House of Commons
(9 years, 2 months ago)
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Prayers
(9 years, 2 months ago)
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Mr Speaker
On the front of today’s Order Paper, it is noted that on 23 September 1915, Captain Harold Cawley, 6th Battalion The Manchester Regiment, Member for the Heywood Division of Lancashire, was killed in action at Gallipoli, Turkey; on 30 September 1915, Captain The Hon. Thomas Agar-Robartes, 1st Battalion The Coldstream Guards, Member for St. Austell, died of wounds received in action near Loos, France; on 2 October 1915 Lieutenant-Colonel Lord Ninian Edward Crichton-Stuart, 6th Battalion The Welch Regiment, Member for the United Boroughs of Cardiff, Cowbridge and Llantrisant, was killed in action at Loos, France; and on 6 October 1915, Lieutenant The Hon. Charles Thomas Mills, 2nd Battalion The Scots Guards, Member for the Uxbridge Division of Middlesex, was killed in action at Hulluch, France. We remember them today.
Business before Questions
Transport for London Bill [Lords]
Motion made,
That the promoters of the Transport for London Bill [Lords], which was originally introduced in the House of Lords in Session 2010–12 on 24 January 2011, may have leave to proceed with the Bill in the current Session according to the provisions of Standing Order 188B (Revival of Bills).—(The Chairman of Ways and Means.)
Oral Answers to Questions
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Dr Alan Whitehead (Southampton, Test) (Lab)
1. What assessment she has made of the relative net financial benefit to the public purse of early closure of the renewables obligation using different cost methodologies.
The Secretary of State for Energy and Climate Change (Amber Rudd)
May I start by welcoming the hon. Member for Wigan (Lisa Nandy) to her Front-Bench role?
We estimate that closing the renewables obligation early to large and small-scale solar PV projects will reduce costs to the levy control framework by between £180 million and £280 million per year. The estimated saving of closing the RO early to new onshore wind is up to £270 million per year. The details of those cost estimates are published in impact assessments that are available on DECC’s webpage.
Dr Whitehead
Does the Secretary of State agree that publishing impact assessments two months after decisions have been taken is unacceptable practice? Does she acknowledge that, using the alternative methodology in the impact assessment, the net present value of deciding to close the RO early turned out to be minus £100 million? That means that we are £100 million worse off as a result of her taking that decision, instead of allowing the RO to continue. If she had had the impact assessment to hand when she took the decision, might she have made a different decision after all?
Amber Rudd
What the hon. Gentleman fails to address in his question and does not seem to absorb from the steps that we have taken to address the costs is that at the centre of everything this Government do is the impact on consumer bills. We had a commitment to limit the levy control framework to £7.6 billion by 2020. When it became apparent that we were way in excess of that, but were still meeting our renewables targets, it was right to limit the amount of money we were spending. That is why we took action quickly to do so.
Dr Andrew Murrison (South West Wiltshire) (Con)
I congratulate my right hon. Friend on the action she has taken, particularly in relation to the wasteful onshore wind turbines that are blighting many areas of the countryside. In June, when she made her original announcement, she suggested that some of the RO money might be diverted to other forms of alternative power generation. Is she in a position to say what those alternatives may be?
Amber Rudd
The key reason for reining back on onshore wind was its very success. The Government are absolutely committed to supporting renewable sources of energy, and onshore wind has been very successful. On the use of funds that may have been saved, I come back to the point that the Government are committed to staying within the levy control framework budget as far as is possible. That is the key reason we are taking steps to limit spending. Any further spending commitments, as my hon. Friend will be aware, are up to my right hon. Friend the Chancellor of the Exchequer.
Lisa Nandy (Wigan) (Lab)
I thank the Secretary of State for her kind words. It is a pleasure to speak from the Dispatch Box today and a privilege to follow in the footsteps of my right hon. Friend the Member for Don Valley (Caroline Flint), who has been a fearless advocate for consumers and the environment in recent years.
My right hon. Friend will be as dismayed as I am that this week it was announced that, for the first time, the UK is no longer one of the top 10 countries in the world for investing in clean energy technologies. The Government have ruled out new onshore wind farms, slashed solar support and left onshore wind farm companies with an uncertain future. The only new nuclear plant that seemed to be proceeding is delayed and in doubt, gas investors do not have the assurances that they need to invest, carbon capture and storage has stalled, and other clean generators have been hit with new taxes. What exactly is the Government’s plan to cut carbon pollution and keep our lights on?
Amber Rudd
I, too, am sorry that the right hon. Member for Don Valley (Caroline Flint) is no longer on the Front Bench. She and I used to have regular, robust exchanges, and she had a realistic approach to energy security, describing nationalisation proposals as “turning the clock back”. How much I agree with her.
The hon. Member for Wigan mentioned investor confidence, but perhaps I may ask her to look within her own team as there are real concerns about the Opposition’s approach to nuclear power—who knows their position ahead? The Government are committed to a mix of energy supply and to ensuring that nuclear power, which she mentioned, is part of that mix. It is so disappointing that under the previous Labour Government there was no planning or looking ahead—
Mr Speaker
Order. The Secretary of State can leave me to adjudicate on these matters. Her answers must be about the policy of the Government. That is the premise from which we start and with which we proceed.
Lisa Nandy
I was going to thank the right hon. Lady for that answer, but I do not think I will.
Investors looking at the UK are scratching their heads. On the one hand the Government say that they are trying to reduce the cost of energy for working families, but on the other hand they say that they want to go for shale gas and CCS, which are unproven markets. We have
“new nuclear build and offshore wind which are substantially more expensive than renewables such as onshore wind and solar PV. Investors don’t know what the government is trying to achieve.”
Those are not my words; those are the words of Ernst and Young’s energy analyst in a report that was published this week. When will the Government return with a plan to keep our lights on, cut pollution, and get energy bills under control?
Amber Rudd
The hon. Lady is entirely wrong. This Government have a clear plan, and in a way she summed it up in her conclusion. We are committed to ensuring that energy security is at the forefront, to carbon reductions, and above all—a feature that never appears except on the Conservative Benches—to keeping consumer bills down.
Margaret Greenwood (Wirral West) (Lab)
2. What steps her Department is taking to promote investor confidence in low-carbon energy generation.
Christina Rees (Neath) (Lab)
18. What steps her Department is taking to promote investor confidence in low-carbon energy generation.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
I welcome the shadow Secretary of State to her position, and in particular I welcome Otis, who I gather was born only a few months ago. That is fantastic, and I congratulate the hon. Lady on being here so soon afterwards. I wish her every success in her new role.
The Government remain totally committed to our green energy future and to tackling climate change. The success of our renewables programme has exceeded expectations, which means that we are on track to meet our targets comfortably. A key priority for the Government is to keep consumer bills down and limit the cost to hard-working families, while ensuring that the UK remains an attractive location for all forms of low-carbon energy.
Margaret Greenwood
The Government are axing support for onshore wind earlier than expected, cutting feed-in tariffs for solar, and ending the exemption for renewables from the climate change levy. If renewables really are the future for our energy supply, what action will the Government take to repair investor confidence?
Andrea Leadsom
That is an incredibly important question. More than £42 billion has been invested in renewables, nuclear and CCS since 2010, and 2014 was a record year with more than £8 billion being invested. The Government remain committed to our long-term, low-carbon future in all areas of low-carbon generation. As the hon. Lady will appreciate, we must also consider our other priorities, such as keeping bills down for consumers. The policy reset that we are undertaking is about ensuring that through our success in generating renewables, we do not impact in a devastating way on the bills of hard-working families in this country.
Christina Rees
Will the Minister outline when the contract for difference negotiations on the Swansea bay tidal lagoon project are likely to be concluded? My constituents in Neath are eagerly awaiting the job opportunities and apprenticeships that will follow.
Andrea Leadsom
The hon. Lady will be aware that the Government are incredibly keen on those new technologies, and we are looking closely at that tidal lagoon and doing our due diligence. The Government would like to support that project, but it must of course offer value for money. It has gone through the first stage of the process and it will take some time, but I assure the hon. Lady that that project, and other firsts for the UK, are on this Government’s agenda.
Peter Aldous (Waveney) (Con)
East Anglia Offshore Wind, which will be developing the UK’s largest offshore wind farm, has the objective of being subsidy-free by 2023. Can the Minister confirm that the Government will set out a clear vision that will enable the industry to plan properly for the future, both to achieve this goal and to maximise the creation of British jobs?
Andrea Leadsom
As I am sure my hon. Friend will be aware, the UK is the world’s No. 1 in offshore wind. We are fully committed to the continued growth and development of that sector. As part of the spending review, we need to look at the impact on consumer bills and make sure that we can manage the ongoing development to reach that subsidy-free point while not impacting too much on the bills for hard-working consumers. We will set out our plans later this year.
Neil Carmichael (Stroud) (Con)
Does the Minister agree that the progress so far on new renewables sets the scene for even more investment in research and development, and that we need to have a clear pathway for that to happen so that we can encourage more investment, the strengthening of supply chains and the export of these technologies?
Andrea Leadsom
Yes, my hon. Friend is right. That is exactly what we want to do. We want to continue to support the growth of the renewables sector. I have already explained that there has been £45 billion of investment since 2010 in this sector and we want to encourage it further. We have to do that in the light of what is affordable for bill payers. At the same time we want to encourage new forms of renewables and keep Britain at the forefront of renewables technologies.
Caroline Lucas (Brighton, Pavilion) (Green)
Will the Minister explain how she can possibly think that investor confidence will be enhanced by taking yet another wrecking ball to the British solar industry with the enormous subsidy cuts, alongside ending pre-accreditation? On the latter issue, the Government’s own consultation concedes that her Department has not even bothered to estimate the likely impact on deployment. With tens of thousands of jobs at risk, will she withdraw this now and stop all the waffle about consumer bills? If she were serious about consumer bills, her Government would not be subsidising fossil fuels and nuclear to the extent that they are.
Andrea Leadsom
I am afraid the hon. Lady has not done her homework. She should be aware that it is a requirement of EU state aid that we regularly review the subsidies to ensure that we are not overcompensating the sector. That is exactly what we are doing. We are now in a consultation which closes on 23 October. I am sure she will give her response to that. As I keep repeating, we want to ensure that we are not impacting negatively on consumer bills, but at the same time we are supporting this very valuable and growing sector to become subsidy-free within the next few years.
Martin Vickers (Cleethorpes) (Con)
I welcome the Minister’s earlier replies, but she will know that there is a lack of confidence and certainty in the offshore industry, which is vital to the future economy of my constituency. Can she assure me that when she visits north-east Lincolnshire later this month, she will have a positive message for the industry representatives?
Andrea Leadsom
I can assure my hon. Friend that I will always have a positive message. I am very much looking forward to my trip to Humber and Lincolnshire. While I am there I will seek to reassure investors and project managers that it is our intention to continue to support and promote the very important renewables technologies in which, particularly in offshore, Britain is world No. 1.
Callum McCaig (Aberdeen South) (SNP)
May I add the welcome of the SNP to the hon. Member for Wigan (Lisa Nandy)? We look forward to working together where there are shared interests.
On the renewables obligation for onshore wind, it will come as no surprise to the Minister that the SNP is opposed to that closure. The implementation of the Government’s policy is causing additional and unnecessary difficulties through lack of finance owing to the lack of clarity about grace periods. Will she clarify when her Department will produce the grace period provision clauses to the Energy Bill, and will she consider a flexible approach where there is an element of community ownership involved in a project?
Andrea Leadsom
As the hon. Gentleman will know, we are looking very carefully at the consultation responses on the grace periods, and we intend to publish our response as soon as we can. That will be within the next few weeks, as part of the process of the Bill’s passage through the Lords. As he will realise, around 30% of the total support under the RO goes to Scottish projects, and we are delighted that Scotland still forms part of a GB-wide energy sector. That is very important for Scotland and for the whole UK.
Julie Elliott (Sunderland Central) (Lab)
It is estimated that 22,000 jobs could be lost as a result of swingeing cuts of up to 87% in the solar industry. Will the Minister confirm that the potential loss of jobs was not taken into account in her decision to cut support for solar power? Can it be right or proper for a formal consultation to ignore such harmful effects on the industry and on the thousands of families whose lives will be affected by these changes, including, as both Ministers have mentioned, their ability to pay their energy bills?
Andrea Leadsom
The hon. Lady is completely wrong to say that we have not considered all aspects of the consultation on reducing subsidies. She will appreciate that, because it is a consultation, it is only as a result of that consultation—which, as I say, closes on 23 October—that we will be able to assess the impact properly and then to make a decision. As I have said a number of times, we are fully committed to the ongoing development and progress of this very important sector. All jobs in the sector are of course extremely important and we will be doing everything we can to ensure that it continues to grow.
Helen Goodman (Bishop Auckland) (Lab)
3. What assessment she has made of the potential effect of Government policy measures announced since May 2015 on carbon dioxide emissions.
The Secretary of State for Energy and Climate Change (Amber Rudd)
As our manifesto made clear, we are determined to meet our climate change commitments. We will do this as cheaply as possible and in the interests of bill payers, hard-working families and businesses. The policy announcements that this Government have made to date are consistent with those commitments. We are making good progress towards meeting our 2050 carbon target, with emissions already down 30% since 1990. We will bring forward further proposals on how to meet carbon budgets over the course of next year.
Helen Goodman
In its June report to Parliament, the Select Committee on Energy and Climate Change said that stronger action was needed to meet the carbon budgets for 2025 and 2050. Since then, as we have heard, the Government have cut support for solar and onshore wind, extended the climate change levy to renewables, and weakened housing standards. Will the Secretary of State go back to the Committee and ask it to make a new analysis, taking account of those policy changes?
Amber Rudd
I repeat to the hon. Lady that we are committed to meeting our climate change commitments. She will be aware that there are some areas of this that are more challenging than others. For instance, we still need to work up and make more progress on heat. As far as the relationship with the Energy and Climate Change Committee is concerned, she is right that we are in regular contact. I believe it will shortly be publishing a response to some of the changes we have made and we will have more comment to make on that in October.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Will my right hon. Friend confirm that the main factors accounting for the reduction in carbon dioxide emissions since 1990 have been the recession, the dash for gas and the outsourcing of the manufacture of carbon-intensive products to China and other third-world countries? The huge expenditure on trying to reduce CO2 emissions by renewables has had far less impact. Is she therefore not right to try to pare down the cost of this rather ineffectual policy?
Amber Rudd
I have to confess that I do not agree with everything my right hon. Friend has said, but I agree that our energy needs a mix of policies. The bringing on of more gas has certainly been a successful way of reducing carbon emissions. With the development of shale, we believe that that will continue to happen.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Surely the Minister realises that if we are to have a cleaner and better environment, we also need to balance that with consumer interest in energy security. We need high-quality innovative technology—in which I have a long-term and registered interest. Many big environmental companies with leading technology have been absolutely alienated by the Government’s policy and are ceasing to invest.
Amber Rudd
I do not share the hon. Gentleman’s interpretation of what has happened. The Government are completely committed to innovation and are absolutely admiring of the areas in the industry where innovation is changing things. For instance, I named storage, where we think there will be great opportunity for more solar deployment.
Mr Philip Hollobone (Kettering) (Con)
Despite the Government’s policy announcements, investor confidence in green energy in the borough of Kettering appears still to be high, because, much to residents’ alarm, fresh applications for solar farms are being submitted to the local council. What can the Government do to get solar energy out of our agricultural fields and on to the big roofs of warehouses?
Amber Rudd
My hon. Friend raises a key point. It is the Government’s aim to ensure that subsidy support is only temporary, and we are hearing that solar could soon be without subsidy, which is something we want to encourage. Finally, just to agree with him, we much prefer, and will try to encourage, roof-top solar, rather than solar in fields.
David Mowat (Warrington South) (Con)
4. What preparations her Department is making for the forthcoming Paris climate change conference.
The Secretary of State for Energy and Climate Change (Amber Rudd)
Securing an ambitious global climate change agreement is crucial, and I am taking every opportunity to press for an agreement that is ambitious, legally binding, has mitigation commitments from all parties and includes a set of robust rules that allows the world to track progress. Over the coming weeks, at meetings in China, India and the US, I will be making the case for an ambitious climate change deal to my international counterparts that helps deliver on these key objectives.
David Mowat
No other country has yet passed climate change commitments to match those in the Climate Change Act 2008, which we passed nearly 10 years ago now. Indeed, globally we are seeing a resurgence in coal, led by countries such as Germany, which is replacing low-carbon nuclear with coal. Does the Secretary of State believe that the Paris process will result in a more level playing field? Without that, the prognosis for energy-intensive industries in this country, which employ 900,000 people, is bleak.
Amber Rudd
I do not accept that we are acting unilaterally. The fact is that the UK is a leader, which is a good thing when we are trying to be ambitious in this area, and we are finding that other countries are increasingly working with us. I believe that Paris will be critical to getting an international level playing field and, to return to earlier questions, supporting investor confidence.
Barry Gardiner (Brent North) (Lab)
Given that so many of the intended nationally determined contributions submitted so far, particularly from developing countries, are conditional on international finance, what efforts has the Secretary of State been making with her counterparts in Europe to ensure that Europe’s contribution to a financial pot to meet those contributions is fulfilled?
Amber Rudd
I share the hon. Gentleman’s concern about climate finance, which is key to getting a successful deal, and I am happy to say that I have been playing a leading role in that, chairing climate finance committee meetings with our international counterparts to ensure the transparency and confidence necessary to bring developing countries into the final deal.
Philip Davies (Shipley) (Con)
Does the Secretary of State accept that global warming can, by definition, only be tackled globally, and will she confirm that the UK is responsible for about 1.5% of global carbon emissions? Will she therefore agree that although unilateral action might make a few people feel good about themselves, in terms of changing the world’s climate, it is completely and utterly futile?
Amber Rudd
The green economy is a fantastically growing opportunity for employment and businesses, and I hope my hon. Friend would agree that it will become even more important if and when we get a deal in Paris, because countries internationally will want to invest in the green economy. They are all making it a priority, as the UK has done.
Lisa Nandy (Wigan) (Lab)
The Secretary of State is meeting her EU counterparts in two days, and she has the Opposition’s full support in negotiating a tough deal ahead of the historic Paris conference later this year. It is clear from recent analysis that the national climate plans do not currently offer sufficient ambition to reach climate safety. She talked about the UK’s being a leader, which was extremely welcome, but what concrete action is she taking to ensure that the UK pushes us further on an international stage and plays a leadership role in the talks in Europe?
Amber Rudd
The hon. Lady raises one of the most important questions and challenges facing us this year, and I am encouraged to have her support. We are playing a leading role in Europe—I referred earlier to the role I have been playing not just in Europe but internationally to help broker support from the developing and developed countries. It is important to play that role to make sure we get the right outcome, and we continue to be ambitious in the EU, but in truth the EU is committed to this; it is bringing in the other countries that is so challenging.
Lisa Nandy
I am grateful for that answer, but the Secretary of State will be aware that, outside this place and in the wider world, there is real fear that we will not reach climate safety through these negotiations. Will she commit to push the EU to go beyond the existing target of a 40% reduction in emissions by 2030, to secure a provision in the agreement that international goals will be increased every five years and to ensure that the UK acts as a force for higher ambition both in Europe and on the international stage?
Amber Rudd
May I gently point out to the hon. Lady that it is not the EU that is the issue; it is making sure that the other international large emitters participate in the process? China, for instance, produces 26% of the world’s emissions, which is more than the US and EU combined, so the real challenge is to ensure that we get other countries on board. She is right that we are also pushing for, and hope to get an outcome on, regular reviews. If the final outcome will not put 2° immediately within reach, we need to ensure that the ongoing process—the reviews—does.
Patrick Grady (Glasgow North) (SNP)
5. What recent discussions she has had with representatives of National Grid on ensuring that the UK’s energy supply is sustainable.
The Secretary of State for Energy and Climate Change (Amber Rudd)
Ensuring that hard-working families and businesses across the country have secure affordable energy supplies that they can rely on is our top priority. The Government have worked closely with National Grid to put in place an effective plan, which worked well last winter. Last week, I met Steve Holliday, the chief executive officer of National Grid, to discuss its readiness, and he confirmed that it has everything it needs to manage the system this winter.
Patrick Grady
Last month, Scottish Power announced the closure of the Longannet power station, citing a disproportionate transmission charging system in which Scottish electricity generators pay substantially more than their counterparts south of the border. The charges were forecast to increase from £40 million this year to £51 million next. With up to a fifth of UK generating capacity expected to close over the next few years, does the Secretary of State agree that an unfair disproportionate regime is punishing operators in Scotland and undermining UK energy security?
Amber Rudd
I do not agree with that assertion. The fact is that Scottish taxpayers and bill payers have exactly the same needs as the rest of us in the UK—and that is to have secure and affordable energy. We spoke to National Grid about Longannet and we were reassured that it has the resources in place to ensure that we continue to have a secure supply of energy.
Sir Roger Gale (North Thanet) (Con)
We understand that due to the failure of the policy of previous Governments, it is necessary for National Grid to buy in from mainland Europe electricity supplies to keep the lights on in Britain. What is not acceptable is for the Grid to run massive pylons from Richborough in Kent across to Canterbury, which is totally unnecessary. If the Grid can bury cables in the New Forest, it can bury them in the garden of England. Will the Secretary of State please make sure that that happens?
Amber Rudd
I have looked into this matter, about which my hon. Friend has written to me. I know how beautiful that part of England is, so I will certainly look carefully and work with National Grid to arrive at an outcome.
Jeff Smith (Manchester, Withington) (Lab)
6. What assessment her Department has made of the effect of the proposed changes to the feed-in tariff on the numbers of jobs in the solar power industry.
The Secretary of State for Energy and Climate Change (Amber Rudd)
The report “The Size and Performance of the UK Low Carbon Economy” from the Department for Business, Innovation and Skills estimated that there were over 34,000 jobs in the UK solar sector in 2013. Our consultation on the feed-in tariff review reflects the need to balance sector support, while keeping bills down for consumers. We strongly welcome evidence from the sector during this review consultation, which ends on 23 October, and only then can we begin to analyse the impact on jobs.
Jeff Smith
Estimates suggest, as we heard earlier, that over 20,000 jobs are at risk. Some companies are already giving notices to workers, and projects such as the Greater Manchester community renewals project, which is planning to install solar roof panels in schools in my constituency, will become unviable. How can the Secretary of State fulfil her promise to “unleash a solar revolution” when she undermines jobs and investment in this way?
Amber Rudd
Jobs are always an important priority for this Government. Under the last Government, of course, we created 2 million jobs and we are expecting, hoping and planning to create another 2 million under this one. Solar is a great opportunity for consumers and for businesses, and I believe it will continue to flourish. As the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) said earlier, we had to do this as part of the European Commission’s requirement for a proper review to make sure that we get the right balance between bill payers and producing more solar. I hope it will reach subsidy-free status soon.
Julian Sturdy (York Outer) (Con)
I very much welcome the review of feed-in tariffs. We should be working towards a zero-subsidised solar industry, but does the Secretary of State not agree that the way to deliver zero subsidy is to have a slightly more tapered reduction so that we continue to have a vibrant solar industry and also make sure that we do not deliver a huge rash of applications over the coming months?
Amber Rudd
I know that my hon. Friend takes a particular interest in solar power. It is too early to say what the outcome will be—we are the middle of our consultation—but we are receiving some very helpful replies from businesses and other participants, which will help us to work out the correct level of support. We want to be careful with bill payers’ money, while also ensuring that we support the solar industry.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
While the world embraces solar power, here the Government change feed-in tariffs, thus costing jobs—20,000 in the United Kingdom, as we heard earlier, and 25 from BayWa r.e. in Machynlleth. That may not sound much, but the vast majority of those who are employed in Machynlleth earn less than the official living wage. Will the Secretary of State agree to table, on behalf of the Government, a prayer in the names of the hon. Member for Brighton, Pavilion (Caroline Lucas) and me to annul the Feed-in Tariffs (Amendment) Order 2015, which amends the preliminary accreditation arrangements, so that Members can debate the issue rather than rushing into economically damaging implementation?
Amber Rudd
I am always interested in listening to other people’s views on this matter. If the hon. Lady would like to write to me, or to engage with her constituents in order to participate in the consultation, I will consider what is said very carefully.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
8. What assessment she has made of the implications for her policy of (a) the findings of the Oil and Gas Authority's “Call to Action” report, published on 25 February 2015, on employment in the oil and gas industry and (b) that report's other findings; and what steps she plans to take to support employment in that industry.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
The Government are fully committed to the oil and gas industry. In fact, the first visit that I made as the Minister was to Aberdeen. The industry is vital to our energy security, and it supports about 375,000 jobs across the United Kingdom. We fully recognise the huge challenge presented by lower oil prices, and accept the Oil and Gas Authority’s Call to Action report. The OGA is working with groups such as the Scottish Energy Jobs Taskforce to encourage companies to consider all possible alternatives to redundancy, as well as ensuring that we keep the vital skills that we will need in the future.
Stuart Blair Donaldson
I welcome the OGA’s early identification of the need to support a technology and innovation strategy. What measures will the Minister introduce to encourage technology and innovation, and to boost efficiencies in the oil and gas sector?
Andrea Leadsom
As the hon. Gentleman will know, the legislation to establish the OGA formally is currently being dealt with in the House of Lords. The authority’s key responsibility will be to maximise the economic recovery from the North sea basin, and it is already fully employed in that respect. The Government have made some fiscal changes to promote investment, and, importantly, we have also invested £20 million in seismic surveying of under-explored areas in the North sea basin to try to identify new opportunities for businesses that are based there, in order to encourage the investment that we so badly want.
Mr Speaker
Indeed, but this is a similar question. The hon. Lady can come in now if she wishes.
Kirsty Blackman (Aberdeen North) (SNP)
17. Thank you, Mr Speaker. I am sorry; I was slightly thrown.I would appreciate it very much if the Minister would tell us what action the Government are taking to ensure that decommissioning is delayed for as long as possible. A total of 375,000 people are employed in the industry, directly and indirectly, and many of them are based in my city of Aberdeen.
Andrea Leadsom
You threw me as well, Mr Speaker, but I get the point.
I am entirely sympathetic to what the hon. Lady has said. We all agree on the need to avoid decommissioning for as long as possible. The OGA is working with operators throughout the supply chain to try to increase co-operation in relation to, for instance, supply ships, and to ensure that they share resources rather than saying, “That is mine, so you cannot have it.” A great deal of work is being done, but key to this will be looking at the long-term possibilities for new exploration. I hope the hon. Lady welcomes the new Culzean project near the Shetlands, which has just been given the go-ahead. That is a good example of what we can do if we all work together.
Callum McCaig (Aberdeen South) (SNP)
May I commend you, Mr Speaker, for the element of surprise that you are introducing to our proceedings?
According to the OGA’s report, more than 5,000 jobs were lost in the sector last year, but analysis carried out by Oil & Gas UK suggests that the wider impact on the industry could involve the loss of some 60,000 jobs. The industry’s calls for support must be listened to. A survey of 450 industry leaders, conducted by the Press and Journal’s Energy Voice, found that there was an overwhelming demand for tax breaks to boost exploration in the North sea, and those calls were echoed yesterday by the National Union of Rail, Maritime and Transport workers. Does the Minister agree with me, and with industry leaders and trade unions, that the Government must provide incentives to encourage exploration and protect jobs?
Andrea Leadsom
As the hon. Gentleman will know, the Chancellor introduced some strong fiscal measures in the March Budget to maintain and build investment, including a reduction in the supplementary charge, introducing a new investment allowance and a reduction in the petroleum revenue tax from January 2016, and we will continue to look closely at what else we can do to provide that fiscal support for further exploration and to keep the oil and gas sector thriving in the North sea basin.
Sir David Amess (Southend West) (Con)
9. What areas of co-operation on green growth the UK is exploring with China.
The Secretary of State for Energy and Climate Change (Amber Rudd)
The UK and China enjoy strong and growing co-operation on low-carbon policies and green technologies. This includes working together on the means of financing renewables and low-carbon infra- structure and a cost-effective response to the challenge of climate change.
Sir David Amess
Is my right hon. Friend aware that minimum import price fixing is having an adverse effect on the solar industry because of the trade dispute between the European Union and China? Will my right hon. Friend ensure that the matter is raised with the Chinese President when he visits this country next month?
Amber Rudd
We are indeed aware of that, and we are trying to address it. The cost of solar panels has fallen dramatically, but we would like it to continue to fall. I am working with my colleague the Secretary of State for Business, Innovation and Skills on this issue, and I can confirm that we will continue to press the EU on this matter.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
10. What assessment her Department has made of the potential effects in different regions of the feed-in tariff review.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
The FITs review covers a wide range of technologies for which deployment across the UK varies depending on the specific benefits of that region. For example, there is more solar deployment in the south-west and more wind in Scotland and the north. The effects of the review will therefore affect all in different ways, and the impact assessment acknowledges this.
Drew Hendry
Just this week the National Farmers Union Scotland expressed deep concern that the FITs proposals will have a damaging impact on those looking to diversify. Why did the Government not consider a steady and more gradual reduction of FITs for small-scale solar and wind as recommended by the industry itself in a strategy published last year?
Andrea Leadsom
As I think my right hon. Friend the Secretary of State and I have made clear, this review is required under EU state aid rules and it is now out for consultation. We hope the NFU and other organisations will feed in their response to the consultation, which closes on 23 October, and only at that point will we look at the right balance between keeping bills down and continuing to support the industry.
Steve Double (St Austell and Newquay) (Con)
Many people in Cornwall feel we have been overrun by wind turbines and solar farms, and may I assure the Minister that the recent changes announced have been warmly welcomed by many people in Cornwall? Does she agree with a constituent of mine who recently wrote to me asking me to thank the Government for their recent decisions because they have saved Cornwall?
Andrea Leadsom
Cornwall is a beautiful place and all of us will probably have had fantastic holidays there and would not like to see it overrun by something unsightly, so I can sympathise with my hon. Friend. I am always grateful for thanks; we do not get much of it in government, so I ask him to thank his constituent for thanking us. We are still in a consultation period, however, but this is an important sector and we want it to continue to be successful.
Alison McGovern (Wirral South) (Lab)
Let me tell the Minister, in case she is not aware, that the north-west of England is a beautiful region as well.
Green energy is vital to our economic future and I am afraid that companies such as Natural Energy Sources based in Bromborough in my constituency simply would not recognise the Government’s account of what they have done, given the risks they have created for the solar industry. I ask the Minister to think again, do as so many Members have suggested, and restructure this change to feed-in tariffs.
Andrea Leadsom
I understand what the hon. Lady says, but there has been a lack of understanding about what we are trying to do. We have been enormously successful in supporting renewables. The generation, particularly of solar energy, has far exceeded expectations, and we are on course to meet our legally binding targets, so in a sense we are victims of our own success. As the hon. Lady will appreciate, in this country we have the trilemma of energy security, decarbonisation and keeping the bills down. The problem is the more we subsidise and the longer we subsidise excessive deployment, the more it costs the bill payer.
Christopher Pincher (Tamworth) (Con)
11. What steps she is taking to increase competition in the energy supply market.
Pauline Latham (Mid Derbyshire) (Con)
15. What steps she is taking to increase competition in the energy supply market.
Andrew Bingham (High Peak) (Con)
19. What steps she is taking to increase competition in the energy supply market.
Maria Caulfield (Lewes) (Con)
21. What steps she is taking to increase competition in the energy supply market.
The Secretary of State for Energy and Climate Change (Amber Rudd)
There are 31 companies supplying households in Great Britain, providing greater competition —that is an increase from the 13 in 2010.
Christopher Pincher
Labour’s price freeze plan discouraged the cost of capital and investor decisions in the competition marketplace. What steps will my right hon. Friend take to encourage smaller entrants into the marketplace, in order to make up the £30 billion or so shortfall between what we need to spend and what is planned to be spent on our pipes and our pylons in the next 10 years?
Amber Rudd
My hon. Friend raises the important issue of electricity transmission, and I intend to publish proposals later this year to enable the competitive tendering of certain onshore electricity transmission assets. Initial estimates show that these competitions could bring savings of at least £380 million in the first 10 years.
Pauline Latham
What assurances can my right hon. Friend give community trusts such as that spun off from Transition Belper, in my constituency, that they can continue being supported in their pre-accreditation bid towards the use of hydro power, which has been four years in production?
Amber Rudd
I know that my hon. Friend has taken a particular interest in community energy. I acknowledge that this change could make it more difficult for community energy projects to deploy, but we had to remove pre-accreditation as a matter of urgency, in order to safeguard spends under the scheme while we carry out the feed-in tariff review. But as part of the review, we are seeking views on whether the scheme should be focused towards specific groups or sectors, which might, for example, include households or communities.
Andrew Bingham
My constituency is one of the coldest in England—it might not be as cold as parts of Scotland—so energy prices make up a significant part of the household budget there. I hope that my right hon. Friend shares my belief that increased competition will help to keep prices down and make energy much more affordable for constituents in High Peak and those across the country.
Amber Rudd
I share my hon. Friend’s views; keeping bills down is a key priority for this Government, and competition is absolutely one of the ways to achieve that. An unprecedented number of companies have entered the supply market since 2010, challenging the big six and providing customers with more choice. We expect that trend to continue, enhancing competition and keeping bills down.
Maria Caulfield
I welcome the Minister’s replies, but solar energy companies are having to reconsider their business plans in the light of Government decisions to eliminate subsidies to the sector. That is creating difficulties for solar companies in my Lewes constituency. What steps is she taking to ensure that all energy companies compete on a level playing field?
Amber Rudd
I thank my hon. Friend for her question, and I know she has a particular interest in solar companies in her constituency, having brought them to my attention before. The sector has, of course, been a great success and has deployed at significantly higher volumes than we anticipated when the subsidy schemes were set up. That is why we are looking again at the right level of subsidy, to ensure that we continue to have a thriving solar industry while ensuring that the bill payer is not disadvantaged.
Caroline Flint (Don Valley) (Lab)
I welcome my hon. Friend the Member for Wigan (Lisa Nandy) to the Front Bench and wish her all the best. I thank her for her kind words, as I thank other colleagues across the House for theirs.
Of course competition should put downward pressure on prices. I have discovered, through a freedom of information request, that despite a tough letter from the Secretary of State demanding price cuts for energy companies in May because of low wholesale costs, responses have not been received from Centrica, RWE npower, E.ON and EDF. The Competition and Markets Authority interim report made it clear that the 70% of customers on their suppliers’ standard variable tariff are being overcharged and it recommended a better deal. Will the Secretary of State therefore join me in calling for the introduction of a protected tariff—a default tariff, as it is known—to make the energy market more competitive and give a fair deal to the consumers who are being ripped off?
Amber Rudd
I thank the right hon. Lady for joining me in making sure that consumers and bills are a priority. The CMA has recently reported—sadly, the Opposition opposed that reference at the time—and we are very interested in what it has proposed. It is just a report at the moment, but the principle of a safety tariff is a very interesting way of approaching the matter. I do feel that we need to take more action to support the vulnerable customers who are not making the switch and are missing out on those opportunities.
Carol Monaghan (Glasgow North West) (SNP)
12. What recent discussions she has had with the Scottish Government on the work of the Scottish Islands Renewables Delivery Forum and enabling the generation of renewable energy in the Scottish islands.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
This is a very important issue for those living on the Scottish islands, and I want to assure the hon. Lady of the Government’s support. The work of the Scottish Islands Renewables Delivery Forum was discussed by the Secretary of State and Fergus Ewing on 8 June and 24 June. I am looking forward to co-chairing the next meeting of the forum in Glasgow with Mr Ewing next Monday. My office has invited the hon. Lady to meet me there, and I look forward to seeing her if her diary allows.
Carol Monaghan
In January, the Prime Minister committed to the deployment of renewable energy on Scottish islands, and the previous coalition Government pledged to publish information about the remote island wind contract for difference by July 2015. It is now the autumn and we have had no further detail on the CfD for remote island wind, which is critical to release the potential of remote island renewables generation. When does the Minister plan to publish those important details on the CfD scheme?
Andrea Leadsom
The Government are actively seeking EU state aid approval to ensure that we can treat remote island wind as a separate technology to onshore and offshore wind, as they operate in high wind areas with very challenging conditions. We are awaiting that approval, and, as the hon. Lady knows, we will be making announcements about CfD rounds later this year.
Ian C. Lucas (Wrexham) (Lab)
T1. If she will make a statement on her departmental responsibilities.
The Secretary of State for Energy and Climate Change (Amber Rudd)
Since we last met, the Competition and Markets Authority has reported. We have concentrated, as always, on keeping our focus on consumer bills. We have engaged with it, and we will continue to ensure that we give it all the support we can to ensure that the focus stays on consumer bills.
Ian C. Lucas
This Government have form in chaotic solar consultations. They lost litigation in 2011-12. Will the Government please tell us how much they are paying in damages to solar companies as a result of their incompetence, and will they learn their lesson?
Amber Rudd
The Government have form in excelling at supporting solar and ensuring that the costs to the bill payer are kept down. I do recall that, in 2011, the reduction in the tariff was opposed by the Opposition, which is extraordinary and could have cost an additional £2.5 billion a year.
Nicola Blackwood (Oxford West and Abingdon) (Con)
T2. I am particularly proud that Oxford is a hub of low-carbon research, but the recent Dowling review found that access to innovation support across Government is too complex. Does the Minister agree that, if we want to accelerate renewable research and achieve our climate change targets, we need to follow Dowling’s key recommendation to simplify access to research and development support for innovators? Will she investigate how she can work with the Business Secretary to achieve that? It will be essential in accelerating growth in our low-carbon economy.
Amber Rudd
I welcome the Dowling review report and agree that innovation is key to delivering future growth and productivity. I support the recommendation to make access to R and D support simpler, and my Department is working, as my hon. Friend suggests, with the Department for Business, Innovation and Skills, Innovate UK and the research councils to make improvements to simplify access to innovation support.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Over the past 18 months, the Secretary of State and I have clashed many times, and I have genuinely enjoyed all of our exchanges. The issue that we have discussed perhaps more than any other is the desperate need for the UK to have a stable energy efficiency policy and for there to be some serious political will to tackle fuel poverty. This Government have already scrapped the green deal and zero-carbon homes. There is no taxpayer-funded fuel poverty programme and the Government’s manifesto commitment proposes a huge drop in the already inadequate levels of insulation measures delivered in the last Parliament. That lack of ambition is disastrous for the environment and for consumer bills. What do this Government intend to do to end fuel poverty?
Amber Rudd
I thank the hon. Gentleman for his question. I, too, have enjoyed our exchanges. He spoke as if it were our last one; I certainly hope that that is not the case. Fuel poverty is an essential part of what this Government are trying to address. As he knows, we set out new regulations under the previous Government for the private-rented sector to ensure that we reach new standards in houses by 2030, 2025 and 2020. We have more ambitious targets. We have committed to making a minimum of 1 million houses more secure against fuel poverty, and I will bring forward more proposals in the autumn.
Stephen Hammond (Wimbledon) (Con)
T3. Like many colleagues, I have had correspondence from residents in my constituency about the consultation on the feed-in tariff system. So that I can inform them correctly, will the Secretary of State please tell me how much energy prices have fallen in the past three or four years and whether she expects the outcome of this consultation to see prices continuing to fall for consumers?
Amber Rudd
Gas prices paid by households have fallen by 4.5%. The best deals are available for customers who switch to low-cost fixed term deals on the market, which are up to £100 cheaper than they were this time last year. I certainly hope that that trend continues, but we cannot guarantee it. However, I can say that the Government will take all the action we can to keep bills low.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
T5. Stability and simplicity are key for oil and gas operators to make investment decisions, but there have been more than 18 changes to the oil and gas fiscal regime in the past 15 years. Will the Secretary of State reassure me and the industry that there will be no tax rises for the industry for the remainder of this Parliament?
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
The hon. Gentleman will appreciate that that is really a question for my right hon. Friend the Chancellor, but I think he will accept that the Chancellor has taken great steps to try to improve the fiscal regime to encourage more oil exploration. By creating the Oil and Gas Authority, we have shown our commitment to trying to ensure that we maximise the economic recovery from the North sea basin.
Alex Chalk (Cheltenham) (Con)
T4. What assessment has been made in light of potential reductions to the feed-in tariff of the UK’s ability to meet its targets of cutting carbon emissions by 80% by 2050 and generating 15% of our energy from renewables?
Amber Rudd
As our manifesto made clear, we are committed to our climate change targets. The policy announcements the Government have made to date are consistent with those commitments. We are making good progress towards meeting our 2050 carbon target, with emissions already down 30% since 1990.
Patrick Grady (Glasgow North) (SNP)
T6. In recent years, a Scottish Government Minister has joined the UK delegation to the United Nations framework convention on climate change climate negotiations. Will the Secretary of State assure us that an invitation to join this year’s conference of parties in Paris will be extended to the Scottish Government?
Amber Rudd
I thank the hon. Gentleman for that question. I will have to look into the precedent, but if that has been the precedent I am sure that we will continue to do it.
Antoinette Sandbach (Eddisbury) (Con)
I was grateful for the Secretary of State’s earlier reply to my hon. Friend the Member for Kettering (Mr Hollobone). My constituents share the concerns about large-scale solar parks on agricultural land. How is the Secretary of State co-ordinating with the Department for Communities and Local Government to see how the planning process can assist with rooftop deployment?
Amber Rudd
My hon. Friend is entirely right that the control of where such deployment takes place is not entirely under this Department’s authority. We engage with the DCLG, which has strengthened planning guidance so that projects must go through a stringent planning process. Decisions should be made locally with community engagement.
Paula Sherriff (Dewsbury) (Lab)
T7. The clean energy switch, being run by The Big Deal and 38 Degrees, is Britain’s first ever mass switch to clean energy. Will the Secretary of State place on record the cross-party support for the initiative and urge people to visit thebigdeal.com to sign up?
Amber Rudd
I believe that thebigdeal.com is one of many switching opportunities, so it would not be for me to prefer one over the other. We thoroughly encourage and support switching, which is a great way to reduce energy bills and I would encourage everybody to do so, including hon. Members.
Jo Churchill (Bury St Edmunds) (Con)
Although I appreciate fully the need to cut subsidies, the decision made on 9 September on pre-accreditation for the feed-in tariff will negatively affect my constituents, as well, as we have heard, as those of other Members. It sends a negative message to investors in the green economy, puts dozens of anaerobic digestion projects at risk and jeopardises the conversion of food waste to energy in Suffolk. Will the Secretary of State assure me that investments in green technology will continue to be incentivised?
Mr Speaker
I am sorry, we do not wish to deprive the Minister of her answer. I apologise that I was ahead of myself, but we will digest her answer, which I am sure will be brief.
Andrea Leadsom
I am grateful, Mr Speaker. As my hon. Friend the Member for Bury St Edmunds (Jo Churchill) will be aware, the feed-in tariff has been hugely successful in encouraging the generation of low-carbon energy for homes and businesses. We appreciate that pre-accreditation was widely supported as it enabled people to book their tariff, but the problem is that there is a tension between the cost to consumers and the value of the subsidies. We need to get that balance right.
Clive Lewis (Norwich South) (Lab)
Is the Minister aware of the concern among staff at the Nuclear Decommissioning Authority about changes to their pensions and will she agree to meet the relevant trade unions to discuss that?
Andrea Leadsom
The hon. Gentleman’s right hon. Friend Lord Hutton’s report on public service pensions was adopted by the Government in 2013 and set out the direction of travel for all public sector pensions. We are in close discussion with the NDA on how we can implement that, bearing in mind the particular sensitivities of Sellafield and other nuclear sites. I am very happy to meet the unions to talk about it, as I have previously.
Tom Pursglove (Corby) (Con)
Chinese steel dumped on the European market is bad not only for British business but for the environment, so does the Minister agree that the best thing to do for the environment and for securing greener growth is to buy British?
Amber Rudd
My hon. Friend makes a very good recommendation. Buying British is always a positive thing to do.
Richard Burgon (Leeds East) (Lab)
How can the Government justify slashing support for renewables while at the same time imposing a 16-week limit on councils, such as Leeds City Council, for considering applications for fracking?
Amber Rudd
Our energy security relies upon an energy mix. We therefore support shale and feel that the right way to approach it is to have a planning process that councils adhere to. We stand ready to help councils when they need it, and I hope that we will have the opportunity to do so.
Mr David Nuttall (Bury North) (Con)
At periods of peak demand this winter, how much spare capacity will the UK have from its own supplies?
Amber Rudd
After National Grid takes account of the various resources it has to add to capacity, that will be over 5%.
Sue Hayman (Workington) (Lab)
Given the concerns expressed today about the sustainability of the UK’s future energy markets, and also the investment required in renewables, what meetings has the Secretary of State had with smaller marine and tidal developers, particularly in the north of England, such as Solway Energy Gateway?
Amber Rudd
I have not met the company to which the hon. Lady refers, but I have met many other industry participants. If she wants to bring a particular group to see someone in my Department, or to write to me about them, I will of course pay attention.
Mr Peter Bone (Wellingborough) (Con)
I wonder whether the Secretary of State has heard the rumour from No. 10 that, in its desire to cut the cost of politics, especially when we are reducing the number of MPs, her Department will be merged with the Department for Business, Innovation and Skills. As a champion of cost saving, would she recommend that move?
Amber Rudd
My hon. Friend often teases me on that point. This is an incredibly important Department that is delivering secure, affordable energy. I would also like to scotch the rumour that the constituency of Wellingborough is in any danger.
Melanie Onn (Great Grimsby) (Lab)
David Attenborough, a former Cabinet Secretary and the Secretary of State’s predecessor have proposed a 10-year investment plan to make renewable energy cheaper than coal. The plan would see big increases in research and development, with the same spirit and ambition as the Apollo space missions of the 1960s. Will the Secretary of State do all she can to get this proposal on the agenda for this December’s climate change talks in Paris, or is she brave enough to disagree with Sir David Attenborough?
Amber Rudd
I cannot claim to be that brave, but I can say that I share the ambition to have more renewable energy and lower carbon and, above all, to reduce the reliance on coal for this country’s energy needs.
Peter Aldous (Waveney) (Con)
Notwithstanding the fact that the oil and gas industry is currently facing serious challenges, the southern North sea has the twin advantages of significant untapped gas reserves and a low cost base. Can the Secretary of State confirm that she will be bringing forward policies as quickly as possible that will meet the nation’s requirement for more gas and protect and create jobs?
Andrea Leadsom
I can assure my hon. Friend that we are doing everything we can to improve exploration of the further potential in the North sea, and he is right to point to the gas reserves in the southern North sea. Of course, the beauty of this is that gas is the cleanest fossil fuel, so it can also help to meet our decarbonisation objectives.
Helen Hayes (Dulwich and West Norwood) (Lab)
This week I had a meeting with Sustainable Energy 24, a community benefit society established to deliver solar panels on public and community buildings in my constituency. It told me, in relation to the cut in the feed-in tariff and the ending of pre-accreditation:
“It is hard to see how any community energy group can continue on this basis.”
Can the Secretary of State tell me why the impact on community energy companies was not considered ahead of the consultation and provide reassurances that the consultation response will address that very important issue?
Amber Rudd
I can assure the hon. Lady that community energy is a very important part of our energy sources. We have already contributed £25 million to supporting community energy projects. We will look carefully at the impact on community energy while working out what is the right price to support solar while looking after bill-payers at the same time.
David Mowat (Warrington South) (Con)
By far and away the most dominant low-carbon technology is nuclear, yet these programmes require cross-party consensus. Is my right hon. Friend as concerned as I am that the leader of the Labour party has come out against nuclear power, because if that becomes policy it will make it impossible for us to meet our climate change commitments?
Amber Rudd
My hon. Friend is exactly right to point out that nuclear needs to be part of the energy mix. In fact, 20% of our electricity comes from nuclear, even today. We have ambitious plans for further nuclear and we sincerely hope that we will be able to rely on the Opposition to support us in that.
Barclays Bank Branch on Woodhill (Leicester)
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Keith Vaz (Leicester East) (Lab)
I would like to present a petition signed by 79 local residents, predominantly in the North Evington area of my constituency. Signatures were collected by volunteers in the local area and I thank Councillors Jean Khote, Luis Fonseca and Abdul Osman for their support. The residents of Leicester East declare that the proposed closure of Barclays bank on Woodhill in North Evington will have an extremely negative impact on elderly residents in the area who use the branch. The petitioners therefore request that the House of Commons urges the Department for Business, Innovation and Skills to meet representatives of Barclays to examine the impact of branch closures on local residents. There will be more signatures and more petitions on this matter, but this is the petition that I will be presenting on behalf of my constituents today.
[Following is the full text of the petition:
The petition of residents of Leicester East,
Declares that local Barclays Bank customers are greatly concerned that their local Barclays Bank branch on Woodhill (Leicester) will be closed in the coming months and further that residents of Woodhill and the surrounding area fear that they will have to travel much further to an alternative Barclays branch in Leicester city which poses serious difficulties for some residents.
The petitioners therefore request that the House of Commons urges the Government to encourage Barclays Bank to reconsider the decision to close the Woodhill Branch in Leicester, as there are no other Barclays branches in the vicinity.
And the Petitioners remain, etc].
[P001546]
School Hall for East Markham Primary School
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Robert Jenrick (Newark) (Con)
I wish to present a petition on behalf of my constituents relating to the urgent need for a school hall to be provided at East Markham primary school near Newark, a highly valued rural school in Nottinghamshire whose overcrowded and unsuitable premises have held back education in that otherwise wonderful part of our great county for too long, signed by 186 parents, grandparents and governors as well as many residents of this community.
The petition states:
The petitioners therefore request that the House of Commons urges the Government to encourage Nottinghamshire County Council to provide a school hall for East Markham Primary School.
[Following is the full text of the petition:
The petition of residents of the Newark constituency,
Declares that East Markham Primary School should have a hall provided by the County Council; further that the petitioners believe that the education of the children at the school is suffering for a variety of reasons including that there is no indoor PE or indoor drama facility, there is overcrowding and that the school has no ability to put on plays, concerts or performances for groups larger than around 30 people; and further that a local petition on this matter was signed by 186 individuals.
The petitioners therefore request that the House of Commons urges the Government to encourage Nottinghamshire County Council to provide a school hall for East Markham Primary School.
And the Petitioners remain, etc.]
[P001547]
Business of the House
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chris Bryant (Rhondda) (Lab)
Will the Leader of the House give us the business for next week?
The Leader of the House of Commons (Chris Grayling)
The business after the recess will be as follows:
Monday 12 October—Debate on a motion relating to superfast broadband roll-out, followed by general debate on the political situation in Stormont. The subjects for these debates were recommended by the Backbench Business Committee.
Tuesday 13 October—Second Reading of the Immigration Bill.
Wednesday 14 October—Second Reading of the Cities and Local Government Devolution Bill [Lords], followed by debate on a motion relating to the Charter for Budget Responsibility.
Thursday 15 October—Second Reading of the Armed Forces Bill.
Friday 16 October—Private Members’ Bills.
I should also like to inform the House that the business in Westminster Hall for 15 October will be:
Thursday 15 October—Debate on the ninth report from the Justice Committee on Prisons: planning and policies, followed by debate on the eighth report from the Justice Committee on the impact of changes to civil legal aid under part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
Chris Bryant
As you mentioned earlier, Mr Speaker, our Order Paper today pays tribute to four Members of the House who lost their lives in the service of their country a century ago. It is a sad fact that the first of them, Captain Harold Cawley, was not the only Cawley son to be killed—all three brothers died, two of them as Members of this House. Their shields stand here as a permanent reminder of the personal tragedy of war. I often think that we are not really worthy.
I thank the Leader of the House for his response. I pay enormously warm tribute to my irrepressible predecessor, my hon. Friend the Member for Wallasey (Ms Eagle). I think she will be a very difficult act to follow.
I gather it has been rumoured that I turned down the job of shadow Defence Secretary because I wanted this country to invade Russia. I can assure the House that I have absolutely no intention, either in that job or this job, of invading Russia. In fact, the way things are going I do not suppose we would be able to invade Alderney.
Besides, I could not honestly think of a better job than this one, up against the right hon. Member for Epsom and Ewell (Chris Grayling). I confess that I have been wondering how exactly I should deal with him. Some have suggested that I should be quite aggressive and angry—and that is just his Back Benchers. I have decided instead to smother him with my love. I might even take him on a bonding session in a B and B, though obviously it would have to be one that accepts same-sex couples, and I am not sure he would like that very much. Let us see if all of us, together, can warm the cockles of his heart and even raise a little smile—it is just peeking out there now, I see.
Last Friday we had a very moving debate on the Assisted Dying (No. 2) Bill. Eighty-seven Members put in to speak—the highest number ever. On Monday we had the Trade Union Bill, on which 67 Members wanted to speak, and on Tuesday we had the statutory instrument implementing the single largest cash change announced in the Budget. In each of these debates, dozens of Members were unable to speak because of the lack of time. In the case of the statutory instrument, the measure will lead to millions of families losing over £1,000 a year as a result of cuts to tax credits and gaining £200 a year, at most, from the so-called national living wage. Yet the Leader of the House allowed a mere 90 minutes for that measure when he could have provided for a full day’s debate before we took the statutory instrument itself.
I think the right hon. Gentleman is a decent man—[Interruption.] Yes, I do, honestly. I know he was a member of the SDP, but then I was very briefly a Tory in my exceedingly misspent youth, so I believe there is much rejoicing in heaven when a single sinner repenteth.
In all seriousness, I ask the Leader of the House, given the circumstances, to make provision for fuller debates so that Back Benchers can have a real crack of the whip. He has announced today a single day for the Second Reading debate on the Immigration Bill, but we have no idea what is in it and I am not sure whether it has even been published yet. Maybe it was published an hour ago, but it has certainly not been possible for anybody to scrutinise it yet. We know one thing for certain: this is the most contested subject in British politics today. Our constituents would expect many Members to take part in that debate, not just a smattering. Would it not be far better to have a two-day Second Reading debate on that Bill? If the right hon. Gentleman were to provide that, he would be the darling of the House.
As the Secretary of State for Northern Ireland made clear on Tuesday, matters in Northern Ireland are at an extremely critical stage. Let me make one thing absolutely clear, as my hon. Friend the Member for Gedling (Vernon Coaker), the shadow Secretary of State, made clear earlier this week: we stand four-square behind the principle of consent and a bipartisan approach to the peace process in Northern Ireland. We will do everything we can to help the Government ensure that the peace process remains on track. We are about to enter a three-week recess, though, so how will the Government ensure that all parties are kept abreast of developments? If necessary, will the Leader of the House, with your consent, Mr Speaker, recall the House?
The Leader of the House has said that he will bring his new proposals on English-only votes to the House before the end of October, but the House of Lords has now called for a Joint Committee to consider the implications of what we consider, and it clearly considers, to be half-baked plans to add four more stages to every Bill as it goes through this House. Can the Leader of the House recall any occasion when such a request from their lordships has ever been refused? Will he set up the Joint Committee as a matter of urgency and before we debate the matter in this House?
As you know, Mr Speaker, we have PQs, PMQs and WMSs, but I wonder whether the Leader of the House will allow us to set up MPAs—ministerial parliamentary apologies. Obviously, we would have to start with the Prime Minister, who could apologise to all the people of Yorkshire. The Leader of the House would obviously have to apologise to the people of Moss Side, about whom he was very rude a few years ago, and the Minister without Portfolio, the Mayor of London, would have to put in a daily—possibly an hourly—appearance.
The Prime Minister could also apologise for breaking his promise to the British people. In April he said he would not cut child tax credits. He said it on television programmes time and again, but this week he forced his Members to go through the Division Lobby to do precisely that. That is the kind of chicanery that undermines trust in politics. Surely the least the Prime Minister can do is to come to this House to apologise.
I hope that, between us, the Leader of the House and I, and all of us together, can help restore the Commons as a place of serious intellectual inquiry, with tough but fair scrutiny, proper respect for political difference and genuine open-minded debate. And maybe the Leader of the House will smile.
Chris Grayling
May I start by welcoming the hon. Member for Rhondda (Chris Bryant) to his new position and echo his words of tribute to his predecessor, the hon. Member for Wallasey (Ms Eagle)? I said in the House last week that she brought a certain style to business questions. We will miss her. She has gone on to an interesting portfolio. I wished her all the very best last week and echo the hon. Gentleman’s words this week. I very much enjoyed debating with her.
The hon. Gentleman and I were born in the same year, share the same name and were elected to this House on the same day. Notwithstanding his comments, we both agree that his party’s defence policy would be a danger to the security of our nation.
I also echo the hon. Gentleman’s comments about Members’ shields in this place. Their names are rightly commemorated on these walls as having done great service for this country. They played a vital role in protecting its security. We should always remember and honour them. The hon. Gentleman is absolutely right to refer to them.
Equally, it is also right to pay tribute to the victims of terrorism whose names are commemorated on the walls of this House, and to state that we as politicians—every single person in this House should state this, although that is not always the case—stand united against terrorism. It diminishes this House when that is not the case.
The hon. Gentleman referred to the debate on the statutory instrument two days ago. I actually agree with him. I think we should have had five days of debate on the changes that we discussed this week, and we did—as changes announced in the summer Budget, they were debated over five days, which is the right and proper way to deal with such issues. We take such issues seriously, and we provided the time to discuss them in the House.
The hon. Gentleman commented on the Immigration Bill, which has been published today. There will be extensive debate in this House, including in Committee and on Report, so I am absolutely satisfied that we will have adequate time for debate.
I remind the hon. Gentleman that one of the things we have done as a party in government is to provide much more time for the Members of the House to secure debates of their choice in their own time. I have just announced two sessions organised by the Backbench Business Committee on subjects of concern to Members. It is right and proper that we, as responsible stewards of the House, make time available for individual Members to secure the debates that they want.
I am very grateful to the hon. Gentleman for his comments about the situation in Northern Ireland, which is a matter of great concern to all of us. I send very best wishes, as I am sure do Members from both sides of the House, to the Northern Ireland Secretary in her efforts to make sure that the situation is resolved as quickly as possible. I pay tribute to all those involved in stabilising Northern Ireland. The progress we have made must not be lost, and I sincerely hope that we can reach a resolution. I am grateful to the hon. Gentleman for his support.
I simply say to the hon. Gentleman that we will update the House on Northern Ireland as and when necessary. This Government will always take the view that if there are matters of sufficient seriousness, we will seek a recall of the House. Clearly, however, those matters have to be of sufficient importance for a recall to be considered essential.
The hon. Gentleman asked me about the Joint Committee. I simply say that I have noted the House of Lords motion, which we have considered and are considering carefully. I would also say, however, that the Standing Orders of this House really are a matter for this House.
The hon. Gentleman made comments about broken promises. I simply remind him that the biggest broken promise of the past 10 years was the previous Government’s promise that we would have a referendum on the Lisbon treaty. They tore up and ignored that promise, so I will take no lessons on broken promises from the Labour party.
I am slightly disappointed about today. Yesterday, we saw a new approach from the Labour party, with a public consultation about what questions should be asked in the House of Commons. The hon. Gentleman sent an email yesterday, or a message via Twitter—
Chris Grayling
I do not know whether he sent an email as well, but he sent a tweet to all his supporters asking for suggestions about the questions that should be asked today. I have to say that we have heard none of those questions, so there must be a large number of disappointed people. [Interruption.] The hon. Gentleman says that they were censored. I must say that one or two tweets about him were very unparliamentary. He referred to past events. One or two of them he may not wish to remember, but they were certainly highlighted on that Twitter feed. Let me do the right thing, however, and give a response now to Graham from Glasgow, who asked, “Do I like salt and vinegar on my chips?” I am afraid I prefer mushy peas and gravy.
Jeremy Lefroy (Stafford) (Con)
May we have a debate on the co-ordination and efficiency of roadworks undertaken by the utilities? At the moment, Stafford is often brought almost to a standstill by necessary work that is not being done in the most efficient and effective manner.
Chris Grayling
I have every sympathy with my hon. Friend. I know that the Secretary of State for Transport has taken a lot of interest in that subject. The issue involves not just that point, but the quality of repairs. We as a House should always say to utility companies that when they dig up a road, we expect them to do a decent job of repairing it. Nine times out of 10 when our roads develop potholes and problems with the surface, it is where a utility company has passed by and not done a decent enough job of repairing it. They have a duty to help to keep this country moving, but they do not always fulfil it.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank the Leader of the House for outlining the business for when we return from the recess. I offer my congratulations to the hon. Member for Rhondda (Chris Bryant), who is one of the few constants in the great Labour revolution of 2015. My colleagues and I on the Scottish National party Benches look forward to working with him in getting rid of Trident as early as possible and in our resolute opposition to Tory austerity.
We are going on recess again today, and we are only just back! This recess is called the conference recess. Apparently, it is designed to accommodate the conferences of the three main UK parties, but we actually return in the week when the third party has its conference. We are disrupting the work of this House to accommodate eight Liberal Democrats. I get the sense that we could just about muddle through without the contributions of those hon. Members, if they felt that they had to be at their conference. May we look at the ridiculous conference recess and decide that we should instead be in this House, addressing our many key responsibilities? Let us get rid of this silly conference recess.
Tomorrow it will be one year since the independence referendum. I am surprised that there is to be nothing in this House to mark that defining moment in UK politics. That experience certainly changed Scotland, if not the UK, for ever. Perhaps when we come back, we could have a State of the Union debate. I and my hon. Friends are in the Union-ending business, but we seem to have been joined in that mission by the Conservative Government. They seem to be doing absolutely everything they can to throw us out the door—making us second-class Members in this House and rejecting any amendment to the Scotland Bill. Perhaps we could have such a debate, so that the Scottish public can observe the Conservatives in action. Just about 50% of them are for independence. If they could listen to what the Conservatives are suggesting, perhaps we could get it up to 60%.
You will have noted, Mr Speaker, that we objected to the setting up of the Joint Committee on Human Rights. That is not because we have any issue with having a Committee on human rights, but we do have every issue with the membership of the Committee. Four Conservative and two Labour Members from this House will be joined by six Members from the House of cronors down at the bottom of the corridor. I do not know why, on such an important issue, there should be parity between that unelected House and this House. Within that Joint Committee we will find a Liberal, who comes from a party that has been overwhelmingly rejected, and an unelected Cross Bencher. Will the Leader of the House go away, have a think about the motion and ensure that the third party of the United Kingdom is included in what is such an important Joint Committee?
Lastly, as we go on the conference recess, the Leader of the House needs to promise that if there are any developments in the great international issues, such as the refugee crisis and the Conservatives’ desire to push us further towards conflict in Syria, he will recall this House, even if it might disrupt the eight Liberal Democrats.
Mr Speaker
I say to the hon. Gentleman that each of the party conferences could perfectly well take place over a weekend—something that some of us have long argued should happen. However, there will be a change of the kind that he wants only if there is consensus across the House.
Chris Grayling
I doubt very much that the attention of the nation will be on the Liberal Democrat conference next week. Indeed, I doubt very much that the attention of most Members of the House will be on the Liberal Democrat conference next week. I say to the hon. Gentleman that the job of Members also involves working in their constituencies. I suspect that next week, most Members of the House will be found not glued to the speech of the hon. Member for Westmorland and Lonsdale (Tim Farron), but doing valuable work in their constituencies. I assume that the same will be true of Scottish National party Members, although they do have MSPs who do most of the work in their constituencies, so I can understand if they feel a bit under-occupied. Perhaps they will think of tuning in to the speech of the hon. Member for Westmorland and Lonsdale.
The hon. Gentleman referred to the anniversary tomorrow of the Scottish referendum. The Scottish National party still has not quite come to terms with the fact that the Unionists won the referendum and the people of Scotland chose to remain within the United Kingdom. Every week is a bit like groundhog day with the hon. Gentleman as he talks about the tension between England and Scotland and—rather nonsensically, because it is not true—about our apparent attempt to turn the SNP into second-class Members. Of course, if he read the detail, he would know that that is all total nonsense. They simply have not come to terms with the fact that the people of Scotland—very wisely, in my view—voted for the United Kingdom and not against it.
The hon. Gentleman referred to the composition of the Joint Committee on Human Rights and the fact that it is balanced equally between the Commons and the Lords. I simply say to him that that is because it is a Joint Committee. It would hardly be a Joint Committee if all its members were Members of the House of Commons. I appreciate that he would like to change many parts of this place, but the workings of a Joint Committee have been in place for a long time, and they represent a balance between both Houses of Parliament. That is not something that we intend to change.
Finally, it has always been the policy of this Government, the coalition Government, and the Labour party in government, that if a sufficiently serious matter occurs, this House—subject to your consent, Mr Speaker—will be recalled. That has happened many times over the years since the hon. Gentleman and I were elected to this House, and it will not, and should not, change. The three weeks that lie ahead are an important part of our political calendar and give people time to do valuable work on behalf of their constituents. I know that is what most Members of the House will be doing.
Rebecca Pow (Taunton Deane) (Con)
There is a clear need for new investment in low-carbon technology, and the new nuclear power station at Hinkley Point is an essential element of that. Associated skills programmes are already running, and 25,000 jobs have been promised locally. Will the Leader of the House come to the House to update it about progress on this crucial power station?
Chris Grayling
It is essential that that project goes ahead, as its success will be an integral part of this country’s future energy strategy. We must ensure that we keep people’s houses lit and businesses running, and this morning we heard questions to the Secretary of State for Energy and Climate Change. I assure my hon. Friend that the Secretary of State will keep the House regularly updated about progress on that important project.
Mr George Howarth (Knowsley) (Lab)
Following the innovation of my right hon. Friend the Leader of the Opposition, I have a question from Jane from Liverpool on the election of police and crime commissioners. As the Leader of the House will know, those elections are due to be held in May 2016, but signals coming from the Cabinet Office suggest that they are likely to be delayed until June 2016. Will the Leader of the House explain why that might be the case?
Chris Grayling
I suspect that Jane from Liverpool has a vested interest in the answer to that question. I encourage George from Knowsley to tell Jane from Liverpool that she should not believe everything that she reads in the paper until the Government make an announcement. If any decisions are taken that would change the timetable of those elections, I am sure that Ministers will first inform the House.
Sir Paul Beresford (Mole Valley) (Con)
May I declare a potential financial interest? Is the Leader of the House able to persuade the Health Secretary to make a statement—even a written statement—on future research and the potential use of the precautionary principle, following recent research that was initially aimed at variant Creutzfeldt-Jakob disease prions? Sadly, that research indicated the potential for proteins related to Alzheimer’s to be transferred on surgical instruments.
Chris Grayling
That is obviously a matter of great concern. I saw those reports, and I know that the Health Secretary will have taken a close interest in the issue. We have Health questions two days after we return from the conference recess, and I encourage my hon. Friend to raise that matter. Alzheimer’s is a dreadful disease. I suspect that most of us in the House know family members or constituents who have suffered from it, and anything we can do to reduce its impact in the years ahead must be desirable.
Valerie Vaz (Walsall South) (Lab)
Why did the Government abruptly cut the ESOL plus—English for speakers of other languages—mandation fund? That has put in jeopardy those who want to get jobs and learn English, as well as providers such as Walsall adult community college. May we have an urgent statement on restoring that fund, or at least a reply to my letter from the Minister?
Chris Grayling
I understand the concern and we seek to do everything we can to further education in this country. Our colleges do a great job for many of those who sought refuge in this country, and they help them to develop English language skills. I will ensure that the Minister of State for Skills is aware of the hon. Lady’s concern, and that he replies to her letter as soon as possible.
Sir Greg Knight (East Yorkshire) (Con)
May we have a debate on coastal erosion? Although this is not a new phenomenon, it is occurring in East Yorkshire at an alarming rate. I accept that defending the coastline is not always economically viable, but the local authority needs to have sufficient resources to take whatever other action is appropriate, so it is an issue that needs to be addressed.
Chris Grayling
My right hon. Friend makes an important point, as ever, in defence of his constituency. Coastal erosion has a real impact on many constituencies. The last thing we would want is to see his constituency disappear into the sea. I commend him, because I know that he has secured a visit from the Minister with responsibility for this matter. I hope that that leads to a dialogue that will improve the situation in his constituency.
Ian Mearns (Gateshead) (Lab)
I thank the Leader of the House for giving us advance notice of the business for 12 October, which is Backbench Business Committee-nominated business—debates on superfast broadband rollout and on the political situation in Northern Ireland. I am sure the right hon. Gentleman will welcome the fact that following the misunderstanding last week, the Backbench Business Committee is reverting to meeting on Tuesday afternoons. That will help in the communication of information to us. During the recess the Committee will still be open for business and will welcome bids from right hon. and hon. Members.
Chris Grayling
I am grateful to the hon. Gentleman for his work and I am glad we have a good process going forward. I pay tribute to him for the work that he is already doing. I was very pleased by the selection of the situation in Northern Ireland for debate immediately after the recess. As the Government have given control of such a large block of time to both the Backbench Business Committee and the Opposition parties, there are times when, on a subject on which we would like to have a debate, the Backbench Business Committee does the job and picks that subject, which makes the Government’s job easier. Also, it makes sure that issues of vital importance to the House are brought before it at an early opportunity.
Maria Caulfield (Lewes) (Con)
This year we celebrate 100 years since the Women’s Institute was formed. Yesterday was 100 years to the day that the first branch began. May we have a debate to celebrate the work of the WI and to recognise its valuable contribution to this country?
Chris Grayling
I echo my hon. Friend’s appropriate words of tribute to the WI. It not only plays an important role in voluntary work in my constituency, in her constituency and in the constituencies of Members across this House, but it played a vital role in wartime in this country—we talked about wartime earlier. The WI’s work is immensely impressive. On one or two occasions it even played a role in the political process. Those of us on the Conservative Benches remember warmly the meeting between a recent Labour Prime Minister and a group of WI delegates, which will remain etched on our memories. I say to every single member of the WI, “Thank you for what you do.” We have just had a conversation about the Backbench Business Committee. The work of the WI could be a topic that the House chooses to debate in recognition of that 100 years.
Rachael Maskell (York Central) (Lab/Co-op)
On Monday we had an important debate about the future of trade unions. In that debate it came to light that the vast majority of recent disputes occurred in the public sector because mayors and Ministers refused to negotiate. As a matter of urgency, may we have a further debate about the responsibilities of Ministers in disputes, and make sure that this happens before the Trade Union Bill progresses into Committee?
Chris Grayling
The hon. Lady and I might have different views about responsibility for recent disputes. Ministers become involved in discussions with unions when it is necessary to do so, but it is often better for those discussions to take place between the public officials responsible for those areas and the workforces who work for them, without politicians getting in the way of that discussion. It is always a matter of judgment as to what happens. However, I have little sympathy with those who argue in favour of a minority of trade union officials, who are often dominated by people with extreme views, of which we have seen quite a lot in recent months, causing massive disruption and chaos in the lives of the working people of this country in a way that is wholly inappropriate.
Philip Davies (Shipley) (Con)
May we have a debate on the forthcoming plastic bag charge, which is not only yet another triumph for the nanny state, but absolutely ridiculous in the sense that it refers to single-use plastic bags and fails to take into account the fact that many people already re-use their plastic bags? According to the TaxPayers Alliance, it will cost residents £1.5 billion over the next 10 years. Tesco has already announced that it is going to charge 40p for every home delivery, even if people use only one or two bags. This Government should be on the side of hard-working people trying to bring down the cost of living, not unnecessarily increasing it.
Chris Grayling
I know my hon. Friend feels very strongly about this issue. Normally, he and I find ourselves with common views, but I am not sure I am entirely of the same view as him in that I recognise the very real impact on our environment of the number of disposable plastic bags that get into our ecosystem. My hon. Friends in the Department handling the charge will have heard his comments. It is absolutely important that we get this right, and I will make sure his concerns are passed to them. He will, of course, be able to use the usual methods to bring forward a debate, if he chooses to do so.
Kirsty Blackman (Aberdeen North) (SNP)
I am delighted that repetition is welcomed in this House. On 2 July, the Leader of the House told us that independent assessments have shown that the Scotland Bill is meeting the Smith commission recommendations. I have asked written questions, I have asked oral questions and, finally, I have resorted to writing a letter, but so far I have received only fluffy responses. Will the Leader of the House make a statement on whether Ministers of this Government should be able to back assertions made in the Chamber with fact?
Chris Grayling
I quote from a press release issued by the Law Society of Scotland:
“Following publication of the Scotland Bill today at Westminster, Alistair Morris, President of the Law Society of Scotland, said: ‘We welcome the introduction of the Scotland Bill into the House of Commons. It reflects the Smith Commission agreement and provides for further powers across a range of areas for the Scottish Parliament.’”
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Last week, as my right hon. Friend may know, I launched a campaign to save the hedgehog. May we please have a debate on how we can save the hedgehog population and the role that badgers play in their decline?
Chris Grayling
This is one of the issues that tends to be avoided by those who oppose badger culls. There is a clear causal link in parts of the country between the growing number of badgers and the diminution in the number of hedgehogs. I am with my hon. Friend on this. I used to have hedgehogs in my garden when I was a child. The disappearance of hedgehogs in many parts of this country is a crying shame. We should do everything we can to help restore their population. Controlling the number of badgers seems to me to be a very good way of doing so.
Kevin Brennan (Cardiff West) (Lab)
May we debate Ministers meddling with the BBC? The Culture Secretary has just announced that the BBC’s “10 o’clock News” should not be at 10 o’clock. Would a debate about ministerial meddling not allow us to explore why a party that once was a supporter of public broadcasting and an independent BBC has been reduced to its Ministers just mouthing the mantras of Murdoch?
Chris Grayling
We strongly support the existence of public service broadcasting in this country, but it is also important that the BBC plays the right role in our society, leaves space for local media and competes fairly with commercial broadcasters. We want a fair environment for broadcasting, as well as an accurate and authoritative environment for broadcasting.
Mr Ranil Jayawardena (North East Hampshire) (Con)
Many of my constituents are affected by poor mobile phone signals, on top of often very slow broadband. Since the summer, there has been a particular issue for the residents of Yateley who use O2. May we have a statement on what the Government are doing to hold mobile phone operators and broadband providers to account where customers are paying for a service but not receiving it?
Chris Grayling
I am sure my hon. Friend’s comments will be greeted with a degree of concern and interest by those involved. We have, of course, secured a very large investment programme in the spread of superfast broadband. That is absolutely right and proper, and work is taking place in many parts of the country. There is an opportunity to discuss this matter immediately after the recess in a Backbench Business debate on precisely the subject of superfast broadband. I encourage my hon. Friend to bring up this point at that debate. Ministers will, I am sure, listen very carefully.
Caroline Lucas (Brighton, Pavilion) (Green)
May I again urge the Leader of the House to ask the Attorney General to come to the House to explain the legal advice that led to a fundamental departure in UK policy, when two British nationals were targeted and killed by an RAF drone attack in Raqqa? This is particularly important now, given that in the past few days the explanation of the legal grounds for that move have become ever more murky.
Chris Grayling
The Prime Minister has explained in detail to the House the reasons for his decisions, and he will provide more information in confidence, as is normal, to the new Chairman and members of the Intelligence and Security Committee. It has always been customary practice when either party has been in power, and in the legal world, that legal advice is not published but a matter of privilege between a lawyer and a client. That is how Governments have always operated and how they will continue to operate. The difference in this place is that both the Prime Minister and the Attorney General are regularly before the House for scrutiny, and the hon. Lady will have opportunities to put questions to them.
Mr Steve Baker (Wycombe) (Con)
My right hon. Friend will remember that I have asked for statements about the EU renegotiation. I am keen that the House should have the opportunity to understand that the Government are working energetically and wholeheartedly towards a fundamentally different relationship with the EU. We need to guard against any scurrilous suggestion that the Government might be heading towards some sort of essay crisis, so may I ask him again for a series of statements to help the House understand the EU renegotiation, which we all hope will lead to a fundamentally different relationship?
Chris Grayling
My hon. Friend and I agree that the status quo in our relationship with the EU is not in our national interest. It is essential that we pursue this renegotiation, put the new deal to the country and give it a choice between staying in and leaving the EU, and of course the Government are bringing forward that choice in a way that never happened under the previous Government. I absolutely understand his concerns, and he knows I believe radical change is necessary. The Foreign Secretary and the Prime Minister will be in the House regularly over the autumn to take questions from colleagues about what is happening, and I know my hon. Friend will be here to ask such questions. I know that many in the House are determined to see change. The interesting question is where the Leader of the Opposition stands. I have heard mixed messages this week
Chris Grayling
The hon. Gentleman might not be terribly sympathetic if his new leader decides to campaign to leave the EU. The Opposition are already in chaos over this policy area, as in many others.
Barry Gardiner (Brent North) (Lab)
If 52,500 people were dying each year in road traffic accidents, the Government would have to respond to the public outcry and act. Last week, the Government revealed that 52,500 people were dying from air pollution every year in this country. The Supreme Court has found that the Government’s failure to prepare a plan to deal with that is illegal, and the UK now faces infraction fines. Will the Leader of the House make time for an urgent debate, in Government time, to set out the Government’s proposals to deal with this damage to the health of the British population?
Chris Grayling
There will be plenty of opportunities to question Ministers about this issue. It is a matter that the Government take seriously, but of course it is a challenge for any Government to deliver dramatic change to our society overnight. Ministers are working carefully on ways to improve the situation, and the hon. Gentleman will have an opportunity to call a Back-Bench debate, either here or in Westminster Hall, bring a Minister to the House, and ask questions at one of the monthly Question Times.
Dr Matthew Offord (Hendon) (Con)
On 15 July, the Foreign Secretary told the House that as part of the nuclear deal with Iran the International Atomic Energy Agency would agree a road map and a set of activities that need to be completed before sanctions can be lifted. He said that it would take about six months. Will the Leader of the House ask him to come to the House before Christmas to update us on progress?
Chris Grayling
I will certainly pass that request to the Foreign Secretary. We all take the situation in Iran very seriously, and we hope that the agreement reached will improve it. It was probably better than the alternative, even though many colleagues have expressed concerns about our ability to see it through. In the Government’s view, it is the best available option. We must be careful to ensure that the agreement is adhered to, while recognising that if the Iranians step back from where they have been, we should seek to improve our relations with them.
Diana Johnson (Kingston upon Hull North) (Lab)
Developing the skills of local people in the renewables industry is vital to the economic future of the Humber area, so may we have an update statement from the Government about their proposals, announced a year ago, to establish a national wind college there and a timetable for its being established?
Chris Grayling
I will happily ask my right hon. Friend the Secretary of State for Energy and Climate Change to respond to the hon. Lady’s point. We regard skill development in key industries as of immense importance, so I will make sure that she gets a response.
John Glen (Salisbury) (Con)
Network Rail is considering enhancements to the line between Yeovil and Exeter. If the improvements could be extended to Salisbury, it would enhance the service for commuters and local businesses. Will the Leader of the House make time for a statement from the rail Minister on these improvements so that we can consider their scope?
Chris Grayling
I will certainly make sure that my right hon. Friend the Transport Secretary is made aware of my hon. Friend’s point. My hon. Friend is absolutely right about the potential for improvements if the route is extended to Salisbury. I will make sure that the Department for Transport gives the proposal due consideration. He is also right that the route has always been much slicker up to Salisbury and that improvements beyond Salisbury will be very welcome. I quite understand why my hon. Friend wants to see the whole route rather than part of it improved.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
During a Westminster Hall debate on Tuesday this week, the Minister for Civil Society, the hon. Member for Reading East (Mr Wilson), appeared to confirm that after Scottish Government Ministers have had private meetings with overseas Governments it is common practice for Scotland Office civil servants to ask the embassies of those Governments for an account of their private conversations—without telling the Scottish Government. Will the Leader of the House arrange for the Secretary of State for Scotland to be brought here in person—not by proxy—to explain why his civil servants are routinely spying on our Government?
Chris Grayling
I do not think anyone is routinely spying on the Scottish Government. The Scottish First Minister denied emphatically that she had indicated that she wanted to see the current Prime Minister back in No. 10 Downing Street, and we absolutely take her word on that, although I would pay tribute to her if that was her view because it is quite clearly in the interests of the country. The Scottish Secretary will be here after the recess to take questions, and the hon. Lady will have the opportunity to put her point to him.
Mr Nigel Evans (Ribble Valley) (Con)
I have a question from Terry who lives in Whalley, but there could be a number of questions on the abuses of private car park operators. They include inflexibility when somebody wrongly enters just one character of their car registration, eye-watering fines that bear no relationship to the fees paid and threatening letters from enforcement agents who act like a paramilitary wing of the parking industry. They are not going to regulate themselves, so may we have a statement from a Minister with a view to reining in these abuses?
Chris Grayling
We see some extraordinary examples of abuse by some operators, although not all—there are good firms out there but there are, equally, bad firms. My hon. Friend is absolutely right. I think all Members will have received legitimate complaints from our constituents. I will make sure that the Transport Secretary is made aware of my hon. Friend’s concerns, and I would also encourage him—I know he always would anyway—to raise the issue again when we have Transport questions in October.
Paul Flynn (Newport West) (Lab)
When can we debate whether the practice of commanding one person to kneel before another is demeaning to both, inconsistent with the concept of a modern monarchy and a medieval relic that should have been abandoned centuries ago?
Chris Grayling
In many respects, I am delighted that the new Labour leader and those who supported him are so dismissive of the traditions of this country. The reason I am delighted is that it means the people of this country who value those traditions, value our monarch and value our history will vote comprehensively to reject their offering in 2020.
Christopher Pincher (Tamworth) (Con)
Will the Leader of the House call on the Education Secretary to come to this House as soon as possible to make an important statement on the improvement of educational standards, so that all young people in our schools and indeed any adult learners who need help can learn the words of our national anthem?
Chris Grayling
It is now a matter of national priority. A few people might well be tested about knowing the words of the second and third verse of the national anthem, but I think most people would regard not knowing the first verse as a little disappointing, not least if that person happens to be the Leader of Her Majesty’s loyal Opposition—perhaps not that loyal.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Last week the Treasury decided that unrestored Scottish mines were purely a devolved matter. That seems to be further proof that we are neither “better together” nor seeing any sign of the “broad shoulders” of the United Kingdom that we were promised a year ago. Will the Leader of the House provide for a debate that would allow restoration options to be discussed and explored more fully, as promised in the Budget last March?
Chris Grayling
We are delivering substantial changes for Scotland. A devolution package is in train that will transform the powers of the Scottish Government. Discussions are taking place constantly between Ministers and officials here and Ministers and officials in Edinburgh, and the discussions will continue.
Andrew Bridgen (North West Leicestershire) (Con)
For several years I have been raising the issue of discrimination against the lettori, foreign lecturers in Italian universities. Despite the best efforts of consecutive United Kingdom Governments and our ambassadors in Rome, the issue remains unresolved. Next month, the Pontignano conference will bring UK and Italian officials together. May we have a statement from the Government on what we can do to ensure that this 35-year injustice is brought to an end immediately?
Chris Grayling
I pay tribute to my hon. Friend for his assiduousness in pursuing the issue. I sometimes wish that those in Brussels would pay attention to and sort out problems that are extant, rather than simply continuing to seek more powers for themselves.
Jeff Smith (Manchester, Withington) (Lab)
Like other Members, I have constituents who are affected by birth defects resulting from the use of hormone pregnancy tests in the 1960s and 1970s. Following a Backbench Business debate some 10 months ago, the Under-Secretary of State for Life Sciences agreed to set up an expert panel of inquiry, which will sit for the first time on 14 October. It now appears that the panel’s terms of reference are at variance with what was promised in the Chamber. Will the Minister come to the House as soon as possible after the recess to make a statement explaining why?
Chris Grayling
I am certain that my hon. Friend the Under-Secretary of State for Life Sciences takes that issue seriously, but a number of very difficult inherited historical problems have arisen from treatments that have gone wrong and treatments that have not been proved to be right for the future, and the treatment that the hon. Gentleman has raised is clearly one of those. I will ensure that his concern is drawn to my hon. Friend’s attention, and I will ask my hon. Friend to respond to him directly and to the House.
Rehman Chishti (Gillingham and Rainham) (Con)
One in four people experiences a mental health problem during his or her lifetime. I have introduced a Bill to require health commissioners to ensure that they take full account of mental health needs when commissioning health services, and I have a forthcoming ten-minute rule Bill on perinatal mental illness. Both Bills are supported by the Royal College of Psychiatrists. May we have an urgent debate on the support that has been given, and the support that is needed, for people suffering from mental health conditions?
Chris Grayling
I pay tribute to my hon. Friend. I hope that his ten-minute Bill will be passed, and will create an opportunity for debate about the issue of mental health. Many Members in all parts of the House take the issue enormously seriously, but it has for too long been the Cinderella of the health service. I am delighted that the new NHS constitution places it on an equal footing with other healthcare challenges, and that this year’s Budget increased the funds to be channelled through local organisations for the treatment of mental health problems. There is a great deal of work still to be done, but it seems to me that we are starting to move in the right direction.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Will the Leader of the House revisit the question of whether we can have, in Government time, a full day’s debate on the recent changes in tax credits, following Tuesday’s wholly inadequate 90-minute debate? According to a detailed briefing issued by the House of Commons Library in the last few days, people earning just over £13,000 will lose £1,500 from their net incomes next year. We must debate these measures, and, in particular, debate the social consequences for families up and down the country who will be pushed into making difficult decisions on the basis of the cuts that will be made in their budgets.
Chris Grayling
As I said earlier, we have had five and a half days of debate on this matter. It was included in the summer Budget, and it was voted on as part of the Budget resolutions. The opportunity to vote was there at that point, and the opportunity to vote was there this week. Indeed, there was a further debate this week.
I appreciate that Scottish National party Members do not agree with this measure, but they need to understand that we in the Government have had to make some immensely difficult decisions, many of which we would rather not have had to make but were forced to make because of the appalling public finance position that we inherited in 2010, and they need to understand the task that still lies ahead of us. We have to complete the job of eliminating the deficit and give this country security for the future, because that is the only way in which we can create prosperity, security and good employment for people throughout the United Kingdom, including Scotland.
Mr David Nuttall (Bury North) (Con)
May we please have a statement on what preparations the Government are making in the event that the people of the United Kingdom should vote to leave the European Union? Answers to my recent questions suggest that little, if anything, is being done across Government to prepare for that eventuality, and a statement would give the House the opportunity to probe whether that amounted to dangerous complacency or simply a lack of prudent planning.
Chris Grayling
I understand my hon. Friend’s concerns, but I remind him that at the moment we have not even got Royal Assent for the European Union Referendum Bill, although I am confident that we will secure it. If the country does vote to leave the European Union, a process will take place beyond that. I understand his concerns; they are shared by many Members of the House. He knows my view, which is that we need a massive change in our relationship with the EU and that maintaining the status quo is simply not an option. However, the renegotiation process is of paramount importance and the Prime Minister has been absolutely right to embark on it. He was also absolutely right to promise a referendum offering a choice between a new kind of relationship with the EU and leaving it, rather than maintaining the status quo, which I firmly believe is not in the national interest.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
May we have a debate on the management of trunk roads in England? Earlier this week, there was a serious accident on the busy A628 in Hollingworth in my constituency. Pedestrian crossings are a lifeline for people in that area to get to schools and local shops. It is always difficult when national trunk roads have to pass through residential areas, but there is a strong feeling in my area that traffic calming and pedestrian visibility are not being given sufficient attention at the moment.
Chris Grayling
This is an important issue. We are lucky to have some of the safest roads in Europe, but as we have seen from recent research, single carriageway trunk roads remain the most dangerous in our society and the ones on which motorists are most likely to have a serious accident. Most of those trunk roads are now the responsibility of local authorities, and the power of central Government to dictate what happens to them is limited. I am sure that the hon. Gentleman will take advantage of the opportunities available to him after the recess to make the Department for Transport aware of his concerns so that it can make them known when it deals with his local authority. I would also encourage him to talk to his local authority about that particular area, because he as a constituency MP can make a difference in securing improvements.
Steve Double (St Austell and Newquay) (Con)
With your indulgence, Mr Speaker, I should like to begin by placing on record my personal tribute to the former Member for St Austell, Mr Agar-Robartes, whose plaque is on the wall and who, as you said earlier, was killed in action 100 years ago this month.
Moving on to slightly more mundane matters, I should like to raise the question of public conveniences. There is no statutory requirement on local authorities to provide them, but they are considered an essential service by many residents. The Liberal Democrat-led council in Cornwall is closing many of our public toilets. Indeed, it has withdrawn funding for all of them. Many residents are very concerned about this, particularly as Cornwall is such an important area for tourists as well as having a substantial elderly population. May we have a debate on the importance of public conveniences to our local communities?
Chris Grayling
I suppose the only explanation for this is that, having been flushed down the pan politically, the Liberal Democrats have decided to do the same to the public conveniences of Cornwall. I am sure they will continue to pay the political price for doing so.
Peter Grant (Glenrothes) (SNP)
On 16 July, the Leader of the House gave me some helpful advice on how I might track down the elusive Secretary of State for Scotland so as to get a direct answer to the question of whether he was on the circulation list for the infamous “Frenchgate” memo. Since then, like a good obedient Back Bencher, I have followed the Leader of the House’s advice and pursued the matter. I asked an oral question in the Chamber, but it was not answered. I put a written question to the Prime Minister but that was not answered either. In a Westminster Hall debate on a Scotland Office answering day, not only did the Secretary of State not answer my question; he did not turn up. A Cabinet Office Minister turned up instead, but he did not answer it, either. Will the Leader of the House now find 30 seconds of parliamentary time in which to get the Secretary of State for Scotland in here to give a simply yes/no answer to the question of whether he was on the circulation list for that memo?
Chris Grayling
I think the hon. Gentleman might not be distinguishing between getting an answer he does not like and not getting an answer at all. I am sure he is going to continue to ask the question.
Iain Stewart (Milton Keynes South) (Con)
The Leader of the House will be aware that many cheap home energy deals will shortly come to an end and that customers potentially face significant increases in their domestic bills. May we have a debate on what additional protections can be put in place to protect customers from such increases?
Chris Grayling
This is going to be a very real issue in the weeks and months ahead. I am sure I am not alone in thinking that prices go up very quickly and come down very slowly. Given the big falls in the oil price, it is surprising that falls have not occurred more rapidly. It does not seem to me that there is an obvious case now for pushing prices up heavily again. This profoundly affects consumers, especially the elderly, and I am not convinced that the energy companies respond to the very real needs of the elderly in their pricing, and that should change.
Ian C. Lucas (Wrexham) (Lab)
On measures that affect only specific jurisdictions, will the Leader of the House give to MPs from Wales, Scotland and Northern Ireland the same rights he plans to give to MPs from England?
Chris Grayling
The hon. Gentleman is very assiduous in making this point. I remind him that he can vote on education in my constituency but not his own. That is an imbalance in the devolution settlement. We are not planning to take away from him the right to vote in any Division he currently takes part in. We are simply saying that if a Government covering the United Kingdom seek to impose on England—and indeed on England and Wales, because this is not simply about England—something that MPs in that part of the country oppose, they should have a comparable say in whether it happens. That is all we are suggesting.
Antoinette Sandbach (Eddisbury) (Con)
I refer hon. Members to my entry in the register of interests. The Leader of the House will be aware of the considerable impact of low milk prices on dairy farmers in Eddisbury. I am aware that the Secretary of State for Environment, Food and Rural Affairs has made a written statement on EU talks, but given the importance of the talks to dairy farmers throughout the UK will the Leader of the House schedule a debate?
Chris Grayling
There is clearly a very real issue for our dairy industry, and our farming industry is strategically important not simply for feeding the nation but for the protection of our countryside and environment. I do understand the very real issues in constituencies such as Eddisbury, which I know well, and I say to my hon. Friend that I know her concerns are in the in-tray of the Department for Environment, Food and Rural Affairs. I will make sure her comments today are passed on to it.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Will the Leader of the House make a statement on when he is willing to visit my constituency, which he so kindly offered to do in the Procedure Committee? My constituents are extremely excited at the prospect and I ask the right hon. Gentleman to say today when he might be available to visit and discuss EVEL—English votes for English laws.
Chris Grayling
We have a big event next May, and it is very much my hope that a Conservative MSP will represent the hon. Lady’s constituency after the elections. It is therefore indeed my intention between now and next May to spend some time visiting Scotland, but not necessarily with a purpose she will find terribly congenial. I am very happy to talk to her constituents, but mostly to get them to vote Conservative.
Mr Peter Bone (Wellingborough) (Con)
I welcome the new shadow Leader to his post. He made a good point about lack of time for debate. It is very frustrating for Back Benchers when we are waiting to speak and the time limit has to be reduced. That point has also been made by SNP Members. Surely, in this new Parliament, we should look again at having a business of the House committee. It would not be the Government deciding timing; it would be an independent committee, and Members would at least be satisfied that their concerns were being looked at. May we have a motion on the Order Paper creating a business of the House committee and allowing a free vote by MPs to see whether the will of Parliament is for such a committee?
Chris Grayling
I know how strongly my hon. Friend feels about this issue. There will shortly be a debate on it, but I simply say to him that more than half the allocated time in this House is already beyond the control of Government—the Opposition days, the private Members’ Bill days, and Backbench Business Committee days. We already allocate more time than most other Parliaments to the will of Parliament, but the Government also have to timetable and get through their own business.
Patrick Grady (Glasgow North) (SNP)
Five years ago today, Pope Benedict XVI made an historic address to both Houses of Parliament in Westminster Hall. It was the first state visit by a Pope to the United Kingdom, and of course it began with a joyful reception in Edinburgh and a mass in Glasgow. Many great occasions of state are commemorated with plaques on the floor of Westminster Hall. Can the Leader of the House advise on the process for deciding on the installation of such plaques and the appropriate route for making representations to those responsible?
