changes we are making as a result of this order. Effectively, the changes that we are making in relation to that area are that, in the past, it was for inbound flights. The information on people coming into the UK had to be submitted in advance, cleared and checked against the no-fly list. We are now saying that, where inbound journeys are taking place through certain ports or rail terminals and where UK citizens are travelling abroad for obvious reasons—for instance, if there are flights from London to Istanbul or via Barcelona with an end point in Istanbul—that would raise certain questions. Therefore, we are now asking for that additional information to be provided.

18:14

The noble Lord, Lord Marlesford, raised a point on which he and I have an ongoing discussion: that is, passport checks. Specific passport checks are not covered in these regulations—they were covered in the Immigration Act 2014. However, I take his general point about the need to have strong checks on all people who come into this country and leave it—and those exit checks will be in place, thanks to the Immigration Act 2014, by the end of this Parliament, or certainly by next month.

Concern was raised by several noble Lords, but particularly by my noble friend Lady Humphreys, on the issue of children. I am grateful to my noble friend for having raised this on a number of occasions. She and I have had correspondence on it. Some of that correspondence might be helpful to the House—I am thinking in particular of the letter that I sent her on 18 March—so, with her permission, I would be willing to share that with other noble Lords. The issue of children is critically important. My noble friend rightly highlighted what will happen under paragraph 31 of the code of practice, but there is also paragraph 27, which states:

“Special care must be taken when considering exercising the power where it is evident that the person is a child”.

Paragraph 28 states:

“Border Force has a duty … under Section 55 … to safeguard and promote the welfare of … children”.

Paragraph 29 states:

“Therefore, when dealing with cases involving children (whether in family groups or unaccompanied), police constables, or designated Border Force officers, must be aware of the necessity to safeguard a child’s safety and welfare”.

Paragraph 31 then makes the point to which my noble friend referred. Essentially, we are trying to avoid saying in the code that the search cannot happen in any circumstances: that is, if two officers of the same sex as the child are not available to undertake it. That is for particular reasons. There may be circumstances in which there is a real fear that the child may be at risk, and we would not want that to be an excuse for not being able to act in those extreme circumstances. However, we set out in paragraph 31.ii that,

“the reasons for taking that decision must be recorded in writing … two officers of the same sex as the child should, where reasonably practicable, be present during the search”,

for all the reasons that noble Lords have mentioned. In particular, the noble Baroness, Lady Smith, said that it would be in officers’ self-interest to make sure that another officer was there.

I know that I cannot go perhaps as far as my noble friend Lady Humphreys would want on this occasion, but I am happy to continue the dialogue. I am sure that it will continue into the time of the next Government, so that when we get more feedback on how the scheme is operating and where there have been specific issues, we can ensure that searches of vulnerable children are done in an appropriate way, wherever possible by two officers of the same sex.

My noble friend Lady Hamwee asked about a redress process for individuals who may be mistaken for individuals on the no-fly list. Unfortunately, it is not possible to identify such individuals until the misidentification happens. When it does, action is taken to make sure that it does not happen again. If we have the right information, particularly where we have a passport number, a date of birth and a name, those instances should be extraordinarily rare.

My noble friend also asked about the representative of a temporary exclusion order subject. The temporary exclusion notice regulations are not before the House today and are subject to correspondence between the chair of the Lords Secondary Legislation Scrutiny Committee and my honourable friend James Brokenshire in the other place. I was struggling for the correct terminology for the other place, but I think we can now refer to it as the House of Commons, thanks to the liberation given to us by the Procedure Committee. I am grateful to her for highlighting this point during today’s debate. In the same context, my noble friend asked about the communications consultation with the Lord Chief Justice. I will write to her on that point.

The noble Baroness, Lady Smith, asked about the consultation exercise and whether there was one consultation or 28. In fact, it was one consultation; 28 carriers responded to it.

[Baroness Smith of Basildon]

I asked whether there was one consultation on all the statutory instruments grouped together, or one consultation on each statutory instrument.

[Lord Bates]

There was one consultation on all the statutory instruments together. If that is not correct in some way, I will set that out in writing.

The intention is to work with carriers, not to fine them £50,000. The UK Border Force already works with carriers, and this will continue. Fifty thousand pounds is for the worst-case breaches. Of course, carrying somebody who we consider to be a sufficient threat to be on a no-fly list is not only a foolish thing to do but a very dangerous thing to do, not only for the airline but for the other passengers and the crew of that airline. Therefore it is right that the penalty is strong, but we hope that it will not be necessary.

I think that I have touched on most of the points raised. The noble Baroness asked about monitoring the use of the power and whether the code explains how to use the power. The code includes a section on monitoring the use of the power, which confirms that the police must consider whether there is any evidence that the power is being used on the basis of stereotyped images or inappropriate generalisations. It must review whether the records reveal any trends or patterns that give cause for concern, and, if they do, take appropriate action to address this. Monitoring records should, where possible, include age, disability, gender, race, religion and beliefs, and sexuality. It also confirms that the power is subject to review by the Independent Reviewer of Terrorism Legislation.

In what circumstances would a maximum fine be given? I have covered that already.

On engagement with NGOs, we undertook a six-week public consultation to raise awareness of the consultation. We notified key stakeholders, including law enforcement, community and regulatory organisations, that consultation had begun, and invited their views. The code focuses on disrupting travel for terrorist-related purposes and on wider safeguarding children issues that are routinely considered by the police.

My noble friend Lady Humphreys asked whether civil liberties organisations in particular had been consulted. I think that the answer is that the stakeholders that we consult include civil liberties organisations; I would expect that to be the case. If that is not the correct answer, of course I will write to her.

With the answers that I have given thus far and the assurances that I have given on continuing the dialogue, particularly in relation to children, I commend the statutory instrument to the House.

Motion agreed.

Authority to Carry Scheme (Civil Penalties) Regulations 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

18:24

Moved by

[Lord Bates]

That the draft regulations laid before the House on 2 March be approved.

Relevant document: 25th Report from the Joint Committee on Statutory Instruments.

Motion agreed.

Passenger, Crew and Service Information (Civil Penalties) Regulations 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

18:24

Moved by

[Lord Bates]

That the draft regulations laid before the House on 2 March be approved.

Relevant document: 24th Report from the Joint Committee on Statutory Instruments.

Motion agreed.

Aviation Security Act 1982 (Civil Penalties) Regulations 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

18:24

Moved by

[Lord Bates]

That the draft regulations laid before the House on 2 March be approved.

Relevant document: 24th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Terrorism Act 2000 (Code of Practice for Examining Officers and Review Officers) Order 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

18:25

Moved by

[Lord Bates]

That the draft order laid before the House on 27 February be approved.

Relevant document: 24th Report from the Joint Committee on Statutory Instruments.

Motion agreed.

Counter-Terrorism and Security Act 2015 (Code of Practice for Officers exercising functions under Schedule 1) Regulations 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

18:25

Moved by

[Lord Bates]

That the draft regulations laid before the House on 12 February be approved.

Relevant document: 24th Report from the Joint Committee on Statutory Instruments.

Motion agreed.

Civil Procedure (Amendment) Rules 2015

Monday 23rd March 2015 Lords Chamber

Motion to Approve

18:25

Moved by

[Lord Bates]

That the rules laid before the House on 27 February be approved.

Relevant document: 26th Report from the Joint Committee on Statutory Instruments (Special attention drawn to the instrument).

Motion agreed.

Gaming Machine (Circumstances of Use) (Amendment) Regulations 2015

Monday 23rd March 2015 Lords Chamber

Motion to Regret

18:26

Moved by

[Lord Collins of Highbury]

That this House regrets that the Gaming Machine (Circumstances of Use) (Amendment) Regulations 2015 do not appropriately address the problems of gambling addiction, and offer no significant protections for vulnerable people from getting into debt. (SI 2015/121)

Relevant document: 27th Report from the Secondary Legislation Scrutiny Committee.

[Lord Collins of Highbury (Lab)]

My Lords, I start by recognising that this is not the first debate that we have had recently on this issue. We had a Question for Short Debate tabled by the noble Lord, Lord Clement-Jones, which I participated in, and we have had a number of Oral Questions on fixed-odds betting terminals. Those reflect not only the concern in this House on this issue but also the concern in our communities.

I start my contribution by making no apology for repeating some of the arguments that I have made in those debates. After 15 years of fixed-odd betting terminals on our high streets at £100 a spin, we are still no nearer to a conclusive answer as to whether they are safe to operate in local betting shops. The response of the Government has been to come up with a £50 cap without any evidence that it would protect vulnerable people from getting into debt or developing a gambling addiction that ruins their lives. Although the Prime Minister promised to get to grips with this issue, it is now a full 12 months since the Government announced that they would do this—in fact, six months later than was foreshadowed in their announcements. Your Lordships’ Secondary Legislation Scrutiny Committee questioned whether the Government could have brought forward the regulations more speedily, especially as, from the words of the Prime Minister, they appeared to accept the need to act.

Irrespective of headline-seeking comments, the difficulty with the proposal is that the Government still cannot explain how they came to decide that £50 will deal with problem gambling or limit the hardship that such high stakes may cause. In these circumstances, many will see this as a bit of a sham rather than firm action. I suspect that in many people’s minds, if there is one thing worse than inaction, it is the pretence of action. The limit relies on the betting industry to apply it. Also customers will be able to bet above £50 on a single play with permission from betting shop staff. The Campaign for Fairer Gambling also claims that its sources in the bookmaking industry have informed it that at least one of the corporate operators is already advising staff to encourage the use of debit cards now that players are being forced by the Government to remote load their money on to the machines from the counter if they wish to access higher stakes. Not only that, but guidance is also being issued to encourage playing two machines at the same time, which would allow players to gamble £100 a spin, circumventing the new law.

Many questions are being asked about the Government’s decisions by the organisations concerned about the proliferation of FOBT machines—a term that I will use throughout the debate—and their impact on problem gambling. Some, such as the Local Government Association and councils from across the political spectrum, are calling for stricter controls. Concerns are also being expressed from within the gambling industry itself. Simon Thomas, the owner of the Hippodrome Casino, stated that betting shops,

“have fast, high stakes machines with little supervision”,

something that I raised in an Oral Question to the Government earlier this year.