Chris Grayling
That is an interesting idea and the hon. Gentleman makes a valuable point. May I suggest he writes formally to the Commission and then it would be considered?
Martin Vickers (Cleethorpes) (Con)
Last week, the Grimsby institute of further and higher education did an excellent job in hosting the World Seafood Congress, a very prestigious event that was attracted to our area. Many jobs in the Grimsby-Cleethorpes area are dependent on the seafood industry. Can the Leader of the House find time for a debate to consider the challenges and opportunities the industry faces?
Chris Grayling
It all sounds a bit fishy to me! I pay tribute to my hon. Friend for being a first-rate representative of his area, and I know how important that industry is to him. It is good to see the local authorities and the local Members of Parliament working to support that industry. I know that my ministerial colleagues would also share the view that this is something we would want to champion and support.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I thank the Leader of the House for announcing that the Second Reading debate on the Immigration Bill will be held on the Tuesday after the conference recess. Given that the Bill is going to be published only in the next hour, does he really think he has given Members of this House enough time to analyse and consider the consequences of such important legislation?
Chris Grayling
The Scottish National party was complaining earlier that the recess was lying ahead and there was not enough focus on important work during that time. SNP Members have three weeks to read the Bill, give it due consideration and bring forward the amendments that they want to table after the recess. I would therefore hope that they could use that time wisely and fruitfully.
Tom Pursglove (Corby) (Con)
The Government’s road investment strategy was firmly welcomed by residents in east Northamptonshire. It committed not only to improve the Chowns Mill roundabout, but to dual the A45 between Stanwick and Thrapston. May we have a statement from a Transport Minister setting out the progress against that strategy at this point in time?
Chris Grayling
I know how important these investments are to the area my hon. Friend represents, and I will certainly ask the Transport Secretary to give him an update. I congratulate my hon. Friend on being so effective in representing Corby, but of course these improvements could have happened only as a result of this Government’s policy of getting our economy back on to the straight and narrow. Corby is seeing the benefits of that.
Chris Stephens (Glasgow South West) (SNP)
May I draw the Leader of the House’s attention to early-day motion 455?
[That this House notes that 26 September 2015 marks the centenary of the death of Keir Hardie, the first independent representative of working people to be elected to this Parliament, a consistent champion of Scottish Home Rule and votes for women, and an unswerving opponent of British involvement in the First World War; further notes Hardie’s seminal contribution to democratic politics, as founder of the Scottish Labour Party (1888), the Independent Labour Party (1893) and the Labour Representation Committee (1900); notes his commitment to women’s suffrage, trades union rights, free schooling, state pensions, Indian self-rule and the end to racial segregation in South Africa, long before these social reforms were attained; notes Hardie’s principled opposition to British participation in the First World War and regrets that his rejection of jingoism and mass slaughter led to Parliament paying no public tributes to this great democrat, on his untimely death at the age of 59; and expresses the hope that Hardie's lifelong support for Scottish Home Rule, universal social justice and equal rights for women will yet bear fruit.]
May I remind the Leader of the House of Keir Hardie’s commitments, detailed above, which of course included a commitment to Scottish home rule?
Chris Stephens
Indeed. The Parliament at the time did not pay a public tribute to Keir Hardie, so will this Government right that wrong and pay a generous tribute to a great democrat?
Chris Grayling
One thing that makes this House strong is that over the decades and the centuries people have come here who have been passionate democrats with profound and determined ideas, to whom, although individually we may disagree with them, we would pay tribute for the contribution they have made to this country. I echo the hon. Gentleman’s view: Keir Hardie was one of the great figures of our political history. He was the pathfinder of the Labour movement, and even though I disagree with many of the policies that his successors have sought to bring before this House, I would say, none the less, that he made an important contribution, as did many others in our past. We should always champion them.
Julian Sturdy (York Outer) (Con)
Many of my constituents will welcome the recent changes to the definition of “a Traveller” within the planning system, which will remove the requirements on local authorities to provide caravan pitches for those already settled in bricks and mortar housing. As such, may we have a debate on this new guidance, to reinforce the need for greater fairness in our planning system for both the settled and the Traveller communities?
Chris Grayling
That is a really important point. Indeed, my hon. Friend the Member for Mole Valley (Sir Paul Beresford) made that same point a little while back, which led to me receiving a number of messages and letters from people in Traveller communities saying that this was not right. I take a simple view on this. If a Traveller hopes to have beneficial arrangements in the planning laws but does not intend to travel, most people in this country would say that that is simply not right. We cannot have people who intend to live in a fixed abode having their own particular arrangements within our planning laws. Our laws should apply equally to every single person in this country regardless of how they live their lives. My view is straightforward. If a person is not travelling, they cannot claim to be a Traveller within our planning system and have special arrangements. I hope that this new Government policy will deal with this issue, which I know frustrates many constituents.
Steven Paterson (Stirling) (SNP)
I have been contacted by my constituent Maureen from Fallin who has asked me why this Government have so manifestly failed to live up to the vow that they and other parties made one year ago this week. Can we have a debate to discuss the failure of the Government to deliver on the vow?
Chris Grayling
If I was a Scottish National MP and I had come to Westminster with a determination to achieve independence for Scotland, I would seek to foment division between England and Scotland. I absolutely understand where that party is coming from, but it does not mean that this Government have gone back on their promises in the vow. We are delivering the Smith commission findings in the Scotland Bill as we promised.
Callum McCaig (Aberdeen South) (SNP)
The number of refused applications made by employers for a sponsor licence to employ non-EU workers has more than doubled since 2010. One of my constituents has had their licence removed for fatuous reasons. Can we have a statement from the Home Secretary as to whether hidden targets regimes are in operation, which is damaging businesses across the country?
Chris Grayling
The hon. Gentleman makes an important point. It is right and proper that we should seek to tackle abuses in the immigration system. Such abuses clearly exist and the Home Office is right to take action. At the same time, he is also right that it has to do so with great caution to ensure that it gets it right. There will be an opportunity at Home Office questions, straight after the recess, for him to raise such issues directly with the Home Secretary. I am absolutely behind her in what she is seeking to do, which is to manage our immigration system properly, but of course we must get the detail of it right.
Points of Order
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Jack Dromey (Birmingham, Erdington) (Lab)
On a point of order, Mr Speaker. I wish to raise the breach of the consultation process by the Home Office, which means that Members, the public and the police are denied vital information on the future funding of the police service. The existing formula is widely recognised to be unfair and out of date. The Government have opened a process of consultation on a new formula to inform the comprehensive spending review. They did so on the last day before Parliament rose for the summer recess. This week, just before Parliament rises for the autumn recess, they have made it clear beyond any doubt that they will refuse to publish vital information, including studies that have been carried out in the Home Office on the likely impact of such a policy and the equality impact study that is required by law, despite the fact that the Minister for Policing, Crime and Criminal Justice conceded before the Home Affairs Committee earlier this week that such studies had been carried out.
I have written to the Home Office, as have the police service and the police and crime commissioners. Freedom of information requests have been lodged, but there remains a stony silence from the Home Office. It has been left therefore to the Association of Police and Crime Commissioners and the police to model the likely impact, pointing to catastrophic consequences in excess of 50%, which will make it very difficult for the great metropolitan forces to function.
I ask for your guidance, Mr Speaker. The first duty of any Government is the safety and security of their citizens. If there is information within the Home Office that the public might be put at risk, the full facts should be disclosed to this House, the public and the police. I seek your guidance on how the Home Office can be made to discharge its duties in disclosing that vital information, enabling meaningful consultation and extending the period of consultation, otherwise it will mean that this House is being treated with contempt.
Mr Speaker
I am grateful to the hon. Gentleman for his point of order and his courtesy in giving me advance notice of his intention to raise it. That said, I fear that my reply will be disappointing, although it has the advantage of being accurate. The timing of a consultation and the information that the Government provide to inform that consultation or in response to freedom of information requests are ultimately a matter for Ministers and not a matter on which the Chair can rule. That said, the hon. Gentleman has made his concern forcefully known and it is on the record. I feel sure that Ministers and the Patronage Secretary will have heard what he has to say. In answer to his inquiry on what more can be done, he is dexterous in the use of parliamentary devices and he knows that there are means by which matters can be brought to the attention of the House, particularly if he thinks that they are urgent or topical, if his continued pursuit of information is unavailing. I hope that that is helpful, and we will leave it there for now.
Paul Flynn (Newport West) (Lab)
On a point of order, Mr Speaker. Yesterday, we had the refreshing change of a Prime Minister’s Question Time that involved an exchange of opinions carried out in a respectful and quiet manner between two politicians. It was a wonderful antidote to the infantile bedlam we suffered for many years, which has done so much damage to the reputation of Members and this House. You have a responsibility in your role for the conduct of Prime Minister’s questions, so may we have an assurance that you will, as you did yesterday, allow generous time to that part of Prime Minister’s Question Time so that we do not go back to the chaos and damaging exchanges of the past?
Mr Speaker
I am grateful to the hon. Gentleman for what he has said and happen rather strongly to agree with him. For what it is worth, if colleagues are interested, I know from my pretty extensive visits around the country that it is clear that there is a divide at the Beltway, particularly between those who observe our proceedings and would be more than happy for there to be a fistfight as it would lead to a headline but are not remotely interested in the detail of scrutiny, and those who make up the mass of the public, who are interested in robust but respectful exchange of opinion between elected public servants. I am with the hon. Gentleman and I think the bulk of the public are, too, and those who took part in Prime Minister’s questions in that way yesterday. It is important that Back-Bench participation should be maximised, so we have to try to ensure that there is plenty of time for Back Benchers to put their questions and get their answers. I hope that the hon. Gentleman is encouraged by what he witnessed yesterday and by what he has heard from me today.
Mr David Winnick (Walsall North) (Lab)
Further to that point of order, Mr Speaker. Without in any way disagreeing with the remarks of my hon. Friend the Member for Newport West (Paul Flynn) or yourself, in view of some of the controversy over PMQs, and making no comment whatsoever about what happened yesterday, may I say—perhaps you will fully agree—that PMQs is a unique feature of our parliamentary democracy? Many countries would for the Leader of the Opposition and Back Benchers to be able to question the Government at least once a week. I, like my hon. Friend, am certainly not happy with the Prime Minister’s response over the years, but we should be very careful not to denigrate this feature of parliamentary life. We should be pleased that it exists, and that should be put on the record.
Mr Speaker
I am grateful to the hon. Gentleman for his point of order and I personally see no contradiction between what he has said and some of the criticisms of the way in which PMQs have been conducted in recent years. He knows that we live in a world in which it is often expected, particularly by our friends in the media, that there is a simple yes/no, like/dislike, agree/disagree, black/white attitude to life. In fact, it is perfectly possible enthusiastically to support the idea of a Prime Minister’s question session for precisely the reason that the hon. Gentleman gives, namely that there are many countries around the world in which the Prime Minister is not required to come to the House each week to respond to questions—I have met people in those countries, politicians and members of civil society, who say that they wish it had to happen as it does here—while believing that the debate should be conducted robustly but in a courteous fashion. I do not think that there is a contradiction between those two things. When I am asked whether I am in favour of PMQs, I say that I am in favour of it but that I would like it to be better. I cannot see that there is anything wrong with that.
Mr Peter Bone (Wellingborough) (Con)
Further to that point of order, Mr Speaker. What we do not want is PMQs becoming Front-Bench PMQs. Given that only a number of questions are drawn for the Order Paper each week, and given that not all of them are asked, would not a simple solution be to make sure that they are all asked before PMQs can finish? Hopefully that would deter Front Benchers, including the Prime Minister, from going on for too long.
Mr Speaker
The hon. Gentleman encourages me, and I am grateful to him for his encouragement, but he knows that, in so far as there is any latitude, I tend to use it to try to ensure that we get further down the Order Paper. Therefore, as he will have noticed—he is a very observant fellow—we do not always finish at 12.30 precisely; sometimes we stray a bit beyond that. I think we once went as late as 12.38. The hon. Gentleman is exhorting me to go even longer. He might be exhorting me to get into trouble. I am sure that he would not do that deliberately. I agree with the thrust of what he says. We ought to be trying to get down the Order Paper. The exchanges between the Prime Minister and the Leader of the Opposition are very important, but they are by no means the only part of Prime Minister’s questions. The opportunity for Back-Bench Members to put their questions to the Prime Minister is precious, so I will do everything I can, increasing my efforts if necessary, to ensure that that happens.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. This is on a completely different matter, and although I gently suggest that your middle name is Latitude, there is one area on which you might allow less latitude. Last Friday the House debated the Assisted Dying (No. 2) Bill, but the debate did not start until 9.48 am because we had a Division that, to my mind, was completely unnecessary. About 10 Members shouted “Aye” when the Question was put on whether the House should sit in private. In practice, only one Member, the hon. Member for Wellingborough (Mr Bone), voted Aye and two Members acted as Tellers. However, several of the Members who shouted “Aye” then voted no. As you know, because the acclamation is part of the voting process and how we proceed, it is a requirement in this House that one’s vote must follow one’s voice, if one chooses then to vote. I am not making bones about the practice of Members shouting and then not voting, but I am making bones about the fact that some Members shouted “Aye” when they had every intention of voting no. Will you make it clear to hon. Members that there is no need to waste time in that way?
Mr Speaker
Yes, I will. The hon. Gentleman is entitled to make bones about the matter, on the assumption, of course, that what he is conveying to the House is truthful, which I am sure he absolutely intends it to be—he always does his research, so I am sure that he has a reason for making a bone about this point. We should not waste time. The public expect us to get on with the substance of debate. If the hon. Gentleman remains dissatisfied over a period, he could consider having a word with the Chair of the Procedure Committee, the hon. Member for Broxbourne (Mr Walker).
Mr Speaker
Well, he might need to do so again. I think that it would be useful to have a view from the Committee on the use of the device that causes a delay in the start of debates on a Friday.
I think that I am right in saying that the appetite for points of order has now been exhausted.
Bill Presented
Immigration Bill
Presentation and First Reading (Standing Order No. 57)
Mrs Secretary May, supported by the Prime Minister, Mr Chancellor of the Exchequer, Secretary Sajid Javid, Mr Secretary Duncan Smith, Mr Secretary Clark, Secretary Nicky Morgan, Mr Secretary McLoughlin, Matthew Hancock and James Brokenshire, presented a Bill to make provision about the law on immigration and asylum; to make provision about access to services, facilities, licences and work by reference to immigration status; to make provision about the Director of Labour Market Enforcement; to make provision about language requirements for public sector workers; to make provision about fees for passports and civil registration; and for connected purposes.
Bill read the First time; to be read a Second time on Monday 12 October, and to be printed (Bill 74) with explanatory notes (Bill 74-EN).
Serjeant at Arms
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Tom Brake (Carshalton and Wallington) (LD)
I beg to move,
That this House expresses its appreciation to Lawrence Ward for his distinguished service to this House, including three years as Serjeant at Arms, and extends to him its best wishes for the future.
I would like to place on the record my sincerest thanks to Lawrence on behalf of myself, the Liberal Democrats, and the House as a whole. He has served this place with great distinction for the past three years as Serjeant at Arms, and the Commons is a great deal better for it. Lawrence began working in the House in 1997 and has served this place in a number of different roles. His skill, dedication and professionalism have always marked him out, and provide a model for all those who are to succeed him.
The year 2015 marks the 600th anniversary of the role of Serjeant at Arms. At this time when parliamentary politics is being vigorously challenged and is under ever greater scrutiny, it is essential that the House remains open and more relevant to the people we serve. The modern-day role of the Serjeant at Arms and his duty to balance the safety of Members and staff with public access is vital in achieving this. In the summer, the parliamentary educational centre, a project that the Serjeant at Arms presided over, opened. It is a fine legacy and one that will serve this place and the public well. It will provide a valuable tool in connecting our democratic work with the public at large.
I wish Lawrence all the very best in his new role outside Parliament.
The Leader of the House of Commons (Chris Grayling)
This is a happy exchange. It is a great pleasure to speak to this motion expressing the House’s gratitude to Lawrence Ward for his service to the House of Commons, particularly as Serjeant at Arms since 2012. As the right hon. Member for Carshalton and Wallington (Tom Brake) said, it is an ancient position, 600 years old. Lawrence is thought to be the 40th Serjeant at Arms. He has had a long and distinguished service in this place. He spent a brief spell as Deputy Serjeant at Arms in 2011 before being appointed Serjeant at Arms in 2012.
It is worth remembering that besides the many hours that Lawrence has spent in the Serjeant’s chair in this Chamber, he has also been very prominent in the role of overseeing the arrangements for the reception of many distinguished visitors to this place, often greeting them personally on arrival. In this context he has met presidents, princes and prelates—even, as the hon. Member for Perth and North Perthshire (Pete Wishart) said earlier, the Pope—as well as the Dalai Llama and numerous foreign statesmen and women. On one momentous occasion, he personally oversaw the arrangements in the Terrace pavilion for a performance by Fat Boy Slim. I am sure that many hon. Members are grateful to Lawrence and his team for facilitating access to meetings and events.
Lawrence is leaving the service of this House tomorrow to pursue a career in the private sector. I am sure that everyone would wish to express their very great thanks to him for the work he has done and all the contributions he has made here, and to wish him all the best for his future career.
As you know, Mr Speaker, a recruitment exercise to appoint a new Serjeant at Arms will commence shortly. In the meantime, Robert Twigger, until recently secretary to the House of Commons Commission, will be the acting Serjeant at Arms.
Lawrence has my thanks and my good wishes.
Chris Bryant (Rhondda) (Lab)
It is a delight to be thirding, if there is such a thing—I know there is not—this motion.
The Serjeant at Arms role is rather a curiosity in the way we do our business. It is something that we have exported around the world to many other parliamentary democracies based on the British system. One of the previous Serjeants at Arms was a regicide, and one of the jobs of his successor was to gather up all the bodies from the previous regicide, chop them up into pieces, and display them in Westminster Hall. Lawrence never had to gather up bodies, though perhaps he knows where the bodies are.
I was once at a dinner party in Islington—this is obviously now mandatory for all Labour MPs—where somebody asked Malcolm Jack, the former Clerk of the House, exactly what the Serjeant at Arms’ job was. I remember very clearly that he said, “Well, he is the chap who dresses up in black silk stockings and patent leather pumps to chase MPs out of the toilets in the Division Lobby with his silver sword.” There are elements of our parliamentary system that do perhaps need a little reform, I gently suggest. Perhaps we should not limit our search to people who like wearing black silk stockings and patent leather pumps.
I am not sure what training is required for the job, but it is interesting that the last two Serjeants at Arms have come not from the traditional cadre, which has always been military or naval, but from very different forms of service and not necessarily through the almost hereditary process of the past.
There are several jobs in politics that have to be done with good grace, such as Leader of the House and a Conservative Secretary of State for Wales. Another is Serjeant at Arms, and Lawrence has done it abundantly well.
I want to make one apology to him, though. I cannot tell all of this story, I am afraid, because you would rule me out of order, Mr Speaker. On 27 March 2010, thanks to your good offices, it was possible for me and Jared Cranney to get married in the Members’ Dining Room. We are not allowed in the Chapel yet, but who knows? Maybe one day. Lawrence was then the Deputy Serjeant at Arms and he made himself and his team fully available to all of my guests. It was the first time it had ever happened in the building and he was absolutely charming. Unfortunately our guests were not allowed to pass through Westminster Hall itself, and I cannot tell you why, but I shouted, ranted and raved at him at the time, for which I apologise. With that, I wish him all the best in his new job.
Sir Paul Beresford (Mole Valley) (Con)
As a co-signatory of the motion, I want to be succinct in adding to the points that have already been made. I am afraid—or perhaps fortunately—I do not have a colourful story such as the last one.
As a member of the House of Commons Commission, I certainly respect—as I think you do, too, Mr Speaker—the advice Lawrence has given us. It is unseen and not reported, but it has been extensive and extremely useful. Most of us see him only in his role of sitting in the chair with the sword and stockings. I am a bit disturbed at the preoccupation of some speakers—one in particular—with stockings. What we do not recognise is how much Lawrence has been involved in the protection of the House while at the same time enabling the public to come in and see us in action. That has been successful. It is also interesting that, having had some interesting and unusual requests from me for slight changes and a bending of the rules, he was extremely polite to me, even if at the end of the day he gave an emphatic and definite no.
Pete Wishart (Perth and North Perthshire) (SNP)
It is a pleasure to follow the other tributes to Lawrence. SNP Members thank him for the services he has fulfilled as Serjeant at Arms. He has discharged his responsibilities in a courteous, good natured and thoroughly professional way, to the extent that he has become good friends with many Members across the House. My colleagues in particular want to express their gratitude for the way in which he has accommodated them as new Members.
Others have referred to the 600-year tradition of the role of Serjeant at Arms. Lawrence was there when Fatboy Slim famously appeared on the Terrace. He was also there for a performance by MP4 when we played to celebrate the 600th anniversary of the role of Serjeant at Arms. Serjeants at Arms from all over the Commonwealth were present that evening to celebrate, and who was at the front? I would not say he was rocking his funky stuff, but it was Lawrence and he certainly appreciated that lovely evening.
We wish Lawrence all the best for the future. I know he will be a regular visitor to the House of Commons as the years go by. I never learned whether he could actually use the sword he wielded by his side, but perhaps he could take up sword lessons and come back to show us how it should be wielded and how the stockings should be put on. We wish him all the best.
Mr Nigel Evans (Ribble Valley) (Con)
We miss Lawrence and he has not even gone yet, which just shows how popular he has been in the role of Serjeant at Arms. He had a number of duties and I worked closely with him when I was a Deputy Speaker. Like you, Mr Speaker, I got to see him on a daily basis. As has been said, his role is much more than just sitting in that chair with a sword. From time to time, I had to call on him to go into one of the Lobbies and find out why a vote was delayed. He is much more than the armed wing of your office, Mr Speaker: he is a human being who has been seen widely around all parts of the House and who always has time to chat with people to see how they are doing.
I had a close relationship with Lawrence in ensuring the speedy entrance into our building of ambassadors and high commissioners whenever they came to Parliament. During my personal trauma, he was somebody whom I looked to, and he gave me some wonderful advice. He told me that his door was always open, and he extended the hand of friendship. I will miss him dearly. I hope that he will not be a stranger—his retirement gives us all hope that there is life after this place—and that he will come back to visit us often.
Mr Speaker
In 2012, the director general of resources, Andrew Walker, chaired a selection panel to find a successor to the retiring Serjeant at Arms, Jill Pay, and the panel produced a shortlist of two candidates. I was proud to choose Lawrence Ward from that shortlist of two as the Serjeant at Arms. I have to tell the House I had absolute confidence that Lawrence would prove an exceptional holder of the office, and I feel entirely vindicated in that view. I have never had reason to regret the choice.
Colleagues have spoken warmly and with a quite fitting generosity of spirit about the contribution that Lawrence has made. For my part, having worked with him very closely, especially during the past three and a half years, two things strike me more than anything else: Lawrence Ward has quite outstanding organisational skills and, as I think colleagues can testify, he has wonderful interpersonal skills. He is totally unstuffy, and he can get on with everybody. Whenever there was a challenge, a problem or an issue, his mindset was “How are we going to sort this?” His mindset was not on all the negatives and what could not be done, but on what could be done to ensure that the wishes of Members in particular were fulfilled.
I am hugely grateful to Lawrence. If I may, I want to mention two other things. First, in the management of the Doorkeepers team—this is not always acknowledged, and I am not sure that it has been stated in the House—Lawrence has brought about much greater diversity, in terms both of gender and of ethnicity, than has previously been achieved. What he has accomplished, without making a huge song and dance about it, but just delivering it, is perhaps a great example or model that could usefully be followed elsewhere in the House.
Secondly, I have an example of his “can do” attitude. Colleagues will know that I am a fanatical enthusiast for tennis. I wanted, in concert with the Lawn Tennis Association, to find an opportunity to showcase tennis within the Palace of Westminster and, in particular, to bring in children from state schools to have the chance to learn about the game with a bit of tuition. If memory serves, on the first occasion the tuition was given by Greg Rusedski, and subsequently—this year—by Judy Murray, among others. I asked Lawrence, “Where in the Palace of Westminster could I pick a venue that would not require me to have to go through a long process of securing agreement from all sorts of other people?” Lawrence said, “The answer is New Palace Yard, Mr Speaker. There is nothing to stop you having a tennis event there. It is within your bailiwick.” I decided to go ahead, and we have had that event every year. Lawrence has always overseen its organisation, which has been done outstandingly. He has also overseen, for the benefit of all of us, the clockwork organisation of the new year’s eve party on the terrace, which many colleagues find it pleasurable to attend.
In short, you ask Lawrence to deliver—and he delivers. As the right hon. Member for Carshalton and Wallington (Tom Brake) rightly observed, he took a key role, along with a good many other people, in translating the House of Commons Commission’s ambition to establish a parliamentary education centre into reality. He has done a wonderful job and provided great service to this House. I really do thank colleagues for what they have said and the way in which they have said it by way of tribute to him, which I know Lawrence and his family will hold dear. We wish him well in the important and challenging new role in the private sector to which he now moves.
Question put and agreed to.
Backbench Business
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
UK Steel Industry
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Anna Turley (Redcar) (Lab/Co-op)
I beg to move,
That this House recognises the unprecedented gravity of the challenges currently facing the UK steel industry; and calls on the Government to hold a top-level summit with the key players from the steel industry to seek meaningful and urgent solutions to the crisis.
Forgive me, Mr Speaker, but I am new to this place. Should I continue?
Mr Speaker
The House is expectant. If the hon. Lady, beyond the formal moving, wishes to make a speech, I know that the House will be agog with attention. The Minister is there to hear her, and others. Please, proceed with your speech.
Anna Turley
Thank you, Mr Speaker, for allowing Back Benchers time for this crucial debate. I also thank the Backbench Business Committee for granting me the opportunity to raise this issue on the Floor of the House. This is an issue of huge significance not only to my constituents, but to the economic security of the United Kingdom and its global position in manufacturing. I thank the Minister for attending the debate. I look forward to building on the constructive conversations that we have had recently on this issue.
I am grateful to the many hon. Members who supported me in securing this debate, including the hon. Members for Rutherglen and Hamilton West (Margaret Ferrier) and for Corby (Tom Pursglove), my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Cardiff South and Penarth (Stephen Doughty), and many others who I look forward to hearing from today. We are bringing the voice of our constituents around the country into this Chamber and I hope that the Government will hear their pleas.
I am grateful to my union, Community, which represents its members and the industry as a whole with great dedication and commitment, as do our colleagues from the GMB and Unite. I pay particular tribute to the Community union’s general secretary, Roy Rickhuss, and the senior trade union representative at the Redcar steelworks, Paul Warren, who are here with us today.
Most of all, I am grateful to the generations of workers who have kept steelmaking alive on Teesside for over a century—those who dug the iron ore and forged the steel that built Canary Wharf, the Sydney harbour bridge, Wembley stadium and the Freedom Tower at the World Trade Centre—and to those proud men and women of Teesside who stand ready to fight again for its future.
UK steel is at breaking point. This is a crisis for one of the most important foundation industries in the British economy. It employs 30,000 people across the country in highly skilled jobs, often in industrial heartlands with high unemployment. The UK steel industry supports the automotive, construction and aerospace sectors, as well as a raft of supply chains, and it is vital that there is a future for steelmaking at the heart of industry in this country.
The industry is in crisis because the price of steel has collapsed from £318 per tonne to £191 per tonne. Chinese imports are flooding the market. Between 2011 and 2015, the proportion of Chinese steel entering the market has quadrupled. The strength of the pound is increasing prices by 10% and crippling exports. I accept that there is little the Government can do about those global drivers, but that should never diminish their responsibility to do what they can.
Mark Tami (Alyn and Deeside) (Lab)
My hon. Friend is right about the crisis facing the industry. Does she agree that energy prices are part of the problem and have been for a long time? They are certainly affecting plants such as Shotton in my seat.
Anna Turley
My hon. Friend is absolutely right that there has been an ongoing discussion about that issue for a long time. The Government have taken some steps, which I will mention in a moment, but there is much more that they can do and they have promised things that we are still waiting to see delivered.
I am glad to hear that the Minister is going to China next week to discuss the dumping of steel, which is affecting producers around the world. There are, however, several UK-specific issues that are having a detrimental effect on steel production in the UK and that it is within the Government’s power to resolve. Action by the Government today could give the British steel sector the chance to stay alive in this fiercely competitive global market.
Research that I have undertaken in partnership with UK Steel has shown that the steel industry in the UK is disadvantaged to the tune of £431 million a year compared with our global competitors as a result of the exchange rate, energy policy costs, air pollution targets and business rates. I am sure that the Minister would agree that we want the UK to be the place to do business and that we do not want to penalise our own manufacturers.
Helen Goodman (Bishop Auckland) (Lab)
What my hon. Friend says about the exchange rate is right. Of course, the exchange rate has appreciated by about 20% in recent months. Will she say whether that has made the situation worse?
Anna Turley
It certainly has made the situation worse. I believe it has added approximately 10% to the prices of the UK steel sector.
I come before the House to call on the Government to act on the factors that I have outlined. I will set out five key actions that the Government could agree to today to demonstrate their commitment to the British steel industry. First, they must fully implement the energy-intensive industries compensation package well ahead of the committed date of April 2016. Energy-intensive industries in the UK are exposed to far higher costs than those elsewhere and face a total cost of £430 million this year.
The package of compensation and exemption measures that were promised over the course of the last Parliament would place the UK industry on a level playing field with its EU counterparts. If the package were in place today, it would have reduced costs from £30 per megawatt-hour to £7 per megawatt-hour. Instead, with compensation available for only a small proportion of the policy costs, energy-intensive companies continue to be exposed to upwards of 70% of them. It is imperative that the spending review announcement allays those worries and confirms the budget for the package. Energy prices for UK steel producers can be more than 50% higher than for our main European competitors.
Paul Flynn (Newport West) (Lab)
I speak as an old lag of the steel industry, having worked in it for 30 years before they pensioned me off into a light job on these green Benches. I applaud the plea that my hon. Friend is making. The steel industry has a wonderful record of serving the country efficiently over many years. Let us all join in the plea, which I am sure all Members will do today, for the Government to take an exceptional measure to deal with what is a temporary problem in the industry, but one that could lead, if neglected, to permanent damage.
Anna Turley
My hon. Friend is absolutely right. This is a difficult time and there are actions that the Government could take to build resilience. There is a future for the UK steel industry. I am sure that everybody—this is certainly true of those on the Opposition Benches—agrees with that. We hope to hear from the Government that their commitment is the same.
Huw Irranca-Davies (Ogmore) (Lab)
Will my hon. Friend note that the failure to implement immediately, with real urgency, the whole package that will provide a level playing field could mean not only that we offshore more jobs, but that we offshore an industry that has been highly successful in the decarbonisation agenda in this country to places that emit more carbon? Let us keep them here; let us do it now.
Anna Turley
I commend my hon. Friend for his passion and commitment. He is absolutely right. There are things coming on stream on Teesside, such as the carbon capture and storage facility, that will struggle if we do not have the steelworks in Redcar. We stand by our climate change commitments, and the steel sector is doing its best to make a difference.
Secondly, the Government must bring business rates for capital-intensive firms in line with those for their competitors in France and Germany. UK companies currently pay between five and 10 times more than their EU competitors. UK manufacturers collectively account for 17% of UK business rates payments. That is estimated to be £4.7 billion in 2015, which would be an increase of £0.3 billion on 2014.
UK Steel wants plant and machinery to be removed from the valuation process. Plant and machinery can make up a significant proportion of a steel site’s rateable value. Under the current system, manufacturers that invest in new plant and machinery to make innovative products, improve efficiencies or meet regulatory standards are punished by the business rates regime. UK business rates therefore act as a disincentive to upgrading facilities, increasing productivity or improving environmental performance.
Thirdly, I ask the Government to consider the derogation requests from the sector on a realistic timetable to meet its increased commitments under the industrial emissions directive. Under current proposals, it is estimated that the cost of meeting the revised permits for the sector will be up to £500 million by 2019. I am sure Members will agree that that is a heavy burden.
Fourthly, the dumping of steel by China is leading to the suppression of global prices. The proportion of Chinese steel entering the UK market has quadrupled since 2011. The Minister showed her support for the steel sector by voting in favour of extending anti-dumping measures for a further five years on imports of wire rod from China into the EU. That is welcomed enormously by UK producers of wire rod.
The UK steel sector is keen for that approach to be extended to other anti-dumping proposals that come out of the European Commission, when it is shown that they can support the UK steel sector against the rapid rise in global imports. That includes the forthcoming decision by the European Commission on rebar—reinforcing bar for the construction sector—which is expected towards the end of the year. In that instance, Chinese imports into the UK market have gone from 0% of the UK market only three or four years ago to 40% of it today.
Andy McDonald (Middlesbrough) (Lab)
Does my hon. Friend agree that the attitudes of countries such as Spain, which take a much more rigorous and robust attitude to the import of Chinese rebar, make it more likely that if the Chinese cannot access those markets, the UK will be the next port of call? That exacerbates the problem in the UK steel industry.
Anna Turley
My hon. Friend is right, and we are always diligent in undertaking our European obligations. All we ask for today is a level playing field with our European competitors.
Mr Peter Bone (Wellingborough) (Con)
I congratulate the hon. Lady on securing this important debate. She makes the point that we are fulfilling our EU obligations but that other countries are not. Rather than trying to make those countries comply, would it be easier for us not to comply, and to protect our own national interest until the whole EU puts its house in order?
Anna Turley
I am afraid I disagree with the hon. Gentleman. Teesside and the north-east is wholly dependent on a huge range of support from UK business, and that is a huge part of our exports. It would be wholly detrimental for us not to be part of the European Union.
There would be a significant opportunity for the UK steel sector if the Government were to support and insist on local steel being used in major public projects and strategic operations. Locally sourced steel can have major benefits not only for the local and the wider UK economy, but as a more sustainable material than imports. Those are the national challenges for the UK steel industry and the steps that we would like the Government to take. The steel summit sought in the motion would help to set out a strategic approach for the UK industry.
Let me say something about the situation in my constituency, which brings me here today with such urgency and determination. Steelmaking in Redcar makes up 7% of the north-east’s exports, and it employs 2,000 people directly on Teesside, with another 1,000 contractors and 50 apprentices currently on site. Approximately 6,000 people are employed in the supply chains, working in the ports, carrying the coal, providing the gas, producing the parts, driving the trucks, washing the overalls, and feeding the workforce. We have already experienced the devastation of losing our plant and we cannot go through that again.
In desperation, I ask the Minister to consider the request for financial assistance from SSI UK, so that wages can continue to be paid and we can get to the 50,000 tonnes of cargo that, as we speak, is sitting on the dock a mile down the road from the blast furnace. We need such assistance so that the gas can keep pumping, the coal can load the furnace, workers can pay their mortgages and feed their families, and the proud tradition of steelmaking in Redcar can remain the beating heart of my constituency.
As I said in my maiden speech, there already is a northern powerhouse, and I am disappointed that the Under-Secretary of State for Communities and Local Government, (James Wharton), who is Minister for the northern powerhouse and a Teesside MP, is not here today. There is already a northern powerhouse—it is called Teesside. If the Government do not act today we will know that their words are hollow. In 2011 the Chancellor of the Exchequer promised
“a Britain carried aloft by the march of the makers”—[Official Report, 22 March 2011; Vol. 525, c. 966.]
Does the Minister believe in a future for UK steel? Will she act now to enable the sector to weather this storm? Can she tell the House whether the Chancellor’s “march of the makers” includes the proud makers of steel on Teesside?
Andrew Percy (Brigg and Goole) (Con)
It is a pleasure to follow the hon. Member for Redcar (Anna Turley) who made a passionate speech. She will clearly be a doughty champion for her constituents, and I agree with a lot of what she had to say, although not with her comments about our membership of the European Union. In defence of the Minister for the northern powerhouse, we know how busy Ministers are, and I thought it was an unnecessary shot—[Interruption.] If Labour Members are going to make a cheap shot, they should at least be prepared for somebody to counter it in a quiet—[Interruption.] I thought we were meant to be being more respectful. Labour Members should take lessons from their leader about not shouting back and forth. Conservative Members are all very delighted about the Labour leader.
Apart from the things we disagree on, the hon. Lady made an excellent speech. I agreed with a lot of what she said—indeed, I will repeat some of it. That is no bad thing, because if something is worth saying once, it is worth saying many times, especially since the Minister for Small Business, Industry and Enterprise is present. I welcome her to the role. In previous discussions she has already given us confidence through her interest in this issue, and I know that she feels strongly about this sector of our economy and is keen to assist. I hope that that will follow through with actions, as it already has done in some respects.
This is an important issue for me and for my neighbour and friend, the hon. Member for Scunthorpe (Nic Dakin), with whom I share the Scunthorpe steelworks. The constituency boundary goes through the middle of those steelworks, although he has all the exciting, sexy plant stuff and I have a lot of the land—[Interruption.] I am not saying that he is exciting and sexy. It is a massive issue for our area, and a big employer across my constituency and Scunthorpe, and the constituency of my hon. Friend the Member for Cleethorpes (Martin Vickers).
Scunthorpe is a steel town, which we are proud of, and North Lincolnshire is a steel county. It is a massive part of the local economy, and 4,000 people are employed directly at the steelworks in Scunny, and another 4,000 to 8,000 in the supply chain across the area. This is a really big deal for us. It is the centre of our local economy and we must do everything to support it.
I apologise for speaking ahead of the hon. Member for Scunthorpe, because he will probably repeat some of the same facts, but it is important to put it on record that Scunthorpe produces 3.2 million tonnes of steel per year as semi-finished slabs, blooms and billets, as well as finished products such as plate, sections, rail and wire rod. We are grateful that the important Network Rail contract was confirmed a year or two ago. It has a fantastic workforce who are proud to work in the steel industry, particularly on the Scunthorpe site.
A lot of my constituents who work in the steel industry have contacted me in recent weeks and months because they are concerned and worried about what the future holds. As the hon. Member for Redcar said in her fine speech, the crisis in the United Kingdom steel industry is causing a lot of concern. In our area that was added to by some of the comments made by the Klesch group, which was considering purchasing part of the business. Unfortunately, when they pulled out they said a few choice words about industrial policy and the Government. I do not think that was helpful or necessarily all that informed, but it has helped to spread more concern in our area.
Alex Cunningham (Stockton North) (Lab)
It is great to hear a Conservative Member speak so passionately about the steel industry, and it was a large part of my life when I was a newspaper reporter. Does the hon. Gentleman support bringing forward the compensation scheme now rather than waiting until April next year?
Andrew Percy
I agree with the hon. Gentleman. My hon. Friend the Member for Cleethorpes and I were two Conservative Members who voted against the imposition of the carbon floor price because of the impact that it would have not just on steel but on petrochemicals, which are massively important to North Lincolnshire and east Yorkshire. We would like the compensation scheme to be brought forward, as I planned to say later in my speech.
As the hon. Member for Redcar said, the nature of the steel industry is changing, and she gave a figure for how much steel we now import, compared with in the past. The figures that I was provided with state that 90% of steel consumed in the UK in the ’70s was from domestic production, but that share is now 20%. That unfortunate decline has taken place under successive Governments over the past few decades. The UK steel industry has had to become more export focused, which is part of the problem and a challenge for Scunthorpe. The hon. Member for Scunthorpe, my hon. Friend the Member for Cleethorpes and I, together with our council leader who will shortly enter the other place, met a couple of weeks ago. We were told once again that although UK demand appeared to be picking up and doing well, the concern for Scunthorpe is the weakness in the European market, as well as other issues that I shall mention. That focus on export is a major weakness at present.
As the hon. Member for Redcar said, the sector continues to suffer from an economic crisis. The service sector-led economic recovery has left steel-consuming sectors such as construction as much as 10% below their 2007 levels. The recovery so far has been less steel-intensive than we might have hoped. In the UK, demand is 75% of pre-recession levels. Further challenges, which the hon. Lady outlined, come from Chinese dumping and currency issues. Those factors, as she accepted, are outside the control of this or any Government in Europe. The current strength of the pound is another issue to which the hon. Lady referred.
Tata has made three asks of the Government, which the hon. Lady mentioned. It is almost as if we co-ordinated our contributions. One of Tata’s requests, as the hon. Member for Middlesbrough (Andy McDonald) said in an intervention, relates to the energy-intensive industries compensation scheme. I do not need to go into detail, having said what I have said already, but if that compensation mechanism were brought forward, that would be most welcome. Energy prices, as we know, are 50% higher in the UK than for the UK steel industry’s main competitor in Germany. Companies in continental Europe are not facing the same cost pressures, nor are they awaiting a decision on state aid rules. So there are steps that can be taken by the Government to improve the situation, and I know that the Minister has heard these.
Martin Vickers (Cleethorpes) (Con)
I agree entirely with all the points my hon. Friend is making. Does he recall that when we met Tata Steel, along with the hon. Member for Scunthorpe (Nic Dakin), one of its other requests was for modest support for some work that needs to be done to determine the firm’s future? Does my hon. Friend join me in hoping that the Minister will view that request sympathetically when she replies?
Andrew Percy
Indeed. We have communicated that request directly to the Minister. I welcome my hon. Friend’s intervention.
Business rates were mentioned by the hon. Member for Redcar. Removing plant and machinery from business rates valuation would have a massive impact, because business rates are five to 10 times higher in the United Kingdom than in Europe. That has a significant impact on Scunthorpe especially, making up 49% of the annual rates at that site or £12 million per annum. North Lincolnshire council has looked at what it can do on business rates, particularly in respect of cash flow. Expecting a small local authority such as that to take a hit on business rates, and putting it in a position where, if it provides relief, it may not be able to provide services, is not fair to North Lincolnshire council. This is an issue on which the Government need to respond.
We had a positive meeting with Tata recently, at which the council said it would see whether payments could be made every two or three months instead of monthly, which would help with cash flow at the site. I know North Lincolnshire council is looking closely at that. When lawyers get involved, these things always become more complicated and there are state aid issues, but the council has assured me that it will do everything it can to help on the cash-flow issue. However, that does not deal with the issues arising from the business rates regime in the UK, compared with elsewhere in Europe.
Mr Bone
I apologise to the hon. Member for Redcar (Anna Turley). I think she slightly misheard what I said. On my hon. Friend’s point about state aid for the steel industry, should we not do what we think is right and worry about the EU consequences afterwards? We seem to put the priorities the other way around.
Andrew Percy
I would rather not worry about the EU at all, which is something on which my hon. Friend and I agree, although I am not sure the Minister or other Members agree. My hon. Friend is right. I was going to say something about that later. We tend to interpret rules and EU legislation very precisely; the insinuation is that other countries in Europe may be more flexible about that, so we should adopt the European approach—I do not say that very often—instead of our officialdom. I think that is the point that he was making to the hon. Lady—let us do what other countries do and worry about the consequences later.
Scunthorpe has enacted a number of waste reduction strategies in recent years, resulting in well over 90% of all residue material produced across the site being subject to internal recirculation or external recovery or recycling. That is in line with the requirements for green energy and sustainability, but the incentive is still not there for companies. Last year Tata stated that it was paying around £30 million more in green taxes than its competitors in France and Germany—a point which other Members have made and will continue to make.
Capturing more value in supply chains is something that Tata is asking of the Government. Promoting local content appears to be happening in other European countries. We have talked about this a great deal in relation to other sectors of the economy and I know that Ministers in the previous Parliament were sympathetic. We all seem to be in agreement that we need to promote more local content, but getting that local content seems to be complicated. We must do more in that respect, as other EU countries do.
I shall not say much more as I will just be repeating the comments of the hon. Lady. Many hon. Members wish to speak in the debate and I have probably spoken longer than I should have done—[Interruption.] I think the Minister is encouraging me to carry on, which has not always been the case in other discussions that I have had with her.
Many Members are present today for this important debate. A country that loses its steel industry is greatly disadvantaged. The steel industry is a fantastic part of our economy, providing high-skilled jobs. Any loss of that to our local economy would be devastating. These are relatively well-paid jobs in a region that has not done as well in the past couple of decades, sadly, and has become worse off compared to the rest of the United Kingdom under Governments of both colours. Many people are inspired to work in the industry, particularly by the apprenticeship programme, and we must do everything we can to protect it, not just for North Lincolnshire or Scunthorpe, but for the for UK. It is of strategic as well as economic importance. I concur with the hon. Lady and will no doubt concur with much of what is asked by other right hon. and hon. Members this afternoon. I urge the Minister, who is engaging positively with us on the matter, to make sure that the Government get behind not only Scunthorpe, but the steel industry across the United Kingdom.
Mr Iain Wright (Hartlepool) (Lab)
The debate opened with strong, passionate and eloquent speeches from my hon. Friend the Member for Redcar (Anna Turley) and the hon. Member for Brigg and Goole (Andrew Percy), characterising what is good about the UK steel industry. Their speeches were measured and consistent, showing the overall picture of the future British economy.
We have been here before. We had an Opposition day debate in January on the future of the UK steel industry, in which I stated that we need to focus on the long-term competitiveness of the UK economy and that, as my hon. Friend the Member for Redcar said, manufacturing should be central to our vision for a modern, dynamic and innovative economy. I also said that steel matters as literally the foundation of a 21st century innovative economy, providing high skills and well paid jobs to parts of the country that often suffer in the larger economic picture, and offering a vital role in the supply chain of key sectors such as automotives, aerospace, construction and transport. It is such a significant foundation industry that other parts of our valued economy will build on. The Government need to recognise its importance and work in partnership with it to secure its long-term prosperity.
I am worried, however, that since the debate in January the scale of the crisis facing the industry has become ever more grave and urgent. My hon. Friend the Member for Redcar and the hon. Member for Brigg and Goole outlined the urgent national issues facing the industry, but I want to reiterate some of them. My hon. Friend mentioned the urgent situation facing the SSI plant in Redcar. In the months since we debated the issue in January, we have faced the prospect of the first national steel strike in 30 years. Last month, Tata announced the mothballing of a steel plant in south Wales, risking 250 jobs. The fall in the oil price has put on hold projects in the oil and gas extraction industry, meaning that Tata plants making world-class pipes—such as the pipe mill in my own constituency—and other steel plants face diminishing order books.
The hon. Member for Brigg and Goole mentioned Gary Klesch, who has abandoned his plans to buy Tata’s Long Products Division, including the great plant in Scunthorpe. He said to the Financial Times last month that workers in the UK steel industry were
“being led to the slaughterhouse”
by the Government’s failure to tackle high energy costs and Chinese imports. He asked:
“What is the industrial policy when it comes to the massive dumping of Chinese steel?”
As the hon. Gentleman says, we should doubt some of Mr Klesch’s motives in pursuing industrial assets, and those comments are emotive and provocative, but his comments on industrial policy do smack of some truth and we need to investigate that still further.
Nic Dakin (Scunthorpe) (Lab)
The real problem with Mr Klesch’s comments, when he withdrew his interest in Tata Long Products, is the impact they have had on confidence in steel. Does my hon. Friend agree that there is a big job for the Government to do to act to restore that confidence?
Mr Wright
Absolutely. I could not agree more with my hon. Friend. He is a passionate defender of the steel industry, not just in his constituency but across the country. He is absolutely right. Industry has a part to play in that, we in Parliament have a part to play in that and the Government also have a role. Government policy is ostensibly about priorities: where to divert attention and resources relative to other things that need to be done.
Other countries recognise the role that steel plays in a modern economy. At one extreme, this can mean renationalising the steel industry, as Italy has done, to safeguard capability for the future. Other Governments try to level the playing field for their domestic industries by addressing costs, taxes, procurement policies and imports to give their domestic steel firms at least a fighting chance. I am concerned that the British Government seem to do the opposite. This is not a personal criticism of the Minister on the Front Bench, who has taken more genuine interest in the steel industry in four months than her predecessor did in four years. She is a strong champion and we welcome her to her post. However, she recognises that the steel industry is facing a perfect storm. UK-based steel firms find it increasingly difficult, if not impossible, to export their products because of overcapacity in the global market, the high valuation of sterling, and uncompetitive costs based on unilateral energy bills and disproportionate business rates. As my hon. Friend the Member for Redcar said, energy prices for UK-based steel producers are 50% higher than for our European neighbours. How can we compete on that basis?
The Government advocate a wholly open domestic market, which leaves the industry vulnerable to dumping and fails to recognise smart local procurement, undermining UK-produced steel. The steel industry has one arm tied behind its back on exports, which, because of overcapacity in the global market, is increasingly difficult, and the other arm tied behind its back on imports. It is little wonder that the industry is punch-drunk and on the verge of a knockout.
I welcome this debate and I agree with the motion’s call for a key summit, but frankly we need more urgent decisive outputs. As Roy Rickhuss, general secretary of the Community union, has said:
“The UK steel industry is at a crossroads. Either it gets the support it needs from government to give it the chance of a competitive future or it continues to be subjected to warm words from ministers in the face of increasing decline.”
I could not agree with him more. On the subject of trade unions, this House debated the Trade Union Bill on Monday. In the Second Reading debate, I said that the Bill’s provisions run the risk of a more adversarial relationship between management and unions. The UK steel industry is characterised by fantastic, positive and productive industrial relations, which we lose at our peril. The UK steel industry will decline if the Bill is passed.
Anna Turley
I would like to draw attention to the role played by the Community union and the workforce, when the Redcar steelworks was mothballed in 2010, in securing the plant, finding a buyer in SSI and ensuring its future. That was absolutely fantastic and is a perfect example of a great union working with all parties to secure the future of the industry.
Mr Wright
What my hon. Friend says is really important. Steel plays a central role in a modern economy and it is really important that we put the empirical case. In places such as Teesside and south Wales we have seen that steel is in the blood of the workers who produce the steel. There is a pride that is difficult to match elsewhere. We need to make sure it continues.
On that basis, we have a simple but fundamental question to ask. We need to decide whether, as a country, we need a steel industry. We need to evaluate whether it is vital to our future prosperity, or whether, frankly, we can let it wither on the vine and just import what we need. I hope we decide that a competitive steel industry is essential to a modern British industrial base. If we do decide that, we need decisive action from the Government now—I stress now—to help to defend its long-term future.
I have a series of asks for the Minister. I know she is keen to help the steel industry as much as she can. Will she accelerate bringing forward the energy intensive industries package to ensure energy costs are made more competitive? Will she work across Government to remove plant and machinery from the business rates valuation for manufacturers, which acts as a massive deterrent against investment in manufacturing improvements, as well as being a big fixed cost disadvantage relative to European steel plants? Will she do more to support the industry in anti-dumping cases? She has already, in her short time in the Department for Business, Innovation and Skills, done an enormous amount. I think we are, as an industry, very grateful, but will she do more and outline to the House what she intends to do? Could she capture more value in the UK supply chain by promoting local content procurement targets, which lends capacity and capability to UK-based steel firms?
My hon. Friend the Member for Redcar knows my frustration. Overlooking our constituencies is the Teesside offshore wind farm, which presents a fantastic opportunity for steel to be part of a supply chain for an exciting offshore renewable industry that can literally power our future. The wind turbines and columns need an awful lot of steel. About 10% of the steel used in that significant local project was procured abroad—not from Hartlepool or Redcar steel mills. That is a disgrace. As a country, we need to be doing more about that; not protectionism, but making sure we safeguard the efficiencies of the local supply chain so we can have a viable future.
Anna Turley
Just yesterday I met Forewind, the company building the Dogger Bank wind farm a bit further out from our constituencies. That will come on stream in the next couple of years. It said to me that there will be a lot of steel involved. We have everything here on Teesside: we have the infrastructure, the skills and the steel. I hope to God that in the coming years we will have a blast furnace making the steel to build those wind turbines.
Mr Wright
I could not agree more. These are strong 21st century jobs in our supply chain that need to be nurtured by the Government, working in partnership with the industry. We need to safeguard that long-term prosperity.
Going back to my ministerial asks, will the Minister ensure that in sectoral strategies such as aerospace, automotive and construction—areas in which British industry is strong—she emphasises the importance of integrating material supply, which offers better synergy between the prime manufacturers and their suppliers in steel, which in turn can promote process and product innovation and efficiency, which in turn makes UK steel more competitive?
When we talk about the steel industry, there is a tendency to talk about the past. We should not shy away from our strong and proud history of, frankly, inventing the global steel industry—it is something to be proud of—but this debate should not be a history lesson. This is about looking to the future. A 21st-century, modern British economy has to have manufacturing and steel at its heart. That is what we are shouting for and demanding. I hope the whole House can unite in asking how we in Britain are going to stand up for steel.
Tom Pursglove (Corby) (Con)
It is a great pleasure to speak in this debate, which I am grateful to the Backbench Business Committee for securing. It is also a great pleasure to follow the various remarks made this afternoon, first from the hon. Member for Redcar (Anna Turley), who made a strong case for her constituency and gave us a positive, constructive and helpful overview of the problems facing the industry. As I often do, I ended up agreeing with my hon. Friend the Member for Brigg and Goole (Andrew Percy) about the EU dimension. The hon. Member for Hartlepool (Mr Wright) made some interesting comments, and I hope that the Business, Innovation and Skills Committee, which he chairs, will play a leading role in bringing forward these arguments, informing the debate and playing a constructive part in it. He redeemed himself later in his remarks, having earlier left me slightly disappointed by the tone of his remarks about the work of Ministers. I pay tribute to the Minister—
Tom Pursglove
I am glad that that is on the record, because the Minister has done an awful lot, particularly on anti-dumping. As Members know, Ministers take these concerns seriously and have been providing what support they can.
Corby has a proud history of steel production that began in Roman times, when the area was worked for iron ore. During the industrial revolution, the ironstone industry thrived in the area, with the discovery of extensive ironstone beds, and by 1934, the steel firm Stewart & Lloyds had moved into Corby to build a large ironstone and steel works, which took the population of Corby from just 1,500 in 1931 to 12,000 in 1939, well and truly putting the town on the map. Many people moved into the area to work in the steel industry, most notably from Scotland, and Corby is regularly known locally as “Little Scotland” owing to the large number of skilled Scottish workers who moved there for the steelworks. This has had a direct impact on the make-up of the area, and today we still have a proud Scottish community in the town and its surroundings. As Corby’s voice in Westminster, I am here to speak in favour of this motion and to urge Ministers to hold a summit on this key industry, which is a large employer not only in Corby but across the country. I know that all Members advocate on behalf of their local workforce, but the Corby workforce are incredibly hard-working, dedicated and committed. I hear such comments week in, week out in my constituency, and I am incredibly proud of that.
Today’s motion has unified Members from both sides of the House who are working constructively together, through the all-party group on steel and metal related industries, to get a better deal for the UK steel industry. I thank my right hon. Friend the Secretary of State for Business, Innovation and Skills for agreeing to meet the APPG in the coming weeks and the Minister for standing up against Chinese dumping. She has taken action in the European sphere, and I trust that she will continue to fight for steel in upcoming anti-dumping cases at EU level. I appreciate their willingness to listen, and I hope that by working together we can find solutions to the problems facing the industry. I also welcome the answer given by the Secretary of State for Energy and Climate Change to my question this morning. She advocated on behalf of buying British products, which is something I am sure we all agree with strongly. I hope that that will come across in future discussions with Ministers and that they will continue to advocate that position publicly.
Mr Speaker, did you know that the steel tubing used in sprinkler systems and managed motorway gantries is made in Corby? Furthermore, as I alluded to in my maiden speech, one can also see Corby steel products at the London Eye, the Wembley arch and the Olympic stadium. These are just some of the products manufactured in Corby, and we should all feel proud that it is British products we can see at these iconic locations in our country. I strongly believe we should shout from the rooftops for British business and support UK supply chains.
I know the industry faces challenges in that regard. Foreign competitors are winning UK contracts over British businesses because of the combination of the current exchange rates and cheap imports, which can provide a more competitive end price. However, the value of steel to the UK is not just in the end product but in the value throughout production. By buying British, we can support our own industries and those working in these sectors, boost our own economy and in turn benefit from this growth. If foreign companies win contracts, this does nothing to further those aims. Furthermore, all the evidence suggests that the quality and standard of British steel is far superior to that imported from elsewhere. That is why I am such a strong supporter of the charter for sustainable British steel, an initiative I would like to see adopted across Government, local authorities and broader public sector procurement.
On the wider context, the benefits of buying British massively outweigh the benefits of importing from foreign countries. First, the transportation costs are lower, and, as we heard in Question Time earlier, it is also better for the environment. Secondly, it creates skilled jobs and the ability to offer young people apprenticeships and graduate jobs. Tata Steel, in my constituency, has led on this, nationally employing 500 apprentices and graduates this year alone, and in Corby it has taken on six new apprentices, investing an estimated £10,000 per year in each. As the local MP, I appreciate Tata’s commitment to local young people. From speaking to local apprentices, I know how important these opportunities are in terms of learning a trade, having a job and, perhaps most importantly, getting the opportunity to forge a career.
Fundamentally, the procurement process must be looked at, and I believe that the Government, local authorities and the wider public sector can do more to promote procurement strategies to support domestic manufacturers. This would obviously require a shift in culture in some areas, but a steel summit would begin that dialogue. Speaking of sustainability, it is vital that the steel industry and the Government identify a constructive way forward on energy costs and green taxation—an onerous burden that Members on both sides of the House have alluded to in departmental questions this very week. The huge costs associated with energy supply for energy-intensive manufacturing immediately puts British business in a difficult position and at a competitive disadvantage over foreign rivals. Indeed, data on EU industrial electricity prices for extra large users between July 2008 and December 2013 show that Britain was the most expensive even before tax. I am aware from my conversations in Corby and east Northamptonshire and from visits to local firms that this does not just affect the steel industry but plagues other sectors, such as the plastics industry.
The current system, whereby energy-intensive industries pay huge energy bills up front and then receive compensation afterwards, is unhelpful. I would be intrigued to know how much the bureaucracy is costing both individual businesses and the Government to administer. By opening a dialogue, as the motion states, we can seek meaningful and urgent solutions to this problem. I am increasingly coming round to the point of view that it would be better to exempt energy-intensive industry from these burdensome levies and charges, but in the shorter term I agree with implementing the compensation package in full and in a very timely manner.
The UK prides itself on innovation in business, as MPs see week in, week out in their constituencies. British businesses are at the cutting edge of international innovation. I struggle to understand, therefore, why industries such as steel are penalised through the business rates system, which disincentivises investment and pushes up costs. How can it be right that these businesses pay rates not only on the size of the site but whenever they invest in new machinery and equipment? An example of this was the Tata Steel site in the constituency of the hon. Member for Aberavon (Stephen Kinnock). Tata Steel invested £185 million for a new blast furnace for its Port Talbot site, which then led to an increase in business rates of £400,000 a year, despite the fact the site did not change in size or scope. Penalising investment like this is detrimental to British industry, and I believe that the Government, who have made clear their commitment to business-led growth, should be working with industries to stop this tax on innovation.
During my remarks, I have outlined just a few of the complex and wide-ranging issues affecting the steel industry. I very much look forward to visiting the Tata site in Corby in the coming weeks, but it is apparent in the short term that we need high-level discussion between all those involved in this important strategic industry. That is why I wholeheartedly support today’s motion.
Going forward, I hope that the cross-party spirit that has characterised the debate—today, but also in the months since I became a Member—endures. I hope that Ministers will continue to engage, listen and work with colleagues of all parties who are concerned about the future of this vital British industry. While I appreciate that at this point some issues are out of the hands of the UK Government, as they have shown, they can do things to hold back the tide and give steel companies an opportunity to adapt and move forward. It is vital for the survival of the industry that we come together to make progress before it is simply too late.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Speaking as chairman of the all-party steel group, I would like to congratulate my hon. Friend the Member for Redcar (Anna Turley) on securing this vital and timely debate.
I would like to say thank you for calling me, Mr Deputy Speaker, but frankly, in view of the impending problems that are putting the steel industry on a cliff edge, I am sick of having to be called to participate in questions or debate about the industry. I am also angry about today’s comments from the Under-Secretary of State for Communities and Local Government, the hon. Member for Stockton South (James Wharton), who is responsible for the northern powerhouse. He referred to Labour Members as “showboating” on this issue.
I did not want to start in that way, because I have a lot of respect for the Minister for Small Business, Industry and Enterprise. While she has been a Minister, she has accelerated the process and the changes that are vital for the steel industry. However, I find the comments from that Under-Secretary to be truly reprehensible, and I am having to control my anger towards an MP who is supposed to represent my community and the people from my area. I will say this, however. The Minister opposite—I have just commended her—represents a great step in the right direction. Members across the Chamber can rally around her; she can be our champion against other Ministers in the chambers of power to fight for, rally and stand up for the case for steel.
People from different communities, trade unions such as Unite and GMB are present in the Galleries, including Roy Rickhuss, general secretary of Community, and Paul Warren, the multi-union chair at SSI Redcar. Those people are looking to us for solutions. They need us to help deliver those solutions for them.
As I said, I am sick of having to talk about this issue. I have gone through—not just today, but earlier—the detailed arguments over and over again. I have raised them at Prime Minister’s questions over and over again. Only last week, my hon. Friend the Member for Scunthorpe (Nic Dakin) raised the issue of the necessity for a steel summit. My colleague in the all-party group and its vice-chair, the hon. Member for Corby (Tom Pursglove), has raised it again today and in questions to the Department of Energy and Climate Change and fastidiously in all questions. What we want to see now is action.
We can base our argument today on an example from our local community in Teesside. The site at Redcar—the very site mentioned by my hon. Friend the Member for Redcar earlier—has been an industrial miracle on Teesside, with the resurrection of the largest blast furnace in Britain, the second largest in Europe. In my opinion, that should have been a rallying-call for any Government—the fact that something of such great significance could be brought back again through the co-operative work of the men and women on site, the management and the then current owners and then the wanted owners. There was a plan; there was a desire; there was a will to fight and save the heart of a community.
I know that the workforce and the trade union movement want that now. We MPs want that now. But do the Government want it? That is the question. Do they really want it? It is now about political will—the next stage. We have talked about Europe and about ignoring or interpreting the European convention. Fine, but if there is political will, it will be possible to get there. That is the stage we are at now. We cannot afford to keep going over the arguments, which we all know are the right ones. What we need now is action.
On 15 April 2012, what I would describe as a small miracle took place. An 11-year-old boy fired up Britain’s largest blast furnace, after it had been mothballed for two years. Within a matter of days, steel slabs began rolling off the production line. Steelmaking had, against all the odds, returned to Teesside. People’s livelihoods had been restored and an opportunity to carry on the tradition of steelmaking had been created for future generations. That boy was Wills Waterfield, son of Geoff Waterfield, a member of the Community trade union and chair of the multi-union committee, who had been instrumental in the Save our Steel campaign, following the announcement by Tata Steel to mothball the site in 2009 after the loss of a large contract. He, alongside Stevie Redmond, Paul Warren, Roy Rickhuss, Michael Leigh and many others, made that happen.
Since SSI bought the site and relit the furnace in 2012, I think it is fair to say that the journey to where we are now has been a bumpy one. Indeed, we find ourselves almost on a cliff edge. That is why today’s debate is so crucial. However, I praise SSI for the initial commitment and determination it showed to bring steelmaking back to Teesside. That grit must endure over what will be an extremely difficult few weeks for the company. During that time, SSI must realise that the workers at the site are not so naive that they do not understand the difficulty in which the company finds itself. It is essential for SSI to respect that and to maintain a clear and honest dialogue with the workers and trade unions on the site. I believe there is a role for the Government to play in ensuring that talks take place and that they continue. It is a profound role.
The Minister is meeting me, my hon. Friend the Member for Redcar and the unions representing the workforce later today. I think we need to explore not just what we have already talked about, but anything that is potentially helpful to the situation. I know the Minister will take that back to her superiors in the Government. We all continue and I continue to champion our vital industry, which I have done for my home area since first elected in 2010—I was re-elected a few months ago.
We are highlighting the issues facing the steelworks in Redcar and Skinningrove in my constituency, which is part of the long products division at Tata, and in the UK as a whole. The issues range from high energy prices to the impact of dumping in the EU by China and many others—and we know all these arguments very well. With each debate, each parliamentary question, each question at Prime Minister’s questions, I am greeted with warm words from whoever is at the Dispatch Box, but it is now clear that words are not enough. They need to be turned into action. That was needed then, and is even more needed now.
I would like the Minister to remind her Prime Minister of the necessity for the meeting that he promised me yesterday in Prime Minister’s questions. I think the matter demands his attention. When we raised these issues with him before—at Prime Minister’s questions and in other debates—he was quite keen for his Government to take the praise for SSI’s purchasing and resurrection of the Teesside Cast Products works in Redcar. Now, however, I do not know. I have to be honest: I do not see the same level of commitment or will as there was before. The Prime Minister was all too keen to take the praise for work that—I am being honest here—other people did, but is not keen to do the work now when he can do something.
I see the prospect of 2,000 hard-working people losing their livelihoods at Redcar. If that does not spur the Government into action immediately, I can only despair. I say 2,000 people, but we are really talking about 6,000 to 10,000 jobs in the downstream supply chain in companies around the area and the port. This is the heart of our local economy; it is a huge chunk of Teesside gross domestic product. More than that, it is our culture and tradition. It is the very identity of who we are, where we come from and the pride we take in ourselves and in our parents and grandparents before us. If we cannot now see the necessity of defending that industry, and that heritage and that history, I do not know why, but I do know this Minister. I have faith in her, and I want her to prove that my faith is justified.
Jessica Morden (Newport East) (Lab)
My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) is an incredibly hard act to follow. The messages that he sent were spot on, he spoke from the heart, and he was right to say that this issue demands the Prime Minister’s attention.
All credit is due to my hon. Friend the Member for Redcar (Anna Turley) for securing the debate, for her excellent, impassioned speech, and for the clear messages that she sent to the Government. Credit is also due to the Backbench Business Committee for appreciating the huge urgency of the situation in steel manufacturing and giving us time for today’s debate. I echo the sentiments expressed by my hon. Friend the Member for Hartlepool (Mr Wright) about the central role that steel plays in our modern economy, and I wholeheartedly support the motion’s call for an urgent steel summit, because this is a critical year for the steel industry.
My hon. Friend the Member for Middlesbrough South and East Cleveland rightly spoke about the situation in Redcar. I obviously want to focus on the impact on Tata’s Llanwern steelworks, which is in my constituency—as is Orb steelworks, which has also been hit by some of these challenges. The current press coverage has focused on the huge challenges that the changes in the steel market are posing for SSI, but Llanwern is already having to react to the same massive headwinds. On 26 August, Tata announced its intention to lose about 250 jobs there, and to mothball the hot strip mill. By the end of October, we shall see that happen. It is the third time the mill has been mothballed since 2009, but this mothballing includes, for instance, the cold mill and one of the pickle lines, and the tonnage of the remaining pickle line is being reduced.
As the Minister will appreciate, the news of the latest mothballing is devastating for workers and their families, and for the confidence of the city, which, like other Members’ constituencies, has a proud tradition of steelmaking. Tata has confirmed its intention to redeploy permanent employees, but 176 contractors and agency staff may lose their jobs, and 81 Tata employees may have to move to another area for work. Anyone who talks to steelworkers cannot fail to sense their uncertainty about the future. Moreover, as others have pointed out, for every steel job, a further two to three jobs in the wider community rely on the metals sector.
Following the announcement, I met representatives of the unions and Tata’s management, and was given an in-depth presentation by Tata’s UK director of strip products. I agree with other Members that no one who sees the figures and observes the situation can fail to be convinced of the need for Government action now, and of just how hard times are. The industry is at an historic crossroads, and what the Government do now will determine whether UK steel has a sustainable future.
All the key arguments that have been made repeatedly by other Members—I suspect that we shall all be singing from the same hymn sheet today—apply equally to Llanwern. European steel demand is still 25% below 2008 levels. The market is being flooded by cheap Chinese imports, because of China’s overcapacity and rising protectionism in other countries. Energy prices for UK steel producers are more than 50% higher than those paid by our main European competitors, which are not experiencing the same cost pressures and are not awaiting decisions on state aid. The package for energy-intensive industries that the Chancellor announced in March is still being held up. UK business rates are up to five times higher than those of our European competitors, and the Government's business rates review is holding up change. Other Members have made good points about the disincentives to investment. Tata UK’s latest accounts show that losses have doubled since last year.
As Community has said, we need the Government to be quick and bold. Steelworkers want to know why they are still allowing cheap Chinese steel to flood the market at a time of rising protectionism elsewhere in the world. Llanwern has been hit by the strong action taken by the United States in defence of its steel market. Its workers are asking why other countries can make quick and decisive decisions and we cannot do the same here.
I welcomed the recent visit by the Secretary of State for Wales and the Minister to Port Talbot, and I know that they will have heard these messages. As others have said, the Minister has been very constructive, and I know that she will be in no doubt about the challenges faced by the industry and the people who depend on it for their livelihood. Following that meeting, however, steelworkers at Llanwern want to know what practical steps the Minister has promised to take, and to remember them and include them in the support that she offers. I agree with my hon. Friend the Member for Redcar that a good start would be an urgent summit, but we also need urgent action, and we need to discuss options for assistance.
It is imperative for any summit to be held quickly, with full and positive backing. There must be Government support, and the unions, the industry and Members whose constituencies are affected must work together for a common cause. During my years as Member of Parliament for Newport East, I have been acutely aware of the many challenges facing steelworkers in Llanwern. They have had to adapt constantly, accepting changes in their terms and conditions and rising to the challenge of hitting the targets that companies have set them in difficult times. Support for the industry is crucial for people who, in constituencies such as mine, have worked so hard during those difficult times to be constructive and help the company along.
I know that it is easy to talk theoretically about China, state aid rules, and “all possible help being given”, but the reality is that 176 contractors in my constituency are being laid off, and more of my constituents face the upheaval of being redeployed to other Tata sites. That is not theory or speculation; it is real, and it is happening now. Any action that the Government can take—such as accelerating the reform of business rates for manufacturers, putting pressure on the European Commission to grant state aid approval for energy cost mitigations and introducing them immediately, and ensuring that UK-made steel is integrated proactively with industry and infrastructure projects—could make a real difference, although we all appreciate that the global challenges are massive.
Some of the best steel in the world is made at Llanwern. Let us recognise that, champion Llanwern, and not stand aside and watch jobs, investment and innovation go elsewhere.
Andy McDonald (Middlesbrough) (Lab)
It is a great pleasure to take part in the debate. I congratulate my hon. Friend the Member for Redcar (Anna Turley) on securing the debate from the Backbench Business Committee, and for leading it. I also congratulate the chair and vice-chair of the all-party parliamentary group on steel and metal related industries, my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) and the hon. Member for Corby (Tom Pursglove). It is a privilege to follow such passionate speakers.
This matter clearly affects the entire country, but if Members from areas such as Scotland, south Wales and Scunthorpe will forgive me, I shall focus on Teesside. Let me begin by saying something that relates to what was said earlier by my hon. Friend the Member for Middlesbrough South and East Cleveland about the Under-Secretary of State for Communities and Local Government, the hon. Member for Stockton South (James Wharton)—the “Minister for the northern powerhouse”.
I was a little reluctant to be too critical of the Minister, having heard what was said by the hon. Member for Brigg and Goole (Andrew Percy) about Ministers being busy. They are busy, and we should not forget that. People may also be ill: there are all manner of reasons why they sometimes cannot be here. However, when I hear of a tweet from the Minister saying that his Teesside colleagues are here in the Chamber “showboating”, I think that it is an absolute disgrace. It is about time that that Minister grew up and started to pay attention to some of the serious issues that affect his constituents and mine, and those of my hon. Friends from Teesside.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I am reluctant to do this, but I think it important for Members to know what has been said in the course of the debate. The Minister who has been mentioned was responding to an ITV journalist, and what he said was this:
“On my way up to Teesside actually doing things rather than showboating.”
That is in stark contrast to the approach of the Minister who is present today, and with the approach of other Conservative Members who are present today and who, to their credit, are standing up for the industry. I think my hon. Friend will agree that it is not appropriate language to use about a parliamentary debate.
Andy McDonald
I agree entirely. Let us move on and deal with the substantive issue rather than dwelling on that matter.
Andrew Percy
I am pleased that the hon. Gentleman wants to move on, and I am sorry about the involvement of those on the Front Bench in this matter, but just for the record, and in fairness to the Under-Secretary of State for Communities and Local Government, my hon. Friend the hon. Member for Stockton South (James Wharton), he has said that he is on a visit to Teesside and, in even more fairness to him, the Member who criticised him for not being present is not here any more either.
Andy McDonald
Let us not dwell on this. My hon. Friend the Member for Stockton North (Alex Cunningham) was here and he has made his contribution. He has done us the courtesy of doing that and he has shown his commitment, so let us have none of that. Let us move on.
Teesside steel is the reason many of us are here. There would be no town of Middlesbrough without steel. I am not going to give people a history lesson but, although Teesside might have the largest blast furnace in the UK, a few years ago we had 100 blast furnaces down on the banks of the Tees. It was like Dante’s “Inferno”. The only reason we are here is steel.
The SSI furnace is fighting for survival, and its loss would spell disaster right across the Teesside constituencies for the 2,000 people directly employed there, the 1,000 contractors and the 6,000 workers in the supply chain. If the plant were to go into administration, it would have an impact on 9,000 families, which would be devastating. For example, PD Ports at Teesport has a contract with SSI and it has seen well in excess of 7 million tonnes of steel pass through its port in just three years.
We have had debate after debate about the need for high-quality apprenticeships for our young people. Our Teesside industrialists and educationists have responded brilliantly to the challenge to ensure that we have the requisite skills coming through, but if there are no jobs for our youngsters, that will critically undermine all their endeavours. The Teesside steel industry might no longer employ the 40,000 people it employed in its heyday, but if it were to fall over, it would send a seismic shock right through the region.
The UK steel industry has faced a perfect storm in recent years with challenges coming from imports, energy costs, exchange rate pressures and a weak market. Many of the problems faced by the UK steel industry are indeed global, as the Government have been quick to point out, but it is important to note that the steel industries of some of our European counterparts are not facing the same cost pressures and are able to access state aid more readily because of alternative policy choices made by their Governments. We are here today to demand that the Government make different policy decisions so that our steelworks are not consigned to the history books and will continue to play a vital role in UK industry for years to come.
The steel industry cannot wait for state aid clearance for assistance with energy costs. The Government must feed through 100% of the energy intensive industry compensation package now. Other countries have secured clearance retrospectively and so should we. The Government often state that it is their plan to rebalance our economy so that prosperity can be shared across the regions, moving away from an over-reliance on the service sector and towards manufacturing and industry. Indeed, many Governments have said the same thing, but they have rarely delivered. If the UK steel industry is the litmus test of this Government’s rhetoric, the signs do not bode too well.
I read an article this week in the Financial Times about the Secretary of State for Business, Innovation and Skills, in which it was revealed that he had a poster of Margaret Thatcher on his wall. It was not the poster that worried me, however. I was worried by his aligning himself with her attitude towards British industry. He has said that he does not like to use the term “industrial strategy”, as it would suggest that he cared about some industries more than others. As Alastair Campbell said of Tony Blair, “We don’t do God”, we now have a Business Secretary saying, “We don’t do industrial strategy”. The Minister for Small Business, Industry and Enterprise, the right hon. Member for Broxtowe (Anna Soubry) is shaking her head—
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
No I am not.
Andy McDonald
She can google the article that was in the FT a couple of days ago. Those are the words that the Secretary of State used. I put it to her that people want an industrial strategy, and that the Government should have one. I recommend it. I found that to be a baffling admission by the Secretary of State. We do, at certain times, prioritise particular industries, because they might need additional support in the short term so that we can enjoy their social and economic benefits in the long term. UK steel ought to be one such industry.
SSI is one of four major players in a hugely ambitious carbon capture and storage project which would not only deliver a massive dividend in terms of energy costs and lower carbon emissions but sustain those very industries and attract major investors into the region to join the CCS network, with all the advantages that the project entails. It is imperative that Government recognise the crucial importance of the project and give SSI and its partners every assistance and support. With a fair wind, Teesside could be on the brink of becoming the carbon capture capital of Europe, and sustaining the Redcar plant is vital to making that a reality. I plead with the Government not to take their eye of that particular ball. In addition, there are vast reserves of coal sitting off the north-east coast. The exploitation of those 400 years’ worth of energy coupled with CCS would not only guarantee the survival of our core industries and attract massive investment but make Teesside a world leader in clean energy.
The impact of steel closure on Teesside would be devastating, but I am not convinced that this Government give a tupenny fig for Teessiders. I do not think they are listening. The Minister shakes her head, but on Tuesday we debated the impact of the cuts to tax credits. This is the same community that would be affected. In the Secretary of State’s constituency, 37% of families depend on tax credits. The figure in my constituency is 81%. The cumulative impact of any closure would be devastating to an entire community. That is what is at stake, and I hope that the Minister will take my comments seriously. I will not dwell on them. I wanted to say more about that issue, but I know that other Members want to speak.
In my constituency, which depends heavily on the availability of good jobs in the steel industry, there is a backdrop of great need. I implore the Minister and the Prime Minister to convene a steel summit of the major players and decision makers to put together a rescue package for the steel industry as a matter of supreme urgency. As my hon. Friend the Member for Hartlepool (Mr Wright) suggested, I would also encourage all participants to leave no option off the table.
I know the visceral rejection that would greet any suggestion of major state intervention, and I know the abuse that is often hurled at anyone proposing such a response, but we cannot rule out renationalisation. If it is a choice between this industry falling over and taking it back under state control, I think I know what the steelworkers around this country would want the Government to do. I also think I know what many industrialists, who are committed to a strong manufacturing base in the UK, would expect the Government to do. We have only to look to Italy. On Christmas eve in 2014, the Italian Government announced that they were temporarily nationalising the Ilva steel plant to safeguard thousands of jobs and make the necessary investment before putting it up for sale. That was an enormous public commitment, and it is one that should not be unthinkable in the UK. The history books will look favourably on Alistair Darling and Gordon Brown for having taken urgent and decisive action in 2008 to save the critical banking industry. This is this Government’s RBS moment. The country is watching and it does not expect to find its Government wanting.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I would like to put on record the fact that it I am delighted to be able to participate in the debate today, having been one of the lead Members to make representations to the Backbench Business Committee, along with the hon. Member for Redcar (Anna Turley). I would like to thank all those who supported the application, and all those who are attending and contributing today. I, too, am glad to see that we have a Minister here today who is listening to us on this issue.
I know all too well the challenges facing the steel industry. Tata Steel’s Clydebridge plant lies in my constituency, and its sister plant, Dalzell, is in the neighbouring constituency of Motherwell and Wishaw. Those two plants are part of the Tata Steel long products business.
As many Members will be aware, the history of the steelworkers industry in Scotland, in particular in north and south Lanarkshire, is extensive. The Clydebridge steelworks was first opened in 1887, and throughout the years it has had the status of being one of the giants of industrial Scotland. The steel plates it made were used in many of the most famous ships ever built, such as the Lusitania, Mauretania, Queen Mary, Queen Elizabeth and the QE2.
From 1786 to 1978, the Clyde ironworks lay adjacent to Clydebridge and supplemented the work of the steelworks. In the Clyde ironworks, the hot-blast process was invented in 1828 by James Beaumont Neilson. This one invention led to a rapid increase in iron manufacture, and the growth of industries made Scotland a world leader in manufacturing.
Established under the Iron and Steel Act 1967, nationalisation tried to rationalise steel production and made the biggest changes to the British steel industry ever seen. Some 90% of UK steelmaking came together under the one single business, the British Steel Corporation.
Clyde ironworks was to be enlarged, and this led to the establishment of the Ravenscraig steelworks in 1954. It was based in Motherwell and had the title of being the steel capital of Scotland, and the skyline was dominated by the gas holders and cooling towers of the plant. Ravenscraig became the heart of the nationalised industry’s Scottish operations and produced its own iron in blast furnaces fuelled by Scottish coal. Iron ore was imported via a purpose-built pier terminal at Hunterston, and lime flux came from its own works in Westmorland. Ravenscraig became western Europe’s largest producer of hot-strip steel and produced slab steel for the Dalzell works, which is still there today.
On the watch of Margaret Thatcher’s Conservative Government, British Steel was privatised in 1988, a move that has left a legacy of decimation. With the privatisation came high manufacturing costs, the free market, overseas competition and a downturn in shipbuilding. This led to the closure of Ravenscraig in 1992, ending the large-scale steel making industry in Scotland. That was widely regarded as one of the biggest social and economic disasters to have ever occurred throughout the UK, and the steel industry has never been able to recover from this hammer blow.
The closure resulted in the loss of 770 jobs and another 10,000 jobs directly and indirectly linked. Ravenscraig at one point was regarded as the largest brownfield site in Europe. Fortunately, however, the Dalzell and Clydebridge plants have remained in operation under the ownership of Tata Steel Europe.
The UK steel sector currently employs about 20,000 people directly, which is just a tenth of the number who worked in it during the 1970s. Tata currently employs around 17,000 of them, down from 25,000 in 2008.
When Tata Steel suffers, the UK steel industry suffers. Tata Steel posted a pre-tax loss of £768 million in the year to the end of March, double that of the previous year. Its revenues fell, down 7.3% to £4.2 billion, and production was down to 8.2 million tonnes, due to “operational issues” at plants. Tata Steel’s liquid steel has this year declined by 2.5%.
Tata’s European branch took a heavy hit when its Indian branch lost £314 million from restructuring and impairments. Tata Steel has been slashing costs since 2007, and 1,000 staff and agency jobs have been lost since last year alone. It has been stated that these losses have been the result of high taxes and energy costs, the strong pound and cheap Chinese imports, along with other external factors.
The Chinese Government have devalued their domestic currency several times throughout the year and this move has improved the competitiveness of Chinese exports. About half of the 1.6 billion tonnes of steel made worldwide each year comes from China, which is now exporting around 100 million tonnes a year as its economy slows.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I pay tribute to the hon. Lady for securing this debate, along with other Members, and she is making a powerful case for her constituents. It is important, however, that we look at the role Governments play in procurement. She talks about Chinese exports and Chinese steel, but did not the Scottish Government choose Chinese steel to build the new Forth road bridge? Has she made any representations to her own colleagues in Holyrood about that crucial issue, because this is an issue for all of us in Governments across these islands?
Margaret Ferrier
The hon. Gentleman is incorrect. There was a bid process, and that was the result. [Interruption.] Yes, the Chinese won that process.
Marion Fellows (Motherwell and Wishaw) (SNP)
May I clear up this point? Yes, the Chinese won that steel contract, but Tata Steel did not bid; that is a fact.
Margaret Ferrier
I thank my hon. Friend for that intervention.
Furthermore, the UK has trading barriers with the USA. Six steel producers in the US filed petitions for the imposition of anti-dumping measures on hot-rolled and cold-rolled coil imports from countries including the UK and the Netherlands.
Exports are an increasingly important part of the UK steel industry’s strategy, given the current weak European demand. Manufacturing in Scotland has shifted focus in recent years with heavy industries such as shipbuilding and iron and steel declining in importance and in their contribution to the economy. It is generally argued that this has been in response to increasing globalisation and competition from low-cost producers across the world, as well as the privatisation of the manufacturing industries.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Does my hon. Friend agree that the Scottish Government have, with the powers they have, offered a whole host and range of practical advice and support to steel companies through Business Gateway, Scottish Enterprise and Scottish Development International?
Margaret Ferrier
I agree; they are doing what they can.
Currently there are 330 people employed between Clydebridge and the Dalzell operation in Motherwell, which is far less than the numbers at the height of the Ravenscraig site. In May of this year Tata announced that it would have to reassess its long products mills to strengthen the competitiveness of its UK operations as a whole. The hot-strip mill in Port Talbot has benefited from this, as quality and capacity upgrades have been carried out. The mill at Newport will also come out of production owing to financial constraints.
The Tata Group, which runs these sites, was recently subject to a takeover bid by an American industrial consortium, the Klesch Group. However, after due diligence no offer was made. Both Tata and Klesch have said that the business has been struggling owing to significant pressure globally. The union official for Community has conceded that the plate market is really slow and that the union has known that there will be losses to come at the Scottish site, and notes that the situation remains very concerning. They had hoped the market would pick up; however, this has evidently not been the case.
It has been the unions who have been fighting the case for these workers and trying to ensure that there are no redundancies. However, the UK Government must do more. The unions have already met the Scottish Government and are to meet them again regarding any assistance that they can offer. We need to ensure that the plants in Scotland remain open and remain sustainable, adding jobs to our communities.
All job losses are devastating news for the steel industries. Many communities rely on them for employment. Every job lost, and every single redundancy, tells its own personal story. We must do whatever we can to protect those jobs.
The UK Government’s flippant “leave it to the market” attitude will destroy this industry. Action needs to be taken, and it needs to be taken now. That accords with the comment of the aforementioned Klesch, who walked away from buying Tata, that its 6,000 workers were
“being led to the slaughterhouse”
by the Government’s failure to address high energy costs or stem a growing tide of cheap Chinese imports. He insisted that the lack of Government subsidies and their lack of industrial policy are hampering the UK’s industry.
This was echoed by Sue Lewis of Community, who has said that the UK Government should have done far more to support the steel industry to meet rising energy prices, while the Welsh First Minister said the UK Government should do more to help. The UK Government have given £35 million to steel firms to offset their costs, but that simply is not enough. Mr Klesch said that the UK Government needed to address these issues urgently, in tandem with other European countries, if they wanted to retain a steel industry. He said:
“Whoever gets the cheapest input costs wins the roses. You have Middle Eastern countries giving free gas to aluminium smelters and the Chinese government supporting their steel industry. We don’t have a level playing field.”
I agree with that assessment and believe we should be doing more.
It is unfortunate that, as the Minister for Small Business, Industry and Enterprise has said:
“Neither the Office for National Statistics nor other governmental statistical sources make such forecasts for steel. The Government forecasts can influence markets and therefore must be able to be robust.”
However, there is an unwillingness to share information and the Government should be able to calculate robust figures. If they do that, we need to be able to work towards this target or even to try to outdo any expectations. Today, I will submit a series of written questions to the relevant Departments to ensure that Ministers will converse with Tata in Scotland and with the local communities.
The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) stated yesterday that he wanted to see the Prime Minister do more in Redcar. I welcome that, but I also want the Government to do more throughout the UK. The time for action is now, and I will happily work across the Chamber to deliver a galvanised response to the steel industry’s pleas for help.
Nic Dakin (Scunthorpe) (Lab)
Let me join everybody in paying tribute to the work of my hon. Friend the Member for Redcar (Anna Turley) and others in securing this timely and important debate. While we are on tributes, it is important that I pay tribute to everybody who is working in the steel industry across the UK, particularly those in my constituency. A number of things have happened this summer: job losses in south Yorkshire; job losses in south Wales; the withdrawal of Klesch from the interest in Tata; and the struggle for survival at SSI in Teesside. All that bears witness to a fact: we have, as UK Steel, a sober, understated organisation, says in the preface to its letter to the Minister, a “Steel Sector Crisis”. Sadly, that is where we are today. We are facing questions about how we ensure the future of this vital, strategic, foundation industry for the UK. My hon. Friend the Member for Hartlepool (Mr Wright), who chairs the Select Committee, rightly said that this should be about the future—we can build on the past but this is about the future, because that is what matters. No modern economy looking to the future can go forward with confidence about this industry unless it has that at its heart.
That is why my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), in an impassioned and incredibly moving contribution to this debate, was right to say that we know all the arguments, because they have been rehearsed time and again in this stadium—[Laughter.] It is not exactly a stadium, but we have built many stadiums with steel and I am sure there will be much steel in here. We have rehearsed those arguments time and again in this Chamber and in this Palace of Westminster. We know the arguments. We know what this is about. We know that it is about energy prices, business taxes, capital investment, procurement policy, Chinese imports and the strength of the pound. We know what the context is, and we can go round and round in all that detail, but what signally matters at the moment is the political will to do something. This is about politicians—us, across this House—people outside this House and, most importantly, Governments, be they the Scottish Government or the UK Government. It is about the decisions they make on procurement, be it procuring steel for the Forth road bridge, sourcing new auxiliary ships for the Royal Air Force through Korea rather than through the UK or deciding whether we buy our new police cars from Peugeot or from the UK. There are procurement decisions where the Government can step up to the mark; this is about looking forward, and we need to make sure that we have the political will.
That is why I asked the Prime Minister at last week’s Prime Minister’s questions to have a steel summit. A steel summit is about saying to everybody that steel is crucial for the UK and it matters, now and in the future. That is why the Prime Minister and this Government need to step up to the plate, and put together a steel summit and respond to the feeling both inside and outside this House that that is important. The Prime Minister gave us warm words. To be fair to him, I believe he does care about the steel industry and he does always give us warm words. For the first time since I was elected in 2010, we have in this Minister a Minister for the steel industry who cares about the steel industry. She has shown honest endeavour and I believe she will continue to do so. But warm words and honest endeavour in themselves will not take us where we need to be. We need clear actions, movements and directions in the future to make the future bright and bold.
My constituency has 4,000 jobs in the local steel industry, with people directly employed, and 25,000 jobs dependent on steel—that picture is magnified across the country. Steel is a crucial industry, for now and for the future. I call on the Minister, who is very good, to move from being very good to being exceptional, to make a difference and to respond to the desire for a steel summit by letting us have one. That will allow us to send the message to investors looking to make a difference to our steel industry and work alongside us in partnership that this Government will stand up for steel and will make sure that steel is there for the future, so that we have a bright future and we can be as proud of our steel industry in 50 years’ time looking back as we are now looking back at the past 100 years of our steel industry. This Minister is going to step up to the mark and deliver for this nation on the steel industry.
Marion Fellows (Motherwell and Wishaw) (SNP)
Thank you, Mr Deputy Speaker, for allowing me to speak in this important debate. I also want to thank the Backbench Business Committee for agreeing to find time to hold it today. I pay tribute to all those who have spoken in this debate. In particular, I pay tribute to the passion, commitment and knowledge of the hon. Member for Redcar (Anna Turley), and thank her for leading in securing the debate. I feel I have something to add, but I will also be reiterating much of what has already been said. I make no apology for that, because everything that has been said is important and cannot be reiterated too often.
My constituency has been associated with steel since John Colville created the Dalzell works in the early part of the 1870s—I apologise to my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) for saying it, but we were there first. The famous Ravenscraig integrated steel plant was located in the centre of my constituency, and its closure is still felt today. I do not want to dwell on the past in this debate, so instead I shall deal with present reality and look to the future.
Dalzell plate mill is part of the long products division of Tata Steel Europe. Tata split this part of its UK operations to form a stand-alone division, which includes the neighbouring Clydebridge heat treatment facility in my hon. Friend’s constituency and the Scunthorpe plate mill, which is situated in the constituency of the hon. Member for Scunthorpe (Nic Dakin) and, as I have also now learned, that of the hon. Member for Brigg and Goole (Andrew Percy). Tata Steel is still trying to secure the third-party contribution after the proposed deal with the Klesch Group fell apart. That makes those plants particularly vulnerable in the current economic climate affecting the UK steel industry.
Long products’ key markets include the automotive and construction industries; energy and power; rail; aerospace; and defence and security. UK Steel, Tata Steel and the Community union all agree on the basic problems that face the industry: energy costs are too high; the pressure put on supply chains from unfair practices needs to be addressed; and the dumping of Chinese steel needs to be looked at again. I welcome the Government’s backing, but more must be done. If other countries, such as Italy and Poland, can provide help for their steel industry within EU rules, it should be possible for the UK Government to do so, too.
It is vital that there is a level playing field for business rates with our European competitors. The business rates system has penalised UK steel producers for making improvements, and that surely flies in the face of common sense. Increasing the value to the UK from supply chains will create jobs. A recent CBI report highlighted that more than half a million jobs could be created across the UK if supply chains are rebuilt. The Prime Minister congratulated Nissan yesterday on its contribution to the UK economy, but where does it get its steel?
Anna Turley
Let me draw on a comment that was made by the hon. Lady and by my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop). It is great that we are championing success in industry and engineering, particularly in the north-east, but we must also be there in times of crisis.
Marion Fellows
I could not agree more. I wish to see expansion in the sector to allow Scottish steel to be used in Scottish infrastructure projects in the future. The energy-intensive industries compensation package payments need to be fully implemented now; there should be no wait until April 2016.
The Government could also consider derogation requests from the sector. We need a realistic timetable to meet increased commitment under the industrial emissions directive. Great work has already been done in this regard, and again companies have been penalised. I wish to commend Community the steel union for its work with Tata Steel to minimise compulsory redundancies at Dalzell and to look for redeployment and voluntary redundancies. That is an example of the close work that it has done with Tata Steel to ensure that the steel industry still exists in my constituency, albeit in a far, far diminished way. It is clear to me and other members of the all-party group for the steel and metal-related industry that this is a vital element in the struggle to save the steel industry in the United Kingdom as well. Various hon. Members have already referred to the good work done by the unions in this regard.
The Scottish Government are fully committed to ensuring that, within their devolved powers, the steel industry remains a vital part of the Scottish economy and they will engage with it and the UK Government as a part of that commitment. John Swinney, the Cabinet Secretary for Finance, Employment and Sustainable Growth, said:
“The Scottish Government recognises the importance of steel manufacturing to Scottish industry, particularly in the construction and growing renewable energy markets. We provide a wide range of practical advice and support to companies”.