18:34

Many of these shops are in areas where there are already clusters of betting shops and the driving force for locating them in the same place is the profits that are to be made from having more and more FOBT machines. The betting industry has argued quite strongly that jobs are at risk if it is not allowed FOBTs. If that is the case, why has the number of employees in betting shops been decreasing while net takings from FOBTs have increased?

Local authorities have a statutory duty to uphold the licensing objectives, which are to ensure that gambling is fair and open, is not associated with crime and does not harm the young or vulnerable. As we have heard in previous debates, 93 councils believe that FOBTs are in breach of all those objectives so have joined the London Borough of Newham in calling for the maximum stake to be capped at £2 a spin. During the passage of the 2005 Act, my right honourable friend Tessa Jowell expressed concern about the gambling industry becoming “overly dependent” on growth driven by these machines and about their role in problem gambling. On the decision to have a limit of four machines in each betting shop, she said,

“there was no certainty that these machines would remain, because we were absolutely clear that we could not know at that stage what their effect was likely to be”.

It is in response to that cap that bookmakers have opened up multiple premises in clusters to facilitate more machines, as a fixed-margin product guarantees bookmakers a return.

Research by the Responsible Gambling Trust, an organisation about which we will no doubt hear a lot more, has identified a link between social deprivation and the use of machines. In England, two-fifths of all bets were placed in venues in the most deprived areas. However, this reflected the distribution of bookies, with 38% of the branches in the most deprived areas of the country. Those with lower incomes were more likely to start to play machines in a bookmaker’s than those with higher incomes. Higher stakes impaired decision-making quality—the impact was stronger at £20 stakes—but the quality of decision-making was also compromised at £2 stakes. Stake size influences gambling behaviour when combined with other factors such as speed of play, volatility and social interaction.

The Secretary of State for Communities and Local Government has told us that this Government are committed to localism and greater local decision-making in planning. If that is the case, would the Minister care to explain why this does not apply to betting shops? The position of this side of the House is to require betting companies to seek planning permission if they want to open a premise that is not a former betting shop. Local authorities would in turn have the ability to ration and manage the number and location of these shops in their area. Labour would also modify the Gambling Act to give councils powers to review the betting shop licences in their area and retrospectively reduce the number of FOBTs in existing betting shops—for example, from four through to zero—in response to local concerns.

Critics of FOBTs have argued that what makes these machines addictive is the immersive nature of the games, which lulls people into losing more money than they intend, with the roulette wheel spinning so quickly and huge losses accumulated rapidly.

While I support the measures in the industry’s code for responsible gambling, such as increasing the time between plays, pop-ups that warn players how long they have played, gambled or lost and requirements to go to the cash desk to limit the amount they can insert into machines, none of them will be effective without sufficient trained staff—staff who are required to be in casinos but not in betting shops. Betting shop staff are on the front line when it comes to consumer protection, as these regulations are even implying, but single staffing is commonplace in betting shops. Does the Minister agree that staff would be in a better position to intervene and help gamblers if they were not made to work alone? Labour will expect operators with FOBTs to have at least two members of staff present at all times. If they fail to comply with this, we will make it a licensing condition.

One of the key issues cited for inaction on FOBTs is lack of evidence. The Government have continually referred to research commissioned by the Responsible Gambling Trust as a justification for their approach. However, the evaluation of RGT research by Professor Linda Hancock of Deakin University in Australia and Shannon Hanrahan, CEO of the Outcomes Group, highlighted the serious flaws in both its methodology and approach. It has been circulated, I suspect, to many noble Lords via the Campaign for Fairer Gambling. The RGT research focused on problem and at-risk gamblers and how they behave while playing FOBTs and failed to assess the impact of the features of FOBTs on inducing that particular playing style.

While the bookmakers continue to have such influence over the research agenda and the commissioning process, we will never, in the words of the Prime Minister, get to grips with this issue. Does the Minister therefore agree that the betting shop operators should be required to collect and provide standardised data on the use of FOBTs to allow independent researchers to analyse their impact to help inform future decision-making rather than the process we have at the moment where figures are grasped out of the air and regulations are brought forward without the firm evidence to back them up? Our communities are at risk from these machines. We need to act but what we should do is empower local communities to act accordingly. I beg to move.

[Lord Lipsey (Lab)]

Too little, too late. Really, those four words say all that is perhaps needed tonight in the face of these regulations, but I will crave the indulgence of the House to speak a little longer.

I will start with “too late”. I really have nothing to add to the slightly tongue-in-cheek findings of the House’s Secondary Legislation Scrutiny Committee, which wrote in its report, which is before us this afternoon:

“The House will be interested to see that the Government have now laid these Regulations. They will come into force only in April 2015, a full 12 months after the Government announced the need for the new requirement, and six months later than was foreshadowed in that announcement … We question whether the Government could have brought forward the latest Gaming Machine (Circumstances of Use) (Amendment) Regulations more expeditiously, given the concern about problem gambling which they address”.

The House should generally pay attention to the findings of its own committees, and that was a pretty severe condemnation.

In case noble Lords have missed the point, I will summarise it more succinctly. In our previous debate on FOBTs on 24 February, called by the noble Lord, Lord Clement-Jones, I said that those who play these machines were practising onanism. The House will forgive me if I resort this evening to the vernacular: the Government have shown themselves to be a bunch of tossers over this one. That, then, is the “too late”.

More important, however, is the “too little”. Again, I set out my views on this in the excellent debate on 24 February, and I will not repeat tonight all I said then. I hope that noble Lords have realised just how small the impact of what the Government are proposing will be. An exceptionally hard-crafted impact assessment of the measures shows that on the department’s central estimate it will reduce FOBT spend by 1.4%, which is about six months’ growth. Therefore, the six months we have been waiting for the Government to get round to doing that has totally dissipated its effect. This is fig-leaf government. It is saying, “Oh dear, there seems to be a lot of pressure to do something about this—what are we going to do? Oh dear, we’ll spend a year thinking about it. Oh dear, we’d better bring something before the House before the election”. It really does not measure up in any sense to the seriousness of the problem.

I have got very bored with hearing Ministers and bookmakers saying, “We haven’t got the evidence”. There seems to be quite enough evidence to proceed on a precautionary basis—which is the argument the Government give for these regulations: that they are precautionary. However, given the scale of the problem, this is a pretty pathetic precaution by any standards.

I said in the last debate that a consensus had grown up among campaigners that a £2 limit would be the right figure. That may turn out to be too harsh, for reasons I will give later. However, the figure, when the Government finally get round to taking a serious measure on this, should be nearer to £2 than to £100. Indeed, it should be nearer to £2 than the £50 that is embedded in these regulations.

One thing that has gone completely unnoticed since our last debate is that the Government have now, deliberately, made it very much harder for them to do anything about this—or at least they plan to make it very much harder. I do not know how many people noticed the announcement by the Chancellor in his Budget speech that the Government would go for a “racing right”. That has been one of the most curious episodes that I have ever seen in government. The Department for Culture, Media and Sport produced two different possible futures for the levy, published in the autumn, despite the fact that the Chancellor had said once before that he would quite like a racing right. To be fair, the Government then published a consultation on the racing right. What do the Government do when those three consultations were just terminating? Without waiting for the department to summarise the results or to find out what those best informed about them wanted or what the public wanted, the Chancellor of the Exchequer—who cannot have much time in his busy portfolio to give attention to racing matters—announced that there would be a racing right.

How does that relate to the FOBT question? Doing anything serious about FOBTs will cost bookmakers money. It will cost them a substantial sum of money—a lot more than 1.4% of their FOBT revenue. But at the same time as the Government are dithering over that, they have suddenly decided to impose an enormous new charge on the betting industry to pay horseracing. The impact assessment on the racing right suggests that on a low yield the costs will not increase but that on the highest yield—50%, which is in the impact assessment—it will cost the bookmakers an extra £390 million a year. If you add a similar bill, as you easily might, for curbing FOBTs, what will be the result? Will it not be the mass closure of betting shops, the removal of a local facility that many people appreciate, shops rotting on the high street because nobody will take them over, and a huge loss of jobs among betting shop staff? That is the Government’s prospectus for the betting industry.

18:45

There is a consolation here—that the racing right has not only not yet come about but may well never come about. As the Conservative MP Philip Davies and I argued in our response to the consultation on the racing right, as presently conceived it seems to us unlikely to survive the test of competition law in Britain, let alone to survive the state aid test that would be applied by Europe. The Chancellor, to put it kindly, has not thought through not the idea of the racing right, which has something to be said for it, but the idea of a racing right that gives British racing a monopoly of its product and enables it to ask whatever price it may choose, never mind the effect on the betting shops.

I close by saying that here we have two things that the Government could do that will cost the bookmakers money—and what is the priority? Doing something to FOBTs would no doubt at some stage cost jobs and shops, but it would stop the bookies from picking the pockets of hard-working people—and, as has been said in this debate already, very often those of poorer people—with all the social costs that are involved in that. But the racing right picks the same people’s pockets not to deal with a social evil but to subsidise some hugely rich owners of racehorses and some very rich trainers for their holidays in the Bahamas, as well as some very rich jockeys gallivanting about the country in their helicopters and some ludicrously rich breeders, who exist only because of the practice of banning artificial insemination in horseracing. Strangely enough, in this bonanza feast, the one lot of people who do not benefit by a penny, in my long experience, are stable staff, who are still exploited very badly. So that is it—deal with the FOBT problem or help all these very rich people at the expense of poor people. I know which I would put first.

[Lord Clement-Jones (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Lipsey, although I agreed with only a fraction of what he had to say. Nevertheless, it was very thought-provoking.

The noble Lord, Lord Collins, reminded the House that a month ago I initiated a debate about the unsatisfactory nature of the Government's current policies towards FOBTs. Nothing has made me change my mind in the mean time. If today’s Motion goes to a vote, however, I shall not vote with the Opposition. After all, the Opposition have tabled a very half-hearted Motion. But I shall take the opportunity today once again to express the strong dissatisfaction of these Benches with these measures, and our intention, if we are in a position to do so, to go much further after the next election.