There have been talks between Fergus Ewing the Scottish Energy Minister and Tata in Motherwell and discussions also with Community. I understand that Tata, Community, Scottish Enterprise and Government officials will be sitting down shortly to discuss a plan for the future to ensure due diligence in safeguarding the Scottish plants.
The UK Government have also expressed concern at the challenges facing the steel industry in the UK, but it is now time for action. The motion for this debate says that
“this House recognises the unprecedented gravity of the challenges currently facing the UK steel industry; and calls on the Government to hold a top-level summit with the key players from the steel industry to seek meaningful and urgent solutions to the crisis.”
I urge the Government to hold that meeting as a matter of urgency and to act quickly thereafter to address the industry’s concerns, thus safeguarding a vital industry and well paid jobs in both Motherwell and Wishaw, Rutherglen and throughout the UK. We in Motherwell and Wishaw know the heartache of steel closure and would not wish that fate on others elsewhere in the UK.
Christina Rees (Neath) (Lab)
I am extremely grateful that this debate has been arranged on an urgent basis, as urgent action is indeed necessary. Many of my constituents in Neath are reliant on their jobs at Tata Steel in Port Talbot, in the neighbouring constituency of my hon. Friend the Member for Aberavon (Stephen Kinnock). Indeed, my father worked at the Steel Company of Wales, which eventually became Tata Steel.
Good quality jobs are desperately needed in our communities, and we want to grow those jobs, not see a slow and inevitable decline of the UK steel industry. That is why it is important that the UK Government take action here and now to stop this decline, and, in doing so, help safeguard these jobs.
Many Members have detailed the current challenges that need to be addressed. I support and echo their calls for a summit bringing together industry, trade unions and other stakeholders and the Government to chart a way forward. Several steps have been outlined, which could readily be put in place to help the UK steel industry remain sustainable and competitive. They include: full implementation of the energy-intensive industries compensation package before April 2016; bringing business rates for the sector in line with those of its competitors in France and Germany; consideration of derogation requests on a realistic timetable from the sector regarding its increased commitments under the industrial emissions directive; continued support for anti-dumping measures at an EU level, such as for the forthcoming decision on reinforcing bars for the construction sector, which has seen Chinese imports to the UK market increase in only a few years from zero to the present level of 40%; and continued support for local content in major public projects that will provide assistance to the UK sector and make full use of the UK supply chain to promote sustainability. Added to those is the need to support best-in-class research and development through more foundation industry projects and better cross-sector collaboration, and to ensure that the UK workforce is highly skilled by identifying and tackling looming skills gaps in high value sectors such as advanced manufacturing.
As a proud trade unionist, I call on the Minister, who believes in the steel industry, to urge the Government to address these issues meaningfully and as a matter of extreme urgency.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I, too, wish to extend my thanks to the Backbench Business Committee for allowing this debate to take place. I also pay tribute to the hon. Member for Redcar (Anna Turley) for her consensual tone in initiating this debate, which is very much appreciated by those on the SNP Benches.
As someone who represents the largest steel fabricator in the whole of the northern UK—I am talking about J&D Pierce, which is located in Kilbirnie in Ayrshire where I live—I am delighted to speak in this debate today. I am disappointed that the consensus with which the hon. Member for Redcar began the debate was rudely interrupted by others on the Labour Benches who were shouting out things such as “irony” when my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) was speaking. The Scottish Government have done all they can with their very limited powers—quite clearly, Government Members and Labour Members wanted those powers to be limited in Scotland—to support the steel industry. I did not want to make these party political points in this debate, because we are all concerned about the future of the steel industry across the UK, but if we are going to go down the road of irony, let us take that road to its natural destination. There is irony in the fact that the hands of the Scottish Government are tied in what they can do to support the steel industry in Scotland.
Like others in the Chamber, I believe that the importance of the steel industry means it deserves a top-level summit to discuss its long-term viability and how it can be supported in these extremely challenging times. We know that productivity increases are part of the reason there are fewer jobs in the steel industry, but we also know that there has been significant movement to production centres overseas. Chillingly, the number of employees in iron and steel production has fallen by 98% in Scotland since 1971 and by 94% across the UK in the same period. There is no doubt that what the UK Government do now and what they are prepared to do will have significant long-term consequences for the industry and might even go as far as determining its very survival, so I am grateful to the Minister for engaging in the debate.
The steel industry in the UK is undoubtedly at a major disadvantage compared with its European counterparts and competitors, since other European Governments have supported and sustained their steel industries while our own has not as yet—we will keep our fingers crossed—received the same level of support. As has already been pointed out, some of the challenges are global, but there is still much that the UK Government could do to provide support.
The importance of the industry is hard to overstate: and, along with its associated metals sector, it comprises more than 24,000 enterprises, which directly employ more than 330,000 people. It was worth more than £45.5 billion to the UK economy in 2012 and, as has been pointed out, two or three jobs in the broader economy are indirectly dependent on each job in the metals sector. The potential economic case for acting to save not only jobs but also the broader value, innovation and skills that come from a strong UK supply chain is both urgent and compelling.
The entire sector in Europe has faced real challenges since 2008, when the demand for steel plummeted. Indeed, such demand is still very much in recovery, standing at 25% below pre-crisis levels for 2015 by contrast with German levels of 94% and Chinese levels of 180%. Of course, China has flooded the market with cheap imports and has huge overcapacity. As has been mentioned, the devaluation of the yuan will result in further increases to China’s export volume, which is already at record levels. Indeed, imports to the UK from China during the period January to April 2015 doubled compared with those in the same period in 2014, so the problem is becoming more and more acute.
In addition, the strong value of sterling against the euro, an issue that poses unique challenges to the UK industry, is an issue. It impacts on UK demand for steel as UK exporters struggle to compete in European markets. Such factors, their impact and how much can and will be done to mitigate them will determine the future, and perhaps the very survival, of this industry in the entire UK. Now is the time of real challenge for the UK steel industry and the Government must not drop the ball. The steel industry has pointed out that Government intervention is needed for its very survival in areas such as energy, tax and procurement—the same levers of support that have been used by Governments in France and Germany and throughout Europe to support the UK’s competitors. We must not be left behind.
Community, the largest and leading trade union in the UK steel industry, has given a chilling warning that the UK Government would be foolhardy to dismiss or ignore. That warning is that unless the Government make a game-changing intervention, it is likely that thousands of jobs will be lost, whole communities devastated and priceless industrial assets lost for ever.
As for the future of Tata, the second largest steel producer in Europe and the largest steel production employer in Scotland, its plate business is of real concern. The plate mills at Clydebridge have been loss-making of late, but they should have a bright future as an integral part of the renewables industry supply chain. As my hon. Friend the Member for Rutherglen and Hamilton West mentioned, Fergus Ewing MSP, the Minister responsible for energy and climate change, has committed the Scottish Government to doing all they can with the powers they have to secure the future of those mills.
Let us consider the renewables obligation and how it impacts on the cost of the industry. Let us defend supply chains from unfair practices and protectionism from countries such as America, with barriers being erected around the world while safeguards remain weak for our industries. Let us re-examine how we can make the industry more competitive and investment-friendly. Let us use local supply chains that will help to meet sustainability targets and to sustain local communities and jobs, examining and being mindful of the criteria of local economic benefits in assessing tenders for major projects—by inserting community benefit clauses in contracts, for example.
The Government in Scotland stand ready to work with the UK Government in whatever ways are necessary to secure the long-term future of this vital industry. Clearly, UK support is the key. If European Governments can support their steel industries, there is no reason why such support cannot be forthcoming from the UK Government.
Stephen Kinnock (Aberavon) (Lab)
I congratulate my hon. Friend the Member for Redcar (Anna Turley) on securing this vital debate today, and I also thank the Backbench Business Committee. Before I get on to the substance of my speech, I want to pay tribute to three gentlemen who are sitting in the Gallery. Roy Rickhuss is the general secretary of the Community union, and he is here with Alan Coombs and Dave Bowyer. Those three men are fighting with passion and dedication to secure a sustainable future for the British steel industry and I pay tribute to their professionalism and dedication today.
The UK steel industry and its associated metals sector comprise more than 24,000 enterprises and were worth more than £45.5 billion to the UK economy in 2012. The sector’s exports account for 150% of UK demand and steel is a driver of productivity that, along with other UK foundation industries, is characterised by sector productivity of 136%. I think the Minister will agree that steel has a clear strategic, economic and defence value to the country and is invaluable in driving sustainable productivity growth.
A foundation industry feeds into the supply chain of multiple other industries. From automotive to locomotive and aeronautical to power generation, from transmission to construction and from white goods to consumer electronics, the steel industry is at the heart of the British economy. It is no exaggeration to say that the quality of our national infrastructure and the future of the British economy go hand-in-hand with the future of the steel industry.
The steel industry and its associated metals sectors are also a vital source of employment, accounting as they do for 330,000 jobs in the UK. In fact, three UK jobs rely on every job in the steel industry and those jobs are likely to be found outside London and the south-east, in regions where such jobs are desperately needed. Those jobs are exactly the type that we all want to see: highly skilled, with high value added, relatively high wages and a vocational field, with the potential for development and fulfilling career paths. In fact, it seems to me that the steel industry is a model of precisely the type of industry that all in this House should wish to promote if we are truly serious about wishing to create an export-led recovery, about solving the productivity puzzle and about rebalancing the British economy away from its dangerous overreliance on the services sector and towards a far more resilient manufacturing base. The Chancellor of the Exchequer, no less, has set a target of doubling exports by 2020. It is crystal clear that he will never achieve that target unless the country has a vibrant and sustainable steel industry.
The steel industry is also crucial to our prestige as a nation. Without a steel industry, would we even qualify as a leading industrialised economy? What would the loss of this strategic industry mean to our membership of the G8, for example?
I rise today not only to remind this House of the central role that the steel industry plays in our national economy and security. This industry also shapes the social economic landscape in my constituency of Aberavon. The Tata steelworks in Port Talbot is one of the largest in Europe; it is essential to the UK’s manufacturing sector and the beating heart of our community. As the Minister will know, as she visited the steelworks only weeks ago, the Port Talbot plant is a beacon of British-made manufacturing. She will be in no doubt about the dedication and professionalism of its 3,000 workers.
As I have mentioned, this is a highly skilled, specialised workforce, and this high-risk, high-skill work results in some of the highest-quality steel in the world. The super bainite steel produced at the Port Talbot works, for example, is used by the Ministry of Defence for such crucial projects as reinforcing the armoured vehicles that were used until recently in Afghanistan. I am deeply proud of the fact that this ultra-specialised type of steel has saved lives in war zones and is made by my constituents.
The steel industry has a proud past and a vitally important present, and it should also have a truly promising future. It is therefore with deep regret that I rise today to make a speech that I hoped I would never have to make. I believe that the steel industry is on the brink of collapse. This is not rhetoric; it is reality. For a number of reasons, as other hon. Members have said, the industry is now caught in a perfect storm. Let me briefly outline those reasons.
First, cheap Chinese steel is distorting the market. For the first six months of 2015 the amount of Chinese steel imported into the UK increased by 120%, relative to the same period in 2015. The fact is that the global steel market is now comprehensively saturated by Chinese steel, and the impact is impossible to exaggerate. It is literally squeezing British steel out of the global market and is the primary cause of the parlous state in which the British steel industry currently finds itself.
Secondly, the pound is stronger than it has been for many years. Some 40% of total steel sales are exported to the EU, and for every sale in euro, Tata Steel now receives 20% less in sterling than it did just 18 months ago.
Thirdly, there is the high cost of production here in the UK, which can be attributed largely to the crippling costs of energy bills. Steelmaking is an energy-intensive activity, and the cost of energy in the UK is twice as high as in any other EU country, despite the fact that those countries face precisely the same regulatory costs charged at EU level, such as the EU emissions trading system. UK energy costs are a massive barrier to companies that wish to invest in the future of their business and the skills of their workers.
The net result of this perfect storm is that Tata Steel is facing a deficit of just over £250 million for the year 2014-15, reflecting substantial year-on-year losses since 2011-12. Despite this, Tata Steel has invested £1.4 billion since it acquired its UK business from Corus in April 2007. I would like to place on the record my recognition of the fact that Tata Steel is facing an extremely challenging macroeconomic and market picture, and I believe that it is striving to address the issues as best it can.
It is now essential that the Government give Tata Steel all the support and assistance they possibly can. If they fail in their duty to do so, the consequences of such inaction will be catastrophic. The action that the Government can and must take urgently is as follows. First, the Minister must accelerate the full implementation of the energy-intensive industries package. The steel industry must be either exempted from the renewables obligation or shifted to a compensation model. In order for that to happen, the Government must instruct the European Commission to give top priority to reviewing the state aid question in this context. That may well mean a reprioritisation of current cases, for example on nuclear power. If that is necessary, so be it. It is essential that the case of steel is fast-tracked now and placed at the top of the pile of British cases that are currently sitting in the European Commission’s in-tray.
The Minister has been asked to intervene in that spirit on several occasions since the beginning of this Parliament. Her answer has been, “It’s complicated”. We on the Opposition side of the House truly understand that Brussels is a complicated place but, with all due respect, those complications need to be overcome rapidly and effectively. The concerns about state aid must be resolved within the next month, so that the British steel industry can receive immediate respite from the crippling energy costs that it currently faces. The Government’s insistence on rigidly following every letter of EU state aid rules is killing the steel industry and forcing UK steel producers to compete on a playing field that is neither fair nor even.
Secondly, a further element of relief on the cost of doing business would be the removal of plant and machinery from the business rates valuation process for manufacturing. Tata Steel recently invested £185 million in the construction of a new blast furnace in the Port Talbot steelworks and was promptly clobbered with a £400,000 increase in its business rates bill. That is patently absurd. If we are to tackle the productivity puzzle by driving a manufacturing renaissance, surely we should be encouraging investment, not disincentivising it in that way.
We recognise that exempting the steel industry from the renewables obligation and removing plant and machinery from business rates will incur a cost to the Exchequer. However, we also know that the collapse of the steel industry would lead to the loss of tens of thousands of jobs, and the resulting cost to the Exchequer would be exponentially greater. Therefore, I urge the Minister and her colleagues to see that a failure to provide the urgent support to the UK steel industry that is now required would be a classic and tragic case of a false economy.
Thirdly, it is essential that the Government do more to support industry positions on anti-dumping cases. I am a firm believer in the importance and value of free trade, but I believe even more passionately in the importance and value of fair play. The fact of the matter is that the US and Chinese Governments are simply not playing fair. There are myriad examples of how tariff and non-tariff barriers are being deployed by Washington and Beijing in order to prevent the fair access of British steel to the Chinese and US markets. That has to stop. I urge the Minister to adopt a more aggressive posture in Brussels, Beijing and Washington. She must stand up for steel and secure a fair deal.
Fourthly, I would like to pick up on a point made by my hon. Friend the Member for Redcar about the use of Teesside steel in wind turbines. I would like to contrast that with the regrettable lack of support that the Scottish Government have shown over the Forth road bridge. I understand that the general secretary of Community union has today written to Nicola Sturgeon and Carwyn Jones requesting a meeting to explore the support mechanisms that the devolved Governments can and must provide.
It is 10 minutes to midnight for the steel industry. The future of this vital foundation industry is hanging by a thread. Steel producers and workers need the full support of the Government, and they need it now.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
Let me start by thanking the Backbench Business Committee for granting this important debate and enabling Members across the House to stand up for steelmaking across the UK. I thank the hon. Members for Corby (Tom Pursglove) and for Rutherglen and Hamilton West (Margaret Ferrier) and, most particularly, my hon. Friend the Member for Redcar (Anna Turley), alongside other Members from all parties, for working so hard to secure the debate. I also thank Roy Rickhuss and his team at Community union for their work. I thank Paul Simmonds, the Community representative at Celsa in my constituency, and all those in UK Steel and other bodies that are standing up, making the arguments and supporting us all in our efforts to secure a sustainable future for steel in this country.
This debate comes at an absolutely crucial time for the steel industry and for the country. As Community has said, we are at an historic crossroads. Decisions taken in the months ahead by the Minister and others in the Government will be crucial in determining whether there is a sustainable future for steel in this country. From Shotton to Cardiff, from Skinningrove to Llanelli, from Scunthorpe to Middlesbrough, and from Newport to Redcar, steel producers are facing clear and present dangers that show no sign of abating.
I want to pay tribute to a number of outstanding contributions made in today’s debate. My hon. Friend the Member for Middlesbrough (Andy McDonald) spoke powerfully about the potential risks that the current challenges pose not only to the steel industry on Teesside, but to incredible projects such as the Teesside Collective. I attended a meeting with the Teesside Collective the other day, and the work it is planning to pioneer in carbon capture and storage could be seriously at risk. The hon. Member for Corby spoke about the history of steelmaking in his constituency and its importance to his constituents.
My hon. Friend the Member for Newport East (Jessica Morden) spoke powerfully about the constructive role that workers in plants across the country have played at a very difficult time for the industry, and she spoke about the reality of job losses and relocations and the impact on families and individuals.
My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) made an outstanding speech that was powerful, passionate and personal and drew upon his own experience. We can be very factual in this Chamber, as we should be at times, but sometimes it is important to hear the passion and frustration that so many of us feel that these issues, which need to be dealt with urgently, are continuing unabated. We also heard a powerful speech from the hon. Member for Brigg and Goole (Andrew Percy). I am glad he agrees that we should bring forward the energy intensive industries scheme in full.
In an excellent speech, my hon. Friend the Member for Hartlepool (Mr Wright), the Chair of the Select Committee, made the key point that manufacturing matters to our economy and that these foundation industries are absolutely crucial. He rightly praised the Minister for the work that she has undertaken, but challenged her in some areas. He rightly praised the co-operation of trade unions and their members and their effort in trying to stand up for communities and workers across the country.
It would be unfair not to praise the excellent opening speech by my hon. Friend the Member for Redcar, who made a powerful case for the impressive projects that the Teesside steel plant has supported and described the deep difficulties that are facing the SSI plant in her constituency. In highlighting some of the crucial factors, she talked about the £431 million a year cumulative disadvantage for the UK steel industry. That is fundamental to this debate. We have to deal with those disadvantages to move forward.
My hon. Friend the Member for Scunthorpe (Nic Dakin) made an excellent speech in which he paid a powerful tribute to his local workers. My hon. Friend the Member for Neath (Christina Rees) also spoke, as did my hon. Friend the Member for Aberavon (Stephen Kinnock). Steelmaking is at the heart of his constituency, as in mine. He made an important point about the contribution that steel makes to defence and the importance of resolving the issues of state aid.
We also heard important contributions by my hon. Friend the Member for Newport East, my hon. Friend the Member for Ogmore (Huw Irranca-Davies), my hon. Friend the Member for Bishop Auckland (Helen Goodman), and the hon. Member for Motherwell and Wishaw (Marion Fellows), among others.
I want to turn to the comments made by Scottish nationalist party Members—the hon. Member for Rutherglen and Hamilton West, the hon. Member for Motherwell and Wishaw, and the hon. Member for North Ayrshire and Arran (Patricia Gibson). [Interruption.] They are saying “Scottish National party”. I know that is its formal title, but it is a nationalist party, as its Members state themselves—a separatist party. Although I am glad that they share the consensus of concern across this House, and that they are here with us to express that, it is also important—I say this to the Government in Wales as well—that there is a consensus of responsibility among all Governments across these islands, including the Scottish Government.
Unfortunately there is a tendency for Scottish National party Members always to be blaming somebody else—it is always somebody else’s fault. On the Forth Road bridge—
Stephen Doughty
I will in a moment, but let me make this point.
On the Forth road bridge, it is important that we deal with the facts. The fact is that if the Scottish Government had applied for the community benefit clauses as they originally could have done in the procurement process, it is possible that the work could have gone ahead with UK companies—Scottish Steel and SSI—involved early on. Instead, it went off to the Chinese, the Spanish and others. Now, eventually, some of the steel is being made in Scotland and on Teesside, and I welcome that, but it is important that Governments across the UK—
Stephen Doughty
I absolutely agree; that applies to the UK Government as well. It is important that the Scottish Government take full responsibility. I am glad that Community is seeking a meeting with the First Minister of Scotland and with the Welsh First Minister, Carwyn Jones, because it is important that we work on this together across the country .
Marion Fellows
Does the hon. Gentleman agree that it is a real pity that he is summing up this entire debate with an attack on the Scottish Government, given that there had been consensus? Members of the APPG and the Scottish National party have worked really hard to get this debate. Will he apologise?
Stephen Doughty
No, I will not, because it is entirely right that in this Chamber we scrutinise all comments made. As I said, it is wonderful that we have a consensus of concern, but we also need a consensus of responsibility. I am not going to shy away from raising concerns about Governments across this country. I will turn to the UK Government now.
After I was elected in November 2012, one of the first issues I raised with the Government was the high energy prices facing energy-intensive industries, including steel. Since then, Ministers have come and gone, but the fundamentals affecting the industry remain, and are advancing unabated. Whether it is energy prices, taxation, foreign dumping, uncertain future ownership, or a lack of clarity in the UK’s industrial and infrastructure strategies, which I raised with the Secretary of State in BIS questions yesterday, warm words at various stages have not, I am afraid, been matched with sufficiently robust or urgent action. The coming months are absolutely critical. Action by this Government will define whether steel has a sustainable future.
I say in all sincerity that I welcome the Minister’s actions on the anti-dumping measure—I hope she will take action on further such measures—as well as the constructive way in which she has approached dialogue with steel MPs and their constituents and the way she has talked about a whole series of issues. I understand that she is to visit China. I would be interested to know what she will raise during that visit and what she expects to get out of it. These are all welcome steps.
However, I must say to the whole Treasury Bench—the Prime Minister, the Chancellor, the Business Secretary and others, not just this Minister—that the time for delay is over. If there is one thing we must leave this debate with, it is the need for urgent action. We cannot delay for months and years into the future. This crisis has been building up for the past 18 months to two years, or even longer, and we have to take action now.
Let me turn to the key issues that I want the Government to address. First, on energy compensation, while I firmly believe we must drive a responsible and urgent transition to a low-carbon economy, it is completely counter-productive if we pursue policies that result in carbon leakage and higher carbon emissions globally. That simply offshores the issue to other countries. That is particularly important in relation to companies such as Celsa in my constituency and SSI, which are pioneering some of the most environmentally and energy-efficient policies and processes. It is unacceptable that that could eventually end up being offshored to places such as China.
Energy prices for UK steel producers can be more than 50% higher than for our main European competitors. While other EU countries, including Germany and France, are providing additional help to their energy-intensive industries to level the playing field, we have not had the same clarity from this Government. The Chancellor announced that he would bring forward part of the energy compensation package for steel and energy-intensive industries, which is waiting on state aid clearance. However, as UK Steel has said, the steel industry in this country is still paying 70% of the policy cost that that package sought to address. No doubt the Minister will say that the Government are providing millions of pounds in exemptions related to the taxes and levies, but the fact is that in 2015 the steel industry will pay a record level of taxes and levies. Will she confirm whether mitigating measures can be brought forward immediately, as many Members have asked? What discussions has she had with the Chancellor and the Prime Minister about reviewing the entire regime, which gets to the absolute nub of the issue? Are there other exemptions that can be considered in VAT and other areas?
Secondly, there are the foreign threats. We have heard about the massive increase in the import of unsustainably produced carbon rebar and other products over the past two years, of which Ministers are well aware. Over-production and dumping are at the heart of the issue. As I said, I will be interested to hear what the Minister hopes to achieve in China. Many non-EU countries such as China and Turkey are increasing their market share, often using anti-competitive practices with scant regard for environmental standards. I want to hear more from her on that.
UK steel companies are subject to business rates that are much higher than those paid by competitors in other European countries—in some cases up to 11 times more. What does the Minister propose to do about that? What discussions has she had with the devolved Administrations? We cannot simply wait for the wider business rates review; is there action that can be taken now?
I draw attention to the charter for sustainable British steel, launched by UK Steel and other producers, and urge support for its straightforward and very reasonable demands. Where does the Minister stand on that? Are the Government supporting it? We have heard some warm words, but can we have categorical assurances?
It is important to look at all ongoing construction and redevelopment projects. I hope that the parliamentary authorities are thinking about the steel that is being used in reconstruction and building projects here. Madam Deputy Speaker, will you pass on that message to the parliamentary authorities?
Any one of the issues raised by me and other hon. Members across the House is enough to put serious strain on any business. The Minister should be left in no doubt that the risks are real and the threats to the British national interest are intensifying. The UK steel industry needs a crucial injection of confidence, urgent and robust action, and ultimately crisis support if necessary, but let us hope that we do not get to that point.
Steelworkers and their families do not want special treatment. They do not want to posture or erect barriers to free trade in an increasingly globalised world, or to protect the industry from fair competition; they simply want to level the playing field. It is worth bearing in mind that the UK steel industry and its associated metal sector encompasses more than 24,000 enterprises, which directly employ 330,000 people and are worth more than £45.5 billion to the UK economy. If that capacity is lost, it may be lost for ever, with dark consequences not only for the employees and our communities and economy, but for our critical infrastructure and construction supply chains. The time for action is now.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
May I begin by congratulating everyone who secured this debate? It has been excellent, with some fabulous speeches by hon. Members who have done what we should all do when we speak in this place, which is represent constituents, especially in times of great difficulty.
I pay tribute in particular to the hon. Member for Redcar (Anna Turley)—I hope I have pronounced her constituency name correctly, or I will be trouble—and to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop). I will talk briefly about the particular problems with the steelworks in their constituencies, but I will not say too much, because this is a critical time for them, and in some ways the least said, the better. I do not want to say anything that might alter or affect the very good work that both hon. Members are doing in trying to find a solution to the problems at this difficult time. I hope that everybody will accept that and—if I may put it this way—not quiz me any further, because after this debate we will meet those union members who are in attendance, and I look forward to that.
I also pay tribute not just to all those who work in the steel industry, but to their families at this very difficult time. Many people listening to this debate or reading about it in their local newspapers are undoubtedly very worried about not just their and their family’s future, but that of their community. I get that—I thoroughly and totally understand it. I do not know whether that is because my great-grandfather began his working life as an apprentice cutler in Sheffield. I remember making the journey from Worksop to Sheffield as a teenager and a young woman and seeing the forges there. It was a fabulous sight. Indeed, I was reminded of it when I visited Celsa in the constituency of the hon. Member for Cardiff South and Penarth (Stephen Doughty). That was a truly remarkable experience, because I had never seen the fabulous process involved in the recycling of steel—I will come on to that in a moment—or the high quality and skills of the workforce. I have also visited the Port Talbot plant in the constituency of the hon. Member for Aberavon (Stephen Kinnock), which has a highly skilled workforce doing a very dangerous job. That should never be underestimated
I thoroughly echo the Prime Minister’s words in response to a question last week by the hon. Member for Scunthorpe (Nic Dakin):
“We will go on doing everything we can to support this vital industry.”—[Official Report, 9 September 2015; Vol. 599, c. 404.]
I fully agree with that. My task in my role is to champion the steel industry and do all I can, not only as a champion, but to make sure that the Prime Minister’s words are echoed right across Government and that we do not fail in doing everything we can to support this vital industry.
Andy McDonald
When there was a crisis in the south-west of England after the floods, I recall the Prime Minister saying that the problem would be corrected no matter what the cost. On the steel industry, he has said that he will do everything he can. Does that mean that the outcome will be secure and that he will do anything to keep the steel industry on the rails?
Anna Soubry
The Prime Minister said:
“We will go on doing everything we can”.
I am not looking for excuses. When she opened the debate, the hon. Member for Redcar said—I wish she was not right, but she is—that the steel industry is in crisis. The hon. Member for Aberavon has said that it is about 10 minutes to midnight. The hon. Member for Redcar went on to say that the industry is in crisis because the price of steel has collapsed as a result of over-production in China—in fact, there is over-production across the whole world—and there are allegations that China is dumping its product. The problem, as the hon. Member for Middlesbrough (Andy McDonald) knows, is that the price of slag has gone from $500 to $300 in a year.
Unfortunately, the Government cannot force other countries to stop over-producing, any more than they can force up the price of steel. We can, however, look at measures and the hon. Gentleman and other Members can be assured that I will do all I can to make the argument within Government when we are doing things that we should not be doing. I hope the hon. Gentleman understands what I mean by that. I am not an actual free marketeer. I believe there is a role for Government, which is why I was more than happy—in fact, I demanded —that we voted in favour of the anti-dumping measures on Chinese wire. There are times when Government should and do intervene. We have a system to compensate those electric-intensive industries that pay an awful lot of money for their energy bills, and that includes renewables obligations and other tariffs.
I will be completely honest: I would much rather that the price of energy were considerably lower. I struggle with the current system, whereby we put something on industries and then use taxpayers’ money to compensate them for it. I want cheaper energy. That is what I see as the solution, but we cannot have it both ways. We cannot say that we want a greener, cleaner environment and to reduce emissions and hit targets—those are all the right things to do—without recognising that the consequences are that we all have to pay more for our energy. We have to accept the realities of the situation.
Andy McDonald
The Minister makes a valid point, but the point I made in my speech is that the steel industry is right at the heart of securing some incredibly powerful dividends with regard to cheaper energy and climate change. If it is not allowed to persevere, it will not be able to deliver them for us.
Anna Soubry
I agree, but as the hon. Gentleman also knows there are very strict state aid rules. We could have a debate about whether this country should impose them at a higher, gold-plated level compared with other countries. My hon. Friend the Member for Wellingborough (Mr Bone) has said, “Everybody else tears up the rules and so should we”, but I do not agree, because we cannot complain about other people breaking state aid rules if we are doing it ourselves. I would much rather go to the European Union with clean hands so that we can say, “We’re abiding by the rules, so now you have to abide by them, too.”
The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) is not in her place, but she made demands of the Government. I hope she will forgive me, but I do not think she is aware of what the state aid rules are: they expressly prohibit the Government from giving any money to rescue and restructure a steel company in difficulty. EU state aid rules for steel permit support only for research and development, environmental protection and training, and only then within specified limits.
The hon. Members for Redcar and for Middlesbrough South and East Cleveland talked about what happened to the SSI plant when it was under the ownership of Tata and mothballed back in 2009-10. I will be corrected if I am wrong, but as I understand it that process was not supported by Government aid. I absolutely pay tribute to the unions, the workforce and everybody involved, including the local Members of Parliament and, no doubt, local councillors, who came together to work out that package, but I understand that the state aid rules forbade the Government from giving aid.
Tom Blenkinsop
To provide some context, at that time trade unions—with Community in the lead—alongside other helpful partners in the industry, were looking at potential buyers, such as Dongkuk, Marcegaglia and SSI, so that was not the issue. We had a destination to go to, but we needed a bridging gap. The Government provided £60 million of support funding to make sure that there was a taskforce for the area. The situation is now different, but we can talk about that in private.
Anna Soubry
I think we are agreed because this has affected Governments of all colours—or rather, of both colours. In all seriousness, the rules on state aid are very strict. I take the view that we should not blatantly breach those rules, because we cannot hold to account other countries that breach them, blatantly or otherwise, if we are guilty of doing the same.
Nic Dakin
The reality is that the universal application of the carbon floor tax in this country has had a detrimental effect on energy costs for this industry, and the mitigation package so far put in place does not fully address what needs to be done. Will the Minister make a commitment to do her very best to bring forward the mitigation from the current 2016 destination?
Anna Soubry
The hon. Gentleman can be assured that I will do everything I can. I think we all agreed on and voted for the financial obligations that we have put on all our industries, so there is nothing between us. I want us to be able to reduce energy prices, not just for domestic consumers—ordinary members of society—but for industry. I think that that would be a much better way forward.
I have not actually got a speech to read out, which often frightens my officials—you may be quite pleased about that, Madam Deputy Speaker—so I will just remind the House of the actions that I and the Secretary of State for Business, Innovation and Skills have taken. He will meet the all-party group on steel and metal-related industries on 26 October. I assure all hon. Members that both he and I have spoken to the Prime Minister and the Chancellor of the Exchequer. Only this morning, I bumped into the Secretary of State for Energy and Climate Change and had yet another discussion about this problem, the urgency of the situation and what we can do to provide assistance. Hon. Members should be assured that we are doing all that and having such discussions at governmental level.
I met the director of UK Steel back at the beginning of June. I have met the chief executive of Tata Steel, Karl-Ulrich Köhler, who did not flinch from explaining to me the very real difficulties that Tata faces in its operation in the United Kingdom. I pay tribute not just to the workers at Tata Steel, but to its management for all that they do. They and hon. Members can be assured that I certainly got everything he told me: Tata does not want to leave the United Kingdom. He made it very clear that it still has a huge commitment to Britain.
We had a debate on the UK steel industry in July, but it was only for 30 minutes, which, as we all know, is far too short. Since then, I have been to Port Talbot and to Celsa, and I have met the directors of SSI. I have had private conversations with the hon. Members for Redcar and for Middlesbrough South and East Cleveland, and we will meet later. Rightly and understandably, the Members who represent Rotherham—the right hon. Members for Wentworth and Dearne (John Healey) and for Rother Valley (Kevin Barron), and the hon. Member for Rotherham (Sarah Champion)—and of course the hon. Member for Scunthorpe, asked to meet me. I have met them, along with the trade unions who came with them and, in the case of Rotherham, the management of Tata. I am due to have meetings with my hon. Friends the Members for Cleethorpes (Martin Vickers) and for Brigg and Goole (Andrew Percy), as well as with those who represent Hull and Rotherham. As I have said, the Secretary of State for Business, Innovation and Skills and I are meeting the all-party group, and we will continue to hold such meetings.
I want to go through some of the very important points made about what more the Government can do. You are looking at me, Madam Deputy Speaker, as if to say, “Get on with it!” You are not wrong, but these are important matters, and I hope that you will forgive me.
The hon. Member for Redcar covered nearly all the points that other hon. Members have made. I have discussed the price of energy, especially for industries, such as steel, which use so much electricity, so I think I have dealt with that point.
Some hon. Members mentioned business rates. They made a compelling case about the fact that if businesses invest—more than £182 million was invested at Port Talbot—they find, bizarrely, that their business rates go up. Even more bizarrely, businesses pay corporation tax only if they are in profit, but whether or not they are in profit they have to pay business rates. That is another peculiarity of the system. We will have a full review of business rates, but the Chancellor has made it quite clear that the outcome must be fiscally neutral. What I would say to everyone as a caution is that if we change the rules in relation to plant and machinery, we will have to move the burden somewhere else, because it must be fiscally neutral.
On the dumping of steel, the hon. Member for Redcar will already know what I have said about the decisions that have been made. There are more decisions to be made in the European Union to make sure that we do all we can to stop steel dumping.
Several hon. Members made very good points about public procurement. It is right that the Government should practise what they preach, and that applies to local authorities as well. I would gently say to SNP Members that they must champion, as many hon. Members on both sides of the House do, the works in their constituencies. They should beat up on Ministers and on Governments—whether the Scottish Government, the Welsh Assembly or whoever they may be—to say that people must buy British.
When I went to Port Talbot, which supplies a large section of the automotive industry, a particular car company was being shown around, and I hope it will not just buy British, but buy Welsh. We have taken a number of steps to ensure that business can get the most from procurement opportunities. Current public sector contracts can be found on the contracts finder portal, which provides what we call forward pipelines of potential contract opportunities up to 2020, including more than 500 infrastructure projects. Public procurement is important, and we are looking at it. We know that Crossrail achieved 97% of UK content and that 58% of the work went to UK small and medium-sized enterprises. There is more that we can do on public procurement, and I have asked my officials to look at that.
I am looking through my notes to make sure that I deal with everything that has been raised by hon. Members. If any of them wants to remind me of anything that I have missed, I am more than happy to take interventions.
Nobody wants to intervene, so I will just say this. I am going to China next week and Members can be assured that the Secretary of State and I will not hesitate to discuss a number of matters with the Chinese Government. We want to talk to them about dumping, production and the future of their steel industry. We will not hesitate to make those representations. If there is anything in any of the speeches that I have not responded to, I will write to each and every hon. Member and answer their points.
Finally, I doubt that this matter will go to a vote. Therefore, we will get on with arranging the summit quickly. I already have a list of people whom it is obvious we should invite. It will be a cross-Government summit, I hope, that will involve the Welsh Assembly, the Scottish Parliament, all the relevant Departments and representatives of the workers and the various companies. I congratulate everybody on what has been a very good debate.
Anna Turley
I want briefly to say a huge thank you to everybody who has participated in the debate. As a new Member, I have been moved by the passion, commitment, diligence and depth of knowledge, and by the willingness of people to work together to do something that is in the interests of all our constituents. We have heard powerful voices from around the country—from Scotland, Wales and across England—come together to fight for jobs, opportunities and the British economy.
I thank the Minister. I appreciate her commitment to hold the summit. We will, of course, continue to press her for action on the specific matters that we have put before her. I look forward to meeting her after the debate. There was no need for her to list all the activities that she has undertaken as Minister, because she has been a breath of fresh air. I hope that she has felt the strength of feeling from colleagues on the Opposition Benches, because we appreciate her constructiveness and willingness to engage. She said, to use her words, that she gets it. We get that she gets it and we look forward to working with her on the delivery.
I thank the Minister for the tone that she used when talking about the issues with SSI in my constituency. It is a delicate situation and we have been dealing with it for days, weeks and months. I want to put it on the record that I object to the comments of the Under-Secretary of State for Communities and Local Government, the hon. Member for Stockton South (James Wharton), regarding today’s debate. Trust me, if anyone wanted to showboat, we could have done so. We have worked hard and constructively behind the scenes, and have tried not to put any pressure on anybody who is involved in the situation because we understand how delicate it is. Today is about bringing the issues to the fore and making sure that there is action to back up the work that is being done behind the scenes. I make no apology for bringing the debate to the House today. I am proud to have done so and to have worked with my colleagues on it.
The Minister said that the Chancellor’s plans have to be fiscally neutral. As my hon. Friend the Member for Middlesbrough (Andy McDonald) said, sometimes money is no object. In a crisis such as this, I beseech the Chancellor and the Government to—
Anna Turley
As my hon. Friend says, they should be bold and look at everything that they can do. It is in their hands to see where the money can be found. We have heard the strength of the feeling today—the money must be found and action must be taken.
I thank everybody who has contributed. When my hon. Friend the Member for Middlesbrough was speaking so passionately about the history and heritage of steelmaking on Teesside, I remembered a word that is held dear on Teesside: “Erimus”, which means, “We shall be”. That word came about on Teesside when steelmaking was coming to the fore, and our whole area was built upon it. It is about our destiny and our future. I do not want steelmaking to be about our past; I want it to be our future, so please tell us once again that it will be.
Question put and agreed to.
Resolved,
That this House recognises the unprecedented gravity of the challenges currently facing the UK steel industry; and calls on the Government to hold a top-level summit with the key players from the steel industry to seek meaningful and urgent solutions to the crisis.
Courts and Tribunal Services (England and Wales)
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ben Howlett (Bath) (Con)
I beg to move,
That this House has considered the closure of courts and tribunals services in England and Wales.
I thank the Backbench Business Committee for giving me and the hon. Member for Hartlepool (Mr Wright) the opportunity to bring to the House this debate on the closure of courts and tribunal services in England and Wales. Given that it was my first pitch to the Committee, I was pretty chuffed to receive the good news.
In July, the Government announced a consultation on the proposed closure of 91 courts and tribunal services across England and Wales called. “Proposal on the provision of court and tribunal estate in England and Wales”, and it closes on 8 October. It forms part of the wider changes to the criminal justice system, which have not been debated in this Parliament.
Many Members have been in contact to say that, with the closure of courts, the way in which people access the justice system will be incredibly different. Given the introduction of new and not-so-new technology, and the fact that fewer people will attend the courtroom in person, we felt that a debate was necessary. I am therefore delighted that the Backbench Business Committee accepted a debate on these significant proposals, which will see some constituents across England and Wales travelling for more than an hour to reach a courtroom. Many Members believe that the changes to the estate of Her Majesty’s Courts and Tribunals Service could lead to the complete transformation of the justice system as we know it.
I thank the Minister for his support and his speedy responses over the last few months. His continued support in person, on the telephone and in relation to exchanges of emails and letters has been incredibly helpful in allowing me to update my constituents. I know that that is true of other Members across the House, so I thank him.
On 23 June the Lord Chancellor gave a speech to the Legatum Institute on what a one nation justice policy would look like. He said that he wanted
“to make our justice system work better for victims; to deliver faster and fairer justice for all citizens…to make sure the laws we pass provide protection for the weakest… rescue young offenders, and those who may be on the path to offending, from a life of crime”.
He announced his intention to work with the judiciary to reform Her Majesty’s Courts and Tribunals Service, and he wanted—I agree with this—to create a modern and efficient service. That will involve challenging decisions about the current system. One such decision relates to the courts and tribunals estate, and the consultation provides a superb opportunity for Members to make a reasoned and sensible case for the use of courts in their constituencies. I hope it will enable them to present clear evidence to the consultation. Pending the results of the consultation, we should begin a conversation now about the future use of the estate, and about how best to use it in the one nation terms outlined by the Secretary of State.
I understand the reasons behind the Secretary of State’s decision to hold a consultation. In his speech he recognised that a dangerous inequality lies at the heart of the current justice system, because it involves not one nation but two. The wealthy international class can settle cases in London with the gold standard of British justice, but everyone else has to put up with a creaking, outdated system to see justice done in their lives.
The courts are trapped in “antiquated ways of working” that leave individuals at the mercy of grotesque inefficiencies and reinforce indefensible inequalities. Over the past few months I have spoken to a range of key stakeholders in my constituency, and it is clear that Her Majesty’s Courts and Tribunals Service needs major reform to deliver value for money for taxpayers and fair treatment for all citizens.
Some children in my constituency have waited two years for sexual assault cases to be brought before the courts, and too many cases show that the system is failing the victims and those whom we are trying to rehabilitate. It is right to use this opportunity not just to look at reforming the Courts and Tribunals Service, but also to consider the processes and administration of the remaining courts.
The Courts and Tribunals Service currently operates from 460 courts and tribunals across England and Wales. The estate costs taxpayers around £0.5 billion each year and is underused. In my constituency, usage is well below the 50% capacity, and last year more than one third of courts and tribunals were empty for more than 50% of their available hearing time. As I discussed with Bath magistrates, there is no shortage of cases needing court time, and if more magistrates were provided, capacity could be increased.
Evidence is clear that hearing rooms in the estate are underused. In the financial year 2014-15, recorded national utilisation levels by jurisdiction were as follows: Crown Courts 71%; county courts 53%; magistrates courts 47%; and tribunal hearing rooms 71%. Although Bath has a relatively modern building, much of the national estate is ageing and requires extensive maintenance. The cost of keeping buildings in a fit state is unsustainable given the overall financial pressures placed on the Department. I therefore understand the need to reduce the outgoings of Her Majesty’s Courts and Tribunals Service and improve efficiency.
It will come as no surprise to hon. Members that today I will make the case for Bath magistrates court to stay open. The Government’s own report states that the court was built in 1989 and is in a good state of repair. It has five courtrooms, of which four are magistrates courtrooms. The court has separate waiting rooms for prosecution and defence witnesses, and video link facilities for witnesses to give evidence. It does not have a prison video link, but I wish to query the lack of a court hearing loop as stated in the consultation, as I understand that it does have one.
After speaking to a range of key parties, there is an opportunity to use the court building more effectively than in the past. If Bath courts are kept open following the consultation, I wish to ensure that our buildings and others around the UK are at the centre of the Government’s reforms to improve the criminal justice system, that they have the best technology and improve access to justice, and that they work effectively in the interests of the most vulnerable—the victims of crime and those in most desperate need of rehabilitation services.
I therefore welcome the fact that the Minister has noted that he would like to maintain access to justice, particularly in rural areas. I also welcome the fact that he wants to make the system fairer and faster, as the Government look to invest significantly in digital technology to enable more issues to be resolved without people needing to go to a court or tribunal building to access justice. This includes extending the use of video links to enable victims and witnesses to give evidence and participate in hearings remotely.
Of course, it is the staff who work in the courts and tribunals who experience the inefficiency every day. From visiting the courts in my constituency, I am baffled as to how they put up with the cumbersome IT processes that they have to go through and the archaic systems. On my visit to the courts in Bath a couple of weeks ago, I was interested to learn that many letters have to be sent out via first class mail, rather than via email. The voices of staff are the ones we need to listen to most when it comes to the reforms.
We need to make sure that prosecutions are brought more efficiently, that information is exchanged via email or conference call, rather than in a series of hearings, and that evidence is served in a timely and effective way. It is not just within the criminal courts that the case for reform is clear. Millions of people each day access our civil courts to reach custody agreements after divorce, contest their traffic offences or settle a dispute over intellectual property rights. Without our civil and family courts or our tribunal services, our contracts are unenforceable and individuals are left with no recourse when deprived of their rights.
As we look at reforms to the civil court estate, we ought also to be looking at maximising efficiency. If the estates are to be kept, we must address the reasons why the current system prevents people from filing their cases online, is often not in plain English, and adds stress owing to its complexity and bureaucratic nature. I am pleased that the Government have recognised that we need to question whether many of these formal hearings need to be heard at all in our current court and tribunal estate, and why we are not submitting more information online and using our estate in a much more efficient way
Like many Members, over the summer I consulted my constituents on the proposed closures and received hundreds of responses. I thank them and the legal professionals, charities and magistrates who sent me their views. One thing is clear: the vast majority know that the criminal justice estate needs reform. Many are clear that it is underutilised and that it needs to be better used to help service those most in need—the victims of crime and those who must be rehabilitated. So far, over 84% of the respondents to my consultation believe that Bath magistrates and county court should stay. However, very few have ever needed to access the services provided by the courts—probably something I should promote a little more. Those who do need the services provided are often the most vulnerable in society, and I think it is right to maintain local access to justice while providing for efficient use of the services provided in the courts and tribunals estate. This is something I will come on to a little later.
At this point it is important to set out the chronology of the relevant reforms to the criminal justice service and Her Majesty’s Courts and Tribunals Service in order to set the scene for Members as we begin a wider debate on the reforms to the criminal justice estate. In March 2014, the Lord Chancellor, the Lord Chief Justice of England and Wales and the Senior President of Tribunals announced details of a programme of reform of courts and tribunals. At the heart of this programme are the use of technology and the principle of proportionality. Modern technology could not only make the justice system more accessible, but reduce the costs of the whole system.
In January this year the president of the Queen’s bench division, the right hon. Sir Brian Leveson, published his “Review of Efficiency in Criminal Proceedings”. In his report he focused on changes to procedure which can be achieved without the need for legislation, but which make better use of technology and other advances within the criminal justice service. All the recommendations were designed to streamline the way in which the business of the criminal courts is conducted, without losing sight of the interests of justice. Therefore, rather than tweak the current system, as has been done over the past 50 years, he tried to identify ways in which our current procedures can be adapted to make the best use of the skills, resources and IT systems available.
With the report published, it makes sense to review the estate in the context of wider reforms to the courts and tribunals service. In March this year my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), then Lord Chancellor, welcomed the Leveson report as a “detailed and valuable report”.
On the wider issue of changes being made to the courts and tribunals service as a whole, I am sure the House would be interested to receive a statement about the progress that the Minister is making in introducing the Leveson report’s recommendations. Given that the improvements to the IT provision, recommended by Brian Leveson, are fundamental to the proposed closure of the courts, it would be useful to understand what stage they have reached.
I would like to set out the debate on the wider consultation, explore how the criminal justice service must be reformed and give an opportunity for Members to explore the reasons why courts in their constituencies should remain open, be reformed, or, in an unlikely circumstance, be closed down, as the structure of the consultation permits.
The consultation sets out a number of key principles that the Government have considered to decide which courts would be included in the proposals. The first principle is ensuring access to justice. Within this section of the consultation, the first consideration is the assessment of the impact of possible closure on professional users, lay court users and tribunal users.
One argument that has been repeatedly raised is that the founding principle of magistrates courts is that justice is delivered by local people who understand the local area and understand where retribution is appropriate. Following the announcement of the consultation, I met magistrates from Bath on numerous occasions and they said that knowing the local community provided a huge benefit when delivering local justice. I am very concerned that this experienced provision of justice will be lost if cases are diverted to Bristol, where this thorough understanding of the nuances of Bath is likely to fall short. Indeed, if one is a part-time magistrate holding two or more roles, how is one able to deliver justice in Bristol as well as work simultaneously in Bath?
The second principle is taking into account journey time for users. I am pleased that the consultation notes that Her Majesty’s Courts and Tribunals Service acknowledges that users should not have to make excessively long or difficult journeys to attend hearings. However, there is a limit to that and I am pleased that at the Justice Committee on 17 July the Lord Chancellor stated that he wanted to make sure that the time it will take for any citizen to travel to court remains less than an hour.
As a Bath resident, it is near impossible to get from Bath city centre to Bristol city centre within an hour by bus or car. If one is trying to get to Bristol court from any of the villages or small towns, this is simply near impossible. Regular trains do run between the cities. However, those attending court would face a walk of half an hour on arrival, which would pose a challenge to some—for example, the disabled.
I also worry that the cost of travel may lead some to not attend court, resulting in harsher penalties at a later date and the involvement of the police to force them to attend a hearing. Each of these steps places a further burden on local services and the taxpayer. It would be useful if the Minister updated the House on the Government’s proposals to provide financial support to the most vulnerable to get to and from the court.
The third principle is the alternative provision of criminal justice services in other locations. If Bath court is to close, I am already working with our council in Bath to discuss the use of our original courtroom, which was indeed a council chamber. As I have explained, there are public buildings in my constituency, as there are in the rest of England and Wales. I hope the Government will work with our councils and other public bodies to offer up facilities where security threats are low. The Government need to undertake a cost-benefit analysis of upgrading current facilities while investing in local civic buildings. Let us not forget that the equipment needs to be brought up to the standards set out by Leveson. We will therefore need financial help to achieve that.
The fourth principle is the need to take into account the needs of the users and, in particular, victims, witnesses and those who are vulnerable. I am pleased, therefore, that the Secretary of State said that the Ministry of Justice has looked at the types of work that the court does and the need to ensure that particularly sensitive people are not exposed to additional upheaval and unnecessary distress.
If the courts are to close and there is an increase in the distance that people have to travel to access the courts system, we need innovative solutions to improve access to justice. In the previous Parliament, some excellent work was undertaken by my right hon. Friend the Member for Hemel Hempstead (Mike Penning) on pop-up civil courts. These courts could open in village halls and community centres. The move would end the requirement for all defendants charged with low-level offences to attend a central court building. This would enable improved access to justice. For people who, for example, have committed a speeding offence, I imagine that having to attend so publicly could have an additional benefit of making them think twice about speeding in the future. Instead of having a public forced to come to the courts for this sort of offence, the public should see justice in their own communities rather than at a magistrates court.
Kate Hoey (Vauxhall) (Lab)
The hon. Gentleman makes a strong case for the court in Bath. On distance, does he accept that in London and other inner-city areas, although a court might seem very near, all sorts of travel issues, such as with bus routes and so on, might arise? In my constituency, for example, a consultation is under way over whether to close Lambeth county court on Cleaver Street. The closure of this court, which is centrally located on all transport networks, would make a huge difference, particularly to the poorest, who are likely to have great difficult getting to the court if there is a change of venue.
Ben Howlett
I agree. As the crow flies, the distance between Bath and Bristol might look like a 30-minute journey by car or bus, but when one factors in the congestion renowned in my constituency, it can be a problem. I know exactly the problems the hon. Lady mentions in Lambeth from my travels through her constituency. It can be particularly problematic for vulnerable people who cannot necessarily afford to access the courts system. In some instances, they might be left in a place that is slightly foreign to them without the money to get home. As I will discuss later, that adds additional costs to the overall system.
The idea of pop-up courts could be applied to a host of lesser offences, including minor criminal damage, failure to pay the television licence or being drunk and disorderly, which could ensure that the most vulnerable can access the courts effectively. The second key principle is value for money. I have largely covered that already, but no doubt Members will want to mention it later. The most interesting principle in the consultation is the third, about creating efficiency in the longer term. I agree with the Government that we need to reduce our reliance on buildings with poor facilities and remove from the estate buildings that are difficult and expensive either to improve or to upgrade. As I have said, however, the Bath courts are already large, having 12 courtrooms, a youth court and county court, and have excellent facilities for court users, staff and judiciary.
Here, then, is my pitch to the Government. Following conversations with magistrates, service users, charitable organisations and others in Bath, I would like to encourage the Government to back the creation of a new justice and rehabilitation service in Bath. I would like our court buildings transformed into a one-stop shop, providing a range of services that attendees might require and enabling all services within the criminal justice service to be accessed at source. That could involve drug and alcohol services, social care and children and witness support under one roof.
Someone in court because of actions resulting from alcohol abuse could leave the court and walk across the corridor to an alcohol rehabilitation charity. Someone struggling to cope with money who needs help from Citizens Advice could access such advice immediately, instead of having to leave the court estate. By getting the help immediately, offenders could rehabilitate quicker, while advice from a local organisation can be tailored to the local area. No doubt that would increase local support for the venture. The criminal justice system must aim to help prevent reoffending, and such ease of access would provide a way of doing that.
The Bath courts, like many others around the UK, have appropriate rooms that could be utilised in that way—these vacant rooms, after all, are the cause of the consultation. Offering rooms within the estate to local organisations and charities would take the pressure for funding these services off central and local government and the NHS. I know from experience that rents in Bath are extremely expensive, and that many charities essential to improving the lives of offenders would appreciate having such access to those who need their help and to facilities from which to operate.
It is also proposed that we move to an estate providing dedicated hearing centres and concentrate back-office functions where they can be carried out most efficiently. Bath magistrates court and county court already provide a range of different services. Without wishing to run before I can walk, I am pleased that the Government have recognised the need to invest in some of the buildings that need improvement, and I hope that following the consultation the Minister will open discussions with MPs as each case is assessed to ensure that plans deliver value for money. In addition, when it comes to the redistribution of the courts around England and Wales, it would be good to discuss the redistribution of local justice areas as well. It makes no sense that a resident living east of Chippenham has to go to Swindon, or that someone living closer to Bath has to go to Yeovil.
In summary, I hope I have made a strong case not only for reform of the courts and tribunals estate, but for better utilisation of the current estate to help create a one nation justice system. On Bath, I end by reminding Members of what was said in Select Committee on 17 July by the Lord Chancellor:
“when you announce a series of closures or economies it will always, always, always be the case that you find someone who will make a very good argument as to why in a particular circumstance a closure should not go ahead…I want to stress that when we make our announcement about closures, it is not the final word. If a strong case is made and, on the balance of judgment, it is worth keeping a court open, we will revisit any individual decision where we think we may have got it wrong.”
I hope I have made a very good case that the Bath court should stay open.
Ann Coffey (Stockport) (Lab)
I congratulate the hon. Member for Bath (Ben Howlett) and my hon. Friend the Member for Hartlepool (Mr Wright) on securing the time for this excellent and timely debate on court closures. It is a pleasure to follow the well-informed and comprehensive speech by the hon. Member for Bath, and I assure him that I fully support his imaginative proposals for Bath.
The Ministry of Justice consultation on the proposals for future provision of Her Majesty’s Courts and Tribunals Service talks about reforming the courts and tribunals system to bring quicker and fairer access to justice that reflects the way people use services today. I absolutely agree that this has to happen. It also talks about how many cases do not need face-to-face hearings and about the increasing use of new technology such as digital screens, video, telephone and online conferencing, which will drive change. The document says we can only provide better access to justice if we take difficult decisions to reduce the cost of buildings and reinvest the savings. It outlines the courts that will close in Greater Manchester, including Stockport, in order to achieve that.
I am sure the Minister will agree that it is vital to get this right. Court buildings, once closed, cannot easily be reopened. There are consultations and there are consultations! The best consultations give people full information that enables them to make a well-informed response from their own experience. My concern is that the consultation document, due to close on 8 October, does not contain sufficient information and costings to enable a proper response to be made.
A further concern is that this is one of three consultations, all of whose proposals might impact on the use of court buildings. The second consultation on the merger of the local justice areas in Greater Manchester has just finished, and although I appreciate that it is not directly about court buildings, the proposals could impact on their use. The problem is that the Government response to that consultation will not be known before the closing date of the consultation on court buildings.
There is also a third consultation, which has just started, about youth justice, which aims to cut reoffending. If successful, it will have an impact on the use of court buildings. There could also be changes to criminal proceedings. I have been interested in section 28 pilots of the Youth Justice and Criminal Evidence Act 1999 that enable pre-recorded cross-examination of the evidence of vulnerable child witnesses. I visited the recorder in Liverpool, one of the pilot areas, and he told me that this has led not only to a better experience for vulnerable child witnesses, but to shorter cross-examinations, thus freeing up court time. These pilots have not yet been evaluated, but if they were rolled out nationally, that would have an impact on the use of court buildings. I am sure Members would be interested in any information that the Minister could provide about when the evaluation of these pilots is likely to be concluded. Also, if as part of this roll-out, non-court buildings such as the St Mary’s sexual assault referral centre were to be used, that would also have an effect on the use of court buildings. Many vulnerable witnesses would welcome giving evidence in a non-court building.
Surely the consultation on proposed closures of court buildings should be done after all the relevant consultations and evaluation of the section 28 pilots have been completed. This feels like a very disconnected consultation process with piecemeal proposals, when we should be considering all the changes to the criminal justice system together. It seems to be a bit of a dog’s breakfast.
I am also concerned about delays in the bringing of cases to the Crown court in Manchester, and I should have liked to see wider proposals to tackle those delays. It cannot be right that traumatised child victims must wait for months to give their evidence. I urge the Minister to be bolder and more radical. At present, cases are sent to be tried at the Crown court because of the seriousness of the offences and, of course, the right of the defendant to be tried by a jury. Perhaps there is a case for holding some jury trials for some offences in courthouses that are currently used for magistrates’ cases and family hearings. I think that business case should be considered. The tackling of unacceptable delays in Crown court hearings would be greatly welcomed by witnesses, and it might meet the Minister’s aspiration—which I support—to provide quicker and fairer access to justice.
Let me turn to the proposals relating to Greater Manchester. The HMCTS’s consultation document provides only minimal information about the costs of the new arrangements, and the impact statement is very general. It talks about value for money, but there is very little available information about how that is being assessed. The only figures provided are for the overall operating costs of the courts that are being closed.
To get a better picture, I tabled some parliamentary questions about the operating costs of each court in Greater Manchester by type of expenditure in each of the last three years. However, I have not yet received an answer. May I ask the Minister to ensure that that information is made available before the closing date for responses to the consultation?
I asked what estimate the Justice Secretary had made of the capital and revenue costs of implementing his proposals for the future provision of HMCTS services in the north-west. I was told that I would not receive an answer until after the consultation had closed and all the responses had been analysed. I also asked what costs were paid by HMCTS for attendance, travel, loss of earnings, childcare and subsistence for all courts in Greater Manchester, and what estimate the Justice Secretary had made of the likely level of such costs if his proposals for future courts provision were implemented. I was again told that the information was not held centrally. How can it be that such information is not available for people to consider as part of the consultation? How can a proposals document be produced when the Ministry of Justice, by its own admission, does not keep those figures?
In response to my question, during the most recent Justice Question Time, about the use of non-court buildings, the Minister talked about the types of buildings, such as town halls, that could be used. I can certainly see that that is a possible solution—as I have said, not everyone likes attending a court—but no costs are attached in the consultation document.
Let me now turn specifically to the proposed closure of Stockport magistrates and county court, and the transfer of the workload to Manchester and Salford. Like the hon. Member for Bath, I am concerned about the impact of travelling times and the implications for local access to justice. I do not want travelling time to be a deterrent for witnesses. I found no evidence in the proposals of the conducting of any survey of people’s chosen modes of travel—bus, train, car or walking. Underlying the proposals is a presumption that the majority of people using the court in Stockport travel by car. I would argue that that is not the case: many vulnerable and disadvantaged people who use the courts travel by public transport.
The consultation document says that it takes 15 minutes to travel by train from Stockport to Manchester. That is unrealistic, as it does not include travelling time from home to Stockport station and on to the court. For example, the total journey time to Manchester from Heaton Mersey in my constituency is one hour and three minutes, and involves a train and two buses. The journey time from Brinnington is roughly one hour and four minutes, and also involves a train and two buses. It cannot be right that, on the basis of these proposals, an area with an identity that is distinct from that of Manchester and a population of 284,000 will be left without a court and access to the local justice system.
Stockport magistrates court houses a variety of court work in the same building. It houses adult and youth work, a family hearing centre, the county court and tribunals, as well as a highly effective problem-solving court which addresses the underlying problems that contribute to criminal behaviour. It is not clear that all those uses have been built into the model that the consultation document has used in its usage statistics. That needs to be clarified.
With regard to the youth court, the borough of Stockport has more children in care than any other area in Greater Manchester. Relocating that court to Manchester would have a significant impact on costs and on the efficiency of justice for a number of youth agencies and court users. The rationalisation of court services provided for in the proposals will mean that there will be family courts in the north and centre of the county but not in the south. That cannot be right.
It is proposed to close Macclesfield court and transfer its business to Crewe, but Stockport is within easier reach of the people of Macclesfield than Crewe. A better option would be to transfer the business of Macclesfield magistrates court, the county court and the family hearing centre to Stockport and retain the Stockport magistrates and county courts. There are good train and bus services between Stockport and Macclesfield, and the train journey from Crewe to Macclesfield takes double the time of the journey from Macclesfield to Stockport. Moving the Macclesfield court business to Stockport would provide local and accountable justice and value for money.
I cannot support the closure of the Stockport magistrates and county courts because I see no evidence that it will lead to better access to justice for my constituents; nor do I think that the financial case has been made. Local people with expertise and a wealth of knowledge of the criminal justice and family courts locally do not feel that the proposals provide the depth of information needed for them to give proper consideration to the proposals. They need to feel confident that the closure of the Stockport courthouse would lead to a better justice system for local people. The closure of the court would be a blow to Stockport, and I would really welcome an opportunity, along with the other Members representing constituencies in the Stockport borough, to meet the Minister to discuss these proposals and the alternatives before he makes his decision.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. It is obvious that a great many people wish to speak. However, we are not under huge time pressure this afternoon—the Benches are not overflowing—and I do not wish to impose a formal time limit. I therefore hope for the co-operation of Members, and if each speaks for between eight and nine minutes, everyone who wishes to speak will have the chance to do so. Eight minutes is a considerable amount of time in which to put a succinct argument; we do not always need to hear the same points being made over and over again. I am sure that we shall not hear that from Mr Andrew Bingham.
Andrew Bingham (High Peak) (Con)
I shall endeavour to grant your wish, Madam Deputy Speaker.
I congratulate my hon. Friend the Member for Bath (Ben Howlett) on securing the debate on this important subject, which is a matter of great concern to my constituents and, I am sure, to those of all hon. Members. I am particularly pleased to follow the hon. Member for Stockport (Ann Coffey), for reasons that will become apparent as I go through my speech.
I want to start by talking about the consultation document, and I am going to be very critical of it. I have witnessed many consultations in my 12 years as a borough councillor in the High Peak, and in my five years as a Member of Parliament, and I am sorry to say that I cannot remember seeing one as poorly written and riddled with errors and inaccuracies as this one. It contains basic mistakes regarding the High Peak magistrates court in Buxton. For example, it claims that it has no public lift, when in fact it has one. That is a basic error, and I shall talk about other such errors in the document later.
Many people take a dim view of consultations, which are often seen as window dressing, while the result of the process is inevitable. I am sorry to say that the mistakes that have been made in this consultation will only feed that view among the general public. I very much welcome the assurance from the Under-Secretary of State for Justice, my hon. Friend the Member for North West Cambridgeshire (Mr Vara), in his letter to me last month that this is a genuine exercise and that no final decisions will be made until the consultation is complete. I was pleased to see that, and I believe it.
I want to return to the content of the consultation. It is a slapdash piece of work, and I have to ask whether its author has actually been to Buxton and visited the court, or whether it is merely a regurgitation of a consultation undertaken about 10 years ago. Has someone simply dusted off that document, changed a few of the names and dates and decided that that would do? Whichever it is, it is not acceptable. At best it is inaccurate; at worst it is misleading. It has been pointed out to me by somebody with a far more qualified legal brain than mine that so great are the inaccuracies in this consultation that any decision based on it could be open to legal challenge, and I would hate to see that. I want to run through one or two of the inaccuracies.
The document says there is no public lift, but there is. In fairness, a letter was sent out subsequently saying, “This was an error and we are very sorry.” I got a copy of that letter, but many people I know did not; that is another mistake. The document states the Buxton court is not compliant with the Equality Act 2010. That is wrong; it is fully compliant with the disability legislation under that Act. The document states that there are two consultation rooms and that they are in poor condition. That is again wrong; there are three, and they are of a high standard because they were refurbished in 2010.
The document also claims that there is one waiting room available, thereby preventing the “desired segregation” of parties. Yet again, that is wrong. In 2010 the waiting areas were reorganised so now there is a separate entrance and room in the courthouse for witnesses, and the “desired segregation”, as it is termed, is therefore now in place; witnesses are segregated from defendants at all times and can be taken into the court without any communication with others waiting in the court waiting room.
I am sorry to labour this point, but the errors are multiple. The document claims that vulnerable witnesses have to use a waiting room across the road. There is a room across the road from the court; it is used for vulnerable witnesses giving evidence via video link. That has proved to be a valuable asset and is one not offered by all courts. It reassures vulnerable witnesses to know that they do not even have to enter the court building where, despite the segregation offered, they would fear bumping into the defendants. That gives huge reassurance to those who need it most.
The document goes on to talk about using Chesterfield as an alternative, claiming it is fully compliant with health and safety regulations. By omitting the fact that Buxton is also compliant, there is implication by omission, and yet again in my view that could be seen as misleading.
I will now turn to the proposals to use Chesterfield court as an alternative. Yet again, if someone had bothered to visit Buxton and do their homework they would realise that Chesterfield is just not practical. It may look a good solution on a map but in reality it does not work. The consultation talks about travel times from Buxton to Chesterfield. It completely ignores the fact that the court serves not just Buxton but the whole of the High Peak, including Glossop, which has a larger population than Buxton. Getting to Chesterfield from Glossop is just not practical by public transport. If someone had to get to Chesterfield court by public transport for 9.30 am, they would have to leave Glossop at 6.45am. We have heard talk about the journey time from Brinnington at one hour and four minutes; a move to Chesterfield would see 73% of my constituents facing a journey by public transport of over two hours. From that perspective, Brinnington is practically next door.
The hon. Member for Stockport talked about Macclesfield. As we both know, the transport links between the High Peak and Stockport are a lot better than those between High Peak and Chesterfield. If there are going to be closures in the High Peak, has any thought been given to sending people to Stockport? We have talked of Tameside, Macclesfield and Stockport closing. My geographical knowledge of the area is pretty good, and although I want High Peak retained, if there had to be just one site other than that, I would choose Stockport. It could feed Macclesfield, Tameside and High Peak because the transport links are a lot better. Has that not been looked at because Stockport happens to be in a different county or region from the High Peak—or could no one really be bothered?
Members will probably have got the impression by now that I am very unimpressed with the consultation and its contents. To compound the felony I wrote to Amanda Lowndes at Her Majesty’s Courts and Tribunals Service on 28 July and I have yet to receive a direct response to my points other than the generic apology regarding the public lift. I do not know why; I do not know whether it is an unwillingness to engage or embarrassment at such an appalling document.
I want to say at this point that this contrasts greatly with the response of the Minister, to whom I have spoken personally and who has responded to my letters. I applaud and thank him for that.
I understand the need to look at issues such as the cost to the public purse and whether we can do things differently, as has been eloquently described by my hon. Friend the Member for Bath. The savings for the courts on the High Peak, however, are projected at about £46,000, but the moving to Chesterfield will incur extra costs elsewhere, such as the travelling costs of defendants and, indeed, the magistrates. Does a magistrate who is living and serving in High Peak really want to be going over to Chesterfield? Those who know the area will be aware that it gets a touch cold in the winter and we have quite a bit of snow, and people who try to drive from High Peak to Chesterfield in February sometimes do not have the best of chances. This move will discourage people from High Peak from becoming magistrates, and I would not like to see that. The magistrates do a great job and I support them in everything they do.
People will face additional travelling costs, leaving aside the inconvenience, but we also have to consider the costs for other organisations, such as the police. Officers of High Peak Borough Council have to go to court for various things and at the moment they have only to go across the road from the town hall. They can go across, do what they have to do and be back behind their desks fairly quickly. Moving the court to Chesterfield will mean that council officers will be taken out for at least half a day, if not more, and then we have to add on the travel costs and so on. Given the lack of feasible public transport between High Peak and Chesterfield, I can see money being spent on taxis to get people to and from the court. That would be an expensive and unacceptable outcome; I seem to remember someone from the other side of the House going on about people in taxis scuttling around cities—that came to my mind a long time ago.
I have had discussions with constituents who work in and around the courts about this matter, and there are other ways that savings can be made. Previous speakers have highlighted the people who work in and around this area. We should speak to them, because I am sure they can find ways. A lot of cases of Crown Prosecution Service inefficiency have come across my desk. I have known of cases adjourned a dozen times because they are not ready and of the double listing of cases. If we speak to the experts, they could find such savings without the court in Buxton necessarily having to close.
I could talk for much longer, Madam Deputy Speaker, but I am mindful of your eight-minute ruling and so I will keep my remarks as succinct as I can. I wish to conclude by saying that High Peak is sandwiched between large towns and cities, and we get pulled one way and then the other, and we often used to be forgotten. As with everybody in this House, part of my responsibility is to represent my constituency, make sure that it is not forgotten and make sure that we get our fair share. The Minister should think long and hard about this decision. He should not base it on this woeful and sloppy piece of work masquerading as a consultation. He should look carefully at the submissions from people in High Peak, mine included. They will give him an accurate picture of High Peak, not the one put out in the consultation. If he is determined to reconfigure the court services in High Peak, I ask him to find a way of doing so that does not force my constituents into long unsustainable journeys. He should examine innovative ways of doing things, such as the pop-up courts. If we have to travel, he should make this realistic and do-able, but I urge him to find a way to preserve a court in High Peak, as that makes sense. If this consultation document had been properly researched and presented, it would have led one to that conclusion. Instead, it is a biased, inaccurate and lazy piece of work.
Mr Iain Wright (Hartlepool) (Lab)
I congratulate the hon. Member for Bath (Ben Howlett) on his 100% record in securing Backbench Business Committee debates.
I want to focus my remarks on the proposed closure of Hartlepool magistrates court and county court, as I have a number of serious reservations about that. The first is that there is nothing lacking or missing from the magistrates facilities in Hartlepool. I understand that magistrates courts in other parts of England or Wales are earmarked for closure in part because they fail to comply with the Equality Act 2010 or are lacking in security. Hartlepool has a prison video link, separate waiting facilities for prosecution and defence witnesses, and interview rooms for confidential consultation. By contrast, the consultation itself concedes that if the proposed closure of Hartlepool’s courts goes ahead, a reconfiguration of the hearing space at Teesside magistrates courts will be required to accommodate a further waiting room and create a disabled access door. No figures are provided as to the costs of this work.
That brings me on to an additional point: the costs saved by the proposal. I understand that, as the hon. Gentleman has said, this consultation is being driven by a desire to reduce costs. The Minister has said that the courts estate costs about half a billion pounds a year. I would question how much will be saved if Hartlepool magistrates court is closed. There is a lack of transparency as to what will be saved. I understand that the court in Hartlepool has operating costs of about £345,000 a year. Does the Minister expect to save all or part of that figure? If it is the latter, how much does he expect to save?
I suspect that a large proportion of those operating costs will be staff expenditure. Eight members of staff work at the magistrates court and seven full-time members work at Hartlepool county court. Will they be made redundant as a result of the proposed closure? Unfortunately, Hartlepool still has a high unemployment problem, like the rest of the north-east. At double the national average, our level is the 40th highest among all constituencies.
Any redundancy in Hartlepool, especially that initiated by the state, does not help that unemployment problem, but if staff are not being made redundant will they be transferred to Middlesbrough, and how much does that save?
The building from which the magistrates and county courts operate is not freehold, so the Government will not be able to realise any value by selling it. According to the consultation, the Government’s wishes are:
“To maximise the capital receipts from surplus estate for reinvestment in HM Courts & Tribunals Service.”
That aim will not be met by closing Hartlepool magistrates courts, a leasehold property on a 99-year lease that currently has 60 years left to run. The building is owned by Hartlepool borough council. How much will it cost to break the lease? If the Minister is considering whole of Government efficiencies rather than a narrow, silo-based approach to achieving cuts for his own Department, what impact does that have? Does he realise that, by closing Hartlepool magistrates court, he is not saving the taxpayer anything, but is merely moving financial pressures to the local authority, which has already had cuts totalling 40% to its budget in recent years.
The criteria by which the courts will be closed seem opaque. I have asked a series of parliamentary questions on this matter. Like my hon. Friend the Member for Stockport (Ann Coffey), I asked about the cost per case across magistrates courts in England and Wales. That seemed to be a reasonable dashboard metric to evaluate relative efficiencies across different operating units. It is what business does all the time. However, the answer I received from the Under-Secretary of State for Justice, the hon. Member for North West Cambridgeshire (Mr Vara), who is a genuinely lovely and decent man and whom I am proud to call my friend, stated:
“The information is not available centrally and can only be provided at disproportionate cost.”
If this metric is not being used, what is? How can relative performance and effectiveness across the estate be evaluated consistently?
I understand that one of the central considerations of this proposed closure is the utilisation of the estate. Those 91 courts are used, on average, a third of the time. What is the magic utilisation figure that makes some courts safe and others not? I have seen the Minister quoted as saying that a third of all courts and tribunals were empty for more than 50% of the time.
Hartlepool has a utilisation rate of 49%. In an answer to a parliamentary question that I received this morning, the Minister revealed that Hartlepool’s utilisation rate is actually higher than the England and Wales average. With the exception of Wakefield, Hartlepool has the highest utilisation of any court proposed for closure in the whole north-east. Will the Minister take that context into consideration when deciding which courts to close, or should Hartlepool resign itself to closure simply because it has missed, by 1 percentage point, the magic 50% utilisation rate?
Richard Fuller (Bedford) (Con)
The hon. Gentleman cites the lack of information. My hon. Friend the Member for High Peak (Andrew Bingham) says that the Department has provided inaccurate information. Given that we are talking about unavailable information, inaccurate information and consultations where things are ignored, does he think that this is an example of the Ministry of Justice going rogue?
Mr Wright
The hon. Gentleman makes an important point. Given what is coming out in this debate, the Ministry of Justice needs to scrap this consultation and start again on the basis of meaningful and accurate information.
I have mentioned costs and utilisation rates, but my central concern is access to local justice for my constituents.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
My hon. Friend mentions access to local justice. Does he share my concern about the impact that this could have on recruiting magistrates, who serve their communities and understand their local areas? Without a strategy for the magistracy, there could be detriment to the principle of local justice.
Mr Wright
My hon. Friend makes an important point. My central focus is the victims, rather than the magistrates—with the greatest respect to those people who provide an invaluable public service.
The consultation on the proposed move to Teesside magistrates courts states that there are
“excellent road, rail and bus links.”
Whoever wrote that has a budding career in writing gags for a living, because that is just not the real experience. Public transport provision in Teesside is appalling. Somebody from Hartlepool who is required to be at Teesside magistrates court for an early morning hearing and has no access to a car will struggle to make it. Victims, who might understandably require a period of calm and reflection before enduring the stressful and arduous process of giving evidence, will be massively inconvenienced. Do the Government really want to make justice more stressful and inconvenient for innocent victims? Justice is not being served by making victims travel longer distances. The consultation says that at present 99% of those accessing Hartlepool magistrates court can be there by public transport within 60 minutes, even taking into account the appalling local public transport provision. The consultation states that after the proposed closure 91% will take between one and two hours. That fails the Government’s intention of ensuring that people will not have to face long journeys, and I hope the Minister will consider that.
Finally, I finish on a wider point that is perhaps not the direct concern of this debate and of the Minister but has implications for relatively small towns such as Hartlepool. We have endured the movement of local hospital services from Hartlepool to other areas. Retail units are moving from the high street and the shopping centre into other areas. There is a drift of services from places such as Hartlepool, but what does that mean for the future? Does it mean dormitory towns, at best, or, at worst, ghost towns in which there is no sense of community and where economic activity is stopped?
We have to think about this as widely as possible and, given the concerns, I hope that the Minister will think again and ensure that Hartlepool magistrates court remains open.
Richard Benyon (Newbury) (Con)
About 10 years ago, sitting on the Opposition Benches, I made my stammering first attempt to entertain the House with my thoughts in my maiden speech, in which I mentioned my belief in local facilities, particularly mentioning the magistrates court in Newbury, which was under threat. I spoke—I thought eloquently, although others probably did not—rather like the hon. Member for Hartlepool (Mr Wright) just did about the need to resist the sucking out of facilities from smaller communities to larger communities, which is a predominant theme. It is done in the name of efficiency, but it disadvantages people. In that context, with some dismay five years ago I had to fight a battle to defend Newbury court from closure. I am glad to say that that was successful, but, like groundhog day, it has come round again. The court is proposed for closure in this consultation and I and a great many organisations and individuals across west Berkshire have made submissions to it.
I believe that, like many others, the court has been deliberately run down to set it up for closure. The usage figure makes it look like a no-brainer, but a few years ago the court service advertised for a new prisoner escort contract and excluded Newbury court from the contract. Now, no case that has even a scintilla of a chance of the accused being given a custodial sentence can be heard in Newbury court. That is another reason for its reduced use, and we lost the Crown court some years ago. That is just one example of a rather badly run service. Hundreds of thousands of pounds of taxpayers’ money was spent on building a new custody suite at Newbury, which lies dormant because of those decisions.
I pay tribute to my hon. Friend the Minister, who is a courteous and decent man and has spent an enormous amount of time talking to me and no doubt others about this decision because he knows that it hurts our local communities. I urge him to consider the points made in response to the consultation. I represent an area with some very rural communities and I think of the victim of crime who has to make the difficult trip to court to give evidence as a witness. I entirely understand my hon. Friend’s assurances about trying to consider new technologies, and in some cases that might be better for individuals, but in others a traumatic experience will be made considerably worse by a long trip to somewhere such as Reading.
Tom Pursglove (Corby) (Con)
One of the problems in Corby and east Northamptonshire is that travelling by public transport from many of the villages is simply impossible. Are there similar concerns in my hon. Friend’s constituency? It costs £80,000 a year to run the court in Corby, but we may well end up spending more on transport for magistrates, witnesses, victims and everybody else.
Richard Benyon
I entirely understand my hon. Friend’s point, because communities in west Berkshire will have precisely the same problem.
The courts service is run according to very strict boundaries. One does not have to go more than a mile south of Newbury before one is in Hampshire, and any cases that are relevant to that part of the community, or indeed to east Wiltshire or south Oxfordshire, cannot be heard in Newbury. It seems crazy that we do not have a more flexible, cross-border system—we are talking about the border between Berkshire and Hampshire, not between Serbia and Hungary. We really ought to be smarter and more efficient by looking at cross-border solutions. If the mistake of closing Newbury court is made, I hope that it can at least be mothballed for a time while we look at the reorganisation of our courts service, and the same might go for other Members’ constituencies.
A journalist working on my local newspaper, the Newbury Weekly News, made the following point: “Surely as important as justice being done is justice being seen to be done.” One local journalist has made a speciality of reporting on court affairs in Newbury, and there is simply no way in which that can continue if cases relating to west Berkshire are to be heard in far-off Reading or Maidenhead. Local people will not see cases for crimes committed in their area being heard in their area.
William Wragg (Hazel Grove) (Con)
On the point about local justice being seen to be done, a magistrate put it very succinctly to me—not wanting to sound like a character from “The League of Gentlemen”—when they said, “It is important in order to preserve the long-standing principles of local justice being administered by local people within that local area.” Does that neatly summarise what my hon. Friend is trying to express?
Richard Benyon
It really makes sense. There is a bypass around Newbury, which, as some hon. Members might remember, was quite controversial, and we also have Greenham Common and the Atomic Weapons Establishment. Magistrates, including the Prime Minister’s mother, developed a great expertise in dealing with those situations. I hope that we never have those problems again, but we do have issues relating to rural crime, and accidents and crimes on the M4, so local expertise and an understanding of the dynamic of the local area really help.
I understand that the low-hanging fruit in the Ministry of Justice has already been grabbed and that the Minister now has the difficult job of reaching higher. I believe in what the Government are doing and understand the difficulties when Members like me support what they are trying to do economically in general but whinge about the particulars. But in this case I really believe that it is wrong and unjustified, and I can make a very good case—I have done in my response to the consultation, so I will not detain the House with it now.
I have one final point to make. Two weeks ago a case was deferred in Newbury because there were not adequate procedures in place to hear it. It cannot be heard until January. Not only must justice be seen to be done, but justice delayed is justice denied. That is a principle we were all brought up with. I do not believe that this decision is right for Newbury. I believe that it really needs to be looked at again. I hope that the Minister will have the opportunity to make the same judgment when he looks at the consultation responses.
Marie Rimmer (St Helens South and Whiston) (Lab)
I want first to thank the Minister for the courtesy and quickness of his response to my first communication—there is another one on the way. I will not repeat what many Members have said, because we are all anxious to get on and there is not much time.
Magistrates in my area have expressed exactly the same concerns about local people serving local justice with their knowledge and expertise. There are serious concerns about the accuracy and quality of the communications in the consultation. In September 2014, the Department for Transport closed the transport direct planner tool used in the impact assessment to calculate travel times by car and public transport, and the methodology for calculations has not been publicised as part of the consultation. It is calculated that the 14-mile journey from St Helens court will take 45 minutes. That takes no account of peak times, delays, parking, or getting to the court in the city centre. There is no car park nearby. People have to travel within the town centre to get a train out to Liverpool and then walk across the city or get another mode of travel. The travel network is not described accurately in the documentation.
The consultation document states that the court was utilised at approximately 62% capacity, but that figure has been seriously challenged. The council is having difficulty getting time allocated to court cases due to the lack of capacity in the courts. There have been some very serious incidents that have bothered me. The youth offending service is required to attend the local youth court frequently. Some parents and carers are not able, capable or willing to attend with their child for a variety of reasons. The situation is likely to be exacerbated if cases are to be heard in Liverpool. When St Helens custody suite was recently closed temporarily while £1.7 million was being spent on remodelling it, young people had to go across to Merseyside. The youth offending service was called on even more because an appropriate adult had to be found for those children. It is likely that more warrants will need to be issued due to failures to attend. This could result in young people being arrested and possibly detained overnight in police custody. That will be evident on their criminal record and may impact on future bail applications.
Residents and other stakeholders will have to travel to and from Liverpool, at additional expense time. As I said, £1.7 million was spent on redeveloping the court, and it is still only just about finished. It is highly suitable for such cases, having more capacity. Even with the figure in the document of 62% usage, which we challenge, its capacity is larger than that of another court that is being kept open. Equally importantly, the courts that it is proposed stay open are within 5 miles of Liverpool city centre court. There are also Birkenhead and Bootle, which are 5 miles and 3.2 miles away. They both have direct rail links into the city centre, with journeys every eight minutes taking about three minutes, while we would not be able to get to Liverpool Crown court within an hour. There are very serious concerns about the quality of the information in the documentation.
The Justice Minister is being done an injustice. His courtesy has been exemplary in the responses to us. I urge him to look at the consultation document again to ensure that the information is accurate, and that justice can be seen to be done and and transparent for all.
Dr James Davies (Vale of Clwyd) (Con)
I congratulate my hon. Friend the Member for Bath (Ben Howlett) and the hon. Member for Hartlepool (Mr Wright) on securing this Backbench business debate, and thank the Backbench Business Committee for allocating the necessary time for it. The estate reform consultation impacts on my constituency. I want to say a few brief words further to my recent meeting with the Minister and his subsequent correspondence with me, for which I thank him.
I fully understand how important it is that the Ministry of Justice ensures value for money and efficiency and that it embraces new technology. Nevertheless, it is also important that true local justice is maintained and that decisions taken as a result of the current consultation are based on accurate facts and projections.
I want to make a general point on behalf of all those Members who represent rural or semi-rural constituencies: we need to consider very carefully the impact of court closures on those who rely on public transport. As a result of some of the proposed changes, not only would many journey times increase significantly, but defendants, victims and witnesses would, in certain instances, need to travel on the same bus and rail services. Clearly, that is of great concern when wishing to minimise further trauma to victims who have already been through difficult circumstances. We must also consider the potential false economy of asking people to travel further when it might increase the possibility of some court users arriving late or even failing to attend.
I have already set out in my consultation submission my specific arguments as to why the proposed transfer of magistrates court functions from Prestatyn to Llandudno may result not in savings but in the opposite. It would not add to today’s more general debate if I went into the precise details, but the key point is that, regardless of the consultation’s outcome, it is intended that the Prestatyn building should remain open to cater for civil, family and tribunal functions. Furthermore, the same building already has a magistrates court utilisation rate which, having been corrected and revised significantly upwards at my request, is at or around the national average. Bearing that in mind, I believe it could and should be converted into what would undoubtedly become a first-class criminal justice centre. That could be carried out inexpensively, and the resulting facility would boast a good overall utilisation rate. Such a facility would, of course, combine the functions of the existing Prestatyn magistrates court and those of nearby Rhyl county court, whose closure was announced in 2010.
It is my belief that Her Majesty’s Courts and Tribunals Service is best arranged to reflect crime statistics, in the interests of both local justice and efficiency, and I respectfully call on the Minister to reconsider the proposal to remove criminal courts from Denbighshire.
Nic Dakin (Scunthorpe) (Lab)
Having listened to the debate, I add my congratulations to the hon. Member for Bath (Ben Howlett) on securing it with the support of others, including my hon. Friend the Member for Hartlepool (Mr Wright). The Minister will be familiar with what has been said because, to his credit, he sat with me and the vice-chair of the Scunthorpe bench and heard pretty much the same arguments from us. They are a familiar refrain on familiar issues.
Part of the problem is the quality of the consultation document. The hon. Member for High Peak (Andrew Bingham), my hon. Friend the Member for Stockport (Ann Coffey) and others have drawn attention to its narrowness. It focuses on closing facilities, rather than on developing justice. It is therefore understandable that we and our communities have reacted with concern, because we have not been presented with a broader consultation on the future direction of access to justice, which is an issue.
The information in the consultation is threadbare. It lacks detail. My hon. Friend the Member for Hartlepool has pointed out that, although it appears to save money on buildings, proper scrutiny of the costs and the framework within which those buildings function would demonstrate that those savings are probably not there to be made. That is certainly the case in Scunthorpe.
I want quickly to rehearse the arguments that have already been made to the Minister, to whom I pay tribute for the way in which he has responded to concerns across the House with his usual diligence and engagement. He is firm and he tells us his views—I respect him for that—but I value the fact that he has gone out of his way to reiterate that this is a genuine consultation. The consultation must therefore take on board the concerns of our communities and of hon. Members.
There are issues about access. As many of us know from the geography of our areas, and as the hon. Member for High Peak mentioned, the situation looks very different from what is on the map to those who know our communities. For some the outlying areas of my community, it takes more than two and a quarter hours to access Grimsby court by public transport, and that does not include the brisk, 15-minute walk at the other end. It will take even longer for someone who is disabled or elderly, or has other constraints.
In Justice questions and in a meeting with me earlier this week, the Minister was at pains to say that we need to see the closures in the context of the digitalisation of the service. That is a helpful umbrella under which to place the closures, but it is important to examine digitalisation properly, because it is not a free hit. There are costs involved in putting in place not just infrastructure, such as for video conferencing, but support for people and businesses, so that they can be confident in how they present information during court processes. Access is a very important issue, but that part of the picture is largely invisible at the moment, because of the nature of the consultation. I respect the Government’s view that how we access justice is changing and ought to continue to change, but such change must be managed properly and appropriately so that it does not lead to any casualties.
I share the concern stated by many hon. Members that the closures result from a narrow consideration of the cost to the Ministry of Justice, rather than of the cost to the public purse. I am concerned that we might find police officers having to spend more time as taxi drivers, when I would prefer them to be out on the streets preventing crime in the community that they serve, so there are real problems about the narrowness of the approach. As other hon. Members have described in relation to their constituencies, Scunthorpe has a very integrated justice area. The courts are next to the police, the probation office, the drugs and alcohol service and a suite of solicitors, so everything is neatly contained for ease of access and all that stuff. I do not mean to say that things should not change, but I am very concerned that the closures may assist the Ministry of Justice’s narrow approach to its balance sheet, while in the end costing UK plc more money, which would be unwise and unfortunate.
I want to emphasise the important role that the magistracy plays within the broader local community. We need justice to be delivered not only locally, but by local people. The magistracy does that, and it also does a lot of important outreach work in the community, particularly with schools and young people. The Respect court in Scunthorpe, which is targeted at reducing youth offending, has been recognised as a beacon of good practice for elsewhere in the country and has made a real difference. It relies on magistrates, the police and others volunteering their time, but it works because we have some of the lowest reoffending rates for that cohort in the country. We cannot measure the value of the work done with schools in the community, but as someone who worked with young people all my life—until I had the dubious pleasure of ending up here—I feel that the sort of work done by the magistracy is important because it has a direct impact on preventing crime and reducing the level of crime in the community.
My final point is about equality and diversity. Humberside—I know that my comrade from Brigg and Goole (Andrew Percy) does not like that term, but let us use it for now—is the area with the largest ethnic minority population in the Humber region and in Lincolnshire. It seems unwise to create barriers, such as long distances and travel times, to that ethnic minority population not only accessing justice, but stepping forward to serve in the magistracy.
On our bench, there are two magistrates who are significantly visually impaired. They make a full contribution to the magistracy in Scunthorpe, but if it is transferred to Grimsby, that will have a direct impact on the ability of those magistrates to contribute.
I see that you are getting a little fidgety, Mr Deputy Speaker, so I will not test your fidgets any more.
Kevin Foster (Torbay) (Con)
It is a pleasure to be called in this debate. I congratulate my hon. Friend the Member for Bath (Ben Howlett) and the hon. Member for Hartlepool (Mr Wright) on securing a debate on this important topic. I now know to ask my hon. Friend for his help if there are any debates that I am interested in securing, given his success rate before the Backbench Business Committee.
First, it is important to set out what I believe to be the purpose of a magistrates court. As a number of hon. Members have said, it is about the principle of local justice. The offences that irritate and affect local communities should be seen to be dealt with locally. We all accept that major crimes will come to trial further away, but there should be local justice for the more minor things and the things that irritate. Crucially, as has been said in one or two other speeches, there must be local decision makers—justices of the peace who live in the communities that they bring justice to. That provides a knowledge of the area and the impact of crimes that is important when dealing with more minor offences. It is different from the justice that is administered in respect of more major crimes at a Crown court, where the law and the penalties that have been provided by Parliament are the driver of what is done.
If the priority is local justice and local decision making, I accept the argument that has been made by the Minister and others that the important thing is not having a building that looks impressive or a bench that looks like something out of the 18th or 19th century. Having the facility of a court is the important thing.
I will focus on the proposals for Torquay magistrates court. As the document says, it is utilised 62% of the time, which is a higher rate than many of the other courts that are included in the consultation. Given the infrastructure in Devon, which was referred to in the earlier debate on steel, I am concerned about witnesses having to travel to court to give evidence and about the potential loss of cases that that could bring. Likewise, general users of the court will have to travel significant distances.
Although Newton Abbot and particularly Plymouth are accessible by car, the consultation document presents quite a different picture when it comes to public transport. If a witness needed to get to a case in Plymouth, it would take 1 hour and 50 minutes by bus or 1 hour and 10 minutes by train. From my local knowledge, I suggest that that is based on the timings working out well.
The hon. Member for Scunthorpe (Nic Dakin) spoke about the police becoming taxi drivers. There is a relatively busy custody suite at Torquay police station. At the moment, there is a bus to the court in the morning and if someone is arrested and detained to be put before the courts, they can quickly be taken a couple of minutes down the road. If the proposal goes ahead, the police will have to become a taxi service between Torquay and Plymouth so that the same people can be arraigned, given the lack of custody facilities at Newton Abbot. I am concerned about an additional demand being put on the police. Torquay magistrates court is also convenient for many of the support services that those who appear before the court benefit from.
I was concerned to read in the consultation that one team based in the court—the TurnAround integrated offender management team—has been given notice to quit its facilities on 31 December. When I heard that, I was grateful for the Minister’s genuine answer to my question last week, which was that no final decisions have been taken about the court. Like other Members, I am grateful for the way that he has engaged with Members who are concerned about this process in a genuine spirit of listening to concerns and alternatives, rather than the line of “a decision has not yet been taken, although it probably has” that we sometimes get in such consultations. I would be concerned if that notice had indicated pre-emption, but I take the Minister at his word, given the enthusiasm that he has shown for listening to our representations.
As the document states, there are issues with the current building, but no issues of dock security have been raised by the police. If Bruce Reynolds was arrested in Torquay today, he would not be arraigned at Torquay magistrates court but taken to a much more secure facility. On whether savings would be made, the consultation states that some enabling work might be required at Newton Abbot magistrates court if custody facilities are required. I suspect that a lot of the £106,000 saving that it is suggested would be made by closing Torquay magistrates court is related to the cost of the custody block. It would therefore disappear if we need to provide custody facilities at Newton Abbot to make up for closing them at Torquay.