I am very pleased that my noble friend Lady Jolly is responding to the debate. Given that it is extremely likely, without giving away any confidences, that we will enshrine a much bolder pledge in our manifesto, I hope that she can square the policy circle as a government Whip and a Liberal Democrat Peer. Perhaps the Government are displaying their real embarrassment by using three separate spokesmen on the three recent occasions when we have debated or had a question on this subject. I see that the Mayor of London, Boris Johnson, has said that he believes that fixed-odds betting terminals can be dangerously addictive and allow bookmakers to prey on the vulnerable in our society—and he has called for the maximum stake to be cut to £2. This is rather at odds with the current position of the Conservative Front Bench.

The noble Lord has explained, as I did a month ago, what these machines are. FOBTs, technically known as B2 gaming machines, offer high stakes and fast play, allowing users to bet up to £100 every 20 seconds. Figures published this month by the Campaign for Fairer Gambling show that £1.5 billion was lost by gamblers on FOBTs in Britain during 2014. As the noble Lord pointed out, most of that money comes from some of the UK’s most deprived communities. That highlights the need for an urgent solution to this serious problem.

The £100 stake on FOBTs is more than 40 times the EU average. Combined with the fast pace of play, this makes them particularly dangerous, leading to high levels of problem gambling. The speed of roulette on these machines is more than five times as fast as roulette in a casino, yet they are in lightly regulated high-street betting shops—more than 9,000 of them across the country.

We rehearsed all those points in the debate last month, and I highlighted the fact that the local authorities which see the problem on the ground and use the Sustainable Communities Act—93 councils from all three major parties—have called on central government to take this action because of the anti-social behaviour, crime and problem gambling that the machines are causing in their local areas. The Local Government Association has called for a reduction in the £100 stake on FOBTs to £2.

As we have heard, the Gaming Machine (Circumstances of Use) (Amendment) Regulations are designed to introduce a requirement which prevents individuals staking over £50 on a B2 gaming machine, or FOBT—whichever expression your Lordships prefer—unless they load cash via staff interaction, or use account- based play. In response to Parliamentary Questions the Minister, Helen Grant MP, has claimed that this will end unsupervised high-stake gambling on FOBTs. But that is not the case. The measures set out by the Government do not address the critical harmful element of the machines, which is the £100 per play maximum stake.

The measures are deficient for the following reasons. First, this is not a stake reduction. After the regulations are passed the £100 stake will still be available, so the machines will still be able to cause harm to problem gamblers and communities. The regulations are not the answer. Only a stake reduction to £2—the maximum stake offered in all other high-street adult premises—will prevent the machines causing harm.

Secondly, there is no evidence that bookmakers are serious about tackling problem gambling. The proposals are predicated on the notion that bookmakers want to prevent problem gambling—but Professor Jim Orford estimates that more than 40% of the profits from FOBTs come from problem gamblers, and there is evidence that bookmakers are actually targeting deprived areas. For example, one chain was recently accused of targeting ethnic minorities, who are more vulnerable to gambling addiction, after the Independent revealed that 61% of its shops were in the 40 boroughs with the highest ethnic-minority population.

Thirdly, the measures in the regulations will be extremely easy to circumvent. Reports from betting staff suggest that some operators are training staff to inform customers how they can play two FOBTs at the same time. This is particularly concerning for customers who have already identified themselves, and for those signed up to a loyalty card, as they will be accessing stakes of £200 a spin. Any rules around signing up for betting shop loyalty cards can be circumvented quite easily. In betting shops, customers are asked only for a name, a date of birth and an email address or mobile phone number. It is easy to fabricate the first two and create a bespoke email to receive the necessary code. That is all people need, and they can then carry on staking £100 a spin. As no checks are made, this is hardly a rigorous process that would deter likely problem gamblers, who may create many such accounts.

To stake more than £50, customers need to load cash remotely via staff intervention. For those who identify themselves at the counter, staff are suggesting that they are being trained to encourage debit card use. Bookmakers say that this will be more convenient for the customer—but it is also more dangerous, as debit card deposits can exceed a daily withdrawal limit from an ATM. This also allows gamblers to bypass the psychological check of actually putting cash into a machine, potentially making losses worse.

Fourthly, £50 is still far too high and unsafe. Fifty pounds per spin is still very large, allowing people to bet £150 per minute. It is significantly higher than the £2 maximum stake on all other UK machines and the roughly £2.20 EU average. Notably, the maximum permitted stake on gaming machines in Germany, Spain and Italy is less than £1. Fifty pounds per spin is not safe, and it is dangerous for the Government to imply this with their proposed measure. According to recent Responsible Gambling Trust research, 80% of those betting an average of £13.40 or more exhibited signs of problem gambling. Why are the Government not reducing the stake to at or below this level? So far, despite claiming they are taking a precautionary approach, the Government have failed to give a clear rationale.

Fifthly, requiring betting shop staff to police machine use will be dangerous and ineffective. The rise of single staffing in betting shops makes this measure all the more dangerous. The presence of automated FOBTs has led to staff cuts in betting shops, who are down from roughly 60,000 in 2009 to 52,000 in 2014, meaning that shops often have only one person working at a time. This fall in staff numbers comes despite the rise in the number of betting shops from 8,800 in 2010 to 9,000 in 2014. Asking staff to refuse to reload the cards of players who have just lost large sums has the potential to provoke already angry gamblers and lead to confrontation. There are also reports that staff are currently incentivised to increase machine use, with this often linked to pay. This situation creates a very clear conflict of interests, reducing the likelihood of staff intervening.

Sixthly and finally, the Government are introducing a policy that will benefit bookmakers. Signing up more players to online accounts means that the operators can encourage customers to gamble on their new online platforms as well. This will improve profitability for the bookmakers even further.

The RGT research described loyalty card customers as a “more engaged” sample, and loyalty cards encourage this engagement with offers of free bets. Player tracking is therefore not intrinsically a means for protecting players and can in fact promote addiction.

These regulations will make the situation worse by allowing the Government to refrain from substantive restrictions on the maximum stake, and FOBTs will continue to operate at £100 per play, causing harm to vulnerable people in the most socially deprived areas of Britain. There is clear evidence to show that the public support restrictions on FOBTs. The YouGov survey showed that only 4% of the public would oppose a ban on FOBTs, with 58% of those who gamble more than once a month in favour of an all-out ban. The Gambling Commission has stated that in interpreting the available evidence it will take a precautionary approach, including where evidence is mixed or inconclusive.

The noble Lord, Lord Bourne, said:

“These measures are on track to start in April, and will, I think, make a real difference. The sensible thing to do now is to see how they bed in before thinking about further action. That is a fair and reasonable approach”.—[Official Report, 24/2/15; col. 1640.]

On the contrary, the stake should be reduced on a precautionary basis until there is evidence that it can be safely increased above the £2 level, and the onus should be put on the bookmakers to demonstrate that effective measures can be put in place before being allowed to offer games at above £2. After the general election, my party will do this if we are in a position to do so.

[Lord Donoughue (Lab)]

My Lords, like the noble Lord, Lord Clement-Jones, I enjoy speaking after the person who spoke before me. There is no greater pleasure in this House than watching a Liberal Democrat spokesman in conflict with his representatives on the Front Bench. Sadly, that pleasure will shortly cease.

I had proposed to make a rather tediously long speech this evening. Fortunately, I shall break with the normal tradition of this House of repeating everything that has been said previously and instead say briefly that I agree with everything that the noble Lord, Lord Lipsey, said. He has described the situation fairly, impressively and comprehensively.

19:00

On the racing right, I heard about that with interest in the Budget. It was one of 27 lollipops thrown to different parts of the community. I urge the Government to keep quiet about it henceforward. The racing and betting industries have previously had this kind of solution put up, which was legally unsustainable. I am not a lawyer, fortunately, so I cannot say that with confidence, but I can advise the Government that if they read, for instance, the analysis of the racing right on the net, issued by Olswang, the country’s leading and best informed lawyers in the racing and betting world, they will see that there are many serious legal questions to be asked. Olswang concluded that it will not survive a legal test. Given our experience with bookmakers in the past, it will certainly experience that legal test.

This evening’s little operation here will fortunately end shortly. It is not very impressive, but everyone should read the speech of the noble Lord, Lord Lipsey, and they will learn the facts.

[Baroness Golding (Lab)]

My Lords, I, too, agree with the noble Lord, Lord Lipsey. He said what many of us have considered saying in the past, but he has done it far more effectively. The number of people who enjoy playing these machines is considerable, and they do so sensibly.

I have friends who travel around the world and playing these machines is their pleasure. They start in the evening with a certain amount of money and they play and play until they have lost it. Sometimes it takes them all night and they are there until five o’clock in the morning but that is their pleasure and why should we stop them doing it? Some of my friends won 2,000 Australian dollars playing in Australia. They decided to leave the money there and go out to try to get rid of it by playing in the same way as they did before. It is their enjoyment and their holiday. The prospect of the poorest people in our communities putting £100 into a machine every 20 seconds is ludicrous. It is beyond belief that they would sit there doing that, losing money. That is absolutely nonsense.

If you are a problem gambler, you are a problem gambler. You will gamble wherever you can—not necessarily on machines, but up in the bedroom, playing online. We cannot stop people who want to gamble from gambling. If they enjoy it, why should we be stopping them?

[Lord Dubs (Lab)]

My Lords, I was not going to say anything but I have been provoked into it by my noble friends behind me. I never thought that I would find myself in such disagreement with them and I regret that they have taken that position.

Of course there are problem gamblers, and of course it is hard for them. We have heard of people who have spent all their money and got into debt simply by gambling away all that they have. Surely there is a responsibility on the Government to at least encourage people who are inclined that way to bet moderately, and not give them the facilities to bet large amounts ever so quickly.

I am not against gambling as such. I remind my noble friend Lord Donoughue of the day that he and I went to a race meeting at Listowel Races in Ireland. We had a great time.

[Lord Donoughue]

Great craic.