If the Government decide that the building is at the end of the line, I hope for another positive indication that alternatives will be considered. Torquay town hall is nearby, and the local legal profession has pointed out that the county court already exists in a different location in Torquay and has more modern facilities. If the magistrates court is disposed of, could that help fund works at the county court to allow for a range of hearings and create a justice centre, rather than the current separation between magistrates court and county court? Many local people would be keen for the Government to consider that the issue lies purely with the building rather than with the service overall.
Torbay is the second largest urban conurbation in Devon. When Totnes magistrates court was closed after a previous consultation, it was argued that cases could go to Torquay. It would therefore be strange for Torquay magistrates court to be closed because cases can now go to Newton Abbot or Plymouth. I hope that the Minister will listen to the consultation and responses, and that a decision will be taken to help keep justice local in Torbay by ensuring that it has a magistrates court in which hearings can take place.
Andrew Percy (Brigg and Goole) (Con)
I congratulate my hon. Friend the Member for Bath (Ben Howlett) on securing this debate, as well as the hon. Member for Stockport (Ann Coffey). I am taken back five years to my first election to this place and the proposed closure of Goole and Selby magistrates courts, which affected my constituency. I was not as successful as the hon. Member for Bath in securing a debate in the main Chamber; I had to settle for Westminster Hall, so in that respect he is already doing a better job for his constituents than I managed to do for mine five years ago. Things have improved since, however.
It is also a pleasure to speak in another debate with my friend the hon. Member for Scunthorpe (Nic Dakin) and the hon. Member for Hartlepool (Mr Wright), who is also my friend. We have been a triumvirate of common sense in three debates this afternoon.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I hope we are going to talk about court closures, rather than patting each other on the backs. It is a great love-in, but I want to hear what the hon. Gentleman is saying about courts.
Andrew Percy
You will know as a Yorkshireman, Mr Deputy Speaker, that you have to take praise where you can get it.
Andrew Percy
Lord no. We can do better than that, Mr Deputy Speaker.
The hon. Member for Scunthorpe, my constituency neighbour, talked about Scunthorpe court. I agree entirely with his comments, so I will not reiterate them all. He shared with the House the fine work of the court and I entirely concur, in particular with regard to the Respect programme. I have seen for myself magistrates and police officers giving up their own time, through the Respect court, to find a way to engage with young people in the system in a different way to try to help them avoid getting a criminal record. It works really well and they deserve praise.
Five years ago, we fought the closure of Goole magistrates court. When it closed, there was no saving grace other than that at least the county of the East Riding of Yorkshire, which I partly represent, had two other courts to replace it: Beverley magistrates court and Bridlington magistrates court. At the time, there was a suggestion that Goole had been chosen over Bridlington because of the private finance initiative contract at Bridlington. There is also a court in Hull, so at least there are three courts to replace that one.
If Scunthorpe magistrates court closes, however, not a single court will remain in the unitary authority of North Lincolnshire. That is a big rural area. It is a real concern to me that people will be expected to travel outside the county of North Lincolnshire to access justice. That cannot be right. For my constituents in particular, moving the court to Grimsby is really not—in any way, shape or form—offering local justice.
I represent the area called the Isle of Axholme, which is a very rural and disconnected part of our area, a considerable distance from Grimsby. Grimsby could be a world away in so many ways. Travelling from communities such as Fockerby or Garthorpe on the north of the Isle of Axholme by public transport to Grimsby is really just laughable. It would be interesting for anybody to actually attempt it—I do not think it has been attempted before. I did say recently to somebody from that area, “Have you ever tried to get to Grimsby?” Their first response was, “Why would I want to make that journey?” I explained all the very good reasons why they might want to get to Grimsby and their second more serious comment was, “Surely that’s not possible.” From the Isle of Axholme, Doncaster is actually a lot closer than Grimsby.
As we explained when we were fighting the closure of Goole magistrates court, from our area it would actually be quicker for people to get to King’s Cross magistrates court on public transport than it would be to get to Grimsby. I do not want to leave the Minister with the idea that transferring all our cases to King’s Cross would be a good idea—it certainly would not. Another concern that applied when we fought the closure of Goole is that if people are forced to use public transport, they could end up being on the same public transport as other parties to a case. That raises safety issues.
The Minister deserves a great deal of praise for the positive way in which he has engaged and communicated with me and other hon. Members on this issue. However, for a local authority such as North Lincolnshire Council not to be able to access a local court, to apply for orders and undertake the cases it needs to in its daily workings, will place a huge burden on it. It cannot be expected to make an 80-mile round trip to Grimsby every time it needs to get a court order. It would be a great loss for a local authority not to have a single court in its locality. I ask the Minister to bear that in mind. North Lincolnshire Council has proactively tried to engage, and has said that it is willing to pay for and accommodate a replacement service in its own building—in the civic centre or elsewhere. It will pay for it. It will cover the running costs. It has been open about that, so important is maintaining a court in our locality.
As I said, I need not go into all the arguments about Scunthorpe. The hon. Member for Scunthorpe put them across a lot better than I ever could. I thank the Minister. He has heard our pleas. I hope and believe this is a genuine consultation. Please consider the rurality of our area and the fact that it is a very, very long way to Grimsby. It is in a different local authority area and for a lot of my constituents it simply would not be an option. It is not nearby. We might as well send the court to Timbuktu for all the connection we have with that area—and please don’t do that either. I will end my comments there.
Andy Slaughter (Hammersmith) (Lab)
I thank the hon. Member for Bath (Ben Howlett) and my hon. Friend the Member for Hartlepool (Mr Wright) for bringing this matter before the House, as well as other Members who have spoken: my hon. Friend the Member for Stockport (Ann Coffey), the hon. Members for High Peak (Andrew Bingham) and for Newbury (Richard Benyon), my hon. Friend the Member for St Helens South and Whiston (Marie Rimmer), the hon. Member for Vale of Clwyd (Dr Davies), my hon. Friend the Member for Scunthorpe (Nic Dakin) and the hon. Members for Torbay (Kevin Foster) and for Brigg and Goole (Andrew Percy).
I will not repeat what hon. Members have said as they have already expressed forensically and eloquently the concerns of their constituents. These debates are remarkable for showing that Members can be consensual, cross-party and precise in identifying problems, and no doubt the Minister will wish to address those raised today, although he might want to pay particular attention to the comments from the hon. Member for High Peak about the consultation being riddled with errors, slapdash and lazy. I know that the Minister, who has been praised by both sides for his care and concern in these matters, will be concerned to hear that. There is evidence to back it up as well.
It is not only hon. Members today, or indeed other hon. Members, who have raised concerns; the Conservative police and crime commissioner for Suffolk said about the proposals for his county:
“It is completely unacceptable. The people at the Ministry of Justice have got to understand Suffolk is a very big rural area and access to justice should not be the preserve of those who are well-off, privileged or the comfortable. The victims need to be at the centre of this. Not some accountant’s pen stuck in Whitehall. These people need to get in the real world.”
The slightly more circumspect chairman of the Shropshire branch of the Magistrates Association said about the Shropshire courts:
“In recent years five small courthouses have been closed in Shropshire market towns. Since these closures took place, the two remaining magistrates’ courts – one in Shrewsbury, one in Telford – have continued to provide an effective service for the whole county. The Association will wish to be convinced that that can continue with only a single magistrates’ court.”
I must bear in mind the spirit in which the hon. Member for Bath introduced this debate. His speech was all the better for being balanced and noting that closures and reorganisation should not always be resisted. I endorse that. Particularly at a time when public money is short, if savings can be made, they should be made, and of course we should look at usage and rationalise where there is chronic under-usage. There are inefficiencies and improvements to be made in the system, and no doubt the Minister will talk about the improvements that he wishes to see or which are happening in digital services. I would add one caveat, however: although technology improves all the time, too great a reliance on it can often lead to more delay than it cures.
We have some historic court buildings, and a certain nostalgia is felt towards many of the older sites and other buildings—going beyond the 19th century to the 18th century—but they are not always fit for purpose in the modern age and some have become obsolete. However, I do not wish to throw the baby out with the bathwater. My right hon. Friend the Member for Tooting (Sadiq Khan), when shadow Lord Chancellor in the run-up to the last election, talked, as some Members have today, about ways of rationalising the court estate. We have heard about pop-up courts, about using public buildings for judicial and non-judicial functions combined and even about using community buildings, but there is an important caveat: as hon. Members have said, we have to preserve and enhance local justice within communities through the constructive use of courts.
I fear, however, that the Government’s approach tends, sadly, towards mass culls of courts. I have been in this job for more than five years now, and I clearly remember the last major cull in 2010. Then there was a proposal to close 103 magistrates courts and 54 county courts. After the consultation, the closure of 93 magistrates courts and 49 county courts went ahead—in other words, about 90% of the original target. Members should perhaps not get their hopes up too much, but there could at least be a window of opportunity.
If the majority of the proposed closures go ahead, 40% of this country’s courts will close over not much more than five years. That suggests to me that this is more about making savings than about balancing decisions with service. The best way to illustrate that point is to look at the issue of travel times, with which some Members have dealt. I note in passing that during the last closure programme five years ago, Ministers were referring to public transport travel times, whereas now they refer principally to travel times by car. However, many court users will not have access to a car and will be entirely reliant on public transport.
Let me provide, with the help of the Law Society, one or two illustrations of what that will mean in respect of public transport times. I looked at the Courts Service in Wales. Holyhead magistrates court is due to close, and work will be transferred to Caernarfon criminal justice centre, but no public transport users will be able to reach it within an hour. It is the same with Dolgellau magistrates court, as users will be sent to Caernarfon criminal justice centre and none will be able to get there within an hour. Users of the Carmarthen civil, family, tribunal and probate hearing centre will move to a variety of courts, but even so, only 7% will be able to reach their new court within 60 minutes. I do not think that that is satisfactory. Another example, which several Members have mentioned, is that according to the Law Society and the Government’s own figures, closing Scunthorpe magistrates, county and family court would mean that not one user could reach the new court within one hour by public transport. That is not good enough.
What the Government should have done is carry out a pre-consultation to allow a much better-informed document to be produced. Should that sound overly bureaucratic, it is exactly what the Government are doing with their consultation on fixed fees for medical negligence cases. That proposal is out for consultation at the moment, allowing the Government to publish a document next month, I believe. I regard the proposal as completely misconceived, but at least I can hope for a sensible document to debate. If Members and the local justice system had had an opportunity to give their input, we would not have seen some of the howlers or some of the more far-fetched proposals that are in the report.
Let me exemplify the point by looking at the closure of Hammersmith county court. I do so not as special pleading, but because I have a particular knowledge of it. If Hammersmith county court closes, most users will be told to go to Wandsworth county court. For some of my constituents in the south part of the constituency, that will not be too troublesome, but it will be for those in other parts of it. I note particularly that Lambeth county court is also closing. Lambeth is where I spent most of my life when I was in legal practice. It was and is a very busy court. Southwark and Lambeth local authorities could probably keep it going permanently on the basis of housing cases alone. It is closing, however, and most users are likely to be referred to Wandsworth, so Wandsworth will have to be extended and money will need to be spent on building it up.
Another knock-on effect of the closure is that space will be freed up at Hammersmith county court and if Feltham magistrates court is closed, users will be sent to Hammersmith. My hon. Friend the Member for Feltham and Heston (Seema Malhotra) intervened earlier in the debate, and I know that she has serious concerns about that. Feltham is a poor area and users of that magistrates court will no longer have the local justice to which they are accustomed. I use these cases as an example of what can happen in a built-up urban area, to show that there are many ramifications of these closures that might not always be apparent to a civil servant sitting in Whitehall. I am in no doubt, however, that problems in remote rural areas are in many cases worse.
We know what the negative effects are, or the potential negative effects. For instance, a very good briefing prepared for the debate by the Public and Commercial Services Union raises—not surprisingly—the issue of jobs. I wonder whether the Minister can tell us how many jobs he expects to be lost as a consequence of these reorganisations. The PCS also raises, on behalf of the family court unions, the issue of access to justice, the issue of accessibility, the issue of delay and the issue of additional costs, all of which have been raised by Members today.
However, it also concerns me that the positive effects of the closures, at least in financial terms, are often not realised. As I am sure the Minister knows, I am alluding to the answer that he gave me earlier in the week in relation to the courts that were closed in the previous round, which are still sitting on the Government estate without having been sold. It is costing nearly half a million pounds a year to keep them empty and mothballed. I am thinking especially of the courts at Knutsford and Alton, which account for £9,274 and £9,828 per month respectively. The total cost, currently, of the 13 courts that have been closed and are just sitting there—including the costs of rates, fuel and utilities, facilities management and security, and other property costs—is £478,146 a year. I do not think that that is a particularly good use of public money.
I ask the Minister to look specifically at the points made by the Magistrates Association, which asks him to ensure that there is access for vulnerable people, as well as security for staff and court users, parking facilities for staff and court users, space and resources for various agencies such as the Children and Family Court Advisory and Support Service and the youth offending teams, childcare arrangements, secure wi-fi, and proper provision for upkeep and renovation costs. I think that without those assurances, the position would be even worse.
This is not the only issue that is currently affecting the magistracy and magistrates courts in particular, those being the bulk of the courts that are facing closure. Not unrelated, I suspect, to the decline in the number of courts is the fact that delays are increasing: it currently takes a week longer for cases to be completed than it did four years ago. Moreover, as a consequence of the disastrous court charge, magistrates are resigning every day and every week because they do not feel that they have the discretion and the ability to do their job properly. I know that that issue is to be debated soon in the other place.
In its briefing, the PCS says:
“We are concerned that the justice system is in danger of becoming so divorced from the people who require access to it, that it can no longer be considered to be true justice.”
I suspect that that resonates with a number of Members who have to explain or justify to their constituents the fact that something that has been taken for granted for centuries in this country—local justice which can be seen and heard in local communities—is now fading fast.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
I congratulate my hon. Friend the Member for Bath (Ben Howlett) and, indeed, the hon. Member for Hartlepool (Mr Wright) on securing a very important debate about a very important subject, and also on managing to secure so many speakers on what is—save for the half-hour Adjournment debate that will follow—the last debate before the conference recess.
I am not sure whether congratulations are in order in the case of the hon. Member for Hammersmith (Andy Slaughter). [Interruption.] The hon. Gentleman has just said that he still does not know whether he will continue in his job as a shadow Justice Minister. I wish him well in the decision-making process that will take place at another level, but I hope that he will know once the conference recess is over, and, for his sake, I hope that it is sooner rather than later.
A number of serious points have been raised by Members on both sides, and they have been put forward in an articulate and passionate manner. I pay tribute to all those Members for the way in which they spoke up for their constituents, and I hope to be able to address many of their points. There were several recurring themes, and I shall address each subject, but I shall make reference to individuals when appropriate as well.
There is one point I want to take up at the outset. Several Members talked about errors in the consultation document, and for that I make an apology. To the extent that there are errors, I apologise. I want to make it clear that this is a three-month consultation, and some colleagues have already written to me. Others should please do so, and I will seek to put the record straight wherever possible. This is not an excuse—it is inexcusable to have errors when we are making such important decisions—but there have been 91 separate proposals for the 91 courts, and in an age in which we still operate with human beings, I hope that some allowance can be made for human error.
The court reform programme has the full support of the judiciary. It is a programme that seeks to bring the courts and the tribunal service in Britain into the 21st century. We want to create a court system that better serves the public and other users, as well as making better use of the taxpayer’s money, which helps to pay for it. My hon. Friend the Member for Bath and the hon. Member for Hartlepool spoke knowledgably in the debate. My hon. Friend made a balanced speech, as the hon. Member for Hammersmith said. He spoke about Sir Brian Leveson’s proposals. Sir Brian makes a compelling case, and I agree entirely with his proposals. We wish to see them put in place as soon as possible.
For the record, I am proud to say that the hon. Member for Hartlepool is a friend. He made that point, and I am proud to make it as well. I hope that my saying that will serve to show that while the public might see our disagreements in the Chamber or on their television screens, there is no reason why there cannot be good friendships across the political divide.
The hon. Member for Stockport (Ann Coffey) spoke about the justice areas. I must point out to her that the Ministry of Justice does not get involved in that issue. It is a matter for magistrates, and the consultation to which she referred is really a matter for them and not for me.
My hon. Friend the Member for High Peak (Andrew Bingham) raised a number of points, and I take on board what he said. I will look into the fact that he has not received a reply to his letter. I am concerned about that, and I will ensure that he now gets a prompt reply.
My hon. Friend the Member for Newbury (Richard Benyon), whom I saw yesterday, talked about local issues and local justice, and I will say more about that later.
The hon. Member for St Helens South and Whiston (Marie Rimmer) and I have corresponded, and she has indicated that our correspondence will continue.
My hon. Friend the Member for Vale of Clwyd (Dr Davies) made a short contribution, in which he sought an assurance that this will be a genuine consultation. I can give him that assurance.
The hon. Member for Scunthorpe (Nic Dakin) also spoke in the debate, and it was good to hear again what he had told me less than 24 hours ago, in a meeting room over coffee.
I want to make it absolutely clear to my hon. Friend the Member for Torbay (Kevin Foster) that I am open to other options, and I shall say more about that later.
My hon. Friend the Member for Brigg and Goole (Andrew Percy) also mentioned local justice, a matter to which I shall return.
One of the strongest recurring themes in the debate was access to justice. Of course there will always be cases that need to go to court, and the court buildings will be there for the cases that need to be heard there. In the 21st century, however, we need to look again at the way everything operates, and that of course means looking at the digital and technological age. It is out there, whether we are shopping, doing our banking, renewing our passport or our driving licence, or doing a whole lot of other activities, and there is no reason why the realm of justice should not consider technology as well. That, to be fair, has been acknowledged by Members across the political divide.
We must also recognise that one third of the court estate is used for less than 50% of the time available. We have to consider ways of making better use of the courts so that taxpayers’ money goes that much further.
Crucially, we also need to consider what access to justice means in the 21st century. For many, it means proximity. They believe—in the way people have believed for decades and, indeed, centuries—that there should be a court nearby to which people can go and show their physical presence in a building that we call a court, but the reality is that we have already started a judicial process whereby people deal with cases without going to court.
A substantial number of magistrates court cases are already being dealt with by post, particularly low level traffic offences, speeding, avoiding payment of the TV licence and the like. We propose that they move online, to be dealt with even more efficiently. We have successfully trialled the process, and soon people will not only plead guilty or otherwise online but will be able to pay their fines online from the comfort of their sitting rooms on a Saturday evening. They will be able pick up their phone and plead guilty and pay their fine. They cannot do that now. Access to justice can be from our sitting rooms.
The technology can be used in other ways, too, such as video-conferencing. Colleagues have talked about people travelling to courts. We do not envisage people travelling to courts as often as they do now. With the introduction of video-conferencing, victims, witnesses and others will be able to give evidence from places near to where they live, rather than having to travel to courts. In Wales, for example, a videoconferencing facility in a community centre is available for people to use if they do not wish to go further away to a court.
Going to court is a stressful experience for anyone, particularly victims and witnesses, and especially if they are vulnerable. Rather than go into an austere-looking building with sombre-looking people in a court room, it would be much better for those people to go to a more comfortable room close by that has been adapted for video-conferencing facilities.
Medway magistrates court has been connected to every police station in the county that has a custody suite. If somebody is arrested and kept overnight in a police cell, the police and the defendant do not have to go to court the following day and the video-conferencing facilities do the work that would otherwise have required people to be physically being present in court. We intend to extend the practice in Kent.
Many prisons already have video-conferencing facilities. All here will agree that it is eminently sensible that we do not have the scenario, which we had everywhere until very recently and we still have daily in many prisons, where prisoners are transported from the prisons to the courts, with all the security, travel, costs and so on involved. We are going to have a system that can dispense with the costs, the travel, the hassle and the inconvenience —it will be a lot cheaper.
We already have, albeit not to the extent we would like, a system whereby lawyers do not go to court and hang around for a considerable time before appearing for 10 or 15 minutes before a judge. Both sets of lawyers and a judge can agree a time and have a conference call. The lawyers stay in their offices or their chambers, and the judge stays in his or her office in the courtroom, and in 10 or 15 minutes they resolve the issue, which otherwise would have meant lawyers going to court, with all the time, stress, inconvenience and cost involved. All of that is now dispensed with. Clearly, there will be a reduction in travel times. This system will be speedier and more efficient, and it will certainly be of great assistance to those of a vulnerable disposition.
We have to recognise that the public expectation has changed—I referred to that earlier—particularly among the young. They expect that they should be able to do things online, and that is increasing. We have a duty to recognise how the world is changing and how the new generation is operating. It would be wrong for us in Parliament not to recognise that the systems for which we are responsible should adapt to the way the world is operating.
We must also recognise that the state of some court buildings is not fit for the 21st century. Some are simply not fit for purpose, some are listed and some are not compliant with the provisions of the Equality Act 2010, particularly regarding facilities for disabled people. We have courts that do not have proper facilities for prisoners to arrive and be taken in a secure fashion to a cell or a room. We have courts that do not have proper facilities to keep victims and witnesses separate. The hon. Member for Hartlepool asked what criteria we had used. We may not have used the criteria for some of the questions that he raised, but I hope that by illustrating the inadequacies of some of our courts we will have gone some way towards showing some of the practical considerations we have taken into account, as well as utilisation, of course. I spoke yesterday to a Member who contributed to this debate, along with a magistrate from his constituency. The magistrate, who was lobbying to keep his court, actually referred to some buildings as “Dickensian”.
Let me be very clear: although the current court building is up for consideration for closure, I am very much open to suggestions about other buildings, such as town halls or civic buildings. For example, where a court is utilised at the moment for one, two or three days a week, there is no reason why there cannot be court proceedings in a town hall or civic building for two days a week. Council leaders have approached me saying that they would be open to their council chamber being used as a court. Sadly, in the case of the one particularly strong representation that was made to me there are no nearby courts proposed for closure, but this person asked me to bear him in mind in case circumstances change.
I want to make it clear that, right now, we are paying for buildings seven days a week, 24 hours a day, when they are actually being utilised for a fraction of that time. The modern world says that we should move on and rent premises elsewhere.
Ann Coffey
The Minister is very eloquent about his vision for the justice system of the future. I absolutely agree with every single word he says about 21st century justice and looking at alternatives, but the problem is that I cannot relate that to the consultation document before me. I cannot see how his vision is met within the proposals for the closure of courts in Greater Manchester. What we are seeing is something that is too embedded in court closures, rather than that vision across the county.
Mr Vara
We have set out our arguments in the consultation document to the extent that there are other submissions that can be made. I have made it clear, and I will make it clear again, that Members can write to me. This was not a rushed consultation over a four-week period or anything like that. This was a 12-week consultation. Many Members have written to me, seeking clarifications. I have responded as promptly and as efficiently as I can. The consultation started on 16 July, so I made it absolutely clear to my office that any Member who wanted to see me in the two weeks before the conference recess should be able to do so, and I am happy to say that I have managed to achieve that. Incidentally, the hon. Lady mentioned that she had asked three questions. They have been replied to and published. One of them requires quite a bit of time to get the information, but I have undertaken to write to her. My replies might be in her office, or she might not have got round to seeing them.
There is a vision, but I invite colleagues to write in with other suggestions. I am mindful of the fact that I must give a couple of minutes to my hon. Friend the Member for Bath, who proposed the motion, but in the minute I have left I will talk about technology.
We have already started to spend a budget of some £130 million to ensure that we have a first-rate digitalised system. Furthermore, we have a world class legal system. These reforms will ensure that we maintain it. I have seen many Members, and I look forward to seeing any more who still wish to see me. Some might even want to see me for a second time, and I am happy to do that. I am certainly open to more correspondence.
Ben Howlett
I want to say a huge thank you to the Backbench Business Committee for giving us the opportunity to debate this issue. I thank, too, the hon. Member for Hartlepool (Mr Wright) for helping to sponsor this debate and hon. Members for delaying their departure to their constituencies for at least a couple of hours. I wish to express particular thanks to the hon. Member for Hammersmith (Andy Slaughter). I thank the Under-Secretary of State for Justice, my hon. Friend the Member for North West Cambridgeshire (Mr Vara), for his support over the past few months in addressing some of the concerns of our constituents. He has eloquently described his vision for a 21st century court system. I hope that all Members’ views will be taken into consideration when the Ministry of Justice is making its final decision as per the consultation.
Finally, let me refer to Bath. By the end of the process, the Minister will no doubt be sick and tired of hearing about Bath’s courts. We have a real opportunity to use our facilities there if they are kept for justice and rehabilitation purposes. For far too long, members of the community have been let down by our criminal justice service. I hope that, following this debate, we can use the facilities better to aid them and their rehabilitation back into society and ensure that witnesses, victims and the most vulnerable get the services they need.
Once again, I thank the House for convening for this debate.
Question put and agreed to.
Resolved,
That this House has considered the closure of courts and tribunals services in England and Wales.
Petitions
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Keith Vaz (Leicester East) (Lab)
I would like to present a petition signed by 79 local residents, predominantly in the North Evington area of my constituency. Signatures were collected by volunteers in the local area and I thank Councillors Jean Khote, Luis Fonseca and Abdul Osman for their support. The residents of Leicester East declare that the proposed closure of Barclays bank on Woodhill in North Evington will have an extremely negative impact on elderly residents in the area who use the branch. The petitioners therefore request that the House of Commons urges the Department for Business, Innovation and Skills to meet representatives of Barclays to examine the impact of branch closures on local residents. There will be more signatures and more petitions on this matter, but this is the petition that I will be presenting on behalf of my constituents today.
[Following is the full text of the petition:
The petition of residents of Leicester East,
Declares that local Barclays Bank customers are greatly concerned that their local Barclays Bank branch on Woodhill (Leicester) will be closed in the coming months and further that residents of Woodhill and the surrounding area fear that they will have to travel much further to an alternative Barclays branch in Leicester city which poses serious difficulties for some residents.
The petitioners therefore request that the House of Commons urges the Government to encourage Barclays Bank to reconsider the decision to close the Woodhill Branch in Leicester, as there are no other Barclays branches in the vicinity.
And the Petitioners remain, etc].
[P001546]
Robert Jenrick (Newark) (Con)
I wish to present a petition on behalf of my constituents relating to the urgent need for a school hall to be provided at East Markham primary school near Newark, a highly valued rural school in Nottinghamshire whose overcrowded and unsuitable premises have held back education in that otherwise wonderful part of our great county for too long, signed by 186 parents, grandparents and governors as well as many residents of this community.
The petition states:
The petitioners therefore request that the House of Commons urges the Government to encourage Nottinghamshire County Council to provide a school hall for East Markham Primary School.
[Following is the full text of the petition:
The petition of residents of the Newark constituency,
Declares that East Markham Primary School should have a hall provided by the County Council; further that the petitioners believe that the education of the children at the school is suffering for a variety of reasons including that there is no indoor PE or indoor drama facility, there is overcrowding and that the school has no ability to put on plays, concerts or performances for groups larger than around 30 people; and further that a local petition on this matter was signed by 186 individuals.
The petitioners therefore request that the House of Commons urges the Government to encourage Nottinghamshire County Council to provide a school hall for East Markham Primary School.
And the Petitioners remain, etc.]
[P001547]
Stalking (Protection of Victims)
(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Alex Chalk (Cheltenham) (Con)
I am grateful for the opportunity to lead this debate on stalking and I refer Members to my entry in the Register of Members’ Financial Interests.
May I begin by placing on record my gratitude to my hon. Friend the Member for Gloucester (Richard Graham), who has played an active role in taking up the case? I also thank Gloucestershire CID and the officer in the case of Knight for their assistance to me, but most of all, I would like to thank my constituent, Dr Eleanor Aston. It is her dreadful ordeal as the victim of stalking that was the principal trigger for the debate. She was targeted by a stalker in a way which, as the court heard, caused her “exceptional anxiety and suffering”. She has shown great courage in supporting the debate, and she deserves the gratitude of the whole House.
I will say a little more about the circumstances of her case in a moment, but thought it might be helpful to set out my main point at the beginning. Stalking is a horrible, violating crime that rips relationships apart and shatters lives. My principal point is that the powers to punish offenders and protect the victims of this horrible offence are wholly inadequate, and that inadequacy is particularly blatant when the stalking concerned forms part of a pattern of repeat offending.
So that you know where I am heading, Mr Deputy Speaker, I am calling for two principal things. First, I want an increase in sentencing powers for offences of stalking contrary to section 4(4)(a) of the Protection from Harassment Act 1997 and, secondly, a review of the restrictive rule in section 265 of the Criminal Justice Act 2003, which means that in any case in which a court sentences a defendant for an offence that he commits on licence—not just stalking—the court must order the new sentence to run concurrently with the old one. It sounds arcane, but it is not. The situation leads to injustice and I shall explain why in a moment. The point is that currently the law does not get that difficult balance right. It creates a sentencing straitjacket that restricts the court’s ability to do justice. The judge in the case affecting my constituent thought that that was wrong. I think it is wrong, too.
I am not seeking something that would have dramatic knock-on effects. Civil servants rightly reach for their calculators to work out what the impact of any legislative change would be. But the cases in which there would be a particularly lengthy sentence for stalking, or indeed an extended sentence, are likely to be rare. Equally, the circumstances in which it would be appropriate to impose back-to-back sentences are likely to be infrequent. The simple point is that when the circumstances demand it, courts should have the tools they need to do justice and protect the victim.
I need to set out a little more detail about the case involving my constituent. Dr Aston is a general practitioner, described at Gloucester Crown Court as “successful and popular”, and she practises at a local surgery in Gloucestershire. Raymond Knight, the defendant, became a patient at her surgery in 2007. As is sometimes the case with this type of offending, the harassment began annoyingly but relatively innocuously, with the defendant sending cards and inappropriate messages to the surgery, but it soon became far more serious.
Raymond Knight began attending Dr Aston’s surgery and vandalising her car, and in 2009 he was convicted of harassment, contrary to section 2 of the 1997 Act, and a restraining order was imposed with conditions. It did not work. He continued to stalk her. He attended her surgery over 100 times and vandalised it, posting foul items through the letter box, and he attended her home frequently. He was arrested and multiple photos were found on his camera and computer. In July 2010 he was sentenced to a two-year community order.
Once again, the community order completely failed to work and the stalking continued. I will set out some of the details so that the House understands why I am making these points. The defendant showed up at a party for Dr Aston’s young daughter and slashed her car tyre. He was arrested again following reports of hacking a water pipe and interfering with the gas supply. In May 2013 he was convicted and sentenced to 44 months’ imprisonment for eight breaches of a restraining order and causing criminal damage.
What about the effect on the victim? Dr Aston was advised by the police to change her name and job and move address. It was suggested that she should come off the General Medical Council register. The stalking led to her being off work for many months, and she was later diagnosed with post-traumatic stress disorder.
What happened next? This is where the law goes wrong. The defendant was released on licence in July 2014, the half-way point of his sentence, with a condition to reside at a bail hostel in Weymouth. However, as is not uncommon in offences of this nature, within six months he was offending again. In December 2014 Dr Aston received two packages, one to her home address in Cheltenham and the other to her medical practice in Gloucester. One was threatening and abusive in content. It suggested that the defendant had been watching her and knew her car registration, where her husband worked and where her children went to school. Chillingly, the second package simply read, “Guess who’s back?”
The defendant was arrested the following day and his licence was revoked. In other words, he was required to serve the balance of the original 44-month sentence. On 15 May 2015 he was sentenced for several offences, including stalking and breach of a restraining order. In his sentencing remarks, the judge stated that the defendant had conducted a campaign for six years in which he had sought to “terrorise” the victim. But the law went wrong, because the maximum sentence the judge could impose for the stalking was five years’ imprisonment. Where there is an early guilty plea, the judge is obliged, as in all cases, to deduct a third from the sentence. That means in reality a maximum sentence of around three years and four months. Of course, prisoners serve half their sentence, so the total time to be served in prison is little more than 18 months. We should bear in mind the fact that that is for the most serious examples of stalking.
The judge in this case clearly felt that the sentence was inadequate. He stated:
“I am frustrated that the maximum sentence for harassment is five years. I would, if I could, give you longer.”
In fact, His Honour Judge Tabor QC appears to have done his best to do justice by imposing consecutive sentences for some breaches of the restraining order, but that is somewhat beside the point.
The second problem facing the sentencing judge was that because of the restrictive wording of section 265 of the Criminal Justice Act 2003, he was obliged to order that the new sentence of five years should run concurrently with the period of licence that he was serving on recall. In other words, he was not allowed to order the defendant to serve out the balance of his original sentence before starting his new one. What did the judge make of that? He added:
“I also make it clear that I feel it is wrong that I am not entitled to pass a consecutive sentence on you.”
The effect of all this is clear. In this case, the judge’s hands were tied. He was able neither to punish the offender nor to protect the victim in the way that justice demanded.
So what needs to change? First, the maximum sentence for stalking contrary to section 4A of the Protection from Harassment Act 1997 needs to be increased. If we think about where stalking fits into the hierarchy, that point is well made. The maximum sentence for criminal damage—an offence against property—is 10 years, and the maximum sentence for a single one-off dwelling house burglary is 14 years. It is bordering on the absurd that the maximum penalty for a campaign of stalking over many years that left the victim feeling, in the words of the judge, “terrorised”, is so much less.
Secondly, to protect the victim, stalking should be a specified offence. That would allow the court, in the most serious cases, after a proper, evidence-based assessment of the defendant, and having found him to be “dangerous” within the meaning of the 2003 Act, to impose an extended period of licence. That would require the defendant, on release, to know that he had to obey the law for an extended period, failing which he could be returned to prison. It may be noted that in this case the judge said:
“I have no doubt at all that you are dangerous in the sense that you pose a significant risk to her in future in terms of causing her serious harm.”
Kevin Foster (Torbay) (Con)
My hon. Friend is making some powerful arguments. Does he agree that because the history of the law dates from a time before social media and the internet had exploded as it has now, when there are much greater opportunities to stalk someone and find out the details of their family, the deterrent needs to be stronger than perhaps it was in previous years?
Alex Chalk
My hon. Friend makes an extremely important point. He is absolutely right. I suspect that stalking is as old as the sea, but the opportunities to stalk are much greater now than they have ever been. Indeed, stalking was discussed in this House during the previous Parliament, but then, as now, there was a growing sense that the courts do not have the tools they need to be able to address it.
Let me make it crystal clear that I am not from the brigade that says we should be locking people up and throwing away the key. I am merely suggesting that there needs to be proportionality so that judges can, in appropriate circumstances, ensure that the punishment fits the crime and, just as importantly if not more so, that victims can be protected. Just imagine what it is like when you, as the victim, know that the person who has made your life a misery is due to be released from prison for the most serious type of stalking offence about 18 months after he was sent there.
Let me return to my point about back-to-back sentencing, which might sound arcane, but is critical. At the moment, a defendant may commit an offence of stalking, go to prison, be released at the halfway point, and then, as is not uncommon, do exactly the same again. The judge should be able to say, “Right, you go and complete the balance of your sentence. You were told that you would be released at the halfway point but your sentence has not come to an end. If you commit further offences, you are liable to be recalled on licence to complete your sentence, and then you will have to start a sentence for the new crime that you have committed.” That discretion is not open to the court. The judge is obliged by section 265 of the 2003 Act to make the sentences run concurrently. That is wrong. The courts should not be prevented from imposing a consecutive sentence of imprisonment in those cases, no doubt rare, where it is called for. I repeat that I am not saying that that should happen in every case, or even in most cases. I am simply saying that it should be on the list of options available to the sentencing judge, who views the circumstances in the round.
In the overwhelming majority of cases I believe our courts—by which I mean judges, barristers, solicitors, police officers and court staff—deliver a standard of justice of which we can all be proud. In this case, however, our criminal justice system fell short. My constituent, Dr Aston, was not given the protection she required and it is time to put that right.
The Parliamentary Under-Secretary of State for the Home Department (Karen Bradley)
I congratulate my hon. Friend the Member for Cheltenham (Alex Chalk) on securing the debate and thank him for raising this important issue. He has made some excellent points on behalf of his constituent and I am genuinely and terribly sorry to hear about this case. It emphasises why we must get the first response right, identify stalking behaviour at the earliest opportunity and ensure that the criminal justice system does deliver justice.
First and foremost, stalking is a dangerous and devastating crime. The impact on the victim—physically, psychologically and emotionally—cannot be overstated, as we have seen in Dr Aston’s case. We owe it to the victims of this terrible crime to do everything we can to afford them the protection and support they need. It is, as my hon. Friend has said, a horrible, violating crime. This Government continue to work closely with victims, stalking support services, the police and criminal justice agencies to ensure that we are doing just that.
It may help if I set out the laws that apply to stalking. As Members will be aware, in November 2012 two new offences of stalking were introduced into the Protection from Harassment Act 1997. That was in recognition of the fact that, while stalking could be prosecuted under that Act, there was a gap in the law. Those specific offences bridge that gap in order better to protect victims and to bring perpetrators to justice more effectively. They have made a difference.
The most recent data from the Crown Prosecution Service show that in 2014-15, more than 1,100 prosecutions commenced under the new stalking offences—almost a 50% increase on the previous year. A significant number of those prosecutions were brought under the more serious of the two offences, involving fear of violence and serious alarm or distress. Those figures are encouraging and show that the new legislation is beginning to take effect. However we know, and we have heard today, that too many victims of stalking are not getting justice and that more can be done. As my hon. Friend the Member for Torbay (Kevin Foster) pointed out, the ability to offend online increases the opportunities available to offenders, although I must make it clear that that which is illegal offline is also illegal online.
Of course, legislation alone is not enough to tackle the problem. If the new laws are to be used to best effect, it is vital that front-line police officers and prosecutors are equipped to recognise the patterns of behaviour that lie behind the fixated obsessions of a stalker. Since October 2012, the College of Policing training package on investigating stalking has been completed more than 68,000 times by police staff. More than 1,600 CPS staff have completed training on stalking and the Director of Public Prosecutions has commissioned more work to identify actions to increase stalking prosecutions even further.
The difference between stalking and harassment has always been a challenge, particularly when trying to bring a successful prosecution. The CPS is working with Government and other partners such as Paladin, which runs the national stalking advocacy service, and the Suzy Lamplugh Trust, which runs the national stalking helpline, to identify additional training to enable CPS prosecutors to address the issue.
We also continue to work closely with the College of Policing and the police to ensure that appropriate tools are available to put in place protective measures for victims. In July, I met the national policing lead for stalking and harassment, Assistant Chief Constable Garry Shewan, to discuss options for further work. ACC Shewan is currently undertaking a review of police information notices in the light of recent concerns over their use. He will consider whether PINs should be rebranded to make their purpose in addressing low-level harassment more explicit. A PIN may not be an appropriate measure in stalking cases, and guidance to officers will be refreshed to reflect that point.
The Home Secretary and I are considering further evidence on the measures available to tackle stalking and looking at whether there is more that the Government can or should do. For example, the Government have introduced civil orders to help the police deal with domestic abuse, female genital mutilation, forced marriage and sexual offending. We are actively looking at whether a new stalking and harassment protection order could provide an additional route to early intervention to stop this crime.
Prolonged campaigns of the kind involved in the case raised by my hon. Friend highlight the fact that both the new offences are needed. Stalking must be acknowledged as the fixated, obsessive offending that it is. We now need to focus on the early identification of stalking behaviour so that perpetrators can be stopped before someone has to suffer for so many years. The legislation has provided a springboard to drive such a shift in approach, but consideration of a new protection order is another step in ensuring that we do all we can to stop stalking at the earliest opportunity. A new order may include the option to place restrictions on an offender.
Alex Chalk
The court already has the power to impose restraining orders—in other words, it can order someone not to go to a certain place—but it is in the nature of such offending that offenders ignore court orders however they are badged. Does the Minister recognise that that is an issue for the criminal justice system?
Karen Bradley
My hon. Friend is right. In the case that he has raised, the offender was given a restraining order banning him from 11 counties. However, we need to look at whether we can bring in more civil orders in addition to the criminal justice legislation. Anything we can do to stop offending at the earliest opportunity and prevent it from becoming a prolonged campaign would be positive. The example he has cited really brings home the fact that we need to intervene sooner, including by identifying the signs of such behaviour as soon as possible and deciding whether any measures can be used. I do, however, understand that once an offender has started such a prolonged campaign, there is a difficulty in using civil orders, and that action must then be taken through the criminal justice system. If my hon. Friend will allow me, I will return to his point about the criminal justice system.
I must also say that we cannot look at stalking in isolation from the broader work being done across Government to tackle violence against women and girls and to protect vulnerable people and tackle exploitation in all its forms. Wider work on tackling violence and abuse may help to support an improved response to stalking. For example, the College of Policing has developed an immersive training programme for officers on domestic violence and abuse. That programme is relevant, because nearly half of stalking cases involve a former intimate partner. That was not the case in the example my hon. Friend has cited, but that has been shown by the statistics. Such training will be crucial in helping officers to tackle domestic abuse and implement the new offence of coercive and controlling behaviour, both of which will benefit domestic abuse victims who may experience stalking. By supporting officers to identify patterns of abuse and promoting a culture of victim belief and empathy, the new training packages will improve the police response to a range of safeguarding and public protection issues, including those of victims who are stalked by a casual acquaintance or a complete stranger, as well as those who know their stalker.
My hon. Friend and I have discussed outside the Chamber the specific points that he has made in relation to Dr Aston’s case, including his wish for stalking to be a specified offence in order to increase the level of sentencing, and for section 265 of the 2003 Act to be looked at in relation to consecutive versus concurrent sentencing. I have met my right hon. Friend the Lord Chancellor to discuss those points. He was disturbed by them, and very much wants to meet my hon. Friend to discuss them and to consider what the Government can do to make a practical difference. This goes back to the point that the criminal justice system has to deliver and be seen to deliver justice. Victims such as Dr Aston deserve no less.
I am proud of the progress that we are making in getting to grips with this complex offence, the effects of which can be deep and long-lasting for victims. Today’s debate has been timely in informing us of the impact and what more can be done. Once again I congratulate my hon. Friend, who is a true champion of his constituents. Dr Aston is very lucky to have him as her constituency MP. I know that he will continue to campaign for her and other victims of stalking. As the Minister with responsibility for preventing abuse and exploitation, I am determined to do everything I can, with him, to protect victims and bring perpetrators to justice.
Question put and agreed to.
Welfare Reform and Work Bill (Fifth sitting)
(9 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 5 - Question accordingly agreed to.
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 5 - Question accordingly agreed to.
Kate Green (Stretford and Urmston) (Lab)
I beg to move amendment 77, in clause 4, page 4, line 33, after paragraph (b) insert—
“(ba) children living in low income working households.”
To require the Secretary of State to include data on children living in low income working households in their report on the life chances of children.
The Chair
With this it will be convenient to discuss the following:
Amendment 78, in clause 4, page 4, line 35, leave out “4” and insert “1, 2, 3 and 4”.
To require the Secretary of State to include data on the educational attainment of children at Key Stages 1, 2, 3 and 4 rather than only at Key Stage 4.
Amendment 79, in clause 4, page 4, line 37, leave out “4” and insert “1, 2, 3 and 4”.
To require the Secretary of State to include data on the educational attainment of disadvantaged children at Key Stages 1, 2, 3 and 4 rather than only at Key Stage 4.
Amendment 80, in clause 4, page 4, line 37, after paragraph (d) insert—
“(e) key health indicators for children in England;
(f) key health indicators for disadvantaged children in England.”.
To require the Secretary of State to include key health indicators in their report on the life chances of children.
Amendment 81, in clause 4, page 5, line 3, after paragraph (f) insert—
“(g) low income”.
A consequential amendment to amendment 77.
Amendment 82, in clause 4, page 5, line 3, after paragraph (f) insert—
“(g) key health indicators”.
A consequential amendment to amendment 80.
Kate Green
Good morning, Mr Owen. It is nice to see you in the Chair and to return to the Committee for, I am afraid, my last appearance in what has been a very enjoyable Committee.
Amendment 77 would require the Secretary of State to include, in the reports that the Bill envisages, data on children living in low-income working households as part of the reporting on their life chances. We all know the damage that poverty does to children’s life chances and to their outcomes in the short and longer term. Poverty is correlated with poor health, poor educational outcomes and poor employment outcomes in adulthood. It is extremely damaging not only to the individuals who experience it, but to the whole country. The amendment is an important one in recognition of the high incidence of poverty in working households. Currently, the Bill only requires reporting on households that are out of work. Therefore, it is important to have a report on the impact that poverty could have on the life chances of children growing up in those working families.
The Government are fond of saying that work is the best route out of poverty. I absolutely agree that it should be, but while families in work do face a lower risk of poverty than those out of work, and the more work people can do and the more hours they can supply the lower the risk, two thirds of children growing up in poverty are in working households. The Government refuse to engage with that fact and the Bill, in failing to address it, continues that situation. Indeed, I would say that the Government are making the situation worse.
According to the Institute for Fiscal Studies, the measures we passed in the House on Tuesday on tax credits will take £3.4 billion annually from low-income families by 2020. Between those measures, the measures in the Bill and other measures in the summer Budget, we will see work incentives damaged. We have to be concerned, as a result, about the impact on in-work poverty. The changes that the House passed on Tuesday will come into force in April next year and will lower the level at which working tax credits start to be withdrawn from £6,420 to £3,850. They will also increase the taper rate at which tax credits are withdrawn from 41% to 48%, meaning that, for every £1 earned over the threshold, there will be a 48p reduction in the level of tax credit entitlement. As a consequence of those changes to working tax credit, the level at which child tax credit begins to be taken away is lowered from £16,105 to £12,125.
Although Labour welcomes the increase in the personal tax allowance and the introduction of the so-called national living wage, the Low Incomes Tax Reform Group has stated that any gains from those measures will not negate the impact of those tax credit cuts from April 2016. The IFS recently concluded that families will lose more than £1,000 a year on average from cuts to tax credits, while they will gain between £100 and £200 a year at most from the proposed national living wage. I recognise that some families will benefit from increased free childcare, but many still use informal care and many will still be left with a funding shortfall for childcare, even under the increased and more generous provisions in universal credit and in relation to older children.
The benefits freeze provisions in the Bill, and the provisions of the cap, will apply to both out-of-work and in-work benefits. We will expand on our concerns about those measures later, but we should be concerned about them given their impact on children growing up in working households. We are particularly worried about the freeze in housing benefit. Many working families rely on housing benefit, and the explosion in housing benefit in recent years is in no small measure due to the increased bill for those families. The way in which the Bill will create a disconnect between rents and housing benefit causes us real concern, especially in high-demand areas such as those represented by my hon. Friends the Members for Islington South and Finsbury and for Bermondsey and Old Southwark, where private rents have shown no sign of falling—rather the reverse, I expect. Our concern is shared widely outside the Committee, as we heard from our witnesses in the oral evidence sessions.
I am concerned, too, about the impact of the freeze and the benefits cap on children in working families. Child tax credit and especially child benefit are a platform that help to improve the gains from paid work. Both will be frozen for four years under the Bill. Working families with children will be hit hard, but the impact will be different for different kinds of households. In that respect, it is interesting to look at the recently published research of Donald Hirsch for the Joseph Rowntree Foundation on minimum income standards. I recognise that that is not exactly the same as poverty, or child poverty, but the research gives some interesting and helpful information about how the measures in the Bill and in the summer Budget will impact on family households differently depending on size, structure and family make-up. The figures show that lone parents and large families will be the biggest losers.
A lone parent with one child, working full time on the minimum wage, was typically just short of the minimum income standard in 2010—that lone parent would have reached 97% of the objective minimum income standard through a combination of earnings, tax credits and benefits. By 2020 the shortfall will grow to between a quarter and a third—around 71%, according to the JRF research. That is for lone parents in full-time work, but many lone parents are forced to work part time because of difficulties in finding childcare, so they will benefit less from the planned rise in the national living wage as they will not be able to supply so many hours of work. The position of lone parents has also been worsened by the rising incidence of sanctions, and many families with young children have been hit as a result.
The picture for low-income working families is complex, hit by forces of opposing, but not necessarily oppositely and equally neutralising, effects. Such families require complex policy responses, but the Government’s measures in the Bill and the summer Budget are certainly not complex or subtle, and they do not even show awareness of how the problems compound one another. It is important that we focus on how the measures impact on low-income working families and the children in those families, since we share with the Government the ambition that work should be a route out of poverty for those families and that work should always pay. Today it does not.
Working families and children in those families are suffering hardship and will suffer more hardship. It is disgraceful that the Government have created such a situation. It is notable that some Government Members were deeply concerned about the matter on Tuesday, when we debated the tax credits measures. We cannot undo any of those measures today under the clause that we are debating, but we can shine a spotlight and require a proper report on the effect on working households. That is what amendment 77 seeks to achieve.
Amendment 78 would require the report to include data on the educational attainment of children not only at key stage 4, as currently proposed in the Bill, but at key stages 1, 2 and 3. I hope the Minister will be able to explain the Government’s rationale for looking only at key stage 4. That is when a child is aged 16, which is late in their development—am I right? No doubt someone will intervene to correct me if I am wrong. Perhaps not colleagues from the Scottish National party, because I appreciate that the situation is different in Scotland. The clause would not affect the constituents of the hon. Member for Livingston. In passing, I note that when we debated the Bill on Tuesday, I pointed out that it would present an interesting little case study on English votes for English laws. Here is an example before us.
It is late in a child’s development to look at indicators only at key stage 4. I hope the Minister will be able to explain the rationale for that approach. I had hoped there might be room for some cross-party consensus on the importance of child development at a much younger age.
Emily Thornberry (Islington South and Finsbury) (Lab)
I suppose a cynic might say—I do not know whether this is right—that if there were to be a major change to child poverty, for instance that it got much worse, and we were to measure it by looking at educational attainment at key stage 4, it would give the Government many years’ grace while children adversely impacted by poverty were going through the system. We would not know how bad it was until they were 16, even if we were to assume that educational attainment at key stage 4 were sufficient to measure child poverty.
Kate Green
That is a very depressing thought, but quite possibly a fair one. It will be interesting to hear the Minister’s response. I do not think it is right in any circumstances to wait to measure the impact on children until they are 16. We know that the early years are a crucial developmental period. Action for Children, in written evidence, told us that
“the rapid brain development in the first two years of a child’s life provides the foundations for their future health and wellbeing”
and their development. Development in the early years is strongly associated with positive outcomes in later life.
Development in cognitive ability in the early years is highly predictive of subsequent achievement, with a strong relationship to educational success at school and income at age 30. By school age there are already wide variations in children’s abilities, which widen throughout childhood. The gap in attainment between the poorest children and children from better-off households, already large at age five, grows particularly quickly during the primary school years.
That points to the importance of measuring at key stages 1 and 2. Children from low-income backgrounds achieve poorer development by age five than their more affluent peers. The latest statistics from the Department for Education show that less than half— 45%—of pupils eligible for free school meals achieve a good level of development. Those children are falling behind before they start school, and the position worsens after they start school.
Closing the ability gap at age five enables children to do better later on in school. Those who arrive in the bottom range of ability tend to stay there. More than half—55%— of children in the bottom 20% of attainment at age seven, key stage 1, are still there at age 16, key stage 4. By measuring, reporting and taking action at key stage 1 would be able to tell a much better story when reporting at key stage 4, instead of waiting for the disasters to pile up.
Emily Thornberry
I am listening with care to my hon. Friend’s important speech about this vital subject. She has just touched upon the impact of cold homes on children’s respiratory health. Is it her experience that people come to her surgery who live not only in cold homes, but in damp ones? Damp homes have an effect on the incidence of children’s asthma and a number of skin conditions, particularly when children’s clothes are rotten because they are put in storage against a damp wall, carpets rot, there is insufficient air going through a property and there is overcrowding.
Kate Green
That is absolutely right. Many constituents come to my surgery particularly distressed by damp in their homes. For many parents, it is the visible manifestation of their fears for their children’s health when they live in inadequate housing. In my experience, landlords are often very reluctant—in fact, extremely hostile—to do anything about problems reported to them by low-income families.
Emily Thornberry
Is it my hon. Friend’s experience that landlords—including social landlords—will go in, wash the walls that are black and tell the family that they do not have their windows open sufficiently, and when the blackness comes back the family are told that it is somehow or other their fault? Does she have the same experience as me with house-proud women coming to her surgery, saying, “I wash the walls down once a month and the blackness still comes back. I keep the windows open as they tell me to, but we are so overcrowded that this is the reason for the dampness”?
Kate Green
I share exactly the experience in my Manchester constituency that my hon. Friend experiences in her inner London constituency. She, like me, may have parents coming to her saying that they have been told by their landlords that they should not hang up damp washing, but they do not have gardens, so where are they meant to put it to dry? They cannot afford to run tumble driers because the electricity bills would simply be beyond their reach. The cocktail of problems that mothers in poor housing have to cope with on behalf of their families is really quite distressing. I am sure that hon. Members all around the Committee will have had similar cases in their surgeries. There is a real concern about housing quality and its impact on child heath.
Inadequate incomes also compound food poverty, meaning that low-income groups consume less protein, iron, fresh fruits and vegetables, vitamin C, fish, oily fish and folate. Women who are seeking to conceive and pregnant women worry about what will happen to their unborn babies and children as they grow up. Inadequate diets are extremely concerning when we look at children’s health and wellbeing, and are a significant consequence of low household income.
Emily Thornberry
I speak from my own experience when I lived in the east end on the Lansbury estate. The local shops did not have fresh fruit and vegetables because, largely, the people living in the area were poor and could not afford to buy fresh fruit and vegetables, so the shops did not stock them. In the end, the local authority subsidised the shops to produce fresh fruit and vegetables, but they sat on the shelves and rotted.
Kate Green
What is very interesting, as well as distressing, about what my hon. Friend said is that, when we have data, we can begin to think about solutions. We can see that the problem is a lack of access to fruit and vegetables and, perhaps, a lack of confidence among parents about how to cook or use them. Perhaps there is a lack of income or good-quality transport to go to buy better-quality food.
Earlier this week we debated how important it is to have local strategies in relation to children’s poverty and life chances. What we have just heard from my hon. Friend shows how useful those local strategies can be in looking at the data, identifying the problems and creating solutions to address them. In relation to child health and its connection to poverty, having a national report and, indeed, the lower-level local strategies and reports, would be extremely helpful to improving children’s health outcomes.
Children born into poverty suffer an increased risk of mortality in the first year of their lives and in adulthood. They are more likely to be born early and small, with low birth weight, and they face more health problems in later life. Preventing low birth weight should be an absolute priority for public health officials, but efforts to achieve that will be hampered if parents have insufficient income.
If children’s life chances are to be fully considered, it should be recognised that life chances begin in the womb, even before birth.
Kate Green
And certainly not as late as 16, as my hon. Friend suggests.
There is a real correlation between poverty—particularly household debt—and the likelihood of mental disorders, including sleep deprivation, depression and anxiety, among new mothers. The effects of poverty are particularly evident among women. Indeed, I have often said that poverty is a gender issue—that women face much of the pain and hold much of the responsibility for coping with poverty in low-income households. Debt and lack of access to income are therefore particularly damaging for a mother’s health.
That means that women are often the shock absorbers of family poverty, reducing their own consumption to ensure that other family members, and particularly their children, are provided for. Even so, it is not in a child’s interests to have a mother whose health is compromised. Naturally, a mother’s instinct will be to put her child first, but the child obviously also has an interest in having a healthy mother. Household incomes are therefore important in the round.
Maternal depression as a result of poverty is itself a significant risk factor in poorer social and emotional development in children. Children from disadvantaged backgrounds are more likely to start primary school with lower personal, social and emotional development, and they are at significantly increased risk of developing conduct disorders, all of which can lead to difficulties with educational attainment, relationships and mental health throughout their lives.
There has not been much research into the impacts of adding or removing money, but, overall, the correlation between economic pressures and health is a serious concern. Children in low-income families miss out on a whole range of the conditions needed for a good-quality childhood, good psychological and physical wellbeing, and good opportunities and life chances in later life.
Amendment 80 is important in focusing action on the consequences and causes of poverty in terms of health. Monitoring and reporting will also enable the Government to make the most of the substantial investment they make in the nation’s health. It will enable us to make a more effective assessment of the impact of health spending on child development and the impact of parental awareness and education—for example, in relation to diet, breastfeeding or smoking cessation—on children’s health. It will also give us an opportunity to look at and focus local health and wellbeing strategies in the interests of improving child health. That would not cost any money, but it would lead to much clearer accountability. I commend amendment 80 to the Committee.
The other amendments are consequential on the substantive amendments in the group, so I will not speak to them. I am grateful to have had the opportunity to address the Committee on these really important amendments. We all know that the poorest children suffer the worst outcomes, and reporting on their poverty and the individual outcomes they experience is therefore the right way to get a rounded picture of child poverty and life chances, as well as of the causes and consequences involved. It will also help us to take action to introduce the strategies to address the disadvantage that poor children face.
The Minister for Employment (Priti Patel)
Good morning, Mr Owen. I thank the hon. Lady for her thoughtful contribution. She said this would be her last sitting, so I would like to thank her for her previous contributions. [Hon. Members: “Hear, hear!”] During my short tenure in this role, working alongside her on welfare issues, she has been a valued colleague.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
I welcome you to the Chair, Mr Owen. I have a couple of questions for the Minister. She dismisses the statements of the majority of witnesses who gave evidence about the importance of the income measure. What message does she think the Government are sending to those witnesses who made a robust case for ensuring that income was retained within the measurements? The professor from Bristol University made powerful point about the UK’s international standing on this issue.
Will the Minister also address the specific point about only measuring at age 16? If a 16-year-old is the target for the initial measure, they will have spent the majority of their life under a Labour Government.
Priti Patel
The hon. Gentleman’s intervention is timely, because I am about to come on to some of those points.
Income-based poverty measures focus only on the symptoms of child poverty while failing to tackle the root causes. Amendment 77 would take us back to when legislation pushed the Government to get families over an arbitrary income line.
Kate Green
Amendment 77 does not only specify the measuring of income. It mentions “working households”. That is what we are particularly concerned about.
Priti Patel
I recognise that, but I am going to carry on and address some of the points that have been made.
Removing income-related measures and targets and replacing them with new measures on worklessness and educational attainment will incentivise future Governments, as well as this one, to improve children’s life chances. To ensure that we drive the right progress, we should not get distracted by measures that do not tackle the root causes of poverty and should instead focus on measures that do.
Hannah Bardell (Livingston) (SNP)
What would the Minister say to the witness who said that we risk becoming an “international laughing stock” if we remove the targets? He felt that we had led the world, but removing the targets means that we could lag behind.
Priti Patel
No other country in the world has attempted to use statutory targets to legislate away income-related child poverty. The point that I think came out towards the end of the evidence session was that the Department will continue to publish low-income statistics as part of the households below average income—HBAI—figures anyway, so there is no assumption that we are dismissing the matter or undermining the UK’s international credibility, which I think was the point that the hon. Member for Bermondsey and Old Southwark was trying to make.
Kate Green
The clauses and amendments that we are discussing are not just about publishing data; they are about reporting on the impact of what the data show on children’s life chances. I stress again that amendment 77 relates to
“children living in low income working households.”
The crucial word there is “working”.
Priti Patel
Work remains the best route out of poverty. We know that children in workless families are around three times as likely to be in relative low-income as children in families—
Emily Thornberry
The Minister is an intelligent woman and I am sure she knows what we are saying, but let me try just once more. The Government may assert that work is the best way out of poverty and may be the best way for a child to be healthy. They can assert what they want. We are asking for evidence. If a family are working, which could possibly mean two hours a week on a zero-hours contract with the children remaining in poverty, what we, the country and I am sure the Government want—if they want to do something about improving the life chances of the poorest and most marginal children—is to measure that. Let us look at some evidence so that we can have evidence-based policy as opposed to assertions made by the Government.
Priti Patel
Let me just put things into context. It is not a case of Government assertions. We are committed to reporting and have stated our commitment, in relation to earlier clauses, to report annually to the House of Commons. Perhaps the hon. Lady will allow me to get on to some of my other points about education and life chances. There is clearly a duty and obligation to report and my Department and the Government as a whole will do so in relation to various aspects of the matter. Despite the Labour party’s bluster it does not recognise root causes in addressing poverty and it fails to recognise that work remains the best route out of it. Only the Government have a committed strategy to look at life chances to overcome many of the root causes of poverty, which previous Labour Governments completely ignored.
Priti Patel
I will not give way. I am going to make progress. Work remains the best route out of poverty and more people are in work under the present Government. Under the present Government and during the previous Parliament we supported people who were long-term unemployed and far removed from the labour market, and helped them to get into work. Those were predominantly households, families and individuals on low incomes.
There has been progress and we are committed to supporting parents to move into work, increasing their earnings and keeping more of what they earn. Universal credit is one example and our investment in childcare and the future national living wage will all play an important combined role. The new statutory worklessness measures will track the proportion of children in workless and long-term workless households in England. The new statutory measures on educational attainment at the end of key stage 4 will hold the Government to account for their successes in raising the attainment of all pupils in England, and specifically the attainment of those who are disadvantaged.
The importance of early years action has rightly been pointed out, and the Government of course agree about that, which is why every three and four-year old in England and the most disadvantaged 40% of two-year-olds are currently entitled to 570 hours of Government-funded early education a year. We are also committed to extending three and four-year-olds’ entitlement to 30 hours a week. The early years pupil premium has also provided another £50 million in extra funding to early years providers.
Kate Green
We welcome those measures. What is the Government’s problem, therefore, about reporting on their efficacy? It should be a good news story for them.
Priti Patel
The Department for Work and Pensions will, as I said, continue to publish low income statistics as part of the households below average income report, including statistics on children living in low-income households.
Amendments 78 and 79 would expand the statutory measures to include educational attainment for disadvantaged children at key stages 1, 2, 3 and 4. The amendments seem to underline the significance already placed by the Government on education as an indicator of future life chances, but we do not think it necessary to add those additional measures. Good education, as the Committee fully recognises—points have been made to that effect—is the bedrock on which to promote individuals’ future successes and life chances. At the heart of that we are determined to promote social justice, with the commitment that every child, regardless of background, will be extended opportunities allowing them to fulfil their potential. Raising the educational attainment of all children will increase their capacity to shape their own futures, reducing the risk of future unemployment.
Emily Thornberry
The point about measuring only key stage 4, as my hon. Friend the Member for Bermondsey and Old Southwark said, is that the Government will be measuring achievement possibly made under a Labour Government. If there were to be a change of policy that had an adverse impact on children’s educational attainment, the Government would not be measuring it for many years, and any difficulties might therefore not be addressed until it is too late for an entire generation.
Priti Patel
I disagree with the hon. Lady. The Department for Education already publishes a great deal of data on how well pupils are doing by the end of primary school, in addition to how well disadvantaged pupils are doing at school. It is therefore wrong to make the assumption that there are no data and that the assessments come in at the end. Of course, key stage 4 is a vital point in a young person’s education. It represents the culmination of primary and secondary school and provides a consistent point at which to measure attainment across all young people. Successful attainment at key stage 4 underpins future life chances, and pupils who fail to achieve at the end of stage 4 are highly at risk of becoming NEET—not in education, employment or training. Other educational data are published by the Department for Education, so we do not believe that the proposed measure would add sufficient value to warrant inclusion in the life chances measures.
Emily Thornberry
I am sure the Minister understands the essential contradiction in what she is saying. If the Department for Education is publishing data for key stage 4, why does her Department need to publish it? If her Department is publishing data for key stage 4, why not for all the others? Why do we not get everything published all together so that we get a proper picture of any failure that might be about to happen as a result of Government measures? What are the Government afraid of?
Priti Patel
With respect, the hon. Lady misses the point. The data are published already across Government, so that information is in the public domain.
Hannah Bardell
I am interested to know why the Minister talks about a commitment to reporting, but is not willing to support our amendment to have reporting to the devolved Administrations. Does she not realise that she is answerable to the people of Scotland on such matters?
Priti Patel
I have made the point about the reporting mechanisms already, including during this debate. If I may, I will move on to something the hon. Member for Stretford and Urmston touched on with regard to the range of life chances measures including key health indicators for children. In England, we also have key health indicators for disadvantaged children.
Amendment 82 is consequent on amendment 80 and requires the Secretary of State to set out in his report what is meant by “key health indicators”. I agree fully with the importance that the amendments would place on children’s health, but the Committee is aware that the Government have already put in place a well-developed reporting framework—the public health outcomes framework—which supports health improvement and protection at all stages of life, especially in early years. The framework includes a large number of indicators on children and young people’s health and, along with the NHS outcomes framework, sets a clear direction for children’s health that allows anyone to hold the Government to account.
The Department of Health has already commissioned University College London’s Institute of Health Equity to produce health inequalities indicators on a regular basis to complement the framework. Those indicators reflect the recommendations of the Marmot review, and profiles will be published for 150 upper-tier local authorities. Our decision to limit our headline statutory measures to worklessness and educational attainment was deliberate and supported by evidence.
Kate Green
What evidence supports looking only at key stage 4, given the importance of early years?
Priti Patel
I come back to the point that information is already being published. The hon. Lady is welcome to engage with the Department for Education to look at the data and to see how they inform the development of the Bill and the decision that we are taking.
Emily Thornberry
Does not the Minister appreciate that the way in which she is approaching the problem highlights just how much the Department for Work and Pensions is giving up on the idea of showing child poverty? Essentially, she has told us that, if we want to have a look at the impact of child poverty, we are to go to the Department for Education. What is the point of the Department for Work and Pensions in relation to the issue?
Priti Patel
I would look at this on the basis of a whole Government strategy. This is not about Department versus Department, or Departments working in silos. If the hon. Lady listened to, or even looked at, the detail of what the Government are proposing with their life chances strategy, she would recognise very clearly that this is cross-Government work—the Department for Education, the Department of Health and the Department for Work and Pensions—to focus on the collective root causes of poverty, which cannot be looked at in isolation. It is the Government’s duty to publish data across those Departments and make it available to the public.
Our focus on worklessness and educational attainment is supported by our review, published in 2013. The review makes it clear that educational attainment is the biggest single factor in ensuring that poor children do not end up as poor adults. The evidence in that review shows that long-term worklessness, and the resulting low earnings, is a highly significant factor in trapping children in poverty now. Children in workless families are about three times as likely to be in relative low-income as children in families with at least one person in work. Our new approach regarding life chances, focusing on the root causes, will drive this and future Governments to improve children’s life chances. That is best achieved through a tight focus on work and education, as set out in the life chances measures in clause 4. Therefore, I urge hon. Members to withdraw the amendment.
Kate Green
That was a depressing response. The Minister attacked the measure of low income and showed a depressing lack of logic in relation to our arguments in favour of a more rounded reporting of educational attainment at the earlier stages of child development and health. She simply did not in the least—this has been a feature of this Government and their predecessor for every year that they were in power—address poverty in working families.
I accept that the risk of being in poverty is reduced the more parents are able to be in work but, when two thirds of children living below the poverty line do so in a family where somebody is in paid employment, we have to say that the issue of in-work poverty is a serious one. It shows a real paucity of ambition for those families in working poverty that the Minister is so uninterested, not just in reporting on them, but even in addressing the point in this debate. She appears to live in some sort of fantasy land where those families are doing better; in my opening remarks, I pointed to the fact that they are doing worse. I am afraid that, in the light of the Minister’s depressing response, I wish to divide the Committee on amendment 77.
Question put, That the amendment be made.
The Committee proceeded to a Division.
Guy Opperman (Hexham) (Con)
On a point of order, Mr Owen. With respect, I believe that may be a miscount. I think that you meant 10 not 11.
The Chair
I will repeat the figures. The Ayes were three, the Noes 10. The noes still have it.
Neil Coyle
I beg to move amendment 98, in clause 4, page 5, line 10, at end insert—
‘(5A) The Secretary of State must, before the end of the period of 12 months beginning with the day on which this Act is passed, publish and lay before Parliament the first life chances strategy for England.
(5B) Before the end of the period to which the strategy relates, the Secretary of State must review the strategy and publish and lay before Parliament a revised strategy.”
This ensures that the Government must produce a life chances strategy for England.
The amendment is tabled in the name of my hon. Friend the Member for Redcar, who is unable to be here because she is speaking in a debate on steel, which is a massive issue for her. She has kindly provided some speaking notes for me.
The Bill is a disgrace. It seeks to repeal some of the most noble and courageous legislation of recent years—namely, the Child Poverty Act 2010—and the ambition to end child poverty by 2020. It shows a paucity of ambition towards tackling poverty and inequality. It flies in the face of decades of thorough and internationally recognised research into the drivers of child poverty and life chances. It seeks to hide Government failure on child poverty behind narrow, cherry-picked and less relevant reporting obligations. And crucially, to which the amendment speaks, it makes no attempt to set out a route map on how the Government intend to lift the life chances of children in this country.
What is the point in reporting on progress, unless there is a strategy that sets out what the Government will do to make that progress? The amendment would ensure that the Government produce a life-chances strategy for England and publish it before Parliament.
The Committee has received a wealth of evidence from independent experts that explores all the complex drivers of child poverty, built up over decades of professional, rigorous, evidence-based research. While issues such as worklessness and educational attainment, which the Bill measures, are important, there are many complex and inter-linked drivers, the most crucial of which is financial income, which this Government refuse to measure.
We know what the drivers of child poverty are, and we know what steps should be taken to reduce it to give children the best start in life. Under the previous Labour Government, the strategies to tackle child poverty and improve children’s life chances and to ensure that every child mattered and that no one would be disadvantaged by the postcode of where they lived included the introduction of tax credits, which transformed the help available to working individuals and families, the introduction of the national minimum wage and Sure Start centres and the Every Child Matters strategy, which allowed for an holistic examination of what the state could do to combat child poverty.
That is what a strategy on child poverty and life chances would look like from a Government serious about tackling the scourge of poverty and inequality. Would a decent Government designing a strategy for tackling child poverty, or, in this case, improving life chances, include measures such as the pernicious bedroom tax, slashing tax credits for working people, when two thirds of children growing up in poverty live in families where at least one person works, reducing the benefits cap and freezing working-age benefits, the inevitable sanctioning of lone parents struggling to manage bringing up a three-year-old, or cutting Sure Start centres?
We know what works in reducing child poverty and we know what the indicators are to measure it. They include being twice as likely to live in bad housing, with significant effects on physical and mental health and educational achievement. Children in the poorest areas weigh an average of 200 grams less at birth than those born in the most affluent areas. They are more likely to die at birth or infancy, to suffer chronic illness during childhood or have a disability or long-term health condition. Children living in the most deprived areas of England have 19 fewer years of life expectancy than those in the least deprived areas.
Emily Thornberry
Is it my hon. Friend’s experience, as it is mine, that there are parts of the constituency where, on one side of the road, people will live five, six, seven or sometimes 10 years more than those on the other side of the road, because there is a poor estate on one side and richer people right next door who will live 10 years longer?
Neil Coyle
That is absolutely my experience in Bermondsey and Old Southwark. We have a massive contrast in income inequality. People who live in areas along the riverside have a higher life expectancy, and in other areas, particularly the Grange, Rotherhithe and South Bermondsey wards, about a third of children are living in poverty.
Emily Thornberry
If the child begins badly—if they are unhealthy and there are health inequalities when they are young—the chances of their dying earlier are obviously very much higher.
Neil Coyle
Absolutely. That was the point made by my hon. Friend the Member for Redcar, and it is certainly my experience of working on these issues as a councillor and now as the Member of Parliament for Bermondsey and Old Southwark.
Children from poor backgrounds are left behind at all stages of education. Without financial income, parents cannot afford the other things that contribute to life chances: school trips, decent healthy food, or a break or holiday away from home with their family. How can the Government say they are serious about improving life chances when they will stop collecting much of this data and have no evidence-based strategy to demonstrate how they intend to reach their targets?
Although the Secretary of State for Work and Pensions told the BBC’s “Today” programme in 2014 that he would meet the current targets, we know that they will not be met. This does not make the goal of ending child poverty any less achievable than it was. We know from past and international experience that, with the right timeframe and the right political will, we can eradicate child poverty. If the Government were serious, they would not remove the child poverty commitment at all. If they were serious about actually improving children’s life chances, they would not just report on them, but would set out a strategy to show how they intend to improve them. That is the aim of the amendment.
Priti Patel
With the amendment, the hon. Gentleman seeks to create a statutory duty on the Secretary of State to publish and lay before Parliament a life chances strategy for England and to review and revise it. Members of the Committee will recognise that the Government have made a clear commitment to publish an annual report containing data on our headline measures of children in workless households and children’s educational attainment. Those are the measures that will drive the action to make a real difference to children’s lives now and in the future.
In addition, the Government have committed to publishing a life chances strategy, which will reflect a wider set of measures on the root causes of child poverty, such as family breakdown, problems with debt, and drug and alcohol dependency. We have said that we will report on those measures annually. I therefore urge the hon. Gentleman to withdraw the amendment.
Neil Coyle
We have discussed some of these issues this morning. To be accused of bluster is unfortunate and insensitive when the concern is that an intervention at 16 is far too late. It is unclear exactly what the Government intend to do if they discover—shock horror!—that there are children aged 16 who are educationally disadvantaged. I am fortunate, as the Member for Bermondsey and Old Southwark, to have a constituency where schools are outperforming the national standards, but this is still a massive concern for us. Intervening at the age of 16 is far too late.
I think that those in the sector will conclude that the Government, in failing to accept the amendment, are acknowledging that they have something to hide on the issue, but I will not force the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 ordered to stand part of the Bill.
Clause 5
Social Mobility Commission
Kate Green
I beg to move amendment 7, in clause 5, page 5, leave out lines 16 to 27 and insert—
“5 Social Mobility and Child Poverty Commission: additional functions
(1) After Section 8A of the Child Poverty Act 2010 insert—”
To leave the name of the “Social Mobility and Child Poverty Commission” unchanged.
The Chair
With this it will be convenient to discuss amendment 8, in clause 5, page 6, leave out lines 15 and 16.
A consequential amendment to amendment 7 to leave the name of the “Social Mobility and Child Poverty Commission” unchanged.
Kate Green
Amendments 7 and 8 seek to leave the current name of the Social Mobility and Child Poverty Commission unchanged. We are shocked at the Government’s brass neck in the way that they seek to airbrush child poverty off the statute book and, indeed, to measure and report on it.
The Child Poverty Act 2010, which established the Social Mobility and Child Poverty Commission, was passed with cross-party support. I was not in the House at the time. I was not in the House at the time; I was one of the external campaigners who warmly welcomed that the Conservative party, in particular, was taking such an interest and demonstrating such an understanding of the importance of income poverty.
Priti Patel
The amendments seek to preserve the Social Mobility and Child Poverty Commission in its original form by retaining its name and preventing the technical change to the Child Poverty Act 2010. It would retitle the relevant schedule to reflect the commission’s name change.
Clause 5 will reform the Social Mobility and Child Poverty Commission to become the Social Mobility Commission. As part of the Government’s drive to improve prospects for everyone in the country, the reformed commission will ensure independent scrutiny of the process to improve and promote social mobility. The reforms to the commission will ensure a high level of independent scrutiny of progress towards a society where everyone is able to play their full part and realise their potential, regardless of their background.
The reformed commission will look beyond the Government’s action to the important role that wider civic society plays in improving social mobility. That is crucial if we as a Government are to meet our ambitions and targets of full employment, in creating 2 million more jobs, and improving the future prospects of disadvantaged children.
The commission has already demonstrated its ability to drive forward the social mobility agenda. Its fully argued annual reports and groundbreaking research on themes such as social mobility in London schools, and evaluating the non-educational barriers to the elite professions, have helped inform the debate on how to improve social mobility. Our reforms will free the commission from having to track the Government’s progress on the old, flawed child poverty targets.
Priti Patel
I will not give way.
Our reforms will enable the commission to invest all its resources in galvanising effort and improving social mobility. Ultimately, reforming the commission to focus on social mobility will help to ensure that all children can reach their full potential. I urge the hon. Lady to withdraw the amendment.
Kate Green
I have no objection or disagreement with the Minister on the importance of addressing social mobility and looking at the drivers of improved social mobility. She simply must accept that around the world the compelling evidence of the importance of income poverty to all other outcomes is unquestioned. This Government will set their face against both that international evidence and their own understanding in 2010.
Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
Under the Bill, the Social Mobility and Child Poverty Commission will be renamed the Social Mobility Commission, with a much narrower remit. It will report on progress made towards improving social mobility in the UK, as well as in England.
The Bill is designed to have a limited impact on the current duties of the devolved Administrations. Scotland will continue to be required to produce a child poverty strategy under a duty in a UK Act. Clearly, we will no longer be statutorily bound to report on the income targets, as they are being removed.
Removing income as a measure of poverty ignores the fact that low income impacts on children’s development and wellbeing, including their development in education and their cognitive ability, behaviour and anxiety levels. Child poverty rates that had previously fallen at the beginning of the century are now at risk of being reversed. The IFS projection is that absolute poverty will stand at 3.5 million children before housing costs and 4.7 million after by 2020.
Although worklessness and lack of access to employment are key drivers of poverty, there is no recognition of in-work poverty. Therefore, income has also to be included to ensure the other measures are meaningful and that there is a tangible benchmark. How can this or any Government tackle child poverty if they do not even recognise it exists? The child poverty measurement framework recognises the importance of measuring poverty in consultation with stakeholders such as the Child Poverty Action Group, the Joseph Rowntree Foundation and Save the Children. It looked at the wide range of factors that can lead to poverty as well as providing an understanding of the impacts of poverty on children and their families.
In addition, the Scottish Government have an ambitious and robust child poverty strategy and host a ministerial advisory group on child poverty, which includes stakeholders from a variety of sectors. On 23 June 2015, Nicola Sturgeon appointed a new, independent adviser on poverty and inequality to help the Scottish Government’s—
The Chair
Order. I am trying to be helpful to the hon. Lady; she is going a bit wide of the amendment. Would she come back to the amendment moved by Kate Green?
Corri Wilson
The Scottish Government will investigate a Scottish approach, building on wide support for the poverty measurement framework. We will support Labour to stop the proposals and ensure that the most vulnerable in society are protected.
Kate Green
I believe that we will have the opportunity to return to the matter on clause 6, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Priti Patel
I beg to move amendment 86, in clause 5, page 5, line 23, leave out from “which” to end of line 24 and insert
“section 5 of the Welfare Reform and Work Act 2015 comes into force.”
This amendment brings the date from which the Social Mobility and Child Poverty Commission is to be called the Social Mobility Commission into line with the commencement of the other changes to the Commission made by clause 5.
The amendment brings the wording of the provision describing the date from which the Social Mobility and Child Poverty Commission will be called the Social Mobility Commission in line with the commencement date of clause 5—that is, two months after Royal Assent. This is a purely technical amendment, designed to ensure that the wording of the Bill is consistent.
Amendment 86 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Kate Green
I beg to move amendment 9, in clause 6, page 6, line 18, leave out subsection 1.
Leave child poverty targets and measures unchanged.
The Chair
With this it will be convenient to discuss the following:
Amendment 97, in clause 6, page 6, line 19, at end insert—
‘(1A) In section 2 (Duty of Secretary of State to ensure that targets in sections 3 to 6 are met) for “2020” substitute “2030”.”
This amends the Child Poverty Act 2010 to set new child poverty targets for 2030 rather than 2020. To be read in conjunction with amendment 9.
Amendment 10, in clause 6, page 7, leave out from beginning of line 25 to end of clause.
Leave child poverty targets and measures unchanged.
Kate Green
Amendment 9 would leave the child poverty targets and measures, currently provided in the Child Poverty Act 2010, unchanged.
With your permission, Mr Owen, I will also speak to amendment 97 on behalf of my hon. Friend the Member for Redcar who is engaged in a debate on the steel industry in the Chamber.
With the exception of Government Members, the importance of targets and measures of income poverty to internationally agreed definitions is unquestioned. Targets, measuring and reporting on them drive action, show progress and enable comparisons to be made: comparisons of trend data over time and other similar economies with similar demographic make-up. The importance of income poverty in that context, as we heard earlier, is linked to a range of poorer outcomes, in education, health and wider societal costs.
As I have said, there is widespread international acceptance that income is key. The Government in their own evidence review last year showed that the most important factor for children’s outcomes was lack of income. That is not just income among families where no one is in work but insufficient income from earnings, too.
Other indicators are important. It is important and right to track educational, health and child wellbeing outcomes, but those are not the same as tracking poverty, as we can see clearly from the written evidence submitted by the End Child Poverty campaign.
In 2013, the Government carried out a wide consultation on whether the income poverty measurement and target regime provided for by the 2010 Act was flawed and should be replaced. Of the many responses received by the Government to that consultation, the overwhelming majority—97%—of the responses said that the measures and the targets were fine and needed no alteration.
If ever evidence of a Government who really do not care about evidence and analysis is needed, it can be found in the proposals in clause 6. One cannot help but feel that it is not evidence but fear that motivates the Government: fear that failure to meet targets, or demonstrate progress towards them, would at the very least embarrass the Government and might even raise concern in the minds of Ministers that there could be a legal threat.
Emily Thornberry
To be fair—I do wish us to be fair to the Government—those who still believe that they are compassionate Conservatives might find it difficult if measures show that they are failing.
Kate Green
That is a very charitable interpretation from my hon. Friend, but she is a charitable lady, so we should not be surprised by her generosity of spirit in Committee today.
I have spent many years looking at this territory and I know that legal challenges have been mounted in the past. I believe firmly that a challenge would not be viable against a well-intentioned, well-meaning Government who had taken purposeful action to address child poverty even if, due to external circumstances, they were not ultimately able to meet the targets they had set, especially if they were ambitious targets in the time hoped.
What we actually have is a Government who are not bothering to try to meet the targets. In the last Parliament, child poverty fell in the first two years of the coalition Government up to 2011-12. That was the result of measures introduced by Alistair Darling, the Chancellor of the Exchequer in the previous Labour Government, that had not yet been affected by the measures that the coalition Government set about introducing. Since 2011-12, while the coalition Government and the present Government have been in charge of family income strategy, child poverty has flatlined. There has been no progress at all and no strategy to improve the position of those poor families.
Neil Coyle
My hon. Friend says that child poverty is flatlining, but for many families, is it not the case that absolute child poverty has risen? That is a particular concern in constituencies such as mine in inner London, and it is linked to in-work poverty.
Kate Green
My hon. Friend is right, and I shall come to that point, because it leads into something that I shall say about the measures and targets that we use.
The summer Budget and the measures in the Bill will push more families and more children into poverty. We have not yet got an analysis of the impact of the Bill or the Budget on child poverty and on the numbers of children growing up poor. It is disappointing that the Government have not laid that impact assessment before the House. We cannot know for sure what assessment, if any, the Government have made of the impact. We do not know whether they bothered to make such an assessment. From our knowledge, expertise and understanding of what drives poverty, we can expect that the impact will be pretty adverse. We can also look to the very helpful Joseph Rowntree Foundation minimum income standards research, to which I referred earlier. It points to a particularly harsh effect on the family incomes of some particularly vulnerable groups, including single-parent families, couples with several children and families who face high housing costs.
Hannah Bardell
I am listening intently to the hon. Lady and I agree with much of what she is saying. Does she agree that the alternative targets proposed are not necessarily related to poverty? Family break-up and drug and alcohol dependency affect families from all income deciles, and problem debt is generally a consequence rather than a cause of poverty.
Kate Green
The hon. Lady makes a very good point about the complexity of disentangling causes from consequences and about the fact that Ministers are giving the public distorting messages about what poverty actually is. Let me make this clear: only 4% of parents experience alcohol or drug addiction, and far from all those parents are parents of poor children. Of course, it is devastating for children who grow up in households where parents are addicted, but it is not the same as poverty and it certainly does not explain the 3.7 million children growing up in poverty in the UK today. As she rightly noted, family break-up affects families across the income spectrum. There will be hon. Members in this room who have experienced it in their own families. We should not conflate the two. While it is true that single parents and their children face a higher risk of poverty, there are measures that could be taken to ameliorate and address that consequence, instead of which the Government will make the position of those families worse.
Neil Coyle
Is there not a challenge in what the Government are attempting to suggest, in that on the one hand the Minister says their policies on tackling poverty are working but on the other suggests that the measurements, accepted by the Prime Minister when they were introduced, are flawed? Does that not expose the Government’s real agenda, which is to mask their lack of effort in tackling the low-wage economy and in-work poverty?
Kate Green
My hon. Friend absolutely makes the case.
As we have heard this morning, it is also ridiculous to think that measuring worklessness alone could be a substitute for measuring poverty, when two thirds of poor children are in households where somebody works. We have repeatedly heard from the Conservative party that the measures are somehow flawed or insufficient, so let us go through carefully what the Child Poverty Act actually requires in relation to measurement and targets.
We know that the Institute for Fiscal Studies expects a rise in relative poverty in this Parliament, but it also expects that it is entirely possible that absolute poverty could fall. So there is a two-way street, if you like, built into the cocktail of measures that we have. We have four measures of poverty in the Child Poverty Act: relative income poverty; absolute poverty; material deprivation; and persistent poverty. That addresses some of the concerns that Government Members might rightly have about tracking only one measure. It is right that when median income is falling, relative income poverty alone is not sufficient to give a good picture of what is happening to our poorest families, although it remains important in tracking the gap that exists.
However, it is also right to recognise that we do not look only at relative income poverty in the Child Poverty Act. We look at absolute poverty, persistent poverty and, crucially, material deprivation. Material deprivation gives a real-life test of poverty and the public can engage with it, get their heads round it and understand it. Also, as I said earlier today, it is a particularly good predictor of health outcomes for children.
Hannah Bardell
Again, what the hon. Lady says chimes strongly with me. Is she aware that, as indicated by the House of Commons Library, the Social Mobility and Child Poverty Commission warned in 2014 that although levels of child poverty are low by historic standards,
“there is no realistic hope of the child poverty targets being met in 2020, given the likely tax and benefit system in place”?
That was in 2014, before any of these changes were made. Is this not a thinly veiled way of covering up the fact that those targets were never going to be reached?
Kate Green
We are certainly not going to reach them under the Government’s current policies; indeed, we will move further away from them. I share the hon. Lady’s scepticism about the Government’s motives, to put it gently. It is really regrettable that, rather than seeking to tackle the problem of poverty, they simply seek to remove it altogether from any understanding of the public policy world.
I hope that the Committee understands that the critique of the Child Poverty Act and its measures and targets as being somehow deficient is completely false. It is also important to understand that the measures the Government proclaim will address poverty are also false, or at least incomplete. As I said earlier this morning, the so-called national living wage will not fully compensate for cuts to benefits and tax credits. What is more, it is highly regrettable that the Government, who are fond of the argument that tax credits are simply a substitute for lower wages, fail to recognise the different functions of pay and tax credits. It is why we have a complex cocktail of policy responses to a set of different drivers of poverty.
Working tax credits compensate for low pay. That means that in households where a family member is low paid, they may derive some benefit from tax credits. Some low-paid people will not do so because they are not in low-paid households; they are the low-paid earner in a household with a high overall household income. So tax credits are a response to low pay, and they help households that suffer low income as a result of low pay to avoid the adverse effects of that low pay.
We should also recognise that the purpose of tax credits for children is not to compensate for low pay or to subsidise employers. It is about sharing among society as a whole the investment that we all have a duty, and indeed an interest, in making in the next generation, who will deliver the future productivity in our economy that will sustain us as we grow old.
We should also remember that while rising pay and an increase in the so-called national living wage are welcome, the national living wage would have to rise very substantially for parents who have no access to any other sources of income—to more than £13 an hour—before their children were lifted out of poverty. Tax credits meet that gap. If it is to be filled entirely by rising wages, that is likely to lead to substantial numbers of job losses, which Ministers would be rightly concerned about.
It is also said that the Child Poverty Act and the measures therein are deficient, because they only look at money. While I strongly contend that money is important, that is also an incorrect analysis of the provisions of the Child Poverty Act. On Second Reading, I particularly sought to draw the House’s attention to that point when I highlighted the fact that written into the Child Poverty Act is a requirement for strategies in relation to child health, children’s education, parental employment, debt—a subject of interest to Government Members—and parenting. Those are all associated with child poverty and provided for in the Child Poverty Act, but they sit alongside the provisions of the Act in relation to measuring relative income poverty and targets for it. They are not the same thing or a substitute.
I am concerned and disappointed by the provisions of clause 6. The clause is cynical and distressing and cheapens the United Kingdom in the eyes of the international community. Most importantly, it means that many of our poor children are at risk of becoming poorer, unobserved. I am frankly shocked at the brazenness of the clause.
As my hon. Friend the Member for Redcar is unable to do so today, with the permission of the Committee I will speak briefly to amendment 97, which was tabled in her name. It addresses the concern that the hon. Member for Livingston pointed out a few moments ago relating to the Government not being on track to meet the 2020 target to eradicate child poverty. That is right, but as Alison Garnham pointed out to us in her oral evidence earlier this week, the Government would not have been completely unable to reach the target in due course. Let us remember that the target, as Ms Garnham pointed out to us, is not to reach zero poverty. A frictional level of poverty will always exist. Families move in and out of poverty, but it might not be sustained if, for example, they quickly return to work. We accept that a reasonable definition of the eradication of child poverty was to reach the best level in Europe—around 10%—which is a realistic target.
The amendment tabled by my hon. Friend the Member for Redcar suggests that the target could be reasonably met by 2030, based on the trajectory that we were on before the measures in the summer Budget and the Bill. The argument for keeping the target but extending it over a realistic period is interesting. We are naturally disappointed that, for another 10 years, too many children will grow up poor, but we would rather that we retained the measure and the target in the statute book at least to ensure that there was a mechanism to drive progress forward.
My hon. Friend’s amendment is good, and seeks to give the Government leeway to deal with the difficult challenges that have existed since the 2008 financial crash and with the fact that pay either fell or was frozen in order to sustain people in employment. We recognise that time must be bought to cope with the consequences of the world financial collapse, but it is not right to give up the ambition for this generation or for future generations of children. We want the target to remain on the statute book, and amendment 97 seeks a realistic end date for that target.
Amendment 10 is similar to amendment 9 and merely addresses the same point elsewhere in the Bill.
As many hon. Members will know, I worked for the Child Poverty Action Group before I was elected to the House in 2010, and of all the measures in the Bill this is probably the one that I feel most pained, outraged and angered by. It is a disgrace. It is a disgrace and a shame that will affect our children, and I hope the Government will think again before it is too late.
Corri Wilson
I am conscious of the time, so I just want to pick out a few reasons why the SNP oppose the changes. The loss of income targets means that a fundamental driver of poverty—how much money a person has in their pocket—is essentially being deprioritised. Focusing on worklessness ignores the 67% of UK children in poverty who live in a household in which one or more adults are working. That is in-work poverty.
Priti Patel
With the amendment, hon. Members seek to preserve the Child Poverty Act 2010 in its original form, including the much discussed income measure and targets, and to extend the target year of the measures from the financial year beginning 1 April 2020 to that beginning 1 April 2030. The Government do not support that position.
First, on amendments 9 and 10, the existing measures and targets in the Child Poverty Act 2010 focus on the symptoms of child poverty while failing to tackle the root causes. We have had an extensive discussion this morning about many of the root causes. As I have described, the fundamental weaknesses with the existing statutory framework, set around the four income-related targets of child poverty, have become all too apparent.
Priti Patel
No, I will not give way.
Removing the flawed income-related measures and targets and replacing them with the new measures of worklessness and educational attainment will drive this Government and future Governments to improve disadvantaged children’s life chances, and it will strengthen our approach by tackling the root causes of child poverty. We do not believe that any number of duties, producing a UK strategy, or placing new demands on local authorities, would be a substitute for a clear commitment to report on the real root causes, which evidence tells us will make the biggest difference to improving the life chances of children and, importantly, transforming their lives. We will report on the life chances measures in this Bill and will be judged on our actions.
On amendment 97, I have described the fundamental weaknesses of the existing statutory measures and targets. It is a framework that incentivises Government action to move people from just below an arbitrary line to just over it, rather than tackling the fundamental issues that affect families, children and their life chances. Extending the target year to financial year 2030-31 will not overcome any of those fundamental weaknesses. Only by removing the flawed income-related targets and replacing them with new measures will we drive this and future Governments to improve and focus on children’s life chances. The Government are focused on doing that; we will focus our resources on achieving those outcomes. It is only right and fair to children and taxpayers that we do so. The Government will not throw good money after bad; it is not fair on our children or our taxpayers, and that is precisely what Opposition Members seek to do.
Priti Patel
No, I will not.
We have discussed the flaws and weaknesses of the measures to some extent. Members suggest that we should extend the deadline on the same flawed measures and force future Governments to spend money on tackling symptoms, not the root causes. I recognise that Members will probably press the amendments, but I urge them not to do so.
Kate Green
I certainly will not withdraw amendment 9. I feel all the more strongly that it must be pressed to a Division in light of the Minister’s response. She is a very intelligent woman, and I have a great deal of respect for her as a Minister. She is extremely able, but she must know that what she is saying is a disgrace that overlooks the myriad evidence before us and—as I think my hon. Friend the Member for Bermondsey and Old Southwark wished to point out—the position of her own party and the Prime Minister in his lecture in 2006. Her party supported what she now calls a “flawed measure” when it supported the Child Poverty Act in 2010.