[Lord Dubs]

We had great craic. I was in the fortunate position that I was quite friendly with the then Irish Culture Minister quite some years ago—he is now dead, unfortunately. He was a very good judge of horses. For the first four or five races I put my money on the same horses he did and I was well ahead of the game. I lost him for the last race or two and I contributed significantly to the Irish economy. The races were 25 minutes or half an hour apart; therefore, it was possible to be quite measured about it.

The problem is the speed with which one can lose large sums of money on these terminals. Why are so many local authorities appalled by this? Why is there a wish to keep the maximum stakes down to £2? Surely not all these people are absolutely against any form of gambling, but the local authorities realise that it can get out of hand.

Initially there were two Lib Dem Ministers on the Front Bench; I am afraid that the arrival of the noble Baroness, Lady Williams, has rather spoilt my story. How was it that they pulled such a short straw to be sitting there, shortly before an election, advocating a case that is against their party’s policy? I cannot understand that. How were they persuaded to do this? The mind boggles. They are smiling now, of course, but they both at one point looked very unhappy about the position that they were in. Their faces revealed what they thought about the whole business. They did not agree with my noble friends, of course.

It is a sad moment that we are putting forward regulations that cannot do much good at best and will do harm at worst. I do not think that the change advocated by my noble friend on the Front Bench would mean the massive closure of betting shops; it would just get betting into a sensible proportion. That is all we are asking. We are not saying that there should not be gambling and betting. It can be fun, but it should not get totally out of hand; I believe that this proposal does that.

[Lord Donoughue]

Does my noble friend not also remember that at that Irish race meeting, when the Irish Minister for Racing—the late, great Joe Walsh—put his bets on, the bookmakers did not even give him a ticket, unlike my noble friend or me? When I asked the bookmaker later why he did not give Joe Walsh a ticket, he said, “You do not give an Irish Minister for Racing a betting ticket”. Does he not think it would be a great advance in this country if British politicians and Ministers were treated with the same respect at our racecourses?

[Lord Dubs]

I do not particularly disagree with my noble friend. I am tempted to go into all sorts of other anecdotes about our experiences together, but I had better not. I will just say this: when we were drinking some nice single malt whisky in a hotel in Brussels on one occasion, he accused me of being a Roundhead and said that he was a Cavalier. Does he remember that?

[Lord Donoughue]

Still true.

[Lord Dubs]

I am sorry that these regulations are being put forward. There is no need to do so in the dying embers of a Government. It will do harm; it will not do good. I very much regret what the Government are doing.

[Baroness Jolly (LD)]

My Lords, I stand before you as a government spokesman but also as a Liberal Democrat. However, I shall not bore noble Lords with the diets of Liberal Democrat raffles, which is the extent of my gambling.

I thank the noble Lord for bringing this Motion of Regret before the House, allowing us to highlight the measures that we are bringing in to improve the protection of gaming machine players. Allow me to begin by re-emphasising that the Government understand the public concerns around fixed-odds betting terminals—FOBTs from now on—and consider the future of their regulation to be unresolved.

Gambling has long been positioned in public policy terms as a mainstream leisure activity. Most people who gamble do so in this context: they choose how much they will spend. This is how they choose to use their leisure time, as the noble Baroness, Lady Golding, said. Generally speaking, they have fun so doing, but it is important to remember that all gambling—not just machine gambling—can and does cause harm for some gamblers, their families, friends, communities and employers. That is why we have intervened to regulate it.

To that end, I now turn to the Motion,

“that the Gaming Machine (Circumstances of Use) (Amendment) Regulations 2015 do not appropriately address the problems of gambling addiction, and offer no significant protections for vulnerable people from getting into debt”.

In April 2014, the Government announced their intention to take precautionary action in this area, with measures for new gambling controls and protections on track to come into force next week. The regulations in question today are designed to reduce the amount of unsupervised cash gambling on so-called FOBTs. We are introducing these precautionary and proportionate measures based on the available evidence. In addition, we have supported, and continue to support, independent research in this area and continue to oversee a cultural change on social responsibility.

The noble Lord, Lord Collins, asked about the independence of the RGT, which commissioned the research. The RGT is an independent charity and the research was commissioned from an independent and reputable provider, NatCen, a leading not-for-profit social research organisation. He also asked whether or not the industry co-operated and provided the information which the RGT asked for. There was an unprecedented level of openness and co-operation from the operators; it is the first time that bookmakers’ data have been scrutinised by independent researchers and also the first time that there has been access to loyalty card gamblers. This has resulted in the largest sample of problem gamblers ever taken in Great Britain.

All players using these machines will be required to use account-based play or load cash over the counter, forcing an interaction, when they wish to stake over £50. Making staff interaction a compulsory component of high-staking machine play ensures greater opportunities for intervention where patterns of behaviour indicate that someone may be at risk of harm from their gambling. In addition, account-based play allows players access to up-to-date and accurate information in the form of activity statements and real-time information about their session of play, which can help people maintain control. On that basis, we believe that these measures will help higher-staking customers benefit from more conscious decision-making, while increasing opportunities for interaction and intervention with appropriately trained staff, and therefore assisting customers to stay in control of their gambling behaviour.