If the Minister is going to try to tell me that she now thinks that the Government have had some awakening that was not available to them in 2010, I invite her to present the evidence that was not available in 2010 and is available today. She has not done so. The fact is that these targets are internationally recognised and respected, have been over many decades and were endorsed in the Government’s own consultation in 2013. There is no reason why we should abandon them now.
May I raise two points with the right hon. Lady? First, she says there is a temptation to move people from just below an arbitrary line to just above it. That is not what happened under the Labour Government. We raised incomes in every single income decile. We were ambitious for all of our children, and we remain so today. The idea that having targets or duties does not work is also a completely flawed argument. Conservative Members often like to point out that child poverty rose under Labour. Yes, it did, in one or two years, but I would point out that it doubled under the Conservatives between 1979 and 1997, whereas Labour took a million children out of poverty between 1999 and 2010. However, I accept that it rose in one or two years. As soon as we could see that we were veering off progress towards the target, we took action to bring ourselves back on track. That is the importance of targets. Any Government can make mistakes and any Government can be faced with external circumstances that make progress difficult, but without ambition and without targets to measure that ambition, there is no incentive, requirement or likelihood of action being taken to correct progress as soon as it is right and possible to do so.
I feel this matter very personally, as hon. Members may identify from the way I am speaking in the Committee this afternoon. I will press amendment 9 to a vote. I urge hon. and right hon. Members, in the interests of future generations of children, not to scrap the Child Poverty Act.
The Chair
I am grateful to the hon. Lady. It is her last speech in this Committee. I thank her and I am sure we will all miss her.
Question put, That the amendment be made.
Priti Patel
I beg to move amendment 87, in clause 6, page 8, line 23, at end insert—
“(c) in the section heading omit “Regulations and”.”
This amendment removes the words “Regulations and “ from the heading of section 28 of the Child Poverty Act 2010, consequential on the changes of substance to this section made by clause 6(7), which removes references to regulations.
This amendment removes the words “Regulations and” from the title of section 28 of the Child Poverty Act 2010, consequential to the changes made in clause 6(7), which removes the regulation-making powers in the 2010 Act. There is only one order-making power. It is therefore logical to remove the obsolete component of the title, “Regulations and”. This is a technical amendment designed to ensure that the wording and section titles in the 2010 Act are consistent. The change is a matter not of policy but of clarity and consistency.
Amendment 87 agreed to.
Question put, That the clause, as amended, stand part of the Bill.
Welfare Reform and Work Bill (Sixth sitting)
(9 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 5 - Question accordingly agreed to.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 5 - Question accordingly agreed to.
The Committee divided: - Ayes: 9 / Noes: 2 - Question accordingly agreed to.
Hannah Bardell (Livingston) (SNP)
I beg to move amendment 25, in clause 7, page 8, line 32, leave out subsection (2).
This amendment would remove the changes to the benefit cap.
The Chair
With this it will be convenient to discuss the following:
Amendment 26, in clause 7, page 8, line 38, leave out “£23,000 or £15,410” and insert “£26,000 or £18,200”.
This amendment would keep the benefit cap level in London at the same rate as today.
Amendment 27, in clause 7, page 8, line 39, leave out “£20,000 or £13,400” and insert “£26,000 or £18,200”.
This amendment would keep the benefit cap level outside London at the same rate as today.
Amendment 71, in clause 7, page 9, line 6, leave out subsection (3).
To retain the current link between the benefit cap and estimated average earnings.
Amendment 38, in clause 7, page 9, line 44, leave out subsection (5).
This amendment is consequential to amendment 25.
Hannah Bardell
Our amendments are intended to protect people from the Conservative Government’s dangerous blanket cut to benefits. The clause lowers the benefit cap set by the Welfare Reform Act 2012 and applies it to a large number of benefits. Our group of amendments would remove the new cap and ensure that the original cap remained for inside and outside London, recognising the significantly higher cost of living in London. Amendment 25 would remove the subsection that makes changes to the original 2012 Act, while amendments 26 and 27 would change the wording of the Bill so as to leave the benefit cap in the original Act unchanged. Amendment 38 is consequent on the other amendments.
The original benefit cap in the 2012 Act was introduced so that benefit claims could not exceed average earnings. The Government have not introduced such a rationale for the imposition of the new cap—the rates at which it is to be set are entirely arbitrary. Where did the figures come from? We have no information on that and we cannot understand the rationale. We must remember that the rates are not only numbers or bands, or digits on a piece of paper; those numbers represent a lifeline for hundreds of thousands of people in the UK.
The Government are not only blindly pushing ideologically driven cuts but applying the cuts with entirely arbitrary figures that have no justification. The families to whom the cuts will apply must have answers on where the figures have come from. I and, I am sure, many others have already had a stream of constituents coming to our surgeries to complain about cuts and sanctions that seem nonsensical and that they cannot understand.
Labour’s amendment 71 would maintain the link between the benefit cap and estimated average earnings that the original Act intended. Although we oppose the cap generally, we also oppose removing the link with average earnings and introducing an arbitrary cap, so we support the principle of that amendment. I commend it.
The utterly thoughtless way in which the Government are making the benefit changes is staggering. The breadth of social groups that will be affected and the depth to which they will be affected should make Ministers hang their heads in shame. The burden of the cuts will be felt not only across Scottish and other devolved Administrations, although we are doing our best to protect people, but throughout all parts of the United Kingdom.
The National Housing Federation estimated that under the £23,000 cap in London, families face a shortfall between benefit and rent of £27.79 per week; the weekly shortfall under a £20,000 cap ranges from £37.40 in Yorkshire and Humberside to £67.35 in the south-east, based on the current rent agreement. There is also danger that families and individuals living in temporary accommodation who, by virtue of their situation, are already deemed to be vulnerable by a local authority will no longer be able to manage rent payments and will find themselves homeless once again. We are making some of the most vulnerable in society even more vulnerable.
Some disability-related benefits are to be protected, which is welcome, but countless charities and lobbying groups have pointed out that disabled people and their carers sometimes also rely on a variety of other benefits that are being capped by the Bill. It is not enough to protect a few disability-specific benefits from the cap; the Government need to look at the bigger picture. Again, there does not seem to be any joined-up or strategic thinking behind the cap.
The effects of the cap will also be felt by those who have life-threatening or terminal illnesses and who require care. They and their carers will be subject to the cap. How can we possibly justify capping and cutting support for some of the most vulnerable and ill people in our society?. It seems nonsensical and the Scottish National party is absolutely opposed to it. Not only are the cuts detrimental to the ability of those who are sick and disabled to live independently, but the poverty and debt might lead to even more vulnerability.
Emily Thornberry (Islington South and Finsbury) (Lab)
It is a pleasure to serve under your chairmanship, Mr Owen. It is also an enormous pleasure to serve on this Committee, to have heard contributions such as that made by my hon. Friend the Member for Stretford and Urmston, who is departing from her current position on the Front Bench, and to hear the passion with which she gave voice to the beating heart of the Labour party and the outrage at how the Bill is being introduced and its extraordinary justification. If anyone ever questions where the Labour party’s heart is, they just need to hear her speech from before lunch.
I wish to speak to amendment 71. According to the Book of Ecclesiastes:
“What has been will be again, what has been done will be done again; there is nothing new under the sun.”
Those words have survived for thousands of years, but could almost have been written yesterday by an author scratching his head over some of the perverse measures in the Bill. I suspect that historians will one day look back on these debates and cite the benefit cap as a classic example of an increasingly prevalent phenomenon in modern politics: a solution without a problem. After all, we have had a household benefit cap for more than two years.
Kate Green (Stretford and Urmston) (Lab)
I am sorry to interrupt my hon. Friend so early. She may be about to say this, in which case I apologise for stealing her moment. As she says, nothing is new under the sun. We had a benefit cap in the 1960s when it was called the wage stop rule. Women in particular campaigned to end it, which was to the benefit of poor children.
Emily Thornberry
And of course, as we will see, those who will be hit most adversely by the benefit cap are, yet again, women.
Ministers seem to be no closer to pinning down a convincing rationale for the policy today than they were four years ago when the Welfare Reform Act 2012 was debated. To the extent that there has been an underlying theme throughout this period, however, it has been the ever-slippery concept of fairness. As the Secretary of State put it when introducing the Welfare Reform Bill on Second Reading in March 2011:
“The principle is that people who are unemployed and on benefits should not be receiving more than average earnings. It is a matter of fairness, so that those who are working hard and paying their taxes do not feel that someone else will benefit more by not playing a full part in society.”—[Official Report, 9 March 2011; Vol. 524, c. 921-922.]
It is almost quaint, with more than four years’ worth of hindsight, to imagine Government policy being drawn up with such sensitivity to people’s feelings, but the Secretary of State’s words are revealing to the extent that they disclose that the closest thing there was to a principled reason for introducing the cap was the perception of the problem, rather than evidence of one.
As I said, that has come to be a tendency over the past few years. In fact, further evidence appeared just a few days ago when the House was asked to consider the Trade Union Bill, which seems to have been designed to allay tabloid hysteria more than to deal with a real problem. When the issue in question is out-of-work benefits, tabloid hysteria is in abundant supply. Goaded by Ministers, the entire debate has become hijacked by splashy headlines that generated heat rather than light. It is time that the plane of discussion was brought back down to earth.
I said that there is nothing new under the sun when it comes to Tory welfare reform, but that is not strictly true, because lowering the cap requires an innovation that is a novel twist to the idea of fairness. The link between the household cap and estimated average earnings has been severed. That is quite a spanner in the works in terms of the Government’s efforts to prop up one of their primary justifications for the cap. The principle that working taxpayers, when they are fortunate enough not to have to claim benefits in order to survive, must be helped to feel positive about the way that the benefit system operates was always a dubious basis on which to make policy. The fact that that was supposed to have been achieved by setting the cap at the level of earnings makes clause 7(3) even more extraordinary.
Returning to the debates of the 2012 Act, the last Welfare Reform Bill, we might find the comments of the right hon. Member for Epsom and Ewell (Chris Grayling) particularly instructive. He was the poor, unfortunate Minister saddled with the unenviable task of defending the cap and attempting to provide a coherent rationale for it. Fortunately for him, he did have a link with average earnings to fall back on. As he explained:
“Our policy approach, and the Government’s clear intent, is to have a cap that bears reference to average earnings. That is necessary for the credibility of our benefit system. It is the right place to set the cap.”––[Official Report, Welfare Reform Public Bill Committee, 17 May 2011; c. 952.]
He was either right then or he was wrong, but are we not being contradicted by the changes to the law that the Government are intending now? Evidently, the new generation of Ministers take a different view. While there may be many problems that can be laid at Ministers’ feet, a fall in average earnings over the past two years is not, probably, one of them. According to the much-quoted Office for National Statistics, since the level of the cap was first established at £26,000 a year, average earnings have risen, not by much—just 0.1%, in fact—but they have risen. If wages are going up, why is the cap coming down if it is supposed to be, in any way, linked to average earnings? It is a simple question and I am sure that there will be a simple answer.
It has therefore proved necessary for the Government to take a different tack in arguing the increasingly tenuous case for lowering the cap. The alternative explanation that Ministers have increasingly relied on is that the cap is a cost-saving measure on one hand, and that it provides an incentive for people to move into work on the other. We now do not have a link to average incomes; we have the cap as an incentive to get people into work and that it will be a cost-saving measure.
Kate Green
My hon. Friend is making a compelling case. May I ask her to comment on recent evidence that emerged over the summer, which showed that although some people did move into work—Tony Wilson, in his oral evidence, told us a little bit about that—those who did not probably could not? They were either the parents of very young children, were suffering from ill health or there was a disability in the household.
Emily Thornberry
Absolutely right. Indeed, some of the evidence that we heard was that those who did move into work were not in what would be called sustainable work. For example, a single mother of many children who perhaps had been moved into 16 hours a week of work to avoid the cap, would find it impossible to sustain that work during the school holidays when her four children were back at home and she did not have childcare.
People temporarily may have been able to move into work and back out again, but we can see the continued high level of spend on discretionary housing payments to support these people. That in itself is evidence that it is not sustainable to try to push people for whom it is not possible to find work into work. Indeed, the evidence shows—I am sorry to keep harping on about evidence, but I always thought that policy was based on it—that most people who were affected by the benefit cap are not even deemed fit for work.
I will just go back. Having abandoned the idea of linking the cap with earnings, the Ministers are now relying on it being a cost-saving measure and an incentive for people to move into work. Of course, neither of those arguments stack up. I will come back to that. There continues to be a bad smell of unfairness, which will not go away. Just two days ago, the Minister was trotting out the same old argument. She said:
“The cap is a simple matter of fairness”.––[Official Report, Welfare Reform and Work Public Bill Committee, 15 September 2015; c. 144.]
However, she left us guessing, as we still are, exactly what was meant and how this could be fair as the cap seems to have been set at an arbitrary level.
Amendment 71 would remove subsection (3) and maintain the link between the level of the cap and estimated average earnings. If we are to accept the argument of the previous Minister that this connection is necessary for the credibility of the cap—a tall order, frankly—I can see no good reason for removing this requirement from the legislation. If the very concept of the benefit cap is to inspire even a shred of public confidence, it is incumbent on Ministers to explain why they propose to hand themselves extraordinarily broad powers to lower the cap at any time for any reason.
Ministers are essentially asking us to trust them to make decisions on the basis of fairness. Frankly, given their track record and given what the Minister said before the luncheon Adjournment—that she did not want to continue throwing good money after bad—it would be fair, for some people at least, to be somewhat sceptical of their understanding of fairness. To trust them to make these decisions on the basis of fairness is a slippery concept if there ever was one. The definition of the word seems in any event to be the subject of regular revisions apparently based on nothing more than political whimsy and the need of George Osborne to continue to save money.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Does my hon. Friend share the concern that some of the Government agenda is being driven by think-tanks that have done none of their own research on these issues and were unable to provide evidence to back up the assertions that they made in the witness sessions?
May I also say how much I enjoyed my lunch?
Emily Thornberry
Yes, there was an opportunity when we heard evidence. We asked the Government for evidence. We asked them again and again. I have tabled several parliamentary questions and have not had particularly good answers. We have asked questions in the House about their justification and evidence, and we got nowhere. If there is an opportunity, it would be great finally to hear from the think-tanks, which I know the Government are close to—at least some of them—and for them to come forward and give us the evidence on which the policy is based.
I was struck that, while hyperbole was in good measure, we had no evidence. We had people coming in again and again telling us the occasional story. It is as though the policy is based on the one family that was found living in Westminster with the flatscreen television and a Mercedes outside, or whatever the extraordinary example was. That is so removed from the reality of the day-to-day lives of people who are affected today by previous benefit caps and will be affected even more by further benefit caps.
The best way to make policy is on the basis of evidence. For that reason, the Labour party has made it clear what our position now is. We oppose the Tories’ reduction in the benefit cap, so we will therefore be joining the Scottish Nationalists on amendments 25 and 26. We will review Labour policy with regard to the principle of the benefit cap and we will look at evidence. It is right to say that Labour Members who represent London constituencies feel that week after week in our surgeries we see an awful lot of evidence of the adverse effect of the benefit cap and how it does not provide an incentive to get people into work, how it does not save money, and how, more than anything else, it is not fair.
We want in the next few months to put forward a good body of evidence to show, one way or the other, whether a benefit cap is right on any basis. For that reason, although we oppose the lowering of the benefit cap now, we have committed ourselves to looking carefully into the evidence, and we encourage people, including the Government, to come forward and share the evidence with us. If the Government want to give us the evidence on which they are basing this appalling policy—this cruel and nasty policy—I would be very glad to hear it and very glad to read it.
More than political whimsy is needed. If we must have a cap, we should at least make it clear that there should be an objective benchmark by which the level should be determined. I will therefore press amendment 71 to a vote.
The Minister for Employment (Priti Patel)
Good afternoon to everyone. These grouped amendments, in simple terms, are intended to counteract the changes that we are introducing to the benefit cap, as we have already heard. Amendment 25 would prevent the proposed reduction in its rate. Amendments 26 and 27 would prevent our plans to introduce a tiered structure to the cap, which will have different rates for claimants living in Greater London and for claimants living elsewhere. The two amendments would also keep the cap at its current rate with the same split between the level for lone parents and couples and the level for single people without children.
Amendment 71 would prevent us from establishing a new mechanism for reviewing the future level for the cap by maintaining the current link with average earnings. Amendment 38 is a more technical amendment that appears to attempt to direct future parliamentary procedures for introducing regulations for the cap. I will come to that amendment later. The cap was introduced in 2013 at the level of £26,000 a year with a lower rate of £18,200 a year for single people without children. Currently, the cap remains at that level.
The hon. Member for Islington South and Finsbury has mentioned why the Government introduced the cap, but I will remind the Committee that it was introduced because it was felt—and is felt—that it was not fair for out-of-work households to receive considerably more in benefits than many working households earn. That view is shared by many people across the country, with around 70% of the public supporting a cap. The cap is also a key part of the overall plan to reform not only the structure of welfare benefits but attitudes towards welfare benefits, and it was introduced to increase incentives to work and to promote fairness to those on benefits and those in work. At the time, as we recall, we were trying to address the bigger economic issues of the deficit.
Kate Green
I understand the point about work incentives. We heard from Tony Wilson that a small number of people have moved into work, but is it fair to talk about changing the attitudes of people who are too sick to work? They are caught by the benefit cap, too.
Priti Patel
This is part of the wider welfare reforms. The Government are supporting people who are sick and ill. Depending on their health conditions, they are receiving support in welfare.
Emily Thornberry
Taking that a little further, would the Minister be prepared to accept that people on employment and support allowance, who are therefore deemed not fit to work, ought to be exempted from the benefit cap if it is her policy to support those who cannot work?
Priti Patel
The hon. Lady will be perfectly aware that people who are very ill, particularly those in the support group, are supported by the Government through many, many welfare measures. That covers a range of conditions.
Kate Green
I am sorry to interrupt, but the Minister will understand that this is terribly important to people with long-term health problems. Some 80,000 people have been placed in the work-related activity group with a long-term prognosis that they are unlikely to see a change in their condition in at least the next two years. That was the finding of the Select Committee on Work and Pensions report last year. Further, 8,000 people in that group over time and, from the figures announced by the Secretary of State the other day, some 4,500 people in that group now have degenerative conditions, which means that they will never be more well than they currently are.
Priti Patel
Those in receipt of the support component of employment and support allowance are, of course, exempt from the cap. The Secretary of State has recently spoken about ESA and the additional support that can be given to individuals with particular health conditions. The Government are working on that right now, completely outside of this Bill.
Neil Coyle
On the point about disabled people being protected, there is an exemption for the support group—fair enough—but 440,000 disabled people are directly affected by the bedroom tax. The personal independence payment and disability living allowance changes will mean that, according to Government estimates, some 600,000 disabled people will lose out directly. Access to Work is supporting fewer disabled people, and there are fewer working-age disabled people in work as a proportion of the overall number than in 2010. The benefits freeze has directly affected even those in the support group of employment and support allowance, so it is incorrect to keep claiming that disabled people have been protected.
Priti Patel
Actually, we have been very clear about safeguards for vulnerable people. [Interruption.] We have. Perhaps this is just a fault line between our two political parties, as the hon. Member for Islington South and Finsbury has already said, and the Opposition intend to vote against this come what may, but we made it very clear that protecting the vulnerable is one of the key principles of our welfare reforms. [Interruption.] I appreciate that Opposition Members want to comment from a sedentary position, but there seems to be a huge area of difference between our two parties. One of the key principles of our welfare reforms is that we will put in place safeguards to protect the most vulnerable. There will be a range of measures, including discretionary housing payments, but it is wrong just to assume that we are deliberately not looking after vulnerable people when we clearly are.
Emily Thornberry
To get to the nub of the matter, perhaps the Prime Minister put it as well as it could be put at Prime Minister’s questions:
“I say that a family that chooses not to work should not be better off than one that chooses to work.”—[Official Report, 16 September 2015; Vol. 599, c. 1039.]
Is that the essence of the Minister’s position?
Priti Patel
This Government and the previous coalition Government have been clear that many of our welfare reforms include the principle of fairness, to which incentivising work is absolutely crucial. However, this comes back to a number of principles relating to welfare reforms and not just the benefit cap. It is right that the Government do the right thing and seek to support people who are long-term unemployed to help them get closer to the labour market, while, at the same time, supporting those who are unable to work for a variety of conditions, and that is exactly the safety net that the welfare state provides.
Emily Thornberry
The central difficulty facing the Minister is that the vast majority of people who are affected by the benefit cap are not those in families who choose not to work. Those on jobseeker’s allowance who do not take up a reasonable offer get sanctioned already under current legislation. For that reason, I hope that, when we get to the next group and I press amendment 68—I will now call that the “David Cameron” amendment, because it encapsulates David Cameron’s position—all hon. Members will vote for it.
The Chair
Order. That intervention was too long, and if you are referring to the Prime Minister, please do so either by his title or his constituency.
Priti Patel
If I may go back to my comments on the amendment, since the benefit cap was introduced in 2013, more than 16,000 previously capped households have entered work, and capped households are more than 41% more likely to go into work than similar uncapped households.
Hannah Bardell
I hear what the Minister is saying about families moving into work, which is good, but does she not accept that the vast majority are on low-paid zero-hours contracts? As we have already debated, she is not willing to put a definition on decent work or even look into having one.
Priti Patel
Absolutely not. I do not accept that at all. As we saw yesterday with the employment figures, over the last year, employment has increased by 400,000 and 90% of those jobs are full-time jobs.
The Bill reduces the cap, as we are discussing. Again, it comes back to the principles. Reducing the levels of the cap will reinforce a message that work pays. It brings a degree of fairness but supports the principles of work, and it works alongside what the Government are doing to support individuals to get into work as well.
The new tiered levels also recognise that housing constitutes one of the biggest costs for households. In London, housing benefit awards are, on average, £3,000 a year more than elsewhere in the country. Even in the south-east, as the average housing costs are around only half that of London, we believe that it is right for the cap to take into account those differences. We believe that the new tiered level for the cap will go further to achieve our aims of increasing the incentives to work.
The Bill also removes the current link between the level of the cap and average earnings. Back in 2011, the benefit cap was a new concept. At that time, with no benchmark, average earnings provided a basis by which to set the cap in order to achieve its aim, but times have moved on. We have evaluated the impacts of the cap, and the cap has been proven to work, as I mentioned, in terms of supporting people back into work.
Neil Coyle
Will the Minister give some evidence to back up her assertion that it has worked? What were the measures of success? How many people have moved into work? What would success look like for the Government if this measure was to go forward as it is in the Bill?
Priti Patel
I understand that the evaluation has been published, and since its introduction, more than 35,000 households who had previously been capped have moved off the cap. As I have said, the evaluation shows that the cap is working, with households 41% more likely to enter work than similar households who were just below the benefit cap. This is of course about the behavioural effects, but we have to, and should, put it into the context of incentivising work and supporting people to help them get into work, which is clearly part of what the Government are doing through their welfare reform agenda.
Kate Green
This is genuinely a request for clarification. The Minister said a moment ago that 35,000 people—I think she said this—had moved off the cap. Is she saying that those 35,000 people moved into work? Or is she saying that they stopped claiming benefits, or that they moved house? What actually happened to them?
Priti Patel
It is a combination of factors. The most common reason for people moving off the cap is a movement into work. There will be a variety in terms of the nature of work roles, depending on individual circumstances, but it is also a reflection of the fact that they have been supported into work.
Neil Coyle
In my borough of Southwark, initially 500 or so households were meant to be affected, with a large number of them in Peckham. The local authority intervened to support some of those families to make decisions. Some people did go to work. I would like to see that figure of 35,000 broken down a bit further, because other people were supported on to benefits to provide the exemption from the cap. There is a mixed picture and I am sure the Minister did not want to lead more people on. However, I also wanted to intervene on the local authority side—
The Chair
Order. We might have a long afternoon in front of us and it will be even longer if interventions are long. I say to you, take the opportunity to speak from the Back Benches before the Minister has responded. I would ask for interventions—
The Chair
No. You have had the opportunity. The Minister is now responding to the debate, and she has been very generous with interventions.
Priti Patel
Thank you, Mr Owen. I heard the hon. Gentleman’s intervention and I know he was touching on local authorities. I will seek clarity on what he was asking and perhaps I will come back to him, if I may, with some details or some further information.
Through clause 8, we are introducing new provisions that require the Secretary of State to take into account the national economic situation and any other matters that they may consider relevant when they review the future level of the cap. The new provisions will allow the cap to be maintained at levels that better support the aims of our welfare reforms, balancing the key aims of strengthening work incentives and promoting fairness between those in work and those in receipt of out-of-work benefits.
That requires a broad assessment of the most significant long-term developments and trends that might affect our economy, which are also important to households up and down the country. Earnings and housing costs are very much a part of that assessment, as are other factors such as inflation, benefit rates, the strength of the labour market and any other matter that may be crucial and relevant at that time. That is why it is important to maintain the new provisions and allow the Secretary of State the ability to consider the context of the cap in a broad and balanced way, without being pinned by any single factor.
Amendment 38 is more of a technical amendment than one that seeks to make any changes to the structure and nature of the cap. It would omit clause 7(5) of the Bill, which omits subsection 97(3) of the Welfare Reform Act 2012. That was the part of the 2012 Act that prescribed the parliamentary procedures under which regulations, made under the benefit cap primary powers, should be subject.
The subsection in question prescribes that the first set of regulations made under section 96 of the 2012 Act should fall under the affirmative parliamentary procedure and so should be subject to debate by each House of Parliament before passing into law. That was the correct thing to do because, as was explained in the debates during the passage of the 2012 Act, the Government’s intention was to provide for a great degree of the structural detail of the cap in secondary legislation. This subsection of the 2012 Act ensured that Parliament would have a full opportunity to debate those detailed plans.
Those debates subsequently took place when the Government introduced the Benefit Cap (Housing Benefit) Regulations 2012, which were debated separately, under the affirmative procedures, in both Houses of Parliament on 6 November 2012. As the undertaking to debate those first regulations has been fulfilled, we considered it opportune to take this chance to remove from the legislation what has now become an obsolete piece of law.
I can assure the Committee that that does not mean that we will take the view that the Secretary of State should not be accountable to Parliament for any future changes to the cap, in particular to its level. Following a review of the cap, if the Secretary of State considers that the level of the cap should be amended, clause 8 provides that they can do so by regulations. It also prescribes that regulations that decrease any of the levels of the cap cannot be made unless they have been debated and approved by each House. Parliament will therefore have a full opportunity to question and debate the rationale for any future reduction in the cap. Increases to the level of the cap will also have to be introduced by regulations, but we believe it is sufficient that they are subject to the negative resolution procedure, and so a debate in the House is not required before an increase can be implemented.
In conclusion, I reiterate that our introduction of the benefit cap has been, first, to support and encourage people to look for work, which is something we will continue to build on. Secondly, introducing a reduced tiered level for the cap will create a greater incentive to work, while ensuring that the impacts of the cap are spread more evenly throughout the country. Thirdly, removing the requirement to base the level of the cap solely on the level of average earnings and replacing it with a broader measure that requires the Secretary of State to take into account the national economic situation will help to ensure that the cap remains at the most appropriate level.
These are important reforms that Members and the public will support. I urge hon. Members to withdraw their amendments.
Hannah Bardell
It is fairly simple. The Bill and the changes to the benefit cap are about taking people to the brink and pushing them over the edge into even greater poverty and, worst of all, pushing people who are severely disabled, sick and vulnerable, not to mention hundreds of thousands of children, into even greater poverty.
Our amendments would mitigate the effects of the Government’s reckless blanket cap to benefits and of the changes in the Government’s austerity measures, which are being imposed on Scottish people who did not even vote for this Government. In Scotland, we are already spending £300 million to mitigate the black hole that Westminster created with the bedroom tax. I wonder how the Minister can justify saying that she is protecting some of the most vulnerable and disabled people when even the severe disablement allowance is itself included in the cap. I can only assume that she will be supporting our amendment 34.
Ultimately, lone parents, women and the most vulnerable will be pushed into even greater poverty, which could lead many into further debt, or vulnerable people into developing mental health issues and problems, spiralling into greater problems and leaving them out of work for longer. Surely those are the very people whom we should be supporting and giving the greatest help to, rather than pushing them further over the edge and putting greater pressure on the third sector and charities. I urge all Members to support our amendments.
The Chair
Order. The hon. Gentleman is a new Member, so I am being generous. Back Benchers have the opportunity to speak before I call the Minister, so in future he should indicate at that point. He may make a small contribution now, before we have the vote.
Neil Coyle
Thank you, Mr Owen. I apologise for getting things in the wrong order. I also apologise to the Minister if my intervention was too long. I am grateful for opportunities to intervene.
The point that I was making was to do with the 35,000 figure mentioned by the Minister. When the benefit cap was approaching, many local authorities across the country rolled out additional support to individuals whom they suspected would be directly affected by the cap. In the borough of Southwark, that included support to identify whether some individuals might qualify for other benefits that would exempt them from the cap. It is therefore not accurate to suggest that 35,000 people moved into work if, for example, someone in a household was moved into the employment support allowance support group or identified as meeting the disability living allowance requirements. The Minister suggested that 35,000 moved into work, but the Government might actually have created a perverse incentive and welfare dependency, which they talked a lot about trying to avoid.
My second point was about local authority resources. It is not free for local government to provide that level of additional support to individuals directly affected. Is the Minister suggesting that there will be more support for local authorities as the measures in the Bill approach implementation to ensure that they can meet the demand of individuals affected to support them to move home, so they may reduce some of their costs, to move into work or to move on to different benefits? Will there be another jump in the level of payments made to organisations such as Citizens Advice by Government in order to meet the jump in demand? For example, in Southwark 40% more people were seeking advice, reassurance and information from Citizens Advice on how to avoid some of the measures proposed by the Government.
Those are some of the concerns that I am trying to get across. I apologise again if I expressed them at the wrong point.
Question put, That the amendment be made.
Emily Thornberry
I beg to move amendment 104, in clause 7, page 8, line 36, at end insert—
“( ) Regulations under this section shall not be made in relation to persons—
(a) responsible for the care of a child aged below 2;
(b) responsible for the care of and in receipt of Carers Allowance in respect of, but not living with, a person in receipt of Disability Living Allowance, Personal Independence Payment or Attendance Allowance;
(c) in temporary accommodation following an incident or incidents of domestic violence.”
To provide that the benefit cap does not apply to benefit claimants who will find it most difficult to enter work.
The Chair
With this it will be convenient to discuss the following:
Amendment 67, in clause 7, page 9, line 5, at end insert—
“(5C) Regulations under this section must provide for an exemption from the benefit cap for persons living in temporary accommodation into which they have been placed by a local authority which has found them to be in priority need (as defined in Part 7 of the House Act 1996 and the Homelessness (Priority Need for Accommodation)(England) Order 2002).”
To provide that the benefit cap will not apply to homeless families living in temporary accommodation after being assessed as having a priority need.
Amendment 68, in clause 7, page 9, line 5, at end insert—
“(5C) Regulations under this section must provide for an exemption from the benefit cap for claimants of Jobseeker’s Allowance, including income-based Jobseeker’s Allowance (as defined in section 1 (4) of the Jobseekers Act 1995) where the claimant has not received a reasonable offer of a job.”
To provide that the benefit cap will not apply to job seekers who have not received a reasonable offer of employment.
Amendment 69, in clause 7, page 9, line 5, at end insert—
“(5C) Regulations under this section must provide an exemption from the benefit cap for persons in receipt of —
(a) carer’s allowance (see section 70 of the Social Security Contributions and Benefits Act 1992),
(b) employment and support allowance, including income-related employment and support allowance (as defined in section 1(7) of the Welfare Reform Act 2007) (see section 1 of the Welfare Reform Act 2007),
(c) incapacity benefit (see section 30A of the Social Security Contributions and Benefits Act 1992),
(d) income support (see section 124 of the Social Security Contributions and Benefits Act 1992),
(e) severe disablement allowance (see section 68 of the Social Security, Contributions and Benefits Act 1992).”
To provide that the benefit cap may not be applied to anyone claiming Carer’s Allowance, Employment and Support Allowance, Incapacity Benefit, Income Support or Severe Disablement Allowance.
Amendment 70, in clause 7, page 9, line 5, at end insert—
“(5C) Regulations under this section must provide for an exemption from the benefit cap for persons in receipt of Universal Credit who are not subject to all work-search requirements as set out in Section 22 of the Welfare Reform Act 2012.”
To provide that the benefit cap may not be applied to anyone claiming Universal Credit who is not subject to work-search requirements.
Amendment 107, in clause 7, page 9, line 5, at end insert—
“(5C) Regulations under this section must provide for an exemption from the benefit cap for persons in employment, as defined by the Office for National Statistics.”
To provide that the benefit cap will not apply to anyone who meets the definition of employment used by the Office for National Statistics, which states that “anyone doing one hour or more a week of paid work is counted in the employment figures”.
Amendment 72, in clause 7, page 9, line 11, leave out paragraphs (b), (e), (h), (i) and (l)
This amendment is consequential to amendment 69.
Emily Thornberry
Now that we have established that fairness is a red herring in the Government’s argument, I should like to save the Minister some time by following the line of argument to which I expect the Government to turn next: the equally spurious claim of delivering fiscal savings. Like other arguments that we have heard over the years, that one simply does not stand up to scrutiny. It was perfectly apparent even before the cap was introduced to anyone who cared to pay attention that the most pronounced effect was to increase the number of people falling into arrears, finding themselves unable to pay their rent and, consequently, to increase the number of people being made homeless and turning up to their local authority for help.
The previous Government made it clear that households made homeless as a result of the cap would not be held responsible for their situation. Making that commitment was the right thing to do. I look forward to hearing Ministers reiterate that assurance today.
Regardless of whether the benefit cap has played a role, local authorities remain legally obliged to rehouse families who are demonstrably homeless, through no fault of their own, who are vulnerable in some way, and who are in priority need of housing. However, given that genuinely affordable housing is in such desperately short supply both in London and throughout the country, local authorities are too often faced with no choice but to place families in temporary accommodation while they wait for a suitable permanent home to become available.
In essence, amendment 104 addresses the situation for a family who are homeless and in need, when the local authority is doing what it has to do under the law to rehouse them, when there is not sufficient social housing for them to be rehoused so they must be rehoused in the private sector, and when the private sector rents are so high as to be on the other side of the cap. If we are really talking about fairness—perhaps we are not any more—and savings, what savings are we making? Is it not right to exempt such a family?
We are not talking about whether or not someone has deliberately refused to take a job. We are talking about a homeless family whom the local authority is obliged to rehouse. In boroughs such as mine—Islington—and increasingly in neighbouring boroughs, there is no private accommodation left where those homeless families can be housed on the other side of the benefit cap. If the benefit cap is brought down further, it will make the situation worse.
A woman who came to my surgery a couple of days ago to tell me about her temporary accommodation. She was put into temporary accommodation when pregnant. It was about to be bulldozed, but it was temporary. It has not been bulldozed. The child is now 16 months old and she is in a bedsit. That is the nature of the housing crisis in inner London. The amendment is, within that context, unexplained.
Families are put into temporary accommodation largely in the private sector. It is well established that temporary accommodation is generally leased by local authorities from the private sector at a premium, which means that a considerable financial burden is placed on councils. Private landlords know that the benefit cap is coming down and that more families will need to be rehoused—the families are desperate and the council is desperate to fulfil its duty. Guess what? The rents go up. That means yet more burden on local authorities.
Neil Coyle
One reason, as my hon. Friend has said, for people potentially being unable to work or to work for significant hours is caring responsibilities. She specifically mentioned carer’s allowance. Is she aware that to qualify for carer’s allowance, people need to be providing a minimum of 35 hours of support a week to a disabled person or other loved one? That is a definition that the Department for Work and Pensions’ own advice suggests is a “substantial” level of support to another individual.
Emily Thornberry
So someone is supposed to give a substantial level of support to another person and yet also be working sufficiently to be exempted from the benefit cap. These are the sort of people who we rely on to keep our society going—frankly, most of them are likely to be women. Those people are carers for those who would otherwise be relying on the state to do it at a much greater cost. Instead recognising the role of such people, they are being penalised under draconian legislation.
Neil Coyle
If carers were to stop providing 35 hours of support or more a week, local authorities would potentially be asked to step in to provide some of that support to an individual. We already know what the Government’s agenda is for local authorities—what is has been for the past five years—but the average cost for care home placement is upwards of £600 a week. There could be a new cost to the Government of getting this policy wrong, particularly for carers.
Emily Thornberry
My hon. Friend puts it very well. If only we had a Government that listened. In fact, the most recent statistical release from the Department included, for the first time, a breakdown of capped households by benefit claimed. By far the largest proportion—49%—were claiming income support. In the vast majority of cases those are single mothers who are unable to work because childcare is neither available nor affordable. It is clear from the evidence that we heard last week that a lack of suitable childcare remains a substantial barrier to lone parents seeking work.
In Islington in my borough the cost of a part-time nursery place is £235 a week—one of the highest in the country and more than 30% higher than the London average. It is not just cost that is the problem here. The jobs that are likely to be available to many of the mothers in my constituency who want to find work are disproportionately likely to be short-notice working, often at unsociable hours—in other words, the times when it is most difficult to find childcare.
The Government’s promise of raising the number of free hours of childcare to 30 hours a week is welcome, but we have been down this road before. During oral evidence we heard concerns to the effect that the shortfall between the reimbursement rate and the actual costs would make it uneconomical for many childcare providers to continue their operations. Neera Sharma stated:
“The Pre-school Learning Alliance has said that, on average, the cost of childcare is £4.53 an hour; the Government contributes, on average, £3.88. When the childcare offer is doubled, nurseries could operate at a loss of £661 per child per year, so there are going to be quite significant issues for providers.”—[Official Report, Welfare Reform and Work Public Bill Committee, 10 September 2015; c. 22, Q32.]
Emily Thornberry
I am so sorry. How can it be consistent with what the Prime Minister said yesterday at Prime Minister’s questions? He said:
“I say that a family that chooses not to work should not be better off than one that chooses to work”?—[Official Report, 16 September 2015; Vol. 599, c. 1039.]
If that is the guiding principle behind the Bill, why is it that 85% of people affected by the cap are not in a position to work, and are recognised as such by the Minister’s very own Department? How is that right? I would really like an answer to that.
We should see this policy for what it is. It is just another form of financial penalty for people who the Government believe, in the absence of any evidence to support such a belief, are out of work through choice and not through simple misfortune. The figures suggest that in total, more than 90% of those currently affected by the benefit cap are out of work through no fault of their own. The Minister said during our debates on Tuesday:
“It is right that everyone who can work should work”.––[Official Report, Welfare Reform and Work Public Bill Committee, 15 September 2015; c. 144.]
Who would disagree with that? No one could disagree with that. That is the guiding principle behind the amendments, and for that reason I will press them.
I turn to amendment 107. I return to the point I touched on earlier about the evidence, or lack of it, to support the Government’s claim that the cap has been a successful tool in moving people into work. Let us probe Ministers’ oft-repeated claim that 41% of people have managed to remove themselves from the cap by finding employment. What the figures actually show is that 41% started making a claim for working tax credit, which is not quite the same thing, given that someone needs to be working for at least 16 hours a week to qualify. The Institute for Fiscal Studies explains:
“Some people may move into work but not work enough hours to be entitled to WTC”.
It goes on to say that others
“might start a WTC claim when they were in work all along, perhaps because claiming this entitlement is a relatively easy way of exempting oneself from the benefit cap.”
It is only “easy” for those who are already working.
What I find striking about the Government’s entire approach of arguing for the cap as a work incentive is their almost total complacency about the quality of work that people are moving into. Of those 41% of people now claiming working tax credit, it would be instructive to know how many of them are in temporary work or seasonal jobs, and how many have moved into work for short periods for that reason, only to fall back under the scope of the cap when work is no longer available.
It would help if we had figures on the number of people who have moved into work but who still have to claim benefits in order to pay for basic necessities, so that we know what the so-called “success” of the benefit cap is. A fact that is all too often left out of any discussion is that the majority of people claiming benefits are in work.
I certainly agree with the Government that it is not at all desirable for the state to be subsidising employers who fail to pay their staff a decent wage. The fault, however, is surely with employers and not the workers themselves. Ministers seem to have become accustomed to thinking that work is an end in itself, regardless of pay, conditions, security or anything else that matters to real people, whether they are in work or looking for it. The Chancellor of the Exchequer and the Secretary of State wrote an extraordinary article in The Sunday Times, in which they stated:
“Helping those confined to the margins of our society by giving them the security and dignity of a job is a one nation government at work”.
Whether work offers security and dignity, however, very much depends on the job in question.
That brings me to amendment 107, which would provide for an exemption from the benefit cap for anyone who meets the definition of employment used by the Office for National Statistics. We have already heard, in relation to the reporting requirements for full employment in clause 1, that there are different ways of defining employment and that many of those bear little resemblance to the traditional concept of a nine-to-five job on a permanent contract, which would pay a family wage. Details of the exact measure of employment that is to be used for the purposes of the reporting requirement have yet to be fleshed out, but Ministers have given no indication that they will depart from the ONS definition, which suits their purposes in inflating the overall numbers.
If, however, someone can be employed under the Bill by working 20 minutes every fortnight and the idea of the benefit cap is to put people into work, why can people not do that? There is a contradiction: on the one hand we talk about 16 hours, but on the other hand we talk about any amount of work being sufficient.
It is strange, therefore, that the benefit cap, which is now more than ever being spun as a means to move people off benefits and into work, should set the bar so high in terms of what “work” means that anyone working for fewer hours than 16 hours a week will fail to meet the standard. Ministers seem perfectly happy with the ONS definition when it suits their purposes, but not when it does not. What is sauce for the goose should be sauce for the gander. If we are to believe Ministers when they say that the benefit cap is intended to move people into work, and that work is an end in itself, it ought not to be so loosely defined. It is wholly inconsistent for Ministers to oppose amendment 107. They simply cannot have it both ways, so I will press amendment 107 to a vote.
I will now move on to amendment 104. We have discussed a number of possible exemptions from the cap, which Ministers have opposed despite the fact that they seem entirely reasonable to me and to so many of the organisations that have sent briefings to the Committee. Amendment 104 takes a different approach, narrowing the number of exemptions to the groups that might be classed as the most acutely vulnerable and perhaps the least able to change their circumstances. The amendment would disapply the cap to single parents responsible for children under the age of two, people with full-time caring responsibilities and victims of domestic violence living in temporary accommodation.
Even in the event that Ministers reject the broader categories of exemption that I have suggested in the earlier amendments, surely amendment 104 will be difficult to vote against. Should people with young children who are living in temporary accommodation after fleeing domestic violence be affected by the cap? In a way, I suppose, the amendment is a form of challenge to the humanity of the Government Members. If welfare reform is meant to protect the most vulnerable, surely the Conservative party should be able to vote for the amendment.
My final point is about amendment 68, the David Cameron amendment—
Emily Thornberry
I am sorry. The Prime Minister amendment encapsulates the argument made by the Prime Minister. If the Bill is really about ensuring that families who have chosen not to work are affected by the benefit cap, surely we could encapsulate that quite simply and exempt jobseekers claiming jobseeker’s allowance who have not had a reasonable offer of employment. In other words, if someone on jobseeker’s allowance is offered a job—if they are fit to work, as defined by the DWP—and they do not accept it, there will be penalties in any event. We are talking only about that group of families, and the Prime Minister seemed only to be talking about that group of families at Prime Minister’s questions, so why do we not confine the Bill simply to that group? Why can we not encapsulate the purpose of the Bill in relation to the benefit cap as suggested in amendment 68—the David Cameron amendment?
Hannah Bardell
I will be brief, as the hon. Lady has put her argument succinctly and extensively. [Interruption.] I do not have a huge amount to add, so I will keep my powder dry, so to speak. The Scottish National party supports the amendments, which would ensure that some of the most extremely vulnerable groups were not affected by the cap.
Frankly, the cap is a disgrace. The amendments acknowledge that those who claim benefits do so for a variety of reasons, from disability to mental health problems, abuse and homelessness, as well as unemployment. The blanket cap shows that the Government have no recognition of the complex psychological factors that can be wrapped up in what is not always a simple benefits claim. The Government are not thinking about the people, events and experiences that lie behind the figures on paper. The amendments would rightly pick up on those who may be hit the hardest, similar to my party’s own amendments, which we will discuss in the next group.
Neil Coyle
Briefly Mr Owen. Thank you for your generosity earlier and for preventing me from being put in the same position again.
The derogatory comments about the succinctness of my hon. Friend the Member for Islington South and Finsbury demonstrate the big difference between the Government and the Opposition. These are incredibly important issues that affect thousands of people, and they go directly to the root of the matter. The Government claim to represent working people, but many thousands of the people affected are in work. The Government are taking away fundamental parts of the support system that helps those on low incomes who are trying to work, move on and do the right thing, to use the Government’s terminology. The Government are also undermining people’s opportunity to live in central London constituencies such as mine.
I want to pre-empt something that I suspect the Minister might say about discretionary housing payments. Rather than just focusing on the few local authorities that pass back, or have passed back, some of their unspent discretionary housing payments, perhaps we could discuss the total spend of councils on discretionary housing payments, including those, such as mine, that spend more than they are provided by central Government.
Priti Patel
The amendments would introduce a new series of exemptions from the benefit cap. Largely, they would provide exemptions for the households that find it most difficult to enter work, for people who may be unable to get a job or for those who are not required to be available for work and to take up employment. I will shortly address why I do not agree with introducing the proposed additional exemptions, but I remind Members that the cap sets out the strong principle that there is a maximum level of out-of-work benefits that the Government will pay to each household. The Government have always accepted that there should be some exemptions from the benefit cap.
I will briefly recap the current exemptions. To incentivise work, the cap does not apply to households in receipt of working tax credits. To recognise the extra costs that disability can bring, households that include a member who is in receipt of attendance allowance, disability living allowance, personal independence payment or the support component of employment and support allowance are exempt. War widows and widowers are also exempt, as I am sure all Members recognise.
Neil Coyle
Has any assessment been made of the impact of the benefit cap and other changes on new applications for the supports just listed by the Minister that provide an exemption from the cap?
Priti Patel
I will have to come back to the hon. Gentleman on that point.
The exemptions best support the cap’s aims of increasing incentives to work and promoting fairness while ensuring that the vulnerable remain supported. The welfare reforms that we have discussed thus far in Committee are about transforming life chances and promoting fairness and opportunity.
Amendment 104 would introduce three new exemptions from the benefit cap. The explanatory statement that accompanied the amendment explains that its purpose is:
“To provide that the benefit cap does not apply to benefit claimants who will find it most difficult to enter work.”
The first exemption that the amendment would introduce is for persons
“responsible for the care of a child aged below 2”.
A blanket description that couples with children are those who find it most difficult to enter work is inappropriate. The vast majority of capped households who have found work include parents who have managed to balance their caring responsibilities with work, as millions of working households already do. By going out to work, parents are helping to improve their children’s life chances and are showing them the importance of a strong work ethic, reinforcing the principle that work is the best way out of poverty.
Turning to lone parents with young children, at whom I think this amendment is most likely addressed, we believe that work is the best route out of poverty for households. Children can have their life chances and opportunities damaged by living in households in which no one has worked for years and in which no one considers work as an option. Lone parents need only enter work at 16 hours a week to become eligible for working tax credits and so become exempt from the cap.
We already provide support to parents for the cost of childcare, which we are extending to help working parents further. The 30 hours of free childcare is just one measure, but there are many others, not least tax-free childcare, which will provide a great deal of support, in particular for families on universal credit, who will be able to claim back 70% of childcare costs. On funding for childcare rates, a Government funding review is currently under way, led by the Department for Education, so more is taking place in this area. Parents who receive help with childcare costs through working tax credits are exempt from the cap and childcare costs paid through UC are excluded from the cap. Since the cap was introduced in April 2013, nearly 8,500 lone parents have moved into work and started claiming working tax credits. In 2014, around 1.25 million lone parents were in employment in the UK.
The second exemption that the amendment would introduce is for people in receipt of carer’s allowance in respect of someone who is in receipt of disability living allowance, personal independence payment or attendance allowance with whom they are not living. We all acknowledge the important role that carers provide, but we do not accept that carers are unable to work. Although seeking work is not a condition for receiving carer’s allowance, many carers are nevertheless able to and combine work with caring responsibilities. Figures from February this year show that around 760,000 working-age claimants were receiving carer’s allowance. Of those, around 75,000 reported that they were doing work at some point while making their claim. It would therefore be inappropriate to introduce an exemption specifically on the grounds that somebody is in receipt of carer’s allowance. However, the vast majority—94%—of households in receipt of carer’s allowance who have a benefit income above the cap level are exempt from the cap, mainly because the person they care for is in the same household and is in receipt of an exempting disability-related benefit.
Emily Thornberry
If so few households are affected and if the justification is fairness—although I am not sure about that—why not allow the exemption? If it would save money, because it relates to so little money, why not exempt such people?
Priti Patel
I will carry on. I may pick up some of the points made later.
The final part of the amendment would exempt those living in temporary accommodation following an incident of domestic abuse. The effects of domestic abuse are awful and traumatic; no one could ever argue to the contrary. That is why we have introduced a series of measures to support those who have been subject to domestic abuse, including easements for prescribed periods of time from any requirements to look for or take work. We have special provisions within the cap to help those who have had to flee their homes and seek sanctuary in refuges.
Before the cap was implemented, we amended the regulations so that any housing support paid for people living in what was then termed exempt accommodation should be excluded from the cap. When concerns were raised that the definition of exempt accommodation was too narrow, we amended regulations to ensure that housing support paid to those living in a refuge, for example, as a consequence of domestic abuse would also be covered by the exclusion.
Amendment 67 would require an exemption for those living in temporary accommodation. We do not agree that the best way to help people in temporary accommodation is merely to exempt them from the benefit cap. We believe that the best way is to support people to overcome the barriers and issues that they might face, including the barriers to work. We cannot see why we would want to exclude all households in temporary accommodation from the positive effects of support to get back to work.
Emily Thornberry
Surely the best and in fact the only way of helping people out of temporary accommodation is to build more housing.
Priti Patel
I support the hon. Lady’s comment. That is exactly what the Government’s policy is, and we are doing so.
Although we recognise that rents in temporary accommodation can be high, local authorities have a duty under homelessness legislation to provide suitable, affordable accommodation where the applicant is deemed to be in priority need. Before the cap was implemented, we amended regulations so that any housing support paid for people living in what was termed exempt accommodation should be excluded from the cap. When concerns were raised that the definition was too narrow, we further amended regulations to ensure that housing support paid to those living in refuges would be covered by the exclusion.
Amendment 69 would exempt those in receipt of carer’s allowance. I have already set out the reasons why we do not think the exemption would be appropriate. The amendment also exempts those on employment and support allowance. As I have said, we have already exempted those on ESA who are in receipt of the support component, recognising that they have particular health conditions and are far removed from the labour market and less likely to be able to increase their income.
As discussed—I think that all Members have commented—the benefit cap is a work incentive. Those in the work-related activity group of employment and support allowance have been assessed and are being supported into work, which we believe is right. More recently, we have announced a funding package of up to £100 million a year in the Budget to provide the right incentives and support to enable those with limited capability but some potential to prepare for work. That relates to those within the work-related activity component of ESA.
We are currently in the latter stages of re-assessing recipients of severe disablement allowance and incapacity benefit who are below pension age to see whether they are entitled to employment support allowance and qualify for the work-related activity group or the support group. Those reforms will ensure that such individuals are supported in their engagement with the labour market, or given whatever support they need. More than 1.4 million of those on incapacity benefits have started the reassessment process since it began, and almost 750,000 of them are being supported to prepare or look for work as a result of the ESA process.
Amendment 72 is consequential on amendment 69, to which I have just spoken. The amendment would omit carer’s allowance, employment and support allowance, incapacity benefit, income support and severe disablement allowance from the list of welfare benefits. I have set out why we do not think that that is appropriate; I return to the principles of the benefit cap.
Amendment 70 relates to exempting those in receipt of universal credit without any work requirements. Before addressing this amendment, I remind Committee members that there is an exemption from the cap for those who are entitled to the universal credit limited capability for work or work-related activity element whose health conditions mean that they are further from the labour market and less able to increase their income through work.
Emily Thornberry
I do not think there is anything else I need to say. I am very disappointed by some of the responses. I will not press amendment 107, but I shall press amendment 104 to a vote.
Question put, That the amendment be made.
Hannah Bardell
I beg to move amendment 28, in clause 7, page 9, line 9, leave out paragraph (a).
This amendment would remove bereavement allowance from the benefit cap.
The Chair
With this, it will be convenient to discuss the following: amendment 29, in clause 7, page 9, line 11, leave out paragraph (b).
This amendment would remove carer’s allowance from the benefit cap.
Amendment 30, in clause 7, page 9, line 13, leave out paragraph (c).
This amendment would remove child benefit from the benefit cap.
Amendment 31, in clause 7, page 9, line 15, leave out paragraph (d).
This amendment would remove child tax credit from the benefit cap.
Amendment 32, in clause 7, page 9, line 21, leave out paragraph (f).
This amendment would remove guardian’s allowance from the benefit cap.
Amendment 76, in clause 7, page 9, line 23, leave out paragraph (g).
This amendment would remove housing benefit from the benefit cap.
Amendment 33, in clause 7, page 9, line 33, leave out paragraph (k).
This amendment would remove maternity allowance from the benefit cap.
Amendment 34, in clause 7, page 9, line 35, leave out paragraph (l).
This amendment would remove severe disablement allowance from the benefit cap.
Amendment 35, in clause 7, page 9, line 38, leave out paragraph (n).
This amendment would remove widow’s pension from the benefit cap.
Amendment 36, in clause 7, page 9, line 40, leave out paragraph (o).
This amendment would remove widowed mother’s allowance from the benefit cap.
Amendment 37, in clause 7, page 9, line 42, leave out paragraph (p).
This amendment would remove widowed parent’s allowance from the benefit cap.
Hannah Bardell
With our amendments in this group, we hope to remove some of the most vulnerable groups that will be included in this benefit cap: people on bereavement allowance; people on carer’s allowance; people on child benefit and child tax credit; people on guardian’s allowance; people on maternity allowance; and people on severe disablement allowance. All those people should be excluded from the cap.
Amendment 28 would remove the bereavement allowance from the cap. Bereavement allowance can be a lifeline for those who suffer after the death of a spouse. As well as helping people to cope with the huge amount of emotional distress that that can cause both before and after death, bereavement allowance helps people to get back on their feet and cope with the potential loss of income caused by their spouse’s death. For the same reason, we have tabled amendments 35, 36 and 37, which would remove benefits from the cap that those who have been widowed are entitled to.
Amendment 29 would remove carer’s allowance from the cap, because it is important that carers are not penalised by the benefit cap. Those who dedicate huge proportions of their day to caring for a loved one, regardless of whether they live with them or not, should not be punished by the Government for their selflessness and dedication.
As Carers UK has pointed out, the Government’s welfare policy is trying to incentivise people into work, but many carers are not in a position to work or take on more work without reducing the care that they provide to loved ones. Increasing financial pressure on carers could have an adverse effect on the people they care for, not to mention the potential psychological burdens, and it would put greater pressure on our local authorities and third sector, which are already under significant pressure due to the cut in the block grant to Scotland. Amendments 30 and 31 would remove child tax benefit and child tax credit from the benefit cap, and amendment 32 would remove the guardian’s allowance from the cap.
Just because the Government have decided to abolish the definition of child poverty does not mean that they have abolished the reality of 3.7 million children in the UK living in relative poverty. That number is projected to rise to 4.7 million by 2012 under current Government policies. Capping those benefits will only push into hardship more children who have no ability to do anything about their circumstances. That would have both short-term and long-term effects for their health, emotional wellbeing and educational achievement. In the case of the guardian’s allowance, a child and a guardian who have already had to cope with the death of a loved one must be protected from the burden of financial hardship falling on them, on top of their loss.
Amendment 33 would remove maternity allowance from the cap to ensure that a woman will not be penalised merely because she has decided to have a child. Amendment 44 would remove the severe disablement allowance from the cap. Although we understand this benefit is undergoing a transition, for those who are still receiving it, it provides extra support for those with particularly severe disabilities. Once again, the effect the cap will have on disabled people claiming benefit will be hugely damaging: not simply because of the inclusion of this benefit in the cap, but the inclusion of many benefits that some disabled people rely on to live life independently.
Emily Thornberry
I would like to talk to amendment 76, but in doing so perhaps offer a critique of the SNP’s amendments. The important thing is that there is a difference between the amendments that have been tabled so far, which would exclude groups, so that if someone is in receipt of a particular benefit, the group would be excluded, but if a particular benefit is to be excluded from the benefit cap, the cap could still hit that group in any event. Let me explain a little better. Take, for example, the bereavement allowance to be excluded from the benefit cap. It would not mean excluding that group because if someone who was bereaved had other benefits that took them on to the other side of the benefit cap, they would still be affected by the cap, despite the bereavement allowance. For my party, it is important to look at the groups as opposed to the benefits. I will throw that into relief in relation to housing benefit.
The housing benefit amendment has been tabled as a probing amendment, but in truth the reason that the cap is even considered is because of the high cost of housing. So if any benefit was to be excluded from the benefit cap, it would be housing. It is housing that causes the so-called trouble. Some people have large families. The Government want to push the benefit gap down even further, but the issue is not even about large families. It can be families that need only two or three bedrooms in some areas, and there will not be a single area in the country that will not be affected by the benefit cap, because of the amount of money that housing costs. So if any benefit were to be excluded, it should be housing benefit, because that is the essence of the costs. If we look at fairness, it really is not the fault of someone who has a larger family who needs to live in a two, three or four-bedroom flat, or someone who lives in a more expensive area. Housing costs could be taken out of the equation when it comes to benefit caps.
The Government are always saying it is not fair for someone on benefits to be receiving more than the average earnings, but of course it is not they who get the money; it is their landlords. It is because the landlords want to be able to accept more money from the state that the rents continue to go up. That is what the amendment highlights. In the end, we are talking about there not being enough affordable housing in this country, either in London or across the country. The benefit caps that have been introduced so far have adversely affected London and large families within London, but the new benefit cap suggested in the Bill of £23,000 or £21,000 will affect families throughout the entire country.
I refer the Committee to the evidence that was given to us by Shelter, I believe. Shelter said that under the new cap a family with four children would be unable to find a home with the number of bedrooms that they need anywhere in England. That is important—nowhere in England without hitting the benefit cap.
The size of the shortfall is also remarkable. The cheapest place to rent the four-bedroom home that the family would need is Bradford, where a home at the lower end of the market costs £123 a week. Even there, a family would face a shortfall of £81 a week. The problem is not only a London one. The way in which the Government are going about introducing the benefit cap and pushing it down and down will affect families throughout the country, including in the constituencies of Conservative Members.
The issue is important. Some people might have been tempted to think that there are Londoners who believe that they should continue to live in London, even though house prices are going up, and that frankly we should leave it to the Russian oligarchs to live in central London and the rest of us ought to move somewhere else. The truth, however, is that there will be nowhere else in the country where a family can live without being affected by the benefit cap—unless we take housing costs out of the cap.
If we take housing costs out and look at the needs of families, we might find that there would not be the same regional variation as we have at the moment. The reason for the variation is the varying housing costs, so the amendment probes that issue. Perhaps the Government will consider the kernel of truth, that the poorest people in this country are being penalised by the Bill and the benefit cap for something that is not their fault; frankly, it is the fault of generations of politicians, Labour and Conservative, who have not built enough affordable housing. It is not the fault of those in my constituency with a family of two living in private rented accommodation that prices are so high. It is not the fault of the family of four in Bradford that house prices will be on the other side of the cap. It is our fault for not ensuring sufficient affordable housing.
I know that the Minister will get up and tell us that the Government are building lots of affordable housing—well get on and build it! Once they have built it, they will not need to have the benefit cap, because people will be able to live on reasonable amounts of money, which will save the country a great deal of money. The time was when Governments used to spend, for every £10 spent on building homes, £1 on benefits that would assist people to live. Now the whole thing is tipped on to its head, so that for every £1 we spend on building homes, we spend £10 on housing benefit.
The answer could be, “Let’s just cut housing benefit! Let’s not let people have enough money to pay rent.” We could do it that way, but that would be draconian, inhumane, cruel and wrong. The other way to do it would be to spend the money on building affordable homes—truly large amounts of affordable homes. We need radical solutions for such a profound problem. The solution is not to turn on the poorest and most marginalised people in this country; the solution is to build more affordable homes and to go for it. If the Government were to do that, they would have the complete support of the Opposition. That is true affordable homes, not the nonsense affordable homes dreamt up for the Greater London Authority by the Mayor of London, with 80% market rent somehow or other an affordable home. We want real affordable homes that cost a reasonable amount of money and that people can genuinely afford to live in.
That in essence is the solution to the problem and what is highlighted in the amendment. I ask the Minister to address herself to the issue raised by the amendment.
Priti Patel
I will not run through the various exemptions called for in the amendments. I will come on to housing shortly, because I will basically rerun some of the points that have been made previously.
The amendments would omit various welfare benefits from those that are currently within the benefit cap. We believe that the current exemptions are the best ones to support our aims of increasing incentives to work and fairness, and to support the most vulnerable.
In our last sitting, we spoke about support for carers and about carers balancing the needs of their care and work responsibilities. I appreciate that the hon. Lady has called for a wide range of amendments to omit child benefit, child tax credit and guardian’s allowance from the benefit cap.
Emily Thornberry
I have a question for the Minister and I would be grateful if she were able to answer it, perhaps with the assistance of her officials. I believe she said that many carers combine work with caring responsibilities, but people can claim carer’s allowance only if their caring responsibilities take up more than 35 hours a week. To work enough hours to exempt themselves from the cap, they would need effectively to work 51 hours a week. If that is right, does she accept that that would be an inappropriate amount of time for people to be working in order to be exempted from the cap?
Priti Patel
I put that in the context of the some of the other benefits within the household, which would therefore exempt the carer from the benefit cap.
The hon. Lady calls for a range of exemptions. She will not be surprised—I made the point on the previous group of amendments—that we believe that, to incentivise work, the cap does not apply to those households in receipt of working tax credits. We outlined a range of exemptions in the last sitting when we discussed the previous group of amendments.
The hon. Lady touched on the only area on which there is a degree of consensus on the Bill and in the debate: the role of housing. She spoke to amendment 76, which would remove housing benefit from the benefit cap. I understand it to mean not that households in receipt of housing benefit would be exempt from the cap, but that their housing benefit payment would be disregarded from the calculation of the total household benefits to which they are subject. The removal of housing benefit from the benefits that are subject to the cap would simply undermine the principle of the cap.
Priti Patel
As the hon. Lady and other hon. Members know, housing benefit is usually the single largest benefit, therefore the cap would no longer have the intended effect of limiting high levels of total benefits.
In addition, the amendment does not refer to housing costs in relation to universal credit. It would therefore mean different treatment for households in receipt of housing benefit and those on universal credit, which is surely not the intention. The inclusion of housing benefit in the cap is specific to the principles of the cap. Obviously the Government support it through discretionary housing payments, for example. As we discussed earlier, there is now more funding for those payments. As I said, we have announced additional funding that will continue, with £800 million being made available for discretionary housing payments over the next five years. Given that, it would not be right to exclude housing benefit from the cap.
The hon. Lady was right—I am going to make the point that more is being done on building homes. That is not for the Bill, because it is not for the Department for Work and Pensions, but building homes is about the Government working with local authorities to focus on doing more in that space. There is no doubt that we all want more affordable housing. The Government have so far committed £38 billion of both public and private investment to help to ensure that 275,000 new affordable homes are built between now and 2020.
The hon. Lady pointed out that we need to get on with it. That is exactly what we are committed to do. I ask local authorities to work with us to achieve that common aim. That is fundamental to supporting people not just in respect of housing need, but in respect of giving them a quality of life. That is right and proper. It is also fundamental to dealing with the issues of rent, housing costs in general and homes standards, which have also been aired in the debate.
Because we have touched on many of the exemptions in debates on previous clauses, I will not rehearse them. Given that we have a vast number of exemptions from the benefit cap, it would not be appropriate or right to extend them to the exemptions proposed in this group of amendments, so I urge hon. Members not to press them.
Hannah Bardell
I would like to respond to the hon. Member for Islington South and Finsbury. As she well knows, these amendments are only a compromise on our earlier amendments, on which I am glad that the Labour party was able to join the SNP. The amendments would ring-fence individual benefits, so that those in receipt would be specifically protected to mitigate their circumstances.
I hear what the hon. Lady says about housing, which is a devolved matter. The Scottish Government have met their targets for building affordable housing. This is about progressive politics. We have picked up the mantle and have filled the gap left for us by previous Scottish Administrations and the Westminster Government, and we have driven forward an ambitious house-building programme within our limited financial framework. With all that in mind, I want to press amendments 28 to 37 to a vote.
The Chair
I thank the hon. Lady for that forewarning. We will deal with amendment 28 first and then with the rest of the group.
Question put, That the amendment be made.
Priti Patel
I beg to move amendment 88, in clause 7, page 9, line 43, at end insert—
“(4A) Subsection (11) (benefits that regulations may not prescribe as welfare benefits) is omitted.”
This amendment to omit section 96(11) of the Welfare Reform Act 2012 is consequential on the amendment of the definition of “welfare benefit” in section 96(10) by clause 7(4).
Priti Patel
Government amendment 88 simply tidies up the existing legislation. Section 96(11) of the Welfare Reform Act 2012 refers to regulations under subsection (10). As regulations will no longer be made under subsection (10), the reference is obsolete and needs to be removed. Amendment 88 inserts a new subsection (4A) into clause 7 to achieve that.
Amendment 89 is consequential on that, removing a reference to section 96(11) of the Welfare Reform Act 2012 from schedule 12 to the Pensions Act 2014 by inserting a new subsection (5A) into clause 7. To be clear, there is no change to the benefits that are subject to the cap. Indeed, the provisions in the Bill move the list of capped benefits into primary legislation, providing greater certainty as to the extent of the cap. The benefit cap applies to working-age benefits. Retirement benefits are not subject to the cap.
Amendment 90 is a technical amendment to clause 7(6), which allows us to put in place, if needed, transitional provisions that will support a phased introduction of the changes we are making to the benefit cap. The amendment extends those transitional provisions to subsection (4) and the new subsections (4A) and (5A). It is necessary to ensure that the cap is rolled out effectively in a way that works for everybody.
We continue to develop our implementation plans for the new benefit cap, and we will work with key partners in doing so. We want to repeat the success we had when we originally rolled out the cap, so we will be working closely with Jobcentre Plus and local authorities to ensure a joined-up delivery approach, which previously provided claimants with notice and support, enabling them to respond to the cap and move into employment. The amendment will give us the flexibility to develop and deliver an implementation plan that achieves the aims of the cap, meets the needs of delivery partners and provides the appropriate supports for claimants.
Amendment 88 agreed to.
Amendments made: 89, in clause 7, page 9, line 45, at end insert—
‘(5A) Paragraph 52 of Schedule 12 to the Pensions Act 2014 is omitted.”.
This amendment provides for the repeal of provision amending section 96(11) of the Welfare Reform Act 2012 and is consequential on amendment 88.
Amendment 90, in clause 7, page 10, line 2, leave out “and (3)” and insert “to (4A) and (5A)”.—(Priti Patel.)
This amendment enables transitional provision under clause 7(6) to disregard the effect on section 96 of the Welfare Reform Act 2012 of the amendments made by clause 7(4) and clause 7(4A) and (5A), added by amendments 88 and 89.
Question put, That the clause, as amended, stand part of the Bill.
Emily Thornberry
I beg to move amendment 12, in clause 8, page 10, line 22, leave out “in each Parliament” and insert “a year”.
To require the Secretary of State to review the level of the benefit cap every year to determine whether it is appropriate to change the level of the cap.
The Chair
With this it will be convenient to discuss new clause 1—Report on impact of benefit cap reductions—
“(1) The Secretary of State must publish and lay before Parliament before the end of the financial year ending with 31 March 2017 a report on the impact of the benefit cap reductions introduced by this Bill.
(2) The report must include an assessment of the impact on each of the measures of child poverty defined in the Child Poverty Act 2010.”
This new clause requires the Secretary of State to review impact of lower benefit cap after 12 months.
Emily Thornberry
Amendment 12 would leave out the provision that the benefit cap should be reviewed in each Parliament and instead state that it should be reviewed each year. The reason for that is obvious. We hear from the Government all the time about how well they are doing, how many people are getting into work and how well the economy is doing. If all of that is true, the level of inflation may well go up. For that reason, it seems entirely reasonable, responsible and fair to review the benefit cap every year. There has been a tradition of benefits being reviewed every year. The amendment would be consistent with what has been settled practice in terms of fairness in the past. If the benefit cap really is about fairness, surely there should be no problem with ensuring that the benefit cap is reviewed each year instead of in each Parliament.
That brings me to new clause 1, which states that the Secretary of State must report to Parliament by 31 March 2017 on the impact of the benefit cap reductions introduced in the Bill and that the report must include an assessment of the impact on each measure of child poverty, as defined by the Child Poverty Act 2010. That takes us back to the mantra that Ministers will hear throughout the parliamentary debate on this Bill, which is evidence, evidence, evidence. Not prejudice, not Daily Mail headlines but evidence.
If the alleged high-minded principles behind the Bill are a true ambition, the Government will not be frightened of an assessment to ensure that they are not being cruel, or randomly dishing out unfairness, but are truly pursuing the policies they claim to be trying to promote. If they are truly confident that their ambitions will be fulfilled as a result of the Bill, they will not run away from new clause 1 but embrace it. As they come up to the next general election, they will want to say, “Thanks to the Labour party, we have been able to measure the real success of our Bill. We have not been unfair on anyone. Everyone is back in work. Look at the way in which the streets of London flow with milk and honey.” Indeed, we will support them, and applaud them, if what they say they want to do really happens, but we will not know what has happened, other than from the weeping people coming into our surgeries, if we do not measure it properly.
The Government have resources to measure this properly, so why run away? Why not go ahead and measure the so-called success that will result from the Bill? If the Government are not prepared to measure it, those watching the debate will know that the reason they do not want to measure it is because they know what is really going to happen: the poor are going to get poorer. The Government are picking on the poorest in order to pay off the deficit, which is unfair.
Priti Patel
This group contains two proposals. As we have heard, amendment 12 would introduce a requirement for the Secretary of State to review the level of the benefit cap annually, and new clause 1 would require the Secretary of State to publish and lay before Parliament a report on the impact of the changes.
On amendment 12, the Bill requires the Secretary of State to review the level of the cap at least once in every Parliament, but it also provides him with powers to review the benefit cap at any other time he considers appropriate. That provides the most effective means of ensuring that the cap stays at the appropriate level while providing the stability that households on benefits require. The cap’s current provisions require the level to be reviewed annually, but that is specifically to review the relationship with average earnings, on which the level of the current cap is based. To date, there has been no need to change the level of the cap following those annual reviews.
Earlier, we touched on some of the evidence showing that households affected by the cap are 41% more likely to go into work. Our provisions already include powers allowing the Secretary of State, if appropriate, to review the cap at any time in the Parliament, which means that the Government will not be constrained from reviewing the cap, particularly in light of any significant economic events. The clause, as drafted, will therefore provide a sufficient safeguard, and the level of the cap remains at the appropriate level.
On new clause 1, during the passage of the Welfare Reform Act 2012, the Government committed to a full evaluation of the benefit cap to explore its effectiveness. The then Minister with responsibility for employment announced that DWP would publish a review of the cap after its first year of operation. The review was published in December 2014 and explored the progress from policy development to implementation and delivery. The report evaluated the effectiveness of three specific aims that underpinned the introduction of the benefit cap. These were to focus on work incentives, introduce greater fairness and, of course, to make the system more affordable by encouraging positive support for individuals who needed it, particularly in getting back to work.
The cap has been in place for about two years, and evidence shows that it has been successful. We intend to build on that success. Since its introduction, more than 16,000 capped households have moved into work. As I mentioned, capped households are more likely to go into work than those that are uncapped. This has been achieved without a legislative requirement for reports and evaluations. We do not feel that it is necessary to commit in legislation to delivering any future evaluations. We have not decided on approaches yet but, as before, an evaluation of the new cap would be most appropriate after implementation, when we can see the cap’s full effect and the behavioural changes it causes, and they can be reviewed accordingly.
The Government’s record on providing a review of the cap should be recognised. Also, a number of independently commissioned pieces of research and analysis, peer reviewed by a range of organisations, has been published. That, with the introduction of the life chances measures, means that, contrary to what is suggested in the amendment, we do not need legislation to report on the impact of the benefit cap. I urge the hon. Member for Islington South and Finsbury to withdraw the amendment.
The Chair
We will deal with new clause 1 later.
Question put, That the amendment be made.
Neil Coyle
I beg to move amendment 94, in clause 8, page 10, line 30, at end insert—
“(aa) the impact of the benefit cap on disabled persons and carers.”
This amendment requires the Secretary of State to consider the impact of the benefit cap on disabled people, and carers, when reviewing the level of the benefit cap.
The Chair
With this it will be convenient to discuss the following:
Amendment 73, in clause 8, page 10, line 31, leave out paragraph (b) and insert—
“(b) The relationship between the level of the cap and average earnings, and
(c) Regional variations in the cost of housing.”
To remove the provision allowing the Secretary of State to set the level of the benefit cap by reference to “any other matters [he] considers relevant” and to instead require that the cap should be set by reference to average earnings and regional variations to adjust for differences in the cost of housing.
Amendment 13, in clause 8, page 10, line 31, at end insert—
“(c) an annual report made by the Social Security Advisory Committee on the level of the benefit cap.”
To require the Secretary of State to take into account an annual report by the Social Security Advisory Committee on the level of the benefit cap when undertaking his review of the benefit cap.
Amendment 14, in clause 8, page 10, line 31, at end insert—
“(3A) The report made by the Social Security Advisory Committee on the level of benefit cap, under subsection 3c, must include an assessment of the impact of the benefit cap on the Discretionary Housing Payments Funds administered by local authorities.”
To require the Social Security Advisory Committee’s annual report on the level of the benefit cap to include an assessment of the impact of the benefit cap on Discretionary Housing Payments.
Amendment 105, in clause 8, page 10, line 31, at end insert—
“(c) any reports on the impact of the benefit cap on the wellbeing of children made by the:
(i) Children’s Commissioners for England;
(ii) Children’s Commissioner for Wales;
(iii) Scotland’s Commissioner for Children and Young People; and
(iv) Commissioner for Children and Young People, Northern Ireland, following the introduction of the benefit cap in Northern Ireland.”
To require the Secretary of State, when reviewing the level of the benefit cap, to take into account any reports made by the Children’s Commissioners for England, Scotland, Wales on the impact of the benefit cap on the wellbeing of children. Should the benefit cap be introduced in Northern Ireland the Secretary of State shall also be required to take account of any similar reports made by the Children’s Commissioner for Northern Ireland. This amendment does not require the Children’s Commissioners to make such report but does require the Secretary of State to consider any such reports if they are made.
Neil Coyle
I rise to speak to amendment 94, which is in my name; the consequential amendment 13, which focuses on the Social Security Advisory Committee and its reports; amendment 14, on the effect on discretionary housing payments; and amendment 105 on reports by the Children’s Commissioners. We support the amendments.
Amendment 94 would require the Secretary of State to assess the impact on disabled people and their carers when considering the cap threshold. This comes back to the earlier discussion about the fault-line between the parties on this issue. Our party believes that disabled people and carers should be protected, and that, as a minimum, the Government should be monitoring the impact of their policies on these significantly disadvantaged groups. Our policy comes from an evidence base, and it reflects the fact that, over the past few years, whether deliberately or by accident, the Government have penalised disabled people and carers.
I should like to give a personal example relating to the amendment before going into detail. My mum has schizophrenia. She is fortunate now, in that she is over state retirement age and so exempt, and has adequate treatment that sustains her mental health. Had this Government’s policy been in place before she was adequately treated, before adequate schizophrenia treatment was available, she might have been forced into homelessness or into being sectioned, at considerable additional cost to the state. She would have been trying to manage the side effects of poor medication, which at times caused vomiting so severe it contributed to loss of teeth. As that was happening, if this policy had been in place, she would also have been losing income and being made even more vulnerable. That is why the Government’s proposals are so dangerous and difficult for so many disabled people and their carers and families.
In the last five years, the Government have been either unaware of or uncaring about the cumulative effects of their policies on disabled people and carers. A massive grassroots movement of disabled people in particular and carers as well has put forward the WOW petition asking the Government to assess the impact of their policies on disabled people and carers. The petition secured 104,818 supporters and resulted in a debate in the House. During the debate, a previous Minister undertook to carry out several actions, including asking officials in the Department for Work and Pensions to work closely with Dr Simon Duffy of the Centre for Welfare Reform to make the independent cumulative impact assessment carried out by him as accurate as possible.
Unfortunately, since that debate, the Government have not worked with Dr Duffy to ensure that. The amendment would help address some of the frustration that disabled people and carers feel about the impact of Government policy and about not being taken more seriously. The Government’s Social Security Advisory Committee concluded that the Government could and should provide an analysis of the cumulative impact of their welfare reforms on disabled people, and the Equality and Human Rights Commission and the National Institute of Economic and Social Research recommended that Her Majesty’s Treasury
“incorporates breakdowns of the cumulative impact of tax and social security measures according to protected characteristics into its distributional analysis as a matter of course.”
The amendment would support the Government in meeting that requirement. I should add that the WOW petition is up and running again in light of the Government’s inaction, despite previous commitments, to ensure that policies are better assessed for their impact on disabled people and carers.
During the last Parliament, we saw the rise of the Hardest Hit campaign, a combination of disability, carer and advice and welfare organisations working to ensure that the Government focus better on the impact of their policies. The campaign remains active and concerned about the impact of continued Government policy and reductions in support to disabled people and carers. The Government have continued to claim that disabled people are protected. That is untrue, and increasingly untrue. Of particular concern is the fact that, from October this year, the number of people on disability living allowance being pushed through personal independence payments assessments will increase. As the Government’s objective is to remove support from about 600,000 disabled people, it will mean that those disabled people will no longer be exempt from the benefit cap, adding additional weight to the importance of the amendment.
Witnesses to the Committee, including Parkinson’s UK, have suggested monitoring the impact of further changes and have said it would be welcome. I am grateful to the Disability Benefits Consortium for supporting my contribution to this debate. The DBC consists of about 60 different disability advice and welfare organisations active on and expert in these issues. It has no ulterior motive other than ensuring that the welfare system works adequately to support disabled people and carers.
The Disability Benefits Consortium has said in briefings to the Committee:
“A third of disabled people live below the poverty line, around 3.7 million people. Furthermore, DWP figures published in June show the number of disabled people living in poverty has increased by 2% over the last year equating to a further 300,000 disabled people living in poverty.”
The benefit cap, combined with freezes and cuts to ESA for those in the work-related activity group, will reduce disabled people’s incomes significantly. It needs measuring. There are additional costs to Government of getting the policy wrong, and that also needs measuring. The impact on disabled people and carers is not only a human one. The Government must be responsible and consider that. Has a policy had the desired effect? For example, has it had consequences for local authority spending, NHS spending or mental health spending?
In addition, while those in receipt of the support component of employment and support allowance are exempt from the cap, those in the WRAG are not, which we discussed earlier today. That means that about half a million disabled people are affected, and I hope that Members are clear about who is affected and who we are talking about in these groups.
The statistics on these people are from February this year and they are the Department’s own. I will not list them all, Chair; I know that we are tight for time. But 3,420 of these people have infectious and parasitic diseases. That is who we are talking about. In addition, 770 people have diseases of the blood and blood-forming organs, and certain diseases involving the immune mechanism; 244,000 have mental and behavioural disorders, which include learning disabilities; 26,000 have diseases of the nervous system; 2,990 have diseases of the eye and adnexa, which I am sure everyone knows about; 8,110 have diseases of the respiratory system; 2,930 have diseases of the skin and subcutaneous system; and 22,000 have injury, poisoning and certain other consequences or external causes. They are the disabled people who this Government policy would affect directly; they are not protected under the Government’s current policy. All that the amendment seeks to do is to ensure that the impact on those people is at least measured and monitored.
The current impact assessment suggests that a new lower-tiered cap has been designed to strengthen work incentives for those on benefits. The Government have yet to provide evidence to back up the claim that cutting the benefits that disabled people receive will incentivise them to work.
The Minister suggested in Tuesday’s discussions that there would be additional measures. We would welcome knowing what additional measures are being considered to reassure disabled people, their organisations and their carers that the Government are focusing on their concerns.
The majority of disabled people want to work, but they face substantial barriers, including attitudinal barriers from employers and wider society. We discussed the figures the other day; 48% of working-age disabled people are in work, but only about 10% of those with learning disabilities and 5% of those with significant mental health conditions, such as schizophrenia, are in work.
I will just give a quick example. The impact assessment provides no detail about the impact of lowering the cap on disabled people who are not in receipt of DLA or PIP. That point was made by the National AIDS Trust and HIV Scotland in their briefing for this specific amendment. Amendment 94 would address this issue, and I hope that it will be welcomed by all members of the Committee.
I come to my final comments, Chair. Scope has provided analysis of the estimated higher costs of living with a disability. Baroness Campbell of Surbiton has made the point that the additional costs that she incurs are for things such as coffee, to make sure that her carers and support workers can have a cup of coffee, as well as things such as loo roll and carpet, and costs to cover wear and tear as people sit down on her sofa. Those are additional costs that disabled people have, which go well beyond the perception of disability costs as the cost of a wheelchair or medication.
I hope that hon. Members will have the Scope research in their minds when they consider the high costs of disabled people, as well as the higher incidence of poverty that already exists among disabled people, and the incidence of low income among disabled people. Low income is a direct result of not being able to work full-time hours.
In ensuring that these measures do not disadvantage disabled people further, it would be worth the Government at least describing how they believe that they are meeting their responsibilities under the Equality Act not to disadvantage these disabled people further. A failure to monitor or impact-assess this policy would be an acknowledgement that the Government know that disabled people and their carers will be made explicitly worse off by their measures.
Emily Thornberry
If one looks at clause 8 in the round, it is about the review of the benefit cap. It says:
“The Secretary of State must at least once in each Parliament review the sums specified”
and:
“The Secretary of State may, at any other time the Secretary of State considers appropriate, review the sums specified…to determine whether it is appropriate to increase or decrease any one or more of those sums.”
In deciding when to review, at some random time that he thinks appropriate, the Secretary of State can consider “other matters” he sees as “relevant”. That seems to give him absolute carte blanche to do what he likes with the benefit cap, whenever he likes and for whatever reason he likes. Does the Minister wish to give us some idea of what other matters the Secretary of State might consider relevant, what he might think appropriate or when he might decide to review the benefit cap?
Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
The amendments in this group are intended to limit the scope of the Secretary of State’s power to adjust what is, and what is not, in the review, to ensure that the Government review the impact on disabled people and carers as well as using reports from important organisations tasked with children’s rights on the impact of the cap.
Amendment 94 would require the Secretary of State to consider the impact of the cap on disabled people and carers, because the impact assessment that accompanies the Bill contains no detail about the possible impact on disabled people who are not in receipt of disability living allowance or personal independence payment. We support the amendment, because it would ensure that the Government carry out further assessment of the impact on disabled people, carers and their families.
The disability benefits consortium has called for the Government to review the impact prior to the lowering of the cap. Those on disability benefits face daily struggles with their health, mobility and wellbeing, and the last thing they need is the prospect of financial hardship, too. I do not believe that anyone chooses to be on benefits, but for those with disabilities, they can be a lifeline, and the means to a better quality of life and independence. Many carers also face daily struggles to make ends meet, as a result of the additional costs of caring combined with the loss of income from giving up work or reducing working hours. What assessment have the Government made of the number of families who will no longer be able to care as a result of the lowering of the cap?
Amendment 73 would remove the provision allowing the Secretary of State to set the cap by reference to any other matters that he considers relevant. Clause 8 does not provide enough assurance that the Government will review the benefits cap with all due process and consideration. The national economic situation and “any other matters” are not exactly the building blocks of a robust and watertight reporting obligation on a matter that establishes the income of hundreds of thousands of people. These factors are too broad to be meaningful, and they run the risk of decision making that is based on political expediency rather than need for some of the most vulnerable households in our community.
We support amendment 13, because the Social Security Advisory Committee would be looking closely at the impact of the changes in the welfare system. Amendment 14 would require the Social Security Advisory Committee to report annually on the level of benefits, and to include an assessment of the impact of the cap on discretionary housing payment, which bridges the gaps that low-income families face because of welfare changes. We support the amendment, because it would ensure close monitoring of the impact of the cap on housing for families across the UK.
The DWP estimates that as many as 90,000 additional households across the UK are subject to the new cap, and vulnerable households, despite already being deemed to be in need of state support, could have their housing benefit substantially reduced even though they do not live in areas considered atypically expensive. Such a policy needlessly risks causing homelessness. Those affected by the cap will increasingly be ordinary-sized families in average-priced areas, who are simply struggling to make ends meet. The new cap will move those families closer to losing their homes.
We welcome amendment 105, which relates to the need for any reports on the impact of the benefit cap on children to be considered in the review of the benefit cap. With 210,000 children in Scotland living in relative poverty after housing costs, we must ensure that any review carried out by the Tory Government looks closely at the impact felt in Scotland by many families and their children. The Child Poverty Action Group has estimated that Scotland’s child poverty rate will increase by up to 100,000 by 2020 as a direct result of the UK Government’s tax and benefit policies. There is real concern that the further reduction of the benefit cap will compromise the wellbeing of more children as housing security is threatened, school life is disrupted and community links are broken. To date, twice as many children have been hurt by the current cap than adults. We do not support the benefit cap as it will cause increased hardship for people and we believe that the legislation does not come close to providing protection for our children from poverty.
Priti Patel
The clause introduces new provisions for how the Secretary of State should review the level of the cap in future and what factors he needs to take into account when undertaking such a review. The Bill prescribes that, when reviewing the level of the benefit cap, the Secretary of State must take into account the national economic situation. It also allows him to take into account any other matter he might consider relevant. The amendments would introduce a number of additional specific factors that the Secretary of State would have to take into account when undertaking that review.
On amendment 94, in the course of the debate we touched on specific aspects of support for disabled people and carers. We are mindful of the impacts of policies on those vulnerable groups, and I outlined some of the support in particular that the welfare system continues to provide to protect the poorest and most vulnerable members of society. I remind the Committee that there are exemptions from the cap for households where there is a claimant in receipt of DLA, PIP, attendance allowance or the support component of ESA. I will follow up some of the points made by the hon. Member for Bermondsey and Old Southwark and drop him a line.
Amendment 73 would require the Secretary of State, when reviewing the level of the benefit cap, to take into account the national economic situation and add average earnings, regional variations and the cost of housing. It would also omit the provision that allows him to take into account any other matters that he considers relevant. I think it is fair to say that the proposed powers drawn up are broad, but we do not think it is possible to stipulate in advance the specific economic factors and developments most suitable to set the appropriate level for the cap at the time the review is undertaken.
Emily Thornberry
The Minister admits that the powers are broad and, therefore, presumably she will concede that it is difficult for us to hold the Government to account for what they are doing. In those circumstances, it is difficult for us to be clear. For anyone who may wish to scrutinise this legislation in future, when we as Members of Parliament were scrutinising this legislation, we were unaware and not told in which circumstances the Secretary of State would change the benefit cap. I want to spell that out, because people will read the transcript and we want to be completely clear in case this matter is to go before the courts.
Priti Patel
The hon. Lady specifically mentions the benefit cap in relation to going to the courts. The Supreme Court has confirmed that the benefit cap is lawful. With regard to work required on reporting the benefit cap, the cap has been reviewed annually since its introduction as per current legislation, and those reviews found that no change was required. Obviously, a review of the national economic situation must be thorough, and regular annual reviews could result in the cap being unduly affected by a range of short-term economic fluctuations. At worst, that could lead to significant variations and cap yo-yoing, which would provide no stability for those in receipt of benefits and those who rely on that income in particular. There will be occasions when economic developments mean that a review of the cap must be undertaken more than once in a Parliament. We have seen considerable changes in recent years through changes to the economy as a whole.
Comments were made about the Social Security Advisory Committee, the long-standing and respected body that has provided an independent voice for many years and many detailed and informed reports on matters across the broad spectrum of welfare and social security. The Government value many of its opinions and the work that it undertakes. The committee already has well-established engagement with a full range of stakeholders with interests in this area on welfare reforms and it ensures that any advice that it provides encompasses a broad range of views. Obviously, we place a great deal of value on the work of the committee, but we do not necessarily think that it is right that in undertaking a review of the level of the cap, the Secretary of State has a statutory requirement to take account of the report of the committee, or that it is appropriate for the Secretary of State to be bound to consult an individual body when reviewing the cap.
Neil Coyle
In light of the Minister’s commitment to provide more information, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 73, in clause 8, page 10, line 31, leave out paragraph (b) and insert—
“(b) The relationship between the level of the cap and average earnings, and
(c) Regional variations in the cost of housing.”—(Emily Thornberry.)
To remove the provision allowing the Secretary of State to set the level of the benefit cap by reference to “any other matters [he] considers relevant” and to instead require that the cap should be set by reference to average earnings and regional variations to adjust for differences in the cost of housing.
Question put, That the amendment be made.
Priti Patel
I beg to move amendment 91, in clause 8, page 11, line 13, at end insert—
“( ) Section 176 of the Social Security Administration Act 1992 (consultation with representative organisations) does not apply in relation to regulations under subsection (4).”
This amendment provides that regulations that change the level of the benefit cap do not require consultation with local authority associations under section 176(1) of the Social Security.
The amendment aims to replicate a similar provision that has been inserted into clause 7, carrying forward the existing arrangements under which my Department is not required to consult with local authority associations on the commencement of housing benefit regulations, specifically in this case when the revised benefit cap is introduced. Historically, commencement orders have not been consulted on and have not been caught by consultation obligations regarding housing benefit regulations. However, commencement orders in the Bill have been superseded by commencement regulations.
As mentioned, to maintain the status quo, a provision in clause 7 has been inserted into the Bill to remove any new requirement for the Department for Work and Pensions to consult with local authority associations on the commencement regulations for introducing the benefit cap. The amendment inserts a similar provision into clause 8, so that there is no obligation to consult on commencement regulations should the benefit cap be changed in future.
The Committee should be aware that any change to lower the benefit cap will be subject to debate.
Hannah Bardell
I would like clarification, if possible. Will the amendment restrict any previous consulting powers that the Government have with Scotland?
Priti Patel
I will provide the hon. Lady with full clarification on that point.
Any change to lower the benefit cap will still be subject to debate under the affirmative procedure in both Houses of Parliament.
The Department will continue to liaise with local authority associations to ensure the successful implementation of the new cap and that claimants are fully supported ahead of the introduction from around autumn next year.
Amendment 91 agreed to.
Question put, That the clause, as amended, stand part of the Bill.
Emily Thornberry
I beg to move amendment 15, in clause 9, page 11, line 32, leave out from “relevant sums” to end of subsection and insert
“are to be reviewed by the Secretary of State having given regard to—
(a) the rate of inflation, and
(b) the national economic situation.”
To subject the four year freeze in the social security payments set out in paragraph 1 of Schedule 1 to an annual review of the levels by the Secretary of State. This review will consider both the rate of inflation and the national economic situation.
The Chair
With this it will be convenient to discuss the following:
Amendment 16, in clause 9, page 11, line 35, leave out from “child benefit” to end of subsection and insert
“are to be reviewed by the Secretary of State having given regard to—
(a) the rate of inflation, and
(b) the national economic situation.”
To subject the four year freeze in child benefit to an annual review of the levels by the Secretary of State. This review will consider both the rate of inflation and the national economic situation.
Amendment 17, in clause 10, page 12, line 21, leave out from “relevant amounts” to end of subsection and insert
“are to be reviewed by the Secretary of State having given regard to—
(a) the rate of inflation, and
(b) the national economic situation.”
To subject the four year freeze in the tax credits set out in paragraph 2 of Schedule 1 to an annual review of the levels by the Secretary of State. This review will consider both the rate of inflation and the national economic situation.
New clause 2—Local Housing Allowance—
‘(1) For each of the tax years ending with 5 April 2017, 5 April 2018, 5 April 2019 and 5 April 2020, the amount paid to claimants of the Local Housing Allowance is be reviewed by the Secretary of State.
(2) In reviewing these sums the Secretary of State shall have regard to—
(a) the rate of inflation,
(b) the national economic situation, and
(c) the levels of market rent.”
This new clause requires the Secretary of State to review the level of the Local Housing Allowance annually, in light of the rate of inflation, levels of market rent and the national economic situation.
Amendment 39, in clause 9, page 11, line 32, leave out from “relevant sums” to end of subsection and insert
“is to increase in line with the consumer price index.”
This amendment would see relevant benefits increasing in line with the consumer price index.
Amendment 40, in clause 9, page 11, line 35, leave out from “child benefit” to end of subsection and insert
“are to increase in line with the consumer price index.”
This amendment would see child benefit increasing in line with the consumer price index.
Amendment 41, in clause 9, page 11, line 37, leave out subsections (3) and (4)
This amendment is consequential to the amendments 39 and 40.
Amendment 42, in clause 10, page 12, line 21, leave out from “relevant amounts” to end of subsection and insert
“is to increase in line with the consumer price index.”
This amendment would see tax credits increasing in line with the consumer price index.
Amendment 95, in clause 9, page 11, line 33, at end insert—
‘(1a) Notwithstanding subsection (1), for each of the tax years ending with 5 April 2017, 5 April 2018, 5 April 2019 and 5 April 2020, the amount of each of the relevant sum claimable by persons with a disability, as defined by the Equality Act 2000, is to increase in line with inflation.”
This amendment exempts disabled people from the four year benefits freeze.
Amendment 96, in clause 10, page 12, line 22, at end insert—
‘(1a) Notwithstanding subsection (1), for each of the tax years ending with 5 April 2017, 5 April 2018, 5 April 2019 and 5 April 2020, the amount of each of the relevant amounts claimable by persons with a disability, as defined by the Equality Act 2000, is to increase in line with inflation.”
This amendment exempts disabled people from the four year tax credits freeze.
Clause stand part.
Clause 10 stand part.
Emily Thornberry
The principle that we have such difficulties with in relation to clauses 9 and 10 can be encapsulated quite simply. For years, benefits have gone in attendance with need. The idea is that the welfare state should be a safety net, that it should be there for those who need it and that we should look first at need. I am not saying that we should have limitless amounts of benefits, but is important that those who are the most vulnerable are assisted.
Much has been said about the popularity of the measures, but if we look at public opinion, in a recent poll 88% of people upheld this British value: it is important to have a benefits system to provide a safety net to anyone who needs it. The clauses not only freeze social security benefits for a year; they do it for four years and they do it from now. We do not know what the state of our economy will be like in four years’ time. We do not know to what extent there may be inflation and who will be affected in what way. I will be brief because I am going to rely on the good sense of the Joseph Rowntree Foundation, which stated:
“While this will make a significant contribution to progress with eliminating the deficit (assuming inflation returns to the target level), it is likely to have a serious detrimental impact upon working-age households reliant upon state support to top-up their income”.
It is serious, and the Joseph Rowntree Foundation recommends:
“Retention of the annual review of benefit levels to allow the Chancellor to link strong economic performance with the maintenance of living standards at the bottom end of the income spectrum”.
If the Government really mean that no one should be left behind and that we are all in it together, we should all be in it together. If the economy picks up, why would those on benefits be four years behind? It is a simple point. They talk about fairness. Here is an opportunity to do something about it. The Chancellor should continue to have a flexible approach to uprating benefits to offset increased costs, particularly for essential goods and services. There is great concern about that.
The argument is that the welfare spend has got out of control and that we need to get back to a more sustainable type of welfare spending. Again, I rely on the Child Poverty Action Group’s excellent briefing, which points out what we all know: that in 1980 working-age welfare spending accounted for 8% of national spending, whereas now it is 13%. However, analysis by the Office for Budget Responsibility questions whether spending on social security is in fact increasing at an unsustainable rate. As the evidence shows, spending on welfare as a percentage of GDP remained reasonably steady until 2008. The OBR finds that the largest contribution to the increase since them was the uprating of state pensions, rather than working-age welfare spending.
In case anybody did not know this, the poor are getting poorer. With this freezing of benefits for four years, they will continue to get poorer. We need to go into this with our eyes open. Government Members should not support the clause without allowing an annual review, so that we can see what is fair. Are we prepared to leave the poorest and most marginalised behind, while the rest of the economy does or does not do well? We are against these two clauses.
Neil Coyle
Amendment 95 and 96 are in my name. In the interests of time, I will be as brief as possible. I hope there will be an opportunity to come back to these issues on Report if my questions are not answered. Fundamentally, this comes back to the same issue. Disabled people are directly affected by this measure—in particular, by ESA. This is about the full component, not just the £30 support group component. The full ESA payment needs to be taken into consideration, and we have concerns about those who are directly affected. The real question is about the Conservative manifesto commitment. Page 28 of the manifesto states:
“We will freeze working age benefits for two years from April 2016, with exemptions for disability and pensioner benefits”.
The amendments would help to ensure that that manifesto commitment is delivered. I hope to come back to this issue on Report if it is not dealt with sooner.
The Exchequer Secretary to the Treasury (Damian Hinds)
Things have accelerated, Mr Owen.
It is a pleasure to respond to this concatenated set of amendments. As these are probably the last words that will be said in this Committee before we break for the party conferences, I want to pay tribute to the hon. Member for Stretford and Urmston and the right hon. Member for East Ham, who is my cloakroom neighbour. They are both impassioned campaigners whose dedication and intentions can never be doubted. They will be very much missed from this Committee. Of course, we warmly welcome the hon. Member for Islington South and Finsbury to her new position.
This has been a full debate on a range of important issues. In responding to the amendments, I will reiterate the rationale behind our proposed changes and set out why we are not persuaded that the amendments should be accepted. However, before I do so, I want to recap the purpose of the Bill and in particular clauses 9 and 10.
The Bill seeks to move this country from a low-wage, high-tax and high-welfare society, to a higher-wage, lower-tax and less welfare-reliant one. That means ensuring that work always pays and focusing support on those on the very lowest incomes. Crucially, it means ensuring that the system is fair to those who pay for it, as well as those who benefit from it. Combined with the national living wage and the changes to the income tax personal allowance, the summer Budget ensured that a typical family working full time on the national living wage will be better off by the end of the Parliament, with eight out of 10 working households better off by 2017-18.
The Bill builds on this Government’s achievements in delivering for working people, whether that is the 1,000 jobs created every day—2 million since 2010—the 2.9% growth in wages this year, a 9% increase in total hours worked since 2010, or the fact that, according to the OBR, living standards are projected to be higher in 2015 than in any previous year. These clauses, which freeze the main rates of working-age benefits, child benefit and the majority of tax credits, are a central element of the Bill and are key to this Government’s ambition of putting welfare on a fairer and more sustainable footing. The exemptions for benefits, which help with the additional costs of disability, ensure that we continue to protect the most vulnerable.
Neil Coyle
I have one quick point about those who contribute. Some of the benefits that we are discussing, employment support allowance in particular, are paid to those who contributed to the system when they have been able to work. It is deeply unfair and unjust to suggest that this is somehow about protecting those who work and do the right thing when the very people that we seek to support have contributed and have then developed health conditions.
Damian Hinds
The hon. Gentleman is absolutely right that people in receipt of a number of benefits will have contributed to the system. It remains the case that we fund benefits out of current contributions. It remains the case that we have a budget deficit of 5% of national income. It remains the case that we need to get that down to start paying down the national debt. In order to do that, we need to find £12 billion of welfare savings.
The freeze has been extended to four years due to the current low-inflationary environment to ensure that it makes a significant contribution to the £12 billion reduction that I just mentioned. When originally announced as a two-year freeze, it was forecast to save £3 billion and to lead to a real-terms reduction in benefit rates of 4%. Due to the current environment, it would now save less than £1 billion. The Government have therefore extended the freeze to ensure that it generates at least the same level of savings, and more, than announced last autumn.
Emily Thornberry
Just to be clear, the Minister is not attempting to put forward a moral case. It is simply about saving money. It is about saving money from the poorest.
Damian Hinds
I am not quite sure how the hon. Lady managed to infer what she just said from what I just said. I was explaining—
Damian Hinds
I will be delighted to. I was explaining why what was originally a two-year freeze has been extended to a four-year freeze because of the current low-inflationary environment and the need to make the savings that form a substantial part of the £12 billion that we have been discussing.
While the Government have a clear mandate for the reforms, it is imperative that we protect the most vulnerable. We are protecting pensioners, with pension credit, the pension additions in other benefits, and the basic state pensions—they are all excluded from the freeze. We are also exempting benefits relating to the additional costs of disability, such as attendance allowance, disability living allowance, and personal independence payments. We have exempted the support group component of ESA, the limited capability for work and work-related activity component of universal credit, as well as additions and premiums in JSA, ESA and tax credits related to disability. Statutory payments, including statutory maternity, paternity and adoption pay, statutory shared parental pay and statutory sick pay are also all exempt. Those exemptions ensure that the most vulnerable in society are protected from the benefit freeze.
Let me speak directly for a moment to amendments 95 and 96, which seek to exempt disabled people from the freeze by ensuring that any of the relevant sums of working-age benefits and tax credits are increased in line with inflation, if they are claimed by a person who is disabled. In bringing forward our policy to freeze benefits and tax credits, we have been extremely mindful of the protections that we believe it is right to put in place to support the most vulnerable.
We are exempting all the benefits relating to additional costs of disability, as I just listed. Similarly, we are protecting the disability premiums and additions in working-age benefits, tax credits and pension-age benefits. The support group component in employment and support allowance and the limited capability for work and work-related activity element of universal credit are also protected. Those elements are paid to those with the most severe work-limiting health conditions in recognition of the fact that they are less likely to be able to increase their income by moving into work and may have additional needs as a result. Those are vital protections alongside the very acute need to make savings.
Neil Coyle
The Minister is accepting that the majority of the payment received by disabled people in the employment and support allowance group who are judged unfit to work—full stop—will not be protected. He is making the Prime Minister’s commitment to protect disabled people false. Of the payment of roughly £100 that those people would be expected to receive, £30 or so will be protected, whereas £70 will not. Will the Minister confirm that that is accurate?
Damian Hinds
What we have said is that those in the support group will be exempt, but not those in the work-related activity group. The main rates of working-age benefits are there to provide basic support for claimants who are not in work. Those rates are common across all claimants who receive out-of-work benefits. Introducing new higher rates of payments specifically for disabled people has the potential to discourage claimants from taking steps to get back to work where they can and would introduce significant complication into the system, leading to possible confusion for claimants.
Hannah Bardell
The Minister says he is going to be protecting disabled people. Will he explain why people on the severe disablement allowance will be included in the benefit cap? Surely that will make those most vulnerable people even poorer.
Damian Hinds
The hon. Lady will forgive me, I know, if we do not talk again at length about the benefit cap. We had a big debate about that in the earlier group of amendments that referred to the benefit cap. I repeat all the exemptions that are being made in the freeze—well, I am not going to repeat them all, but she heard them. There are all the exemptions that the Government are making for those specific benefits and elements of benefits that refer to the additional costs of disability.
The Government are committed to ensuring that disabled people are able to participate absolutely fully in society and have set out their ambition to halve the disability employment gap, which I think is something that Members on both sides of the Committee and the House would agree on.
Damian Hinds
Will the hon. Gentleman forgive me if I do not, just in the interests of time?
Most people with disabilities and health conditions want to work and we will support them to prepare them for work and to move closer to the labour market, and when they are ready, to move back into work. We believe that the freeze is a necessary and fair way of putting welfare spending on a more sustainable footing, but that it is vital to offer protection to the most vulnerable. The best way of doing that is by supporting people who can to move closer to the labour market and by continuing to protect those benefits relating to the additional costs of disability.
Neil Coyle
Let me try a different tack. Does the Minister expect this range of cuts to be as successful as the last set of cuts, which were projected to save billions on ESA and DLA but actually resulted in higher spending of £10 billion?
Damian Hinds
We are debating a group of amendments about a four-year freeze to certain benefits. Do I expect that to be successful in delivering the £3.5 billion that it is projected to? Yes, I do, and it is clearly a mathematical point about the rate of inflation and so on. We have the independent forecasts of how the economy is going to grow and of inflation, and I believe that our measure will deliver.
The Scottish National party amendments replace the freeze and the duty to review with the removal of the freeze altogether. That would remove the certainty we have about legislating directly for a freeze, and move us from the position where we have a clear plan reflecting the electoral mandate of the Government to one where the taxpayer could not be sure, year on year, as to the level of benefits.
Certainty for individuals, to help them plan ahead, is a key feature of the Government’s economic policies. It is also why we have introduced a national living wage, and pre-announced the anticipation that it will rise to £9 an hour by 2020 and the ambition to increase the tax-free personal allowance to £12,500 by the end of the decade. Legislating now to freeze for four years, along with those other measures, provides clarity to benefits recipients, giving them fair notice and the opportunity to make positive changes. Anyone supporting the amendments before us would have to spell out how they would instead give the public that certainty about the level of spend and identify where else they would make cuts.
I turn briefly to new clause 2 on the local housing allowance. The measure announced in the summer Budget to freeze local housing allowance rates for four years will contribute savings of £1 billion towards the Government’s commitment to reduce the welfare bill by the £12 billion I mentioned. It is not included in the Bill, as the Secretary of State already has the powers in primary legislation to change the way in which LHA rates are set. Those powers were included in the Welfare Reform Act 2012.
It may help, however, if I clarify how the freezing of LHA rates will work during the four-year period. The rates will still be reviewed each year and rent officers will calculate, as they have been doing previously, a rate calculated by reference to the 30th percentile value from a list of rents for properties of a given size in that area. Each list of rents must include achieved rental values from the distribution and range within each area. In line with the Government’s measure to freeze rates, they will then set the new LHA rates based on the lower of either the April 2015 rate or the 30th percentile of listed rents. The Government recognise that some areas will see particularly high increases in rents, so we have made specific provision for those areas.
Over the Parliament, 30% of the savings generated from this measure will be used to create more targeted affordability funding, building on the £140 million already distributed since 2014. Alongside that, local authorities are able to provide support to the most vulnerable claimants affected by housing benefit reform through an enhanced package of £800 million of discretionary housing payment funding, which is significantly more than was provided over the previous Parliament.
I reassure hon. Members that, alongside the LHA rates, we will continue to publish, as we have previously, the 30th percentile of market rents in each area. We believe that the freeze to the main rates of the majority of working-age benefits, child benefit and tax credits are a necessary and fair way of putting welfare spending on a more sustainable footing. I urge the hon. Member for Islington South and Finsbury to withdraw the amendment.
Hannah Bardell
We will not press our amendments, on the basis that we will be voting against the clause. I would like to make some points on those amendments. The Minister made a point about reducing the deficit. We reject that wholeheartedly. There is a huge amount of academic research that says the austerity agenda is going to fail, and that investing in people and investing in benefits will stimulate the economy. For all those reasons, we categorically reject what he is saying. Our amendments speak to the fact that the benefits system has to keep up with the economic conditions of the country, otherwise we are letting the poorest people down.
The UK Government are proposing to extend the freeze on working-age benefits from two years to four years, which will end in 2020. That would end the link with prices and earnings, effectively cutting the benefits that support those people who are most in need, and ensure that the lowest-income households continue to get poorer over the years between now and 2020. For example, child benefit is projected to lose 28% of its value, according to the Child Poverty Action Group. That will have a devastating impact on child poverty rates in Scotland.
Emily Thornberry
We will not press the amendment to a vote this afternoon, but this matter will be revisited on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That clauses 9 and 10 stand part of the Bill, and that the schedule be the schedule to the Bill.
Finance Bill (First sitting)
(9 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
Good morning, ladies and gentlemen. Before we begin, I have a few preliminary announcements. While I am in the Chair, Members may, if they wish, remove their jackets. I imagine that Mr Howarth will extend the same courtesy, but that is for him to say, not for me. No refreshments other than water may be consumed in Committee meetings, so if Members are in need of coffee or anything like that, they will have to go outside. Please could all Members ensure that mobile phones, pagers and the like are switched off or on silent? It is infuriating both to the Chair and to other Members to have people constantly ringing. It would be appreciated if Members could use electronic devices for parliamentary purposes, not for doing sudoku or whatever.
The pile of boxes behind me is provided for Members to keep their papers in. During the process of the Bill, there will be an accumulation of papers—that I can promise you—and if you wish to leave them in the room, they will be locked in the cupboard behind me. So it is possible to leave papers here, obviously other than those that arrive in your personal boxes and post during the week, and collect them before the start of each sitting. During the lunch break, the room will be locked. Mr Howarth will take the Chair at 2 o’clock, but, in the interim, if you wish to leave papers or indeed anything else within reason on the desk—I would not advise you to leave very valuable things—they can be left safely in the room. The room will be locked between 1 pm and 2 pm, so do not feel that you have got to take everything with you.
As a rule, Mr Howarth and I do not intend to call starred amendments, which have not been tabled with adequate notice. The required notice in Public Bill Committees is three working days, so amendments need to be tabled by the rise of the House on Monday for consideration on Thursday and by the rise of the House on Thursday for consideration on the following Tuesday.
Not everyone is familiar with the Public Bill Committee, so we will have a very brief teaching—this is also for the benefit of long-standing Members and, indeed, the Chairman. I think I am right in saying that I am now the longest-serving member of the Panel of Chairs and even I find these processes confusing sometimes. The first rule is: if you are in any doubt, ask. Please do not feel that we sitting in this Chair are so fierce that you cannot stand up and say, “Please, I don’t understand that.” We may or may not be able to explain, but if we cannot, Mr Hamlyn, our superb Clerk, will be able to.
The process is this: we first consider the programme motion on the amendment paper and the debate on that is limited to half an hour. For those of you who are not aware, that is the motion that was agreed at a pre-hearing with a small group of the Committee under the chairmanship of Mr Howarth. The agreement was reached on both sides Committee by consent. That does not mean that you cannot talk about it, but you cannot do so for more than half an hour.
We then proceed to a motion to report any written evidence. That is because, in the course of the sittings of the Bill, written evidence will be received and we need the Committee’s consent to ensure that that is made available formally and becomes part of the record for the Committee. We then begin the line-by-line consideration of the Bill.
The selection list for today’s sitting, which is available and I hope all Members now have a copy, shows how the amendments selected for debate have been grouped together for debate. Amendments are normally grouped on the same issue or similar or related issues. Ladies and gentlemen, I would be grateful if you would pay particular attention to this, because this is the article of the most confusion and it is important that everyone understands the process.
You will find a group of amendments. Clause 1, which will be the first piece of the Bill debated, is debated as a clause. The motion will be that clause 1 stand part of the Bill, and that will be a broad-ranging debate, because there are no amendments tabled to clause 1.
Clause 2, in similar fashion, will be a general stand part debate, but in addition we are debating new clauses 1 and 3. The first point of confusion is that whether or not a Member, on either the Government or Opposition side, wishes to put those provisions to a Division, it will not happen then because Divisions take place in order throughout the course of the Bill. While new clauses 1 and 3 will be debated with clause 2, if they are voted on at all it will not be until much later in the proceedings, when we get to them on the amendment paper. That applies to any other amendments.
If a Member—often an Opposition Member—seeks to table and then move an amendment, it may become the lead amendment in a group. It will be grouped with amendments of a similar nature or subject matter. Only the lead amendment will be moved at that time. People have a tendency to stand up and say, “I wish to move this,” but they cannot. You must wait until we have reached it on the amendment paper, which may be the middle of next week or next month, depending upon how long the sittings take.
If you are in any doubt, please ask. Because there are a significant number of new Members on the Committee, Mr Howarth and I will endeavour to be as generous within the terms of proper procedure as we can, but once the tipping point is reached and the business moves on, it is not permissible to go back, so you need to keep your wits about you. It is normally assumed that Government amendments will become part of the Bill and that the Government will therefore always wish to move them. That is accepted by the Chair and understood by both Front Benches.
That’s it. Let me repeat: if you have any problems, misunderstandings or difficulties, please ask. If there is something you really do not understand but do not feel inclined to stand up and ask about, nobble the Chair after the sitting, and we will be pleased to do our best to explain it to you. The object of the exercise is not to confuse but to assist. Like the Inland Revenue, we are here to help you.
The Financial Secretary to the Treasury (Mr David Gauke)
I beg to move,
That—
(1) the Committee shall (in addition to its first meeting at 11.30 am on Thursday 17 September) meet—
(a) at 2.00 pm on Thursday 17 September;
(b) at 9.25 am and 2.00 pm on Tuesday 13 October;
(c) at 11.30 am and 2.00 pm on Thursday 15 October;
(d) at 9.25 am and 2.00 pm on Tuesday 20 October;
(2) the proceedings shall be taken in the following order: Clauses 1 to 11; Schedule 1; Clauses 12 to 15; Clauses 18 to 23; Schedule 4; Clauses 24 and 25; Schedule 5; Clause 26; Schedule 6; Clauses 27 to 31; Clause 33; Schedule 7; Clause 32; Clauses 34 to 42; Clause 44; Clauses 46 and 47; Schedule 8; Clauses 48 to 50; new Clauses other than those relating to the subject matter of Clauses 16 and 17 and Schedules 2 and 3 or the subject matter of Clause 43 or the subject matter of Clause 45; new Schedules other than those relating to the subject matter of Clauses 16 and 17 and Schedules 2 and 3 or the subject matter of Clause 43 or the subject matter of Clause 45; remaining proceedings on the Bill.
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 20 October.
It is a very great pleasure to see you in the Chair, Sir Roger. This is not the first time I have had the pleasure of serving under you in a Finance Bill Committee, and I know the Committee is in safe hands with both you and Mr Howarth.
I welcome all members of the Committee, and I am delighted we have such a large turnout for the beginning of our proceedings. I particularly welcome the Opposition Front-Bench team: the hon. Members for Feltham and Heston and for Worsley and Eccles South. I look forward to hearing their questions and inquiries. I do not know whether the Scottish National Party has the same Front-Bench arrangement, but I welcome all members of Opposition parties and, indeed, my own colleagues, in particular my hon. Friend the Economic Secretary to the Treasury, who will be sharing some of the burden over the weeks ahead.
I am pleased that agreement was reached at the Programming Sub-Committee, and I am grateful for the support of the usual channels. I thank my hon. Friend the Member for Central Devon and the hon. Member for Scunthorpe for their work in reaching that agreement. I very much looking forward to serving under your chairmanship in the weeks ahead, Sir Roger.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I thank the Financial Secretary for his opening words and his welcome, which I echo. I thank you, Sir Roger, and your co-Chair Mr Howarth, who I understand will be in the Chair this afternoon. It is a pleasure to serve under two distinguished Chairmen. Although I had the pleasure of serving on a previous Finance Bill Committee as a Back Bencher, this is the first time I have served on one as a Front Bencher. I was recently appointed shadow Chief Secretary to the Treasury.
I thank and pay tribute to my predecessor, my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood), and the other outgoing shadow Treasury Ministers, my hon. Friends the Members for Wirral South (Alison McGovern) and for Newcastle upon Tyne North (Catherine McKinnell). I also pay tribute to the previous shadow Chancellor of the Exchequer, my hon. Friend the Member for Nottingham East (Chris Leslie), who is a veteran of Finance Bills and has led much of our work this year. I also pay enormous tribute to my hon. Friend the Member for Worsley and Eccles South before she leaves the Treasury team, and in advance of her excellent contributions today, for her stellar work.
I extend my thanks to the hon. Member for Central Devon and my hon. Friend the Member for Scunthorpe. I have had experience of their office, so I know that the usual channels work behind the scenes to ensure everything goes well during Bill proceedings.
I welcome those who are relatively new to the House. If this is their first Finance Bill Committee, I am sure it will be an experience they will remember. It will be a good foundation for much more that they do in the House.
I know from past experience that we have many hours in Committee ahead. I am sure I speak for all here when I say that we relish the opportunity to get further into this legislation and to change it for the better. I also know that the Financial Secretary will relish the opportunity to serve on his 11th Finance Bill Committee—or is it the 12th?
Seema Malhotra
He is certainly a veteran. If there is a record for the Minister who has steered the most Finance Bills through Parliament, if he has not won it already, I am sure he is well on his way.
When I mentioned to a colleague that the Bill has only 50 clauses, they expressed concern that the Government are already running out of business, as they were in the months running up to the election. I recall that when I served on the Finance Bill Committee in 2012, that Bill had three volumes and 227 clauses. Indeed, last year’s Finance Bill had 295 clauses. This year, the Finance Bill has 50 clauses, and we are scheduled to have only eight sittings.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
This is the third one in a year.
Seema Malhotra
I know it is. Perhaps the Financial Secretary does not have the same concerns.
Although some aspects of the Bill are to be welcomed, many others are worrying. The change to the climate change levy, for example, has been almost universally challenged. The increase in insurance premium tax, which will raise substantial amounts for the Government, will cause significant hikes in insurance premiums for millions of people across the UK, with possible adverse consequences for consumer behaviour that must be understood. Those issues were tackled, to some extent, in Committee of the whole House last week.
We need a Finance Bill that supports working people and does not penalise them, as the tax credit statutory instrument, which we discussed two days ago, does. We need a Finance Bill that supports business and provides long-term certainty, and which leads to investment now that will reap dividends in the future. A retrospective change to carbon taxes, for example, will not achieve that aim. That is the approach we will take in Committee.
Obviously it would not be proper to start proceedings without thanking the usual unsung heroes: not only the Treasury officials, whom I thank for their diligence, but the Clerks, Hansard and others who help keep our proceedings going smoothly.
I am sure I speak for all Members when I say that it is an honour and a privilege to serve on the Finance Bill Committee, and I am sure we will approach all the sessions in that spirit. Indeed, I hope we will scrutinise the Bill properly and methodically and do what we are all here to do, which is to serve the people of Britain.
Barbara Keeley (Worsley and Eccles South) (Lab)
It is pleasure to serve under your chairmanship, Sir Roger, and that of your co-Chair, Mr Howarth, when he joins us later. I associate myself with the remarks of the shadow Chief Secretary, my hon. Friend the Member for Feltham and Heston, and welcome the Clerks, the Hansard reporters and others who will assist us in the days ahead, although it will just be one day ahead for me.
I welcome the members of the Committee and in particular those who came into the House in May. On the Labour side, that is my hon. Friends the Members for Bradford South, for Halifax, for Dewsbury, for Torfaen and for Cambridge, and we will be joined by my hon. Friend the Member for Erith and Thamesmead. We should also mention the stalwart work of our Whip, my hon. Friend the Member for Scunthorpe.
As has been said, this is the first ever Bill Committee for those new Members, and I remember when I served on my first Finance Bill Committee back in summer 2006. I checked back, and the Financial Secretary was on that same Committee. We know now that he has served on 11 Finance Bill Committees, so he certainly wins the prize. I am afraid I do not. I assure the Committee and him that we will scrutinise the Bill thoroughly, as is our duty. Members should be grateful that the Bill is much shorter than the Finance Bill in 2006, which had 21 sittings.
As an opening comment, the Bill sadly does little to help families and individuals on low and middle incomes, and I think that is a pity. Millions of those families have heard that they will be hit by the tax credit cuts that were voted through by Government Members earlier this week. Those savage cuts will come to be seen as the hallmark of the summer Budget of 2015, which was also a tax-raising Budget, but I will come back to that point.
In Prime Minister’s questions yesterday, we heard about a working family who would be hit badly by the cuts, and there will be so many more, because 3 million families will lose more than £1,000 a year. In my constituency, more than 8,000 families with children receive tax credits, of whom 5,300 are working families. The Bill does not contain that measure on tax credits, but it comes from the same Budget, so I will keep those families in mind as we work through all the issues in the Bill.
Roger Mullin
It is a pleasure to serve under your chairmanship, Sir Roger, along with my colleagues. I start by thanking everyone who has already been thanked, thus making sure that I miss no one out. I am slightly surprised that I am making this speech, because I did not know that this was how proceedings would begin, but on behalf of my colleagues, I would like to say that we look forward to scrutinising the Bill in detail. We are particularly unhappy about a number of matters, and we share the views already expressed by the Labour spokespersons.
We also want, through new clauses, to raise some matters that are of particular concern to Scotland and the people of Scotland, who are severely disadvantaged on a number of fronts by measures within the Bill. I hope we will contribute constructively and speedily. I had a wonderful experience when I attended the Sub-Committee of this Bill Committee on Monday; the thing I thought was particularly impressive was that it lasted one minute. I am sure this Committee will take a little longer, but we will do our best to contribute constructively and efficiently.
The Chair
Before I put the question, those who are long in the tooth in the House and those who are not have learned a lesson: most of the remarks just made were technically out of order—[Laughter.] However, within the half-hour available for this particular piece of the process, a Chairman is normally reasonably flexible.
I should have mentioned a couple of other things. I was asked by the Opposition Front Bench team what the form of address is. I am Sir Roger—for reasons I do not entirely understand—and George Howarth is Mr Howarth at the moment, although I am sure that will change in due course. In the English Parliament, in Committee as on the Floor of House, we refer to Members by constituency or by “my hon. Friend” or “the hon. Lady” or “the hon. Gentleman”, not by “you” or whatever. “You” is the Chair, and the Chair is non-partisan and does not take part in the proceedings. So if you say, “You have said that,” I shall leap to my feet and say, “No, I haven’t,” even though we all know what was meant. We will try not to be too heavy on that at the start, however.
Question put and agreed to.
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Mr Gauke.)
Clause 1
Income tax lock
Question proposed, That the clause stand part of the Bill.
Mr Gauke
The clause makes changes to ensure that there will be no increase in the main rates of income tax for the duration of the Parliament. That will provide certainty for taxpayers and enable working people to keep more of the income they earn.
The Government committed to legislate to rule out increases in income tax rates, national insurance contributions and VAT for the duration of the Parliament. Clause 1 delivers that commitment for income tax and clause 2 deals with VAT. The national insurance contributions element of the tax lock is being legislated for in a separate Bill, because it is outside the scope of this Bill.
Nick Thomas-Symonds (Torfaen) (Lab)
It is a pleasure to serve under your chairmanship, Sir Roger. On the passing of the Fiscal Responsibility Act 2010, which, like the clause, had declaratory effect, the then shadow Chancellor, who is now the Chancellor of the Exchequer, said that it was “vacuous and irrelevant”. Is the Minister as surprised as I am about the Chancellor’s U-turn on declaratory legislation?
Mr Gauke
I would draw a distinction between a Government who had no reputation for fiscal responsibility seeking to obtain such a reputation by passing such legislation and a Government who have a record of controlling income tax by increasing the personal allowance and not increasing rates, notwithstanding the challenges we face in the public finances. The clause underlines the Government’s commitment not to increase taxes, and income tax in particular, on the British people, because that is the wrong response. That is consistent with what we have done in office. The problem the last Labour Government had was that, in response to the fiscal crisis, rather than coming forward with clear proposals to reduce the deficit or even to accept a need to get to grips with that deficit, they simply sought to pass legislation. That was the wrong response then, whereas this is the right response now.
Nic Dakin (Scunthorpe) (Lab)
It is a pleasure, as always, to serve under your chairmanship, Sir Roger. The logic of the Minister’s argument does not really stack up. If the country has confidence about the Government’s fiscal responsibility, there is no need to pass legislation. I am totally confused by his argument.
Mr Gauke
We fought the last general election saying that we would introduce this legislation. We won that general election, which suggests that the British people had confidence in the overall package of our fiscal policies. If Labour Members are worried about fiscal confidence, perhaps they should look somewhat closer to home.
Mark Garnier (Wyre Forest) (Con)
Does my hon. Friend agree that one thing any Government should be able to do is give some sort of confidence to households that their tax rates will not go up, providing them with the opportunity to plan for the future with more security than they would have if this measure were not in place?
Mr Gauke
My hon. Friend makes an important point. A striking point made by a number of my hon. Friends on Second Reading of the National Insurance Contributions (Rate Ceilings) Bill earlier this week was that the introduction of the tax lock in the context of employers’ national insurance contributions gives employers much greater confidence. Providing economic stability and security is an important part of the Government’s long-term economic plan. A credible party needs to present to the British people how it will provide economic security and stability. That is what this Government are doing. I look forward to the day when there is cross-party consensus that economic security and stability are important to this country.
George Kerevan (East Lothian) (SNP)
Sir Roger, not having served under your chairmanship before, I look forward to doing so. I accept the Minister’s point that he is trying to produce certainty through the clause, but it is surely the case that he is merely displacing the uncertainty. If projected tax receipts fail and the Bill is on the statute book, the Government will have to either cut public expenditure, which will impact on the economy and affect the confidence of suppliers, or raise borrowing, which again will have an impact on confidence in the economy because interest rates will have to go up. In no way can we ever introduce certainty; all we can do is put the uncertainty somewhere else, so the Minister’s argument fails.
Mr Gauke
I was making the point that it is important we provide certainty on taxes. At the last general election, the Labour party—I am not sure this was the case for the SNP—certainly said that it would not increase income tax, VAT and national insurance contribution rates. In that sense, there was a cross-party consensus—at least there was at the last general election; I appreciate things may have moved on since then—on not increasing those rates. We are underlining our pledge by legislating for it, which further strengthens our commitment. In the context of a Government who have a record of ensuring that income taxes do not increase, even when we face the most difficult circumstances, that pledge and this legislation have credibility.
The changes made by clause 1 will set out that the basic, higher and additional rates of income tax will not rise above their current levels of 20%, 40% and 45% respectively for the duration of this Parliament. The tax lock will apply to the main rates of income tax for earnings and savings. That accounts for more than 90% of income tax revenue collected, and that is what we want to lock, enabling working people to keep more of what they earn.
The tax lock does not prejudice the Government’s commitments on tax devolution. From April 2016, Scotland will have the power to vary the rate of income tax for earnings, and we are devolving further unprecedented flexibilities over income tax to Scotland through the Scotland Bill, which will give the Scottish Parliament the power to set the rates and thresholds applying to earnings income. The Government are committed to delivering that in full, giving Scotland full flexibility over income tax rates and thresholds on earnings income. The tax lock will therefore not restrict Scotland from setting higher rates of income tax, nor Wales when it has the Welsh rate of income tax.
Clause 1 delivers the Government’s commitment to rule out increases in the main rates of income tax for the duration of this Parliament, ensuring that working people can keep more of the money they earn.
Barbara Keeley
Clauses 1 and 2 enact the promise that the Government made during the general election not to increase the rate of income tax or VAT in the next Parliament. Clause 1 states that the basic, higher and additional rates of income tax will not increase above 20%, 40% and 45% for the duration of this Parliament.
We support the Government’s pledges on tax locks for this Parliament. In fact, it would be surprising if we did not, because we made them first. The Labour party made the same pledge on 25 March, and our 2015 manifesto contained a commitment not to increase the basic or higher rates of income tax, or to raise VAT or national insurance. We are glad the Conservative party adopted our pledge during the election.
However, as my hon. Friend the Member for Torfaen said, and as was discussed in the Budget debates, legislating for that pledge represents a U-turn. As my hon. Friend rightly said, in 2009 the current Chancellor said he was very critical of Chancellors passing laws to ensure they fulfil their promises. The current Chancellor stated then:
“No other Chancellor in the long history of the office has felt the need to pass a law in order to convince people that he has the political will to implement his own Budget…As one commentator observed this week, there are only two conclusions. Either the Chancellor has lost confidence in himself to stick to his resolution, and is, so to speak, asking the police to help him, or he fears that everyone else has lost confidence in his ability to keep his word, but hopes that they might believe in the statute book if not in him. Neither is much of a recommendation for the Chancellor of the day.”—[Official Report, 26 November 2009; Vol. 501, c. 708.]
Simon Hoare (North Dorset) (Con)
On Tuesday the hon. Lady advised us on the Floor of the House that she would not seek to defend or reference remarks made on previous occasions by the new leader of her party. Surely what is sauce for the goose is sauce for the gander.
Barbara Keeley
I think comments that somebody made when they were a Back-Bench MP are different. Once somebody has taken on a role, either in opposition or in government, what they say carries a certain weight. There is a freedom to the Back Benches that I and others here have experienced. Many Members of the Conservative party say things that their Front-Bench team would not agree with. That is my distinction, and I am sticking to it.
It appears that the Chancellor had a change of heart, and now feels the need to pass a law to convince people that he has the political will to implement his own Budget. During the debate on the National Insurance Contributions (Rate Ceilings) Bill earlier this week we discussed the view that measures such as this are in fact gimmicks. We questioned why Ministers feel the need for this additional legislation when the promises that the Prime Minister and the Conservative party made during the election should be good enough. To people outside Westminster, it could appear that Treasury Ministers have lost confidence in their ability to stick to their resolutions, or perhaps they fear that everyone else has lost confidence in their ability to keep their word. The Minister may want to tell us which he thinks it is.
Although Labour supports the pledge to make no increase to VAT, income tax and national insurance contributions during this Parliament, I still question whether introducing legislation to ensure those locks is the best course of action. Rather than gimmicks, we need long-term tax reform and sensible policies to ensure that the taxpayer gets a good deal.
We have some concerns about the durability of the income tax lock in clause 1. As it stands, it appears that rates could be raised by repealing the Bill in a future Budget. Can the Minister assure the Committee that it is not simply a gimmick? Will he outline how he intends to show that the lock will remain in place? In our deliberations, we should consider the impact of that tax change and the other changes to the tax system announced in the Budget. As many tax experts have pointed out, only then will we be able to see the real impact of Government measures on particular groups of people.
In Committee of the whole House, I raised the issue of the insurance premium tax. Although the clause protects workers against an income tax rate rise, I note that they will not be protected from the other tax increases in the Bill.
Chris Philp (Croydon South) (Con)
I look forward to serving under your chairmanship, Sir Roger; I hope to profit from your experience. I want to challenge the hon. Lady’s assertion that the tax lock is a gimmick. Is it not in the same spirit as the legislation that ensures that 0.7% of GDP is spent on international aid each year? That measure is ensuring, as we speak, that refugees from Syria are being rescued from terrible circumstances. Is this not in a similar spirit?
Barbara Keeley
I do not think it is. In fact, if it is seen in the same way, someone needs to have a word with the Prime Minister. He constantly refers to the 0.7% commitment as a matter of huge pride and has quoted it a great deal in our debates about the refugee crisis over the past week or two. The difference with financial matters—this is probably why the current Chancellor was so critical of things in 2009—is that there are many opportunities to legislate. This is the third Finance Bill this year, so things could change. The 0.7% international aid commitment was a very long-term commitment. It came up a great deal in international discussions and still does, so there is a difference.
I was talking about the insurance premium tax and the fact that people are not protected from those sorts of tax increase. Paul Johnson, director of the Institute for Fiscal Studies, has said:
“The tax and welfare changes between them mean that poorer households have lost quite significantly and as a result of yesterday’s Budget, much more significantly than anything that has happened to richer households.”
He also said:
“Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.”
Let us bear in mind that many of the households that benefit from this tax lock have been adversely impacted by other tax changes. In fact, the summer Budget did not cut the overall tax bill; it raised it.
Mark Garnier
The hon. Lady makes a lot about feeling it unnecessary that the Government have to promise to legislate not to change tax rates and about the importance of not affecting working households, particularly those at the bottom end. Is it not the case that when her party was in government, there was an understanding that people at the bottom end would be protected, yet at that time the 10p tax rate was removed, causing huge problems for working households? What is sauce for the goose is sauce for the gander.
Barbara Keeley
There is a great deal of looking back, but let us look at what is happening this year and what will happen in the years following this Budget. The Office for Budget Responsibility forecasts net taxes to rise by more than £47 billion over the next four years, with much of the money coming from increases in dividend tax, insurance premium tax, vehicle excise duty and cuts in pension tax relief. Of course, welfare cuts will also raise almost £35 billion. It is one thing saying that families will benefit from the tax lock, but all of those measures will hit many families and individuals in the UK hard.
The combination of changes needs to be seen in the context of the cut to tax credits that Government Members voted through this week, which are likely to leave millions of families worse off. I was asked the other day, “What else would you do?” It is our contention that the welfare reform we need is to things such as overpayments and the error and fraud in the welfare system, because things are not properly checked at the point of application. Error and fraud cost £3 billion a year. The cut to tax credits will hit working people on middle and lower incomes, which undermines the Government’s argument that this is a Budget for working people.
Nick Thomas-Symonds
On that point, the Chancellor of the Exchequer made much in the last Parliament of a distinction between those who are in work and those who are not. By this attack on those who are in work, does he not find himself on the wrong side of his own dividing line?
Barbara Keeley
Absolutely so. A great deal is said at the moment about working people, working families and who supports them. Paul Johnson, director of the IFS, has said:
“Significant allowances were an integral part of the design of universal credit, intended to give claimants an incentive to move into work.”
That is an important point. On tax credit cuts, he adds:
“This reform will cost about 3 million families an average of £1,000 a year each. It will reduce the incentive for the first earner in the family to enter work.”
Chris Philp
Could the hon. Lady confirm whether it is the Labour party’s intention to reverse the tax credit proposals put forward earlier this week?
Barbara Keeley
We had the same question the other day. It is not helpful for us to keep repeating things.
As we saw during the election campaign, we have a different mix of changes that we want to introduce and different ways of moving the economy forward, and that will always be the case. I am sure we would not have made the cuts to tax credits. We introduced tax credits to help working people. We believe in them, because they help to bring children out of poverty. We would never have made such savage cuts. We believe that it is necessary to tackle the root causes of welfare spending—low pay and high housing costs—to bring down Government spending sustainably. Those things are not being tackled; rather, the infrastructure that supports families in work is being taken away. The Institute for Fiscal Studies confirmed that the introduction of tax credits played an extremely powerful part in the improvement in child poverty figures, and that is what is at risk.
Simon Hoare
The hon. Lady is being generous in giving way, as always. Under the moderate and reforming Labour leadership of the right hon. Member for Doncaster North (Edward Miliband), Labour Front-Bench Members for the whole of the previous Parliament were never able to say what they would actually do. They were very good at saying what they would not do and at opposing everything that my right hon. Friends in the Treasury sought to do to reduce spending and bring it back under control. We await—with bated breath, it has to be said—what the reforming instincts of the new Labour leader will bring forward, but can the shadow Minister say what she would do? She has spoken about her long-term plans for house building, and so on, but, in the shorter to medium term, what would the Labour party do today, or what would it have done recently, to balance the nation’s finances better?
Barbara Keeley
That is a very easy question to answer. We heard earlier about the former shadow Chancellor, my hon. Friend the Member for Nottingham East, who put in a great deal of work this year on zero-based budgeting spending reviews. He came up with a list of savings that amounted to £12 billion. We talked about that a great deal during the election—
Barbara Keeley
I think it would be better, Sir Roger, if we could move away from things to do with the Labour party and concentrate on the Bill. It is not helping progress.
The Chair
Order. It is for the Chairman to decide what is in order and what is not. Inevitably in any debate of this kind there is going to be a certain amount of party political skirmish, and both Chairmen understand that. However, now that I am on my feet, what is relevant is that this debate is about income tax. We could have a debate about every aspect of tax—we could not, actually, because it would be out of order. Perhaps we can now revert to income tax.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to serve under your chairmanship, Sir Roger. I quite take the point you just made, but does my hon. Friend agree that it is slightly rich for Government Members to talk about the past when they were elected last time on a pledge to reduce the deficit by half by the end of the Parliament, which they have completely failed to achieve? Setting tax rates in stone will only further perpetuate their past failure.
Barbara Keeley
Absolutely. In talking more broadly, I have been trying to paint a picture of the impact of the set of policies in the Budget, not all of which are in the Bill.
We feel that the tax lock is a short-term measure. As I said earlier, we need to think about long-term reform to ensure an equitable and efficient tax system that provides good value for the taxpayer. There is also a need for long-term tax system planning. We welcome the consultations announced by the Government, but action is also needed on, for example, the alignment of national insurance contributions and income tax. That has been discussed many times, over and over again, but never acted upon, and I will be talking about that later in the debate.
Mr Alan Mak (Havant) (Con)
May I associate myself with hon. Members from both sides of the Committee in saying that it is a pleasure to serve under your chairmanship, Sir Roger? I look forward to profiting from your experience. Does the hon. Lady—
The Chair
Ah. I understood that the hon. Lady was giving way. As no one else wishes to speak, I call the Minister.
Mr Gauke
I shall briefly respond to the hon. Lady’s speech. Let me be clear that if one looks at the measures set out by the Chancellor of the Exchequer in his Budget speech this summer, one will see that we are ensuring that working families will benefit from a strong and growing economy. By 2017-18, eight out of 10 working households will be better off as a result of the changes we are making to the personal allowance, the introduction of the national living wage and the welfare changes set out in the Budget.
The concern has been raised that the clause is somehow just presentational, but I return to the point I was making earlier about underlining our commitment. It is consistent with the approach we have taken to the tax system, and I think families up and down the country will welcome that. In particular, in the current context, with the official Opposition apparently moving in the direction of wanting to increase taxes, the fact that Parliament is making it clear what the current majority feels can only be helpful.
Barbara Keeley
As I have said already in this debate and the other day in the Committee of the whole House, this is a tax-raising Budget and the Government are raising taxes. I touched on some of those taxes and we have talked about the insurance premium tax. This is a tax-raising Budget and a tax-raising set of measures.
Mr Gauke
The Government are committed to creating a low-tax economy and the clause marks clear progress towards that. We must remember that the Government inherited the biggest deficit in our peacetime history. We heard criticism from the hon. Member for Cambridge, who said it should—[Interruption.] If the Scottish National party’s position is that the deficit should be larger, I strongly disagree. The deficit fell significantly over the course of the previous Parliament, but there is still further work to do. In that context, we must make some difficult decisions.
Public spending is taking the greater share of the strain when it comes to fiscal consolidation, and we believe that is the right approach. I do not know whether the Opposition parties share that belief, but I very much doubt it. The clause demonstrates our commitment on income tax, just as in the next clause demonstrates it on VAT—to ensure that over the course of this Parliament we do not increase those tax rates. I think the British public will welcome those measures—after all, they were set out before the last general election. I hope that the clause has the Committee’s support.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
VAT lock
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 1—VAT treatment of the Scottish Police Authority and the Scottish Fire and Rescue Service—
‘(1) The Treasury shall, within six months of the passing of this Act, publish and lay before the House of Commons a report on the VAT treatment of the Scottish Police Authority and the Scottish Fire and Rescue Service.
(2) The report must include (but need not be limited to) an analysis of the impact on the financial position of Police Scotland and by the Scottish Fire and Rescue Service arising from their VAT treatment and an estimate of the change to their financial position were they eligible for a refund of VAT under section 33 of the VAT Act 1994.’
New clause 3—VAT on sanitary protection products—
‘(1) The Treasury must, within 12 months of the passing of this Act, lay before the House of Commons a report setting out the impact of exempting women’s sanitary protection products from value added tax.
(2) The report must include (but need not be limited to)—
(a) an estimate of the impact on VAT revenue of exempting women’s sanitary protection products; and
(b) an assessment of the impact on the purchase of women’s sanitary protection products of exempting them from VAT, with particular reference to purchasing by women aged under 25.’
Mr Gauke
I will say a word or two about the clause and then, if I may, I will respond to the new clauses that I assume will be set out by the hon. Member for Kirkcaldy and Cowdenbeath. The clause states that the standard and reduced rates of VAT will not rise for the duration of the Parliament. It also locks certain provisions in the Value Added Tax Act 1994 to prevent them from being used to change the scope of VAT by moving any goods or services out of the zero rate or reduced rate for the duration of the Parliament.
The Government believe in lower taxes and are committed to eliminating the deficit in a way that is fair to taxpayers. As part of our plan to move the UK to a lower tax economy, we made a manifesto commitment to rule out any increase in the main rates of income tax, national insurance contributions and VAT for the duration of this Parliament, as I have mentioned. Clause 2, following on from clause 1 on income tax, implements that commitment for VAT. This initiative will provide certainty to taxpayers and ensure that working people will not have to pay any additional VAT on their purchases for the duration of this Parliament.
Let me set out the changes made by the clause in a little more detail. Currently, the standard rate of VAT is 20% and the reduced rate is 5%. Clause 2 states that the standard and reduced rates of VAT will not rise, locking the rates for the duration of this Parliament. As the zero rate clearly cannot be more than 0%, it is not covered by the legislation. Supplies that are subject to the reduced rate, such as domestic fuel and power, are listed in schedule 7A, and those that are zero-rated, such as books, children’s clothes and most food, are listed in schedule 8. The supplies listed can be varied by means of a Treasury order. However, the legislation will prevent the use of Treasury orders to expand the scope of VAT by removing supplies from the zero and reduced rates.
While the 20% standard rate of VAT is among the lowest in the EU, the UK also has the lowest reduced rate of VAT permitted by EU law and is one of only eight EU member states to have successfully negotiated to apply a zero rate of VAT. The Government will not increase the reduced or standard rates of VAT and will retain the zero rate of VAT, in keeping with our commitment to creating a higher wage, lower tax and lower welfare country.
In summary, clause 2 provides the strongest possible backing for the Government’s commitment not to increase VAT for the duration of this Parliament. It delivers on our manifesto promise and is consistent with our policy to deliver a lower tax economy for hard-working taxpayers.
Barbara Keeley
Many of the points I raised about clause 1 on the principles of tax locks also apply to clause 2, which states that the standard and reduced rates of VAT will not rise for the duration of the VAT lock period. It also ensures that no goods and services can be removed from the zero and reduced rates of VAT for the duration of the VAT lock period.
The Labour party made a commitment not to raise VAT back in March and in our 2015 manifesto. Indeed, the Government’s tax lock was announced in response to our challenge about not repeating their broken promises on VAT. We are pleased the Government have agreed that VAT rates should not go up, because that will benefit people on lower and middle incomes. This legislation is perhaps a little more needed, given the Conservatives’ record on VAT. The Prime Minister made a similar commitment in 2010 not to raise VAT, only to raise it to 20% immediately after entering Downing Street. However, as with the income tax lock, we are concerned that there is nothing to prevent the Government from changing the VAT lock in future legislation.
How will the VAT lock stand up in the face of European Union intervention? The UK is subject to EU VAT law and European Court of Justice decisions on VAT will have an impact on VAT here. On 4 June this year, the European Court of Justice judged that the UK had failed to comply with the VAT directive by applying a reduced rate of VAT to the supply and installation of energy saving materials for housing, which the Court ruled will have to be charged at the standard UK VAT rate of 20%. Another recent example of EU involvement is the 2015 Court decision in the “Go Fair” case, in which the Court found that VAT should be chargeable on the supply of care workers provided by a temporary agency. Currently, UK agencies supplying nursing staff can benefit from a VAT exemption. Will the Minister indicate whether that will change as a result of the European ruling?
Lucy Frazer (South East Cambridgeshire) (Con)
The hon. Lady may know that courts are overruled by higher courts day in, day out in the court system. Should the initial legislation not be passed because it may be overruled at some point in the future?
Barbara Keeley
I am not in any sense challenging it; I am asking the Minister to tell us what he thinks the impact on the legislation will be of that Court’s decisions. Those cases seem to suggest that the lock on UK VAT is not as robust as the Chancellor claims, so it would be helpful if the Minister outlined what impact future EU Court rulings could have.
On the scope of the VAT lock, clause 2 prevents any increase in the standard and reduced rates, and prevents anything from being moved out of the scope of the reduced or zero rates, but there is no mention of exemptions. It would be helpful if the Minister confirmed that the current exemptions from VAT will remain over the course of this Parliament.
SNP Members tabled a new clause that seeks a report on the impact of exempting women’s sanitary products from VAT. Labour supports the new clause. We welcome the opportunity to call again for those essential healthcare products to be made tax-free. Women do not choose to use sanitary products; they are essential. Although the reduction in the rate of VAT on sanitary products in the UK from 2000 was welcome, more needs to be done. This is not just a female issue, but a family and household issue. Women supporting families across the country should be able to purchase those necessary items VAT-free. We recognise the complexity of the EU rules on VAT and the challenges faced by national Governments that want to make such unilateral changes. I ask the Minister to take action at an EU level to support the exemption of women’s sanitary products from VAT in the UK.
The Chair
I assume that the hon. Member for Kirkcaldy and Cowdenbeath wishes to speak to his new clauses, but I may be incorrect. Before he does so, I ask hon. Members look at the amendment paper. I will reiterate what I said earlier for understanding. At the end of this morning’s amendment paper are new clauses 1, 2, 3 and 4. Only new clauses 1 and 3 have been selected for debate with clause 2, because they relate to VAT. New clause 2 does not relate to VAT, so although it appears on the amendment paper ahead of new clause 3, we are not debating it now. The new clauses will not be moved now. They can be spoken to by any hon. Member who wishes to address the subjects. Clearly, the hon. Gentleman in whose name the new clause was tabled will wish to speak to it. Others may also wish to speak to it; that is entirely in order. The new clauses will not be moved now. They will be moved, as with all other new clauses, right at the end of the Bill, which may be, I suspect, several weeks hence. There is an arcane form of words in which new clauses, as distinct from amendments, are moved. That is a pleasure in store for us, but we will deal with that when we come to it.
Roger Mullin
Thank you, Sir Roger. You have no idea how grateful I am to have you in the Chair guiding me through this process. I rise to speak to—not move— new clause 1, and later my colleague, my hon. Friend the Member for Glasgow Central, will speak to new clause 3.
New clause 1 addresses a long-running issue that has affected the provision of police and fire and rescue services in Scotland. The Scottish Police Authority is the only police authority in the United Kingdom that does not have relief from VAT, which costs it about £23 million per year. The Scottish Fire and Rescue Service is similarly disadvantaged and is liable for an annual cost of about £9 million to £10 million. The reason sometimes given is that—hon. Members may not be aware of this—a few years ago the Scottish Government, after taking advice, decided to go down the road of having a single national police force. It was undertaken for a number of reasons, and I would like to point out two that might be relevant and of interest to Government Members in particular.
First, we previously had eight forces. As hon. Members may recall, some years ago there was a terrorist incident at Glasgow airport. We are just as concerned about the impact of terrorism on our society in Scotland as other Members will be, quite rightly, in their constituencies. One thing the new police force has been able to do is join up measures so that we can address the terrorist threat more effectively than before. Similarly, it used to be that when the Scottish forces had issues, say of serious crime and relating to—[Interruption.]
Simon Hoare
The hon. Gentleman might wish to have cognisance of the note that his colleague passed to him.
Roger Mullin
That is one of the most helpful interventions of my entire parliamentary career. I hope I do not require any similar interventions in the future—[Laughter.] I am so glad that I can bring some levity—it was not deliberate. Where was I?
Roger Mullin
Dare I agree? Back to a slightly less humorous point. When we had eight police forces in Scotland, some of them were very small, and at times that created difficulty in co-ordination on cross-border issues with forces south of the border. One benefit is that we now get much greater co-ordination of police forces across the United Kingdom. Terrorism and cross-border co-ordination are two serious areas where the police service is delivering benefits not for merely the people in Scotland, but for the people of the whole United Kingdom.
It seems strange, therefore, that the Government of the United Kingdom has continued to deny every overture made by the Scottish Government for VAT relief. My colleagues in Edinburgh inform me that no fewer than five letters from Scottish Ministers have been sent to the UK Government: two from the Justice Secretary, two from the Deputy First Minister and one from the Minister for Community Safety. There has also been: a letter from the cross-party Convenor of the Scottish Parliament’s Finance Committee to HM Treasury; eight letters from Scottish Government officials; and six meetings or conference calls in which the Scottish Government have sought to have our police and fire and rescue services treated in the same manner as all other forces in the United Kingdom.
We are not asking for something completely unusual or out of order. Since the amalgamations took place, the new transport agency, Highways England, has been granted VAT exemptions, so there is precedent. It is matter of common justice that this should be looked at. In new clause 1, we ask the Government to produce a report and lay it before the House to examine in greater detail some of the problems that arise because the police and fire and rescue services cannot reclaim VAT.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to serve under your chairmanship, Sir Roger. I welcome the support of the hon. Member for Worsley and Eccles South for new clause 3, and I saw the Economic Secretary to the Treasury nodding as well. I therefore hope to get some support on this issue.
My concern with the VAT lock as presented is that it is very restrictive. Our new clause would leave a window open to resolve the injustice of VAT being levied on sanitary products. This injustice has long needed to be corrected and, as a female MP, I feel obligated to use this opportunity to raise the issue. My hon. Friend the Member for Glasgow North East (Anne McLaughlin) informed me that she campaigned on this issue in the 1980s, so it is a long-running one. The fact that it has not yet been resolved is quite disappointing and perhaps reflects a lack of willpower from the men who hold the purse strings in many of these cases. This is perhaps the chance for the Minister to make a difference. In the past, we have seen Jaffa Cakes and Tunnock’s teacakes go to the courts to fight for their zero ratings, and I seek the support of all Committee members to allow leeway for further consideration of this issue.
There seem to be a lot of inconsistencies in the application of the rating. As no one can fully control the manner in which sanitary products are required, it is a bit odd and incongruous that we do not treat them as we do other exempted items, such as medical incontinence pads and babies’ nappies, which I understand are both zero-rated. There is a recognition that those products do not fall under the full rate. Sanitary products are taxed at the 5% rate, but they are not, as the hon. Member for Worsley and Eccles South said, optional or luxury items. I certainly know of no woman who would exclaim, “Wow! I had my period—what a luxury!” We need a recognition that these are essential items that are very much required in households across the country. Indeed, if we were to go without these products, we would see public indignation, as there was when Kiran Gandi ran the London marathon in April without any protection, as a means of protest about the issue.
Another concern for me is that sanitary protection for women who have just given birth is not exempted from VAT. It is charged at 5%, despite being an absolute essential for women who have just had a child and being used for up to six weeks afterwards. These are medical products, in my view, and should also be exempted. We cannot do without them, and it would be both unsanitary and dangerous for our own health and that of our families if we were to go without them. We need a recognition that women across the country use these products. There is no recognition that they are essential items, and a zero rating would go some way to addressing that.
It has been mentioned that this is a European Union issue. My understanding is that Ireland has an exemption for these products, which is something we should look at. It would be useful if the Government were to take a stance on this, push it and send a message out to the rest of the European Union and women right across it, who would see a benefit if this went to the EU for further discussion.
What we are proposing today leaves a window open. I appreciate that we cannot ask for a particular change to be made, but it would leave the window open for negotiation, for further study and for a report, in order, I hope, for the issue to finally be resolved after many decades of campaigning.
The Chair
Order. I paused to allow precisely what has just happened to happen. I am sorry to continue to lecture, but members of the Panel of Chairs are blessed with both second sight and extra-sensory perception—it comes as part of the kit. That said, if anybody wishes to speak, it makes life earlier if they rise in their place, as is custom and practice on the Floor of the House. The danger is that we move on and an hon. Member then does not get called. While any Member can ordinarily intervene on the Minister’s winding-up speech, once the Minister has sat down at the end of that speech on a particular debate, the Chairman will not call any other Member. In other words, if you want to speak, get in early.
Holly Lynch
Thank you, Sir Roger. It is a pleasure to serve under your chairmanship. Thank you for your kind and thoughtful guidance, which is particularly useful to me and, no doubt, other new Members.
I rise to speak in support of new clause 3, and I encourage other Members to join me in doing so. I am mindful that there are European implications regarding VAT that we must consider, but I am certain that the European restriction on abolishing VAT on sanitary products is more oversight than intent. I have every faith that there will be support for addressing this injustice at a European level, and I urge the Government to investigate those possibilities. The new clause would give the Government 12 months, which would be ample time to conduct investigations.
There is huge public support for abolishing VAT on sanitary products. A recent change.org petition asking the Chancellor to look into the issue has reached nearly 250,000 supporters. The Prime Minister was asked what he would do about the issue by a student at the University of East Anglia in the run-up to the general election and he agreed to look into it again. We know that the new clause has cross-party support and would be well received by the electorate.
I am pleased that the new clause makes particular reference to women under 25. On average, girls need to start purchasing sanitary products at the age of 12. It should have as small a financial impact as possible. Girls at that age are inevitably in full-time education, so we need to ensure that what can be a big personal transition has a limited financial burden.
I found examples of bizarre VAT-exempt products, including alcoholic jellies, edible sugar flowers and exotic meats, such as crocodile and kangaroo. Perhaps most ironically of all, no VAT is paid on millionaire shortbread. [Laughter.] We can all have a giggle about some of those bizarre contradictions, but what an insult to women and girls they are. It is a travesty that tampons and sanitary towels have ever been deemed luxury purchases. They are necessities for millions of women. I hope the Government will do the right thing in considering the new clause.
George Kerevan
I am mindful of the fact that we have got another 48 clauses, so I will try to be brief—which is difficult for me. There are particular issues about the VAT lock that have to be put to the Minister.
VAT income to the Treasury is notoriously variable because VAT is a tax on consumption. It varies with the business cycle because it is a consumption tax. Unfortunately, in clauses 1 and 2 the Government are introducing the new doctrine that major taxes, including VAT, will be set once every five years at the start of each Parliament. I presume that in the Government’s mind the tax lock will exist in perpetuity and will be set at a different level every time we elect a Government. They are decoupling the raising of revenue—the revenue function of the Government and the Treasury—from the business cycle. As the business cycle goes up and down, income to the Treasury will go up and down independently of when we set tax rates—particularly VAT.
Mark Garnier
I am acutely aware of the fact that we have got a lot to get on with, but I find the hon. Gentleman’s argument utterly preposterous. He is arguing that, should the business cycle slow down, he would increase VAT—were he in a position to do so—which would have the effect of stifling consumption and thereby amplifying the problem, rather than negating it. This measure is quite clearly a cap, not a floor, so we can reduce VAT should we want to stimulate the business cycle.
George Kerevan
My good friend from the Treasury Committee anticipates what I was not going to say. All I am arguing is that we require flexibility in setting taxes to respond to events in the real economy. The doctrine that the Government are introducing of a tax lock in perpetuity removes such flexibly. That in itself creates uncertainty in the minds of business and the financial community, which the Government will have to address.
I accept the principle that we should try to set taxes in a way that is not destabilising. That should lead us to consult with the business community and community interest groups before we change taxes. That is perfectly possible and it is done in other countries. In Germany, for instance, there is mandatory consultation between the federal and regional Parliaments before income tax levels are changed. There are other ways to do that. The Chancellor accepted that principle in relation to North sea oil taxes when he gave an undertaking that any major changes would come only after consultation with the industry. Unfortunately, he did not extend that doctrine to the renewables industry, which would have been sensible.
To put a tax lock on VAT in perpetuity decouples revenue setting from the business cycle and, in the end, that is not tenable, because the taxes would be varied in an emergency. It is not tenable to decouple them, so the Government will live to rue the day that they put the lock in. That explains the reason for the lock. It is not for economic reasons; they are playing a political game. It is a gimmick.
The Chair
Before I call the Minister, I need to make it plain that the recommendations of the Procedure Committee have not yet been adopted and, until they are, there has to be an Adjournment of the sitting rather than a suspension. It is what is known in the trade as madness, but that is nevertheless what is needed. I do not have the power to suspend the sitting at 1 o’clock as would normally be the case to allow hon. Members on both sides of the Committee time to review papers and emails and to have some lunch. Therefore, I gently caution the Committee: if the Minister wishes to go past 1 o’clock, he is entirely entitled to do so—he may have some cross friends on both sides of the Committee—and the Whip has to have the opportunity to move the Adjournment before we can end the sitting.
Mr Gauke
Let me say that I share your ambition for the timing of the Adjournment, Sir Roger.
I have addressed some of the points about the tax lock already. As for the application of EU law and ECJ judgments, which by the hon. Member for Worsley and Eccles South rightly raised, let me be clear: EU VAT law and Court decisions will have to apply to the UK, too. Legislation will have to be changed to reflect any changes or Court decisions, otherwise the UK would be breaking the law. I do not wish to evade that point in any way. None the less, that does not undermine the basis of the VAT tax lock, because the great bulk of VAT issues on rates and the boundaries between the zero rate, reduced rates and standard rate are unlikely to change. However, I acknowledge that point. VAT exemptions are set out in EU law and cannot be changed by the UK unilaterally. We are therefore not binding our hands on the exemptions because they are not determined by the UK alone. I hope that provides a little clarity.
Barbara Keeley
Before the Minister moves on, I want to clarify once more why Opposition Members believe that the tax lock is a gimmick. If things go really wrong, it will have to change and, having bound their hands, if the Government have to increase VAT or income tax, that will really destroy public confidence out there. That is the problem.
Mr Gauke
Let me respond to that quickly. I come back to the intervention made by my hon. Friend the Member for Croydon South. We did not hear those arguments from the hon. Lady or her colleagues when we were legislating for the 0.7% expenditure on overseas aid; these points were made in the context of the tax lock. One cannot help feeling that when the Opposition’s heart is really in the legislation, they think it is the right thing to do, and when their heart is not in it, they call it a gimmick. Very similar arguments apply to both items of legislation.
New clause 1 would require the Treasury to write a report on the VAT treatment of Police Scotland and the Scottish Fire and Rescue Service, including analysis of the change in their financial position since 2012 as a consequence of their ineligibility for section 33 VAT refunds. As we heard, in 2012 Scotland’s eight locally governed police and fire authorities consolidated to become two national bodies. As a result, they were no longer reliant on local taxation for funding, which is one of the two criteria for eligibility for the section 33 VAT refund scheme. Following the restructuring, the new national bodies were therefore no longer were eligible for VAT refunds.
The new clause asks the Treasury to write a report on the VAT treatment of those bodies, including an estimate of the change to their financial position since their restructuring if they had remained eligible for VAT refunds. However, it is important to remember that the Scottish Government were forewarned of that consequence well in advance of the decision they took. The Treasury was keen to ensure that the Scottish Government considered that consequence as part and parcel of their decision to restructure the services. Because the expected cost savings to the Scottish Government outweighed the loss of any VAT refunds, I perfectly understand why they went ahead with their restructuring programme.
As I have explained, as the Scottish Government restructured those services, they are no longer eligible for VAT refunds. That is plain and clear, and the eligibility is set out in legislation. There is no need to explain it further or for a report to be submitted to the House. If the Scottish Government are now reconsidering their position and wish to discuss how the services can become eligible once again for VAT refunds, the Treasury will happily engage with them to advise. In conclusion, there does not seem to be any justification for using Treasury resource to set out in a report something that is clearly set out in legislation. As things stand, the Scottish police and the Scottish Fire and Rescue Service are not eligible for VAT refunds. I therefore ask that new clause 1 not be moved.
New clause 3 would require the Treasury to write a report on a VAT exemption of women’s sanitary protection products, including a financial assessment and an assessment of the impact on the purchasing of these products, especially by those aged under 25. I am well aware of the ongoing campaign to zero-rate or exempt from VAT sanitary protection products, which has cross-party support. I very much sympathise with the aims of the new clause, but this is not simply a case of the Government taking action.
The new clause asks the Treasury to submit a report to the House on the impacts of exempting sanitary protection products from VAT. The plain facts of the matter are that the goods and supplies to which the UK Government can apply a VAT exemption are set out in EU law. Any change to EU VAT law would require a proposal from the European Commission and the support of all 28 member states, which is no easy task.
To put this into context, the UK applies a reduced rate of 5% to sanitary protection products—the lowest permissible rate of VAT under EU law. However, different countries have different priorities, setting their tax rates to meet the economic conditions prevalent in their own jurisdictions. Across the EU, the average rate of VAT applied to sanitary protection products is more than 17%. The hon. Member for Glasgow Central made reference to the Republic of Ireland. My understanding is that it is not correct that these products are zero-rated or exempt there. The UK applies the lowest rate across the whole EU.
In discussions in the EU, some member states may consider other reviews to be of more concern to them at this time. It is not that there is any lack of sympathy for the cause. When the previous Labour Government, under Gordon Brown, reduced the rate, he did not zero-rate these products because of the constraints of EU law. Any change would require the overall consent of the EU institutions.
Mr Gauke
Before I do so, I wish to correct something. I understand that the Republic of Ireland has a zero rate for sanitary products. I correct what I said: the hon. Member for Glasgow Central was correct, so I apologise. That zero rate was agreed before Ireland joined the European Union in the early 1970s. A zero rate on these products was not in place when the UK joined the EU, or the Common Market as it then was. I am sure we would all consider that regrettable, but that was the situation. Trying to extend zero rates across the board would be difficult.
Barbara Keeley
There is a recognition of the difficulty—that certainly came out in the speeches we heard on this element of the Bill. What other Members and I would like to hear from the Minister is whether he supports doing something about it. Does he want to have a push on it? Party leaders seem to say that they do, but it would helpful if we could hear him say that he wants to do something about this issue.
Mr Gauke
There are a number of ways in which the European Union and the rules that apply within it could be improved. A strong case is made from all parts of the House that greater flexibility in this context would be helpful, but the point I would make is that we see little indication that other member states, which by and large have higher rates—the average rate is 17%—share that objective. If there is a general move, we would support that.
Other than when an accession country joins the EU and negotiates a zero rate, there is no particular indication that the Commission or member states as a whole are prepared to introduce new zero rates. Indeed, quite a lot of the advice coming from organisations such as the OECD and the general position that the Commission takes tend to be against that, so I do not want to underestimate the difficulties.
Alison Thewliss
I thank the Minister for giving way, and I am glad he was able to make that correction, because I checked whether Ireland had a zero rate this morning on the Irish Tax and Customs website. I appreciate what he is saying about things being difficult, but this is about promoting what is correct and right. I seek an assurance that he will lead on this issue. Changes could and should be made in this instance to correct a long-standing injustice, and I would like to hear a wee bit more about the Government’s ability to do that.
Mr Gauke
I come back to the point that we are not stating that we do not see the case the hon. Lady is making, but that we should not underestimate the resistance to the introduction of zero rates. The UK already has zero rates to a greater extent than most if not all other member states. As I said, zero rates have been possible only on accession, which is why the Republic of Ireland has a zero rate. There is a reason why the Labour Government introduced a 5% rate, not a zero rate. We are supportive and we would like the rate to be as low as possible, but without wider EU reform and greater flexibility in this area—other member states have other priorities—it will be a challenge. I do not dismiss the issue: were we able to progress further, I would be sympathetic, but we should bear in mind the task ahead of us.
With those remarks, I hope that new clause 3 will not be moved when it comes to it, however much I sympathise with the intentions behind it.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mel Stride.)
Finance Bill (Second sitting)
(9 years, 2 months ago)
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The Chair
Before we commence debate, people may have noticed that there is an unusual buzzing sound, which appears to be caused by some technical fault. For convenience of making sure that what people say is recorded accurately, I would be grateful if colleagues spoke even more clearly than they normally do.
Clause 3
Personal allowance and national minimum wage
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause 4 stand part.
Clause 5 stand part.
The Financial Secretary to the Treasury (Mr David Gauke)
Welcome to the Chair this afternoon, Mr Howarth. As I said to Sir Roger this morning, we look forward to serving under you both in the weeks ahead.
Clauses 3 and 4 will ensure that in future an individual working 30 hours a week on the national minimum wage will not pay income tax. Clause 5 sets the income tax personal allowance for 2016-17 and 2017-18. The changes deliver the Government’s commitment to support and to reward those in work. The Government are committed to supporting hard-working individuals, which is why we have a strong record in cutting taxes and reducing the tax bill for the lowest paid. To date, 27.5 million individuals have seen their typical income tax bill reduced by £825 as a result of personal allowance increases over the previous Parliament.
Nick Thomas-Symonds (Torfaen) (Lab)
I am sure that, like me, the Minister has read the Joseph Rowntree Foundation’s report on the Budget proposals. It finds that, over the course of this Parliament, a single parent working full time on the national minimum wage will end up being worse off as a result of this Budget. Is what is being introduced really a national living wage?
Mr Gauke
If one takes into account the overall Budget measures, including the changes to welfare and the personal allowance, the introduction of the national living wage and the extension of free child care to 30 hours, eight out of 10 households will be better off by 2017 as a consequence. That is a record to be proud of.
Mark Garnier (Wyre Forest) (Con)
My hon. Friend has referred to specific personal changes that help, but is it not also the case that the Government have done a great deal to support very small businesses, of which many are microbusinesses or sole traders? The reduction in corporation tax and the non-domestic rate relief for those very small businesses will also help households, particularly those who are self-employed and who run small businesses.
Mr Gauke
My hon. Friend is absolutely right. The best way to ensure that we have rising living standards is to have strong economy, which ensures that we encourage businesses, attract investment to the UK and reward entrepreneurship. That is the Government’s approach, but whether it is that of the official Opposition remains to be seen.
As we are talking about income tax, it is worth pointing out that 3.8 million individuals have been removed from income tax altogether since 2010 as a consequence of increases in the personal allowance. The Government are committed to continuing to make work pay and have pledged to raise the personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament. The Government also believe that people working 30 hours a week on the national minimum wage should not pay income tax. That is why we are introducing a change so that the personal allowance will automatically increase to ensure that it does not fall below the equivalent of 30 hours a week on the national minimum wage.
This will be the first time in history that the personal allowance has not been indexed on the basis of price inflation, instead ensuring that individuals who earn up to 30 hours on the national minimum wage will not pay income tax in the future. Clause 3 changes the basis of indexation for the income tax personal allowance from the consumer prices index to ensure that it is always set at a level at least equivalent to 30 hours a week on the national minimum wage. The change will take effect once the personal allowance reaches £12,500. Individuals working 30 hours a week or fewer on the national minimum wage will therefore be taken out of income tax altogether.
Clause 4 sets out that, until the personal allowance reaches £12,500, the Chancellor will have a legal duty to consider the impact of any proposed increase to the personal allowance on an individual working 30 hours a week on the national minimum wage. The clause also sets out the requirement for the Chancellor to make a statement on the impact that this will have on those individuals when an increase to the personal allowance is made at a future fiscal event.
The changes to income tax thresholds in the Bill will mean that an individual can work at least 30 hours a week without paying income tax both in 2015-16 and next year. In 2010, an individual could work only 21 hours on the national minimum wage without paying income tax. In time, an individual working 30 hours on the national minimum wage will be brought back into income tax.
On clause 5, it is worth pointing out how much the personal allowance has increased in recent years. In 2010-11, it was just £6,475; now, it is £10,600. Following on from that record, in this Parliament, we have committed to delivering a high wage, low tax, low welfare society. That includes reducing taxes for the lower paid, and that is why we have committed to increasing the personal allowance from its current level of £10,600 to £12,500 by the end of the Parliament. Clause 5 increases the personal allowance from £10,600 in 2015-16 to £11,000 in 2016-17 and to £11,200 in 2017-18.
In total, 570,000 individuals will be taken out of income tax altogether by 2016-17. That will increase to more than 660,000 by 2017-18. The changes represent a tax cut for 29 million taxpayers who will see their typical income tax bill reduced by £905 by 2016-17. Taxpayers who are over 65 will also benefit. From 2016-17 onwards, the tax system will be simplified so that all taxpayers will be entitled to the same personal allowance; the remaining age-related allowance of £10,660 will be merged with the higher personal allowance of £11,000.
The clauses allow us to support those in work by enabling people to keep more of the money they earn by paying less income tax. We are helping the lowest paid by taking them out of income tax altogether and we are moving towards a high wage, low tax and low welfare society.
Barbara Keeley (Worsley and Eccles South) (Lab)
Welcome to the Chair, Mr Howarth. It is a very long time since I did a Finance Bill––it was in my very first year as an MP. We have had a lot of guidance this morning, because apart from me going back to 2006, many Members have not done one before.
Clause 3 changes the basis of indexation for the income tax personal allowance from the consumer prices index to a link to an annual equivalent of an individual working 30 hours per week at the national minimum wage adult rate, when the personal allowance reaches £12,500. Clause 5 outlines future increases in the personal allowance that will work towards the Government’s stated aim of a personal allowance threshold of £12,500. The personal allowance is currently £10,600 and is set to rise to £11,000 in 2016-17, followed by a further increase to £11,200 in 2017-18.
Labour supports measures to improve the living standards of families across the UK. Every worker should be entitled to a fair wage and we welcome the increase in the personal allowance. We understand the reasoning behind changing the indexation for the income tax personal allowance. Linking the allowance to the annual equivalent of an individual working 30 hours per week at the adult rate of the national minimum wage when the personal allowance reaches £12,500 should help to increase a worker’s take-home pay when they work full time on the national minimum wage.
Currently, a person working on the minimum wage for 48 weeks a year earns £9,360 and so is already below the personal allowance threshold. Indexing the personal allowance to the national minimum wage rather than inflation will help to protect the earnings of minimum wage workers as the minimum wage rises above inflation. If the indexation of the personal allowance were to remain aligned to the consumer prices index measure of inflation, many workers on the national minimum wage could find themselves dragged into the personal allowance as their wages increase, as has certainly been the case in the past.
It is welcome that the Government are moving towards a wage and tax system that acknowledges people’s right to make a decent living, but it must be noted that the change in indexation may also have unintended consequences, particularly in the long term. In future, if the national minimum wage fails to rise in line with inflation, families could be hit by stagnant wages and a personal allowance that fails to reflect a squeeze on living standards. I hope that is borne in mind and that any future Government faced with this problem will act to protect family incomes.
Although the measure means that people working 30 hours a week on the national minimum wage do not have to pay any income tax, many people are excluded from the additional benefits that brings because they do not earn enough to qualify. In particular, it will make little difference to someone who works part time on the national minimum wage. There are 8.27 million part-time employees in the UK. People work part time for a wide variety of reasons. For example, they may have caring responsibilities or be unable to find any other suitable work. We know that the majority of low-paid part-time workers are women, and we must bear in mind that an increase in the personal allowance is unlikely to have any effect on that group. If the Government are serious about helping those on low pay to achieve a decent standard of living, we must also look towards other areas of income taxation.
The Institute for Fiscal Studies has suggested that reform of national insurance contributions could help those on low incomes. Many people earning below the income tax personal allowance threshold still pay national insurance contributions. I question the Government’s priorities in increasing the income tax personal allowance, because I feel that there could be more targeted assistance for those on the lowest incomes through changes to national insurance contributions.
That is a symptom of a wider problem within our tax system. The lack of alignment between income tax and national insurance causes additional complications for employers, Her Majesty’s Revenue and Customs and the public. We welcome the Chancellor’s asking the Office of Tax Simplification to look at the possibility of merging income tax and national insurance. As national insurance and income tax have become less distinct in their purpose and what they are used to fund, it is important that we review how we can address the lack of alignment between the two.
Although the personal allowance for income tax has consistently been raised to take more people out of tax, the tax people pay through national insurance has lagged behind. We must consider whether any future increases in the personal allowance could be targeted at national insurance, reducing distortions in our tax system and simultaneously helping those on low pay.
Although the use of the adult national minimum wage as a benchmark for the personal allowance is welcome, we must note that it will not be equivalent to the real living wage or even the apparent living wage announced by the Chancellor in the summer Budget. As the Bill stands, the national minimum wage appears to be the rate for those aged 21 and over. The personal allowance is therefore no guarantee of a living wage for people who work more than 30 hours a week. Will the Minister say whether the Government will seek to increase the personal allowance in future to the level of the new national living wage for the over-25s, once it is introduced?
There is great confusion about the Chancellor’s use of the term “living wage” in the Budget. Even if the new so-called living wage of £9 per hour were used in this calculation, it is unlikely to provide a real living wage for full-time workers. The current UK living wage, as calculated by the Living Wage Foundation, is £7.85 an hour throughout the UK, with the exception of London, where it is £9.15 an hour. The current real living wage, however, takes into account the tax credits that many families will lose under the Budget. When the Chancellor’s living wage reaches £9 an hour in 2020, it is likely that that will not reflect a real living wage as calculated by the Living Wage Foundation.
Mr Gauke
From what the hon. Lady said, I take it that she welcomes the significant further increases in the personal allowance. We have come a long way from the days when it was just £6,475, and I am glad we have made that progress. I am pleased that she appears to accept the principle of linking the personal allowance to the national minimum wage. I hope she recognises that the reforms we are making are helping the country to move towards the low-tax economy we need.
The hon. Lady asked a number of questions, for which I am grateful. She stated her support for the introduction of the national living wage, but then raised concerns about the jobs that will be lost and the care sector. We have to remember that this country is successfully creating a lot of jobs. Large numbers of jobs have been created in the past year or so, so we believe that the time is right for us to introduce the national living wage. We are locking in a more generous floor for the lowest paid across the economy, which obviously applies to the social care sector. Clearly, the costs of social care will be taken into account as part of the local government settlement in the spending review later this year. I cannot add much more to that at the moment, but I hear the hon. Lady’s point.
Barbara Keeley
It is instructive to listen to care providers and the people around them—the national provider associations. Privately paying residents of care homes now subsidise the residents who are paid for through local authorities to a substantial extent. I was given a case of somebody who, at the end of their life, was moved to a much smaller, cheaper room. That can happen in people’s last months, as they are approaching death. Care home providers do not want to do that, but they are in an awful situation in which there is a great disparity between the cost of supporting people as they need more and more care and the money available. We have to recognise that that is happening. I want to emphasise how important this is. The Minister and his colleagues should listen to the people who are worried about this. Although more jobs are being created and people can transfer between jobs, we cannot live without care homes.
Maria Caulfield (Lewes) (Con)
As someone from a healthcare background—I was a nurse—I take the point made by the hon. Member for Worsley and Eccles South about how vital staff are, but surely if there are cost issues, we must find ways to meet the cost pressures elsewhere. Paying the living wage is absolutely fundamental. Yes, it puts pressure on budgets, but not paying the living wage is not the way to address those issues.
Mr Gauke
I am grateful to my hon. Friend for her contribution. She makes a very good point.
The hon. Member for Worsley and Eccles South asked what would happen if inflation is higher than the increase in the national minimum wage. The Government’s aim is to have a national minimum wage that helps as many low-paid workers as possible without damaging their employment prospects. We welcome the fact that the Low Pay Commission shares our aim of seeing progressive real increases in the national minimum wage. It is because we have a strong economy and high levels of employment that we are seeing increases in the national minimum wage and that we now have the flexibility to introduce a national living wage.
On those who do not benefit from the increase in the personal allowance, we believe that in our income tax system someone working 30 hours a week on the national minimum wage should not pay income tax. These changes will ensure that those individuals will be taken out of income tax. We want to create incentives to encourage those who, for example, wish to increase their hours if their circumstances permit them to do so. They should be able to do that without finding themselves paying income tax.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to serve under your chairmanship, Mr Howarth. Will the Minister tell me how much a part-time worker earning, say, £8,000 will benefit from the changes?
Mr Gauke
The point I am making is that as we increase the personal allowance, people who earn under that amount do not pay income tax. If we still had a personal allowance of £6,475, such a person would clearly be paying income tax. If the hon. Gentleman is saying that we have already made an awful lot of progress, I would entirely agree with him. That does not mean that we should stop.
The hon. Member for Worsley and Eccles South raised the issue of the national living wage, which we will introduce. It is based on the national minimum wage, which we believe should continue in its current form, applying recommendations from the Low Pay Commission to the Government. That has an important role to play.
The Government want to protect younger workers’ employment prospects as well as see as many people as possible benefiting from a higher wage. Given that younger workers tend to have less experience in the labour market than older workers, there is a risk that too high a wage rate might make them relatively less attractive to employers. That is why we will have both the national living wage and the national minimum wage.
Barbara Keeley
I talked at some length about national insurance and the fact that those with very low earnings may not reach the personal allowance but still pay national insurance contributions. Will the Minister comment on possible steps to remedy that drift? What are the Government’s plans?
Mr Gauke
I understand the hon. Lady’s point. In the coalition agreement in 2010, the coalition Government made it clear that our objective was to increase the personal allowance. Again, in my party’s manifesto for the 2015 general election, we made it clear that we wanted to increase the personal allowance, and of course we will. Our priority is to honour our manifesto commitments and that is what we will do.
It is worth pointing out that the income tax rate is higher than the rate of national insurance contributions. The increases in the personal allowance have been effective in sending a clear signal that we are making work pay and I think they have contributed to the strong recovery we see in jobs. That is to be welcomed, because it incentivises people to work.
Barbara Keeley
I understand that we want to ensure that people on the lowest incomes who may not work a lot of hours, and certainly those on the national minimum wage or zero-hours contracts, do not reach the personal allowance. However, the point remains that they are paying national insurance contributions and that is an alternative route to help people on very low pay.
Mr Gauke
That is an alternative route; it is hard to argue against that point. What I would say is that we had a manifesto commitment to increase the personal allowance to £12,500. Given that that was our manifesto commitment, it is right that we fulfil it—I am sure the hon. Lady does not disagree with that—and that is precisely what this measure will do. I hope that the Committee will support the clause.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Clauses 4 and 5 ordered to stand part of the Bill.
Clause 6
Basic rate limit from 2016
Question proposed, That the clause stand part of the Bill.
Mr Gauke
The clause sets the income tax basic rate limit for 2016-17 and 2017-18. The changes deliver the Government’s commitment to support and reward those in work. In the last debate I set out the Government’s record on cutting taxes. On top of that, we also want to support middle-income households and to reward individuals who want to work hard and progress. That is why we have committed to increasing the higher rate threshold—the point at which the higher rate of income tax is applied—to £50,000 by the end of the Parliament. The clause takes the first step in delivering that commitment.
Clause 6 increases the basic rate limit from £31,785 in 2015-16 to £32,000 in 2016-17 and £32,400 in 2017-18. That is the income on which 20% tax is due. The income tax higher rate threshold, which is the sum of the personal allowance and the basic rate limit, will therefore increase from £42,385 in 2015-16 to £43,000 in 2016-17 and to £43,600 in 2017-18. Above that level, 40% tax is due. This is the first above-real-terms increase in the higher rate threshold since 2010, taking 130,000 people out of the higher rate of tax by 2016-17. By 2017-18, that will rise to more than 160,000 individuals. Since 2010, a typical higher rate taxpayer will have gained £818 by 2016-17 and £918 by 2017-18.
As in previous years, the national insurance upper earnings and upper profits limits will remain aligned with the higher rate threshold in 2016-17 and 2017-18. I noted on Second Reading of the National Insurance Contributions (Rate Ceilings) Bill earlier this week that a number of Labour MPs suggested that the link should be broken and that national insurance contributions should be charged at 12% above the higher rate threshold. Clause 6 allows the Government to support those in work, enabling people to keep more of the money they earn by paying less income tax. That helps us to move towards a high wage, low tax and low welfare society.
Barbara Keeley
I note the Minister’s point about the comments of Back-Bench MPs, but as I said earlier, all parties in the House have Members who do not share the views of those on the Front Bench. That is the way it is, and I could certainly quote all kinds of thing that have been said by Conservative Members on matters dear to my heart.
Clause 6 sets the income tax basic rate limit for the 2016-17 and 2017-18 tax years. It will rise to £32,000 in 2016-17 and £32,400 in 2017-18. We are in favour of tax cuts for those on middle incomes and we support the increases in both the personal allowance and the basic rate limit for 2016-17. However, as inflation, pay and living costs increase, we need to ensure that the basic rate limit for income tax reflects that change. That will prevent families and individuals from being dragged into a higher tax bracket and paying a higher proportion of their income in taxes, despite them seeing no real-terms increase in their living standards or disposable income. Many people feel that is the situation they are in today.
We must also bear in mind how many people will benefit from the increase in the basic rate. In the most recent annual survey of hours and earnings, which used 2013 data, the median gross annual earnings for an individual was just over £22,000. The majority of basic rate taxpayers earn much less than the basic rate limit and are unlikely to benefit from the increase. It will only benefit people with earnings towards the top of the basic rate of tax and will disproportionally benefit people who earn much more than the average income of an individual in the United Kingdom.
As always, we must look at the package of measures outlined in the summer Budget to understand the true impact of the change for working people. Although the Government are altering the tax system to help to ensure that people are rewarded for work, this still does not help to tackle low-paid insecure work. On 2 September, the Office for National Statistics released its figures for zero-hours contracts, which we have already touched on today. Those figures showed that zero-hours work is on the rise, with the total number of contracts rising to 1.5 million and the number of people reporting zero-hours contracts as their main source of employment rising by almost 20% since last year.
At the same time, there are now more than 1.2 million people working part time because they could not find full-time work. That is 200,000 more people than when the Conservative party took office in 2010. John Philpott, director of the Jobs Economist, has raised concerns that the new national minimum wage will mean that employers could stop offering full-time permanent contracts to avoid paying the steep rise in the national living wage for the over-25s, which comes into force next April. He has stated:
“In an otherwise very lightly regulated UK labour market the forthcoming large hike in the minimum wage when the national living wage (NVL) is introduced next year might act as a further incentive to employers to increase their use of zero-hours contracts—which are already very prevalent in sectors where the NVL will bite hardest—in order to minimise the impact on total labour costs.”
We welcome the introduction of the higher limit for basic rate taxpayers. Although basic rate taxpayers will be protected from a rise in living costs, the Government’s freeze in working-age benefits will mean that benefit recipients will not receive the same assurances. In fact, taking into account inflation forecasts, the Institute for Fiscal Studies has estimated that the freeze in working-age benefits is equivalent to a 4.8% cut to working-age benefits over the four years. That will result in 13 million families losing £260 a year on average in benefits.
Although a basic rate rise will be welcomed by those who will benefit from the increase, we must bear in mind that many workers will not benefit from the rate rise. It will not help to solve the problem of insecure work nor will it make up for the other changes to welfare payments and tax credits that go to people who earn significantly less than the threshold.
Mr Gauke
I retract that. The hon. Lady is not dismissing the opinions of Back Benchers; she just does not like them being quoted. I can understand why she holds that position, given the circumstances in which she finds herself.
The hon. Lady makes the point that the changes will not help individuals who do not pay income tax, or those who do not pay higher rate income tax. Under the circumstances, however, we believe that it is right to increase the higher rate threshold. This is the first above-inflation increase for some years. We have set out our intention to have a higher rate threshold of £50,000 by the end of the Parliament, and I hope that the hon. Lady will support that.
It is right that we support work. I sat in similar debates during the previous Parliament and listened while Front-Bench Labour spokespeople made the point that some nurses, policeman and others would benefit from bigger increases in the higher rate threshold, but that we were not increasing it fast enough. I hope that she will welcome the fact that we are making that progress and that the Labour party will continue to support such measures, which are all part of our move towards a low tax, low welfare and high wage economy.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7
Rate of corporation tax for financial years 2017-2020
Question proposed, That the clause stand part of the Bill.
Mr Gauke
Clause 7 will cut the rate of corporation tax to 19% in 2017 and 18% in 2020. Let me begin by giving some background to the measure. The Government have made it clear that we want a business tax regime that is competitive and fair, and since 2010 we have made clear strides towards that goal. The main rate of corporation tax was 28% in 2010. We had the 20th-lowest main rate among the EU27 countries, as other countries cut rates further and faster than the UK. To combat that, we have cut the rate by almost a third, to 20%, to make the UK more competitive and to support growth and investment. That is one of the biggest boosts that British business has ever seen. [Hon. Members: “Hear, hear!”] In addition, the small profits rate was also cut to 20% in the previous Parliament, and the two rates were merged to simplify the tax regime. Overall, the cuts delivered in the previous Parliament will save businesses £10 billion a year from 2016-17.
[Mark Garnier in the Chair]
The cuts that we have already delivered are significant, Mr Garnier—
Mr Gauke
Such greatness to fall on one so young.
In the face of global competition, the UK cannot afford to stand still, which is why we will go further in this Parliament, cutting the rate to 19% in 2017 and 18% in 2020. Those cuts will benefit more than 1 million businesses, saving them a further £6.6 billion by 2021, and will give the UK the lowest corporation tax rate in the G20, supporting investment, productivity and growth.
There is strong evidence of the economic benefits of lower corporation tax rates. Low rates increase the return that companies receive on investment, so encouraging the business investment that is vital to productivity growth. The University of Oxford estimates that the reduction in the corporate tax burden that we have delivered will increase business investment by £11 billion. The Treasury and HMRC have modelled the economic impact of the corporation tax cuts delivered since 2010, along with those announced at the summer Budget. The modelling suggests that the cuts could increase long-run GDP by more than 1%, or almost £20 billion in today’s prices.
[Mr George Howarth in the Chair]
As well as supporting businesses already operating in the UK, lower rates of corporation tax make the UK more attractive to international businesses. UK foreign direct investment stock has increased by almost 50% since 2010, reaching £1 trillion by the end of 2014. Last year, UK Trade & Investment reported almost 2,000 inward investment projects—the highest number ever—which have created almost 85,000 new jobs. The corporation tax cuts and other reforms, such as the introduction of the patent box, have completely changed perceptions of the UK tax regime. Five years ago, businesses were leaving the UK because of our tax regime; that regime has now become an asset that attracts firms to the UK, which is now regularly cited in surveys as having one of the most competitive regimes in the world.
In conclusion, cutting corporation tax has been a central part of the Government’s economic strategy, and it is working. The UK grew faster than any other G7 economy in 2014, and 2 million more people are in employment since 2010. Business investment is growing rapidly. Tax competition is dynamic. In the past few decades, we have seen countries throughout the world cut their corporation tax rates. We cannot afford to stand still while others rush ahead. The UK needs to be as competitive as possible.
There were those at the general election who advocated an increase in corporation tax to 21%. I am pleased that, months later, on Second Reading, those very same people were supportive of the measures in the clause. I am grateful to the hon. Member for Birmingham, Ladywood (Shabana Mahmood), who spoke for her party in that debate and supported the reduction in corporation tax to 19% and then 18%. A new 18% rate will send out the message around the world loud and clear that Britain is open for business. I hope that the Labour party will continue to support the policy, and I commend the clause to the Committee.
Barbara Keeley
I am glad to see you back in the Chair, Mr Howarth. I put my head down for a moment and then you were not there.
As we have heard, clause 7 sets the main corporation tax rate at 19% for the financial years beginning on 1 April in 2017, 2018 and 2019, and at 18% for the financial year beginning 1 April 2020. Labour is in favour of support for businesses, which is what we need to discuss as we consider the clause. We want to help British businesses to invest in the UK and to enable long-term investment. We will support the corporation tax measures, but we have questions about the future direction of policy on support for businesses. It perhaps is not appropriate to discuss it at this point, but that is why later in our consideration of the Bill we would like to introduce a new clause asking for a public consultation on the reforms to the system of tax relief for businesses.