Opponents of this measure call for a reduction in stakes on these machines to £2. We do not accept that this is justified or proportionate. The campaigners on this issue often fail to highlight two key points. The first is that problem gamblers usually gamble on a wide range of products. The idea that cutting the stake on one machine in one environment will somehow make problem gamblers see the error of their ways seems fanciful, as they are likely simply to take their business to the arcade or casino or online. The second is that not only do we find significant proportions of problem gamblers staking at lower levels but we find many of those staking at higher levels are doing so safely. The evidence points to a stake cut of this scale doing little to protect problem gamblers, and a lot to constrain the choice of normal leisure gamblers.

That is why we are pushing for better interventions that complement controls on the machines and the betting environment, with a greater focus on individual customers. The Government believe that this is a sensible approach that balances the commitment to reduce problem gambling and protect the vulnerable while, at the same time, protecting an enjoyable leisure activity for the vast majority of customers who visit bookmakers’ offices.

It is perhaps worth reminding ourselves that, in addition to these amending regulations, the bookmaking industry has itself made progress, with support from the Government and the Gambling Commission, to further assist gamblers who display signs of problematic behaviour. The betting industry introduced new measures, under its code of conduct from 1 March 2014, aimed at improving social responsibility measures towards problem gamblers.

The noble Lord, Lord Collins, asked about staff numbers. I will get back to him about these. I am sure that all noble Lords have briefings from the industry, but one thing that is included is training of staff in these measures.

While a step in the right direction, we support the Gambling Commission’s move to make the measures mandatory in its updated licence conditions and codes of practice—or LCCP—published in February 2015. We believe that the measures we are taking are sufficient to improve player protection on a precautionary basis. These moves, combined with the measures outlined in the Gambling Commission’s response following its consultation on the social responsibility provisions in its LCCP, are justified on this precautionary basis.

I should like to re-iterate that not only are the Government responsive to evidence that is produced concerning gambling-related harm but they have also made great steps in improving the quality of the available evidence through their positive engagement with industry. This remains an issue which I am sure all sides of the House treat with the utmost seriousness. Striking the right balance between protecting a leisure activity and helping those who have fallen into harmful habits and preventing others from succumbing is the objective of all sides of the House.

I apologise to the noble Lord, Lord Collins, that I was without an official for the first eight minutes of this debate, but I will pick up on a few of the issues that he raised. The point that parts of the industry are now recommending that staff encourage people to play two machines at the same time and encourage the use of debit cards over cash causes alarm bells to ring, as far as I am concerned. Before we prorogue, I will write to the noble Lord to give clarification on that issue.

It is also worth mentioning to noble Lords that I am here today rather than the noble Lord, Lord Gardiner of Kimble, who should have taken the debate, because, unfortunately, he has a close family bereavement. I offered to do this and I was happy so to do.

Other areas of concern included single staffing. I take issue over the lack of evidence—there is a debate to be had about whether the RGT is independent, but many organisations are funded. For example, Drinkaware is funded by the drinks industry and it comes out with very hard-hitting reports as well.

I thank my noble friend Lord Clement-Jones for being robust, as ever.

I close by emphasising again the importance of taking these precautionary and appropriate measures based on the available evidence. As I said at the beginning of my speech, the Government consider the future of FOBT regulation to be unresolved. The next few weeks will see all parties articulate their view on this issue once Parliament dissolves and the election campaign plays out.

I thank noble Lords for their contributions. We all want to offer protection to those who are vulnerable. This SI was written after a consultation and any future Government will have the opportunity to assess its success at their earliest convenience and make the changes that they think appropriate.

I hope that I have covered satisfactorily all the questions put to me and that the noble Lord will be sufficiently reassured to withdraw the Motion.

[Lord Lipsey]

I do not think that the noble Baroness has answered the question about the long delay raised by the House’s committee on secondary legislation.

[Baroness Jolly]

I do not have that information, but I am happy to write to the noble Lord to let him know the reason for the long delay.

[Lord Collins of Highbury]

I, too, thank noble Lords for this debate. It has been really important to raise these issues again. The concern is not just in this Chamber; it is in our communities. Nor is the concern just among people who do not gamble; the concern is among people who want to use their local betting shop as a community resource but are fearful of what they are turning into. That is the problem.

Of course, it is not just about activity on these machines in relation to problem gambling; it is about the way that they can be used and the pressures that this puts on staff. For the sake of clarity, I think that all noble Lords who have contributed to the debate have shared one absolute, common concern—that these machines are potentially dangerous and that we should have a precautionary approach.

The actions of the Government have been, in my noble friend’s words, too little, too late. I think that I said that if there is one thing worse than inaction, it is the pretence of action. Not for the first time, my noble friend Lord Lipsey and I agree on the fundamental issues, even if we occasionally disagree on other issues. As a co-signatory of the amendment that supported the horserace betting levy, I was very keen to ensure that the consultation on its future was full and frank.

I agree with my noble friend that it was wrong for the Chancellor to prejudge issues to make short-term political gain, but I fear that that is a problem with the coalition as we have it at the moment. When Labour is returned to government on 7 May, our focus will be on giving control to local communities to determine what is safe in their own areas. In the light of the comments I have made, I beg leave to withdraw the Motion.

Motion withdrawn.

House adjourned at 7.21 pm.