Chris Philp (Croydon South) (Con)
I suggest to the hon. Lady that businesses have been generous in passing on the fruits of their expansion and profitability, as evidenced by this week’s figures showing that wage growth is at a record recent level.
Barbara Keeley
I do not see how that follows the flow of what I am talking about, but if I find a place to give a reply, I will do so.
In 2014-15, corporation tax made up 7% of the total tax take in the UK. We need to be clear that cutting corporation tax amounts to a transfer to the largest businesses that disproportionately benefits them. We are concerned that a more effective policy measure, such as the one suggested at the election, could have been used to help all businesses, rather than just the largest companies. We question the reasoning behind the Government’s policy decision. It appears that corporation tax has been used because it is relatively easy to alter. I am sure the Government recognise that a substantial amount of money is going to businesses. Will the Minister outline how the Government intend to pay for the rate cut, which in 2020-21 will cost £2.5 billion? We have not seen a breakdown of exactly how that will be paid.
We have heard the point about firms being attracted to this country due to our tax regime. KPMG’s December 2014 survey of tax competitiveness revealed that only 8% of respondents saw favourable tax policies as the factor with the most impact on our recovery. Only 18% saw tax as having a high influence on where companies base themselves. That contradicts the point that the Minister just made. We believe that the focus of support for small and medium-sized businesses should be a priority and that policies to encourage businesses would have been better targeted elsewhere than this tax rate change.
Many small and medium businesses will have been disappointed that the Chancellor failed to mention business rates in his Budget speech. During the general election campaign, we outlined proposals to cut and then freeze business rates, so that smaller firms could have the support needed to invest, innovate and raise productivity. That would have helped more than 1.5 million small business properties. Small and medium-sized businesses are concerned about the pressures on business rates. Every time I visit such businesses in my constituency, that is almost the first thing they raise. Labour, along with small and medium-sized businesses up and down the country, will be waiting to see whether the Government will take action to reduce the business rates burden. There are reports that the valuation office now has to deal with 500 appeals a day. Will the Government give small and medium-sized businesses a gesture of support by providing them with an interim report on their business rates review?
Rates reform continually tops many small retailers’ and business groups’ lists of areas that need real reform, but the tax, over which there is a backlog of more than 250,000 complaints, failed to get a mention in the Chancellor’s speech. That caused a lot of disappointment. The British Retail Consortium has warned that the level of business rates could cause 80,000 shops to close by 2017, and business groups including the Confederation of British Industry say that the antiquated system of business rates is a major barrier to investment.
Let me return briefly to the point about the 80,000 shops. Very many MPs, including me, have in our constituencies the situation of empty shops on high streets and we all want to do something about that, but here is the big problem. John Allan, chairman of the Federation of Small Businesses, urged the Government to take action. He said:
“Bringing forward reforms to business rates is an immediate priority.”
We urge the Minister and the Chancellor to ensure that the ongoing review of business rates does not result in small businesses paying disproportionately more. We call for greater attention to be given to business rates as a means to support small businesses.
It is quite common in these debates to hear questions backwards and forwards about the different priorities. During the general election campaign, Labour set out further ways to support small businesses, including elements that are often talked about here in debates. One was the tackling of late payments with a new requirement on larger businesses to set out the extent of late payment that they have been responsible for and the action that they have taken to compensate suppliers. We would have given business organisations, such as the Federation of Small Businesses, the right to take cases on behalf of their members, because they believe that that is very important.
We wanted to strive to reduce unnecessary regulation in the small business arena by establishing a small business administration, which the FSB has called for, to co-ordinate work across the Government to benefit smaller businesses and cut unnecessary regulation as it affects them. Our small business administration would have been given a remit to ensure that regulations or requirements on small business were proportionate and appropriate and avoided unnecessary burdens or compliance costs. They want to see regulation designed from the perspective of the smaller firm and they feel that it is not.
There is a need to deliver a longer-term road map for capital allowances and incentives for research and innovation such as the research and development tax credit, and not just for the headline rate of corporation tax. There is also a need to improve support for entrepreneurs and small and medium-sized enterprises that want to grow rapidly.
We understand that the Government have started to take steps to address the issue of late payments and that a consultation on the proposed role of small business commissioner was undertaken. As we are talking about the different scale of businesses, may I ask whether Ministers can provide us with an update on the new role, because that consultation ended on 21 August?
What other action are the Government taking to offer the support needed for small and medium-sized businesses? Feedback from a cross-section of businesses, ranging from start-ups to FTSE 100 companies, that was gathered by PricewaterhouseCoopers stated a number of key messages about their view on how the UK tax system should be shaped in the future. They included the following. The UK needs to be clearer on tax; that is the issue of the road map to instil confidence. A longer-term approach to tax needs to be taken. We will talk about that later in terms of how some taxes and allowances have changed. Businesses feel that the tax system should be more focused. It is too complex, with many different reliefs and exemptions; reliefs should be better targeted at specific purposes. Also—I have already made this point—national insurance contributions should be aligned with income tax. That was the view of those businesses.
Labour wants certainty for businesses looking to invest.
Lucy Frazer (South East Cambridgeshire) (Con)
The hon. Lady mentions certainty. Does she accept that other measures in the Budget, such as the national insurance contribution ceiling, will not only create certainty, but help the small businesses that she is mentioning?
Barbara Keeley
Indeed; that is why we made that pledge first. There is nothing else to say about that. We understood how important that was, and made the pledge first—on income tax, national insurance and VAT. The only difference between us on that is that we would not have spent the time of a Public Bill Committee or Committee of the whole House on gimmicks—on putting forward legislation to bring in what we pledged. We support action to help small and medium-sized businesses, and a system in which business reliefs are clear and focused. We want to ease the burden on smaller business of navigating the myriad reliefs that, we have to admit, exist today.
George Kerevan (East Lothian) (SNP)
We will not challenge the main substance of clause 7, but it has unintended consequences that reflect on later clauses that we will try to amend; I want to bring those up, and will ask the Minister to reflect on them and perhaps discuss them with the Chancellor.
The clause pre-announces the cut to the main rate five years in advance. Ordinarily, I would think that was quite a good thing to do, because it maximises revenue streams and still gets us the maximum impact of the incentive. That worked very well in Sweden, so we should congratulate the Minister on that principle. The first problem that emerges is that significant evidence shows that large amounts of corporate surpluses are staying in the bank or are being used for share buy-backs. There has been no great evidence over the past few years to show that cuts to corporation tax are leading directly to reinvestment in manufacturing plant and productive infrastructure. In fact, corporate balances have been going up significantly in the UK and, for the same reason, the United States.
My practical worry is that if we continue, over these five years, to cut corporation tax, that may incentivise profit-making in business, but the profits will not be reinvested into raising productivity in the British economy. That link has to be looked at. The issue could be dealt with by adding extra incentives for investment, so that the corporate surpluses are recycled. One of my criticisms of the Bill overall is that those incentives do not exist. I ask the Minister to look at that.
Chris Philp
Does the hon. Gentleman agree that if we put in place the incentives that he describes, we would add complication to an already very complicated tax code? On his point about reinvestment, if corporate profits are dividended back to shareholders, it is likely that those shareholders will reinvest them elsewhere. If the profits are deposited in banks, my basic Maynard Keynes reading suggests that the banks will lend the money to other people. The money will find its way back into the economy, but via different routes.
George Kerevan
Both are fair points, but the recycling is largely going into property. Every crane that we count around this building is the result of that. We have offset productive investment into an overheated property market, which is hardly what we want to do to raise productivity.
On the hon. Gentleman’s first point about how we craft incentives so that they do not become over-complicated and lead to further tax loopholes, that is an historical problem. This is a question of the here and now. I am sure that the Chancellor and the Government can come up with some good ideas on that.
I raised the issue with the Treasury Committee and the Monetary Policy Committee yesterday, because I am concerned that the Government are adding to the burden by attempting to run a permanent budget surplus—to generate surpluses that do not go into the productive economy. The representatives of the Monetary Policy Committee committed themselves to an answer that they may rue and that the Government should go away and think about. The committee was pressed on the point that if the Government run a permanent budget surplus, it must have an impact on the rest of the national income accounts. If we run a budget surplus, we are saving; we are taxing people to save. Where do the savings go? The best that the committee could do was say that there would be a further rundown of corporate balance sheets—in other words, money would flow out of the corporate sector—and that money might start flowing abroad, so we would end up investing abroad.
Chris Philp
We have a £1.5 trillion national debt, and I would respectfully suggest that surpluses would begin, in a very small way, to pay it down.
George Kerevan
I merely reflect the answer given to me by the Monetary Policy Committee of the Bank of England. The hon. Gentleman may take it up with them.
Clause 7 will have a second unintended consequence, which is more specific. The Finance Bill does not just cut taxes to business; it raises them in a new way in the banking sector through the introduction of the bank levy—the surcharge on bank profits, which will replace the old levy. The problem with the change to the surcharge is that it extends the new tax to challenger banks and mutual building societies. The Chancellor responded to me personally and said that challenger banks and mutuals will not be disadvantaged because any shift in the extra tax burden from the surcharge on their profits will be offset by the reduction in corporation tax. Unfortunately, there is a five-year gap, and therein lies the problem. Yes, the reduction in corporation tax will eventually feed through to the challenger banks and mutuals, but in the interim they will have to pay a surcharge. There is a problem for competition, because we will be placing an extra burden on the mutuals and challenger banks in the interim by raising the surcharge on their profits. The full effect of the cut in corporation tax will come only five years down the road.
The Chair
Order. The hon. Gentleman has done a very good job of conflating two issues into one clause, but he needs to keep relating his speech to the levy on corporation tax. He has done that so far, but he seems to be straying from that a bit.
George Kerevan
I stand chastened, Mr Howarth. My point is that the one does not offset the other because of the time gap, which is where I wanted to finish. That is what I would like the Minister to reflect on.
Mr Gauke
I begin by welcoming the support of the hon. Member for Worsley and Eccles South for the reduction in corporation tax—although, if I may say so, she could have sounded a little more enthusiastic about the measure. I would be grateful to know whether the shadow Chancellor agrees with the reduction in the corporation tax rate first to 19% and then to 18%. He is on record suggesting that the rate should be considerably higher, but I appreciate that he made those comments when he was a Back Bencher, so perhaps we should not dwell on them for too long.
A few issues were raised, some of which relate to this clause. I will try to address as many as possible. First, on the issue of the UK’s reputation and the base erosion and profit shifting process, which was instigated by the UK Government and others, the UK believes in a tax system that is competitive and fair, and which properly reflects where economic activity takes place. We want a simple, competitive and fair tax system, which is why we instigated the BEPS initiative to ensure that companies are not able to make use of an outdated international tax system that does not properly reflect where economic activity takes place. Within that system it is perfectly reasonable to have low and competitive rates, and that is exactly what we have delivered.
As I set out earlier, we are seeing signs of increased business investment. The analysis undertaken by the Treasury and HMRC shows that much of the tax loss as a consequence of the reductions is recovered by increases in economic activity. A dynamic behavioural analysis shows that this is helping. Real business investment is growing as a proportion of GDP; business investment grew by 8% in 2014, and the Office for Budget Responsibility is forecasting that it will grow strongly over the next few years. It is also worth pointing out that the likes of the OECD make the case that corporation tax is perhaps one of the most economically damaging taxes and one of the most inefficient of our taxes. That is why it has been a priority for the Government to reduce it. We believe that if the UK is to prosper and to win the global race, it is important that we have that competitive tax system.
Our case as a country would be aided if there was consensus that we should have low rates of corporation tax, and that is why I genuinely welcome the fact that the Opposition parties apparently will not divide the Committee on that issue. I hope that that consensus can be maintained, because those who go around advocating very high rates for corporation tax do not aid those of us who are trying to advocate that businesses should invest in the UK when they have a number of international choices.
Barbara Keeley
I do not think it would be my place to confirm the shadow Chancellor’s support for the measure. If this is going to come up again in the debate, I should explain that we have a robust system of policy development and that decisions in the short to medium term are taken by the shadow Cabinet, which I think has met only once since we had the change of leadership at the weekend; then we have a substantial policy forum set up, which works nationally with our annual conference to take forward new developments and changes in policy direction and decisions. It is not sensible in this very short time into a new administration to ask a junior shadow Treasury Minister to make that point.
To bring the Minister back to my questions, I spent quite a lot of time talking about corporation tax versus business rates. We made our pledge on business rates and we are very concerned about small and medium-sized businesses, and about the high street. Can he answer my questions?
Mr Gauke
I will, although I do not want to hurry away from corporation tax, given that it is the essence of clause 7. I note that the hon. Lady said that although she is able to make a statement about party policy as the Labour party Front Bencher in this Committee, neither the leader of her party nor the shadow Chancellor are in a position to do so. If that is the way the Labour party operates, that is one for that party, curious though it might be to the rest of us.
The Chair
Exactly, and I think we should not get too drawn into policy-making processes of any political party.
Simon Hoare (North Dorset) (Con)
I wonder whether my hon. Friend shares my view that those who usually call for higher rates of corporation tax have never themselves ever been involved in the running of a business.
Mr Gauke
My hon. Friend makes a very important point. Another point about corporation tax that can be lost in the debate is that, ultimately, the burden of all taxes falls on people. There is a lively debate on corporation tax about how much should it fall upon shareholders, in which case we are often talking about pension funds that pay pensions to ordinary people. Sometimes it could fall upon employees as a consequence of the fact that there is a reduction in investment as a consequence of corporation tax, which in turn means that productivity does not improve, and as productivity tends to drive salaries and wages, employees often suffer; or it could indeed be consumers who suffer from higher prices as a consequence of corporation tax.
Let us be clear that all taxes that we debate in this Committee are ultimately paid by people. They might not be writing the cheque or transferring the funds from their account, but ultimately all taxes are paid by people, and if one has an economically inefficient tax, the price that people pay for the benefit to the public finances becomes all the greater.
Barbara Keeley
I find the comment from the hon. Member for North Dorset about the prior experience of Members of this House rather patronising. I started my career in IBM, which is one of the biggest companies in the world. In fact, I worked at the large systems end of IBM with some of the largest organisations in the country, so I will not be patronised about my business experience. I have also been self-employed, which an awful lot of Members have not been.
I return to the point that this was a straightforward switch. I do not have many large corporations in my constituency in Salford, but I do have a lot of small and medium-sized businesses. Our straight switch from corporation tax was to support those small and medium-sized businesses. That was the essence of my contribution.
Mr Gauke
I am grateful to the hon. Lady for her intervention. To be fair to my hon. Friend the Member for North Dorset, he was saying that those who advocate corporation tax rises might not understand business. As she is not advocating corporation tax rises, I do not think she should take those remarks personally.
The coalition Government introduced a number of measures on business rates at autumn statements and in Budgets—for example, introducing a discount and extending the small business rate relief. We have announced a review of business rates, which will report by the end of the year. We set out details in the Budget of how we are paying for the rate cut, as part of a set of tax-reforming measures.
The Government have taken strong steps to deal with avoidance both domestically and internationally. I will not detain the Committee on that, but I am happy to do so if necessary.
On tax simplification and helping small and medium-sized enterprises, it is worth pointing out that the Office of Tax Simplification was set up in 2010 and has made more than 400 recommendations, of which half have already been implemented. The OTS will be established on a statutory basis with an expanded role and capacity.
The hon. Lady asked specifically about the late payments consultation. As we heard, that consultation was completed last month and the House will be updated on its results once responses have been reviewed. I am grateful for the Committee’s support for the measures, and I hope clause 7 will stand part of the Bill.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Annual investment allowance
Question proposed, That the clause stand part of the Bill.
Mr Gauke
Clause 8 increases the permanent level of qualifying expenditure eligible for the annual investment allowance to £200,000 from 1 January 2016. It provides a stable and long-term incentive for small and medium-sized businesses to invest in plant and machinery by allowing them to reduce their taxable profits by 100% of the value of their investment, up to the £200,000 threshold.
Encouraging long-term investment has been highlighted as a fundamental objective for achieving greater productivity, as outlined in the Chancellor’s productivity plan. The clause signals the Government’s intention to do just that, in order to support long-term business investment. Business groups such as the Confederation of British Industry, the Federation of Small Businesses and the British Chambers of Commerce have all welcomed a higher permanent level of the allowance.
The coalition Government temporarily increased the annual investment allowance to £250,000 and £500,000 in 2012 and 2014 respectively. Those temporary increases have provided valuable support to businesses as investment has recovered since the recession. The allowance was due to revert to a permanent level of £25,000 at the end of the calendar year, but the clause prevents that from happening. Instead, the annual investment allowance will be set at £200,000, its highest ever permanent level. That will provide certainty for businesses in the long term.
Barbara Keeley
I think businesses might say, “About time,” given the history of the allowance. As the Minister said, the clause increases the maximum amount of the annual investment allowance from £25,000 to £200,000 for expenditure incurred on or after January 2016. In fact, that is a cut to the existing temporary level of £500,000.
The allowance ensures the immediate deduction of expenditure on most plant and machinery from taxable profits. The history of the allowance’s levels is entertaining. It was set at £50,000 between 2008 and 2010 and then it increased to £100,000. It was cut to £25,000 in 2012 but then increased to £250,000—supposedly temporarily—in 2013. In the 2014 Budget, as we just heard, it was raised again to £500,000 and, as was announced in the Budget, it is now being cut to £200,000 in 2016. The Institute for Fiscal Studies said:
“These changes and instability create costs and uncertainty and distort behaviour.”
In 2010, the Chancellor cut the main capital allowance rate and reduced the annual investment allowance to just a quarter of its previous level, from £100,000 down to £25,000. The Government then increased it, but on a temporary basis. Such unpredictability and complexity makes it difficult for businesses to plan the long-term investments that the allowances are intended to support—that is their whole purpose.
Huw Merriman (Bexhill and Battle) (Con)
That said, taking into account fluctuations over the years and the fact that it was a two-year stimulus, does the hon. Lady agree that the key part to the provision is that it is permanent, thus allowing businesses to plan in the way she advocates should be the way forward?
Barbara Keeley
The hon. Gentleman says that, but, looking at what people say about this, it seems that they do not have confidence that the allowance is permanent because of the way it has chopped and changed. That the Government acted in 2010 to reduce it to a quarter of its earlier value—it was £100,000—is part of the problem. One can see from what I just read out that it jumped around.
To answer the hon. Gentleman’s point, both the Institute of Directors and the British Chambers of Commerce have called for the annual investment allowance to be retained at £500,000. Crucially, the IFS also states that
“restricting the AIA to investment in plant and machinery only creates distortions through differential treatment of assets.”
The IFS has estimated that setting the annual investment allowance at £200,000 from January next year will cost £0.8 billion.
Will the Minister explain how the Chancellor reached the figure of £200,000? As I say, the allowance has jumped about: it was cut to just £25,000 and is now going to be £200,000. There were calls from some small and medium-sized businesses to set a level over £500,000. The IFS says that over the past few years there has been
“an absurd degree of inconsistency”
in the setting of the allowance. As highlighted earlier, PricewaterhouseCoopers’ “Paying for Tomorrow” campaign put forward a strong argument for a need for a long-term view on tax, with a simple, focused approach to tax reliefs. The history of the allowance is anything but that.
The inconsistency has a damaging effect on businesses’ confidence to plan for the future. The move to make the annual investment allowance a permanent rate is welcome, and we support the move to encourage investment and productivity, but we question whether the measure goes far enough. As I said, a number of small and medium-sized businesses have called for the allowance to be set above the current level of £500,000. As with business rates, they feel that the Chancellor has not listened to them. There are calls for him to look again at how he helps businesses to continue to spend and grow.
Other reliefs should also be considered. Consultations are out on business rates—although the Minister did not seem keen to tell me more about that one—enterprise investment schemes and venture capital trusts. We encourage the Government to focus more than they have on the needs of small businesses. I have many questions about how the annual investment allowance has been handled by the Government to date, but of course we welcome some degree of permanence, as guaranteed in the summer Budget—if it is to be permanent. However, the overall system of tax reliefs for businesses must be considered if we are to have a competitive and fair system for businesses to invest and grow. I hope that the Minister will adopt Labour’s new clause and launch a public consultation on reforms to the system of tax reliefs for businesses. I hope also that Members will support the new clause when we vote on it later.
Michelle Thomson (Edinburgh West) (SNP)
Much of what I say will be in support of the comments made by the hon. Member for Worsley and Eccles South. The Scottish National party also considers the allowance a vital investment tool, particularly for small businesses. The fact that it can be claimed during a year of investment rather than over a number of years is particularly beneficial for encouraging investment and therefore productivity, which we are also keen to see.
To reiterate what the hon. Lady said, yes, the allowance was increased to £500,000, and we are pleased that it will not fall off a cliff edge to £25,000 in January 2016; rather, it will just be decreased to £200,000. It is, however, a pity that it is a decrease of £300,000. My question for the Minister is, if it is good at £500,000, why not keep it there to encourage productivity? In his Mansion House speech, the Chancellor said that we do not export enough, train enough, save enough or invest enough. The key question stands: why not make the allowance permanent at £500,000?
Mr Gauke
I thank hon. Members for their questions. First, let me make it clear that £200,000 is the highest permanent level there has been for the allowance. If I recall correctly, it was £100,000 during the Labour party’s last year in office. We made some temporary increases in the AIA to support the recovery, and those increases were warmly welcomed by businesses, which believed that they allowed them to bring forward and realise their investment plans. We recognise the importance of providing certainty to businesses in the current economic climate, and we are committing to keeping the level of £200,000 for the entire Parliament. We believe that that will help to provide an environment of long-term support for businesses to invest.
The level of the allowance must be viewed in the context of cuts to corporation tax. We must remember that although the previous Government had an annual investment allowance of £100,000, the rate of corporation tax was 28%. The allowance of £200,000 when we have a corporation tax rate of 20%, falling to 18%, is significantly more generous.
On business reaction, let me read two quotations following the Budget announcement on 8 July. John Allan, the chairman of the Federation of Small Businesses, said:
“The Annual Investment Allowance has been an important incentive for people investing in the future growth and productivity of our small businesses. We have long called for the Allowance to be set permanently and at a reasonable level. Small firms will therefore welcome the move by the Chancellor to do just that by setting the Allowance permanently at £200,000.”
John Longworth, the director general of the British Chambers of Commerce, said on the same day:
“The Chancellor has confirmed that Britain is open for business. Firms across the UK will cheer not just the new permanent Annual Investment Allowance, further Corporation Tax reductions, and lower National Insurance for small businesses, but also commitments to childcare and higher education that help them employ Britain’s best.”
We must bear that in mind.
Barbara Keeley
The quotes give part of the message, and it is not surprising that those whom the Minister has quoted from business support permanence. As two Opposition Members have said, however, businesses have called for the allowance to be retained at £500,000. It is not surprising that they wanted permanence, but they also wanted a higher level.
Mr Gauke
The reaction to the announcement was that businesses were pleased. That is what we got from the Federation of Small Businesses and the director general of the British Chambers of Commerce. Would they have liked it to be higher? Of course they would, but the claim that the measure has disappointed business is certainly not supported by those two quotations.
Michelle Thomson
In that case, I would be interested to understand why it is not set at £500,000. Surely, if it was, businesses would be doubly delighted. What is the economic thinking behind not making it permanent at that level?
Mr Gauke
There is a question of cost. It is necessary to evaluate where the impact would lie and the benefit of going above £200,000. Yes, the allowance was once at a very high level, but that was because of particular temporary circumstances, given the uncertainty that existed towards the end of the previous Parliament.
Let us not forget that 99% of companies will receive 100% relief on their investment with an annual investment allowance of £200,000. It is a question of balancing the benefit to investment with the cost in tax that we will forgo if we go above £200,000. The judgment that we made was that, given that 99% of companies will get 100% relief, a level of £200,000 was a reasonable approach to take in the context of a set of policies that are undoubtedly pro-business and designed to attract investment in the UK.
Daniel Zeichner
On a point of clarity, given that we are discussing permanence, I think I heard the Minister say that this would be the level for the remainder of the Parliament. Is that what he is saying?
Roger Mullin
I would be interested to hear the Financial Secretary’s reflections on the Chancellor’s speech, which my hon. Friend the Member for Edinburgh West has cited. Does the Minister accept that there is a fundamental problem of investment in the UK economy and that we need to do more to try to stimulate investment? One way of doing that would have been to retain the investment allowance at a higher level.
Mr Gauke
Our view is that the most effective way is the balance of policies we have set out in the Budget, preceding Budgets and autumn statements. It has reduced corporation tax from 28% in 2010 to 18% by 2020, the end of this Parliament. That is important too, so we have a proud record.
I am glad that there is agreement that we need to attract business investment in the UK. I have already quoted the numbers and increases we have seen in recent years. It is important that we provide that pro-business environment, and that is precisely what the Government continue to do.
Question put and agreed to.
Clause 8 accordingly ordered to stand part of the Bill.
Clause 9
Increased nil-rate band where home inherited by descendants
Mr Gauke
I beg to move amendment 1, in clause 9, page 9, line 11, leave out from “if” to “to” in line 14 and insert “—
(a) the property becomes comprised in a settlement on D’s death, or
(b) immediately before D’s death, the property was settled property in which D was beneficially entitled to an interest in possession.
‘(3A) Where the property becomes comprised in a settlement on D’s death, B inherits the property if—
(a) B becomes beneficially entitled on D’s death”
The Chair
With this it will be convenient to discuss the following:
Government amendments 2 to 6.
Amendment 7, in clause 9, page 13, line 26, at end add—
“(5) The Chancellor of the Exchequer shall, within three months of the passing of this Act, undertake a review of the impact of the introduction of the new nil-rate band for inheritance tax and lay a report of the review before both Houses of Parliament.
(6) The review must pay particular attention to the impact of the introduction of the new nil-rate band on:
(a) different regions of the UK; and
(b) house prices.”
Mr Gauke
Clause 9 will reduce the burden of inheritance tax for most families by making it easier to pass on the family home to their children and grandchildren. That means there will be an effective inheritance tax threshold of up to £1 million for married couples and civil partners by the end of this Parliament.
Nick Thomas-Symonds
Can the Minister tell me what percentage of properties in the UK will benefit from these inheritance tax changes? What percentage of those properties are outside London and the south-east?
Mr Gauke
This is an area where I hope we can reach a consensus, although I may well be confounded. There is a place within our tax system for an inheritance tax regime that applies to the wealthiest estates. We believe that a proportion of estates should continue to pay inheritance tax. One challenge we face is that over the next few years, unless we take some form of action, it is likely that the proportion of estates that will pay inheritance tax will increase significantly. If we simply allow the system to roll on as it is, inheritance tax will become much more widely applicable. That may well be the position that some Members hold, but we are talking about an application far wider than was the case under the previous Labour Government.
Let us not forget that it was the previous Labour Government who made a substantial change to inheritance tax when they brought in the transferable nil-rate band. I am sure that Members will remember the autumn of 2007 as clearly as I do, and the announcement by the then Chancellor, Alistair Darling, of the introduction of that nil-rate band. At that point, the proportion of estates affected by inheritance taxes was somewhat lower than is forecast to be the case by the end of this Parliament. I hope that context is helpful to the hon. Gentleman.
The changes we are introducing were a commitment in our manifesto, and it is a commitment that I am pleased to deliver. Inheritance tax was introduced in 1986. It may be helpful if I explain briefly how it works. The rate of inheritance tax is 40% on anything above the inheritance tax nil-rate band of £325,000. There is also a full exemption for anything left or gifted to a spouse or civil partner. As a result, the estate of the first spouse or civil partner will often not use the full allowance of £325,000, so any unused amount can be transferred to a surviving spouse or civil partner. That means the surviving individual can have an allowance of up to £650,000 before inheritance tax needs to be paid.
However, we now have the problem that more hard-working families are facing an inheritance tax bill than at any time since the introduction of the system nearly 30 years ago. Last year, 35,000 estates had an inheritance tax liability and that has been forecast to rise by nearly double to 63,000 in 2020-21. And thousands more worry about leaving their families with a large inheritance tax bill when they die. A YouGov poll in March 2015 showed that 59% think that the tax is unfair—more than any other tax—and it is easy to understand why. If people have saved, paid their taxes and worked hard to own their home, it can only be right that it will go to their family and not to the tax man. That is why we promise to make it easier for hard-working families to pass on their home to their children and grandchildren, and that is what the clauses deliver.
From 6 April 2017, a new additional transferrable nil-rate band will be phased in for all individuals who leave their home on death to direct descendants. That includes children, stepchildren, adopted children, foster children and grandchildren. The new allowance will be up to £100,000 in 2017-18, up to £125,00 in 2018-19, up to £150,000 in 2019-20 and up to £175,000 in 2020-21. That will be separate from the existing inheritance tax nil-rate band, which will remain at £325,000 until April 2021.
Nick Thomas-Symonds
Prior to coming to the House, I practised law in this area of law. It seems to me that clause 9 essentially seeks to increase the nil-rate band up to £1 million to include family homes. That is the stated aim. I know that the Minister is a fan of simplicity in the tax system, so I am puzzled as to why it takes an additional 400 lines in the Bill to do that, which in turn creates even greater complication in what is an already complicated area of law.
Mr Gauke
I understand the hon. Gentleman’s point, but if he will bear with me, I will set out the rationale for the measure. We think there is a particular issue about family homes and the fact that more and more homes are caught by inheritance tax. That is why we have introduced these measures. When it comes to complexity, if one looks at the inheritance tax regimes of Germany, Italy or France, they all consist of a number of different bands or rates, depending upon the relationship between individuals. Germany also allows for an exemption in certain circumstances when the family home is left to children or stepchildren. Several countries, such as Australia, Sweden and Canada, do not have inheritance tax, but still charge capital gains tax on death, and those regimes have their own complexities. Complexity is inevitable because of the complexity of relationships and so on.
What we are considering today is in addition to the existing inheritance tax nil-rate band, which will remain at £325,000 until April 2021. That means that individuals will have an effective inheritance tax threshold of up to £500,000 by the end of this Parliament. In addition, a surviving spouse or civil partner will be able to claim up to £1 million.
From 6 April 2017, a surviving spouse or civil partner who dies will be able to benefit from the transferrable element of the new allowance even if their spouse or civil partner died several years ago. To ensure that the wealthiest make a fair contribution to the public finances through inheritance tax, the largest estates will not be able to benefit from this new allowance. They will have it gradually withdrawn by £1 for every £2 that the estate is worth over £2 million. We do not want to discourage downsizing, and I can confirm that legislation will be introduced in the Finance Bill of 2016 to ensure that those who downsized or ceased to own a home on or after 8 July 2015 are not penalised.
The Government have tabled six amendments to clause 9. Amendments 1 to 3 clarify that homes placed in some types of trust for the benefit of a surviving spouse during their lifetime, and where the home passes to a direct descendant on the spouse’s death, will benefit from the new main residence nil-rate band. Amendments 4 and 5 will ensure that the main residence nil-rate band will apply when an individual leaves their home to the current or surviving spouse or civil partner of anyone already defined as a direct descendant. Finally, amendment 6 is a minor change to the definition of a foster parent to include other similar terms, such as kinship carers in Scotland.
The Opposition’s amendment 7 would require the Chancellor of the Exchequer, three months after the passing of the Bill, to publish a report reviewing the impact of clause 9 on different regions of the UK and house prices. I recognise the importance of evaluating the impact of policy changes, but a formal report is not necessary in this case. HMRC already publishes annual statistics on the number of tax-paying estates and the amount of tax due in each region. I have also explained the steps taken to reduce any potential impact on house prices. The OBR has confirmed that it expects this measure to have only a small impact on the housing market. The Government will keep the impact of the policy under review in the normal way and at the appropriate time, but a report more than a year before it takes effect is not a sensible way forward.
The changes made by clause 9 will mean that around 93% of estates will be able to pass on all their assets without paying any inheritance tax. The number of estates facing an inheritance tax charge in 2020-21 will be almost halved in comparison with previous forecasts, and thousands more will pay less tax. This measure will also provide peace of mind to thousands of families who worry about the prospect of paying inheritance tax. Inheritance tax will, however, continue to make an important contribution to the public finances. The number of tax-paying estates will continue to be higher at the end of the decade than at any time between the introduction of inheritance tax in 1986 and 2014-15. Indeed, more estates will continue to make a contribution than at any time between 1979-80, when capital transfer tax was in operation, and the end of the last Parliament.
There are those who disagree with making it easier for hard-working individuals to pass on their family home to their children and grandchildren. They say that rewarding hard work and aspiration is not a priority, but they are out of touch with the British people. The Government listen to the British people and deliver on their promises.
Barbara Keeley
I am afraid I am not at all convinced, but perhaps that is no surprise. Clauses 9 and 10 bring into force the nil-rate band for inheritance tax, allowing parents to pass on a house to direct descendants, as defined by the Government’s amendments, worth up to £1 million free of inheritance tax. This legislation is extremely technical, running to more than 400 lines and representing six of the clauses we are considering today.
We have been clear that we believe that the focus of tax cuts should be on helping working people on middle and low incomes and on tackling tax avoidance. To answer the question from my hon. Friend the Member for Torfaen, the Treasury has admitted that 90% of households will not benefit from the Government’s inheritance tax policy, so we should be clear about the part of society we are talking about. The priority for the Government, we believe, should be helping the majority of families and first-time buyers struggling to get a home of their own. That is why Labour voted against the Government’s inheritance tax proposals in the July Budget debate.
The Treasury estimates that the changes to inheritance tax will cost the Exchequer £940 million by 2020-21—nearly £1 billion. We must think of priorities and the context of what we are talking about. This is a week when tax credits have been cut, so that two parents working full time on the minimum wage and raising two children will lose £2,200 from tax credits and be £660 worse off, even with the increase in the minimum wage that we talked about earlier.
I would like the Minister to clarify why exempting wealthy property owners from inheritance tax has been one of his Government’s policy priorities. That is the question that we keep coming back to. When this was proposed in the general election campaign, the IFS commented that
“The vast majority of estates (over 90%) are not liable to IHT at the moment and therefore would not benefit…With around 50,000 estates forecast to pay IHT over the next few years this gives an average (mean) gain per IHT paying estate of around £20,000. The maximum reduction in IHT on a couple’s estate is £140,000 which will go to married couples with estates worth between £1 million and £2 million. Since the children of those with very large estates are disproportionately towards the top of the income distribution the gains from this (and in fact any) IHT cut will also go disproportionately to those towards the top of the income distribution.”
The IFS has said:
“Inheritance tax is not very effective at achieving wealth redistribution. Were the threshold raised to £1 million it would also be much less effective in terms of raising money.”
We have to think about that.
Barbara Keeley
I was not in anything like my current role at the time; I am afraid that I cannot explain the thinking of the former Chancellor.
To bring us back to policy priorities, there is much to be said about the technical detail of this legislation. Inheritance tax is already a complex tax to navigate, and the Bill creates a new level of complexity. The tax faculty of the Institute of Chartered Accountants in England and Wales has set out 10 tenets for a better tax system, one of which states that
“the tax rules should…be simple, understandable and clear in their objectives.”
This tax has never been that. The institute says of the clause:
“The measure is excessively complex; it would be simpler to just increase the nil rate band to £500,000.”
Why has the Minister chosen to implement the policy in its current form? There seems to be a simpler way of administering the tax.
Chris Williams of the Chartered Institute of Taxation said:
“The proposals add further complexity to an already complex system. The government has recognised that the problem of downsizing”—
to which the Minister referred—
“must be addressed but proposes only to allow for downsizing that takes place on or after 8 July 2015. Other problem areas include the need to define a main residence consistently throughout the tax system, and to recognise the diverse patterns of the modern family when attempting to restrict the benefit to children and descendants.”
I will come on to that, because there is an important point about what a modern family consists of.
The Mirrlees review, led by the IFS and funded by the Nuffield Foundation and the Economic and Social Research Council, noted that inheritance tax was a
“somewhat half-hearted tax, with many loopholes and opportunities for avoidance through careful organization of affairs.”
That is well known. It went on to say:
“This leads to charges of unfairness and makes a principled defence of the current inheritance tax difficult.”
I grant it that the Minister tried. With such a generous increase in the nil-rate band and such low estimated returns to the Exchequer, the question now is whether we should start revising this to a quarter-hearted, rather than half-hearted, tax. Is this policy a priority at a time when families and first-time buyers are struggling to get a home of their own? The average house price outside London is just over £183,000. The current nil-rate band is £325,000. That would be enough to cover the average value and include a buffer. Why has the Chancellor decided to introduce that additional residence nil rate band?
Simon Hoare
Why does the hon. Lady’s narrative automatically presume that because an estate is asset-rich, descendants are cash-rich? She referred to people trying to get on the property ladder—to pay the deposit, stamp duty, and so on. Take the widow who has stayed for years in the family home, which she bought reasonably cheaply in a part of London where property values have risen. It is the disposal of that asset on her death, and her descendants’ inheritance of it, as free of tax as possible, that allows those descendants, who may be in low or middle-paid jobs, to get on the property ladder. Why do the hon. Lady and the Labour party automatically exclude them from their thinking?
Barbara Keeley
I will come on to a very good reason why. I will answer the hon. Gentleman’s points. I ask the Minister why—I hope he does not lose this question—given the average house price outside London, the Chancellor has decided to introduce this additional band. There are wider questions, which I said I would come to, about the scope of who will benefit from the nil rate band.
The new tax exemption applies to lineal descendants. We welcome the clarification of who will benefit outlined in the Government amendment, and the apparent extension of the nil rate band to a lineal descendant’s spouse or civil partner in the event of the lineal descendant’s death. However, the Institute of Chartered Accountants has pointed out that it could be seen as discriminatory to allow the relief only to lineal descendants; many godparents, aunts and uncles are as close to, and their lives are as intertwined with those of, godchildren, nieces and nephews as are those children’s parents. That is the kind of family structure that we have these days.
Daniel Zeichner
I agree with my hon. Friend. I have had representations from constituents who feel that the lineal descendancy clause is absolutely discriminatory, particularly against childless couples. There seems to be no logic to it, and I would welcome hearing the Minister’s case for it.
Barbara Keeley
My hon. Friend puts that in an excellent way. Will the Minister clarify the Government’s position on why the policy will apply only to lineal descendants? It has the potential to raise house prices by making property an even more attractive investment for the wealthiest, which would make it even more difficult for ordinary working people to get on to the property ladder.
Paul Johnson, the director of the IFS, has said that it is
“rather odd to give this special treatment to housing given that owner-occupied housing is already extremely tax privileged”.
He said:
“This will only increase the bias we have towards putting your money in a house, to inflating potentially the value of housing, without dealing with the lack of housing, which is driving up the value of private residences.”
Many of the policy’s features are similar to those analysed in a Treasury document that was leaked to, and published by, The Guardian. According to the estimates in the document, based on Budget 2014 forecasts, the policy would reduce the proportion of estates liable for inheritance tax from 8% in 2015-16 to just over 6% by the end of the Parliament, rather than increasing it to slightly more than 10%, as the current policy would have done. The document contains the argument that
“there are not strong economic arguments for introducing an inheritance tax exemption specifically related to main residences”.
A number of problems with the policy are set out in the document, such as the fact that it would encourage investment in owner-occupied housing rather than other more productive investments and that it would discourage downsizing late in life when that might otherwise be appropriate. Although the Government have made some provisions to prevent the downsizing problem, industry experts have said that the changes could lead to more people choosing to upsize later in life, which would have consequences for the availability of housing stock for other buyers.
I want to talk about the balance of the Government’s tax cuts, including changes to inheritance tax. Those changes will cost £24.6 billion over the Parliament, and they will be financed by five main sources, according to the Office for Budget Responsibility. Tax increases will raise £47.2 billion over the Parliament; we have talked about things such as insurance premium tax. Welfare cuts, including cuts to tax credit and many freezes, will raise nearly £35 billion. Other spending decisions will cut £8.1 billion. Cuts to departmental spending and to the BBC have been proposed. Various tax and spending decisions have indirect effects that will raise a further £14.2 billion.
The Budget decisions, interestingly, imply £3.5 billion of extra borrowing over the Parliament, on top of the £14.6 billion increase indicated by the OBR pre-measures forecast. Inheritance tax raised an estimated £3.8 billion in 2014-15, but house price inflation had been expected to drive the tax take up to £6.4 billion by 2019-20. Instead of the Exchequer receiving more revenue from inheritance tax, however, the policy is expected to cost it £940 million a year by 2020-21, when the additional family home allowance—like the existing allowance, it will be transferable between spouses—reaches £175,000 per person.
When they talk about borrowing, Conservative Members should bear in mind that if the Government had kept the existing allowance, they would have more than halved expected additional borrowing over the lifetime of the Parliament. In contrast, their position appears to mean more borrowing, when one of the Government’s specified aims is to do the opposite. It seems strange that in the debates we have had so far the Conservative party seems to be convinced that it is okay to increase taxes such as insurance premium tax and to make increases that hit very large numbers of people the main way to raise finances, while implementing changes to inheritance tax that will cost the Exchequer considerable sums of money.
Surely, keeping inheritance tax as it was would be better than increasing the insurance premium tax and making hefty welfare cuts. Those are the decisions that are weighed against each other. The Government are cutting a tax for the wealthier families in the country, while cutting tax credits for millions of those who are in need. That is what we are going to see over the coming years. We could say that this is a rather warped interpretation of Robin Hood: taking money from the poorest to pay for a tax cut for the richest.
To answer the point made by the hon. Member for North Dorset, this tax cut comes at the same time as the Government have decided to abandon a manifesto pledge to implement a £72,000 cap on care costs. In a written statement to the House of Lords on 25 July 2015, the cap on costs was described as an expensive new commitment. The cap—a pledge made by the Conservative party—was designed to prevent older people and younger people with disabilities from having to sell their homes when they went into care.
Here is the answer for the hon. Gentleman: why is it okay for people with care needs to have to sell their homes and have nothing to pass on, while the very wealthiest—the top 10%—are allowed to keep house values of £1 million? The Government have decided to abandon a cap, for which they had made legislation, on the grounds that it is too expensive, while they are opting to go with the introduction of the nil rate band for inheritance tax on properties, which will cost £1 billion by 2020. That £1 billion a year could have been an incredible investment in social care; instead, we are going the opposite way. We are talking about hundreds of thousands of pounds, if not millions. People who have to pay their own care costs will be under a huge burden and will have to give up their homes.
Simon Hoare
I would simply say to the hon. Lady that it is just about how an individual uses the asset. If someone needs to use their asset to pay for their care, that is what they must do. Greedy children will be hanging at the gate preventing them from putting up the “For sale” sign or whatever, but we just have to get used to using our residential assets better, as needs require.
Barbara Keeley
We were committed to a better way of funding social care, and in future we will be committed to even better ways.
I want to finish by questioning the Government’s priorities. It is a question not only of priorities, but of the unintended impacts of the policy. We talked about downsizing and the effect on the housing market. The clause may have a significant impact, which is why we tabled amendment 7, which would require a report on the effect of the inheritance tax changes on different UK regions and on housing prices. The Minister seemed to signal that he will not look at or accept our amendment, but it is very reasonable, asking only for a report. If he will not accept our proposal now, we will bring it back on Report.
Roger Mullin
I do not think I need to go over the nine pages of the clause in detail, for which the Committee will be grateful. The hon. Member for Worsley and Eccles South did a good job of going through the minutiae and detail, for which she has our thanks. I will not repeat her.
I have one or two simple observations. I have paid particular attention to the Minister’s words in a number of his remarks. It is an extraordinary priority that the Government are putting in place these measures when they are also making some of the most vicious cuts in welfare that people have experienced in our lifetime. It was very telling when the Minister indicated that one criterion for the decision on inheritance tax—I think that I quote him fairly—was that it will give “peace of mind” to those who are no doubt relatively wealthy, with considerable assets. I did not hear the Government say that the peace of mind of the poor was a criterion when they brought in their tax credit cuts and other welfare reforms.
It is also interesting to reflect that the Minister talked earlier about the need to do things because of the trying circumstances that the economy is in. If we have to take account of those circumstances, why is this measure a priority? It contributes nothing. My party is wholly opposed to the Government’s proposal.
Mr Gauke
I am disappointed that the Opposition parties will not support this measure, but let me try to respond to some of the points raised. Rising house prices mean that inheritance tax is hitting more families than previously. More estates are paying it than at any time since the system was introduced, and the numbers were forecast to double. This measure will simply return the number of estates paying IHT to the levels of 2014-15, which, at the end of the decade, will still be more than in any year between 1997 and 2010—that is any year of the last Labour Governments, including 2007, when the then Labour Chancellor stood up and announced a significant reform to take more estates out of inheritance tax. Receipts in cash terms will continue to be higher under this Government than at any time since the introduction of IHT.
It is worth pointing out that the taper for estates worth more than £2 million ensures that the largest estates do not benefit. This measure is being paid for by increasing taxes on the wealthy elsewhere in the tax system—for example, changes to the rules relating to non-doms—and by reducing the generosity of pension tax relief for those with incomes over £150,000 in particular.
The question of lineal descendants was raised. The Government have sought to focus on the passing of homes to the next generation in the immediate family, which ensures that parents know that they can pass on the family home they worked hard for without the worry of inheritance tax. The extension of that to homes left to others would carry an additional cost to the Exchequer, which would need to be financed by raising other taxes or reducing public expenditure. We sought to strike the appropriate balance, with a policy that allows the family home to pass on to the next generation, but which is also affordable. In terms of the impact on downsizing and the housing market, the OBR agreed that there will be only a small effect.
The hon. Member for Worsley and Eccles South touched on the cap delay. The Government remain fully committed to introducing a cap on social care costs and helping people to cope with the potentially high costs of social care, but a time of consolidation is not the right moment to implement such expensive new commitments. The decision to delay implementation has not been taken lightly: it follows concerns about timing expressed by stakeholders across the sector, including the Local Government Association and the National Audit Office.
We listened to those concerns and, by delaying implementation of the funding reforms until 2020-21, we will allow local authorities time to focus on delivering the important reforms to care and support introduced on 1 April, laying the groundwork to implement the funding reforms as successfully as possible in 2020. We will also use that time to work with the financial sector to explore what more can be done to support people to plan and prepare for later life and the risk of needing social care. I regret that the measure does not have cross-party support, but I hope that the Committee as a whole will support it.
Amendment 1 agreed to.
Amendments made: 2, in clause 9, page 9, line 18, leave out
“under the disposition the property becomes”
and insert
“the property becomes, on D’s death,”
Amendment 3, in clause 9, page 9, line 20, at end insert—
‘(3B) Where, immediately before D’s death, the property was settled property in which D was beneficially entitled to in an interest in possession, B inherits the property if B becomes beneficially entitled to it on D’s death.”
Amendment 4, in clause 9, page 9, line 27, leave out “a person’s death,” and insert
“the death of a person (“D”),”
Amendment 5, in clause 9, page 9, line 29, leave out
“a lineal descendant of the person”
and insert “—
(a) a lineal descendant of D,
(b) a person who, at the time of D’s death, is the spouse or civil partner of a lineal descendant of D, or
(c) a person who—
(i) at the time of the death of a lineal descendant of D who died no later than D, was the spouse or civil partner of the lineal descendant, and
(ii) has not, in the period beginning with the lineal descendant’s death and ending with D’s death, become anyone’s spouse or civil partner.”
Amendment 6, in clause 9, page 10, line 44, after first “parent” insert “(however styled)”—(Mr Gauke.)
Barbara Keeley
On a point of order, Mr Howarth. I need to check something with you. Sir Roger said this morning that if we are not sure of our process, we should ask. I understand that if we vote on the amendment and the clauses now we will not return to them on Report, but we want to return to them on Report.
The Chair
You can come back to issues on Report, but it depends on the number of amendments and new clauses at the time, and the judgment that is made. I cannot give the hon. Lady any absolute assurance.
Barbara Keeley
I understand that. We are choosing to return to this issue on Report, so we will not press our amendment.
The Chair
In my opinion, all the issues in the clause have been fully debated, so I do not propose to have a clause stand part debate.
Clause 9, as amended, ordered to stand part of the Bill.
Clause 10
Rate bands for tax years 2018-19, 2019-20 and 2020-21
Question proposed, That the clause stand part of the Bill.
Mr Gauke
Clause 10 supports the changes introduced by clause 9. It ensures there will be an effective inheritance tax threshold of up to £1 million for married couples and civil partners by the end of this Parliament. The nil-rate band of £325,000 for individuals and up to £650,000 for married couples and civil partners ensures that the majority of estates do not have any inheritance tax to pay at all. The nil-rate band was frozen throughout the last Parliament. For this Parliament, the Government have said that they would introduce an effective £1 million inheritance tax threshold, as we have just debated. Keeping the existing nil-rate band at £325,000 is consistent with that objective. The existing inheritance tax nil-rate band will remain at £325,000 until April 2021. It will then increase in line with the consumer prices index.
The changes made by clause 10, along with the changes made by clause 9, will ensure that around 93% of estates will be able to pass on all their assets without paying any inheritance tax. The clause will help provide peace of mind to thousands of families who worry about the prospect of paying inheritance tax in the future. I hope the clause will stand part of the Bill.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Circulation of rate of inheritance tax on settled property
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
That schedule 1 be the First schedule to the Bill.
Clause 12 stand part.
Clause 13 stand part.
Clause 14 stand part.
Mr Gauke
Clause 11 and schedule 1 make reforms to the inheritance tax treatment of relevant property trusts. With your permission, Mr Howarth, my remarks will also cover clauses 12 to 14, which rectify anomalies in some areas of the trust legislation to provide more certainty and clarity. The changes being made will tackle individuals avoiding inheritance tax through the use of multiple trusts. They will also simplify the calculation of inheritance tax on trusts by removing the need to include certain categories of assets. The Government are making the changes to ensure that there is fairness in the tax system and to reduce the administrative burden on trustees and practitioners.
Let me give some background to the changes. The current rules allow individuals to achieve a tax advantage by creating several trusts on different days. Those trusts are often set up with the intention that significant funds will be added to each at a later time, and all on the same day. Those trusts are not related for inheritance tax purposes if they are set up on different days, and where the funds are subsequently added to each trust on the same day, the additions are not related either. The result is that each trust is able to use a full nil-rate band, which creates an advantage with ongoing inheritance tax charges. For example, an individual might create three trusts on separate days, with £100 as the fund for each of the trusts. They could then leave legacies in their wills, so that a third of their estate passed into each of the three trusts. Each trust would be able to use a full nil-rate band, which means that up to £975,000 could be held between the three trusts, minimising any future inheritance tax charges that arise. While some may consider that a legitimate use of existing rules, many respondents to the Government’s consultation agreed that it is right that aggressive tax planning through the use of multiple trusts should be tackled.
We also believe that it is right to simplify the tax system where we can and reduce the burden on those tasked with administering it. The calculation of inheritance tax charges on trusts is dependent on a number of different factors and historical information, which results in complex calculations, but quite often the amount of tax due does not justify the time spent by trustees and practitioners. The changes made by the clause will remove the need for some of the historical information and reduce the complexity.
Certain anti-avoidance measures in the legislation are there to protect inheritance tax revenues, but we recognise that sometimes the provisions do not operate as they were intended. Clauses 12 to 14 correct those anomalies.
The changes made by clause 11 and schedule 1 ensure that where property is added to two or more relevant property trusts on the same day, the value of the property trust added to each trust and the initial value of relevant property settled in the trust will be aggregated and brought into account when calculating the rate of tax for the purpose of inheritance tax charges. Aggregating the value of property in trusts that are not related increases the capital value used to calculate the rate of tax. That removes the advantage that arises through the use of multiple nil-rate bands. Individuals will still be able to create as many trusts as they like, but the changes mean that there is effectively only one nil-rate band available every seven years, and we believe that this is fair.
The clause and the schedule also remove the requirement to include the historical value of excluded property in the calculation. That simplifies the trust charge calculations. The changes will apply to all charges arising on or after the date of Royal Assent. However, to prevent forestalling, they will also apply to relevant property trusts created before 10 December 2014, the date that draft legislation was published, where there are additions to more than one relevant property trust on the same day.
Clause 12 amends the inheritance tax legislation relating to claims for conditional exemption from inheritance tax for heritage properties. Currently, a claim must be made before the approaching 10-year anniversary charge. The clause amends that requirement, so that trustees can make a claim for exemption within two years of the 10-year anniversary charge arising. The change puts trustees dealing with a claim for exemption on the same footing as trustees and individuals subject to other inheritance charges. Again, that will be effective from the date of Royal Assent.
Clause 13 corrects an unintended effect of the changes made to inheritance tax legislation in 2006. For the benefit of hon. Members, the term “non-qualifying interest in possession” is used to describe a trust created after the 2006 inheritance tax changes, where a beneficiary has a present right to enjoy the income of the trust. An unintended effect of the 2006 inheritance tax changes allowed those types of trust to escape all inheritance tax charges because the assets held in trust were neither part of the beneficiary’s estate, nor were they comprised in a relevant property trust.
The clause, which will apply on the day after the date of Royal Assent, means that assets held in a non-qualifying interest in possession trust are treated as being comprised in a relevant property trust. As a result, those assets will be subject to inheritance tax charges. To prevent the change in the legislation from triggering an immediate creation of a relevant property trust, the commencement of the relevant property trust is aligned with the ending of the current interest in possession.
Clause 14 resolves an anomaly in the inheritance tax legislation. It ensures that in specific circumstances, the effect of a disposal of property, known as an appointment, can be read back into the will, and the spouse or civil partner exemption from inheritance tax can be given. That change will apply where a death occurs on or after 10 December 2014 and an appointment is made within three months of the date of death, from property settled by will and in favour of the deceased’s surviving spouse or civil partner.
In conclusion, these provisions ensure that it will no longer be possible for individuals to create multiple trusts and use multiple nil-rate bands in order to avoid inheritance tax. They ensure fairness in the tax system and protect inheritance tax revenues from those who seek to exploit the rules in order to gain an advantage. Furthermore, the amendments simplify the trust calculations, and provide greater certainty for trustees and practitioners as a result of the removal of certain anomalies in the legislation.
Barbara Keeley
As I said earlier, we will return to inheritance tax on Report if we can. Clauses 11 to 14 address tax avoidance measures that have previously been allowed in the inheritance tax system and a number of anomalies that have created unintended consequences and loopholes in the inheritance tax regime.
The clauses illustrate the complexity of inheritance tax legislation. That complexity is compounded by the need to continually update and rectify the regime with additional legislation, making the legislation even more difficult to understand and apply. Although we welcome the moves in the Bill that seek to close loopholes, this raises a bigger question about the efficacy of inheritance tax legislation. In the light of that, will the Minister say whether the Government have any further plans to adopt a programme of reform to simplify this tax and make it easier to navigate?
We welcome the fact that clauses 11 to 14 address areas of the legislation that give an unfair advantage to some beneficiaries over others, because that will help to ensure that inheritance tax is applied in a fair manner. Previously, it has been relatively easy for people to avoid paying the correct amount of inheritance tax by placing property into a number of trusts or by increasing the value of property in a trust immediately after an initial amount of property was settled. The clauses and schedule aggregate the value of property in trusts that are not related, for the purpose of determining the rate at which inheritance tax is charged, when the value of property in those trusts is increased on the same day. The schedule also simplifies some of the rules for calculating the rate of tax for the purposes of the 10-year anniversary and exit charges.
The provisions are welcome as measures to prevent avoidance techniques through the use of multiple trusts settled on the same day. We also welcome the adoption of a system that aggregates property over multiple trusts, rather than splitting the nil rate band to take into account multiple trusts. That would have been an extremely complex system to administer, and aggregating property held in multiple trusts is a much simpler way to resolve the problem. The simplification of rules on exit charges and the 10-year anniversary charge is welcome, but I would like to know whether the Minister is considering any further changes.
We have had a good debate on inheritance tax today, but wider issues with it remain. In particular, it is still extremely complex. Although the Government have introduced many of the measures outlined in previous consultations to make inheritance tax policy more cohesive —for example, multiple trusts, the 10-year anniversary charge declarations, interest in possession and the implementation of an IT strategy to transfer inheritance tax administration online—the tax still lacks simplicity. Each of those issues has added another set of complexities to inheritance tax.
In 2010, the Office of Tax Simplification’s report identified 89 inheritance tax reliefs. It noted the need for a top-down review of inheritance tax in 2011, stating:
“We consider that a more appropriate approach to the inheritance tax reliefs is to consider the scope and operation of inheritance tax with reference to the original and desired policy rationale, and thus to consider individual reliefs in context. In addition, any review of inheritance tax needs to include a review of the taxation of trusts, which are often used to pass family assets between generations.”
Does the Minister have any further plans to enact new measures to simplify the rules and administration of inheritance tax?
At the heart of the clauses, an issue of tax avoidance is addressed. We should encourage planning for the future. Planning what happens to their finances after their death is something that most people should consider. For some people, that has been entwined with navigating the inheritance tax rules to minimise their contribution. People should pay no more and no less than their fair share. Will the Minister provide any details on the measures the Government are taking to ensure that everyone who is eligible pays their share of inheritance tax?
The Minister has taken us through the clauses and how they operate. The correction of the anomaly in clause 12 means that trustees will now have clear guidance about the timeline to submit an application for exemptions. That should make it easier for Her Majesty’s Revenue and Customs to administer the exemption.
Clause 13 corrects an anomaly whereby types of interest in possession escaped all inheritance tax charges because the property was neither part of the beneficiary’s estate nor included within a relevant property trust. That was an unintended effect of the 2006 legislation. Labour welcomes corrections of that type. We welcome the change, which will ensure that an interest in possession in settled property is treated the same, regardless of the date at which the settlement was created.
Clause 14 provides that where property is left in trust in which no interest in possession subsists and an appointment of that property is made within three months of the date of death, the appointment can be read back into the will. I do not think any of us is an expert in this, but I understand that that corrects an anomaly known as the Frankland trap. Labour welcomes the removal of the anomaly, as the tax will now be applied fairly. It will protect families who could unfairly suffer if they were unaware of the trap.
In view of what we said earlier about our overall views on inheritance tax and clauses 9 and 10, we think that it is right that the tax is applied in the fairest way possible and that anomalies are removed.
Mr Gauke
I thank the hon. Lady for her remarks. Many people would agree that we should take action where there is aggressive tax planning. The changes will ensure that there is no longer an advantage in creating multiple trusts. It is right that we take action. At the same time, existing trusts will benefit from the simplification aspects, such as the removal of the need to include non-relevant property in the calculation.
The main point made by the hon. Lady relates to a programme of reform to simplify IHT legislation. We will of course continue to simplify the tax system wherever possible. I should use the traditional response of a Treasury Minister in these circumstances, which is to say that all taxes are kept under review, and we will continue to look at inheritance tax. More generally, it is worth pointing out that we have established the Office of Tax Simplification. We are putting it on a statutory footing and strengthening its role and capacity. It has already achieved a great deal in the period it has existed, and I hope that will continue to be the case over the next few years. I am grateful for the support for the clauses.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Schedule 1 agreed to.
Clauses 12, 13 and 14 ordered to stand part of the Bill.
Clause 15
Inheritance tax: interest
Question proposed, That the clause stand part of the Bill.
Mr Gauke
Clause 15 makes minor changes to the rules for interest when inheritance tax is paid by instalments that will ensure that the interest is calculated correctly when the new inheritance tax online service becomes available.
The Government announced in the 2013 autumn statement that HMRC will provide a new online service for people to submit inheritance tax returns and settle the affairs of those who have died. The introduction of the new service requires various legislative changes to facilitate the new online processes, including aligning the treatment of interest for inheritance tax with that for other taxes. Rules that apply standard rates of interest across all taxes should also apply to inheritance tax. The new online service now provides the opportunity to make the necessary IT changes to apply the rules. To ensure that the standardised interest rules apply correctly, some minor changes are required to make consequential amendments to related provisions and to correct an error in the rules.
It might be helpful if I explain briefly to the Committee why the changes are being made. There are specific rules for charging interest when inheritance tax is paid by instalments and the estate includes shares in certain companies or financial institutions that deal in shares and securities on the stock exchange, which are known as market makers. The current inheritance tax rules were amended in regulations in 2012 to reflect a change in the definition of a market maker, using a power in the Finance Act 1986. The equivalent standardised interest rules also need to be amended in a similar way, but the power in the 1986 Act may be used only to amend the current inheritance tax interest rules, not the standardised ones. Clause 15 amends the relevant provisions in the 1986 Act to extend the power to the standardised rules to enable the definition of a market maker to be updated. That will enable the standardised interest rules to apply correctly to payments of tax instalments on shares in such companies and financial institutions.
The interest rules also need to be amended so that the period from which interest is charged is six months from the end of the month in which the death occurs. The changes made by the clause will come into effect on a date specified in regulations, which will be at the same time as the new online service for taxpaying estates becomes available, currently expected to be in April 2016. The changes are expected to affect only a very small number of estates that include shares in companies that are market makers and where the tax due is paid by instalments. The impacts on the Exchequer and on individuals and businesses are therefore expected to be negligible.
The changes are small but necessary. Clause 15 will enable the new interest rules for instalment payments to be applied correctly and consistently when the new inheritance tax online service becomes available for taxpaying estates. I commend the clause to the Committee.
Barbara Keeley
Labour welcomes any move to make the payment of tax simpler and more efficient. Many people already benefit from paying certain taxes online—I must say I am not one of them; I find it quite difficult, despite my IT background—and clause 15 will allow inheritance tax to follow that road map. In particular, relevant provisions relating to the late payment of interest will be updated and applied consistently when the new online service becomes available.
The only question remaining is when the new online service becomes available. The Government have reported that the service will become available. I wonder whether the Minister’s officials can get a note to him fast enough for him to answer. Can the Minister provide an update on the service’s progress or, indeed, tell us when he expects the service to be functioning? He has not answered many of my questions today—he has brushed his way past an awful lot of the questions he has been asked—so perhaps he can answer this last one if he has the answer in his notes.
Mr Gauke
As it so happens, let me say the following. The IHT online service will be implemented in phases, with increased functionality at each stage. Selected customers who have no inheritance tax to pay and are applying for probate in England and Wales will be invited to test the new online service during this month and next. It will become available to the public in November, and later phases will extend it to taxpaying customers, as well as agents and people in Scotland and Northern Ireland. Details of the timing of future releases will be given in due course.
I hope that, finally, at the end of a long day, I have been able to satisfy the hon. Member for Worsley and Eccles South with respect to one of her questions. I know that this is the end of her contribution to the Finance Bill Committee this year, so I thank her for her questions and constructive engagement. [Hon. Members: “Hear, hear.”] I also commend her for managing to brush past the various quotations from her leader and shadow Chancellor that were thrown at her, which she was happily able to ignore.
Question put and agreed to.
Clause 15 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mel Stride.)
Westminster Hall
(9 years, 2 months ago)
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Arms Sales (Human Rights)
(9 years, 2 months ago)
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Ann Clwyd (Cynon Valley) (Lab)
I beg to move,
That this House has considered the implications for human rights of promoting arms sales.
I am particularly pleased to be having this debate under your chairmanship, Mr Amess; we have been in the House for about the same amount of time, so it is a great pleasure. I am also pleased to see so many hon. Members here to discuss this very important issue. I will keep my speech relatively brief to allow everybody to get in who has something to say, so that as many Members as possible can share their views about the implication for human rights of promoting arms sales.
As many hon. Members know, I have always been passionate about human rights and have argued against arms sales to human rights violators ever since I became an MP. As chair of the Committee against Repression and for Democratic Rights in Iraq—known as CARDRI—in the 1980s, I argued against the supply of military equipment to Saddam Hussein, a man who, at that time, was gassing his own people, had executed a British journalist and generally oversaw a very repressive and brutal regime. Iraq was, of course, also then at war with Iran.
I was horrified when, in 1986, the then Conservative Government invited a five-strong Iraqi delegation, led by its director of armaments and supplies, to the British Army equipment exhibition in Aldershot. Of course, in 1990 Saddam’s troops invaded Kuwait, and he became no longer a friend, but an enemy of the west. Lord Justice Scott’s report a few years later detailed the involvement of the UK Government and British companies in arming him. However, Saddam had not changed overnight in 1990.
Helen Goodman (Bishop Auckland) (Lab)
I am grateful to my right hon. Friend for securing this very important debate. Does she recall that the ultimate obscenity was that because these weapons were sold using the export credit regime, and were never paid for, the British Government, in fact, gave them to Saddam Hussein?
Ann Clwyd
That is a very good point. I am really sorry that so few companies have been prosecuted since for supplying some of the arms. The authorities did that in Germany, and are continuing to do so, but there have been very few prosecutions in this country.
As I was saying, in 1990 Saddam’s troops invaded Kuwait and he became an enemy of the west, but Saddam had not changed overnight. Enough was already known about his regime’s human rights violations—backed by detailed information from inside the country about the savage nature of the regime—and about the UK Government’s and companies’ attempts to arm him. Some us had tried to stop that, but our warnings were not heeded.
When the Labour Government came to office in 1997, there was a test case for the new Foreign Secretary Robin Cook’s “ethical foreign policy”. I remember sitting at the Foreign Office, listening to the speech he made. I went up to him at the end of it and said, “I am very pleased to hear those words from you, but I’ll be watching you”. I did not realise how quickly I would have to put those words into operation, because the test case for the ethical foreign policy that he spelt out, with human rights at its heart, was selling arms to Indonesia, as we were doing at that time. Anybody who followed that particular conflict will know that repression in Aceh, for example, was acute. President Suharto’s troops were still occupying East Timor then. I am glad to say that our new Leader of the Opposition came to East Timor with me at the time and monitored some of the things that were going on there.
The previous Conservative Government had issued licences for the export of Hawk aircraft and armoured vehicles to Indonesia, but when Labour came to power, the equipment had not yet been delivered. Unfortunately, Robin Cook was not able to convince his Cabinet colleagues at that time and the export licences were not revoked. Hawk aircraft were later in action in Aceh and the armoured vehicles out on the streets of Jakarta.
However, the new Labour Government in 1997 did institute annual reports on arms export licences. Members of the four relevant Select Committees—the Foreign Affairs Committee, the Trade and Industry Committee, the International Development Committee and the Defence Committee—came together to look at those reports. Initially known, for obvious reasons, as the Quadripartite Committee, it became the Committees on Arms Export Controls in 2008. I was a member of the Committees in both guises.
In the last Parliament, the Committees on Arms Export Controls was chaired by Sir John Stanley. As everybody knows, he is a former Conservative Defence Minister; I pay tribute to the work of Sir John, my colleague both on the Committees on Arms Export Controls and the Foreign Affairs Committee. I also note that every CAEC—as it began to be known—report was unanimously agreed by their members during their 15 years of existence, including those when Sir John was chair. Sir John assiduously raised arms export issues with Ministers and civil servants and he came to see what is at the heart of this debate—that it is not possible to promote human rights at the same time as promoting arms exports. The two are not compatible.
The CAEC report from the last parliamentary Session said that
“the Government would do well to acknowledge that there is an inherent conflict between strongly promoting arms exports to authoritarian regimes whilst strongly criticising their lack of human rights at the same time rather than claiming, as the Government continued to do…that these two policies ‘are mutually reinforcing’”.
Although so far unable to convince Governments of this, the Committees on Arms Export Controls’ oversight was of immense benefit—I stress that it really was of immense benefit—in shedding light on this cross-departmental issue. For six months now, we have been without those Committees. As yet, my inquiries have not indicated when they are likely to be reformed. The global situation regarding conflict and arms transfers, not least as it affects the middle east and north Africa, makes it vital to have the Committees functioning at the earliest possible date. I would therefore urge the relevant Committee Chairs to come together as a matter of urgency to ensure that this process of scrutiny continues.
UK Governments—plural—argue that they operate one of the most rigorous and transparent arms export control regimes in the world, that their export licensing criteria take human rights into account and that licences will not be granted if the equipment might be used for human rights abuse, or more particularly, if there is a clear risk that the proposed export might be used for internal repression, to provoke or prolong armed conflicts or to aggravate existing tensions or conflicts in the country of final destination. All applications are subject to a case-by-case assessment.
In the first instance, I note with regard to the “clear risk” criteria that I just mentioned, that that is vague as to what exactly constitutes a clear risk. How can that be defined? What meets that threshold? To my mind, “clear risk” is in effect a blank cheque in human rights terms. In connection with that, it would be helpful, as a starting point, to know about the UK’s risk assessment methodology. We were always being told, when Ministers in Governments of all colours were being questioned, that there would be or was monitoring in the countries to which the arms were supplied. However, I have continually failed to find out what that monitoring constitutes.
In the previous Parliament, CAEC also raised concerns about the insufficiency of information being released about specific end users. Although the country is mentioned, there is no more specific designation. That means that the public are left in the dark about exactly who will be receiving the arms in question. I call on the Government to provide information about who exactly UK-supplied equipment will be used by and for what purpose.
In addition, situations change. The fact that after the uprisings in north Africa and the middle east in the spring of 2011, more than 150 licences—more than 150—had to be revoked indicates that the Government’s licensing process leaves a lot to be desired. Frankly, many of those licences should never have been granted in the first place, because licence revocation can be of only limited effect, for the simple reason that revocation is of no use whatever for exports that have already been shipped—those arms can never be recovered. It is imperative, therefore, that the utmost caution—that is, much more caution—be exercised when assessments are being undertaken on arms exports to authoritarian and war-torn countries.
However, the incompatibility between promoting human rights and promoting arms exports is primarily a difficulty not with export controls, but with the mindset that prioritises export promotion. Arms sales are promoted by those right at the top of Government. That is not new. Prime Ministers Margaret Thatcher, Tony Blair and David Cameron have all led delegations to promote arms sales, including to some of the world’s most repressive regimes. Earlier this year, licences to Foreign and Commonwealth Office-designated countries of concern were valued at almost £12 billion.
In the middle of the brutal suppression of protest in the middle east in February 2011, the Prime Minister chose to go ahead with an arms promotion tour of Egypt, Kuwait, Qatar and Oman. The message sent to those regimes is quite alarming; the UK Government were in effect legitimising the regimes and provided them with political cover. Even the help of the royal family is enlisted. Prince Charles famously did a sword dance in Saudi Arabia in 2014 to secure a fighter jet deal for BAE.
Those high-level sales efforts in relation to human rights abusers such as Saudi Arabia mute any criticism of their abuse of human rights. In the case of Saudi Arabia, it is a “priority market” for the UK Government’s arms sales agency, the UK Trade & Investment Defence & Security Organisation.
I think that the desire for arms deals prevents meaningful UK Government criticism of, for example, Saudi human rights abuses. That is a country where, according to Amnesty International, someone is executed every two days. Raif Badawi was brutally flogged and is in jail simply for blogging. Women are treated as second-class citizens, and immigrant workers far worse. The arms sales links have prevented the UK Government from criticising Saudi Arabia for the humanitarian catastrophe being created in Yemen. There are, it is said, even UK civil servants and military personnel in Saudi Arabia, who are now presumably supporting the Saudi-led coalition’s bombing campaign.
I mentioned the licences that the Government were forced to revoke in 2011, when the Arab uprisings took place.
Andy Slaughter (Hammersmith) (Lab)
My right hon. Friend is absolutely right, in her excellent speech, to highlight the Gulf area, because that is one area where the contrast between human rights and arms sales is very clear. Does she agree that that also applies to Bahrain? For example, the UK was one of 33 countries this week criticising Bahrain at the UN Human Rights Council for not upholding human rights, while going ahead with not just arms sales but building a naval base there.
Ann Clwyd
I absolutely agree with my hon. Friend. I chair the Inter-Parliamentary Union’s committee on the human rights of parliamentarians. At our biannual conferences, we have delegations from the countries where parliamentarians are in jail, not able to carry out their mandates or, in some cases, have been murdered. We follow up their cases, and Bahrain, in the next three weeks, will be on our agenda again in Geneva.
I mentioned the licences that the Government were forced to revoke in 2011, when the Arab uprisings took place. However, even then not a single licence to Saudi Arabia was revoked. The Government presumably did not want to undermine one of their most lucrative defence export markets, as well as other security, intelligence and trade arrangements. That was despite the fact that UK armoured vehicles supplied to Saudi Arabia were being used to protect vital infrastructure in Bahrain, arguably giving the Bahraini forces a free hand to attack protesters. I emphasise that there is even more reason to re-examine licences now, with the Saudis’ use of military force in Yemen.
Today, the biennial Defence and Security Equipment International exhibition, one of the world’s largest arms fairs, which generates millions in arms deals, is taking place at the ExCeL centre in London’s docklands. It is organised by a private company, Clarion Events, but the Government’s arms sales agency, UKTI DSO, has issued the official invitations to 61 countries. Those include countries on the Foreign Office’s list of countries of concern on human rights grounds, such as Colombia, Iraq, Pakistan and, inevitably, Saudi Arabia, plus others where human rights are a major issue, including Azerbaijan, Bahrain, Egypt, Kazakhstan, Nigeria, Turkey, which I shall return to discussing, and the United Arab Emirates, as well as Ukraine.
Clarion says that there are 1,500 international exhibitors, comprising suppliers from 121 countries, Israel being among them with a big pavilion. They will be displaying the full range of military equipment and components, taking part in seminars and building the relationships that facilitate the deals. That DSEI is a global arms fair is emphasised in the letter of understanding between UKTI DSO and Clarion:
“Since DSEI is an international exhibition, the necessity of achieving a fair and equitable share of delegation time between exhibiting UK companies and overseas exhibitors affects both the short term perception and long term survival of the event. DSEI needs to continually develop and maintain its position as the leading global market place. For this to happen, both UK and international companies need to feel they have equal and reasonable access to delegations.”
Arms sellers meet arms buyers at DSEI. If they agree a deal whereby the equipment does not come into the UK, it is not subject to any UK export controls. If the equipment is a UK export, it will go to one of well over 100 countries across the globe for which UK export licences are granted. The FCO’s “Human Rights and Democracy” report, which I have here, identified 28 “countries of concern”. In 2014, the UK approved arms export licences to 18 of these, including Israel, Libya, Saudi Arabia and Iraq.
I turn briefly to a specific example that worries me greatly. Turkey may be a member of NATO—
Andy Slaughter
Before my right hon. Friend moves on to Turkey, I should say that she mentioned Israel as a country of concern. The arms trade with Israel is huge—there were more than £11 million of licences last year and nearly £29 million of dual-use licences—but last year also saw Operation Protective Edge, in which 2,200 people were killed in Gaza, including 550 children. Is that not one of the most blatant examples of double standards?
Ann Clwyd
I think that the majority of us would agree with my hon. Friend, and I thank him for making that point.
Turkey, as I said, is a member of NATO, but it is also a country in a region of great turmoil and its Government are cracking down hard on their opponents. Over the last two years, brutal tactics have been used against protesters during rallies in Istanbul’s Taksim Square. There is also some evidence that arms acquired by Turkey, although not specifically from the UK, may have fallen into ISIS hands. That is an apt illustration of what can happen when weapons have left a supplier country, particularly in an unstable region: they can end up anywhere and with anyone.
Turkey has long been involved in a conflict with separatist Kurds, although there were hopes that negotiations might lead to a permanent end of hostilities. Recently, however, it has undertaken bombing missions across the border in Iraq, and locally built AgustaWestland attack helicopters, purchased for use against the PKK, have been deployed and reportedly used in recent renewed fighting. Since the pro-Kurdish HDP party won seats in the general election in June, Turkey has once again carried out attacks on the Kurdish population living within its borders. Earlier this month, Turkish military and police mounted a relentless assault on the town of Cizre in a counter-terrorism operation against the PKK, killing 21 people. A 10-year-old girl was shot dead by snipers as she left her home, with her hands in the air, in an attempt to get medical help for her father. He was also killed. This month, police shot three children from an armoured vehicle. They had left their houses to buy bread.
Turkey is a priority market of the UK Trade & Investment Defence & Security Organisation. The UK Government have officially invited Turkey to send a delegation to the DSEI exhibition in 2015. We do not know who will be on the delegation, but last time it included the deputy Defence Minister. Turkey is also a welcome guest of the UK Government at other military exhibitions here. Turkish delegations were present at both the 2014 Farnborough air show and this year’s security and policing exhibition. If Turkey buys weapons at the DSEI exhibition, they could be used to support the repression of its political opponents or its attacks on Kurdish people. With such sales, the UK Government are sending the message that the lives and human rights of the Turkish and Kurdish people are of little importance.
Turkey is not only present as an arms buyer; it wants to build its reputation as an arms seller. The Turkish Government’s Defence and Aerospace Industry Exporters Association is present at this week’s arms exhibition in London’s docklands as an international partner. It is currently building new drones, redesigning a battle tank and developing its own fighter jets. The association’s chair has said:
“A country’s development can be associated with the development of its defence industry. We identified our export target as 25 billion USD for year 2023, which is the 100th anniversary of the establishment of the Turkish Republic. We desire to take”
a
“place at the top 10 of”
the “world defence industry.”
During the 2015 Turkish election campaign, the AKP boasted that Turkey would make all its own military equipment, with massive posters on the streets proclaiming, “We’re making our own warplanes” and “We’re making our own tanks”. President Erdogan stated:
“Our goal is to completely rid our defence industry of foreign dependency by 2023.”
Prime Minister Davutoglu said in January 2015:
“Now we have a Turkey that won’t bow to others with its own national defence industry. This is the new Turkey.”
It is disappointing for those of us who have been involved in these matters for many years that the Government appear to have learned so little from their predecessors’ experiences of arming Saddam Hussein, President Suharto and President Gaddafi. It would seem that if a repressive regime has the money, a blind eye can be turned to human rights abuses. Turkey’s presence, and that of other countries that are or should be of concern, at the London arms exhibition this week essentially allows more arms to be provided to volatile and increasingly repressive regimes.
It is time for change—fundamental change. The UK Government need to change their policies and practices, and end their military sales to despotic regimes. That change would prove popular, because 70% of UK adults who were recently polled agreed that the UK Government should not promote the sale of British military equipment to foreign Governments who have a poor record on human rights.
Several hon. Members rose—
Sir David Amess (in the Chair)
Order. The three largest parties will make their contributions starting at 2.30 pm. I think we have six or seven colleagues who wish to contribute. My maths, unfortunately, makes it about three or four minutes each at the most, but I want to call everyone who has made the effort to be here.
Dr Tania Mathias (Twickenham) (Con)
I applaud the right hon. Member for Cynon Valley (Ann Clwyd) for securing the debate. I would like to declare that I am a member of Amnesty International and of the British Medical Association.
I want to mention some points that have not been raised. First, I want to honour the Londoners in the docklands area who peacefully protest against the ExCel arms fair, and the religious leaders who come every two years to pray peacefully in that area. We are talking about the human rights of Londoners, who get off the Docklands Light Railway near the ExCeL centre and see murals commemorating the destruction and civilian loss of the second world war. I do not believe that it is an appropriate location for the arms fair. As Amnesty has reported, shockingly, companies at the 2013 arms fair were selling cluster bombs and equipment for torture. I am not reassured that this year’s arms fair will not involve the sale of cluster bombs, torture equipment, depleted uranium, phosphorous or other items that I do not believe to be ethical, which no Londoner would wish to have sold in this area.
On Bahrain, I strongly urge the Minister and any members of the Government who are going to ExCeL this year to ask for the release of Dr Ali Al-Ekri. He is a consultant paediatric orthopaedic surgeon, and he should not be imprisoned. The only criminals in the situation are the Bahraini Government, because medical neutrality is a fundamental right.
Rachael Maskell (York Central) (Lab/Co-op)
I thank my right hon. Friend the Member for Cynon Valley (Ann Clwyd) for securing this important debate on ethical questions. As a global arms export player, the UK is second only to the US, with a share of global contracts worth 22% of the total market. Over the summer, I had real concerns about our contribution to the devastating situation in the middle east, and I am grateful to the House of Commons Library for supplying me with so much information. The Department for Business, Innovation and Skills strategic export controls report—all 686 pages of it—was chilling reading, and enabled me to see where our arms trade was leading. It led me to shine a spotlight on the situation in Saudi Arabia and where our arms can end up. I have had discussions with an expert on Syria, who talked about how Saudi Arabia is supplying weaponry to help resistance organisations in the current crisis. Some of those resistance groups have fallen into the hands of Daesh, which is of huge concern, but we also know that Daesh has received weapons, probably including weapons manufactured in the UK, from other parts of the region.
Turning the spotlight back to Saudi Arabia, which is one of our major export markets, some £3.9 billion-worth of contracts were signed under the previous Government. We therefore have many aircraft, helicopters, combat vehicles, explosive devices and other weaponry in the region. We have heard how Saudi Arabia is using UK-manufactured aircraft on one side of the conflict in Yemen while we are delivering humanitarian aid to that country. Saudi Arabia may well be bombing the refugee camps that we are supporting, and at the very least it is creating more refugees. There is therefore deep concern, and we must seriously scrutinise what is happening.
Once our manufactured goods enter the region, we have no control over how they will be used, where they will end up and who they may kill. With such destabilisation in that part of the world, as in so many others, we need to ask serious questions when issuing each licence. Why are we exporting the goods? Would we class it as a humanitarian act to help defenceless countries provide safety and security, or is it an opportunity to generate revenue? Is our export control list extensive enough? Surveillance technology, for example, is not subject to the same export rules. What are the risks, now and in the future, of signing a contract with another country? What are the human rights records of those countries? Let us face it, Saudi Arabia, Bahrain—as we have heard—and so many other places, particularly in the middle east, do not have a good human rights record. What do countries such as Saudi Arabia have to do for us to stop selling arms and to say that their human rights record has crossed the line? I believe that they have well and truly passed that mark. What diplomatic pressures can we apply to encourage more countries to sign up to the UN arms trade treaty?
The time has come for us to ask whether UK- manufactured goods are directly, or indirectly, contributing to the mass humanitarian crisis that we are witnessing. What steps will the Government take to stop that?
Paul Flynn (Newport West) (Lab)
It is a great pleasure to serve under your chairmanship for the first time, Sir David. It is a special joy to support my right hon. Friend the Member for Cynon Valley (Ann Clwyd), who has a heroic record of working for Indict and CARDRI. She took on a lonely task, and she behaved with genuine heroism by going to inspect the wars for herself. It is a shame that previous leaders of our party have never been as aware of her talent as the present leader may be. Her best days are ahead.
My right hon. Friend mentioned Yemen. We should be greatly concerned that, in a country of 21 million people, 84% of the population are in need of humanitarian aid. It is an extraordinary crisis that has had very little attention. What is going on in Yemen? A group, the Houthis, are regarded as rebels, and the Saudis have gone in, supported by us, and are creating a terrible situation. At least 4,000 people have been killed in the past few months. Last week, on “Newsnight,” we saw a water-bottling plant that was bombed, with the workers turned into carbon. All that was left of them was their burned bodies, and we had a hand in doing that.
The extraordinary thing, as my hon. Friend the Member for York Central (Rachael Maskell) said, is that the Government are behaving in two different ways: they are providing humanitarian aid, which we do very well—the Government should be congratulated on their record of maintaining the 0.7% aid budget—but, on the other hand, they are feeding the war machine that is causing death and creating refugees.
There is a nasty regime in Azerbaijan under Aliyev. I spoke to him a year ago, and he told me that it is untrue that Azerbaijan imprisons journalists, demonstrators and opponents. He promptly went home from that meeting, which took place when, absurdly, his country headed the Council of Europe, a body in charge of human rights, and arrested dozens more journalists, demonstrators and opponents. Yet there is a campaign in this House to get as many Members as possible to join the all-party group on Azerbaijan. Members of that group are welcome to go on the caviar trail, and they will be very well looked after while they are in Azerbaijan.
The arms trade contributes to undermining the work of this House. When the war drums are beating, we are all blackmailed into supporting new wars because there will be jobs at stake in our constituencies. We hear from those workers and are told that, if we are against the war, we are against jobs in our constituency. The powerful arms trade lobby is deeply corrupting. The Government are trying to edge us into a new war, into blundering into the four-sided civil war in Syria, with God knows what consequences. Just two years ago they wanted us to fight Assad, and now they want us to take on ISIL—they are both deadly enemies—but the House no longer trusts Government information. We lost 179 of our brave British soldiers in pursuit of non-existent weapons of mass destruction in Iraq. We went into Helmand in 2006, having lost just four soldiers in battle up to that point, on the assurance that not a shot would be fired; in fact, millions of shots were fired and we lost 454 soldiers. Again, we were told two years ago to prepare for war with Iran because it was going to attack us with its non-existent long-range missiles carrying non-existent nuclear weapons.
We in this House must look to the arms trade. Yes, there are benefits to be gained from that trade, but we must resist the temptation to go ahead and support oppressive and murderous regimes in the name of profit. A sensible line must be drawn between our great record on humanitarian aid and our record of unnecessarily shoring up wicked regimes that create the problems of deprivation, cause deaths and create a large number of refugees. We must have a consistent, rational policy that makes sense.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Poverty is a factor in conflict and the buying of arms. In turn, conflict is the root cause of poverty, important in itself and intertwined with other causes. High military spending means overconsumption of resources, and it results in degradation of the environment and distortions in the economy. Such spending is intimately related to problems of debt, illegal drugs and the denial of democracy and human rights. It may lead to armed conflict that causes loss of civilian life, displacement—we are well aware of that today—destruction of the environment and infrastructure, and severe disruption of the economy.
I particularly wanted to speak in this debate because of my role on the Select Committee on International Development. Unless we address the issues already raised pertaining to arms sales and human rights abuses, I fear that we will not reach our global goals of ensuring action for people, planet, peace, prosperity and partnership. I will particularly address humanitarian issues linked with arms sales to countries that have child soldiers and with our UN obligations.
There are an estimated 250,000 child soldiers in the world today. People may not be aware of it, but 40% of all child soldiers are girls, who are often used as wives—in other words, sex slaves—for male combatants. Many rebel groups use child soldiers to fight Governments, but some Governments also use child soldiers in armed conflicts.
Africa has the largest number of child soldiers. They have been used in armed conflicts in the Central African Republic, Chad, the Democratic Republic of the Congo, Somalia and Sudan. In June 2013, the United Nations set a goal of having no child soldiers anywhere in the world by 2016. Of the eight Government armies listed for the recruitment and use of children, six have committed to making their armies child-free. In 2012, South Sudan, Myanmar, Somalia and the Democratic Republic of the Congo signed action plans with the UN, and Afghanistan and Chad made similar commitments the previous year. Discussions initiated with the Governments of Yemen and Sudan are expected to lead to action plans.
I speak also as a clinical psychologist. It is important to note that children are used as soldiers because they are easier to condition and brainwash. They do not eat much food, they do not need much pay and they have an underdeveloped sense of danger, so they are easier to send into the line of fire. As children make up the majority demographic in many conflict-affected countries, the supply of potential recruits is constant, and due to their size and, tragically, their perceived expendability, children are often sent into battle as scouts or decoys, or sent in the first wave to draw the enemy’s fire.
The effects on children are felt long after their physical scars have healed. Many child soldiers are desensitised to violence, often at a formative time, and it psychologically damages them for life.
It is crucial that we as a Government support aims to get children out of army uniforms and into school uniforms. It is crucial to support humanitarian efforts and ensure that arms are not sold directly or indirectly to countries or regimes that deploy child soldiers. Although child soldiers can go through formal demobilisation, disarmament and reintegration programmes when they are free, many are vulnerable and marginalised, and are not accepted back into society. We must ensure that we support humanitarian efforts to make child soldiers a thing of the past.
Angela Rayner (Ashton-under-Lyne) (Lab)
I am pleased to speak under your chairmanship, Mr Amess. I praise everybody who has contributed to this important debate.
I am not a particularly religious person, but my politics and those of my party are probably shaped more by Methodism than by Marxism. Matthew 5:9 is a guiding principle as pertinent today as it was when it was written:
“Blessed are the peacemakers, for they shall be called the children of God.”
Amnesty International estimates that roughly 500,000 people are killed every year by firearms in the battlefield, as a result of state repression, or by criminal gangs. Many more millions around the world die after being denied access to things that most people in my constituency take for granted, such as healthcare, water and food, because they are trapped in conflicts fuelled by the poorly controlled flow of arms. In the Democratic Republic of the Congo, for example, it is estimated that more than 5 million people have died since 1998 as an indirect result of the armed conflict.
The new politics that puts people before unfettered profiteering demands that it is time for the march of the peacemakers. Some may ask why it is a concern for my constituents in Ashton, Droylsden and Failsworth. Some may talk about job creation and economic growth stemming from the arms trade. I say that hundreds of my constituents have written to me over the last few weeks demanding that the current Government show more compassion for the families, women and children fleeing war-torn countries such as Syria. I agree wholeheartedly that the Government need to do more and that we should take our fair share of those seeking sanctuary and refuge, but I also say that we must do more to deal with the causes of the migration crisis by tackling head-on the countries that supply arms to regimes and nations with appalling human rights records.
On the question of job creation, the arms industry is in decline while new and emerging industries require research, investment and development. The greatest investment in conflict resolution is the creation of jobs and the building of houses, good schools, hospitals and road and rail infrastructure. That is the peacemaker approach.
When I came to this House, I promised my constituents I would do all that I could to protect, and provide for, the next generation. They deserve a future. The issue affects us all; we are all children of one world. I am concerned that despite the grand words and intentions in the arms trade treaty, an event such as the DSEI arms trade fair carries on in ignorant bliss.
I congratulate my right hon. Friend the Member for Cynon Valley (Ann Clwyd) on securing this important debate and on her work in this area. I remind those here and beyond that, as she mentioned in her opening remarks, the treaty requires
“that no state authorises arms transfers to those committing genocide, crimes against humanity, war crimes and serious violations of human rights law, or turns a blind eye to dealers supplying arms likely to be used to commit serious human rights violations."
In the march of the peacemakers—the new politics for which so many in our nation and in my constituency are crying out—we must ensure that we press the UN and all signatories to the arms trade treaty to implement the treaty obligations fully. We also need to invest both aid and time in the industries of peace, stability and sustainable growth to create a safer world for all. I ask the Minister to do all that he can in that vein.
Jo Stevens (Cardiff Central) (Lab)
I thank my right hon. Friend the Member for Cynon Valley (Ann Clwyd) for securing this important debate and for her thorough and impressive speech on the issue, about which I know she is extremely knowledgeable and passionate. I share her deep concern about the promotion of UK arms sales to countries with poor human rights records. My contribution will focus on the UK arms trade and military-industrial collaboration with Israel.
The House will know that last summer, while Gaza was under military attack, there was widespread horror and opposition to Israel’s bombing and invasion. Protests took place across our country involving hundreds of thousands of people. In my constituency, nearly 2,000 people marched to protest at the Israeli Government’s actions. The Israeli assault on Gaza in July and August 2014, in which 2,205 Palestinians were killed, including 521 children, is only the most recent example of the Israeli Government’s indiscriminate acts of violence against the Palestinian people, but the United Kingdom continues to treat Israel’s defiance of international law as, at best, an inconvenient detail to be worked around when making decisions on arms trade control. Contrary to their own criteria, the Government grant export licences allowing British military hardware and components to be supplied to Israel. At the same time, they import Israeli military hardware and components and provide training in the UK for Israeli military personnel.
My right hon. Friend the Member for Cynon Valley has outlined the criteria against which arms export licences are considered, yet the Government have been reluctant to refuse or revoke export licences to Israel. Since 2010, they have licensed the export of £42 million worth of military equipment to Israel, and have purchased from Israel targeting systems, drone technology and drones. The latter were developed by Israel’s Elbit Systems in a joint venture with Thales UK under a contract awarded by the Ministry of Defence. Members of the Israeli military have attended education courses for military personnel in the UK, and Israeli firms, including Elbit Systems, receive funding through 46 projects under the European Union’s framework research programme.
Although much was made of the Government’s decision during the Gaza war to halt 12 licences for components in the event of serious hostilities, no definition of “serious hostilities” was ever offered, and although violence resumed the very next day, those licences were not halted. In July 2015, the Secretary of State for Business, Innovation and Skills announced that those licences were no longer under review, as he was content that the licences for material, including components for military radar and tanks, met the UK’s export criteria.
Israeli military and industry sources openly attribute the success of Israeli exports to the fact that weapons and technologies are combat-proven in the Occupied Palestinian Territories. This means that when the UK imports Israeli arms, it helps Israel to benefit from unlawful practices. Despite official controls on arms exports, UK-made arms and military technologies continue to be sold to and used by the occupying Israeli forces. The value of licences awarded for export to Israel amounted to more than £11.5 million for military use and nearly £29 million for dual—civil or military—use in 2014 alone
Importing arms from and selling arms to Israel makes the UK complicit in Israel’s continuing violations of human rights and international law. So long as the Governments of the world engage in the arms trade with Israel, it has no incentive to relinquish its unlawful use of force and its illegal colonies in the Occupied Palestinian Territories. This is why four Nobel peace laureates—Archbishop Desmond Tutu, Adolfo Pérez Esquivel, Mairead Maguire and Rigoberta Menchú—together with the former UN special rapporteur on human rights in the Occupied Palestinian Territories, Richard Falk, have accused the USA and the European Union of complicity in Israel’s crimes and have backed the call for an international military embargo against Israel.
I ask the Government—please—to refuse all of the export licences to Israel, directly or via a third country, where the end user is the Israel defence forces or military industry; to revoke any extant export licences to Israel, directly or via a third country, where the end user is the Israel defence forces or military industry; ban arms imports from Israel; and ban collaborations between UK-based companies and the Israel defence forces or Israeli military industry. We must end our shameful complicity in Israel’s continuing violations of human rights and international law in the Occupied Palestinian Territories.
Sir David Amess (in the Chair)
Order. We have nine minutes left before the wind-ups, so I am afraid Members have three minutes each.
Tom Brake (Carshalton and Wallington) (LD)
I congratulate the right hon. Member for Cynon Valley (Ann Clwyd) on securing this debate. Since my time on the all-party group on human rights, I know how assiduous she has been in pursuing these issues. Her dedication to the cause is probably only matched by that of my friend in the House of Lords, Lord Avebury, who is equally assiduous in following such matters.
It is clear that the arms trade and human rights is an issue that concerns many of our constituents. I am sure that all Members here today will have been on the receiving end of a campaign email, which rightly highlights concerns around the defence and security equipment in the arms show that is being held in London at present. That campaign email focuses on two particular matters: Egypt and Israel. In relation to Egypt, it is regrettable that the UK Government are rolling out the red carpet for el-Sisi when he comes to visit. I think that that is a mistake. I hope that the Minister will be able to explain why such a decision was taken.
In relation to Israel, Members will know that last year my right hon. Friend the Member for Sheffield, Hallam (Mr Clegg), who was then Deputy Prime Minister, said that if Israeli forces go back into Gaza and use disproportionate force, the UK Government should take action. What is the new Government’s position in that respect?
Also, what is the UK Government’s explanation for allowing arms sales to countries that are on the FCO list of countries about which it has human rights concerns? Many of the countries that we have talked about in this debate are on that list. There may be different versions, but one suggests that North Korea and Zimbabwe might be on that list. I hope that that is not the case but, if it is, what weapons and security equipment might we be exporting to those two countries?
Catherine West (Hornsey and Wood Green) (Lab)
Does the right hon. Gentleman agree that arming authoritarian regimes undermines the generally excellent human rights record that Britain has abroad?
Tom Brake
Indeed. Another country that has been mentioned where we have such concerns is Yemen. Clearly, the Saudi Arabians, with a coalition of other nations in the region, including the United Arab Emirates, have embarked on what many have said is indiscriminate military action that has put many civilian lives at risk or killed many civilians. We are providing a pathway for bombs to that campaign. Can the Minister say anything about that? Also, perhaps as a side issue, what impact might that have on the RAF and its ability to deal with any future crises?
Sir David Amess (in the Chair)
Order. There is so little time and we still have two Members before the wind-ups. However, if the Minister wants to intervene, he may do so.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
I just want to respond to this issue that has come up many times. I will not have enough time to respond to everything, but on this particular point on Yemen, President Hadi has invited support because of what is happening with the Houthis. Other countries have been invited to assist a country in need in the same way that President Abadi in Iraq has invited us to assist his country in dealing with a threat. That is why Saudi Arabia and the United Arab Emirates are involved in south Yemen.
Tom Brake
They may have been invited in, but if countries such as Saudi, which are supplied with UK weapons, are acting indiscriminately in that country, we need to be concerned.
Clearly, there is a role for a strong UK arms industry. It creates jobs and helps technological development, but there is certainly no role for a UK arms industry that exports weapons made here to repress people in other countries.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
It is a pleasure to serve under your chairmanship, Sir David.
Those of us speaking today will certainly not be short of words. The defence and security equipment exhibition taking place this week in this city has brought the issue to the fore. The UK Government have invited many countries to attend the four-day event. To make the most of my time, I will focus on Saudi Arabia.
In 2014, the Economist Intelligence Unit, not usually known as a radical source, ranked Saudi Arabia at 161 out of 167 in its democracy index. Only six of the world’s Governments are deemed more repressive, including Syria, North Korea and the Central African Republic.
It is easy for me to stand here and quote statistics today, but I would rather give an example that seems to be making the news: the case of Ali Mohammed al-Nimr, who was arrested in February 2012 when he was only 17. He was accused by Saudi authorities of participating in an illegal protest and of firearms offences. Despite there being no evidence to justify the charges, he was convicted of the alleged offences by the specialised criminal court. His final appeal, which was held in secret and without his knowledge, was dismissed. The young man’s life is now set to be cut dramatically short and he has been sentenced to death on charges that include insulting the king and delivering religious sermons that disrupt national unity. It is an absolute outrage and I intend to write to the Minister to ask for urgent action to be taken.
As if all that was not alarming enough, Ali’s sentence is due to be barbarically carried out by crucifixion. I feel for this young man and his family. Reading Ali’s story this morning filled me with grief for his life about to be savagely and abruptly ended. How in 2015 can a supposedly civilised country impose such an inhumane and merciless penalty on any of its citizens, let alone one so young?
Ali is but one of countless examples of Saudis falling foul of the ruthlessly relentless regime. While human life holds little or no value to the Saudi establishment, our own Government seemingly place a high value on the arms business. Saudi is one of the largest arms export markets, worth billions of pounds to our Exchequer: blood money that the UK Government are happy to take. We supply weapons and ammunition. We deliver military aircraft and we help to train Saudi personnel. We even co-operate with the military action. Saudi is leading the coalition that is bombing Yemen, killing and maiming many civilians as well as destroying their homes. This is being done, with the apparent blessing of the UK, using arms purchased from us.
The Government appear to be bending over backwards to sustain the relationship. In 2014, when David Cameron could not get the Saudis to agree the financing for a multi-billion-pound Eurofighter Typhoon deal, Prince Charles came to the rescue. The prince visited Saudi Arabia and did a sword dance in traditional dress at a festival supported by BAe. His visit came two days before BAe was due to issue its financial results, amid rumours that its share price was set to fall unless agreement could be reached on the pricing of the Typhoon deal. The next day, Saudi Arabia and BAe Systems announced that a deal had been finalised. So while the royal family grovel to maintain the status quo of our arms trade with the Saudis, the human rights abuses continue apace. On average, one person is executed every two days in Saudi Arabia.
It seems that for the UK Government the interests of BAe Systems trumped any frank speaking to the Saudi authorities about human rights. There can be no doubt that such determined pursuit puts commercial relationships before human rights, and sends a strong signal of UK support for the regime. The blind eye that we officially turn to Saudi Arabia’s dreadful denial of human rights only serves to support its savage and sadistic regime. Can the Minister please answer the points I have made?
Kate Osamor (Edmonton) (Lab/Co-op)
I am the last person to speak today before the Front-Bench spokespersons and, as people can well imagine, a lot of things that I am going to say have already been said. However, if we stand together and say the same thing, it will make the story and make our case even stronger.
I am very pleased that we are having this debate today. As we have already heard, the debate about UK arms sales and human rights internationally is very relevant, as this week London is hosting the Defence and Security Equipment International arms fair, one of the largest arms fairs in the world. Countries with very bad human rights records are present at that fair, including Azerbaijan, Kazakhstan, Egypt and Thailand, so it is right that we ask whether UK arms sales are compatible with promoting human rights around the world. I firmly believe that they are not.
We recently learnt that warplanes made in the UK have been used by Saudi Arabia in attacks on Yemen. Those air strikes have already killed hundreds of civilians, including more than 64 children. Saudi Arabia also has an appalling record when it comes to domestic human rights. The regime is engaged in a campaign of repression against opposition and pro-democracy groups in the country. It also carries out scores of executions against individuals, often after unfair trials.
The UK has also continued to sell arms to Israel, despite its ongoing illegal occupation of the west bank. Israel currently holds more than 5,000 Palestinians as political prisoners, and last summer it carried out a military campaign that besieged the Gaza strip and led to the death of more than 2,000 Palestinians, over 500 of whom were children.
By selling arms to countries involved in these violations, the UK is not only condoning the Governments who are carrying out these policies but actively supporting them. This activity also sends out the message that the UK will turn a blind eye to human rights violations committed by its allies. That is bad in itself, but it also weakens our hand when it comes to promoting human rights in countries that are not our allies at the moment, leaving us open to charges of hypocrisy.
No doubt we will hear from the Government that the UK has one of the strictest arms control regimes in the world. That may be true, but our controls are clearly not good enough if weapons made in the UK still end up in the hands of regimes that violate basic human rights and carry out attacks that harm civilians.
Sir David Amess (in the Chair)
Order. I thank hon. Members for co-operating. May I just ask our next two speakers to allow the Minister some time to respond to the many points that have been made?
Patrick Grady (Glasgow North) (SNP)
It is a pleasure to serve under your chairmanship, Sir David. I am reminded of the early days of the Scottish Parliament, when it was chaired by Sir David Steel, who was also addressed as “Sir David”. If the House of Commons ever seeks a change, who knows, they might welcome that opportunity back up the road.
I pay tribute to the right hon. Member for Cynon Valley (Ann Clwyd) for securing this very valuable and timely debate. I also pay tribute to her long-standing commitment to the issue of the arms trade and to the peace movement. She is joined in that by the right hon. Member for Islington North (Jeremy Corbyn). Sadly, he has not made it to Westminster Hall today, although I do not know what the conventions are. I also pay tribute to all the Members who have made extremely valuable speeches. I hope that the Minister will have time to respond to their points, particularly the specific points about countries of concern such as Israel, Yemen and Saudi Arabia, and some of the powerful points made by my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) on the issue of child soldiers.
When I was a student, I had the opportunity to visit New York and the United Nations, which is committed to the building of peace and stability around the world. I was struck by a display—nowadays, we would call it an infographic—that showed the proportion of arms sales to the cost of just about everything else that the UN is there to try to achieve: the cost of universal free education; the cost of ending hunger; and the cost of providing clean water and sanitation to everyone in the world who lives without that. The arms trade dwarfed all those other things. That image has stayed with me ever since. I saw it in the days before smartphones were ubiquitous, so I was not able to grab a photo of it, but I know that similar infographics and statistics are all too readily available nowadays.
Figures reported recently in The Independent showed that British companies secured export deals for weaponry that were worth £8.5 billion in the past year. By comparison, the departmental expenditure limit for the Department for International Development is only slightly more than that figure, at £11 billion.
The trade in arms is “the trade in death”, as it has been described by numerous thinkers and peace campaigners, not least various popes. Today is the anniversary of the speech to this Parliament by Pope Benedict XVI, in which he spoke about the arms trade and its insidious impact on stability and security around the world. The money that goes to waste on arms when it could be spent on much better and more important things is truly shocking, and one of the great scandals of the modern world.
The regulation around arms has also come up many times. Amnesty cites the interesting fact that there are more international laws regulating the trade in bananas than regulating the trade in weapons. Even with the arms trade treaty, which I will come back to, it seems that very little consideration is given to the end-use of a lot of weapons. The arms trade is seen simply as a valuable export market and a way of achieving economic growth, but economic growth should not come at any cost.
The UK Government’s dealings on this issue go way back. In 1966, Denis Healey set up the Defence Sales Organisation, which was located within the Ministry of Defence. Today, it goes by the name of the UK Trade and Investment Defence and Security Organisation. However, its essential purpose remains, which is to sell UK military equipment overseas.
As we have heard today, all too often such sales are made to regimes that have a terrible record on human rights. According to the Campaign Against Arms Trade, UKTI DSO is staffed by about 130 civil servants, to say nothing of the high-profile political and royal visits that work behind the scenes to promote the trade in arms. That support for military sales helps arms to account for less than 1.4% of UK exports. According to CAAT’s research, sectors covering the remaining 98.6% have 107 dedicated civil servants. That is completely out of proportion, given the things that we are trying to achieve.
As we have heard, in 2014 the UK approved arms export licences to 18 of the countries that the FCO lists as countries of concern. Despite the well-documented repression and human rights abuses, some of those countries have been priority markets for UK arms sales. Since the UK Government do so much to help companies to promote their sales, it is inconceivable when it comes to issuing export controls that licences will be refused. Regulation through export licensing is at risk of becoming little more than a bureaucratic exercise. As we have heard, it seems that the only time that arms export licences are revoked is when the Government are shamed or embarrassed by coverage in the media, for example, during the Arab uprising.
We live in a world in which there are structures and conventions that ought to prevent that. I mentioned the arms trade treaty, which is the subject of a hugely successful and long-running campaign by a large number of civil society organisations around the world. Article 13 requires annual reporting on the sales. I wonder whether the Minister can tell us today whether the annual report will include an assessment of the end-use and the end-users of UK-supplied equipment and arms. Article 10 requires regulation of brokering. Perhaps the Government can tell us when it will introduce a register of arms brokers in the UK.
Of course, the debate today is taking place in the context of the DSEI exhibition at the ExCeL centre in London. Amnesty has identified nine companies that have violated UK law at past DSEI events—at least one at each event between 2005 and 2013. What steps are the Government taking to enforce controls at their own arms fairs? Will they commit to prosecuting any company found in breach of the law?
At the end of the day, the arms trade is a choice; it is not a necessity or something that we should depend upon, celebrate or think is the only way of growing the UK economy. It is increasingly difficult to see how the trade, especially in its current forms, can be compatible with the human rights obligations to which this country has rightly chosen to commit, so I look forward to the Minister’s response.
Hilary Benn (Leeds Central) (Lab)
It is a great pleasure to participate in this debate under your chairmanship, Sir David. I begin by congratulating my right hon. Friend the Member for Cynon Valley (Ann Clwyd) on securing this debate and above all on her passionate and determined campaigning on this issue over many years. I also thank the Members who served previously on the Committee on Arms Export Controls. I echo the comment on the need to re-establish that Committee as quickly as possible in the new Parliament.
I begin by saying that in an uncertain world, we need to acknowledge—uncomfortable though it is for some—that the defence industry plays a part in enabling us to protect our own security. States have the right to acquire the means to defend themselves. We are commemorating the 75th anniversary of the day in the battle of Britain when the RAF in effect defeated the Luftwaffe. If we had not had Spitfires and Hurricanes, where would we have been as a nation?
My hon. Friend the Member for York Central (Rachael Maskell) raised an important point about Daesh. She is absolutely right that it has in all probability acquired weapons that had been supplied to others: the Government of Iraq and perhaps the peshmerga, to whom we have supplied some heavy machine guns. We did that because they are trying to protect themselves from a brutal group of people who rape, enslave and sell women, decapitate aid workers and recruit child soldiers. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) spoke about the effect that that has on children. Their childhoods have been stolen, which is something I saw for myself in the Democratic Republic of the Congo when I was International Development Secretary. We have to acknowledge that defence is an important industry in the UK, providing 160,000 jobs directly and 100,000 indirectly.
Just as arms exports can be a force that enables countries to protect themselves, the opposite can also be the case, and that is why it is vital that we have a responsible trade in arms exports. It is why we have to ensure that the system has proper accountability and transparency and is correctly exercised, including in respect of human rights. We have the export licensing criteria and the EU consolidated criteria, which show what can be achieved by working together within the European Union. I pay tribute in particular to the last Labour government and the late Robin Cook, who played such an important part in bringing that about. Reference has also been made to the arms trade treaty, which Britain campaigned on for many years and was adopted by the UN General Assembly in 2013.
It has been said in the debate—we will no doubt hear this from the Minister—that we have one of the toughest regimes in the world. The rules are there and they are clear; the issue is how they are applied in respect of particular applications, and scrutiny of that is the responsibility of the Committee on Arms Export Controls. We have heard how during the Arab spring, there was a great deal of controversy over UK arms exports to middle eastern and north African countries, including Bahrain and Libya. The Committee expressed some concerns, which led to some of the licences being revoked. The Committee asked questions about the decision-making process that led to the granting of the licences in the first place and about the speed with which decisions are taken when it is finally decided that there is a risk of breaching the guidance. I think that that led the then Foreign Secretary, William Hague, to announce that the Government would
“introduce a mechanism to allow immediate licensing suspension to countries experiencing a sharp deterioration in security or stability.”—[Official Report, 7 February 2012; Vol. 540, c. 7WS.]
We heard from my hon. Friend the Member for Cardiff Central (Jo Stevens) that there is a question on how that is applied. Improvements have been made to the transparency of the system, and transparency is important, because it allows all of us to hold the Government and the Committee to account.
The Committee expressed concern when the Government decided that they would delete from the consolidated criteria the words:
“An export licence will not be issued if the arguments for doing so are outweighed by…concern that the goods might be used for internal repression.”
The Government’s argument in response was that it was a general statement that formed part not of the criteria, but of the introductory text. If that is the case, I wonder why it was felt necessary to remove the words, because they did seem to send a signal. Sir John Stanley, who chaired the Committee, expressed concerns about that. At the time, he expressed the concern that too many licences were initially being given that subsequently had to be suspended or revoked. I think that change was in a backwards direction. The Government may try to argue to the contrary, but the change sends a signal.
The question of Yemen and the great humanitarian crisis there has been raised in the debate. My hon. Friend the Member for Newport West (Paul Flynn) described how more than 80% of the population is in need of humanitarian assistance, including 10 million children. Some 500,000 children are severely malnourished. The aid agencies have serious access problems and report aid being diverted, not on the basis of need, but depending on where people were and who they were believed to be supporting in the conflict. I know the Minister has a lot to reply to and will not have time—if he could write to us all, it would be appreciated—but will he respond to reports of attacks on civilian targets, including those on “Newsnight” last week? What discussions are he and his FCO colleagues having with their Saudi counterparts about the conflict and these concerns? Given that it is reported that since the conflict began, the Government have issued a further 37 arms export licences to Saudi Arabia, does he know whether the defence equipment we have sold has been used in that conflict? Has he made an assessment of whether that is consistent with the consolidated criteria?
In the “United Kingdom Strategic Export Controls Annual Report 2014”, published in July this year, the Government set out that their policy on arms exports to Israel would be “subject to further review”. Will the Minister confirm whether that remains the case?
Finally, will the Minister comment on the invitations issued to countries to attend the biennial Defence and Security Equipment International arms fair this week? We heard from a number of Members that they include countries on the FCO’s list of countries of concern on human rights grounds. What criteria were used to judge whether those countries, given that they are on that list, could be invited? Were any countries not invited because they were on the list and the Government thought it inappropriate? Given what the hon. Member for Twickenham (Dr Mathias) said, will he confirm that no cluster bombs or torture equipment are being displayed or sold at the fair?
The debate has been extremely important, and we are all grateful to my right hon. Friend the Member for Cynon Valley for giving us the chance to raise these matters. Like everyone, I look forward to the Minister’s response.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
Thank you, Sir David. It is a pleasure to be able to call you that, and I am delighted to work under your chairmanship today. I begin by joining others in paying tribute to the right hon. Member for Cynon Valley (Ann Clwyd). She has a formidable reputation in this House going back many years. She has been consistent not only on this issue, but on wider humanitarian concerns. It is no surprise that she is at the forefront of this debate today. I echo the tributes paid to Robin Cook and the work that he did on this area and to Sir John Stanley, who continues to be active in these areas. I met him only a few days ago to discuss these matters.
To make it clear, I will not have the opportunity to answer all the questions, but as I have done in the past, I will write to Members personally and individually—I am looking at my officers behind me—to ensure that each question is answered in detail. I have done that before and I will honour that today. Ten minutes does not do these debates justice.
I will touch on some of the important contributions, and I echo the comments on the standard and importance of this debate. It is a healthy debate for the House to have. My hon. Friend the Member for Twickenham (Dr Mathias) mentioned cluster munitions, as did the shadow Minister, the right hon. Member for Leeds Central (Hilary Benn)—I have got to know him so well that I wanted to say my right hon. Friend; I am pleased to see him in his place and welcome him. I can confirm that cluster munitions are not on sale in any form at the DSEI exhibition. The exhibition is patrolled to ensure that every bit of kit meets the required standard and that such equipment is not on sale.
My hon. Friend the Member for Twickenham also mentioned Bahrain, an example of a country that is on the list of concern, but also a country with which we have a strong military relationship. We do sell it military equipment—air force, navy and army components—but, as in all the cases of countries that are on the Foreign and Commonwealth Office list and with which we have a defence relationship, we make sure that our robust controls are honoured. That allows us to have a strong and robust relationship with countries. Bahrain is a great example of where that allows us to be frank and up front about human rights concerns. I will write to my hon. Friend with the detail on how our experts are working with the Bahraini Government to improve human rights. That is welcome, and we can do it and be frank with them because we have built up that relationship.
The hon. Member for York Central (Rachael Maskell) talked about Daesh and the potential for UK weapons to fall into their hands. I would be grateful to know of any examples. There have been many suggestions that UK equipment might have fallen into the wrong hands, but we need to make a distinction between press reports and evidence. If the hon. Lady has any actual evidence, she should please provide that to us and we will certainly look into it. I am not aware of any evidence on that front.
The same goes for Yemen. I touched on this in an intervention on the right hon. Member for Carshalton and Wallington (Tom Brake). The coalition was put together at the request of the Yemeni President. UN Security Council resolution 2216 states that all means and measures should be taken to support the country. The Houthis were asked to return and back away from the areas that their military had taken over. They refused to do so, which is why military action was confirmed. There is the potential that the military equipment that has been sold could be used, but that would be deemed a legitimate use of those weapons systems. It comes down to the fundamental right, guaranteed in article 51 of the UN charter and mentioned by the shadow Minister, for any country to have the means and the right to defend itself, or to provide support to other countries for the same reason.
Mr Ellwood
If the right hon. Gentleman does not mind, I will not because I have so much to get through. If there is time at the end, I will certainly come back to him.
The hon. Member for Newport West (Paul Flynn) is no longer present, but his views on this matter have been consistent. He spoke about the humanitarian crisis in Yemen, which certainly worries me. All the humanitarian aid is currently coming through the port of Aden. Until the port of Hodeidah is liberated, the humanitarian crisis will not be avoided. In fact, we are one step away from famine breaking out in Yemen, affecting some 20 million people. The international community should certainly be concerned about that, but we can all be proud of the British humanitarian contribution in providing aid and support to that country.
The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) spoke about the connection between conflict and poverty, on which I agree with her. She also made it clear that, as a clinical psychologist, she has experience and brings expertise to the House, which is very much to be welcomed. I absolutely agree with her ambition to remove those children who are in uniform and put them into school uniforms. If I may, I will write to her with more detail on the programmes we are involved in to make that happen. That is exactly what we should be doing.
The hon. Member for Ashton-under-Lyne (Angela Rayner) began by quoting Matthew 5:9—“Blessed are the peacemakers”. I wrote that down and underlined “makers”. How do we make peace? That is a big debate in its own right. She also discussed the causes of the crisis and looking at ways to deal with the source of the problem, not just those who are running away from it. The House will soon have to look in detail at what more we might want to do in relation to Iraq and Syria.
The hon. Member for Cardiff Central (Jo Stevens) spoke about another very important area: what has happened in Israel. There was huge scrutiny of the most recent events that unfortunately unfolded in front of the world’s eyes. We have to recognise that Israel lives in a very difficult neighbourhood, confronting Hamas on one side and Hezbollah on the other. Arms exports came under huge scrutiny during those events, but Israel does have the right to defend itself, and we conducted the necessary reviews to ensure that our robust rules, which have been mentioned a number of times, actually fell into place. The hon. Lady spoke with particular passion and, may I say, expertise, and if she would like to meet to discuss the issue in more detail, I would be delighted to do so.
The right hon. Member for Carshalton and Wallington, on whom I intervened, also spoke about UK weapons being used for oppression. I return to the fundamental question about our ability to have influence in a country by having not only a defence relationship with it, but a relationship right across the spectrum, in order to have influence on the improvement of human rights. Again, if he is aware that any UK weapons systems are used for oppression, it is important that he makes me aware of that.
Mr Ellwood
I did say that I would give way to the right hon. Gentleman. I have about three minutes left, so I hope he can be brief.
Mr Ellwood
I visited the United Arab Emirates only last week, and what is happening in Yemen, from the military campaign to the humanitarian issues, came up in our discussions. I am interested in any and every aspect of what we are doing in Yemen. If any reports with bona fide evidence suggest that that is happening, we would be the first to ask how our arms exports are being used. That applies not only there but in every situation, which absolutely must be the case.
The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) discussed a specific case. She said she would write with more detail; I do not know whether I am the Minister to whom she was going to write, but I would be more than delighted not only for her to write to me but to meet her to discuss that case.
The hon. Member for Edmonton (Kate Osamor) spoke about Saudi Arabia. I do not have enough time to go into everything now, but I have a whole list of areas—such as human rights, labour reform, migrant worker reform, political reform, and the elections taking place in which women are participating for the first time—in which things are moving forward. They are not moving forward as much as everyone would like; sometimes progress is slow, particularly in countries with a more conservative approach where reform can be difficult, but we are making inroads and progress. I will write to the hon. Lady with specific details about what is happening in Saudi Arabia.
The Scottish National party spokesman, the hon. Member for Glasgow North (Patrick Grady), spoke in detail about the arms trade treaty. I think I can answer his outstanding questions in the affirmative, but, again, I will write in more detail to clarify the Government’s position in relation to all his questions.
The shadow Minister gave a very measured response, which I was pleased to hear. He underlined the importance of article 51 on the right of individual countries to defend themselves.
I am left with exactly one minute for my speech, but I will try to articulate the main messages by reiterating that, as Members would anticipate me saying, we take arms export responsibilities very seriously. We aim to operate one of the most robust, vigorous and transparent systems in the world. Our core objective in export licensing is to promote global security and prevent controlled goods from falling into the wrong hands, while at the same time facilitating responsible exports and supporting British businesses. I make it clear that as we develop relationships with various countries, we very much scrutinise what is actually happening, and if we think there is something untoward, we try to correct it.
Ann Clwyd
This debate proves that we need more debates of this kind. [Hon. Members: “Hear, hear!”] The quality of the debate has been excellent and I thank everyone who took part, on all sides. I want particularly to thank the Campaign Against Arms Trade. There are other organisations, but CAAT in particular informs us so well about what is going on.
Motion lapsed (Standing Order No. 10(6)).
Dangerous Driving Penalties
(9 years, 2 months ago)
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Alok Sharma (Reading West) (Con)
I beg to move,
That this House has considered penalties for dangerous driving.
It is a pleasure to serve under your chairmanship for the first time in this Parliament, Mr Hollobone.
On 13 February last year, the lives of two families living in my constituency were devastatingly changed forever as a result of a most appalling act of dangerous driving. My constituents Kris Jarvis and John Morland were out that day enjoying their regular pastime of cycling. They were cycling back home to their young families. Both men were wearing safety helmets and clothing that made them visible to motorists. Sadly, that did not save them from being mowed down by a stolen sportscar, driven by an individual by the name of Alexander Walter.
Walter was driving at 70 mph in a 30 mph zone. He was almost two and a half times over the legal blood alcohol limit. He was found to have taken cocaine in the 24 hours before the appalling incident. He had 67 previous convictions, one of which related to his having phoned Heathrow airport to deliver a hoax bomb threat only days after the devastating 9/11 tragedy. He was also serving a four-year ban from driving. Every time I read this litany of Walter’s transgressions, it leaves me absolutely numb with shock.
Kris Jarvis and John Morland died as result of the injuries they sustained, killed by the actions of a dangerous driver. As a result of Walter’s actions, Tracey Fidler lost her fiancé Kris and their five children—Kyle, Ryan, Luke, Emma and the youngest, Adam, who was nine years old at the time of this tragedy—lost a father. Hayley Lindsay lost her fiancé John and their two young children, Harvey and Jazmin, who was seven years old at the time, lost their father. Both couples had planned to marry this year. Tracey and Hayley are here today watching this debate.
Unless someone has gone through the same horrific experience as Tracey and Hayley and their families, it is impossible to imagine how difficult it has been at times for them and their children to cope with this harrowing tragedy. I have got to know Hayley and Tracey and members of their extended family over the past year, and I know that at times it has been a case of taking each day as it comes. The pain of their loss is with them constantly. They have been helped by their families and friends, and I pay tribute to all of them, including Karen Rowland who has accompanied them to Parliament today. Tracey and Hayley are remarkable women: incredibly brave, wonderfully caring and hugely determined: determined to make sure that John and Kris’s lives were not lost in vain; determined to get justice for the families of future victims whose lives are cut short by the actions of dangerous drivers such as Walter.
Talking of justice, I should note that for killing two people and ruining the lives of two families Walter was sentenced to 10 years and three months in prison. Given how the current justice system operates, he will probably be out in less time than that. To add insult to grievous injury, Walter decided to appeal against his sentence. Thankfully, he was not successful. In contrast, Tracey and Hayley and their families started, on 13 February last year, a life sentence without Kris and John. In their case, life really does mean life. Simply put, this is not justice. This is not fair. This regime of sentencing for those who cause death by dangerous driving has to change. It has to get much tougher, and Tracey and Hayley believe it needs toughening, too.
Tracey and Hayley started a Government e-petition last year calling for a change in the law so that a dangerous driver receives a maximum sentence of 14 years for each person they kill, with the sentence to be served consecutively, not concurrently as happens right now. If the terms of the e-petition became law and if a dangerous driver killed two people, he or she would face up to 28 years behind bars. Thanks to Tracey and Hayley’s tenacity, the e-petition had reached over 102,000 signatures when it closed in March. I want to thank the national media, in particular The Sun, and our local papers, the online getreading and The Reading Chronicle for all that they have done to publicise the petition.
It is a remarkable achievement to reach over 100,000 signatures on a Government e-petition, and it is all the more remarkable that that was done by a few individuals. It was not backed by any national organisation or campaign team, but by two women and their friends and families, who care so much about this matter. It also demonstrates that constituents across this great country of ours want the law strengthened when it comes to sentencing for dangerous driving.
Tracey and Hayley have brought their campaign for justice for victims and their families to the heart of Government. We had a constructive meeting last year with my right hon. Friend the Minister for Policing, Crime and Criminal Justice, who also responded in an extremely sympathetic tone to a short debate that I held last November on sentencing for dangerous driving offences. In February this year, Tracey and Hayley met the Prime Minister to set out their reasons for why the law should be strengthened. They were joined in this meeting by the family of Ross and Clare Simons, who have been greatly supported by my hon. Friend the Member for Kingswood (Chris Skidmore) in their own campaign to strengthen the sanctions against dangerous drivers. I am sure that my hon. Friend will speak about that case. I know that Tracey and Hayley are incredibly grateful and touched by the personal interest that the Prime Minister took in both cases.
When we debated the matter previously, many colleagues brought examples from their constituencies, which demonstrates clearly that we need the law to be strengthened. My hon. Friend the Member for Stafford (Jeremy Lefroy),who unfortunately cannot be here today due to other commitments, asked me to highlight the case of his young constituent Laura Thomas. Laura, who worked in a school for children with special needs, was killed by a truck when the driver was browsing the internet on his phone. It was a shocking waste of a young life. Laura’s mother, Lisa, and her family certainly want tougher enforcement and tougher penalties in future cases.
I also pay tribute to the hon. Member for Leeds North West (Greg Mulholland), who unfortunately also cannot be with us today, for launching a big campaign and working extremely hard with the families of victims. Indeed, he has produced a charter of the sort of changes that they would like to see when it comes to strengthening sentencing.
As I am sure we will hear from the Minister today, a Government review of sentencing for all driving related offences is currently under way. After the aforementioned meeting with the Prime Minister, he wrote, as he had promised, to my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), the then Justice Secretary, setting out his thoughts following the discussion with Hayley and Tracey. I want to read from part of the Prime Minister’s letter, which mirrors what Hayley and Tracey are asking the review to consider.
The Prime Minister wrote:
“I agreed that the following issues should be considered in depth as part of the review we are carrying out on sentencing for driving-related offences: The maximum sentence length available for causing death by dangerous driving (currently a 14 year sentence); Whether offenders convicted of causing death by dangerous driving should be denied automatic early release from prison at the half-way point in the sentence”.
If such a provision were in place now, we would not be facing the thought of Mr Walter coming out of prison before his 10 years and three months had been served.
To those issues, the Prime Minister added:
“The question of whether sentences should be awarded concurrently or consecutively in cases where a number of people are killed as a result of dangerous driving, whilst recognising that the courts normally determine this issue; The discounts provided for late guilty pleas in these types of cases; The length of the driving ban given to offenders, and the potential for ensuring that no period of their sentence counts towards the driving ban.”
I would be grateful if the Minister, in summing up, confirmed that those suggestions do indeed form part of the review. We would all be grateful if he also set out the timetable for when the review will be published and how long the public consultation process will be. What actions will his Department take to publicise that consultation?
Can the Minister also confirm—this is an incredibly important point—that if the public consultation suggests that constituents up and down the country consider any of the changes to the sentencing regime for dangerous driving proposed in the review to be too lenient, the regime will be strengthened further? We want justice—that is what the 102,000 people who signed the petition want—and I hope that is reflected when the consultation is completed.
Tracey and Hayley have done everything to keep the memory of Kris and John alive. They have held a range of events locally in Reading. Tracey has been nominated for a Pride of Reading award—an award given to those living in Reading who have done exceptional public service. She has been nominated because of the campaigning she has done on changing the law so that the families of future victims get more justice than Kris and John did.
Tracey and Hayley know that none of that will bring back Kris and John—that is something they will have to live with all their lives. However, they do not want the loss of Kris and John to be in vain. They want justice. They want a change in the law so that we are much tougher on those who kill through dangerous driving. I have pledged to them that I will fight by their side for justice for as long as it takes. If we are able to achieve a change in the law, and it is indeed strengthened, it would be fitting if that law was referred to as “John and Kris’s law”. That would be a tribute to the memory of two family men whose tragic deaths led to a national campaign to strengthen sentencing for dangerous driving.
Several hon. Members rose—
Mr Philip Hollobone (in the Chair)
Order. Let me set out for Members the terms of the debate. We will get to hear Mr Sharma sum up for three minutes at the end. Under the rules, the Scottish National party spokesman, the Opposition spokesman and the Minister are all entitled to 10 minutes each. I intend to call the Front-Bench spokesmen just before 4 o’clock, with the debate due to close at 4.30 pm. Six people stood to speak. I will not impose a time limit, but six sevens are 42, so if those six Members all speak for about seven minutes, you will all get in. This is such an incredibly important subject that I want everyone to have their say. We will start with a Member who has probably seen more car accidents than anyone else, given his previous career as a firefighter—Jim Fitzpatrick.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
Thank you very much, Mr Hollobone. It is good to see you presiding over our business this afternoon. I will certainly do my best to follow your stricture about time.
I am pleased to follow the hon. Member for Reading West (Alok Sharma). I congratulate him on securing the debate and on his continuing campaign on this issue. This is not the first time he has raised it, and he continues to lobby all of us to make sure that, if we can, we support him in his endeavour. He makes a powerful case that the punishment should fit the crime.
I look forward to hearing the Minister and the shadow Minister, my hon. Friend the Member for Kingston upon Hull East (Karl Turner), respond to the points that Members raise in the debate. It is good to see colleagues here, and I welcome them to their places.
The issue that underpins the question of penalties for dangerous driving is road safety. In itself, that is not controversial. There are no party politics involved in this issue; there may be differences of approach and emphasis, but we all want the same outcome: safer roads and fewer casualties.
When individuals break the law, the appropriateness of their punishment arises. As the hon. Gentleman said, that is not about vengeance or retribution, but about society making a statement. Attitudes to road safety have been changing. Drinking and driving used to be the norm; now it is socially unacceptable, but that took time. Getting people to wear seatbelts took even longer, and thousands of people were killed in the meantime.
The language around these issues is critical. In the fire service, in which I served, we used to talk about RTAs—road traffic accidents. They are now classified by the police and the fire service as RTCs—road traffic collisions. That language is important, because the majority of crashes, collisions and incidents have an avoidable cause: people drinking, taking drugs, speeding and using mobile phones. We are talking about deliberate decisions by human beings—drivers—that impact on innocent victims. In that sense, these are not accidents. Although some accidents do happen, the majority of fatalities and serious casualties are caused by people doing something deliberate. The word “accidents” is now passé for the emergency services, and, given how important language is, it should be passé for us too.
I am grateful to the Parliamentary Advisory Council for Transport Safety and the Cyclists Touring Club—the national cycling charity—for their briefings for the debate. Both make what is for me the most important point: enforcement is the most effective deterrent. Penalties and tariffs are important, but enforcement is critical.
That takes me to the issue of policing. CTC’s briefing says:
“CTC’s Road Justice campaign has for several years been highlighting the fact that roads policing has suffered disproportionate cuts in recent years, compared with overall police numbers. Traffic police officer numbers fell by 37% from 2002/3-2013/14”.
This is not a party political point; these things have happened under different Governments. The CTC goes on to say that traffic police numbers have fallen
“from almost 7,000 uniformed officers down to just 4,356…total policing levels fluctuated a little from year to year, but not to this degree”—
overall police numbers fell by about 3.5%, but traffic police numbers are down by nearly 40%.
Both PACTS and CTC cite individual cases where the punishment does not fit the crime, and the hon. Gentleman movingly recounted many such cases, drawing on his own experience and that of other colleagues. Of the punishment, the CTC says that the length of the prison sentences and the length of the driving bans is totally inappropriate.
The CTC also raises the review the Government promised, which the hon. Gentleman also mentioned. The previous Justice Secretary announced a review of road traffic offences and sentencing. In a previous debate, also moved by the hon. Gentleman, the Minister’s predecessor promised widespread consultation on sentencing, but no word has been heard since. The hon. Gentleman asked the Minister for an update, and I am sure we would all be grateful for one.
I pay tribute to all the campaigning organisations, many of which have been founded by victims’ relatives and have campaigned for years, and even decades. When I was road safety Minister, I had my first request from a victim’s family for a meeting to discuss their relative’s death. I have huge regard for the civil service, but my civil servants said, “Don’t do it, Minister.” I asked why not, and they said, “If you meet one, you’ll have to meet them all.” My line was, “If I meet one, I will meet them all.”
These people have a lesson to teach the rest of us, and if we understand their suffering, we can use it to emotionally drive us to arrive at the right conclusions and to get the balance right between crime and punishment. They were some of the most moving meetings I ever had, and they were inspiring at the same time, because bereaved families want to make sure that no one else suffers as they did, as the hon. Member for Reading West explained. I look forward to the Minister’s updating us on the review.
Preventing road traffic collisions in the first place and protecting pedestrians, cyclists and other road users is essential, and enforcement is the key to that. We have all seen how road users behave near speed cameras, in average-speed camera zones and when a high-visibility police car is travelling on the same stretch of road that we are on. Their attitude is completely different from that of the minority of drivers who just do not care about the rest of us. The real deterrent is visibility and visible, effective policing.
I would like ordinary citizens to be able to empower the police more. Some constabularies operate a system by which if several members of the public report someone they have seen in the pub getting into their car, the police will send the driver a warning letter to say, “You have been reported to us; we are watching you.” That has an impact, and I have been told, and have read, evidence of that. I want ordinary citizens to be more empowered to report drivers they know are breaking the rules. That system might help to restrain the minority of selfish, dangerous and potentially killer drivers, before they ruin lives.
As to prosecutions, PACTS writes:
“There are reports that the reductions in CPS budgets and staff are impacting on the level of Dangerous and Careless Driving prosecutions.”
I should be grateful if the Minister commented on that observation, in the light of the evidence cited by the hon. Member for Reading West about reduced numbers of bans and the complications of concurrent bans. [Interruption.] I see the Minister’s officials nodding, so perhaps a note will be coming in a moment; I look forward to a response to what PACTS has asked.
The debate is about penalties for dangerous driving. All the evidence informing public opinion is that more could and should be done to prevent dangerous driving, but the social mood has changed about those cases where it happens and convictions are secured. The punishment should fit the crime.
Pauline Latham (Mid Derbyshire) (Con)
It is a pleasure to serve under your chairmanship once again, Mr Hollobone. I am delighted to take part in this important debate secured by my hon. Friend the Member for Reading West (Alok Sharma). He has been a champion on this issue, as he says, since the tragic deaths of two of his constituents who were killed by a dangerous driver. Any positive changes that may come about on penalties for dangerous driving will be attributable to his and his constituents’ hard work. Such events affect families for ever; it never goes away.
Last week in the main Chamber, I held an Adjournment debate on road traffic safety outside Morley primary school in my constituency. I want measures to be taken outside the school to prevent another tragedy. When anyone’s child is killed it affects the whole community, and speeding and the death of a child outside the school would be witnessed by many children. I want to prevent that. One of the main issues I focused on was enforcing penalties for dangerous drivers and what can be done to reduce instances of dangerous driving. If penalties are not enforced and drivers think there will not be consequences for not sticking within the law on the roads, there will be more deaths on our roads and more debates like this one, calling for something to be done to prevent them.
In the previous Parliament, the then Secretary of State for Justice announced a review of dangerous driving sentences, and the outcome of that review process has yet to be finalised. For many victims and families of victims injured, sometimes fatally, by a car driver, it can be baffling, and a source of disappointment and anger, when, often, the driver is charged with a minor traffic offence rather than the more serious crime of dangerous driving. Making sure there are tough and clear penalties for dangerous driving should go hand in hand with practical efforts to tackle it.
One of the key ways in which, I think, we can combat dangerous driving is by increasing the use of cameras that can detect when someone goes through a red light and is speeding. While speed cameras are utilised for recording motorists speeding, bringing prosecutions for dangerous driving strongly relies on there being witnesses to the incident. In rural areas, such as in Morley, that is not always possible, and I agree with the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), who said that cameras can and will change behaviour.
Every constituency has areas of high risk where the chance of someone being hit by a car is much higher. In my constituency the busy A608 leads traffic to and from Derby city and runs through a crossing where schoolchildren cross twice a day, which means that there are up to 200 crossings a day. I do not want to bog this speech down with statistics, but I will highlight a few instances that really frighten me. Outside Morley primary school, over a 40-minute period, with a police van present and children crossing, a car ran straight through a red light at speed, driving at over 59 mph.
The children are used to crossing the road, day in, day out. They stop when there is no green man. They start walking, or running, towards the school or home, when the beeping starts and it is safe to cross; but it is not safe to cross if a car is going through the red light. The children are well disciplined; it is the drivers who are not. During the same 40-minute period, four other drivers travelled at over 40 mph outside a school where there is an explicit 30-mile-an-hour limit. It is my hope that the school’s campaign to have the speed limit reduced to 20 mph will be successful—but it will be successful only if the county council is listening.
Just as importantly, I want the drivers to be properly prosecuted. Kate Marsland, the head, has to spend half an hour at each end of the day trying, alongside the accompanying parents, to protect the children. The drivers know there is a school on the road and they put the lives of the children in great danger by what they do. We only know they were breaking the law because of the school’s requests to have the area monitored by the police. However, the police cannot always be there to monitor the situation. Cameras on areas of high risk can really help to catch dangerous drivers before they kill someone. They can also greatly help with prosecutions by showing not just the speed of the car but whether the driver is doing anything illegal at the time, such as using their phone or texting. The clearer the picture of what happened, the easier it is to prosecute.
Moving control for enforcing traffic penalties directly to local authorities could also make a difference. As it currently stands, traffic penalty enforcement is under the remit of the police who have limited resources to spend on traffic violations. They have many other important things to do. My hon. Friend the Under-Secretary of State for Transport, the Member for Harrogate and Knaresborough (Andrew Jones), said in July that he wants to make effective enforcement of traffic laws a priority to help keep our roads safe.
Would the Minister consider looking at the issue again, and assess the possibility of giving local authorities the power to enforce traffic penalties or even take forward prosecutions, which might persuade drivers to be more careful and obey the law? Giving greater power to local authorities, so that they can allocate more resources to catching dangerous drivers, will help get the message across. If people drive dangerously they will be caught and face the consequences. Maintaining consistency in the penalties given to dangerous drivers will also make people think about their actions before deciding to check their phone or glance at the paper while driving at speed.
I want such measures because I do not want never to have raised the issue and a child to be killed. That is what will happen, with many children witnessing it. They will never get over that and neither will the parents or the school. I want the law changed to allow enforcement against dangerous drivers to be increased.
Catherine West (Hornsey and Wood Green) (Lab)
I thank the hon. Member for Reading West (Alok Sharma) for securing the debate. I will touch briefly on what I call the three Es of traffic safety—education, engineering and enforcement. Enforcement has been well dealt with by Members on both sides of the Chamber today.
In particular, my experience has come from my time in a local authority. I was the council leader who brought in the 20 mph zone across the whole borough, which was in some ways popular and some ways unpopular. That measure, however, brought to the fore the importance of traffic speed. A 20 mph limit may not be introduced in the whole area, but zones should be considered. Certain schools have zones, which is a positive development in our engineering.
Capital funds must be made available for engineering. My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) commented on the fall in the number of enforcement officers. The capital spend for local authorities to fund the necessary engineering for safety, however, has also dropped in recent years. I am talking about real basics—kerbs, traffic lights, cycle lanes and so on. All such engineering changes to make pathways and roads safer must also be funded.
On education, obviously much can be done in schools. It does not stop the bad behaviour later by people who are driving as criminals almost, but it improves general awareness early on of the importance of road safety. Again, such programmes need to be funded. I am aware that cycle funding, for example, has been reduced in the past few years, which is a pity, particularly in built-up areas such as the London boroughs and other metropolitan areas. Even in rural areas much can be done to teach about cycle, pedestrian and indeed driver safety.
Education about better signage is not necessarily a miracle fix for everyone, but where we have not paid attention to adequate and high-quality signage it can be confusing for motorists. We need to look into that and improve the general feeling of safety in a particular area. In more built-up areas, signage is becoming increasingly important, because we have a high turnover of different sorts of drivers who might need more education in how traffic moves, in particular as the light changes at different times of the year. The statistics for road traffic accidents show a spike around this time of year, as we go into the shorter days. I wonder whether we could do more on education in that regard.
On driver education, we can do all we like, but if drivers are going to behave criminally, as the hon. Member for Reading West suggested, there is not much we can do. We can, however, try to explain sometimes to young drivers in particular the long-term impact on people’s lives when these terrible accidents occur. Some of our statistics show that it is our younger drivers who are sometimes having these terrible accidents, perhaps because they have not encountered the extreme human pain involved.
Those are the three Es of education, engineering and enforcement. Obviously, my knowledge of them is to do with the cycling and pedestrian experience, but they also relate to drivers. I thank you, Mr Hollobone, for allowing me to speak, and I thank the hon. Gentleman for proposing the motion.
John Howell (Henley) (Con)
It is a great pleasure to serve under your chairmanship, Mr Hollobone. I, too, praise my hon. Friend the Member for Reading West (Alok Sharma) for securing this important debate. I also praise those who lie behind it, not only for backing the debate, but for their petition.
This important issue has been raised with me by constituents on a number of occasions. I, too, have raised it with the Ministry of Justice, and I will refer to that later. A huge concern is that with the increase in traffic comes an increase in dangerous driving, which can have a big effect on our constituents. Only yesterday I was at a meeting of the joint all-party group on rural issues and policing, where a startling statistic was revealed, that the fear of crime in rural areas was much increased over the reality—although in the case of dangerous driving, the reality is all too visible. More than 63% of people who had responded to the survey had a fear of road traffic crime. It was a huge and sad number, and behind it is the public reaction to lenient sentences in the area. Happily, the Select Committee on Justice, of which I am a member, has picked up on the matter a number of times. Only this week, we had the opportunity to question the Attorney General on lenient sentences.
A letter that I received from the Ministry of Justice in 2013 explained:
“When considering the appropriate charge, it is the driving behaviour that is the deciding factor, that is, whether the driver was careless or dangerous, rather the outcome of the incident however tragic.”
I suspect that at some point that ought to lead us to a review of sentencing guidelines, which are produced independently of government. The Justice Committee is a statutory consultee of the Sentencing Council, which produces the guidelines, and I shall certainly take it upon myself to respond and to try to achieve the things that my hon. Friend set out in this debate, so that is an important contribution that I can make.
We need to do something to take forward work on the subject, which has never been more required. I can illustrate this with a couple of cases from my own postbag. For example, a constituent wrote to tell me that his nephew had been run over and killed by a hit-and-run driver. His nephew was a 22-year-old student who was knocked down on a pedestrian crossing by a driver who went through a red light at twice the legal speed. The killer received a sentence that means he will spend less than two years in prison. That example from my constituency makes the very point that my hon. Friend was making and shows why the law needs to be changed.
Another constituent wrote to me asking for an urgent review of how such criminals are allowed to turn the law on its head. One wrote:
“To make a difference we need larger fines to act as a deterrent”—
although I am not sure that larger fines are the only answer. We should submit proposals to the Sentencing Council to review the guidelines.
Nusrat Ghani (Wealden) (Con)
My constituency has the fifth worst record in Britain for serious incidents involving people being killed and seriously injured. The issue of sentencing and fines has come to my postbag as well. For example, an individual was banned from driving for 12 months and ordered to pay a fine of £300 for a drink-driving incident in south-east Sussex. In another incident, the driver who was behind the wheel of his car while twice over the alcohol limit was banned for six months. Another individual was caught with herbal cannabis and admitted to smoking the drug, but was only banned for 12 months and fined £300. I would like some clarity on sentencing and some sort of order to the convictions—sentencing is erratic and often depends on which part of the country an individual is in. Clarity would be useful.
John Howell
I thank my hon. Friend for her excellent remarks and for providing yet more examples of what my hon. Friend the Member for Reading West was discussing when he opened the debate. I hope that the Minister will be able to respond to the various cases. The point that my hon. Friend the Member for Wealden (Nusrat Ghani) made about the criminal process is a good one, and one on which I would like to see action.
I fully support the case made by my hon. Friend the Member for Reading West and his call for consecutive sentencing, because that will help to overcome some of the problems that he illustrated. I echo his call for the information requested to be provided, so that we do not have such a situation again.
Craig Tracey (North Warwickshire) (Con)
Thank you, Mr Hollobone, for giving me the opportunity to speak in this very important debate, which is my first here in Westminster Hall. I congratulate my hon. Friend the Member for Reading West (Alok Sharma) on securing it and on the powerful argument that he made.
During my previous career as an insurance broker, all too often I saw the aftermath of avoidable dangerous and careless driving offences. I was frequently left amazed by the lenient sentences handed out to the offenders and by an apparent reluctance to apply the law fully. Low penalties for motoring offences send the message that these are minor infringements, rather than serious offences that cause needless suffering and loss of life.
Brake, the road safety charity, says that Government figures show that only three in five people convicted of killing someone for risky driving are currently jailed, with an average sentence of just four years. Many drivers who kill or injure receive low or no custodial sentences at all. Major improvements are needed to charges, penalties and sentencing to ensure that justice is done and that there is a strong deterrent against risky and illegal driving.
For my main contribution to this debate, I would like to expand on the issues raised by my hon. Friend the Member for Reading West and other Members, and point out further inadequacies in the laws surrounding motor offences. I would specifically like to refer to the case of Sean Morley, a 20-year-old constituent who was tragically killed as he crossed a road on his way home in 2012. Sean, a keen rugby player and about to start his final year at university to study history and politics, was struck by a car as he crossed the A444 near Bedworth. Although the driver of the vehicle initially stopped at the scene, he subsequently left without checking on Sean, despite his car being so badly damaged that he was unable to open the door. After managing to drive home to nearby Coventry, one of the two passengers in the car returned to the scene later on that night with another person, but denied seeing Sean. He was eventually discovered by the roadside at 6.20 am the next morning by a passing lorry.
Mr Morley’s parents were advised that it was likely that he lived for at least two hours after the accident, and the decision by either the driver or the passenger not to call the emergency services was critical. At best, it could have saved Sean’s life, and at worst, it would have given his loved ones the opportunity to say goodbye. The driver handed himself in to police at 2.30 pm the following day and was found to have drugs and alcohol in his system. He was subsequently convicted for the incident and given a 16-week custodial sentence. He was also banned from driving for 12 months. That cannot be fair and highlights a huge imbalance in the law.
In the instance of Sean, the only offence that the courts could prosecute on was hit and run, for which the maximum sentence of six months was not even handed out. As Sean’s mother Kerry points out:
“The worst thing is that in the eyes of the law Sean’s death was not important. If you kill someone in a car it’s not deemed as serious as punching someone, and I think that’s wrong. I’m not talking about people being jailed for life if someone steps out in the road in front of them, but people who text while driving, or speed, or drive when drunk or drugged.”
They need tougher sentences imposed. She continues:
“Just because someone has been killed by a car or a lorry doesn’t make it less of a death than if they’ve been killed by a knife or a gun.”
It is difficult to disagree with her.
The law is inadequate when drivers are almost encouraged to flee the scene of an accident if they have drink or drugs in their system, rather than to stay to face the consequences. The penalty for leaving the scene of an accident, as I have referred to, is currently up to six months in prison. Had the driver stayed and reported the accident and either drugs or alcohol had been found in their system, they could have been prosecuted for the higher offence of dangerous driving, which carries the greater sentence of 14 years—hardly an incentive to hang around and do the right thing.
As my hon. Friend rightly stated, even the 14-year maximum for dangerous driving is not always a sufficient penalty for the crime, but in the case of my constituent, it would have been a welcome increase on the paltry sentence that was handed down. I know that substantial work on the penalties of driving was done by the Leader of the House of Commons when he was Secretary of State for Justice. He worked with Sean’s family, my predecessor and me—his contribution was greatly appreciated by all—but there is much more that we can do.
First, we need an appropriate sentence for drivers who hit a person and leave them to die. Currently, the charge is the same as it would be for knocking off someone’s wing mirror. The driver who killed Sean knowingly left him to die, yet because he would probably not have lived even with medical intervention, due to the severity of the impact, the charge of manslaughter was not followed. Yet the driver’s actions were still the same. What I, Sean’s family and many other people would like to see is that where drivers leave the scene, guilt should be assumed. Currently, it is up to the police to find the driver and prove fault, and then it is at the behest of the Crown Prosecution Service as to what charges will be allowed.
Secondly, at least three others, excluding the driver, were involved that night, knowing that Sean was lying somewhere along the A444. None of those people has ever been brought to account for their lack of action that night in not calling for an ambulance or the police. In the eyes of the law, their only obligation was moral, not legal. Sadly, it seems that Sean was the only one with no rights that night.
Finally, the court process needs to be more controlled. In this case, and, I am sure, in many more around the country, the driver simply played the system. He chose not to plead either way, turned up without legal representation and then finally made his plea at the end of the hit-and-run court process to get credit for pleading guilty on the day. He also received a lesser sentence for his drugs conviction as he had no criminal record, despite the court process for the hit-and-run case having started before the drug trial. As a result, the driver served absolutely nothing for killing Sean as he was already in jail for the drug offence at the time.
I am sure that this tragic case, as well as the representations made by other colleagues today, perfectly highlights the desperate need for a review of the laws concerning motorists. We have more cars than ever on our roads, and, in the wrong hands, they are a dangerous and deadly weapon. The law must reflect that when passing sentence.
Chris Skidmore (Kingswood) (Con)
It is an honour to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Reading West (Alok Sharma) for going to the Backbench Business Committee and the Committee itself for giving us this time today. The fact that we have Members from all parties here shows the strength of feeling involved, which goes beyond party politics. Members can be from Labour, the SNP, the Conservatives, or the Liberal Democrats and still passionately know that a grave sense of injustice remains in the judicial process and the sentencing process that currently applies to dangerous driving.
As local Members of Parliament, we all know that nothing is more tragic or terrible than when constituents come to us with such awful cases. We know that we must act, because our constituents do not have that voice to be able to raise these issues in Parliament. My hon. Friend the Member for Reading West has, superbly, voiced this issue continually over the past year, and we have gone to meetings with the Prime Minister and the Justice Secretary in order to keep ensuring that this issue is raised at the highest level. We are having this debate today to make sure that we carry on raising it, and we will continue to do so if no action is taken.
As the Member of Parliament for Kingswood, I very clearly remember Sunday 27 January 2013. I looked on the internet and saw, on BBC News, that there had been an incident involving Ross and Clare Simons, two of my constituents, who were riding a tandem bike down Lower Hanham Road when they were hit by a dangerous driver, who was actually disqualified at the time. I am not afraid to name him—Nicholas Lovell. He had 70 previous convictions, many for dangerous driving, and had been disqualified four times previously, yet he was able to get in a car, despite being disqualified, and drive at 70 miles an hour in a 30-mile-an-hour zone and knock Ross and Clare off that tandem bike. The pictures that were recently published in the Daily Mail were absolutely horrific. Edwin, Ross’s father, had the courage to release those photos, showing the impact that the tandem bike had on Lovell’s car. It was wedged straight through the grille and into the engine, such was the velocity of that impact.
Lovell fled the scene. He was eventually arrested and we went through the trial process. I pledged, as the Member of Parliament, that I would do all I could to bring justice to the case of Ross and Clare, because they did not get justice in that court case. The maximum sentence of 14 years—it had gone up to 14 years—was applied for the first time in the case of Nicholas Lovell. Because he pleaded guilty in the last week of the trial, that went down to 10 years and six months and, because the sentences were served concurrently instead of consecutively, Lovell was serving the two sentences back to back and, due to good behaviour, may be out within five to six years. The family of Ross and Clare Simons, including Edwin, Dawn, Colin, Kelly Woodruff, Ross’s sister, and his nephew, Callum Woodruff, feel that it is in effect two lives for the price of one.
I understand that there are reasons for the concurrency law taking effect, but two lives were lost. In a tragically similar case a year later, nothing changed. In the case of John and Kris, two lives were lost, yet the same penalty was applied, and the judge in the court case said that if he had been given the chance by the judicial system to impose a tougher penalty, he would have done so, but he had to give the maximum sentence that he could at the time—14 years.
In the previous Parliament, as the local Member of Parliament, I campaigned on the issue of disqualified driving. Because Lovell was disqualified, he should never have been in the car in the first place. That was automatically an act of dangerous driving, because of his being disqualified. Previously, it was only a two-year sentence if someone was disqualified and killed someone; it has now gone up to 10 years. We had a petition, which was signed by 18,000 residents in my local area, and we took that to Downing Street. That shows that the law can be changed. This is not an isolated example. We can go further.
I am determined to work with all hon. Members, but particularly my hon. Friend the Member for Reading West, in pushing for a change in the maximum sentence. My hon. Friend the Member for North Warwickshire (Craig Tracey) made the point very clearly. A person could take any other weapon and kill someone and they would get life. If they get in a car, they will get 14 years. Where is the justice in that? That, for me, is the tenet of this debate: we need to look at the maximum sentence. I understand from having had several meetings with the previous Justice Secretary that the Justice Secretary has the executive power to raise the maximum sentence. That is isolated from whatever happens with the Sentencing Council. I realise that there has been a significant and unhelpful delay in the Sentencing Council reporting back, but the Justice Secretary can take action now, and that action now is what we are demanding as local MPs.
So many families across the whole country are suffering now. As my hon. Friend the Member for Reading West said, they are serving their own life sentences. We see the justice system throw back at them this insult that someone can kill their relative, get just a couple of years in prison and end up back on the streets and, potentially, back in a car. That is just too horrendous to imagine.
I speak today as the Member for Kingswood, on behalf of my constituents. I cannot imagine what it must be like for families to deal with this day in, day out. I therefore urge my hon. Friend the Minister to take this matter back to the Ministry of Justice. We have the Prime Minister on our side; we met him in March. The previous Justice Secretary came down to the site and stood in front of where we had marked what had happened and paid tribute to Ross and Clare Simons, who were killed. He did an excellent job. We now need to see that that work is followed through in the Department, that it is taken seriously and that our demands are met.
Douglas Chapman (Dunfermline and West Fife) (SNP)
I am grateful for the opportunity to speak, Mr Hollobone, and it is a pleasure to do so under your chairmanship. I commend the hon. Member for Reading West (Alok Sharma) for securing this important debate. I admire how he has gone about the campaign and today’s debate and the obvious care and concern that he has shown for his constituents, whom he is obviously representing today.
That said, the families here today could be any of our constituents. Hon. Members who have served for many years as MPs or local councillors—or, indeed, through their own family connections—have had vast experience of tragedy striking because of the callous and unacceptable behaviour of a few. Where a serious injury results or, more devastatingly, a life is lost, the impact on the family and the experience of loss inflicted on them can be excruciating. Families are often left asking the simple question, “Why?” There is never an adequate answer that we as Members of Parliament can give that will fill the void left by the loss of a much-loved father, mother, son, daughter, husband, wife or friend.
The case brought by the hon. Member for Reading West before the House today involved not just one family, but two. The case was described by the hon. Member for Kingswood (Chris Skidmore) as well. The loss of two lives just doubles the pain that families face.
Drinking and driving lies at the core of many deaths on our roads. In summing up the debate, I want to focus some of my comments on that aspect. In Scotland last December, the blood alcohol limit was lowered from 80 mg to 50 mg in every 100 ml of blood. That new law brings Scotland in line with most of Europe. Projections suggest that it will reduce the number of arrests and prosecutions, as we have already seen in the Republic of Ireland, where drivers have adjusted their behaviour to take account of the lower limit. From my own social circle, I know that the change in the law in Scotland is causing similar changes in behaviour there. The pre-festive season campaign that will be run on TV, on radio, in the print media and on motorway overhead gantry signs is that “none” is the best advice when it comes to drinking and driving.
Evidence in Scotland is that 20,000 Scottish drivers are stopped by Police Scotland every month. That is equivalent to one driver every two minutes. Chief Superintendent lain Murray, head of road policing in Scotland, said to the Scottish Parliament’s Justice Committee that
“research shows that drink driving and alcohol counts across the board tend to drop following the introduction of lower limits.”
The North report cites that reducing the drink-drive limit in Scotland would save anything between three and 17 lives on Scotland’s roads every year. There are families with us today who would give anything to have just one life saved if the clock could only be turned back. The North report also cites that having one alcoholic drink and then driving makes someone twice as likely to be involved in a fatal car crash. Surely that is too much of a risk to take.
I do not want to take anything away from the thrust of the hon. Gentleman’s debate by raising a constitutional issue. However, in Scotland we have only the power to set the drink-driving limit itself. We would love to have extended powers also to consider differential limits for young and newly qualified drivers and for professional drivers such as those driving heavy goods vehicles, taxis and buses and to consider random breath testing or to change the penalties available to the courts for drink-driving offenders. I reiterate that I raise that not as a constitutional point, but in order to ask the Minister to explore all the possibilities.
Hon. Members also spoke about speeding. Certainly the introduction of “20’s Plenty” zones has been successful in changing driver behaviour, but as the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) said, such initiatives need to be, and be seen to be, enforced with appropriate policing resources. In my own local authority area, the number of children whose lives are lost through dangerous driving remains at zero, and long may that continue. It is a direct result of a “20’s Plenty” scheme across the county.
Hon. Members have given their own accounts of harrowing cases where lives were lost—absolutely unnecessarily, some would say—and we now have to consider whether the law as it stands is adequate to deal with these tragic cases, whether the punishment fits the crime and whether there should be a change in the way in which the courts consider serial offenders.
Following the success of the e-petition, the hon. Member for Reading West has met the Prime Minister and, more recently, the Justice Secretary. Thanks to the hon. Gentleman’s interventions and those of the families, a full review is now under way. The calls by the hon. Member for Reading West should be supported. To back his calls, we need clear information about the consultation process and an assurance that the outcome will be listened to. A timetable must be laid down to ensure that any recommendations from the review can be translated into the law of the land as timeously as possible. Without wishing to prejudge the recommendations, the law must be amended where necessary to give greater recognition to the rights of innocent parties who are the victims of reckless behaviour, and to ensure that appropriate and consistent sentences are applied.
It would, of course, be greatly preferable for time, effort and energy to be put into preventing such dreadful accidents and tragic losses from occurring in the first place. I hope that the Minister will also comment on some of the prevention measures that could be taken to reduce the number of serious accidents and deaths on our roads.
Karl Turner (Kingston upon Hull East) (Lab)
It is always an honour to serve under your chairmanship, Mr Hollobone. I begin by congratulating the hon. Member for Reading West (Alok Sharma) on securing the debate and on the work that he has done for at least the past 12 months to raise this issue.
In my experience, the Prime Minister is always very receptive to Members on this subject. I saw him a few years ago on behalf of a constituent, and he was helpful in ensuring that the law was changed. I represented constituents, whom I will not name in the debate because I have not had the opportunity to check whether that is permissible, who were involved in a very serious road traffic incident. On that occasion, unfortunately, the Crown Prosecution Service decided, for whatever reason, not to continue the prosecution that it had begun. Had it continued with the prosecution, however, the court, on conviction, would have been able to sentence the offender to only two years.
In that scenario, the dangerous driver had caused very serious injury but had not, fortunately, brought about the death of the people in the vehicle. The maximum sentence at that point was two years. Fortunately, after I lobbied the Prime Minister, he allowed provisions from my private Member’s Bill to be introduced into the Legal Aid, Sentencing and Punishment of Offenders Act 2012 as a new offence of causing serious injury by dangerous driving. The maximum sentence for that offence is five years.
This is not a party political issue. Members on both sides of the House raise serious concerns about driving offences on behalf of their constituents. In my experience, the civil service sometimes tend to be a little reluctant to listen carefully to what is raised by Members of Parliament, but Ministers—including the Prime Minister—have been very receptive.
I have professional experience of dealing with road traffic offences from my time as a criminal lawyer. I recall, on occasion, standing up in the Crown court representing a defendant and listening to the prosecution outline the facts of the case, which were sometimes horrendous and for which one would expect heavy penalties. If I was defending—often, I would be prosecuting the cases—I would begin my mitigation on behalf of the defendant; I remember the expressions on the judges’ faces when I started to say, “This is not the worst case you have ever seen, your honour. It is mitigated by various factors.” The judge would say, “Thank you very much indeed, Mr Turner. The maximum sentence, as you know, is two years. It is worth an awful lot more than that, but my hands are tied.” He or she would often sentence the defendant to 12 months or less, even though the victims of those horrendous crimes and their family members had to deal with serious injuries.
I am pleased to say that the law has now changed, but it is not good enough yet. In this country, 23,000 people suffer serious injury or are killed in road traffic incidents each year. The previous Government did a great deal of work to reduce that figure and improve road safety, but this Government have taken their eye off the ball in certain regards. It is startling that the average sentence for road traffic offences is four years. In my respectful submission, it is of great concern—I suspect that this is, in part, the result of cuts to the CPS and the police—that defendants charged with dangerous driving when they attend court will often, after counsel and solicitors for both sides have had the opportunity to discuss the case, have that charge reduced to careless driving.
There is a huge difference between the two offences. Dangerous driving is where the offender’s standard of driving falls far below the standard of a reasonable, competent driver. Careless driving is where the offender’s standard of driving falls below that standard. Dangerous driving is not a momentary lapse of concentration; it is going out with a dangerous weapon, driving it completely recklessly—in some cases, quite deliberately, in my experience—and causing that offence to occur.
I do not want to take up too much more time, because I want the Minister to answer the points that each and every Member has made. The Opposition support the Transport Committee’s inquiry into road traffic enforcement, because that is an issue. I have made the point—I do not mean it to sound party political—that the CPS is struggling. I think it is fair to say that CPS lawyers are accepting pleas to lesser offences when they should probably be pursuing dangerous driving cases to trial and allowing the jury to decide whether the offender was driving dangerously.
There is a question about funding to local authorities. I think I am right to say that most local authorities are reporting that their attention to, and efforts on, road safety have been reduced by as much as 90% since 2010. That is of serious concern to all of us in the House.
I have a couple of questions for the Minister. Will he confirm whether the Department is considering a review into the effect of policing and cuts on driving offences? That would definitely assist the Government. As I have said from the outset, the Prime Minister, in my experience, is keen to do everything that he can to assist in such cases. Secondly, I believe that the hon. Member for Reading West requested a timeline for the Government’s review of sentencing for driving offences. Will the Minister confirm when he plans to publish that review and what mechanism his Department will use to initiate the legislation?
I thank all right hon. and hon. Members who have taken part in the debate. The subject is, as I have said, absolutely not party political. We all do our best to represent our constituents as well as we can.
Mr Philip Hollobone (in the Chair)
Were the Minister kind enough to finish his remarks no later than 4.26 pm, that would allow Mr Sharma three minutes to sum up and one minute for me to put the motion to the Chamber.
The Parliamentary Under-Secretary of State for Justice (Andrew Selous)
As always, it is a pleasure to serve under your chairmanship, Mr Hollobone. Thank you for the efficient way in which you have chaired our proceedings.
I congratulate my hon. Friend the Member for Reading West (Alok Sharma) on securing this important debate. The seriousness with which dangerous driving is taken is evident from the strength of feeling among Members on both sides of the House. I pay tribute to him for his persistence and for how he has brought this matter before the House. Indeed, I thank all hon. Members for the non-party political way in which these serious matters have been addressed.
My hon. Friend was right to say that it is not possible for us to imagine the pain of the families who have lost loved ones to such terrible experiences. I regularly meet victims, and I will continue to be available to do that to try to give myself the best possible idea of what they have been through. He mentioned the 102,000-signature petition, which is a significant achievement. I note that he has been to see the Prime Minister. The shadow Minister spoke about the Prime Minister’s supportive attitude on this matter.
I am also grateful to my hon. Friend for mentioning the case of my hon. Friend the Member for Stafford (Jeremy Lefroy), whose constituent, a teacher, was killed on account of someone browsing the internet while driving a lorry—an atrocious thing to have done. My hon. Friend the Member for Reading West asked three particular questions and, yes, the five issues that he raised are being considered as part of the Government’s review. Secondly, I hope to be able to move to the public phase of the review soon, and we will do everything possible to attract the widest public attention. Thirdly, the reforms are likely to require legislation and so will be debated by Parliament. All hon. Members will have a chance, as they have had this afternoon, to put the views of their constituents in that debate.
Jim Fitzpatrick
The Minister says that he hopes the review will move to its public phase soon. Can he be more specific about the definition of “soon”? When I was the Minister for a time, a civil servant drafted an answer for me that said, “The answer to the parliamentary question will be published in the autumn.” I asked, “When is the autumn?” They said, “23 December, Minister.” I said, “Well, that’s usually Christmas.” They said, “It’s the end of the autumn Session, Minister.”
The word “soon” is even less specific than “autumn” and certainly “this year.” It would be nice to know whether that means the calendar year or the parliamentary year.
Andrew Selous
The hon. Gentleman is a former Minister, and he knows how such things work. I am sorry that I am not able to be more specific, but I can tell him and every other Member here that I get it. There is clearly huge concern on both sides of the House about dangerous driving. A commitment has been made to have the review, and I assure the hon. Gentleman that my officials and others are working on that in earnest. I would be extremely grateful if he were good enough to accept that for now.
The hon. Gentleman made an excellent speech, and he is right that we all want safer roads. He spoke about the language we use in such matters, and I agree that using drink, drugs or phones does not make it an accident. Getting the language right matters, and I hugely agree that enforcement is critical, as my hon. Friend the Member for Reading West also said. As a former road safety Minister, the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) brings great experience and knowledge to this debate. The issue of prevention resonated most strongly with me, and the public reporting of drivers who break the rules is an interesting idea. He also said that the punishment should fit the crime.
I assure hon. Members that Ministers and officials in the Department for Transport will be sent the transcript of this debate so that they can study what has been said, because that is an important aspect of our proceedings. The hon. Gentleman specifically asked about prosecutions and, despite the increased number of cars on our roads, the number of incidents and, more significantly, the number of deaths on our roads have fallen very significantly. As a result, there are fewer prosecutions for causing death by dangerous driving, but the sentence length has increased, which is part of a long-term trend.
I listened with great interest to the speech of my hon. Friend the Member for Mid Derbyshire (Pauline Latham). Safety near schools is incredibly important, and I commend her for continuing to campaign on that issue. She made an important point, which links to the point raised by the hon. Member for Poplar and Limehouse, about the need for effective enforcement. Again, I will ensure that that point is passed on to the Department for Transport.
The three Es mentioned by the hon. Member for Hornsey and Wood Green (Catherine West)—education, engineering and enforcement—are right. She also made a useful contribution to our proceedings. My hon. Friend the Member for Henley (John Howell) told us of a personal experience from his constituency. He speaks as a member of the Select Committee on Justice, so I welcome his contribution. I am struck that 63% of respondents in his constituency expressed a fear of road traffic crime. I agree that that is a significant finding, and one of which we should take note.
Andrew Selous
I thank my hon. Friend for that correction, which makes the finding even more significant. Like him, I was deeply shocked by the case he mentioned of someone driving at more than twice the legal speed limit through a red light, killing someone, and the sentence that was passed down. I tell him, and my hon. Friend the Member for Mid Derbyshire, that sentencing guidelines make it clear that driving without care in the vicinity of a pedestrian crossing, hospital, school or residential home are all to be taken into account as aggravating factors when determining an appropriate sentence. I note her further comments on these matters.
My hon. Friend the Member for North Warwickshire (Craig Tracey) also made an excellent contribution, and he highlighted the tragic case of Sean Morley. We were all extremely moved by his description of the highly distressing circumstances of that utterly terrible case. I have taken very careful note of what he said.
Finally, my hon. Friend the Member for Kingswood (Chris Skidmore), in another powerful speech, told us of an horrific incident in which a couple riding a tandem bicycle were tragically killed in his constituency. He said that the former Secretary of State for Justice, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), has visited the spot. I agree with my hon. Friend the Member for Kingswood that the similarities between a knife, a gun and a car are fairly strong when it comes to taking someone’s life or causing horrific injuries. I note the judge’s comments in that case, and I pay tribute to my hon. Friend’s persistence in raising such matters. He said that the Justice Secretary can raise the maximum penalty, but that is not correct; it is actually for Parliament to set the maximum penalty for an offence, but I understand his point.
The hon. Member for Dunfermline and West Fife (Douglas Chapman), who speaks for the Scottish National party, talked about the reduction of the legal alcohol limit in Scotland. Those powers are devolved to Scotland and are the responsibility of colleagues in the Department for Transport. I will pass on his comments.
The shadow Minister also has a long-standing record of personally campaigning on dangerous driving. He told us that he has previously been to see the Prime Minister, which led to a change in the law. I pay tribute to him for that, and for the contribution that he has made on the issue. A recent inspection report on Crown Prosecution Service practice has recommended better training and more specialist road traffic prosecutors. I am sure that he will be grateful to know that, and I will write to him on the further specific details for which he asked.
I am grateful to have had the opportunity to go in some detail through the matters brought before us in this debate. On the particular case that my hon. Friend the Member for Reading West brought before the House, the driver entered a guilty plea to a number of offences, including two counts of causing death by dangerous driving and driving while disqualified. He received a sentence of 10 years and three months on 16 April 2014, and he was banned from driving for 15 years.
Turning to the specific issues that my hon. Friend raised, he will know as well as I do that sentencing is a matter for judges, who are independent. The judges decide on a sentence, having considered the full details of the case and the offender. They are best placed to decide on a just and proportionate sentence. The duty on the courts is to follow guidelines or, if they do not, to say why. That leads to greater transparency in the sentences likely to be imposed, and will hopefully lead to increased consistency in sentencing practice.
As my hon. Friend mentioned, the appeals procedure allows the Attorney General to make a reference to the Court of Appeal in serious cases if a sentence is unduly lenient, or if the offender believes the sentence is unduly harsh. In this case, the offender appealed the sentence. I was particularly struck by the care taken in the case by the Court of Appeal to consider not only the appalling driving involved but the harm that it had caused to the families. I know that the appeal would have been a difficult experience for the families, and I hope that its dismissal has brought some reassurance.
A reduction for an early guilty plea is not just about saving money and time; it is designed to ensure that wherever possible, victims, their families and witnesses are not required to relive or be cross-examined about dreadful events in court. It can also lead to swifter justice. In keeping with the current law and guidelines, the driver in this case had his sentence reduced for pleading guilty to the offence at an early stage. A guilty plea at the earliest opportunity will normally attract the maximum sentence reduction of one third, but judges retain discretion in regard to that reduction. In this case, as the evidence against the driver was overwhelming, the judge exercised that discretion and did not apply the full discount. Taking account of a lesser discount for the early plea, the 10-year sentence imposed is close to the 14-year maximum penalty for the offence. The Court of Appeal gave a clear judgment upholding both the sentence and the judge’s decision not to grant the full reduction for the early guilty plea.
Turning to my hon. Friend’s calls for changes in the law, I should say that he raised two main points. The first relates to the imposition of maximum and minimum penalties; the second is that when more than one person is killed, the court should make the sentence for each additional death follow on from the first, so that they are served consecutively rather than concurrently. On maximum penalties, it is worth stressing that although sentencing is a matter for the courts, setting the framework within which the courts work is for Parliament. The 14-year maximum sentence for causing death by dangerous driving was set by Parliament to cover the worst imaginable case of that specific offence.
When deciding what sentence to impose within the maximum available, the court is required to take account of all the circumstances of the defence and any mitigating or aggravating factors. Where there is more than one victim, that will be taken into account and will aggravate the seriousness of the offence, meriting a longer sentence. The sentencing guidelines for causing death by dangerous driving specifically mention that the courts should take account of the higher harm caused by the offence where there is more than one victim. That is exactly what the court did in this case; it took the very high harm caused by two deaths, applied a smaller than normal reduction for the early guilty plea and arrived at a sentence close to the maximum.
It would be contrary to our system of justice to impose a maximum penalty for any death in any circumstances, in road traffic or in any other offence. The Government do, however, want maximum penalties that allow the courts to respond appropriately to the full range of cases as they are likely to take place. Where there is a clear failing in the law, Parliament has moved to remedy it. In the past, where offenders have left a victim with serious injuries, the maximum penalty for the offence has related to the driving, not the harm caused.
In the Legal Aid, Sentencing and Punishment of Offenders Act 2012, a new offence of causing serious injury by dangerous driving was created, with a five-year penalty, as the Opposition spokesman told us. That change in the law means that there is now a range of offences and maximum penalties dealing with dangerous driving that more properly reflect the harm caused. In addition, under the Criminal Justice and Courts Act 2015, the maximum penalty for disqualified drivers who kill or cause serious injury has been increased. The previous maximum was only two years for causing death, but it has now been increased to 10 years. The measure came into force in April 2015. I hope that hon. Members will see that there has been action in response to the quite proper parliamentary pressure in that area.
I am aware of your strictures, Mr Hollobone. Everyone else has obeyed them, so I feel that I should as well. I could say more, but it is right that I give the remaining time available to my hon. Friend the Member for Reading West. I thank him again for what he has said. I realise the strength of feeling on this extremely important matter, and I will continue to engage with him and other hon. Members on it.
Alok Sharma
We have had an excellent debate involving some excellent contributions from across the House. I agree with all colleagues who have made the point that there is cross-party consensus on this issue. Those watching this debate and those here today are seeing Parliament at its very best: we are debating issues that matter to all our constituents, and we want to find a common solution.
We have heard examples of too-lenient sentences being handed out, and we have heard of judges who think that the sentencing regime is not strong enough. I refer to the point made by the hon. Member for Poplar and Limehouse (Jim Fitzpatrick): the social mood has changed absolutely, and we need to go with that. What we are hearing from across the country, through colleagues and in the petition, is that the country wants stronger sentencing for such offences. My hon. Friend the Member for Kingswood made the very good point that there is a grave sense of injustice in the judicial process right now. That absolutely must change.
I am delighted to hear from the Minister that there will be a review outcome soon; I hope that that means before the end of this calendar year. I am delighted that it will be widely publicised, and I am pleased that it will require legislation, because that will give all of us the chance to debate these matters again in detail. He is absolutely right that judges decide sentences, but he has also made the important point that the framework for that is set by Parliament. That is what we are here to do, listening to the wishes of our constituents across the country.
I am pleased that the Minister has listened, and I know that he has kindly agreed to meet with the families after this debate, but ultimately it is about ensuring that the punishment fits the crime. That is what we all want, and I hope that when the legislation is reviewed, that is what we will all get.
Question put and agreed to.
Resolved,
That this House has considered penalties for dangerous driving.
Written Statements
(9 years, 2 months ago)
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UK Atomic Energy Authority: Triennial Review
(9 years, 2 months ago)
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The Minister for Universities and Science (Joseph Johnson)
The commencement of the triennial review of the UK Atomic Energy Authority was announced in Parliament on 22 July 2014 through a written ministerial statement. I am now pleased to announce the completion of the review.
The UK Atomic Energy Authority has as its principal mission ‘to position the UK as a leader in a future, sustainable energy economy by advancing fusion science and technology and related technologies to the point of commercialisation’. In addition to its main mission, the Authority manages a campus development portfolio at the Culham and Harwell sites and a number of other responsibilities that arise from historical civil nuclear programmes.
The review concludes that the functions performed by the UK Atomic Energy Authority are still required and that it should be retained as an executive non-departmental public body. However, the review recognises that there are potential benefits for the Authority to merge with another relevant science body. It therefore recommends that the Authority should commence work to assess the viability of such a merger, with a view to implementation from 2018.
The review also examined the governance arrangements for the UK Atomic Energy Authority in line with guidance on good corporate governance set out by the Cabinet Office. The review concluded that the Authority governance largely complies with Cabinet Office’s principles of good corporate governance, but has also identified several opportunities to improve its functions.
The full report of the review of the UK Atomic Energy Authority can be found on the Gov.UK website and copies have been placed in the Libraries of both Houses.
Attachments can be viewed online at: http://www. parliament.uk/writtenstatements.
[HCWS203]
Banking Act 2009
(9 years, 2 months ago)
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The Economic Secretary to the Treasury (Harriett Baldwin)
The Treasury has laid before the House of Commons a report required under section 231 of the Banking Act 2009 covering the period from 1 October 2014 to 31 March 2015. Copies of the document are available in the Vote Office and the Printed Paper Office.
[HCWS211]
Informal ECOFIN
(9 years, 2 months ago)
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The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne)
An informal meeting of the Economic and Financial Affairs Council was held in Luxembourg on 11 and 12 September 2015. Ministers discussed the following items:
Implementation of the investment plan for Europe
Ministers discussed the implementation of the investment plan for Europe, following a presentation by the Commission and the president of the European Investment Bank.
Climate finance
Ministers held an exchange of views on climate finance on the basis of a presidency note and presentations from Bruegel and the European Investment Bank.
Minimum effective level of taxation
On the basis of a presidency note, Ministers discussed key issues on tackling tax avoidance, including in relation to a minimum effective level of taxation in the EU and to third countries.
Five presidents report: deepening of economic and monetary union
The presidency introduced their note on deepening of economic and monetary union, which formed the basis of discussion among Ministers on the way forward. Statements were made by representatives of Eurogroup, the European Central Bank, the European Commission, European Parliament and Economic and Financial Committee.
SRF bridge financing
In the final session, Ministers discussed possible ways forward with regard to SRF bridge financing.
[HCWS212]
Inquest into the Deaths of Corporal James Dunsby, Lance Corporal Craig Roberts and Lance Corporal Edward Maher
(9 years, 2 months ago)
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The Minister for the Armed Forces (Penny Mordaunt)
On 15 July 2015 I made a written statement (HCWS107) regarding the inquest into the deaths of Corporal James Dunsby, Lance Corporal Craig Roberts and Lance Corporal Edward Maher, who died as a result of training activity on the Brecon Beacons in Wales. Following the inquest, HM Senior Coroner for Birmingham and Solihull highlighted a number of failings which contributed to the deaths of the three soldiers and made a number of recommendations to prevent future deaths. I responded to the Coroner on 14 September 2015 and will place a copy of my response in the Library of the House in a month’s time. The delay in releasing this is at the request of the Coroner. We have a service inquiry under way to look at the wider safety aspects of such training and I will keep the House informed. My thoughts remain with the families of Corporal Dunsby, Lance Corporal Roberts and Lance Corporal Maher and we are committed to doing all we can to ensure such a tragic event cannot happen again.
[HCWS205]
Extraordinary Agriculture and Fisheries Council
(9 years, 2 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Elizabeth Truss)
My noble Friend Lord Gardiner, DEFRA spokesman in the House of Lords, represented the UK at the extraordinary Agriculture and Fisheries Council on 7 September in Brussels. Michelle O’Neill MLA, Rebecca Evans AM and Richard Lochhead MSP also attended.
The extraordinary Council was called to discuss market developments in the livestock and dairy sector. There were also two any other business items on the agenda.
European Union Commission Vice-President Jyrki Katainen unveiled a €500 million aid package for farmers in all member states, recognising the deteriorating market situation. The package will focus on:
addressing cash-flow difficulties farmers are facing;
stabilising markets through a new private storage scheme;
addressing the functioning of the supply chain by establishing a high-level group to focus on credit for farmers and futures markets.
Vice-President Katainen also highlighted that the European fund for strategic investments was available to support investment in the farming sector. The Commission’s programme will also help to stabilise prices of products through the distribution of dairy products to vulnerable groups. Renewed efforts will be made to reach an early conclusion to the ongoing negotiations for revised school schemes for fruit and milk.
Lord Gardiner thanked the Commission for its approach to this crisis over the last couple of weeks, but urged rapid action and implementation of the package. For example, he asked the Commission to relax a number of specific common agricultural policy controls for 2015 so that the majority of farmers can be paid promptly. This will help with serious cash-flow problems which are concerning farmers at the moment.
Lord Gardiner also urged that we fast-track the use of European Investment Bank financial instruments within our rural development programmes.
Looking forward, Lord Gardiner asked for greater transparency and fairness in the supply chain. The UK groceries code adjudicator offers a robust approach, which could be a basis for wider EU action. He also called for further action from the Commission on country of origin labelling. Better labelling and branding, with regional flexibility, would provide shoppers with greater certainty on where their products come from.
During the table-round, member states broadly welcomed the package announced by Vice-President Katainen and like the UK called for rapid action and asked for more details to be able to help farmers as quickly as possible. Despite the Commission’s rejection to increase the intervention prices several member states including France, Spain, Belgium, Poland, Czech Republic, Ireland and Portugal still called for them to be raised. The UK along with the Netherlands, Denmark and Sweden argued against an increase.
The main AOB on the agenda consisted of the Baltic states and Poland requesting more clarity on the rules governing regionalisation following an outbreak of African swine fever. Commissioner Andriukaitis agreed to review the rules but stressed that the European Union’s disease regionalisation policy could not be jeopardised. Helpfully, the Commissioner reiterated that member states should not start bilateral discussions with Russia on re-opening trade. He argued that Russia “played games” to,
“seriously harm our common EU interests”.
The other AOB on drought in Poland and Romania was included as part of the wider market discussion.
Since the extraordinary Council took place, the Commission has announced that the UK will receive €36.07 million in targeted aid.
[HCWS204]
Life Sciences: Investment
(9 years, 2 months ago)
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The Parliamentary Under-Secretary of State for Health (Jane Ellison)
My right hon. Friend, Mr Chancellor of the Exchequer, has today announced the Government’s plans to invest £350 million in a world-class laboratory facility in Harlow, Essex by Public Health England (PHE).
This important investment will help to secure the United Kingdom’s place as world leader in life sciences, as well as ensuring state-of-the-art facilities to keep our country safe from infectious diseases. The Public Health England facility will be established in the London-Cambridge life sciences corridor, allowing researchers from our world-leading universities to be better connected to these vital facilities.
This investment will enable the relocation of a number of PHE’s functions currently at Porton Down to the new facility. The facilities at Porton are more than 60 years old and this investment will replace them with much needed modern facilities. However, PHE remains committed to the Porton site, and the publicly owned pharmaceutical company Porton Biopharma, as well as a regional PHE laboratory, will remain at Porton.
The Government will consider future plans for PHE’s other facilities as part of the spending review.
[HCWS208]
Independent Reviewer of Terrorism Legislation: Annual Report
(9 years, 2 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
David Anderson QC, Independent Reviewer Of Terrorism Legislation, has completed his fifth annual report, on the operation of the Terrorism Act 2000 and Part 1 of the Terrorism Act 2006 in 2014. This report will be laid before the House today.
I am grateful to David Anderson, once again, for his considered report, which continues to provide important independent scrutiny that UK counter-terrorism legislation is fair, effective and proportionate. I will, following consultation with other relevant departments and agencies, publish the Government’s response as a Command Paper in due course. At that time the response will be made available in the Vote Office.
I can also inform the House that Mr Anderson has agreed to undertake a review of the operation of a deprivation of citizenship power, as required by section 66 of the Immigration Act 2014. He will produce a report covering the initial year that this power has been in force, which ended on 28 July 2015. This report will then be laid before the House.
[HCWS207]
Terrorism Prevention and Investigation Measures
(9 years, 2 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
Section 19(1) of the Terrorism Prevention and Investigation Measures Act 2011 (the Act) requires the Secretary of State to report to Parliament as soon as reasonably practicable after the end of every relevant three-month period on the exercise of her TPIM powers under the Act during that period.
The level of information provided will always be subject to slight variations based on operational advice.
TPIM notices in force (as of 31 August 2015) | 3 |
TPIM notices in respect of British citizens (as of 31 August 2015) | 2 |
TPIM notices extended (during the reporting period) | 0 |
TPIM notices revoked (during the reporting period) | 0 |
TPIM notices revived (during the reporting period) | 0 |
Variations made to measures specified in TPIM notices (during the reporting period) | 10 |
Applications to vary measures specified in TPIM notices refused (during the reporting period) | 0 |
The number of subjects relocated under TPIM legislation | 2 |
The TPIM review group (TRG) keeps every TPIM notice under regular and formal review. The TRG met on 2 June and 14 September 2015. The next TRG meeting will take place in December 2015.
The case of DD v. Secretary of State for the Home Department [2014] EWHC 3820 (Admin) was heard again at the High Court between 21 and 24 April 2015. In a judgment handed down on 19 June 2015 Mr Justice Collins upheld the Secretary of State’s decision to revive the TPIM notice against DD on 23 August 2013, 6 May 2014 and 3 July 2014. Mr Justice Collins also upheld the Secretary of State’s decision to extend the TPIM notice against DD for a second and final year. In the same judgment Mr Justice Collins quashed the monitoring measure contained in DD’s TPIM notice as he concluded that in DD’s specific circumstances it breached DD’s rights under article 3 of the European convention on human rights. Mr Justice Collins also directed a variation to the electronic communications device measure contained in DD’s TPIM notice. This judgment can be found at: http://www.bailii.org/ew/cases/EWHC/Admin/2015/1681.html
[HCWS206]
Machinery of Government Changes
(9 years, 2 months ago)
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The Prime Minister (Mr David Cameron)
This written ministerial statement confirms that policy responsibility for data protection policy, sponsorship of the Information Commissioner’s Office, and sponsorship of The National Archives will transfer from the Ministry of Justice to the Department for Culture, Media and Sport, and that responsibility for Government records management policy will transfer from the Ministry of Justice to the Cabinet Office. These changes will be effective from 17 September. The Lord Chancellor’s responsibilities under the Public Records Act 1958 and associated legislation will therefore be transferred as necessary to the Secretary of State for Culture, Media and Sport.
[HCWS209]
Rail Franchising: East Anglia
(9 years, 2 months ago)
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The Parliamentary Under-Secretary of State for Transport (Claire Perry)
Today I have published the invitation to tender (ITT) documents setting out the specification for the next East Anglia rail franchise. This asks bidders to set out detailed proposals on what improvements for passengers they will deliver and how they will build on the East Anglia line should they win the franchise.
Alongside the ITT I have published a stakeholder briefing document which describes what the specification will mean for passengers and how the responses to the public consultation held between December 2014 and March 2015 have been taken into account when my officials developed the ITT.
We know that customers are not satisfied with the current arrangements on this route. The rolling stock is too old and unreliable and there is demand for more, faster services. That is why this ITT has the condition and quality of trains at its very heart. I believe that the minimum standards we have set out today will provide bidders with the opportunity to address these fundamental issues. We expect to see new trains servicing this route but have not specified this because we want to incentivise the bidders to price their options competitively while ensuring that the taxpayer gets maximum value for their investment. We have reformed franchising to place quality of service and passenger experience at the centre of the process. These changes have already led to a step change in performance elsewhere in the country and I expect East Anglia to fully benefit as well.
The region served by the East Anglia franchise is vital to the long-term economic growth of the country. It was clear from the more than 1,300 responses my officials received to the consultation exercise that we need to make sure that the railway does more to support it in the next franchise. The specification I have published today sets out how we will do just that.
A key part of the ITT is that bidders will be required to plan for how they will introduce at least four services (two in each direction) between Norwich and London that have a journey time of 90 minutes or less each weekday; and at least two services between Ipswich and London (one in each direction) that have a journey time of less than 60 minutes. These headline journey times were a key recommendation of the Great Eastern main line taskforce and were highlighted in responses to the consultation. I am therefore delighted that the next franchise will see these services become a reality.
There are a number of other requirements that will mean passengers will see a step change in the franchise. Approximately 180 additional services are specified each week across the franchise, significantly enhancing journey opportunities for passengers. The franchise’s rolling stock too will be significantly improved as a result of this ITT and while we have not been specific about what class of train bidders must use, we have been clear that they should be of a high quality and fit for the railway of the 21st century. That means that all of the trains should include provision for wi-fi and controlled emission toilets, so that waste is not dropped onto the tracks. The specification also acknowledges the calls to reduce crowding on the franchise by establishing challenging targets for bidders to meet in their plans.
Throughout the ITT my officials have taken an output based approach to specification. This means that the private sector bidders for the franchise have the space to innovate and use their experience to develop the best possible solutions for passengers on the franchise.
The three bidders for the franchise—Abellio East Anglia Ltd (a joint venture between Abellio and Stagecoach); First East Anglia Ltd; and National Express East Anglia Trains Ltd—will now have until 17 December 2015 to provide their bids to the Department. These will then be evaluated and I expect to announce my intention to award the contract to the preferred bidder in June 2016, with the new nine-year East Anglia franchise expected to start in October that year.
For too long, East Anglia has not had the high-quality rail services that it deserves. The specification that I have published today will reverse this situation. I now look forward to the bidders stepping up to this challenge and providing plans that will provide a transformation on the East Anglia franchise for passengers and taxpayers.
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